Spartacus Blog

The Vassal State: How America Runs Britain

In his book, Vassal State: How America Runs Britain (2025), Angus Hanton, blames Margaret Thatcher privatization policies in the 1980s for the reason why the United States singled out the United Kingdom for economic capture. However, he points out this has been reiterated by every prime minister since she left power. Hanton is not only interested in how this happened but wants to explain the consequences of our politicians agreeing to become an American colony. (1)

As Cormac Kelly has pointed out: "The buying of UK businesses is encouraged by both the Labour and Conservative governments and in turn leads to an attack on workers, as was the case with the purchase by Kraft of Cadburys, which was subsequently followed by the closure of the UK factory. When a local company faces economic problems, capitalists launch an operation to buy them up and shut down sections they think they cannot make money out of." (2)

Hanton argues that the famous "Special Relationship" is less of a diplomatic partnership and more of a corporate takeover, where the UK has become a "vassal state" whose infrastructure, data, and wealth are increasingly owned and controlled by Wall Street and Silicon Valley. He quotes the US Department of State as saying: "The United Kingdom (UK) is a popular destination for foreign direct investment (FDI) and imposes few impediments to foreign ownership." It adds: "A Bilateral Tax Treaty specifically protects US and UK investors from double taxation." (3)

Supermarket Sales

Hanton looks at breakfast cereals that we assume are produced by British consumers. Ready Brek, Alpen and Weetabix that on the back of the packet that says; "by Appointment to HM the Queen". However, all three brands are owned by Post Holdings of Missouri. Kellogg's, who supply over a third of the UK cereal market, is based at Battle Creek, Michigan. Cheerios, Wheaties, Cocoa Puffs and Honey Monster Puffs are owned by General Mills of Golden Valley, Minnesota. (4)

Of course, consumers could always buy own-brand cereals, which are less expensive even if they do taste remarkably similar. That should not be surprising, because a bit more research reveals that they are often produced by the same American companies. For example, Post Holdings, based in Missouri, makes many of Tesco's and Asda's own-label brands. (5)

American owned brands dominate our supermarket shelves. Hanton explains that these companies are well aware of the power of sugar, salt and fat, and are adept at harnessing the consumer's addiction to these ingredients. In October 2022 the government attempted to stop large supermarkets strategically placing unhealthy items near checkouts to make a "suggestive sell" to queueing customers. Mike Tattersfield, chief executive of Krispy Kreme, the doughnut manufacturer based in Charlotte, North Carolina, was not concerned by this and commented that customers can easily be trained to look for doughnuts in different places. (6)

Hanton points out: "Arriving at the checkout you might notice that your shopping is being scanned by machines from NCR Voyix, formerly National Cash Register, of Atlanta, Georgia. You will almost certainly pay through an American company – Visa, Mastercard, American Express, Google Pay or Apple Pay. Even if you are that rare shopper still using cash taken from a "hole in the wall" or ATM, there is a two-thirds chance it came from a machine made by NCR."

Hanton goes on to look at how the sales of coffee in the high street is dominated by three US chains – Starbucks, Caffe Nero and Costa Coffee. "Together these chains have more than 4,500 branches, selling hundreds of millions of drinks each year. It fits the pattern of much American commerce in Britain in being a high-margin business. Through bulk-buying, the cost of the ingredients and a paper cup for our coffee has been driven down to about 30p, while the product sells for £3 or more." (7)

Hanton is also concerned by the American domination in online shopping. He points out that Seattle-based Amazon, whose sales now make up more than 30 per cent of all UK online commerce. "The US giants don't just build their own powerful market positions across the economy: they have become the controllers of the ‘platforms' and ‘pipes' through which everyone else's goods and services are delivered. Owning the route to market allows companies such as eBay or Taskrabbit, both based in the San Francisco Bay Area, to make chunky ‘toll charges' year after year. After we have placed our online order, we will expect speedy and reliable delivery, and very likely that will come from one of the US companies – FedEx, UPS or XPO – who together have more than 15,000 lorries and vans in the UK." (8)

American Multinationals

The economist Will Hutton points out that American owned companies such as Coca-Cola, Ford Motor Company, Uber, Deliveroo, Expedia, Netflix, Apple, Meta/Facebook, Google, Microsoft, Goldman Sachs, Morgan Stanley, BlackRock, etc. now dominate our everyday life. This is made worse by the fact that over the last 20 years there has been an acquisition of brilliant British technology companies by US corporations and private equity houses. "The path-breaking artificial intelligence company DeepMind, for example, is now owned by Google. Cyberspace pioneer Darktrace was recently bought by US private equity company Thoma Bravo and bio tech Abcam by Washington DC's Danaher – part of a $12.7bn spending spree on Cambridge University companies in 2024 alone." (9)

A significant factor in the American takeover of the UK is the role of private equity firms. These are investment management companies that pool capital from investors to acquire, restructure, or invest in private companies - or take public companies private - with the goal of selling them later for a significant profit. They therefore raise huge loans to buy UK companies that they move offshore so that they pay minimal tax, compared to what the purchased company paid. They then reduce workforces, lower wages and worsen working conditions. Seventeen of the top twenty private equity funds in the world are American. (10)

Hanton points out that roughly 25% of the UK's GDP is generated by a little over 1,200 American multinationals. Unlike other European nations that protect their home-grown industries, the UK has operated an "open-door" policy for decades, allowing US firms to buy up the "family silver" across almost every sector. "US corporations have more employees in the UK than the number they have in Germany, France, Italy, Portugal and Sweden combined. Measured by sales, the largest US companies sell more than $700 billion of goods and services to the UK, which amounts to over a quarter of the UK's total GDP. That total, from the latest IRS report, is 36 per cent greater than it was just four years previously. Considering how much of GDP is necessarily made up of labour costs and rental income, these numbers are eye-watering." (11)

Amazon

Amazon's annual UK profits rose from around £1 million in 2011 to £204 million in 2021. They have made arrangements to pay low corporation taxes. They made a profit of £12 billion in 2019 yet only paid £15 million in corporation tax. Amazon's net UK sales soared again: to more that £20 billion in 2020, yet they paid corporation tax in just £18 million. For the second year in a row, in 2022 Amazon paid no UK corporation tax. Instead, it received a £7.7 million tax credit. (12)

The reason for this is the government's "super-deduction" scheme for businesses that invest in infrastructure that was introduced by Rishi Sunak when he was chancellor. It allowed companies to offset 130% of investment spending on plant and machinery against profits for two years from April 2021.

Paul Monaghan, the chief executive of the Fair Tax Foundation, criticised Amazon for failing to disclose its total profits in the UK and the corporation tax paid on that despite calls for more transparency from tax justice campaigners and shareholders. He said: "Over the last decade, Amazon has grown its market domination across the globe on the back of income that is largely untaxed - allowing it to unfairly undercut local businesses that take a more responsible approach. We now have a situation where Amazon UK Services is not only not paying tax, but is being handed tax credits for investment that almost certainly would have happened anyway. Tax credits for old rope, if you will. These super-deductions have not only wiped out the corporation charge for the last two years but will likely do so again in 2023 and possibly 2024." (13)

Covid-19 was also great for American companies based in the UK. The pandemic created at least 40 new pharma billionaires, with two major US vaccine providers – Moderna of Cambridge, Massachusetts, and Pfizer of New York City – reportedly making $1,000 profit every second from their Covid-19 vaccines in 2021. The wealth of the world's billionaires increased more in the first 24 months of Covid-19 than in any two-year period over the previous 23 years. (14)

Boris Johnson, the prime minister at the time, credited the profit motive with helping to deliver Britain safely through the crisis by prompting the effective development and distribution of vaccines. Speaking to Conservative Party MPs on 23 March 2021, Johnson claimed: "The reason we have the vaccine success is because of capitalism, because of greed, my friends." (15)

In fact, it was British scientists working at the University of Oxford that were the first to announce a Covid-19 vaccine. In November 2020 they reported that analysis indicated its promise – with data showing it was 70.4% effective when combining data from two dosing regimens. Sarah Gilbert, professor of vaccinology at the University of Oxford, said the news took the world, "another step closer to the time when we can use vaccines to bring an end to the devastation caused by Sars-CoV-2." (16)

Angus Hanton argues: "British companies and innovators offered much to governments in the crisis, but they did not win the lion's share of pandemic revenues – not even in their home country… An analysis of Britain's government spending after six months showed that American companies were picking up over half of all Covid-19 contracting. In business terms, the country did not pull together to solve the crisis. On the contrary, the government often looked for help anywhere but at home."

Hanton goes on to give the details of these contracts: "In May 2020, Honeywell of Charlotte, North Carolina, won a deal to supply 70 million face masks. Hologic of Marlborough, Massachusetts, won a £150 million contract for testing kits, and another £68 million was given to Thermos Fisher of Waltham, Massachusetts. When the ‘test and trace' scheme required call centres, they were operated by Sitel of Miami, Florida. Testing kits were largely delivered by Amazon and ID checks were made by the consumer credit company Transunion, of Chicago, Illinois. Blake Bros, owned by Sysco of Texas, shared a £250 million untendered contract to deliver food boxes to vulnerable people who were isolating during the pandemic. The company also received a £600 million government loan at 0.5 per cent annual interest under the Covid Corporate Financing Facility (CCFF) – a particularly valuable benefit in light of the inflation that followed the crisis in Britain." (17)

Palantir Technologies

I want to look in detail about one of these America companies, Palantir Technologies. It was established by Peter Thiel in May 2003. He originally made his fortune by establishing PayPal with Elon Musk. Thiel stated that the idea for the company was based on the realization that "the approaches that PayPal had used to fight fraud could be extended into other contexts, like fighting terrorism". He also stated that, after the September 11 attacks, the debate in the United States was "will we have more security with less privacy or less security with more privacy?". (18)

Peter Thiel holds extreme right-wing views and is a passionate supporter of Donald Trump. He explained his political philosophy in an article entitled, The Education of a Libertarian: "I remain committed to the faith of my teenage years: to authentic human freedom as a precondition for the highest good. I stand against confiscatory taxes, totalitarian collectives, and the ideology of the inevitability of the death of every individual. For all these reasons, I still call myself ‘libertarian.' But I must confess that over the last two decades, I have changed radically on the question of how to achieve these goals. Most importantly, I no longer believe that freedom and democracy are compatible." (19)

An early investor in Palantir was the Central Intelligence Agency through its In-Q-Tel Venture Fund. The CIA is now one of its major customers, along with the National Security Agency, the Federal Bureau of Investigation, the United States Immigration and Customs Enforcement (ICE), along with other U.S. counterterrorism and military agencies. "Palantir has become the go-to company for mining massive data sets for intelligence and law enforcement applications, with a slick software interface and coders who parachute into clients' headquarters to customize its programs. Palantir turns messy swamps of information into intuitively visualized maps, histograms and link charts. Give its so-called ‘forward-deployed engineers' a few days to crawl, tag and integrate every scrap of a customer's data, and Palantir can elucidate problems as disparate as terrorism, disaster response and human trafficking." (20)

Palantir Technologies decided to move into the UK market. In 2015 Palantir met twice with Matt Hancock, then a junior Cabinet Office minister, who would go on to become health secretary overseeing the NHS pandemic response. "Not long after those meetings, Palantir won its first public UK government contract - with the Cabinet Office. Government transparency records indicate that Palantir employees met with UK ministers and senior officials almost 90 times over a 10-year period, a figure that seems likely to be an underestimate. (21)

Peter Thiel had a close relationship with Jeffrey Epstein. The pair exchanged over 2,000 messages from 2014 up until Epstein's final arrest in 2019. During this period, Epstein was a significant limited partner investor in Thiel's venture capital firm Valar Ventures – to the tune of approximately $40m. (22) Jeffrey Epstein introduced Peter Thiel to Peter Mandelson. In November 2010 Mandelson had established Global Counsel, a London-based lobbying firm. In 2018 Palantir hired Global Counsel to help procure UK Government contracts. (23)

In 2020 Palantir won a contract with the NHS to ensure critical medical equipment is available to the facilities most in need during the coronavirus outbreak. The contract was valued at more than £23.5 million. It announced that firms would create computer dashboard screens to show the spread of the virus and the healthcare system's ability to deal with it. These will draw on data gathered via 111 calls and Covid-19 test results. (24)

The awarding of this contract sparked a backlash, including a lawsuit from legal campaign group Foxglove which alleged the contract had been a stitch-up. "No to Palantir in Our NHS", a campaign backed by Foxglove and dozens of other advocacy groups, warned the public: "Palantir is a US tech and security corporation with a terrible track record. They help governments, intelligence agencies, and border forces to spy on innocent citizens and target minorities and the poor. We don't trust them with our health data, and we don't trust them to respect the values of our NHS." (25)

Palantir developed a good working relationship with the Conservative government. In 2022, Palantir recruited NHS England's former artificial intelligence chief, Indra Joshi. Palantir's UK head, Louis Mosley, grandson of the late British Union of Fascists leader Oswald Mosley, was quoted as saying that Palantir's strategy for entry into the British health industry was to "Buy our way in" by acquiring smaller rival companies with existing relationships with the NHS in order to "take a lot of ground and take down a lot of political resistance". (26)

In November 2023, NHS England awarded Palantir a £330 million contract to create and manage the Federated Data Platform. As Mark Wilding has pointed out: "NHS patient data, spanning more than seven decades and covering most of the UK population, is a trove of potential medical and demographic insights that may be unrivalled anywhere in the world. Opponents of the FDP contract have questioned whether private companies can be trusted with such sensitive personal data and whether it could be used to develop profitable products that benefit Palantir shareholders rather than the British taxpayer." (27)

Just before the 2024 General Election the Labour Party received the a £4m donation by Quadrature Capital, a hedge fund registered in the Cayman Islands. It was the largest single donation in Labour's history. Quadrature had holdings in several American tech companies. However, its biggest investment is its $71m in Palantir. (28)

On February 27, 2025, during his visit to see Donald Trump, US ambassador, Peter Mandelson arranged for Starmer to meet Palantir chief executive Alex Karp and the company's UK chief Louis Mosley at the company's showroom. "Downing Street has refused to say whether Sir Keir Starmer knew Palantir was a client of Peter Mandelson's lobbying firm when they both visited the company in Washington last February - ahead of it winning a £240m UK government contract. At the time, Mandelson was both Britain's ambassador to the US and a shareholder in Global Counsel, the lobbying firm he co-founded in 2010 that counts Palantir as a client." (29)

In December 2025 the Ministry of Defence (MoD) directly awarded Palantir a £240 million agreement for "data analytics capabilities supporting critical strategic, tactical and live operational decision making across classifications" over three years. The contract, worth three times more than a previous MoD agreement with Palantir signed in 2022, will see the company play a key role in modernizing the U.K.'s armed forces. The award, which was made without a competitive process, follows a "strategic partnership" between Palantir and the MoD announced in September during President Donald Trump's state visit to the U.K. (30)

The Good Law Project submitted a freedom of information request, to find out what Starmer talked about with Palantir and Peter Mandelson, while he was there. The Cabinet Office told them it was only an "informal visit" – a tour of the facilities, a short video presentation and a meet and greet with staff members. So no minutes were kept. "We don't understand, at all, why Keir Starmer and Wes Streeting are banging the drum for this dangerous spytech firm", said Good Law Project's executive director, Jo Maugham. "But Peter Mandelson has a clear conflict of interest – and the failure to keep a minute of the meeting he arranged for the PM shows a kind of contempt for the public interest." (31)

According to Harriet Williamson, Palantir Technologies currently holds over £670m in UK government contracts across "NHS patient data, defence operations, police intelligence databases and nuclear weapons management. The multibillion-dollar US company has also provided military tech to the Israel Defense Forces (IDF) during the genocide in Gaza, and helped facilitate Donald Trump's brutal immigration enforcement crackdown across the US." (32)

Since 2023, Palantir has secured more than £500m in contracts with the NHS and the Ministry of Defence (MoD), while it employed Global Counsel, the lobbying firm founded by Peter Mandelson. The Green party leader, Zack Polanski, wrote to the health secretary, Wes Streeting, urging him to break a £330m contract between Palantir and the NHS. Polanski said Palantir "has absolutely no place in the NHS, looking after patients' personal data … I understand there is a break clause in the contract this year and I would urge you not to renew the contract of such a disreputable corporation". The government has for months blocked attempts by MPs and campaigners to scrutinise Palantir's deals. Requests for information about meetings between the company's leadership with Keir Starmer were among those that have been refused. (33)

An investigation by Carole Cadwalladr of Palantir showed it was enmeshed in Britain's civil and defence structures to a far greater degree than previously realised. She has found at least 34 current and past state contracts across at least 10 government departments, local councils and police authorities. The investigation also reveals previously undisclosed contracts between Palantir and AWE Nuclear Security Technologies, the agency that underpins Britain's nuclear deterrence programme. "Palantir has current and historic deals worth £388m with the MOD across at least a dozen contracts and extensions to contracts, and more than £244m with the NHS (12 contracts/extensions). Government agencies and authorities with smaller contracts include Coventry city council, Leicestershire police, DEFRA and the Homes for Ukraine scheme." (34)

In March 2026 the Financial Conduct Authority (FCA) awarded Palantir a contract to investigate the watchdog's internal intelligence data in an effort to help it tackle financial crime, which includes investigating fraud, money laundering and insider trading. Palantir has been appointed for a three-month trial, paying more than £30,000 a week to analyse the FCA's vast "data lake", which could lead to a full procurement of an AI system. The deal is part of the FCA's drive to use digital intelligence to better focus resources on rule-breaking among the 42,000 financial services firms it regulates, from major banks to crypto exchanges. The deal has raised concerns inside the FCA. One source said: "Once Palantir understands how we detect money-laundering threats, how do we know that they are ethically reliable enough not to go to share that information?" (35)

Palantir is one of many American technology companies taking control of UK's critical national infrastructure. This has helped create an AI policy in which the UK has essentially agreed to be a staging ground for US-designed hardware being rented mostly to US tech companies. The former deputy prime minister Nick Clegg in September 2025 called the UK a "vassal state technologically" and taking "sloppy seconds from Silicon Valley". However, in March 2026 Clegg became a board director at Nscale, the UK registered company owned by Microsoft– part of the US tech hegemony whose power he lamented six months ago. (36)

A coalition of leading human rights, health groups and trade unions has urged NHS England to cancel its contract with Palantir based on serious risks to the NHS. Medact has sent its new briefing document, Concerns Regarding Palantir Technologies in NHS Data Systems , to all NHS trust and Integrated Care Board CEOs. It urges them to exercise their local autonomy and not comply with NHS England's instruction to adopt Palantir's Federated Data Platform. Assessing the risks posed by the company's technology to patients and the NHS, the briefing raises alarm over data protection, governance, procurement practices, state surveillance and the wider human rights implications of embedding Palantir's systems across the health service. (37)

Tax Evasion

When the US firms use the UK's infrastructure but pay minimal tax into the system. Data collected by HMRC from the 1,000-plus multinationals operating in the UK. "They make up about 30 per cent of the UK's trading economy (total goods and services) but the tax they pay on their profits makes up little more than 1 per cent of the government's total tax take. This is even more striking considering the US companies tend to be the most profitable ones." (38)

The main reason for this is that US companies are much more likely to make use of tax havens than UK companies. Angus Hanton refers to the research carried out by Gabriel Zucman, a leading tax researcher at the University of California. Zucman points out that in recent years at least 55 per cent of foreign profits of US multinationals were directed to tax havens, whereas in 1970 the figure was only 8 per cent. (39)

Will Hutton has argued: "Tax departments of US multinationals are regarded as profit centres, using every avenue available – selling into the UK from low-tax Ireland, routing profits through tax havens often under British control, artificially lowering profits in Britain through transfer pricing – so that on average tax represents only 5% of profits. If the effective tax rate were just 15% on only the profits we know about, Britain would be at least $10bn (£8bn) a year better off. The true figure is almost certainly half as much again. And if Britain dares to suggest even a mild corrective, such as the digital services tax of 2% put forward in the 2018 budget, intense US government lobbying forces the measure to be defanged." (40)

The use of tax havens has hurt the UK badly. Of the world's top 50 countries, the UK has been losing more tax from the offshoring of profits than anyone else. "With the UK's 25 per cent corporation tax rate they should be paying $17.5 billion in UK tax, but typically in recent years they have been paying less than $10 billion. But this does not take into account of the sales to the UK made direct from tax havens such as Ireland, Luxembourg and the Netherlands, which may well be more than double that number. If these estimates are right, the annual tax loss is likely to have been more than £12 billion, enough to build an extra 150,000 new homes each year, or twice the current rate of construction." (41)