Ex-Welsh Labour comms boss denies he shut down business over ‘crony’ claims

Martin Shipton

A former Welsh Labour director of communications claims his decision to shut down a lucrative business had nothing to do with concerns that Labour MPs were using public money to pay his firm for work that should have been done by their own staff.

In June 2023 Nation.Cymru reported how Cathod Du Consultancy Ltd – a company wholly owned by Luke Holland, who as well as having run Welsh Labour’s publicity machine is a former member of Cardiff council’s cabinet – was at the centre of cronyism allegations.

Plaid Cymru’s then Arfon MP Hywel Williams called on the UK Parliament’s expenses regulator to halt all payments to public relations firms pending a review of procedures after it emerged that Cathod Du may have made more than £370k doing work for MPs.

Trusting

Mr Williams 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.”

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

Diligence

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.

“No work provided to elected members via IPSA payment is ever outside the parameters set down by IPSA themselves. General election campaigning work would clearly fall outside of these parameters. There has never been any IPSA payment for such work.

“The support our team provides covers a wide range of areas and platforms, from subtitled clips of speeches and parliamentary questions through to news releases and articles; graphics and social media for advice surgeries and community events through to Christmas card competitions and campaigns on local issues and awareness days.”

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

Jo Stevens

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.

An up-to-date briefing document about Cathod Du’s finances sent anonymously to Nation.Cymru states: “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: *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.

* The claim that there was no diversity of clients is demonstrably untrue, and self-evidently so. By way of brief illustration, Cathod Du’s clients included Mumsnet, IDP Connect, the Complete University Guide, Aker Offshore Wind, Unchecked UK, the Civil Service College, Index on Censorship, Be The Business, Oasis Cardiff, the Employers Initiative on Domestic Abuse, CAB Cymru, Learning & Work Cymru and Think Through Nutrition amongst others.”

Questions

Nation.Cymru sent further questions to Mr Holland:

* If all Parliamentary client work was legitimate, why did you serve notice to all MP clients and terminate these contracts?

* Why were these contracts ended at Cathod Du’s instigation, especially if the work complied with IPSA rules?

* Was the decision related to external scrutiny, such as IPSA’s review into PR companies?

* If the company was viable and had a diverse client base, why was the business or client book not sold as a going concern?

* Were any efforts made to sell the business or transition it to new management? If not, what was the rationale behind this decision?

* You stated that Cathod Du is now dormant. Why has the company not been formally registered as dormant with Companies House? Dormant status implies no trading activity; however, Cathod Du is still listed as actively trading.

* Why do the company’s accounts show a significant reduction in assets if it was operating successfully and had a diverse client base?

* Were Parliamentary clients the majority of Cathod Du’s income, as suggested by the accounts? If not, what percentage of the company’s revenue came from non-Parliamentary clients?

* If the company had a diverse client base, why did all remaining accounts close shortly after the two team members were elected to Parliament in June 2024?

* You assert there was no “collapse,” yet the dramatic drop in assets and closure of operations strongly suggest otherwise. How do you reconcile this contradiction?

* Can you provide evidence to support your claim of a diverse client base? Were these clients active in 2023 and 2024, or had many already ceased work with Cathod Du?

* If Parliamentary clients were not the primary source of income, why did the closure of these accounts have such a significant impact?

* If the company is now dormant, why is the website still live and operational?

* Why are the company’s IT and email systems still functioning if all accounts have been closed?

We put it to Mr Holland: “To ensure accuracy and address these questions comprehensively, we would appreciate if you could provide the following:

* Evidence of written notices served to all Parliamentary clients and the rationale for this decision.

* Financial statements for 2023 and 2024 to clarify income sources and operational viability.

* Correspondence with IPSA confirming the approval of all invoices.

* Documentation of contracts with non-Parliamentary clients to demonstrate a diverse client base.

* Records confirming the cessation of trading and steps taken to register the company as dormant.

* Explanation for why the website, IT systems, and email accounts are still operational if the company is truly dormant.

Mr Holland did not respond substantively to any of our follow-up questions.