Link to this page: https://www.socialistparty.org.uk/issue/261/24659
A Nice Little Racket
New Labour's tax-avoiding friends
AT THE Wimbledon tennis championships last week KPMG - one of the top accountancy firms suspected of malpractice in the recent big business scandals - had a corporate hospitality marquee.
They offered their spoilt guests the softest of cushions to stop their backsides getting sore. KPMG may need those cushions back when details emerge of their involvement in the Xerox scandal.
Xerox overstated its revenue by almost $2 billion in a plot which even US corporate policemen SEC said was designed to enrich top executives.
KPMG were Xerox's auditors for 30 years until they were fired as the scandal came out. They're one of the big four accountancy companies worldwide and they also seem on the best of terms with the New Labour government in Britain.
An investigation by the Guardian found that KPMG has been allowed to place its own 'secondees' in the Inland Revenue, the Department of Trade and Industry and the Serious Fraud office, even though most of KPMG's money comes from advising big companies and investors how to avoid paying tax.
As much as £85 billion in tax may be lost to the government because of avoidance promoted by the big four!
New Labour also loaned a KPMG accountant as its finance director in the year before the 2001 general election. It sponsored a KPMG partner on the supposedly independent commission to promote the hated private finance initiative (PFI) deals.
KPMG advised Hertfordshire University and the Highways Agency on major projects which went to their clients. The government used them to 'investigate' offshore tax havens where KPMG had its own lucrative operations.
In fact Blair's government has paid this firm £70 million since it took office in 1997. They've used other highly profitable accountancy firms too, include Andersen who audited Enron, the biggest bankrupt in US history.
In 1997 New Labour ended the ban on Andersen's government work (in place since they were implicated in the 1982 DeLorean scandal).
Labour used Andersen to advise London Underground on privatisation, run PFI schemes and the Education Action Zones which were designed to make big business a fortune out of our public services.
A big business party pampers its big business friends. Perhaps KPMG can lend New Labour a few cushions.
In The Socialist 5 July 2002: