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.”