Concerns have been raised about the city’s impact on Westminster after a report found that financial firms and sector-related individuals donated £ 15m to political parties and £ 2m to MPs during the pandemic.
The Positive Money campaign group calculated the gifts, expenses and donations given to MPs, colleagues and their parties, as well as the value of politicians’ second-hand income, saying it contributes to the “excessive influence” of finances on policy-making. .
He found that banks, insurers and lobby groups had a “disproportionate” number of meetings with the Ministry of Finance, representing one third of ministerial meetings in 2020 and 2021, and argued that this had led to favorable policies such as deregulation and an economy that is “structurally dependent” on the City of London.
The Conservative Party was the largest recipient of City donations to political parties, representing more than £ 11 million or 76% of the money donated over the two-year period.
“Once the scale of the impact of big finances on government is exposed, it becomes clear how banks are receiving bailouts and tax cuts, while others are getting austerity and tax increases,” said David Barms, a senior economist at Positive Money.
The report, entitled The Power of Big Finance: Getting Democracy Back from the Banking Lobby, found that 47 MEPs received £ 2.3 million between them – an average of £ 48,936 each – from the financial sector between January 2020 and December 2021. While 26 did not work in return for payments, those who did received an average of £ 2738 per hour, 180 times the UK average of £ 15.15.
About £ 1.2 million of this amount was raised by just five conservative politicians, including former Prime Minister Theresa May, who was paid more than £ 200,000 for speeches at events hosted by JP Morgan and Amundi Asset Management, and health. Secretary Sajid Javid, who received a total of £ 175,000 for his previous role as a senior adviser to JP Morgan, as well as speeches for companies including HSBC.
As a result, JP Morgan was the largest spender among City’s companies in Westminster, paying £ 300,000 in salaries and lecturer fees during the period.
Eurosceptic Conservative MP John Redwood had the highest income in City among his colleagues, receiving nearly £ 471,000 for roles, including his position as chief global strategist in investment manager Charles Stanley and a consultancy role with private equity firm EPIC.
In the House of Lords, the report found that one-fifth of colleagues had registered paid positions in financial firms, including more than half of their colleagues on a committee responsible for investigating economic and financial issues.
Positive Money also expressed concerns about the revolving door between Westminster and City. This issue of possible conflicts of interest became known during the recent Greensill scandal, after it was found that former Prime Minister David Cameron and former government officials lobbied in front of former colleagues on behalf of the now bankrupt creditor Greensill Capital.
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“Access to public institutions is not just an exceptional case of a few bad apples that break the rules – such as lobbying David Cameron on behalf of Greensill Capital – but it is a far broader systemic problem,” Positive Money said.
He now recommends a ban on second jobs for MPs – in addition to public service roles – and the introduction of longer cooling-off periods and bans on lobbying by former ministers, civil servants and regulators. He also called for limiting donations from political parties and the amount that politicians can pay for speeches, as well as requiring all party parliamentary groups to disclose sources of funding.
TheCityUK and UK Finance declined to comment on the report, saying it was a matter for individual donors.
The Ministry of Finance said that as the department responsible for the financial services sector, it was “quite right for ministers and officials to meet regularly with representatives of the sector, as is standard in policy engagement.”
“There is a clear policy for declaring and managing interests for government employees, taking steps to avoid any conflict of interest.
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