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The money-making business of ministerial life after politics

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Life after politics can be a daunting prospect. But, for some, after many years in government, possibly as career politicians, entering the private sector also opens-up a host of opportunities, and financial reward that were once, technically, off-limits.

No-one goes into politics in the UK to make money, just ask Boris Johnson. However, the status that comes with having held a position in high-office often attracts significant and lucrative opportunities for those once they leave the corridors of Westminster behind. George Osborne is a notable example, who, among the 10 private sector jobs he undertook after leaving office, secured a £650,000 a year advisory role with BlackRock. Tony Blair in early 2008 joined US investment bank JP Morgan as a ‘senior advisor’, reportedly earning him six-figures for three 90-minute appearances a year.

The Advisory Committee on Business Appointments (Acoba) is the government watchdog that sets the rules for out-going MPs, Ministers and other senior civil servants on what they can and cannot do within the first two years of leaving office. Current guidelines suggest Ministers wait a minimum of three months after leaving government before undertaking a paid private sector role and are required to seek advice by the committee who will assess the merits of the role, and whether, it will be seen as a reward for previous work carried out in office, or whether the former post will give rise to an unfair advantage, at which time, a prospect may be deemed ‘unsuitable’. However, Acoba has no official powers to enforce, and there are several examples where Ministers have chosen to ignore recommendations, including the incumbent Prime minister Boris Johnson, who re-joined the Telegraph immediately after his brief tenure at the helm of the Foreign Office.

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Former Prime Minister, David Cameron, has also recently made headlines after his ties to Greensill Capital were exposed. He faces allegations that he exploited his position and his network in order to seek preferential access to state funding for the bank, claims he strongly denies. The now collapsed bank, led by disgraced financier Lex Greensill has left the UK taxpayer with a bill of more than £1 billion.

As an advisor to the bank, he lobbied government heavily and in return, was handsomely rewarded. While no figures have been made public, he admits to having a large economic interest in the bank’s success, telling MPs: “By anyone’s terms, it was a generous salary”.  

Appearing in front of the Treasury Select Committee and the Public Accounts Committee last week, Cameron was grilled for four hours over a series of now public messages he sent to Ministers, MP’s and other government officials lobbying on behalf of the bank. Such was his voracity and insistence that Labour MP Angela Eagle accused him of effectively stalking, rather than lobbying, while another MP criticised him for bringing the office of the Prime Minister into disrepute.

Malcolm Rifkind, former Foreign Secretary and Chairman of the Intelligence and Security Committee, is another politician who found himself in hot water, following a ‘cash for access’ scandal in 2015 while still in office. Since choosing to stand down, he has taken on several board positions at various advisory outfits, including 17 Arm, a firm involved in the questionable business of unregulated litigation funding and asset recovery.

Founded by the controversial businessman Paddy Meade, the 8th Earl of Clanwilliam, the Dubai based company is not a member of the Association of Litigation Funders (ALF) and therefore, unlike others in the field, does not operate under any established codes of conduct, nor does it raise capital for cases on the open market through institutional investors like others, leaving a large question mark over the source of its funds.

17 Arm made recent headlines when The Guardian reported they were funding the case bought by Alexander Tugushev against his former associate, Vitaly Orlov, which has been playing out in the British courts since 2018.

Tugushev, himself a former government official in his role as Deputy Chairman of the (then) State Fisheries Committee of the Russian Federation, is a convicted fraudster, who, in 2007, was sentenced to six years in prison in Russia for abusing his position in public office and taking illicit payments and bribes. He is also the subject of several other open criminal investigations in Russia, including an indictment for fraud committed against Mr Orlov that is now procedurally attached to a separate case in which Tugushev is subject to an international arrest warrant on charges related to fraud committed against Mr Alexander Sychev.

It is not clear who is financing 17 Arm regarding this case, with Tugushev going so far as to pay £7.8 million in securities to cover legal costs to avoid identifying his backers, who are alleged to be possible rivals of Orlov’s fishing company Norebo and individuals from the Russian criminal under-world looking to cash in.

The practice of former government officials using their networks and experience to cash-in on lucrative business deals is not new.  In fact, why would a firm add a costly former government official to their payroll if not because of the doors they can open? Across every industry almost every outgoing official in recent years, from both sides of the chamber have moved into the private sector.  

In most cases, as questionable as these relationships and deals may look from the outside, no rules have apparently been broken, instead the system is simply manipulated to the benefit of individuals like Lex Greensill, and even wanted criminals like Tugushev, who try to gain credibility by riding the tailcoats of these connected and influential individuals.

For the likes of respected figures such as Rifkind and former public prosecutor, Ken Macdonald to be tied to such individuals demonstrates the need for reform and strengthening of Acoba, which has so far proven ineffective in ensuring former officials do not bring into question the integrity of the British political institutions.

Health

PEPSICO Europe expands healthier snacks and beverage portfolio across Europe

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1 July 2021 - PepsiCo Europe is today (1 July) announcing an ambitious new plan to add more choice to its food and beverage portfolio in the member states of the European Union. The plan involves a series of commitments based on rigorous science-based nutrition guidelines. This voluntary commitment will be submitted to the European Commission as a part of its Code of Conduct for Responsible Business and Marketing Practices.

These commitments build on progress PepsiCo has already made globally over the past decade to reduce added sugars in beverages and sodium and saturated fat in foods, introduce smaller portion sizes and create alternatives of existing brands with improved nutritional profiles, like Pepsi MAX, 7UP Free and Lay’s Oven Baked. [1]

For its beverage portfolio in Europe, which includes Pepsi-Cola, Lipton Ice Tea and 7UP, PepsiCo’s new pledge will reduce the average level of added sugars across its entire soft drinks range by 25% by 2025 and 50% by 2030[2].  Across Europe, PepsiCo has already established a strong sugar-free portfolio in beverages, including Pepsi MAX and 7UP Free.  The sugar reduction also has a positive climate impact.  The company estimates that moving from full sugar to sugar-free formulations reduces up to a quarter of the greenhouse gas emissions from a beverage.

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PepsiCo Europe wants to also further its journey to diversify its snack portfolio to include healthier options, learning from its success in growing sugar-free beverages.  It aims to increase sales of snacks rated a B or better in the widely used Nutri-Score nutrition labelling system[3] by more than 10X by 2025.  This will make healthier snacks its fastest growing food category over the next four years with an ambition to expand this to a $1 billion portfolio by 2030.   

The new goals will be achieved through reformulation of existing products, expanding the company’s existing brands, including Lay’s Oven Baked, to more markets, and introducing new snacking ranges such as PopWorks, its newly launched popped corn crisps range.

PepsiCo’s grains portfolio, which includes Quaker Oats, already offers a range of nutritious products to EU consumers with 70% of the product[4] rated at either Nutri-Score A or B.

PepsiCo Europe Chief Executive Officer Silviu Popovici said: “Consumers want healthier and more sustainable brands, and they want products that taste great.  Over the past decade, we’ve reformulated and launched new products to bring more options to consumers. As a result, in Europe today, almost one in three beverages we sell is sugar-free and we believe this trend will continue to grow over time.  With this pledge, we can use our experience with sugar reduction to accelerate our shift to a healthier snacks portfolio.”

PepsiCo understands that it is vital to market its products responsibly.  The company has also aligned to UNESDA (the European soft drinks industry association) and the World Federation of Advertisers (EU Pledge) commitments around no marketing or advertising to children under 13. Since 2006, PepsiCo has not advertised its soft drinks to under 12s across Europe and it has applied science-based nutrition criteria to determine which food products it can advertise to under 12s.

This new plan is part of PepsiCo’s efforts to create a more sustainable food system and support the EU’s ambitious Green Deal.  At the end of 2020, the company announced its plans to reduce virgin plastic use by moving to 100% recycled plastic bottles for brand Pepsi across nine EU markets by 2022.  PepsiCo has also stepped up its goals to tackle climate change, committing to net zero by 2040 and a 40% reduction in greenhouse gas emissions (GHGs) by 2030, while also scaling regenerative agriculture across its entire agricultural footprint, reducing GHGs by 3 million tons by 2030.

About PepsiCo

PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $70 billion in net revenue in 2020, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana and SodaStream. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales. 


[1] Calculated by Retail Sales Value

[2] Compared to a baseline of 2019

[3] Nutri-Score is a nutritional label which evaluates the overall nutritional quality of food based on a five-colour coded scale going from A to E.

[4] Calculated by Quaker product volume.

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Italy's 5-Star in turmoil as founder lambasts former PM Conte

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Italy's co-ruling 5-Star Movement was thrown into turmoil on Tuesday after its founder Beppe Grillo said the man primed to become its next leader, former Prime Minister Giuseppe Conte (pictured), was not up to the job, writes Crispian Balmer, Reuters.

"Conte...has neither political vision nor managerial skills. He has no experience of organisations and no capacity for innovation," Grillo wrote in a blog that looked certain to doom the ex-premier's efforts to revive the divided group.

Conte agreed to take the reins of 5-Star after his coalition government collapsed in February, but his plans to relaunch the struggling party have been delayed by internal disputes, triggered in part by his demand that Grillo relinquish control.

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An increasingly exasperated Conte set out his conditions for taking charge on Monday, saying Grillo had to decide whether to be a "generous father who lets his child grow up or a bullying father who prevents his child's emancipation".

Within 24 hours Grillo hit back, saying Conte wanted to subvert the maverick, anti-system nature of the 5-Star.

"We cannot let a movement born to spread direct and participatory democracy turn into a one-man party governed by a seventeenth-century statute," he wrote.

There was no immediate response from Conte, who was a little known lawyer with no party affiliation when he was plucked from obscurity to become head of a coalition government following inconclusive elections in 2018.

He remained in charge when 5-Star switched coalition partners the following year, becoming one of Italy's most popular leaders as his confidence grew.

Many 5-Star parliamentarians had hoped that this popularity would help their own party bounce back in the polls.

The group defeated all its rivals in 2018, taking 32% of the vote, but since then its image has been undermined by policy U-turns and internal feuding and it is now polling at around 16%, making it Italy's fourth largest party.

Conte had said he wanted to give the formerly anti-establishment protest movement a more traditional, moderate face as part of his efforts to form a stable alliance with the centre-left Democratic Party. Read more.

Grillo, an outspoken comic, worried that Conte wanted to transform his group into a traditional party, peopled by slick, professional politicians.

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Brexit

EU accepts UK request for a three-month extension to chilled meat grace period

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EU co-chair of the Joint Committee, Vice President Maroš Šefčovič

This afternoon (30 June), the European Commission announced that it would grant the UK a further three-month grace period it requested to implement the provisions on chilled meats in the Northern Ireland Protocol. Vice President Maroš Šefčovič also announced that the EU would adjust its law to facilitate the trade in medicines along with other concessions.

The Commission said its package of measures would address some of the most pressing issues related to the implementation of the Protocol on Ireland and Northern Ireland.

The EU's co-chair of the Joint Committee, Vice President Maroš Šefčovič, said: “Our work is about ensuring that the hard-earned gains of the Good Friday (Belfast) Agreement – peace and stability in Northern Ireland – are protected, while avoiding a hard border on the island of Ireland and maintaining the integrity of the EU Single Market. Therefore, we have spared no effort in trying to mitigate some of the challenges that have arisen in the implementation of the Protocol.”

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The Commission has put forward solutions in a number of areas, including for the continued supply of medicines, provisions on guide dogs, as well as a decision waiving the need to show an insurance green card, which is of particular benefit for motorists crossing the border in Northern Ireland.

The UK negotiator Lord Frost said: “We are pleased we have been able to agree a sensible extension on chilled meats moving from Great Britain to Northern Ireland - one that does not require rules in the rest of the UK to align with future changes in EU agrifood rules.

 “This is a positive first step but we still need to agree a permanent solution. The chilled meats issue is only one of a very large number of problems with the way the Protocol is currently operating, and solutions need to be found with the EU to ensure it delivers on its original aims: to protect the Belfast (Good Friday) Agreement, safeguard Northern Ireland’s place in the United Kingdom, and protect the EU's single market for goods.”

The EU said that the temporary solution on chilled meats is subject to strict conditions. For example, the meat products that are subject to the channelling procedure referred to in the United Kingdom's unilateral declaration must remain under the control of the Northern Ireland competent authorities at all stages of that procedure. These meat products must be accompanied by official health certificates issued by the UK competent authorities, can exclusively be sold to end consumers in supermarkets located in Northern Ireland, and must be packed and labelled accordingly. The EU also underlined the importance of ensuring that Border Control Posts in Northern Ireland have the necessary infrastructure and resources to be able to perform all the controls required by the EU's Official Controls Regulation.

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