Greasy Pole: Public Accounts Hodge Podge

If anyone had any doubts about the purpose and activities of those luminous, towering buildings in what was once London Docklands they can refer to the most assertive of them, announcing itself in enormous letters on high, as HSBC. This is the successor to what was named the Hong Kong and Shanghai Banking Corporation, founded in 1865 to spread out until it achieved its place as the second biggest bank in the world, reminding us of the power of the class who own it and fashion all its operations. But now the bank is under pressure to justify its record in matters such as the failure to pay legal taxes, the rewards to its upper management and a pervading policy of corruption. All of which has attracted the attention of the Public Accounts Committee (PAC) where they are assumed to be certain of their sources of information and of their intention to use what they know. Such as was ruthlessly imposed by its recent Chairman Margaret Hodge MP for Barking – who insists that she is not to be known as Chair.


HSBC was among the victims of the PAC, under suspicion of colluding in tax avoidance at their Swiss Branch, leading to the withdrawal of blocks of cash amassed through such activities as dealing in drugs, armaments and all that entailed. Shortly before grilling some of the bank’s top executives Hodge had set the scene by informing another witness who exasperated her with his evasions that ‘..honestly, I want to put a bomb under you guys’. So the prospects were not promising for HSBC’s Non-Executive Director Rona Fairhead, who assured the Committee that it did not follow from her salary of £513,000 a year that she would be expected to be aware of the tax offences, even though they were estimated to have reached some £135 million in the UK ‘…I can assure you we had no evidence of tax evasion’. But Hodge was unimpressed: ‘I think you knew. Either you colluded in tax evasion or you didn’t know. In that case you are either incredibly naïve or totally incompetent’. And then, in relation to one of Fairhead’s other lucrative responsibilities ‘…you should think about resigning and if not, I think the government should sack you’.


Who is this fearless, feisty champion of truth and probity in public office? Hodge is a multi-millionaire who was brought to England as a child when her family left Egypt to escape the anti-Semitism arising from the 1948 Egypt/Israeli War. Settled in London, they grew massively rich on the proceeds of their family-owned steel processing and trading company which now has a turnover reckoned in billions, and of which she is still a shareholder. After university Hodge worked in Market Research and in 1973 she was elected as a local councillor in the London Borough of Islington. She rose to Chair of the Housing Committee, something of a hot seat in a borough notorious for its housing problems. But she was well-connected; her Vice Chairman was Jack Straw and a neighbour was Tony Blair, whose wife Cherie was employed in the legal firm of Hodge’s husband. At that time the Social Democratic Party was growing, causing large scale desertions among Islington’s Labour Party – an opportunity for Hodge to take over as Leader of the Council. Islington was reputed to be a hot-bed of ‘loony lefties’ where they attempted to conceal attention from the chaos on the ground by flying a red flag from the roof of the Town Hall.


Hodge stepped down from the Council in October 1992. The more suspicious observers may have regarded this as an example of shrewd timing because it happened when a massive scandal about sexual abuse of children in Islington council care was about to be exposed. In 1985 Demetrious Panton had written to the council to complain about his treatment when he was in their care during the 1970s and the 1980s. The doubts and anxieties about this were aggravated by the council’s failure to reply to Panton until 1989, and then to inform him that while regretting his experience they did not admit to any fault on their part. But the matter did not die away because at that time Senior Social Worker Liz Davies and her manager were facing a succession of severely damaged youngsters who, apart from other problems such as homelessness and involvement in petty survival crime, were saying that they were regularly abused in private or council homes. ‘It was like a queue’ was how Davies described what she found at her office each morning; ‘There is a lot that I just can’t speak about’. Apparently, Hodge would not hear social workers’ pleas for additional resources: ‘She only cared about the budget’. Then some crucial publicity was threatened in October 1992 from the Evening Standard publishing the first of a series of reports on the abuse at the care homes, which Hodge chose to describe as ‘a sensationalist piece of gutter journalism’.


It was shortly after this that she left the council and, after a by-election in 1994, entered the House of Commons to support Tony Blair’s campaign for the Labour leadership. Her reward came in 2003 when she was appointed as Minister for Children. This was too much of a shock for even the most ardent of Blairites as it aroused the still festering anger about what had happened, and what had allegedly been suppressed, in Islington. For one thing an independent report by the Director of Oxford Social Services in 1995 had largely found that the original complaints had been valid and described the affairs of Islington council as ‘disastrous’. But Hodge fought back, writing to the chairman of the BBC in an attempt to stop a Radio Four programme about the abuses which she described as ‘deplorable sensationalism’ and to inform him that Panton was ‘an extremely disturbed person’. In all this she was going too far; she offered to apologise to Panton but he refused this as inadequate so that in the end she had to make a public apology in the High Court and to pay him £30,000. So it could be said that at least the Panton episode had reached some kind of conclusion 25 years after it had begun. And in June 2010 Hodge was made Chair of the PAC, in which job she has impressed a clutch of Members too easily blinded by her energetic concealment of cruel facts under her fog of self-promotion.


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