Big business spends £25m on lobbying politicians
- January 13, 2017
- 0
- Will Turner

Revealed: companies exploit reporting loophole
Britain’s biggest listed companies have spent at least £25 million on political and lobbying activities in the past two years, an investigation by The Times has found, triggering calls for stricter disclosure rules.
FTSE 100 groups, including banks, defence contractors, tobacco manufacturers and telecoms companies, have spent more than £24 million on lobbying in Brussels and about £335,000 funding all-party parliamentary groups in Westminster.
Less than £10,000 of identified political and lobbying spending in the EU was disclosed to shareholders in the companies’ recent annual reports.
Since 2015 just over a fifth of blue-chip companies have funded specialist interest groups, whose members include MPs and lords from different political parties and which help to push industry agendas in parliament.
National Grid, which has spent about £55,000, BT Group, which spent £53,000, and BAE Systems, which spent £37,000, including on a group “to promote better understanding of the Her Majesty’s armed forces in parliament” are among the biggest backers of the parliamentary groups.
HSBC, which has a big Asia business, gave about £11,500 to a group that aims “to ensure parliamentarians are kept well informed on China, and to act as a platform for discussions on all issues of importance to [the] UK-China relationship”.
Diageo has spent £11,220 on a beer group whose purposes include promoting the “wholesomeness and enjoyment of beer and the unique role of the pub in society”.
The parliamentary groups have proved contentious because of the large amounts spent on reports that often support the views of industry and which grant access to parliament for companies and lobbyists. BT’s £53,000 included backing the parliamentary internet, communications and technology forum, known as Picfor, which along with Sky gets access to more than 60 MPs and peers, including Tom Watson, the Labour deputy leader, and Lord Birt, former director-general of the BBC, who are members.
The group’s stated aim is “to further understanding of policy issues affecting the internet, communications and technology sector between parliamentarians, the industry, consumer groups and academia”, but it also provides a way for corporate representatives to meet with decision-makers.
Sharon White, head of Ofcom, the media and telecommunications regulator, is due to give the keynote speech at Picfor’s reception in July.
Oliver Parry, head of corporate governance at the Institute of Directors, said it was important that governments engage with business but it was also “crucial that companies are as open as possible about how much they are spending on such activity”.
He added: “Money spent on lobbying should be declared to shareholders if it reaches significant levels, as it would be for any other kind of spending.”
Details of spending are disclosed in registers published by parliamentary groups and the EU. However, companires are not required to disclose details to shareholders and little information on corporate political and lobbying activities is revealed in annual reports, which are published before shareholder meetings.
There is no suggestion of any wrongdoing or rule-breaking by companies, but an analysis of disclosures by the FTSE 100 groups shows they tend to use the narrower definition of political donations and expenditure under the Companies Act 2006 when making disclosures in annual reports.
It means that many companies make no reference to political activities or state that no political donations or spending was made. It also means the tens of millions of euros spent each year in the EU go largely undeclared to shareholders.
The bulk of the spending analysed by The Times was made in the EU where companies are encouraged to disclose an annual estimate of money spent on items such as running an office in Brussels, the cost of events and annual trade association memberships.
The oil companies Shell and BP were the top spenders, paying £3.8 million and £2.1 million, as were the banks HSBC and Barclays, which spent about £1.5 million and £1.3 million in the EU.
Corporate Europe, which campaigns for greater transparency in EU decision making, has spent years tracking how the business world moulds policy.
Vicky Cann, the group’s UK representative, said that the banking and energy industries were the most active lobbyists. “The financial services industry is a huge spender and even then we think the real scope of their spending is probably bigger than we can currently see,” she said.
Her colleague Pascoe Sabido, who studies the energy industry, said that the same was true for oil and gas companies and gave the example of recent emissions legislation that was the subject of intense lobbying by BP and Shell.
In the 12 months before the UN Climate Summit in Paris in December 2015, the relevant EU commission officials, including Miguel Arias Cañete, the commissioner responsible for energy policy, held 413 meetings with business lobbyists, about 80 per cent of all their publicly disclosed appointments.
Since December 2014, BP and Shell have held 77 meetings with commission officials, while the total for the UK’s five largest bank stands at 64, including 37 for HSBC.
The Times findings, which took the lowest latest annual estimate disclosed by the companies to the EU, have prompted transparency campaigners to call for greater disclosure to shareholders and a tightening of the rules.
Peter van Veen, director of business integrity at Transparency International, said there was “undoubtedly a serious issue with the lack of transparency in leading UK companies, with many reluctant to disclose information beyond basic data around political donations and lobbying”.
He added: “Corporate transparency over political activities is important to ensure the public can have the confidence that their politicians and industry leaders are conducting business ethically . . . If companies are not voluntarily willing to disclose their political activities and funding of these, then stronger legislation should be considered and a possible starting point may be to broaden the definition of political activities and expenditure in the Companies Act 2006.”ompanies said they accurately reflected their spending in their annual reports under the rules and some have sought shareholder approval to spend a certain amount on political activities, as defined under the act. They also said they were politically neutral and that it was important to engage in the regulatory and political environments that impact their businesses.