“Jacob Rees-Mogg’s investment firm is advising one of the highest-profile investors in Canada’s marijuana market.
Somerset Capital Management, co-founded by the prominent Brexiter MP, is an adviser to an emerging markets fund established by Purpose Investments.
Purpose Investments has emerged this year as one of the most prominent investors in the Canadian cannabis market. The drug will become legal for recreational use there in October, but it has been legal for medical use since 2001.
Rees-Mogg, chair of the pro-Brexit European Research Group, has refused to back either the decriminalisation or legalisation of cannabis in the UK.
The development comes days after it emerged that Somerset set up a second fund in Ireland after it warned earlier this year about the financial dangers of the sort of hard Brexit favoured by the Conservative MP.
Documents show that Somerset Capital Management is an adviser to the Purpose Emerging Markets Dividend Fund, which invests in sectors including financials, IT and mutual funds in countries such as South Korea, Russia, China and Turkey. The fund does not include investments in the marijuana market.
With legalisation in Canada due in the autumn, funds across North America are looking to cash in.
In January, it was reported that Purpose’s subsidiary Redwood Asset Management had set up Canada’s first actively managed marijuana-themed exchange-traded fund. According to the Purpose website, the Purpose Marijuana Opportunities Fund is close to fully invested.
Rees-Mogg, the MP for North East Somerset, said in an interview last year that he would not be in favour of the legalisation or decriminalisation of cannabis. “With the [cannabis] laws as they currently are, you provide a certain amount of protection for people.
“If you have a system of protection which is saving people you are right to keep the ban in place. The onus of proof is on those who wish to change the law and I don’t think they have managed to establish that the extra risk is worth taking,” he said.
A spokesman for Somerset Capital Management confirmed that it advises an account on behalf of Redwood.
“One of the many downsides of Brexit is that for the last two years or more it has sucked all the energy out of the Westminster policy making process, with the result that other problems are being ignored. It is a major opportunity cost. There are plenty of examples, but adult social care is probably the most glaring. Experts agree the situation is in crisis. The Conservatives floated some audacious plans in their manifesto, but they proved electorally toxic and since then they have gone silent on the topic, putting off announcements until the much-delayed green paper due later this year. Labour’s own plans are sketchy and, understandably, they are reluctant to propose reforms that will involve higher when the government won’t take the initiative itself.
So all credit to the cross-party Local Government Association that is today floating plans in a green paper (pdf) to raise taxes to put care funding on a sustainable footing. With councils in England receiving almost 5,000 new requests a day for adult social care, the LGA says this is essential.
Since 2010 councils have had to bridge a £6bn funding shortfall just to keep the adult social care system going. In addition the LGA estimates that adult social care services face a £3.5bn funding gap by 2025, just to maintain existing standards of care, while latest figures show that councils in England receive 1.8m new requests for adult social care a year – the equivalent of nearly 5,000 a day.
Decades of failures to find a sustainable solution to how to pay for adult social care for the long-term, and the Government’s recent decision to delay its long-awaited green paper on the issue until the autumn, has prompted council leaders to take action.
Short-term cash injections have not prevented care providers reluctantly closing their operations or returning contracts to councils and less choice and availability to a rising number of people with care needs. This is increasing the strain on an already-overstretched workforce and unpaid carers, and leading to more people not having their care needs met.
Increased spend on adult social care – which now accounts for nearly 40 per cent of total council budgets – is threatening the future of other vital council services, such as parks, leisure centres and libraries, which help to keep people well and from needing care and support and hospital treatment.
The LGA is publishing its green paper to start a public debate on how adult social care could be properly funded. There’s a summary here:
Lord Wolfson does not mention a transaction tax on online purchases – not surprising as Next has a big online presence too.
“The chief executive of Next has called on the government to reform business rates, which he says are accelerating the rate at which high street shops close.
Lord Wolfson, a Conservative Party peer, says the tax on commercial property has not been updated to reflect the increasing popularity of online shopping and needs changing.
“The one thing that I think the government must do is make rates more responsive to today’s reality,” Simon Wolfson told ITV News.
“Let the thriving towns and cities, we should be paying high rates, but the ones that are dying, actually that process of failure is being accelerated by rates that are stuck at levels that don’t reflect today’s reality”. …”
“Nuclear waste could be stored in vaults deep under national parks after it emerged yesterday that MPs backed the proposal.
However, the controversial plan is certain to be fiercely opposed by green campaigners.
After the Government began looking for a site to locate an underground radioactive waste vault, the Commons business committee backed its approach – but decided against calling for national parks and areas of outstanding natural beauty (AONBs) to be excluded. …
Energy minister Richard Harrington told the committee: ‘I am not saying we should have them on national parks, but it would be very wrong to exclude them at the moment in this big policy statement.’ …
The committee said the plan was ‘fit for purpose’, adding: ‘We decided against an exclusionary criterion for national parks and AONBs.
‘Although we agree that major developments should not be allowed in designated areas except under exceptional circumstances, we believe existing planning legislation and the national policy statement contain sufficient safeguards against intrusive developments and environmental damage in national parks and AONBs.
‘We support the Government’s view that it is conceivable for a GDI to be designed in a way that would be acceptable to communities, preserve the socio-economic benefits that national parks and AONBs bring them and avoid any intrusive surface facility in conservation areas.’
But Kate Blagojevic, from Greenpeace UK, said: ‘The Government have decided to bet the house on new nuclear reactors without any clear idea of how high the spiralling costs will be… or where to put the unknown quantity of waste they will generate.
‘Now we learn that the main protection for national parks is that local people won’t agree to anything bad, even though the local people won’t know what they’re agreeing to.’ “
“More than £330,000 was spent on flights and accommodation for MPs to visit Azerbaijan between 2007 and 2017, and 12 MPs were paid more than £90,000 to appear on Russian state TV, according to a report by Transparency International UK.
The report focused on parliamentarians who had accepted hospitality from corrupt and repressive governments while providing political access and lobbying.
It said many of the MPs and peers had been given all-expenses-paid trips to such countries paid for by the host government.
The publication of the report follows the suspension of the DUP MP Ian Paisley last week after he admitted he had failed to declare £50,000 of family holidays paid for by the Sri Lankan government.
The parliamentary commissioner for standards found that Paisley had breached the rules on paid advocacy by writing to David Cameron in 2014 to lobby against a UN resolution on human rights abuses in Sri Lanka, after receiving holidays from the country’s government.
Transparency International UK’s report also found that two MPs had provided advisory services to the king of Bahrain over the period the government enforced a brutal crackdown of Arab spring protesters in 2001.
The authors of the report say that not only have some MPs actively supported corrupt and repressive governments, but that there is also a “culture of impunity” regarding such practices.
“The activities of the Azerbaijan lobby in parliament has become so infamous that it is seemingly tolerated as almost an eccentricity,” the report said.
Steve Goodrich, Transparency International UK’s senior researcher officer and one of the authors of the report, said: “This is not the first time that the inappropriate behaviour of foreign regimes in lobbying UK parliamentarians has been exposed. But our report shows that this has become a systemic pattern of behaviour, with many MPs and peers completely ignorant or knowingly dismissive of these problems.
“This type of engagement between parliamentarians and corrupt and repressive regimes can no longer be kicked into the long grass because it’s politically convenient. It is a detriment to the UK’s standing as a beacon of democracy and the rule of law.”
Following the publication of its report, Transparency International UK is calling for an inquiry into the conduct of MPs and peers in legitimising corrupt and repressive governments.
The group recommends that MPs and peers should also be banned from taking trips paid for by foreign states and their lobbyists over £500 in value. Instead, the group suggests that a list of organisations should be agreed in parliament for whom paid trips over this amount are acceptable.
Transparency International UK also recommends that MPs should be prohibited from providing paid or voluntary services to foreign governments and state institutions, and that the register of members’ financial interests should be published as structured open data.
Duncan Hames, director of policy at Transparency International UK, said it was “time to end the discredited practice of our parliamentarians enjoying generous foreign hospitality”.
He said: “International visits can certainly aid informed parliamentary debate, but when these trips are offered by foreign governments they undermine the independence of those MPs accepting them.
“Our politicians are elected to work on our behalf, not the interests of foreign states who increasingly have subversive desires. Global scandals have exposed the activity of foreign states meddling in the affairs of others and we need to shore up our defences against this sort of activity.” …
What happened to the “rough and tumble” of electioneering?
Owl fears we are going the way of the USA where no criticism of the ruling party (sorry, person) is tolerated. And where some politicians only seem to have thin skins when their rivals challenge them …..
A long read, but if you worry about the unaccountability of our Local Enterprise Partnership (and you should) it is a “must read” – note the requirement for LEPs to be scrutinised by council scrutiny committees:
For good or ill the Government has chosen Local Enterprise Partnerships (LEPs) to play a key part in assisting in the delivery of government policies to support local economic growth.
There are 38 LEPs in England. Through the Local Growth Fund, the government has committed £12 billion to local areas between 2015 and 2021; £9.1 billion of this is through Growth Deals with LEPs. The government also sees LEPs as key to its new industrial strategy. But performance has varied as acknowledged in the government’s publication of July 2018 “Strengthened Local Enterprise Partnerships”.
Amongst other things this paper announced that all the recommendations of last year’s Mary Ney review (see below), and this year’s Public Accounts Committee (PAC) report on Governance and Departmental oversight of the Greater Cambridge Greater Peterborough (GCGP) LEP, would be accepted.
Now is the moment to review these three publications which, taken together, amount to a scathing criticism of the way LEP governance arrangements, and government oversight of them, have, to date, been working.
In 2016 the PAC reported on the governance of LEPs and made clear recommendations for improvement which were accepted by the Ministry of Housing, Communities and Local Government. [Footnote: East Devon Alliance submitted evidence to this inquiry].
Despite this, things are going seriously wrong and, in the words of the PAC: “the Department needs to get its act together and assure taxpayers that it is monitoring how LEPs spend taxpayers’ money and how it evaluates results.”
In the case of CGGP (Greater Cambridge Greater Peterborough Enterprise Partnership) the LEP could not respond satisfactorily to allegations of conflicts of interest, levelled by an MP. The governance arrangements were not up to standard. There were no comprehensive conflicts of interest policies nor an up to date register of interests for board members. In addition, the LEP was not acting transparently.
In March 2017, the Department applied the nuclear option and withheld the release of money to the LEP. Then, in December 2017, the LEP went into voluntary liquidation, following the Chair’s resignation the previous month.
Key findings by the PAC were that GCGP LEP did not comply with expected standards in public life, particularly in terms of accountability and transparency. Also that the Department’s oversight system failed to identify that GCGP LEP as one which should have raised concerns. Furthermore, that the Department has a long way to go before it can be sure that all LEPs have implemented Mary Ney’s review properly.
Which leads us to: the “Review of Local Enterprise Partnership Governance and Transparency”, Led by Mary Ney, Non-Executive Director, DCLG Board, October 2017. This is an internal departmental review but nevertheless surprisingly thorough.
The review makes 17 recommendations (all now formally accepted) covering the following topics: Culture & Accountability; Structure & Decision-Making; Conflicts of Interest; Complaints; Section 151 [financial accounting] Officer Oversight; Transparency; Government Oversight & Enforcement. Just a few of these 17 recommendations of particular importance are highlighted out below.
Many LEPs have codes of conduct reflecting the requirements of company board directors and do not sufficiently embrace the dimension of public sector accountability. This is inadequate as it does not reflect the dual dimension (i.e. public and private) of the role of board members.
The code of conduct, which all board members and staff sign up to, should explicitly require the Nolan Principles of public life to be adopted as the basis for this code. E.g. the notion of integrity whereby holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.
Key features of decision-making to ensure good governance and probity should include:
• a clear strategic vision and priorities set by the Board which has been subject to wide consultation against which all decisions must be judged;
• open advertising of funding opportunities;
• a sub-committee or panel with the task of assessing bids/decisions
• independent due diligence and assessment of the business case and value for money;
• specific arrangements for decisions to be signed off by a panel comprising board members from the local authority, in some cases including a power of veto;
• Section 151 officer line of sight on all decisions and ability to provide financial advice;
• use of scrutiny arrangements to monitor decision-making and the achievements of the LEP.
Conflict of Interest declarations must include employment, directorships, significant shareholdings, land and property, related party transactions, membership of organisations, gifts and hospitality, sponsorships. Interests of household members to also be considered.
LEPs to include in their local statements how scenarios of potential conflicts of interest of local councillors, private sector and other board members will be managed whilst ensuring input from their areas of expertise in developing strategies and decision-making, without impacting on good governance.
LEPs will need to publish a whistleblowing policy.
As part of transparency, in addition to the obvious things such as agendas and minutes, LEPs should maintain on their websites a published rolling schedule of the projects funded giving a brief description, names of key recipients of funds/ contractors and amounts by year.
GOVERNMENT RESPONSE – STRENGHTENED LEPs
In accepting these recommendations the government in its “strengthened LEP” paper does add a few points of clarification which are worth noting.
Readers may recall our LEP, Heart of the South West (HotSW), proposing in its 2015 prospectus “towards a devolution deal” to deliver, amongst other things, a world-class integrated health and care system within our communities. A prospectus produced without any public consultation. Well, the government has taken on board a further PAC criticism that it has not been clear about the current role, function, and purpose of LEPs.
The government now says it will set all Local Enterprise Partnerships a single mission to deliver Local Industrial Strategies to promote productivity.
Each Local Enterprise Partnership’s overall performance will be held to account through measures agreed in their delivery plans. The Government will work with Local Enterprise Partnerships to ensure that they have these plans in place by April 2019.
In addition, Government will commission an annual economic outlook to measure and publish economic performance across all Local Enterprise Partnerships and benchmark performance of individual Local Enterprise Partnerships. In the light of HotSW aim of a 4% annual growth rate and record-breaking productivity growth, starting this year, this might prove to be an interesting exercise.
Other points on topics such as increasing diversity of board members are covered in the previous Watch blog:
The House of Commons Communities and Local Government Committee inquiry into Effectiveness of local authority overview and scrutiny committees was also investigating LEPs and made this recommendation in December 2017 [East Devon Alliance submitted evidence to this inquiry as well]:
“The Government to make clear how LEPs are to have democratic, and publicly visible, oversight. We recommend that upper tier councils, and combined authorities where appropriate, should be able to monitor the performance and effectiveness of LEPs through their scrutiny committees. In line with other public bodies, scrutiny committees should be able to require LEPs to provide information and attend committee meetings as required.”
If, as it seems is essential after Brexit, we have to grow more of our own food to make us more self-sufficient, how do we do it if more and more high-grade agricultural land is being gobbled up for housing, while developers ignore brownfield sites?
In World War 2 everyone was encouraged to “grow your own”. But how do you do that with a tiny patio or no patio at all and no extra allotments?
For many years we have relied on food imports to cover shortages. Do we really want bleach-washed American chicken on the dinner tables of our tiny new homes built on agricultural land?
Oops, sorry, no space for a dining table – on our knees in front of the TV in our tiny new homes!