Now growing Uber scandal engulfs another minister
They had been posed by Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, a trade union which represents the capital’s 24,000 traditional black cab drivers.
And they concerned a thorny topic: the Tory minister’s relationship with Californian-based internet firm Uber.
The controversial, tax-dodging Silicon Valley company — which runs a smartphone app that allows users to summon cheap minicabs — is a serious threat to the livelihoods of McNamara’s highly-trained and regulated members.
Uber launched in the UK in 2012. Its enormous financial muscle (investors subsidise annual losses of around £2 billion), clever tax arrangements (it pays no VAT and most UK earnings are funnelled to Bermuda via Holland), and cavalier approach to regulation and employment law allow it to dramatically undercut its old-fashioned rivals.
Many black cabbies, whose income has declined by around 25 per cent as a result, were — and still are — therefore being forced off the road.
The fact is that tens of thousands of Uber cars now operate in London and about 30 other UK cities and towns. They add to pollution, and make traffic congestion worse.
There are also growing concerns about passenger safety. At one point, complaints of rape and sexual assault against Uber drivers were made in London at a rate of roughly one every 11 days.
The Mail revealed last month that Cameron, Chancellor George Osborne and several other Cabinet ministers led by Downing Street aide Daniel Korski, lobbied Boris Johnson on behalf of Uber
Against this already troubling background, a series of extraordinary revelations in the Mail have in recent weeks thrown the firm to the centre of an extraordinary political scandal.
It dates back to late 2015, when, we have disclosed, senior figures in David Cameron’s government decided to secretly intervene to persuade the then Mayor of London, Boris Johnson, to abandon proposed new regulations that would curb Uber’s growth in the capital.
As the Mail originally revealed last month, Cameron, Chancellor George Osborne and several other Cabinet ministers, along with their publicly funded staff, led by a Downing Street aide called Daniel Korski, launched a campaign to aggressively lobby fellow Tory Johnson on behalf of the tax-dodging firm.
During this period, between September 2015 and January 2016, the Mayor was considering measures to curtail Uber’s growing dominance of the London taxi market.
Uber PR chief Rachel Whetstone, 49, one of David Cameron and George Osborne's closest friends, quit her role at the private hire company when the scandal reached a rolling boil
These included making cab drivers pass an English language test (many Uber drivers are foreign-born), capping the number of licences available, and requiring minicab firms to wait five minutes between accepting a booking and picking up a customer (Uber prides itself on fulfilling orders in an average of three).
But after intensive badgering by Cameron, Osborne and No 10 officials, plus several other loyal ministers, Johnson caved in, and dropped all significant new rules.
Uber’s revenues soared. Since at the time it employed Rachel Whetstone, one of PM’s and his Chancellor’s closest friends, as its most senior UK lobbyist, this affair seems to many in Whitehall to raise serious questions about cronyism and corruption.
Last week, as the scandal reached a rolling boil, Whetstone — who’d known Cameron for 25 years and was the godmother of his late son Ivan — announced she’d suddenly quit Uber.
Meanwhile, the Information Commissioner announced an investigation into suspicions — again revealed by the Mail — that No 10 officials had breached the Freedom of Information (FOI) Act, in an attempt to keep their lobbying of Johnson secret.
They are accused of deliberately hiding emails that showed how Korski had corresponded with the Mayor’s Transport for London quango about Uber. Deliberately destroying, hiding or altering requested information is a criminal offence under the FOI act.
We shall return to this matter later. But first, back to the Licensed Taxi Drivers’ Association. For it has unearthed evidence that it claims shows a very similar sort of FOI cover-up involving staff working for Sajid Javid, who (unlike Osborne and Cameron) remains a Cabinet Minister.
This example stretches back to April 2016, when cabbies heard two intriguing rumours concerning the involvement of the then Business Secretary, now Communities Secretary, in this secret, and ethically dubious, lobbying campaign.
One suggested Javid had helped organise a meeting in Westminster just before Christmas 2015, at which senior Tories ordered Boris Johnson to lay off Uber. Several other Cabinet ministers, special advisers and Downing Street staff were said to be present.
An email suggests Javid helped organise a meeting in Westminster just before Christmas 2015, when senior Tories told Boris Johnson to lay off Uber
The other rumour was that Javid’s staff at the Department for Business, Innovation and Skills had, in October 2015, lobbied their opposite numbers at the Competition and Markets Authority — a regulator charged with protecting the public from unfair monopolies — to ask Johnson to drop several proposed Uber regulations.
Their entreaties, it was claimed, helped persuade the Authority, in December 2015, to publish a statement saying it was ‘concerned’ the Mayor would ‘excessively and unnecessarily weaken competition’ if he cracked down on Uber.
To establish whether either story might be true, the cabbies’ union decided to use the Freedom of Information Act to find out what the Department for Business — known as BIS — had been up to.
Cameron's key confidante Oliver Letwin held extensive talks with Boris Johnson and the Transport Secretary
It wrote asking for ‘copies of email or written correspondence between ministers, special advisors and senior civil servants and other Government departments or public bodies’ relating to Transport for London’s regulations with regard minicabs for the period September to December 2015’.
On June 10, Javid’s department responded, in a letter on headed notepaper attributed to the Whitehall ‘regulatory delivery directorate’. Short and unequivocal, it declared that ‘following a search of our paper and electronic records, I have established that there are no records’ of the sort requested.
In other words, it appeared the department was claiming that neither Javid, nor any of his special advisers, nor any senior department civil servant had sent any email to any other ministry or public body concerning the proposed Uber regulations, during the period in question.
Remember: this reply was sent under the Freedom of Information Act, which requires Government officials to answer such questions truthfully. Breaking it can lead to criminal prosecution.
All of which now raises some troubling questions. For as a result of emails that were later disclosed by London’s City Hall after a separate FOI request, we now know that Javid was indeed present at a meeting held to discuss the proposed Uber regulations on December 16, 2015.
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It saw him, along with Transport Secretary Patrick McLoughlin and key Cameron confidante Oliver Letwin, hold extensive talks on the issue with Johnson himself.
Also there, according to a civil servant’s note of the proceedings, were ‘various Government officials and special advisers’ including Daniel Korski, the Downing Street fixer.
Senior figures in David Cameron’s government decided to secretly intervene to persuade the then Mayor of London, Boris Johnson, to abandon proposed new regulations that would curb Uber’s growth in the capital
The official purpose of the meeting, the civil servant’s email explained, was to discuss what it called the ‘consultation on the Private Hire Regulations Review’ — the exact topic McNamara’s FOI request asked for correspondence about. Given this fact, Javid’s department’s response that there was ‘no record’ seems — shall we say? — odd.
In theory, such a denial could only be supported if that key December 2015 meeting (involving several ministers, advisers and other officials, from across Whitehall and Downing Street) had been scheduled without any correspondence being sent to or by Javid, or any of his senior members of staff or civil servants.
Is it reasonable to believe, in an ever-more-connected world where even minor meetings are routinely arranged via email, that this was the case?
Is it also plausible that after this important meeting, no record, minutes of proceedings, or other note of its existence, or even any related correspondence can have been conveyed to or from anyone senior in Javid’s department?
Daniel Korski, the Downing Street fixer, was among ‘various Government officials and special advisers’ at the talks between the Transport Secretary Patrick McLoughlin and Johnson, according to a civil servant's notes
In response to questions from the Mail, Javid’s staff insist that they acted appropriately.
‘There are clear procedures in place when it comes to answering Freedom of Information requests and all of those were followed,’ they say. ‘Searches were undertaken to identify any correspondence within the scope of the request — these were carried out within Freedom of Information rules and no relevant information was identified.’
However, not everyone is convinced.
The taxi union has written to the Information Commissioner, which regulates FOI disclosures, asking for a formal investigation into whether the department’s claims were accurate. It’s also filed a complaint to the Parliamentary Standards Committee and the head of the Civil Service.
We shall see what becomes of them. But as the Mail revealed last week, the Information Commissioner has already begun at least one inquiry into a parallel incident involving Cameron’s No 10 team.
It centres on a response to another Freedom of Information request sent in March last year in which No 10 denied there were records of any exchanges about Uber with Boris Johnson’s City Hall officials.
In fact, No 10’s claim was later shown to be highly dubious.
For such correspondence, as the Mail reported, was separately found and released by Transport for London. This showed that Daniel Korski sent the organisation at least three emails and received four about Uber.
There are widespread calls for a full Parliamentary inquiry. Lib Dem leader Tim Farron says: 'It’s time a full investigation was undertaken into this cover-up at the heart of Government’
Not surprisingly, there is a growing furore about this suspected culture of cover-up — fuelled by the fact that Osborne, who was one of those lobbying for Uber to be spared stringent new rules in London, is now being paid £600,000 a year to work one day per week for BlackRock, a U.S. investment firm with a £500 million stake in Uber.
Indeed, there are widespread calls across Westminster for a full Parliamentary inquiry into the relationship between Uber and Cameron’s inner circle.
Lib Dem leader Tim Farron says: ‘There is a gathering amount of evidence that No 10 and ministers attempted to cover their tracks over how they have lobbied for Uber. It’s time a full investigation was undertaken into this cover-up at the heart of Government.’
Meanwhile, there is the second, parallel issue that the taxi union had heard whispers of: the question of whether Javid’s staff secretly urged the Competition and Markets Authority to criticise Boris Johnson’s proposed crackdown on Uber.
For while his ‘BIS’ department has formally insisted neither Javid, nor his advisers, nor any ‘senior civil servants’ contacted any other public body about Uber during the period in question, a separate FOI request — to the Competition and Markets Authority — appears to tell a different story. It reveals Authority staff discussed Uber with ‘BIS colleagues’ via email on multiple occasions. On October 5, 2015, for example, staff at the regulator were told that Javid’s department ‘wanted to know if we’re planning to respond to the Transport for London [TfL] consultation on Uber’.
Osborne, who was one of those lobbying for Uber to be spared stringent new rules in London, is now working one day per week for BlackRock, which has a £500m stake in Uber
Emails were then exchanged between officials at Javid’s department and the Competition and Markets Authority on October 12, 13 and 14, with the subject line ‘Tfl/Uber’. They mentioned that staff at the two organisations were scheduling phone conversations to discuss details of their respective positions on Uber.
On October 19, a member of the Authority’s staff even contacted one of his peers at the Department for Transport, apparently on the instructions of a BIS civil servant, saying: ‘I had a useful conversation with [name redacted] about BIS’s thinking on this matter and I thought it would be useful to speak to you as well.’
Finally, on October 27, an official at Javid’s BIS department exchanged emails with a colleague at the Authority saying his office would find it ‘very useful to know where CMA’s thinking is’ on Uber regulations and proposing a ‘quick call’ on the phone to discuss it.
It follows that multiple emails about the Uber affair were being sent from Javid’s department to the Competition and Markets Authority, a ‘public body’, during the period in question.
A stench now hangs over not only Cameron’s No 10 team, but a growing swathe of Whitehall. And, of course, a serving Cabinet Minister, Sajid Javid
So, why did Javid’s ministry suspect no such email existed?
Asked about this matter, a spokesman for Javid’s ministry claimed that those emails were not disclosed in the BIS department’s original FOI response because they failed to fall ‘in the scope’ of the request.
The spokesman argued that the FOI request that was refused had merely asked for correspondence about Uber from ‘senior civil servants’, and said that the civil servant who sent the emails from BIS to the CMA was not sufficiently important to be officially regarded as ‘senior’.
Is that a fair point, or weasel words? Sadly, we cannot be sure: the individual’s name has been redacted from the correspondence released under FOI.
However, what we do know is that after these emails were exchanged, the CMA took the unusual step of deciding to speak out forcefully against regulation of Uber.
Its eight-page statement opposing nine of Boris Johnson’s 25 proposals, published in December 2015, stunned many observers, who did not regard the issue of cab regulation in London as being something the Competition and Markets Authority ought to take an interest in.
After all, the public organisation, which is charged with protect consumers from the unfair power monopolies, had only days earlier been formally asked — again by the black cab lobby — to investigate whether loss-making Uber was using a predatory pricing structure.
A written complaint to the Competition and Markets Authority by taxi-drivers (seen by the Mail) claimed that tax-dodging Uber was charging artificially low fares in order to try to drive competitors out of existence and establish a monopoly which could be exploited in future.
In response to that complaint, the Authority said it would not investigate the matter because it was ‘unlikely to fit with the CMA’s current strategic priorities’.
So at one moment, the Competition and Markets Authority was claiming it wasn’t interested in an Uber issue.
The next moment, just days later, it was deciding to publish a lengthy document telling Boris Johnson in great detail why he ought to leave Uber alone. It gives the impression of being a strange, and sudden, volte face.
And there’s another intriguing piece of this complicated jig-saw. Alex Chisholm, a career civil servant who was the CMA’s chief executive at the time of this controversy, has since become permanent secretary in Sajid Javid’s BIS department.
And for its part, the Competition and Markets Authority vigorously denies that either Javid or anyone from the BIS department had any influence on its decision to oppose regulation of Uber, saying: ‘We did not respond to the consultation because of an “instruction” by Government.
‘We chose to respond as we believed it could reduce competition.’
Yet many MPs are increasingly concerned about this affair. Among them is Labour’s Wes Streeting, chair of the All-Party Parliamentary Group on Taxis, who has seen copies of emails between Javid’s department and the Competition and Markets Authority.
He says: ‘The Competition and Markets Authority is supposed to be independent of government and acting in the interests of customers. If, as it appears, senior figures in government have leant on the CMA in Uber’s favour, this is incredibly serious and demands an independent investigation.
‘Given that the Competition and Markets Authority told the taxi industry that an inquiry into Uber was “out of scope”, and then subsequently lobbied the Mayor of London in Uber’s favour, there is a foul stench of hypocrisy hanging over the whole affair.’
He’s right, of course. For that stench now hangs over not only Cameron’s No 10 team, but a growing swathe of Whitehall. And, of course, a serving Cabinet Minister, Sajid Javid.
So a full Parliamentary inquiry, into this ever smellier scandal, is surely the only way to clear the air.
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