Ex Labour official’s firm at centre of ‘cronyism’ concerns is still an active company

Martin Shipton

A former Welsh Labour official who was criticised by a political opponent over “cronyism” allegations involving a public relations company he set up has told Companies House he intends to keep the firm going.

Cathod Du Consulting, which is wholly owned by Luke Holland, an ex director of communications for Welsh Labour whose wife Louise Magee was the party’s general secretary, is thought to have been paid more than £370,000 out of public funds to do work for Labour MPs when the party was in opposition at Westminster.

Hywel Williams, the then Plaid Cymru MP for Arfon, told Nation.Cymru in 2023 that he had concerns about a number of firms that were getting work from MPs that should have been done by their own staff.

Review

Mr Williams called on the UK Parliament’s expenses regulator to halt all payments to public relations firms pending a review of procedures. He said at the time: “The Independent Parliamentary Standards Authority (IPSA) seems remarkably trusting of both Conservative and Labour MPs using public money to fund work by PR firms.

“They only require invoices which may provide no detail of work to be done. They do not check output.

“They take a ‘targeted and risk-based’ approach and follow up on complaints.

“This leaves the door wide open for potential misuse of public money for party political purposes and for political parties favouring particular contractors.

“IPSA should halt all payments until it has reviewed its procedures and has checked any cases which would allow for a suspicion of wrongdoing.”

Open Democracy

In February 2023 the media platform Open Democracy published an article that also raised concerns about a number of named PR companies, including Cathod Du.

At that time a spokesperson for Cathod Du told Open Democracy : “If IPSA rules or guidance were to change in any way, we would work to those with the same diligence that we work to current arrangements.

IPSA was invited to comment at the time, but did not do so.

Among the Labour MPs who had paid Cathod Du for PR work while in opposition were the current Secretary of State for Wales Jo Stevens and the current Secretary of State for Justice Shabana Mahmood.

A briefing document about Cathod Du’s finances sent anonymously to Nation.Cymru in November 2024 stated: “Cathod Du Consultancy Ltd’s latest financial statements reveal a significant downturn. Current assets have decreased from £46,523 in 2023 to £5,895 in 2024, with net current assets dropping from £17,120 to £1,000.

“The firm’s workforce has been reduced from an average of three employees in 2023 to one in 2024, highlighting the extent of its decline.

“The accounts suggest that the consultancy’s business model was heavily reliant on income from MPs.”

In a statement, Mr Holland said at the time: *Cathod Du was managed day-to-day by its UK-based team from April 2023.

* Work with all Parliamentary clients was ended at Cathod Du’s instigation more than a year ago. Notice was given to all Parliamentary clients in writing in September 2023, with all contracts ending in October 2023.

* All IPSA invoices for services provided were approved and paid in full. No invoices were rejected.

* The two remaining Cathod Du team members ran all remaining non-Parliamentary accounts for the period following.

* Both of these team members were successfully elected to Parliament at the July 2024 general election. [Gareth Snell became MP for Stoke-on-Trent Central and Ben Goldsborough became MP for South Norfolk].

* Following this, and the arrangements put in place prior to it, remaining client accounts were closed upon their election.

* Since that time, Cathod Du has had no active accounts.

* Company accounts were filed properly – as always – and the company is now dormant.”

Mr Holland went on to indicate that the company would remain dormant.

Companies House

However, it has now emerged that two days after emailing his comments to Nation.Cymru, Mr Holland sent a formal confirmation statement to Companies House which said: “The company confirms that its intended future activities are lawful.” The statement was received for filing in an electronic format on January 2 2025.

We sent further questions to Mr Holland, including:

* Can you clarify whether Cathod Du is actively trading, dormant, being dissolved, or being prepared for sale?

* If the company is no longer trading, why has it not been dissolved or registered as dormant with Companies House?

* If the company is being maintained despite no longer trading, what is the rationale behind this decision? Would this not represent poor practice, given your earlier statements about its dormancy?

* Are there any plans to sell the business or transfer its client book? If so, could you please provide details.

* If the company is genuinely dormant, why are the website, IT systems, and email accounts still operational?

We added: “These questions are raised to clarify the apparent discrepancies between your earlier statements and the recent confirmation statement filing. Maintaining an active company that is not trading or being wound up could raise compliance and transparency concerns.”

Mr Holland has not responded.