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MP attacks ‘greedy’ industry lobbying

Labour MP Paul Flynn has tabled an early day motion attacking the level of lobbying by the financial services industry and condemning the coalition’s “repeated surrenders” to their demands.

It comes after the Bureau of Investigative Journalism yesterday revealed the industry spent £92m on political lobbying in the past year. BIJ says the lobbying effort resulted in cuts to corporation tax, the introduction of restrictions on Nest and the Government abandoning proposals for a new watchdog to police companies listed on the stock market.

Early day motions allow MPs to give support to causes or statements but they do not have any potential to result directly in laws. Tabled this morning, Flynn’s EDM has yet to be signed by anyone else.

It says: “This House is appalled at the revelation that the British financial services industry spent £92m last year lobbying politicians and regulators in an economic war of attrition that has secured a string of policy victories.

“[This House] also condemns the Coalition’s repeated surrenders to greedy self-serving pressures from lobbyists and calls for new transparent regulation that will end the present manipulation of the finance industry which favours large firms and cheats millions on modest incomes.”

Yesterday, the FSA denied it had done anything wrong by working with groups like the British Bankers’ Association and the Association of Financial Markets in Europe on lobbying strategies.

According to the Guardian, the FSA met with financial industry trade bodies 16 times between 2006 and 2011. Previously restricted minutes of those meetings show UK and EU regulatory reforms were targeted.

• The FSA discussed how the European Commission’s proposed financial transaction tax would make high-frequency trading “prohibitively expensive”.

• The authority agreed on a co-ordinated effort to influence UK regulatory reforms, including opposition to plans of the business secretary, Vince Cable, for a new super-watchdog that would crack down on corporate governance abuse.

•  The FSA discussed the best time for industry to start lobbying the Markets and Financial Instruments Directive, advising “industry should engage as early as possible and at all levels”.

Treasury select committee member John Mann says the “devastating” revelations show “the real inner workings of the banking sector”.

He says: “The regulator and its head, Lord Turner, have paid lip service to their designated role of regulating the industry. Instead, they have seen regulation as a negotiated partnership, where cosy deals are reached and where it is hard to see who is the poacher and who the gamekeeper.”

An FSA spokesman says: “We clearly state in our business plan that the FSA attempts to influence the international and European policy agenda for the benefit of the UK economy and we do this by playing a prominent role in a number of EU wide bodies and supporting the government in its EU negotiations.”

In the lobbying industry’s defence, Cicero Consulting director and chief corporate counsel Iain Anderson says it should not be surprising the UK’s biggest single industry is taking part in the public policy debates.

He says: “Whilst publicly controversial issues such as the ongoing regulatory debate often hit the headlines, the industry is responsible for countless policy changes that have real social benefit that would never come about without this spend by the sector. We have worked on campaigns responsible for banning mobile phone use in cars, better and fairer pensions for women, protecting UK jobs and countless other things that almost everyone now takes for granted.

“Transparency and accountability are essential. It is absolutely vital that the industry is entirely transparent in what we do when dealing with politicians. Our client list is published in full, our staff undertake regular ethics training and we never seek special access or favours from policymakers. Those who break these rules should rightly have the spotlight shone upon them.”
 

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. Greedy!!Coming from an MP thats a bit rich!!

  2. Presumably the alternative that Mr Flynn is proposing is a political world where no lobbying whatsoever goes on and politicians are left to devise policies, systems and procedures without any undue interference from interested parties . In fact why even bother with any scrutiny of policy at all. Let’s just leave the politicos to it and welcome in a new wave of Blair’s wars, Brown’s profligacy, MP’s cheating, European laws, more and more government….the list goes on> Politicians are about as much use as a chocolate fireguard.

  3. Stevo
    At least you can eat a chocolate fireguard!

  4. Some balanced reporting covering other industry groups and the sums they have spent on lobbying would be more informative. As financial services remains the biggest (private) sector of the UK economy and is under more scrutiny and pressure from regulation than ever before, it should come as no surprise that it spends most. The question remains if it is disproportionate?

  5. I hope we are not all being tarred with the same brush.

    My lobbying consists of working through the AMI to limit the damage to consumers inherent in the Mortgage Market Review and this has essentially been on behalf of my clients (current and future), as well as trying to alert politicians to the iniquity of dual pricing via non-advised sales.

    That is hardly greedy.

  6. The first reaction to this tale from Peter is exactly what came to my mind!

  7. I little rich coming from westminster.

    The lobbying takes place because without it policy would be railroaded through to the detriment of consumers of financial products and services. Typical old (new) labour small thinking.

    This is what happens when we have career politians with little real commerical experience.

  8. Least we know AIFA haven’t been involved in this practice,

    Well not with any real result anyway.

  9. Larry in London 11th July 2012 at 2:18 pm

    EDMs are parliamentary graffiti – they mean nothing. CDMs on the other hand are rich, dark and addictive. Altogether more interesting.

    Love and kisses

    Larry

  10. Nigel Tinsdale 11th July 2012 at 3:43 pm

    The coalition have enough problems keeping itself together, they will not be strong enough to take on the might of the finance sector. Big money rules, they are just too powerful.

  11. So lobbying didnt happen when Labour had their snouts in the trough?

  12. Another point i’d like to make is that trying to prevent the financial services sector (which is a very wide church) from trying to protect itself from interference (can you imagine car showrooms being told how much mark up to put on a car) does not stop greed at the top. All that happens is that they continue to receive their high salaries and bonuses and a few thousand more low salaried staff are consigned to the dole queue – the stupidity of MP’s never ceases to amaze me.

  13. Kevin Grimwood 11th July 2012 at 4:27 pm

    It would be nice if lobbying did not work but think for a minute Governments take no notice of public opinion, they also commission reports that cost millions and take years then ignore them because it has made them look like they are tackling problems when they have no intention of doing anything.

    At least lobbyists have some influence on policy its a shame though that they are often only effective because of the financially strong entities that they represent.

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