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Lovebombed by lobbyists: How Labour became the party of Big Business

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Original article by Ethan Shone republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Senior Labour figures have met hundreds of times with lobbyists for big business, banks and arms firms in the last year
 | Tim Grist Photography/Dan Kitwood/Getty / Composition by James Battershill

An openDemocracy investigation reveals the secretive mass lobbying campaign that shaped Starmer’s policies

Twelve months before seizing power in last week’s historic election victory, Keir Starmer and the Labour Party welcomed with open arms an unprecedented lobbying campaign by the UK’s most powerful corporations.

Weapons manufacturers implicated in human rights abuses in Gaza bent the ears of would-be defence secretaries. Incoming climate change ministers met with oil companies. Labour ministers who will now be responsible for curbing the excesses of the City of London were wined and dined by financial services executives. Public affairs firms representing asset managers, the tobacco industry, gig economy firms and tax-avoiding mega corporations secured meeting after meeting after meeting with future ministers.

In a high-voltage campaign that was simultaneously secretive yet enacted in plain sight, lobbyists worked hard to ensure the policies of the UK’s first ostensibly progressive government in 14 years reflected the interests of their influential clients. And Labour was only too happy to engage.

Westminster’s lax transparency rules mean there is no official record of this mammoth public affairs offensive. The rulebook says the public has no right to know which companies lobby the opposition – a position shared by Starmer’s Labour. In every instance, the party has refused to disclose what was discussed, what promises were made, and even who was at its meetings, saying: “We should not be treated as the government.”

Now, an investigation by openDemocracy lays bare the astonishing access that Big Business had to Starmer and his frontbench team.

openDemocracy spent months gathering information about lobbying meetings from a variety of open sources, including parliamentary meeting rooms’ booking logs, social media posts and events publicised by lobbying firms. These meetings, spanning the past 18 months, have included private meetings, exclusive Q&A sessions, dinners, mixers, briefings, client roundtables, overseas visits and seminars.

We have identified hundreds of meetings that senior figures in the party held with corporate lobbyists, financial institutions and business groups. On average, they met with influential business leaders every single working day of the past year.

This is about more than private dinners and smoked salmon breakfasts. Starmer’s cabinet is about to begin implementing the programme for government laid out in Labour’s manifesto. As Rachel Reeves, his new chancellor, said last month, the “fingerprints” of business are all over Labour’s policies, shaped as they were through an unprecedented level of engagement with corporate lobbyists, financial institutions and business groups.

Experts warn the consequences of the party effectively outsourcing its policy-making to private corporations will be far-reaching for British society. Labour has pledged to build new towns, to increase green investment, to reform health and social care and to launch major infrastructure projects. Mick McAteer, a former director of the UK’s financial services regulator has warned that the much-vaunted partnership with private finance which lies at the heart of all these plans “will result in a massive transfer of wealth from local communities to the City of London and global financial institutions over the next decade”.

The corporate lobbyists

Lobbying is a huge business in the UK. Dozens of agencies make millions every year advising clients on how to influence policy to their benefit and get their messages heard by the politicians who write laws, set regulations and sign off on public sector contracts. The last decent estimate of the industry’s size is from 2007, when Gordon Brown was still the prime minister. A study by the Hansard Society then put it at around £1.9bn. Insiders suggest it has certainly grown in the nearly two decades since.

A big part of a lobbyist’s work is getting their clients access to the right people, which often relies on the lobbyist themself knowing the right people – or having contacts who do. Around 18 months ago, after the spectacular implosion of the Liz Truss regime meant the chances of Labour taking power started to look more likely, the public affairs industry began to reorient en masse.

To prepare for a Labour government, lobby firms began establishing dedicated ‘Labour Units’. They hired former Labour MPs and staffers to make use of their contact networks, with a few even snapping up prospective candidates or seconding staff members directly into the offices of senior party figures. Lobbying firms Global Counsel, Lowick Group, FGS Global and Weber Shandwick have all sent members of staff to work in the offices of senior Labour figures in the past two years – at a combined cost to the firms of more than £100,000.

Other lobbying companies have given donations in cash or in-kind to influential MPs, despite industry rules seeming to bar this practice. New deputy prime minister Angela Rayner alone has received donations from two lobbyists – Sovereign Strategy and Pentland Communications – in the past year.

openDemocracy reached out to each of the firms mentioned above to ask whether they expect to receive anything in exchange for seconding members of staff at their own cost or donating to MPs, but received no response.

The lobbyists’ efforts bore fruit: in the twelve months leading up to the election, not a week went by without a member of Labour’s frontbench team attending a private client roundtable organised by a lobbying firm. These meetings, industry insiders say, represent only a fraction of the work a firm does in connecting its clients with politicians. They often serve merely as an introduction, with clients then able to follow up on issues discussed at the meetings or raise more sensitive matters, either through the agency or in some cases directly with politicians.

One firm, Arden Strategies, was able to secure more private client roundtables with Labour than any other, as far as openDemocracy can establish. The lobby shop, run by former Labour minister Jim Murphy, put its clients in a room with senior Labour figures on at least nine occasions – with politicians lobbied including Reeves, business and trade secretary Jonathan Reynolds and Starmer’s head of business engagement.

Unlike many firms, Arden doesn’t publish a general client list on the Public Relations and Communications Association register. But openDemocracy can reveal that the firm’s major clients include leading arms manufacturer Northrop Grumman and two of the UK’s largest power distribution companies, UK Power Networks and SGN.

Labour needs to take on the vested interests of big corporations, not give them the pen to write policy

Unlike in many other democracies, such as Canada, Germany and Scotland, voters have no right to know who is lobbying opposition politicians in Westminster. Only government ministers are required to regularly publish a list of any meetings they have with businesses, charities, think tanks and corporate lobbyists, along with a brief description of what was discussed. Details of government politicians’ meetings are not disclosed unless a specific Freedom of Information request is made asking about them, and the government may well decide to refuse to answer such requests.

This heavily flawed system is a major issue in a year such as this one, when the opposition’s election victory was almost a foregone conclusion and interest groups have been queuing up to influence its plans for government.

While firms do not need to declare which opposition politicians they’ve lobbied, many advertise their ability to secure access to the shadow frontbench. openDemocracy monitored the leading lobbying firms and found dozens of public references to meetings involving senior Labour politicians. In every instance where openDemocracy asked the lobbying firms and Labour which clients were present at these meetings, neither would provide any details.

Tim Bierley, campaigner at Global Justice Now, warned that Labour may be treating lobbyists as “independent experts” rather than people “responsible primarily for boosting their shareholders’ income”.

Bierley added: “On climate, trade and the economy, the interests of giant corporations are extremely different from the public’s – their outsized influence would blur any visions of progress under Labour.

“To provide a remotely adequate response to crises on multiple fronts, Labour needs to take on the vested interests of big corporations, not give them the pen to write policy.”

The City

Few interest groups carry as much sway with Labour as the representatives of the City of London – and the wider financial services sector that the City rests at the heart of. In recent years, no other industry has more effectively forged ties with the party.

In the weeks before polling day, Labour’s shadow City minister Tulip Siddiq – who is expected to keep the post in government – took to LinkedIn to share manifesto documents on three occasions. Tellingly, it wasn’t her party’s manifesto she was sharing, but those of three major financial services industry representative bodies, UK Finance, TheCityUK and the Association of British Insurers.

“I have worked closely with TheCityUK and its members in recent years,” wrote Siddiq in one of the posts, “to formulate the Labour Party’s policies for the financial and professional services sector.”

Her other two posts are seemingly copy-and-paste jobs, with near-identical wording. In both, Siddiq told of how “delighted” she had been to “work closely” with the Association of British Insurers and UK Finance “to inform Labour’s plans for the sector”.

All three posts suggest that the lobbyists for the City of London and the financial institutions were directly involved in shaping the policies and regulatory approach that will apply to their own industry.

When Labour published a policy document earlier this year laying out its plans for the financial services sector, the party held a no-press-allowed soiree in the City of London’s Guildhall, sponsored by the City of London Corporation, to thank the industry for its contributions. The plans were criticised for committing the party to the same lax regulatory approach taken by the Conservatives, with campaigners describing the document as “a love letter to the city”.

Labour’s frontbench team, including Siddiq, has met with City lobbyists on more than 20 occasions in the past year – not counting its significant engagement with the British Private Equity and Venture Capital Association, which openDemocracy revealed last month. BlackRock, Macquarie, HSBC, Bloomberg, Lloyds, Brookfield Asset Management and Blackstone are among firms to have secured access to leading members of the new government, including Starmer, Reeves, Reynolds and the chancellor of the Duchy of Lancaster, Pat McFadden.

Mick McAteer, a former board member at the Financial Conduct Authority and a campaigner for economic social justice at the Financial Inclusion Centre, told openDemocracy that the close relationship between incoming ministers and the Labour Party can essentially be seen as a kind of quid-pro-quo.

Lobbyists for financial institutions push Labour to commit to a favourable regulatory environment while dangling the promise of vast amounts of private capital. McAteer is increasingly concerned this relationship will amount to a rehashed form of the Private Finance Initiatives (PFI) favoured by New Labour, in which private firms provide all or most of the investment to build infrastructure such as hospitals and schools, and generate profits from lucrative contracts to maintain the infrastructure long after it has been built.

These public-private partnerships, McAteer warns, will shape almost every aspect of Labour’s agenda in government – from its plans for house-building to energy generation and distribution – and will represent a bad deal for the public.

“Private investment is by definition more expensive than public investment, because of the high returns that financial institutions expect to make for their shareholders,” MacAteer said. “These returns have to be paid for in some way, so ultimately, the costs get passed on to households through higher bills.”

The financial services sector has consolidated its relationship with Labour in different ways. HSBC has had a staffer in Reynolds’ office for almost a year, for example, and NatWest had a similar arrangement with the new business secretary for a few months prior to that. Staffers seconded from the firms have been involved in policy development and business engagement – but because they are still paid by their employers while working for Labour, the Electoral Commission classes the arrangements as political donations.

Then there are two advisory panels made up of executives from major financial institutions, which Labour set up while in opposition but that will continue to advise it on where and how to deploy billions worth of private sector investment in government. One board, the National Wealth Fund Taskforce, is headed by Mark Carney, the former Bank of England director general who now works for Brookfield Asset Management. The other, the British Infrastructure Council, includes senior figures from investment firms such as M&G and BlackRock.

McAteer warns these advisory panels constitute a major conflict of interest. “The British Infrastructure Council is full of representatives from firms that stand to financially benefit, who will not just be determining where the money goes, but in what form does the money go, what are the terms of the deals, and that the capital is de-risked before they’ll commit the finance.

“There’s a reason why they want to be on this infrastructure council, they’re not charities. This is not a criticism, it’s just how finance institutions work, and how markets work. They exist to get the best deal for their shareholders and their owners.

“This thing has been sold as a win-win for the economy and for the investors, but somebody pays for that. Ordinary households pay for it, and more importantly, because they don’t have a say in this, it will be future generations who will pay for this.”

He added: “Because these firms will have ownership of the economy and they’ll be able to extract value for as long as that infrastructure lasts. Ordinary people are really going to end up on the wrong side of some very, very badly designed transactions here, shaped by the financial institutions in the City of London.

“They’ve been lobbying for this for a couple of years – and they’ve got what they wanted.”

openDemocracy reached out to each of the firms mentioned above, but only HSBC provided a response. A spokesperson said: “HSBC regularly engages with the major political parties in the UK on issues facing our customers and the wider financial services industry.”

The consultants

If the City of London’s financial institutions stand to win big from Labour’s PFI 2.0, then so, too, do the City management consultancies and accountancies that work so closely with them.

Firms such as the ‘Big Four’ consultancies – Deloitte, KPMG, Ernst and Young (EY) and PriceWaterhouseCoopers (PwC) – and the industry lobbying body, the Management Consultants Association, have met with senior Labour figures at least 13 times since March last year.

Lord Sikka, a Labour peer and Emeritus professor of accounting at the University of Essex, said his party should not be working so closely with management consultancies.

“I think this new form of PFI would be disastrous, it would be a continuation of what we’ve seen in the UK since the late 1970s, a kind of right-wing coup which has seen a restructuring of the state so that it has become a guarantor of corporate profits, rather than an entrepreneurial state which invests,” Sikka said.

“PFI, privatisation and outsourcing – the very things these companies advise on and profit from – are all examples of that.”

Though Starmer doesn’t appear to have attended many of the meetings openDemocracy has uncovered, he was present at a day of business roundtable events at EY’s London offices in March 2023. There, the Labour leader, along with Reeves and Reynolds, heard from business leaders about “the potential value of public and private sector collaboration”, according to a LinkedIn post by EY’s managing partner. The trio returned to EY in November, along with the now chief secretary to the Treasury, Darren Jones, for similar discussions with a few dozen business leaders.

Jones has also attended secretive meetings with elusive consultant Hakluyt, which was founded by former MI6 operatives in 1995 and claims to work with “at least one of the world’s top five corporations in every major sector globally” and “three-quarters of the top 20 private equity firms in the world”. The firm also organised a dinner with Labour MP Peter Kyle, then the shadow secretary for science, innovation and technology, while he was in the US earlier this year.

Hakluyt counts among its advisory board former executives from Rolls Royce and Coca-Cola, as well as former senior civil servants and politicians. It has previously been linked with large oil and gas interests, having been accused by The Sunday Times in 2001 of deploying an agent to spy on Greenpeace campaigners on behalf of oil companies. In recent years Hakluyt has sought to “demystify” and says it now has “no relationship with the spooky world”. A spokesperson said Hakluyt is not a lobbying organisation and does not advise political parties.

Speaking at last year’s Labour Party Conference, Reeves pledged to slash public spending on consultants if elected. This promise also made it into the party’s manifesto. But as economists and authors Mariana Mazzucato and Rosie Collington highlight in their book, The Big Con, the industry has been known to offer its services pro-bono during times of austerity, in hopes of securing lucrative paid contracts in future. In 2011, the then head of public sector at KPMG described the strategy to the Guardian, in the context of working with David Cameron’s coalition government: “We can’t afford to [work pro bono] indefinitely, but we can in the short-term. We’re hoping to position ourselves well when the government decides it is willing to pay.”

In a similar vein, when Labour’s shadow Treasury team was working on its aforementioned plan for financial services, City consultancy Oliver Wyman donated a staff member to help out – at a cost of more than £58,000 for the past year, according to Electoral Commission data. Senior staffers at leading consultancies Grant Thornton and EY have held parliamentary passes as members of Starmer’s team for the past year or so, according to the register of MPs’ staff interests. Since 2021, firms including PwC and Baringa have provided combined pro-bono services to the party worth more than £650,000.

“There are huge questions about why these firms have been providing free staff,” Lord Sikka said, “because obviously that has a cost to them and they would expect a return because they’ve made an investment.”

None of the firms mentioned above responded to openDemocracy’s request for comment.

Labour is sending a clear message to arms dealers – that it will be business as usual

The arms dealers

In March last year, Labour’s then shadow defence secretary, John Healey, and minister for defence procurement, Chris Evans, filed into a function room in the Churchill War Rooms along with executives from 20 of the world’s biggest arms manufacturers, including BAE Systems, Leonardo, Lockheed Martin, RTX, Rheinmetall and Rolls Royce.

The private event at the historical attraction in Westminster was arranged by public affairs firm Rud Pedersen. The firm’s head of defence and security is a former Labour staffer who worked in the party’s shadow defence team between December 2018 and September 2020.

Since last March, party figures have met with representatives from defence firms on at least 13 occasions, including two visits to sites run by BAE Systems and German defence contractor Rheinmetall. Labour’s then shadow science minister Chi Onwurah and armed forces minister Luke Pollard attended a private meeting – hosted by the industry lobbying body, ADS Group – with BAE Systems, Rolls-Royce and Thales at the Labour Party Conference.

A BAE Systems spokesperson said: “As the UK’s largest defence company, employing more than 45,000 people in the UK with thousands more in the supply chain, we regularly engage with political representatives to increase awareness and understanding of the significant contribution our industry makes to the UK’s security and prosperity.”

Most recently, Reeves attended a private client roundtable event hosted by lobbying firm Headland in March this year. The CEO of German AI defence startup Helsing was also present, as was Headland staffer and new Labour MP, Gregor Poynton.

While Labour has consistently ruled out progressive policies such as scrapping the two-child benefit cap or boosting local government funding, it has committed to increasing defence spending to 2.5% of GDP, up from 2.3% last year. Despite a YouGov poll from April indicating that the majority of the public backs a ban on exporting arms to Israel, the party has declined to call for an end to arms sales to the country.

Emily Apple from the Campaign Against the Arms Trade described arms trade lobbyists’ access to the upper echelons of the Labour Party as “hugely alarming”.

She said: “These meetings give [some of] the companies profiting from Israel’s genocide in Gaza a huge amount of influence over Labour’s future defence and foreign policy. This rings alarm bells over whether a future Labour government will uphold international law and impose an arms embargo on Israel or any other human rights-abusing regime.

“These companies profit from death and destruction. Labour should be taking a stand and reducing the influence of these death merchants on political policy. Instead, these meetings mean Labour is sending a clear message to arms dealers – that it will be business as usual for them to continue boosting their share prices through perpetuating conflict and misery across the world.”

openDemocracy reached out to each of the firms mentioned above, but only BAE Systems responded. A spokesperson said: “As the UK’s largest defence company, employing more than 45,000 people in the UK with thousands more in the supply chain, we regularly engage with political representatives to increase awareness and understanding of the significant contribution our industry makes to the UK’s security and prosperity.”

If business wins, who loses?

On Friday morning, during his first address to the nation as prime minister, Starmer said voters had given him a mandate “to do politics differently”. But the representatives of big business, finance and the arms trade, which have worked hard to influence his party, will hope it plans to continue the status quo: prioritising their interests over those of working people.

One week earlier, as now-chancellor Rachel Reeves prepared for a Monday morning sit-down with the heads of financial firms, the couriers’ branch of the IWGB trade union held its annual group meeting in a sunny courtyard in east London. There, some of the most marginalised workers in the UK reflected on the struggles and victories of the past year and looked ahead to the future.

The IWGB, one of many smaller independent trade unions with no affiliation to the Labour Party, works across a number of sectors where the power gap between workers and employers is most acute. From Hartlepool to Hackney, its members are outsourced security guards and cleaners, foster carers, receptionists and couriers.

Many of the corporations that have spent the past 18 months wooing Labour are the same firms severely exploiting these workers, the IWGB’s general secretary, Henry Chango Lopez, told openDemocracy.

“These huge corporations,” Chango Lopez said, “have access to vast sums of money to lobby governments – a method of policy influence that is simply not available to working people. That many senior members of the Labour Party have allowed those employers to get anywhere near influencing policy is indicative of where the government’s priorities lie.”

Original article by Ethan Shone republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingLovebombed by lobbyists: How Labour became the party of Big Business

It’s time to ban MPs from taking donations from fossil fuel firms

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https://leftfootforward.org/2024/04/its-time-to-ban-mps-from-taking-donations-from-fossil-fuel-firms/ Many articles from LeftFootForward today.

We need to build a firewall between politicians and the oil and gas firms driving the climate crisis.

Richard Burgon is the Labour MP for Leeds East

The same oil and gas giants behind the record energy bills that have forced so many into poverty have also brought us to the cliff edge of climate catastrophe.

If we are to have a fighting chance of preventing the worst of the climate crisis, then we need to rapidly cut fossil fuel use. Key to that is breaking the vast power that oil and gas companies have over our politics.

That’s why this week I will present a Bill in the House of Commons to ban MPs from receiving funding or any other benefit from oil and gas companies.

My Private Members Bill would stop MPs from taking any second jobs with, or receiving any donations, gifts, hospitality or benefits-in-kind from, any company that makes more than 50% of its annual revenue from oil or gas.

It would also force the Government to end investments by the Parliamentary Contributory Pension Fund in any oil and gas companies.

The aim of my Bill is simple: to build a firewall between our political decision-makers and the oil and gas corporations that have knowingly caused the climate crisis.

For decades, oil and gas giants used their vast financial power to confuse and undermine the science about the role of fossil fuels in driving climate change. More recently, their focus has moved on throwing huge sums at delaying, blocking and weakening global climate action.

Fossil fuel money also pollutes British politics. The Tory Party received £3.5m from donors with fossil fuel, polluter and climate denial links in 2022 according to an analysis of Electoral Commission records by DeSmog, an investigative website focused on global warming misinformation campaigns.

…

https://leftfootforward.org/2024/04/its-time-to-ban-mps-from-taking-donations-from-fossil-fuel-firms/

dizzy: Despite this article having been written by a Labour MP it should not be assumed that the UK Labour Party will be any different from the Conservatives on the climate crisis or fossil fuel industry.

Continue ReadingIt’s time to ban MPs from taking donations from fossil fuel firms

Labour in ‘cash for access’ scandal over meetings with £150k donor

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Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence. 

Keir Starmer and Rachel Reeves have engaged heavily with the financial services industry
 | Dan Kitwood/Getty Images

Labour top brass including Keir Starmer gave Bloomberg ‘exclusive’ look at party’s financial plan at private meeting

Labour leader Keir Starmer, shadow chancellor Rachel Reeves, and four other senior party figures met with a major media and financial information conglomerate weeks after it donated £150,000 to the party – sparking concerns of “cash for access” from transparency campaigners.

The meeting between Labour and the Bloomberg group, which took place in Edinburgh on 8 December last year, was described as “suspicious” and “highly unusual” by two Labour sources.

The private roundtable event came shortly after the US business conglomerate, majority owned by American businessman and politician Michael Bloomberg, made its first donation to Labour in seven years. The donation was made by a Bloomberg subsidiary called Bloomberg Trading Facility Limited.

The party used the meeting to offer Bloomberg and others in attendance “an exclusive dive” into its flagship financial services policy document, which was published the following month, according to a social media post by a person involved in coordinating the event.

Labour did not deny that the meeting was connected to the donation, with a spokesperson telling openDemocracy: “It is standard practice for the Labour Party to meet with the private sector.” The party did not reply to openDemocracy’s query about whether Bloomberg was given exclusive access to the flagship financial services policy document. Bloomberg declined to comment for this story.

The Edinburgh event was facilitated by Sovereign Strategy, a lobbying firm that has represented Bloomberg for almost two decades, which promises to get its clients’ “messages heard at the highest levels of government”, according to the firm’s website.

Lobbyists often hold such events to introduce their clients to Labour frontbenchers so they can try to shape the party’s policy on issues relevant to their businesses.

But two Labour sources, who spoke to openDemocracy on the condition of anonymity to avoid retaliation for appearing critical of the party’s leadership, said the Edinburgh meeting was “highly unusual” and “suspicious” due to the sheer number of senior politicians present.

Starmer and Reeves were joined at the event by shadow business secretary Jonathan Reynolds, shadow City minister Tulip Siddiq, as well as Scottish Labour leader Anas Sarwar and Daniel Johnson MSP, the party’s business spokesperson in Holyrood.

Other comparable meetings are typically attended by only one or two shadow ministers. openDemocracy has analysed more than 200 meetings attended by Labour frontbenchers in the past year based on publicly available data and triangulation through multiple sources, and found the Edinburgh meeting involved far more senior figures than any other.

The meeting took place less than two weeks after Bloomberg Trading Facility Ltd, a subsidiary of Bloomberg LP, donated £150,000 to Labour – with the conglomerate becoming one of the party’s top corporate donors for all of 2023 in a single day, according to Electoral Commission records.

A Bloomberg company last made a cash donation to the Labour Party in late 2016, when it gave the party £60,000. The firm has since handed the Conservatives £260,000, most recently donating £100,000 in June 2022.

Simon Youel, the head of policy and advocacy at not-for-profit advocacy group Positive Money, told openDemocracy that voters should be worried by the timing of the meeting – which took place as Labour finalised a key document to set out its policy on the financial services sector.

“What is most concerning is that weeks after this meeting, Labour published a plan for financial services that reads like a love letter to Big Finance, with much in there that could have been written by the industry itself,” Youel said.

Labour spent months drafting its financial services report, bringing in a staffer from City consultancy Oliver Wyman to put it together. After its publication in January, Reeves and Siddiq threw a lavish, no-press-allowed reception in the City of London’s famed Guildhall to thank the industry for its contributions.

In a since-deleted LinkedIn post, a Sovereign Strategy staffer said the roundtable discussion had a focus on the “outlook for the financial services industry and an exclusive dive into Labour’s launch of the financial services review”.

Youel added: “Rachel Reeves herself has acknowledged New Labour’s errors in relying on an under-regulated financial sector to generate wealth, yet the party seems set on repeating the mistake of letting the City of London dictate policy-making, which inevitably the public will again be left paying the price for.”

In a video from the event, Starmer can be heard telling the attendees: “What you now see is a Labour Party that is fundamentally different to the Labour Party that fought the last general election. Unrecognisably different. And very obviously pro-business.”

The video, which Labour released on the day of the meeting, made no reference to who was at the event or what was discussed.

Bloomberg holds a unique position within the financial sector, providing hardware, software, data and advisory services to all manner of financial services institutions.

Its computer systems, Bloomberg Terminals, are used by banks, institutional investors and financial analysts all over the world to access high-level investment data and place financial transactions. The company also has a news division and TV channel that employ over 2700 journalists in 120 countries, according to its website. Its eponymous billionaire founder and majority owner, Michael Bloomberg, is a fixture in US politics and one of the richest people in the world. He was mayor of New York City for 12 years, before running for President as recently as 2020.

Youel said that access to frontbench politicians could give Bloomberg a “value-add” for its clients, raising “serious concerns around cash for access in our democracy”.

The roundtable was also attended by investment manager Baillie Gifford, Aegon Asset Management and NatWest Group. For several months in 2022, NatWest provided a member of staff to Jonathan Reynolds’ office, valued at £13,800.

A Labour Party spokesperson said: “Donations from corporate entities are declared in line with Electoral Commission rules. Labour is proud to engage with the financial services sector as we develop policies to grow our economy after 14 years of Tory chaos and decline.”

Scottish Labour refused to provide any additional details about the meeting, with a spokesperson saying only that the party “meets with a range of stakeholders to discuss a range of issues”.

They added: “Boosting economic growth is at the heart of our plans to deliver a fairer and more prosperous Scotland, and we are working in partnership with both businesses and trade unions to deliver that.”

Partnership with business
Lobbyist Sovereign Strategy has in recent months strengthened its links to the Labour Party, which is widely expected to win this year’s general election.

Keir Starmer is featured in a brochure published by the lobbying firm in September 2022. The Labour leader is pictured posing for a photo alongside Sovereign chairman Alan Donnelly, a former Labour MEP, in front of a display bearing Bloomberg’s branding.

The brochure goes on to quote a senior Bloomberg executive as saying that the firm has “expanded our influence with key decision-makers”.

Sovereign Strategy also donated £5,000 to deputy leader Angela Rayner “for campaigning activities” last month, according to the register of members’ financial interests. Just over a week after the donation from Sovereign to Rayner, Starmer met with Mike Bloomberg, the billionaire co-founder of Bloomberg, to discuss “Labour’s partnership with business”, .

This donation appears to be a breach of the Public Affairs Code set out by the Public Relations and Communications Association (PRCA), a trade body representing UK lobbyists including Sovereign Strategy. A breach of the code could result in a member being reprimanded or their membership of the organisation being suspended.

Section 8 of the code – a set of rules on the proper lobbying of governments – states that PRCA members must not “make any award of payment in money or in kind… to any MP”. There is no suggestion of wrongdoing on Rayner’s part.

A spokesperson for Sovereign told openDemocracy the donation was made by the company’s chairman in a personal capacity, but was unwilling to provide any further details. A Labour source, however, confirmed the donation was from the company and made by its company bank account.

The PRCA said it was reviewing the information openDemocracy provided.

In January this year, a senior account manager at Sovereign who was involved in organising the Edinburgh roundtable joined the executive committee of Labour Business, an affiliate of the party that focuses on fostering links between Labour and the business community, in January.

The Sovereign staffer in question previously worked for the Labour Party for a number of years in the business relations and endorsements team.

They are one of a large number of former Labour staffers to have left their positions at the party to join Westminster consultancies and lobbying firms the past 18 months, as firms look to beef-up their Labour bona fides in anticipation of a Conservative wipeout at the next election.

Steve Goodrich, the head of research and investigations at Transparency International UK, told openDemocracy: “Parties should scrupulously avoid the perception that they’re offering privileged political access in return for cash.

“The next general election looks set to be the most expensive in modern times so it’s crucial that politicians of all stripes avoid stumbling into quid pro quos in the rush for funds.

“Until we reduce the cost of politics, cases like these will continue to undermine public trust in our democracy, which is already perilously low.”

Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence. 

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Continue ReadingLabour in ‘cash for access’ scandal over meetings with £150k donor

Dark money think tanks hail ‘full expensing’ measure in autumn statement

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Original article by Ruby Lott-Lavigna republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Opaquely funded lobbying group claims to be responsible for parts of Jeremy Hunt’s budget, calling it ‘amazing news’

Former chancellor Nadhim Zahawi, a patron of the Adam Smith Institute, has lobbied Jeremy Hunt for so-called ‘full expensing’ Hunt in the House of Commons
 | Chris Ratcliffe/Bloomberg via Getty Images

Opaquely funded right-wing think tanks have claimed responsibility for parts of today’s budget, celebrating its announcement as a victory for its lobbying.

Jeremy Hunt unveiled his autumn statement this afternoon, including policies such as a 2% cut to National Insurance, punitive enforcement action for those on disability benefits who do not find work in 18 months, and raising Local Housing Allowance before freezing it again in two years.

A key part of the chancellor’s budget, a policy called ‘full expensing’, means businesses can claim 100% of investment costs such as digital equipment against revenue in the same year, allowing businesses to pay less tax. It was first introduced in spring as a temporary measure but will now be made permanent.

The Adam Smith Institute, which first published a blog post on the policy in 2017, has claimed the decision as a victory.

“Amazing news that the full expensing has been made permanent,” the think tank wrote on its X (formerly Twitter) page. “Congratulations to everyone who worked so hard to make this a reality.”

It added: “We at the ASI have been campaigning for full expensing over many years.”

Former chancellor Nadhim Zahawi, a patron of the Adam Smith Institute, has lobbied for full expensing to Hunt in the House of Commons. Zahawi was fired from his role as chair of the Conservative Party and minister without portfolio after breaching the ministerial code by failing to declare he was being investigated by HMRC while chancellor under Boris Johnson.

In the past, companies like Amazon have taken advantage of expensing schemes – in particular, a ‘super-expensing’ short-term policy that allowed companies to write off 130% of investment in infrastructure. The company’s UK division paid no corporation tax for a second year in a row thanks to the scheme.

The Adam Smith Institute, named after the 18th-century Scottish thinker on capitalism, lobbies on issues such as deregulation and lower taxes. It was given the lowest possible transparency rating in openDemocracy’s ‘Who Funds You?’ project earlier this year, but is reported to be partly funded by the tobacco industry as well as American climate denial groups.

Other right-wing think tanks have also lauded the move. In a “wish list” written by free-market think tank the TaxPayers Alliance, it asked the chancellor to “Make full expensing for corporation tax permanent… to reduce the tax penalty on long-term investment.”

The TaxPayers Alliance does not publicise its funders, and was also given the lowest possible rating by Who Funds You?

Allowing businesses to invest more can be positive, so long as public spending isn’t cut in the process, Pranesh Narayanan, a research fellow at the Institute for Public Policy Research (IPPR) told openDemocracy.

“In this autumn statement, the Conservatives are able to ‘afford’ it because they’ve frozen public investment spending from 2025 onwards,” Narayanan said, referring to the billions of pounds of spending cuts forecast after the next general election. “You need both kinds of investment to have a proper economic recovery. You can’t do one at the expense of the other, especially when you have crumbling schools and crumbling hospitals.”

Narayanan added: “This policy is mainly for the benefit of big corporations. We believe we need more public investment.”

Economist Ann Pettifor argues in openDemocracy today that Hunt’s autumn statement “extinguished… any faint hope of the beginnings of an economic revival”.

Original article by Ruby Lott-Lavigna republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingDark money think tanks hail ‘full expensing’ measure in autumn statement

Top Tory Think Tank’s North Sea Oil and Gas ‘Vested Interests’

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Original article republished from DeSmog.

‘Shocking’ findings show how board members at the Tufton Street think tank are tied to fossil fuel firms.

North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)
North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)

The influential Conservative-linked Centre for Policy Studies (CPS) has been pushing for further North Sea oil and gas drilling while several of its board members hold financial interests in the industry, a DeSmog investigation has found.

The news follows the government’s approval of the major Rosebank oilfield and the issuing of new North Sea licences, which the government intends to turn into a mandatory annual process, as announced in this week’s King’s Speech.

Five of the think tank’s board have financial interests in North Sea oil and gas, including its chair Lord Spencer, a major Conservative Party donor whose exploration company is bidding for licences in the current round.

The think tank, which is based at 57 Tufton Street in Westminster, meets regularly with ministers. It has called for new oil and gas projects to be accelerated, labelled the windfall tax on energy companies a “terrible idea”, and argued for a more generous fiscal environment for the UK’s fossil fuel producers.

Prime Minister Rishi Sunak is quoted on the organisation’s website as saying that “Lots of exciting ideas are being generated at the CPS… many of which are finding their way into government.”

Tessa Khan, executive director of climate group Uplift, said the findings were an example of how some think tanks have “long been little more than lobbying vehicles for private interests, including oil and gas”. The CPS denies that it is a lobbying group.

Khan added that organisations like the CPS “amplify the voices” of the oil and gas industry.

“This maybe goes some way to explaining why this government is set on subsidising new oil and gas fields when they represent such a bad deal for the public, in that they won’t lower bills, won’t increase energy security but will make the climate crisis worse,” she said.

Nature broadcaster Chris Packham, who is threatening to take the government to court over its recent watering down of climate measures, said: “Just weeks after we learn that not a single new offshore wind project will be going ahead this year due to the government’s intransigence – and as Rishi Sunak tears up vital climate policies – these findings are shocking.

“They provide further evidence that Number 10’s fossil fuel agenda is far from accidental. There are powerful vested interests at work and the Centre for Policy Studies seems to be at the heart of it. The government’s plan to hand out more than a hundred new North Sea drilling licences in the coming months is looking grubbier than ever.”

DeSmog previously revealed that the Conservative Party received £3.5 million from fossil fuel interests in 2022, including from the North Sea industry. This week, DeSmog also revealed that the government watered down its windfall tax on the excess profits of energy firms after a lobbying blitz by the oil and gas industry.

When asked about its board members’ business interests, a CPS spokesperson said that the think tank is “grateful for all our supporters, especially the support of our board members, but the investments of other boards on which they sit have no bearing on their relationship with the CPS”.

They claimed that DeSmog was “cherry-picking in order to manufacture an incorrect picture of the CPS’s position” and that it was “misleading and below journalistic standards.”

They added that “the Centre for Policy Studies has been one of the most prominent champions of free-market environmentalism, with a dedicated workstream on net zero” and that “Where our work is sponsored, this is made clear in the report acknowledgments, in press releases, and in event invitations.”

The North Sea Transition Authority (NSTA), the regulator in charge of issuing drilling licences, said that oil and gas were “forecast to play an important role in the energy mix for decades to come”. A spokesperson said the NSTA was “pleased” with the number of applications received in the current oil and gas licensing round and that the process of assessing them was “progressing well”.

The Department for Energy Security and Net Zero declined to add any further comment.

At the end of September, the International Energy Agency, of which the UK is a member, released a report reiterating the need for a phaseout of fossil fuels if climate goals are to be met. 

Lord Deben, the recently retired chair of the UK’s Climate Change Committee, which advises the government, argued in August that the government should stop approving North Sea licences.

Deltic Energy

Lord Spencer, who has chaired the CPS since the start of 2020, is the largest shareholder of Deltic Energy, which holds stakes in 18 North Sea areas, known as blocks, according to NSTA data.

A former Conservative Party treasurer, Spencer was given a life peerage by Boris Johnson. Official data shows that he has donated more than £7.5 million to the Conservative Party, individual Tory politicians and officially affiliated groups since 2015. He also sits on the board of the party’s multi-million-pound endowment fund. DeSmog revealed earlier this year that many of its directors have significant fossil fuel interests.

Through his holding company, IPGL, Spencer owns a £17.5 million stake in Deltic, according to Refinitiv data – nearly a fifth of the firm. He has held a significant shareholding since at least 2018, and bought more shares in 2019 from its founder Algy Cluff, a pioneer of the original North Sea oil boom in the 1970s who himself later joined the CPS board.

Responding to an enquiry from DeSmog, Cluff said that although the value of the company “may have increased in the view of management”, the stock market is “unimpressed and very much aware of the risks associated with any oil investments nowadays”. He described the “small number” of options he holds in the company as “presently worthless”.

Cluff has nevertheless spoken of the North Sea’s “second coming”, claiming that there is “a lot more oil to be found” and a “huge amount of gas”.

Deltic has made significant discoveries in recent years, touting its “enviable reputation as proven hydrocarbon finders” on its website, and has seen its market value rise in tandem.

It won blocks in North Sea licensing rounds in both 2018 and 2020, with the former is said to represent an area the “size of Bedfordshire”.

In its latest annual report, for the 2022 calendar year, Deltic criticises the government’s windfall tax but praises its accompanying investment allowance, which provides North Sea companies with tax breaks to encourage investment.

A presentation it gave investors in March describes its strategy as “Identify. Explore. Monetise. Repeat.” It says the investment allowance “significantly enhances economics from investment in Deltic exploration”, touts controversial gas-derived “blue hydrogen” as environmentally friendly, and highlights “established export infrastructure” and “regular licensing rounds” as attractive features of the North Sea.

Deltic is chaired by Mark Lappin, a former technical director of fracking company Cuadrilla who has publicly called for more oil and gas production, criticising opposition to new drilling.

Lord Spencer’s Conservative donations, made either personally or through IPGL and ICAP, include £25,000 gifts to the 2022 leadership campaigns of Sunak, Liz Truss, and Penny Mordaunt.

Spencer made £20,000 donations to Johnson, Jeremy Hunt, Michael Gove and Sajid Javid in 2019, and has made smaller donations to numerous other leading figures within the party in recent years, including Kwasi Kwarteng, Dominic Raab, Theresa May, Brandon Lewis, and Andrew Griffith.

Spencer has also funded “Blue Collar Conservatism”, a large caucus of Conservative MPs working to “champion working people”, with donations totalling £25,000 in 2019 and 2020. The group has campaigned against fuel duty rises.

Spencer’s Other Fossil Fuel Interests

Lord Spencer has also publicly talked up the fossil fuel industry, telling LBC’s Nick Ferrari last September that the UK “sadly has opposed further investment in North Sea oil and gas”. During the interview, he praised then Prime Minister Liz Truss for speaking out against windfall taxes on the sector, calling them “not Tory policy” and “not pro-business”.

He also expressed support for fracking, praised Truss’s “strategy” and “ideology”, and called for investment in renewable energy, but omitted to mention his interests in oil and gas.

In addition to the North Sea, Spencer has various other fossil fuel interests. According to Refinitiv, he holds the second largest stake in Pantheon Resources, a UK company exploring for oil in Alaska that recently hailed a potentially enormous discovery.

His brokerage firm ICAP also includes an oil and gas trading arm. Until December last year, Spencer held shares in Petrofac, an oilfield services firm heavily involved in the North Sea, including the controversial Cambo project.

Spencer’s shareholdings are disclosed to the House of Lords – indicating either a stake worth more than £70,000 or significant control over the company. They include Cluff Energy Africa, described as an “early stage oil prospecting company, seeking licences in Africa (Angola and Sierra Leone)”.

Its founder, Algy Cluff, told DeSmog that they had “wound the company up” because they “found the premium being asked by governments for the right to explore not to be consonant with the rewards”.

Cluff was a director of the CPS between 1995 and 2006, coinciding with the executive directorship of the late Tessa Keswick. Cluff confirmed to DeSmog that Keswick helped him find investors for his North Sea consortium in the 1970s, as has been reported.

Tessa’s husband Henry Keswick, chairman emeritus of the conglomerate Jardine Matheson and a major Tory donor, used to own the influential conservative Spectator magazine and sold it to Cluff in the early 1980s. Cluff was its chairman until 2004, during which Charles Moore, Dominic Lawson, and Boris Johnson were editors.

The magazine was edited in the 1960s by the late Nigel Lawson, who would become Thatcher’s chancellor and in later life promote climate science denial through the Global Warming Policy Foundation, based at 55 Tufton Street.

Cluff’s remaining business interests include Cluff Mineral Resources, an Africa-focused gold and coal exploration company, which was temporarily based at 55 Tufton Street before moving next door to share an address with the CPS.

The Board

Another CPS board member, Lord Strathclyde, is a senior strategic adviser to Hibiscus Petroleum, a Malaysian oil and gas company that has amassed stakes in 11 North Sea blocks in recent years. 

Ithaca, the firm behind the high-profile Rosebank and Cambo projects, is partnering with Hibiscus on one of the blocks.

Hibiscus is also one of the firms to have been awarded stakes in the latest round of oil and gas licences.

Strathclyde, who was leader of the House of Lords under David Cameron, is an adviser to oil trading giant Trafigura.

Sir Douglas Flint, chair of Abrdn – formerly, Standard Life Aberdeen – also sits on the CPS board. Abrdn has been targeted by protesters for its investments in oil and gas, which climate researchers Urgewald estimate at £2.9 billion. According to the latest figures, they include oil majors like BP, Shell and Exxon, as well as North Sea-focused firms Serica Energy, Harbour Energy, and EnQuest.

The major asset manager was reportedly one of a group of financial institutions recently summoned by the Treasury to increase investment in the North Sea.

Lord Spencer’s entry in the register of interests indicates he also holds a stake worth more than £70,000 in Abrdn.

Other CPS board members include Jon Moulton, chair of FinnCap, a financial advisory firm whose activities include raising finance for North Sea oil and gas companies, and Roger Orf, a partner at Apollo Global Management, a US private equity firm with £349 million of investments in BP and Shell, both major North Sea players.

Two further CPS board members have wider interests in oil and gas: Ian Molson, deputy chair of Central European Petroleum, which is exploring for oil in Germany and Poland; and major Tory donor Lord Bamford, chair of construction giant JCB, a sector still heavily reliant on fossil fuels.

In April 2023, DeSmog revealed that CPS board members had donated more than £600,000 to the Conservatives since Rishi Sunak became prime minister. 

The CPS also leans on its board for funding. According to the group’s latest accounts – for the period up to September 2022 – its directors donated £1 million to the company during the year. Turnover was £650,000 during the year and ‘other operating income’ hit £1.5 million, meaning that the CPS board contributed nearly half (47%) of its income during the period.

North Sea Push

The Centre for Policy Studies has strongly supported new North Sea oil and gas drilling in recent years.

In a March 2022 economic bulletin, it recommended that the government “look at accelerating regulatory approval for upcoming oil and gas projects such as Rosebank [Phase 1], Clair South, Glengorm, Cambo and Bentley [Phase 2]”. 

The bulletin added that introducing a windfall tax on profits would be a “terrible idea” and “completely self-defeating”. It welcomed “reports” suggesting the government was planning to launch another licensing round for fossil fuel projects.

A month later, the CPS welcomed the government’s “energy security strategy”, calling the return of annual North Sea licensing rounds “overdue”. A 33rd licensing round was launched in October.

In September 2022, an economic bulletin from the think tank called for “improved tax incentives for firms operating in the North Sea”.

In February this year, one of the CPS’s senior researchers criticised the “punishment beatings inflicted on the North Sea oil and gas industry from George Osborne onwards” – despite the sector having enjoyed one of the most generous tax regimes in the world until the recent windfall tax.

Other articles published on CapX, a commentary website run by the CPS, have labelled the Labour Party’s policy of no new North Sea licences “more than a little nuts” and the SNP’s similar position a “dangerous gambit”.

Andy Mayer, chief operations officer at the BP-funded Institute of Economic Affairs, writes regularly for CapX. He has used the platform to describe opposition to the Rosebank project as “shrill hysteria”, Shell’s bumper profits this year as “brilliant stuff”, and North Sea companies being fined for gas flaring as a “dotty investment message to send”. Following the announcement of the latest North Sea licences, Mayer wrote a story for CapX headlined “Hurrah for new North Sea oil licences!”

CPS Influence

The CPS has significant political access, having conducted private, one-to-one meetings with ministers on 27 occasions since 2014 and attended many other larger ministerial meetings, according to data compiled by Transparency International from government disclosures.

A number of the think tank’s former employees are now working as government advisers and its homepage carries supportive quotes from former prime ministers Liz Truss and Boris Johnson. 

Rishi Sunak spoke at a CPS event at the Conservative Party conference in 2019 and wrote a report for the organisation in 2016 backing the roll-out of freeports, which have since been introduced.

The think tank, which was co-founded by Margaret Thatcher, hosted a “dedicated space” at this year’s party conference, with speakers including Jeremy Hunt, Michael Gove, and Grant Shapps.

The chair of Times Newspapers, which publishes The Times and Sunday Times, and the editor of The Spectator, both sit on the CPS board. All of the titles editorially support new North Sea oil and gas.

Richard Sharp, who was forced to resign as chairman of the BBC earlier this year over his connection to a secret £800,000 loan to Boris Johnson, sat on the CPS board for 19 years before joining the BBC in 2021.

The CPS, which does not disclose its funding, has offices on Tufton Street in Westminster, alongside several other “free market” pressure groups and think tanks, including the climate science denying Global Warming Policy Foundation.

Other board members include Rachel Wolf, a co-author alongside CPS Director Robert Colvile of the 2019 Conservative manifesto, which said the “North Sea oil and gas industry has a long future ahead” and supported a deal with the sector that allows for new drilling projects.

Original article republished from DeSmog.

Scientists protest at UK Parliament 5 September 2023.
Scientists protest at UK Parliament 5 September 2023.
Continue ReadingTop Tory Think Tank’s North Sea Oil and Gas ‘Vested Interests’