Some thoughts from the Editor on the appointment of Louise Haigh MP to Cabinet recently;
There is an argument that people should eb able to move on from convictions of course, but that is not an option for ordinary, non-MP people convicted of fraud. They cannot work at a senior level in regulated companies like insurance brands or banks. The FCA rules are quite clear on this point. There is a “Fit and Proper” test as regards senior hires or managers. You cannot get around that by starting your own claims company, underwriting firm or brokerage either, the FCA bans that ploy. This is to protect consumers from taking out insurance with companies run by, or employing people convicted of fraud or financial crimes.
In the Haigh case she did disclose this conviction to Starmer but when it was discovered by journalists, she was invited to resign by ex-PM Keir Starmer. You may say Starmer did that to distract people from his spectacles, football match tickets or suit sponsorship issues, I couldn’t possibly comment.
Now Haigh returns to Cabinet, as Chancellor of the Duchy of Lancaster, a vague role which is generally best described as someone who oversees the Cabinet, approves a few plum jobs and passes on gossip to the PM, or others, depending on their own political ambitions. Despite the lack of a government department budget this is a senior role and it opens the door for candidates across the UK insurance sector to take Tribunal or legal action against insurers, brokers or underwriters who might refuse a position, on the basis of a past fraud conviction.
THE FRAUD ITSELF IS A MINOR ISSUE
To summarise, Louise Haigh worked for Aviva before becoming an MP. She claimed she was mugged and a phone stolen, she received a new phone but the old one was re-activated and Aviva could see this data. She denied any wrongdoing of course, but was found guilty of fraud by misrepresentation at a magistrates court and given a conditional discharge.
The interesting thing about the case is that according to Haigh she was “poorly advised” by a solicitor to state “no comment” in a Police interview, and despite stating her innocence years later, actually offered a guilty plea in court to obtain a lighter sentence. Which many would say is good advice from a solicitor, since it avoids prison, or a more serious suspended sentence. Aviva and Haigh parted company after the incident and in the real world that would have been pretty much the end of the matter. But in the UK we supposedly have a democracy where those convicted of various offences are not supposed to be in senior positions, or remain an MP in certain cases.
The punchy MP for Frodsham had to resign, although he wasn’t initially keen. Another MP in the past Keith Vaz had to resign after his dealings with male sex workers came to light, plus some allegations of bullying. He wasn’t convicted of anything but he had to go. In short, it looked bad. There are lots more examples of course, politics is rotten now, arguably always has been since Lloyd George was caught holding peerage auctions for cash. The crux of the case is that Haigh has been welcomed back because plenty of Labour people actually think she did nothing wrong and it’s a snub to Starmer and his acolytes. The political gesture matters far more than the case itself, it’s about sticking two fingers up to the old regime and saying “you’re finished, it’s our turn now.”
MINOR FRAUD WON’T BAR YOU FROM RUNNING A LLOYD’S BROKERAGE IN FUTURE
The real consequences of decisions like Burnham’s appointment of Louise Haigh, and to a lesser extent the appointment of Angela Rayner MP, who still has questions to answer about taxes due and the money sources for her expensive property purchases, will be felt by the FCA and insurance firms in future. People who feel unfairly booted out of well, paid jobs in the past will come back and apply for senior roles, pointing out that convictions, especially those regarded as spent, should not affect their hiring chances.
They may be right. But insurance is a contract based on trust and once you open the door to people who have proved to be untrustworthy in certain ways in the past, then you risk the reputation of the entire brand. That’s why Louise Haigh didn’t go on to become head of claims at Aviva. Or join the FCA as a senior investigator of regulatory breaches.
Presumably all these jobs are now open to anyone with an old conviction from the early 2010s, because that is the precedent being set here by politicians – who as ever – perceive themselves to be exempt from the rules that apply to us “little people.” Tedious things like expenses having to be backed up by receipts, not getting a VIP hotline at HMRC, or accepting massive donations and having to declare them, are all annoyances to the political class who see themselves as being above the law. We even have a Mayor of Tower Hamlets convicted of electoral fraud who simply shrugs and says it means nothing, business as usual.
But these poor examples will encourage various claims at Tribunals and claims for damages against firms in the real world. Others will seek to re-write the rules at the FCA on senior hiring, to be “more inclusive.”
These cases also encourage policyholders to try their luck at various types of fraud, since they see others “getting away with it.”
That’s the knock-on effect from this steady erosion of standards in the public sector; in the end everyone decides that insurance fraud pays in the long run, just keep denying any wrongdoing. It’s fine, give it a try. If caught, you won’t go to jail, and you might even get another cushy job a few years later.
So expect more staged crash-for-cash events in Birmingham this summer, watch for a spike on smartphone claims in Canning Town, or a spate of mysterious suitcase thefts in Tenerife hotels over winter, with jewellery and watches all going missing. This is the endgame of embedded fraud becoming the norm in society and the abolition of consequences for wrongdoing. When everyone has a victim card to play insurers will pick up the tab, along with the UK taxpayer.
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