Who Really Runs This Place?
A short report on
the Big 4 accountancy firms
and their ties to government

June 2013

Summary
The four global accountancy firms – PWC, KPMG, Deloitte and Ernst & Young, also known as the
Big 4 – have captured the British government.
They are embedded in it, earning hundreds of millions of pounds a year in government business,
loaning their staff to government departments and the political parties, advising on everything from
tax law to privatisation programmes.
At the same time, the Big 4 are central to the tax avoidance industry. They earn tens of billions from
their tax advice to the world’s biggest corporations. Much of this is aimed at helping companies
legally avoid paying vast sums of tax, euphemistically called ‘tax planning’.
The British government says it is committed to tackling tax avoidance. But, how serious is it when
it has such a close working relationship with the Big 4?
David Cameron has put the issue of corporate tax avoidance at the centre of this month’s G8
meeting, which the UK is hosting. He recently called on Britain’s tax havens – islands such as
Bermuda and Jersey – to do more to fight aggressive tax avoidance. But he also urgently needs to
look at those driving tax avoidance much closer to home: the Big 4.
These four accountancy firms are global giants. Together, they check the books of nearly all blue
chip companies in the world. In 2011 they had a combined global revenue of $110 billion. i Their
reach is international, having offices in hundreds of cities, including over 80 offices in tax havens.
The Big 4 have been described as being ‘more powerful than government’.ii But the relationship is
symbiotic. A mutual dependency exists between the firms and the UK government. Their shared
agenda, however, is often at odds with the public interest.
This short report looks at some of the relationships between the Big 4 accountancy firms and the
UK government. It examines some of their lobbying activity: on their own behalf to block muchneeded reforms of the industry that they dominate; at some of the lobbying they have undertaken to
protect the tax avoidance industry; and at their role as lobbyists-for-hire.
It aims to give an insight into the reach of the Big 4 inside government and the range of their
lobbying activities. It demands that we take a closer look at their influence within our government.

ISBN Number: 978-0-9570274-3-5

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The ‘driving force’ behind tax avoidance…
The Big 4 are at the epicenter of the tax avoidance industry. They have been called the ‘driving
force’ behind the creation of complex corporate structures, tax avoidance schemes and the many
creative ways of complying with tax laws. They stand accused of manufacturing tax avoiding
schemes ‘on an industrial scale’.iii ‘Literally, international tax avoidance could not happen without
the active involvement consent and support of the Big 4 firms,’ says tax justice campaigner,
Richard Murphy. ‘Without them it would not be possible.’iv
The four firms earn £2 billion from their tax work in
the UK, and around $25 billion globally. Much of
this advice is aimed at minimising the tax that
wealthy individuals or corporations pay. In 2005, a
government study concluded that the Big 4 made
around £1 billion a year from commercial ‘tax
planning’ and ‘artificial avoidance schemes’.v

‘Literally, international tax
avoidance could not happen
without the active involvement
consent and support of the Big 4.’
Richard Murphy, tax justice campaigner

… helping to shape Britain’s tax laws
At the same time as selling advice to multinationals and wealthy individuals on how to cut the tax
they pay to the Exchequer, the Big 4 are big contractors to the British state. They provide advice
and services across government on a range of issues, including helping to write Britain’s tax laws.
Employees of the Big 4 are regularly invited into government to help shape tax policy. In April
2013, an influential committee of MPs discovered that the very same people from the Big 4 that
were helping to write tax policy were then returning to their firms and using their insider knowledge
to advise their corporate clients on how to use those same laws to avoid tax. It was a case of
‘poacher, turned gamekeeper, turned poacher again,’ said the MPs.vi
The committee highlighted the case of a KPMG employee on loan to the Treasury who was
advising the Government on the development of tax policies, including something called the ‘Patent
Box’ rules. KPMG then produced marketing brochures on the Patent Box, advising clients how to
make ‘more economic use’ of their tax losses via the scheme. KPMG was criticised by the
committee for presenting clients with a business opportunity to avoid tax, via a scheme they had
acting as technical advisors on.vii
The MPs expressed concern that the close relationship that the four firms enjoy with government
creates a perception, at least, that they ‘wield undue influence on the tax system which they use to
their advantage’. viii
The Big 4 are quick to defend their role in shaping Britain’s tax laws. They insist that their
involvement is limited to providing ‘technical insight’ into proposed polices. Deloitte’s head of tax
policy, Bill Dodwell, for example, says that its people ‘have never driven any policy initiative’. ix
All four firms are adamant that they do not write legislation or make policy decisions. That is a
matter for government, they claim.x
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However, they are clearly capable of influencing tax laws, as evidenced by the fact that some of
them specifically offer it as a service to clients! Ernst & Young, for example, has a team that is
committed to lobbying for tax breaks for clients.

Lobbying for tax breaks
Ernst & Young’s Tax Policy Development team
‘works with clients to develop proposals for
changes in tax policy that can be taken to
government’. In other words, it lobbies for tax
breaks for clients. This is in addition to ‘finding
solutions within the existing tax system’. Its
website cites cases where Ernst & Young has
successfully lobbied for tax breaks in the past.xi

‘In an era where the government is
focusing on… tax avoidance,
and where there has been
considerable media coverage on
particular 'tax avoiders',
policy development [aka lobbying]
offers a low risk alternative.’
Ernst & Young

‘Unlike a traditional lobbying service,’ the pitch reads, Ernst & Young’s team will work with its
clients to develop ‘technical policy options in a form that is used inside Government today’. Put
simply, this means it uses its knowledge of the workings of government to lobby for clients. This, it
says, means that tax changes can be ‘implemented with the minimum of delay’, and makes sure that
‘the concerns of policy-makers are addressed’. This gives proposed tax breaks ‘the maximum
chance of adoption’. In this respect, the insider status of
E&Y is clearly of benefit to its clients.
Should auditors also lobby?

The advantages to clients of lobbying for tax policy
changes – as opposed to tax planning – are clearly
explained in Ernst & Young’s pitch: ‘In an era where
the government is focusing on actively identifying and
countering tax avoidance, and where there has been
considerable media coverage on particular 'tax
avoiders', policy development offers a low risk
alternative.’ In other words, ‘policy development’ – or
lobbying – offers its corporate clients a less risky way
to reduce their tax bill.
Ernst & Young’s lobbying team is led by its global head
of tax policy, Chris Sanger. Also in the team, until late
2012, was Vincent Oratore, a partner at the firm. Both
Sanger and Oratore are advisers to the government. In
July 2010, just weeks after the Coalition was formed,
they were appointed to HM Treasury’s newly created
Tax Professionals Forum, which is looking at ways to
reform how the government develops tax policy.xii
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Some of the Big 4 have come under scrutiny
in the US for their lobbying.
In January 2013, it was reported that
US authorities were investigating whether
Ernst & Young violated auditor rules by
letting its lobbying unit perform work for
several major audit clients.
Accountants are supposed to be
impartial when they review a client’s books.
If they are also lobbying for them, the
danger is that they may be too cozy with the
management of an audit client. Auditors are
watchdogs for investors and should not be
promoting management's interests.
In the U.S. rules on auditor
independence include a bar on auditors
serving in an ‘advocacy role’ for audit
clients. The UK's auditing regulator, the
Financial Reporting Council (FRC), has not
specifically barred auditing firms from
lobbying for audit clients.

So, while the two Ernst & Young tax specialists are advising the government on more businessfriendly ways to develop tax laws, they are at the same time part of a team that is paid to lobby for
changes to the tax system for particular private interests.
Ernst & Young is not the only firm to offer lobbying services. Deloitte says that it lobbies for clients on
‘a small number of occasions’.xiii For example, the firm says it has occasionally helped a specific client
with ‘drafting a viewpoint’ with which they can lobby government. However, Deloitte’s head of tax
policy, Bill Dodwell, has previously said that the firm is ‘more engaged than ever before in policy
debates with the Treasury and with HMRC’, although it is not known if this is on behalf of clients.xiv
KPMG says it does not engage in third party lobbying for clients.xv PWC did not say directly
whether it lobbies for third parties in the UK. In a statement, it said: ‘We engage with politicians,
government officials and regulators both inside and outside the UK.’xvi However, PWC does act as
lobbyists-for-hire in the US, albeit on a smaller scale today since audit firms came under greater
scrutiny for their advocacy work.
Lobbying against efforts to tackle tax avoidance
In the US, PWC have been paid to lobby for the Business Roundtable and Financial Executives
International, as well as other lobby groups.xvii The Business Roundtable is a formidable player,
made up of the CEOs of 150 of the largest corporations operating in America, which pushes for
lower corporate tax rates.xviii In 2012 it spent nearly $14 million lobbying Washington, with
$600,000 going to PWC to lobby on its behalf.xix
Who are the Big 4 lobbying?
Financial Executives is dedicated to ‘advancing the
success of senior-level financial executives’. It pays
PWC $20,000 a quarter to further its interests in
The UK government has pledged to introduce
transparency rules for lobbyists.
Washington.
Thanks to lobbying disclosure laws in the US, we know
that PWC has been lobbying Washington for these
groups on international tax, tax reform and tax
accounting issues.
In June 2013, just ahead of the G8 meeting, the Business
Roundtable and Financial Executives were among a
handful of business lobby groups that wrote to President
Obama expressing their concern about the possibility that
G8 leaders might decide on steps to rein in aggressive tax
avoidance by companies. They warned that ‘recent tax
initiatives in a number of foreign countries’ appear to be
targeting US multinationals ‘in the guise of combating
tax avoidance’.xx

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However, its current plans, which
are due to be fast-tracked through
Parliament before the summer, are set to
cover only a fraction of the lobbying
industry: lobbying agencies.
It is not clear whether the
regulations would include lobbying by the
Big 4, some of whom lobby on behalf of
third party clients.
When a similar, limited register was
introduced in Australia, it was reported that
the accountancy giants become ‘seriously
powerful in Canberra’. The rise was
attributed to ‘traditional lobbyists being
sidelined following the introduction of rules
that require lobbying agencies to disclose
their clients.’
The minister overseeing the register
of lobbyists in the UK is Chloe Smith,
formerly of Deloitte.

The UK does not yet have a robust register of lobbyists, and so it is not known precisely who is
lobbying our government to resist efforts to reform the tax system. It is safe to assume, however,
that the lobbying is intense and coming from many quarters, including the Big 4.
In May 2013, for example, Ernst & Young’s lobbyists John Dixon and Chris Sanger, held a high-level
lobbying meeting in Downing Street, during which they urged the prime minister not to back calls for
tax reform. Dixon acknowledged, though, that calls for companies to pay up was an issue that was not
going to go away: ‘It is receiving a huge amount of interest at the highest level of our society,’ he
said.xxi
This is the problem for the Big 4 and their corporate, tax avoiding clients. Politicians have tuned
into public anger about those large corporations who are seen to avoid their responsibilities to
society, such as Google, Amazon and Starbucks. When budgets are being cut and public services
slashed, those who do not pay into the system, but are happy to profit from it, are rightly coming
under the spotlight. This includes those that sell corporations strategies for avoiding tax. The UK is
estimated to be losing around £100 billion of tax revenues each year and a large part of this is due to
the activities of the Big 4 accountancy firms.
However, this does not mean that government will choose to stand up for the public interest over the
private interests of the Big 4. Do not forget that these four firms played a significant role in the financial
crisis of 2008, which has had such a devastating effect on the finances of so many countries. But, when
proposals were put forward in Brussels to challenge the power of the Big 4, and to create a safer, more
robust financial system, the British government appears to have sided with the accountancy giants.

Lobbying against reform of their industry
‘Auditors serve the public interest’, claims Ernst &
Young.xxii In the context of the 2008 financial crisis, they
failed to do that.
Auditors have a special job at the heart of the world’s
economy. They are supposed to be the system’s
watchdogs, there to warn of impending trouble, checking
the health or risk of companies, and entrusted to give an
opinion on the truth and fairness of the financial statements
of the companies they audit.
In the event, the accountancy firms gave their banking
clients a clean bill of health right up until the point that
some of them keeled over and their failure threatened to
bring down the entire financial system.xxiii

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Too cosy?
The Big 4 have been accused of
‘considerable shortcomings’ in their auditing
of the banks.
KPMG, for example, is facing a
potential investigation over the audit work
that gave HBOS a clean bill of health in the
run-up to its collapse.
The City's regulator, the Financial
Reporting Council is considering an
investigation into their role. However, the
new head of the regulator is the former head
of KPMG, John Griffith-Jones, prompting
one commentator to note: ‘It cannot be right
that the chairman of the new FCA has any
link with the second-largest UK banking
collapse in history.’
Griffith-Jones was appointed to his
job as regulator by then Treasury minister
Mark Hoban, formerly of PwC.

The accountancy giants have been officially hauled up for ‘grave defects’ in their auditing of banks.
A House of Lords committee concluded that either they were culpably unaware of storm ahead, or
they culpably failed to warn anyone of the impending danger.xxiv
Part of the problem lies in the long and close relationships between banks and their auditors. PWC,
for example, has been doing Barclays’ books – earning tens of millions for itself each year – since
the 19th century. Finally, after a 117 year stretch, Barclays proposed that it might consider changing
auditors.xxv
What is of concern is, again, this issue of auditor independence. Are the auditors sufficiently
independent of the management of companies they are charged with vetting? Do such lengthy
tenures put at risk the objectivity and independence of the audit? There are also concerns around
conflicts of interests, with the accountancy giants earning significant fees from consultancy work,
and the firms’ auditors often acting as salespeople for their other, more lucrative consulting
services. When auditors are working for management in another capacity, and earning large sums
on the back of it, are they able to audit in a truly
detached and critical way?
How much spent fighting reform?
In 2010 these and other problems inherent in the
auditing industry were deemed sufficiently serious that
officials in Brussels thought to make some changes.
They proposed new rules aimed in particular at
strengthening the independence of auditors, making
accountants more sceptical of what clients tell them, as
well as challenging the monopoly of the Big 4.xxvi
Central to their proposals was the compulsory rotation
of auditors, with firms being permitted to audit a
company for no more than six years (with a few
exceptions). They also wanted to see audit firms
prohibited from providing non-audit services to their
audit clients, to avoid the risks from conflicts of interest
and prevent firms from getting too cosy with
management. And they wanted a new regulator to
oversee the industry. It is safe to say their proposals did
not go down well. The new rules were described by one
insider as ‘striking at the heart’ of the Big 4.xxvii

The Big 4 have been lobbying against
reform of their industry in the US , as well as
the UK and Brussels.
Ernst & Young, for example,
counselled companies that they needed to
keep a close eye on developments in
Washington and lobby officials.
The firm spent $2.2 million lobbying
Washington in 2011. The total lobbying
spend for the Big 4 was nearly $10million.
This is more than any other year since
2002, which saw Enron and its auditor
Arthur Andersen mired in scandal.
The lack of transparency in lobbying
in the UK means that we don’t know how
much has been spent lobbying the British
government to persuade them to resist
reform of the audit market.

The Big 4 fought hard to derail the plans, their lobbying being described as ‘fierce’ and ‘excessive’
by one EU official.xxviii It was ‘worse’ even than the lobbying by the banks, previously seen as the
benchmark on pummelling policy-makers in efforts to retain the pre-crisis status quo.
Ernst & Young went in hard, lobbying on its own and marshalling others to petition officials. One
of its lobbying vehicles is the European Audit Committee Leadership Network, xxix a select group of
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audit committee chairs from leading European companies, brought together and kept informed by
Ernst & Young.xxx They repeatedly targeted the man behind the proposals, European commissioner
Michel Barnier.xxxi
Ernst & Young also appealed to companies and investors to mobilise their national governments to
lobby against what they saw as some of the ‘more extreme proposals’.xxxii Whether or not urged on
by auditors, Win Bischoff, chair of Lloyds bank and head of the advisory group of London’s
financial services lobby group TheCityUK wrote to the minister Mark Hoban (formerly of PWC) in
September 2011 to petition him to oppose the proposals. A ‘strong majority’ of the group’s advisory
body, on which all four of the accountancy giants sit,
were concerned, he wrote.xxxiii
The Big 4 have ‘organised
meaningful reforms of their
Bischoff warned that the proposals would increase
industry off the political agenda’.
costs and may also put audit quality at risk. This from
Prem Sikka, Professor of Accounting
a man who chairs a bank that went on to rack up
£25billion in losses, thanks in part to bad loans made
by the bank it saved, HBOS, which auditors KPMG failed to spot.xxxiv
Bischoff, however, called the plans ‘inappropriate’ and warned of the impact they would have on
the UK’s global financial services sector and the industry’s growth. ‘I hope government is actively
engaged in resisting these proposals,’ he wrote, urging the British government to ‘reach out’ to
other EU countries to join the opposition.xxxv The UK’s chancellor George Osborne and Business
Secretary Vince Cable were both copied in. UK officials were indeed busy lobbying to kill the
plans, Vince Cable’s department describing them as ‘damaging to growth’.xxxvi
Other business organisations waded in, including the Hundred Group of Finance Directors, which is
administered by KPMG, and has been described as ‘the most influential organisation that you’ve
never heard of’. In a letter to Catherine Ashton, the EU’s first High Representative of the Union for
Foreign Affairs, the Hundred Group dismissed the proposals as ‘radical’, ‘untested’ and warned of
‘profound implications’ for the way audits are conducted, ‘none of which are likely to be
positive’.xxxvii
The widespread negative campaign by the Big 4 and others, including the British government,
appears to have paid off. In April an influential European Parliament Committee watered down the
proposals on mandatory rotation of auditors.xxxviii Reform in Britain, unsurprisingly has also been
disappointing. A long-awaited report by the Competition Commission on the UK auditing market
has been described as having ‘little positive impact’ on the auditing market. The Big 4 have
‘organised meaningful reforms of their industry off the political agenda’, says Professor of
Accounting Prem Sikka.xxxix
The UK government’s support for the accountancy giants is best understood in the context of the
much wider and collusive relationship that exists across government. The Financial Times has
written of the ‘symbiotic relationship’ between government and the Big 4. xl Others have gone
8

further, Labour MP Austin Mitchell describing the accountancy firms as being ‘more powerful than
government’.xli
Who actually runs this place?
The Big 4 are embedded across Government and the political parties. First, they act as consultants
to the government, and not just on tax matters. As in the private sector, the accountancy firms have
learnt the value of offering a range of services to government, across numerous departments.
Collectively, the Big 4 earned nearly £500million a year from government business. xlii Take PwC,
the biggest of the four: it has recently won vast numbers of contracts with central Whitehall
departments including: HM Treasury; HMRC; Cabinet Office; Ministry of Defence; Ministry of
Justice; Department for Business; Work and Pensions; International Development; Environment;
Transport; Communities and Local Government; Health; and Education. And that is just one firm.
PWC says its work with government is focused on ‘looking for answers on how to increase
efficiencies while improving quality and outcomes’.xliii PwC also claims to have ‘acted on more
privatisations than any other financial adviser’.xliv But they do more than simply advise government.
The Big 4 also seek to cash in on changes to policy.
Take changes to the education system and the move to convert schools to independently-run
academies. PWC has been supporting the government on its academies programme. At the same
time it has been developing a service to sell to groups of academies to provide back office functions
– what it calls a ‘schools solution for sharing’xlv – which
unlike public sector ‘sharing solutions’, would be
Profiting from privatisation?
provided on a for-profit basis.
It is a similar picture at the Department of Health. PWC
holds a number of contracts with the department, while at
the same time taking advantage of the latest, controversial
NHS changes. Today, it earns hundreds of thousands
advising new commissioning groups introduced under the
recent reforms.
PWC is currently investing heavily in its fast-growing
healthcare practice. The firm has just appointed former
Health Secretary Alan Milburn, one of the biggest
cheerleaders for NHS privatisation, to head up its new
board that will oversee the health sector business. The
board already advises the firm’s public health, private
health and pharmaceutical clients.xlvi
Potential conflicts of interest exist in other areas of
government policy. The Bureau of Investigative
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KPMG is one of the firms to have done well
out of its close relationship with the
Department of Health.
Mark Britnell, former head of
commissioning in the Department – in
charge of the system that determines how
the NHS spends its £100bn budget – left in
2009 to join KPMG. Britnell hit the headlines
last year for saying that the NHS will be
‘shown no mercy’ by this government.
Britnell’s responsibilities then
passed to his colleague Gary Belfield, who
stayed in post less than a year before
himself moving to KPMG.
Not long after, KPMG was awarded
one of the first private sector contracts
under the reformed commissioning system,
reforms overseen by both men.

Journalists reported that George Osborne received support from Deloitte in the form of ‘services
and advice provided in connection with the Eggar report’. This report informed the Tories’ 2010
energy paper, in which they promised, if elected, to reform taxes affecting offshore oil and gas
companies. However, as well as providing tax expertise, Deloitte also has ‘clients across the oil and
gas sector’ who would have benefited from the paper’s proposed changes to taxation.xlvii
The Big 4 have also benefited significantly from policies such as the Private Finance Initiative,
earning money from advising government, advising the companies bidding for the contracts and
then auditing the bids.xlviii PFI is a cash cow that keeps on giving to the Big 4, even when things go
wrong. When the South London Healthcare Trust was recently declared bankrupt, PwC was paid
nearly half a million pounds for advice on how the Trust could survive its financial crisis, which
was in part caused by PFI debts.xlix The Treasury’s Private Finance Initiative unit has been run by a
partner of PWC.
From just a handful of examples, it is clear is that there is a shared agenda between elements of
government and the Big 4 accountancy firms. And, as night follows day, we are also seeing a great deal
of sharing of personnel, with people flitting between the two, through a well-oiled revolving door.
A shared agenda
As well as Alan Milburn, the former Labour Health Minister recently employed by PWC to advise
on changes to the NHS,l a further five ex-government ministers have taken jobs with the Big 4 in
recent years, including two former Home Secretaries, Charles Clarke and Jacquie Smith who moved
to KPMG. li
Mark Britnell, formerly of the Department of Health, is one of a dozen government officials to have
also jumped ship to the Big 4.lii Those to make the move also include Paul Kirby, ex-Number 10
Policy Unit, to KPMG and Neil Sherlock, the former advisor to Nick Clegg to PWC. liii Perhaps the
most notorious, however, is Dave Hartnett, the UK’s chief tax collector at HMRC who recently
announced his move to Deloitte.
Hartnett’s reputation had already taken a battering for striking a ‘sweetheart deal’ with Goldman
Sachs, letting them off a £10m interest bill.liv He was also holder of the dubious title of ‘the most
wined and dined mandarin in Whitehall.’ In the course of just a couple of years his diary included
27 occasions when he dined with representatives of the Big 4.lv
The revolving door works the other way too. The list of people to move from the Big 4 into
government positions is long, and includes: PwC tax partner John Whiting appointed to lead the
Office of Tax Simplification, where he works alongside Caroline Turnbull-Hall, another PwC tax
manager; and Chris Tailby, formerly a tax partner at PWC was, until recently, Head of AntiAvoidance at HMRC.
The Big 4 also regularly loan – or second – people to government departments, including their tax
experts to the Treasury.
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Giving evidence to the Public Accounts Committee, PwC said it has sent two people from its tax
department to HMRC and six to other government departments.lvi KPMG said it has sent two tax
experts to the taxman and two to the Treasury, while the firm says it ‘typically’ has six working
with other government departments at any one time. According to Ernst & Young it only has a very
small number of people on secondment.lvii
However, according to information gained from government departments from Freedom of
Information requests, at least 50 people have been seconded to Government from the Big 4 in the
last three years.
At the Treasury: Deloitte seconded two employees to the Business and International Tax division,
another to work as a policy analyst, and it continues to have a policy advisor to the Office of Tax
Simplification. For six months, Ernst & Young had an employee policy analyst working on
gambling duty in the Treasury. Since April 2012 the company has also seconded a project manager
working on the ‘mobile wallet’ initiative promoted by mobile companies such as Vodafone and
O2.lviii KPMG, meanwhile, seconded a senior policy advisor to the Corporate Taxers Team; a
commercial advisor to the Enterprise and Growth division, and an advisor to the Performance and
Reform Unit. PWC also seconded two senior policy
advisors to the Performance and Reform Unit and one to
At least 50 people have been
the Public Services and Growth team.lix In 2011-12
seconded to Government in the last
alone, a total of 15 people were on loan to the Treasury
three years from the Big 4.
from accountancy firms.
The Big 4’s people are not just inside the Treasury though. At the Cabinet Office, there have been
fifteen secondments from the Big 4 since January 2010, with Ernst & Young responsible for the
lion’s share with seven, followed by PWC with five and Deloitte with three. We have no idea what
they are doing there as the Cabinet Office says it does not hold a central record of their job
descriptions or titles.lx
At the Department for Business there have been ten secondments in the three years to now, with
four from PWC, and two each from the other three firms. All but one of these positions were part
funded by the government.lxi At the Department for Transport, PWC seconded two employees,
KPMG one.lxii The Department for Education’s Corporate Finance Team has a PWC employee
working inside it.lxiii The Department of Health claims to have no central record of employers of
secondees.lxiv PWC, Ernst & Young have all had an employee inside the Bank of England in this
period, with Deloitte two. lxv
On top of their generosity to government, the Big 4 have donated £1.14 million of staff time and
consultancy work to political parties since the general election.lxvi The parties see this support as
crucial. When an inexperienced shadow minister and their team gets shifted to the Treasury, it is the
Big 4 that they turn to for advice. These experts will then tweak the tax system according to the
particular party’s priorities.

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The Big 4 are also inside Parliament. PWC provides consultancy services and background briefings
to the All-Party Parliamentary Group on Insurance and Financial Services. lxvii And they also seek to
influence government through their support for think tanks. The free-market think tank, Reform, for
example, whose deputy director Nick Seddon recently became an advisor to David Cameron, has
been funded by all the Big 4 firms. Reform is a strong advocate of privatisation policies.

How serious is the government about tackling tax avoidance?
From hiring ex-ministers, and civil servants to offering secondments to government, as well as inkind expertise for political parties, the Big 4 accountancy firms hold huge sway and influence.
Politicians and the machinery of government have become dependent on the Big 4. The
accountancy giants, in turn, need politicians who are onside, who will support policies that benefit
them and their clients.
On the eve of the G8 summit, David Cameron admitted that his thinking on tax avoidance had been
hugely influenced by the academic Paul Collier, from Oxford University.lxviii Collier, however, has
written that those companies at the heart of the tax avoidance and secrecy industry, such as the Big
4, should ‘hang their heads in shame’.lxix
If Cameron is serious about tackling the multi-billion pound tax avoidance industry, then he has to
break the relationship between government and the Big 4. He has to see the Big 4 as part of the
problem. If not, all his fine words on tackling tax avoidance will count for little.

12

References
i

David Ingram and Dena Aubin, ‘Insight: Big 4 auditors spend more than ever on U.S. lobbying’, Reuters, 13 March
2012; http://uk.reuters.com/article/2012/03/13/us-usa-accounting-big-idUSBRE82C0JQ20120313
ii
Maeve McClenaghan, How ‘big four’ get inside track by loaning staff to government, Bureau of Investigative
Journalism, 10 July 2012; http://www.thebureauinvestigates.com/2012/07/10/how-big-four-get-inside-track-by-loaningstaff-to-government/
iii
Austin Mitchell & Prem Sikka, The Pin-Stripe Mafia: How Accountancy Firms Destroy Societies, Association for
Accountancy & Business Affairs, 2011, p5; http://visar.csustan.edu/aaba/PINSTRIPEMAFIA.pdf
iv
Today Programme, Radio 4, 5 December 2012
v
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