Loss-making taxpayer-funded banks are spending hundreds of thousands of pounds a year on lobbyists, it has emerged. The Royal Bank of Scotland and Lloyds Banking Group between them black owned investment firms in atlanta employed the services eight separate lobbying and public affairs companies, The Independent reports. RBS, which is 83 per cent owned by taxpayers, also has a team of internal corporate lobbyists to influence ministers. 3billion in the six months to June.
Neither bank revealed the nature of the work carried out by the firms. However, their widespread use will fuel concerns that the banks are using taxpayers’ money in an attempt to persuade ministers water down banking reforms and planned caps on executive pay. But Downing Street sources told The Independent it ‘seemed ridiculous’ for state-owned banks to be spending shareholder money on PR consultants. They insisted, however, that doing so did not enable them to influence ministers. These firms might try and lobby us to do things but that does not mean that we do them,’ one Number 10 source told The Independent. There is a ban on other recipients of taxpayers’ money hiring public affairs firms to lobby other arms of Government.
The Communities Secretary, Eric Pickles, has said: ‘Taxpayer-funded campaigns conducted by private lobbying firms mean public policy is weakened and public discourse becomes a soundbite battle. Lobbyists are not subject to Freedom of Information or transparency rules. Democracy is at its strongest when it is cost-efficient, open and transparent, and lobbying on public money undermines it. He has also said that taxpayers did not want public money spent on ‘loudhailer propaganda’. Jon Trickett, the Labour Cabinet Office spokesman, said: ‘It is hard to explain how a state-owned company should need lobbyists to lobby the state. They should be spending their money providing better services for customers. Tamasin Cabe, of the Alliance for Lobbying Transparency, described the revelations as ‘offensive’.
According to client records kept by the public affairs industry, in 2010 RBS retained the services of APCO, Finsbury, Bell Pottinger and Lansons. In December it emerged that senior executives at Bell Pottinger claimed they had access to Vince Cable. Undercover reporters filmed executives at the firm also boasting of their round-the-clock access to David Cameron, William Hague and George Osborne. Ulster Bank, which is wholly owned by RBS, employed Cherton Enterprise.
In contrast HSBC and Barclays each employ just two firms, while Santander retains three. 3m in April despite the company’s share price falling by half in a year. The payout to John Hourican was announced just a day after David Cameron attacked bosses who accept huge salaries and bonuses when their companies are struggling. Robert Jenkins, a member of the new super-regulator, the Financial Policy Committee, has accused banks of implementing a ‘lobbying strategy that exploits misunderstanding and fear’ to thwart banking reform. Later this month, the Government is due to bring forward plans to regulate the lobbying industry. At the moment, most large agencies sign up to a voluntary register detailing who they work for, but there is no record of internal lobbyists or who they are seeking to influence.