UK banks 'spending millions to influence govt policy'

12 July 2012

British banks spent in excess of £92 million ($142 million) last year on lobbying officials in order to influence government policy.

That is according to a new report conducted by the Bureau of Investigative Journalism (BIJ), which has found financiers spent this eight-figure sum throughout 2011 as they attempted to encourage decisions to be made in their favour.

And the BIJ revealed that this effort paid dividends, as lobbyists managed to secure several reforms to policy to benefit banks.

For instance, people acting on behalf of the British Bankers' Association, the Association of British Insurers and the City of London Corporation Tax group ensured UK corporation tax and levies on lenders' overseas branches.

In addition, lobbyists managed to end government plans to create a new watchdog to oversee the financial industry.

Vince Cable, business secretary, said this provides clear evidence that the banking sector remains "disproportionately influential".

"I do worry that Britain’s financial sector, particularly the banks - as opposed to more successful and less problematic financial services like insurance - are too dominant," he added.

By Claire Archer

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