Lesley Riddoch: Watchdogs must be encouraged to bite

Greedy multinationals are finally getting their comeuppance. That’s the conclusion most will draw from news that Starbucks, Google and Amazon have been accused todayof “immorally” minimising tax payments by the Commons Public Accounts Committee (PAC).

Starbucks have reportedly said they’ll change their tax affairs to pay more into British coffers. We may be appalled that big business has got away with it for so long, but relieved our regulatory framework has finally got it right.

Not so fast. The MPs’ “inescapable conclusion” is that “multinationals are using structures to move offshore profits clearly generated from economic activity in the UK”.

The inescapable corollary is that passive governance “structures” and toothless watchdogs have let them get away with it for too long. And those structures are still alive, kicking and drawing salaries. The PAC accuses HM Revenue and Customs of appearing “way too lenient” over its handling of big name tax bills and “selective” prosecutions which leave small companies feeling victimised. For any business effectively closed down over a minor tax or filing date transgression, that’s the understatement of the century.

The MPs’ report will doubtless prompt heated debate about the ethics of multinational business. But will it restore public confidence in HMRC, the fairness of taxation or indeed the very business of governance? Doubtful.

Two statutory watchdogs are also in the firing line. The Financial Services Authority stands accused of being “too middle class” to bother about extortionate interest rates set by “payday lenders”. Banking industry group TheCity UK say that “because of how the FSA was constructed… it wouldn’t engage with people who needed the most protection.” Instead, it was an Office of Fair Trading investigation into “aggressive debt collection practices” that “outed” lenders charging 4,000 per cent interest in an industry worth an estimated £3.5 billion a year.

Last week the government finally caved in to pressure and gave the Financial Conduct Authority – successor body to the FSA – powers to cap the total cost of credit offered by lenders like Wonga.com, QuickQuid and the ChequeCentre.

Does anyone really believe those capping powers will be used though, if the FCA recruits the same “complacent” people with the same “limited” life experience and the same “hands off” outlook as the FSA?

Elsewhere on the toothless watchdog front, the Press Complaints Commission looks set to be scrapped or replaced following the Leveson report into phone hacking. Meanwhile the Savile scandal is still widening the sweep of public organisations found wanting.

Former BBC chat show host Michael Parkinson observed at the weekend that “he (Jimmy Savile) had a reason for being at the BBC. He was employed by them. What on earth was his reason to be at Broadmoor, Stoke Mandeville or the hospital in Leeds?”

Of course, all these public bodies are investigating themselves to find answers. But in all probability questions over Savile’s “right to roam” just didn’t arise. The abuser’s acceptance by the BBC was the Platinum Gold Card that ensured acceptance in every other state institution – and vice versa. Win over one and you’ve won over them all. Business, newspapers, the BBC, government, watchdogs and the police really are “all in this together” – reinforcing and validating one another’s decisions, choices and outlooks. Our society is that complex and inter-spun. The problem of regulating power, entitlement and nepotism is that profound.

This is partly why the press argue for another shot at self-regulation. The argument was put strongly in our sister paper Scotland On Sunday yesterday: “If this newspaper is doing its job correctly, it’s ruining Sunday breakfast for somebody in power.” That’s a strong argument after a week when arms of government, statutory bodies and industry watchdogs have all been found wanting. And of course it’s true that the MPs’ expenses scandal and newspaper phone-hacking practices were brought to public attention by other newspapers.

But the press and media have a far greater power than detecting and ventilating the activities of law-breakers when watchdogs fail. They set the tone of public life.

The trouble for the press is that headlines scapegoating “benefit scroungers”, “queue-jumping young mums” and “teenage thugs” don’t ruin breakfast for somebody in power – they ruin the lives of the least powerful in society every waking day.

The McCanns and celebrities have at least had compensation and a day in court. The millions effectively defamed as malicious, malingering wasters have not and never will – even though insidious, unpleasant, snide assertions combine over a lifetime to make the workless feel completely without hope or value. If inequality is a cancer eating away at British and Scottish society – and it is – then blanket, indefensible headlines and contemptuous, hostile stories are the mechanism that keeps inequality firmly in place.

Newspapers and TV have such power to damn… or praise. Could the relatively unknown Michael Forbes ever have beaten Billy Connolly and Sir Chris Hoy to win Top Scot of the Year at the Glenfiddich Spirit of Scotland Awards last week if his cussed and protracted stand against Donald Trump wasn’t implicitly validated by a film broadcast on BBC Scotland last month?

Of course, Private Eye’s Ian Hislop argues the press is not the main problem – even in the appalling Milly Dowler phone-hacking scandal. He makes the good point that News of the World behaviour wasn’t just immoral – it was illegal and would have been nipped in the bud if police had investigated, MPs had questioned and watchdogs had acted using existing powers. So why didn’t they?

Where there’s a will there is a way. Where there’s no will, there’s no way to make laws, voluntary codes or anything else stick. There’s not enough money or staff anywhere in the world to police and prosecute every possible crime and misdemeanour. So society relies on a shared vision and sense of fairness to work. For decades though morality has been for “softies and losers” in the harsh opinion of Britain’s post-Thatcher world of winners.

Let’s be clear. The scandal of ineffective control by the great and good over the great and good is everywhere – and growing. Toothless watchdogs are created by ineffective systems which arise from unequal societies and elites who lack the ability to change.

I’m not sure David Cameron or Alex Salmond have the political will to tackle that.