Reciprocity and the £18 billion spending spree

A force for good and evil

Photo by Tom Parsons on Unsplash

I was reminded recently about the power of reciprocity after Matt Hancock (Health Secretary) was found guilty of unlawfully failing to publish details of high value coronavirus-related contracts which he’d issued for PPE when he was scrabbling around for a face mask. This has since snowballed revealing that many government contracts have been awarded to people and companies with links to the Conservative Party, backdated and issued without a tender process. In these unprecedented times, the pandemic has resulted in an £18 billion, private sector spending spree in less than a year.

Journalists, as you would expect, smelling blood, have jumped on this and are yelling ‘cronyism’ from the rooftops - Tories helping out their chums rather than someone better qualified. It’s the practice of partiality to friends. For completeness, partiality to family (go Donald) is called nepotism.

These are just words, very helpful when you’re trying to make a political point because they come gift wrapped with lots of negative connotations.

Reciprocity, on the other hand, is defined by The Cambridge Dictionary as,

Behaviour in which two people or groups of people give each other help and advantages.

This sounds more benign and not much use as a headline but it’s actually closer to the truth if you’re looking for the real forces at work. This was the same invisible power behind the success of my old business, CitNOW, which enabled car dealers to provide personal customer videos.

Human nature

It’s all down to human nature and a built-in desire everyone has to reciprocate. We don’t like being indebted to others. Culture, race, geography it really doesn’t matter, it’s there, in all of us. It is brilliantly described by Robert Cialdini in his best selling book, Influence - The Psychology of Persuasion.

We all remember the hilarious film, Airplane from the 1980’s and the Hare Krishna people giving flowers to unsuspecting passengers. This was of course, a parody of what plagued some US airports back then. People who received a flower donated significantly more than those who hadn’t, even though they really didn’t want a flower which was all too often dumped in the nearest bin afterwards.

Personal video advantage

CitNOW was able to harness this same power by offering more information when the customer wanted it most. Long before Covid, customers were no longer prepared to traipse around dealers forecourts, preferring instead to search online for their next car. Armed with a shortlist, they would then phone the dealer to fill in vital missing information. The two openers are usually, is the car still for sale and what’s your best price? The salesperson having answered questions would try and persuade the customer to come and take a closer look. The smart seller would also send a follow-up, unexpected personal video introducing themselves and a tour of the car being discussed. Under these circumstances most of us will watch the video. Left with the choice between two very similar cars, same colour, price and mileage (give or take), one with a personal video, one without, which are you more likely to purchase?

That is the power of reciprocity, the need to repay, however small, the unrequested gift or kindness received. To my knowledge, no one ever said they hated their video, some of which were shockingly poor.

Conservative policy

The Tories have been beating the drum on outsourcing to private companies for decades. There is nothing currently illegal about companies helping themselves by making donations to their favourite party, hoping to exact a commercial benefit later when public sector contracts roll out. These donations are delivered as unexpected gifts with no strings attached. Except, of course, they’re not. While they may not care to admit it, there is now an obligation on Conservative Party ministers like Hancock to reciprocate their ‘generous chums’.

Judging by the pay outs kindly identified by Byline Times and The Citizens, ministers take their obligations very seriously indeed.

Meller Designs is owned by David Meller, who has donated nearly £60,000 to the Conservative Party. Better known for health and beauty product supply on the high street, they picked up a contract for masks and hand sanitiser worth £163.5 million.

Medacs Healthcare was awarded a £350 million contract to provide laboratory staff to the UK’s testing operation. Medacs ownership leads back to a holding company and former Conservative Party deputy Chairman and billionaire Michael Ashcroft. He’s donated £5.9 million over the years. You remember him? He resigned from the House of Lords in 2015 due to controversy over his non-domiciled tax status.

There is a comprehensive list, I could go on but it’s depressingly similar.

Given the innocence of these companies the real question is why does UK politics entertain it? A system which encourages party contributions from private individuals and companies but does not prevent them acquiring high-value government contracts is wrong and should be made illegal.

Only today, The Good Law Project, who successfully sued the government and The Department of Health in particular, reveals that Johnson and co, despite assurances last month are still at it with 100 issued contracts still to be revealed. This on the same day that the same department offers NHS staff in England a 1% pay rise. Apparently it’s all they can afford.