Friday, 2 October 2009


And so, two of my recent subjects suddenly combine in one news story.

The Spectator is suggesting that British Aerospace should not be prosecuted merely "because it operates in a trade that is oiled by tarts and overpriced champagne". It says:

The Czech Republic is a close ally and will object to the intimation that ministers were bought with a combination of 8 course dinners, the finest booze known to man and a procession of energetic escorts, exactly as the Saudis were.
The suggestion is that bribes (as such) were not in fact paid to officials in order to distort their decisions; BAe merely entertained a series of potential clients.

This brings to mind the recent fines imposed by the OFT on building firms who engaged in "cover pricing". Now, there may be more to this than has met my eye, but as reported much of this "cover pricing" merely consisted of hiking the quote for a job that they didn't want to do. Yes, sometimes the eventual winner paid the losers, which strongly implies anti-competitive behaviour of a serious nature, but this seems to have been a minority of cases.

So, the SFO says that corporate entertainment is corrupt, and the OFT says that you can't put in a high quote for work you don't want. I'd better wait for the prosecution, then; I do both routinely. If I want someone's work, then I'll try to get to know them. Lunch is a good excuse for a chat*. If I don't want the work, then I'll up the quote to a level at which it is irresistible if offered.

What, exactly, is wrong with either of these practices?

And then, at the end of the Spectator article, is the sting that proves the Attorney General must resign:
I hope that the Attorney General ignores the SFO’s overtures; in this context, slush funds are the equivalent of not paying the congestion charge.

*though I tend to pass on the "energetic escorts", I have to admit.


  1. This "cover pricing" business is new to me, and I know nothing about it. Hence I am a little puzzled.

    I would have thought that since one is innocent until proven guilty in English law, the OFT cannot fine a company just for putting in a high quote; they need to prove that money has actually changed hands between competing businesses.

    I would also have thought that, in the absence of convictions in a court of law, the answer to cover pricing is simply "caveat emptor" - or "Never accept a quote from a business that you don't trust." If a business is accused or suspected of this kind of practice, can't one just not ask them for a quote?

    Or am I being naive again?

  2. If you operate outside of the norms of behaviour or collude with your competitors, it all boils down to creating a false market which can be prosecuted in a variety of ways depending on when it occurred and what evidence is available. Check out the latest proposals from Europe to protect consumers. I think the precise meaning of consumer will require further judicial interpretation. I have always fancied being a damsel in distress. ;-)

  3. Measured - I quite agree. but quoting more for a job you don't want is normal, I thought. As is being nice to people who might give you work you do want.