Finance dominates UK lobbyists operating in Brussels bubble

March 8th, 2016
by Vicky Cann

Financial services dominate the list of the UK's top corporate lobbyists at the EU level, says LobbyFacts.

Barclays, Bank of America Merrill Lynch, HSBC, Morgan Stanley, Royal Bank of Scotland and Aviva are all in the top 15 of UK-based companies spending most on EU lobbying, with their collective spending totalling between €6,736,619 and €7,536,614 in the most recent year for which figures are provided. (For many of these companies which originate from outside the UK, London provides their European base, which is why they feature in this list of top UK lobbyists at the EU level.)

A look at the similar analysis which LobbyFacts conducted last year shows finance plays a bigger role this year than last year. The focus of finance lobbyists' recent efforts have included the Banking Union, Capital Markets Union and trade policy, including TTIP, and they have secured at least 53 meetings with the top echelons of the Commission between December 2014 and January 2016, according to data from Integritywatch.

Sector Company Annual lobby spend in € Full-time equivalent lobbyists Meetings with senior Commission reps
1 energy BP p.l.c. 2,750,000 - 2,999,999 3.75 24
2 electronics Samsung Electronics Europe 2,500,000 – 2,749,000 4 15
3 pharma GlaxoSmithKline 1,750,000 – 1,999,999 5 5
4 finance Barclays PLC 1,736,619 2.75 6
5 pharma AstraZeneca 1,500,000 – 1,999,999 2.75 0
6 tobacco British American Tobacco 1,500,000 – 1,749,000 7 0
7 beverage Diageo 1,500,000 – 1,749,000 5.5 2
8 finance Bank of America Merrill Lynch 1,250,000 – 1,499,999 2.75 9
9 finance HSBC Holdings PLC 1,250,000 – 1,499,999 5.25 19
10 engineering Rolls-Royce plc 1,000,000 – 1,249,999 3.25 9
11 telecoms BT Group plc 950,000 4.25 16
12 finance Morgan Stanley 900,000 – 999,999 0.75 3
13 finance The Royal Bank of Scotland 900,000 – 999,999 1 4
14 music Universal Music Group International 900,000 – 999,999 1.5 14
15 finance Aviva Plc 700,000 - 799,999 2.75 12

Otherwise, the list of top 15 UK companies lobbying the EU is dominated by household names with energy giant BP taking the number one spot with its declared annual EU lobby spend of €2,750,000-€2,999,999, a substantial increase on last year's declared lobby spend of €1,500,000-€1,250,000, perhaps reflecting the focus on the development of the Energy Union. Big Pharma features prominently with GlaxoSmithKline (GSK) and AstraZeneca both in the top five with a combined spend of between €3,250,000 and €4 million. A recent Corporate Europe Observatory report has highlighted how the pharma corporate lobby massively outspends public interest groups on the medicines issue, with TTIP a growing focus of interest for Big Pharma lobbyists.

British American Tobacco is sixth on the list of UK corporate lobbies operating in Brussels. The tobacco firm manages to spend €1,500,000-€1,749,000 a year and employ the equivalent of seven full-time lobbyists on EU lobbying when, under the World Health Organisation's Framework Convention on Tobacco Control (UNFCTC) and its guidelines, decision-makers should keep lobby contacts with tobacco companies to the minimum. Nonetheless, during the recent Tobacco Products Directive lobby battle, tobacco lobbyists were out in force and won several important concessions from EU decision-makers as that dossier made its way through the EU decision-making process. The European Ombudsman recently said that she “strongly regrets that the European Commission has chosen not to make its dealings with the tobacco industry more transparent in line with UN guidelines”. We also know that MEPs are not always rigorous in avoiding contacts with the tobacco lobby.

The leaders of 9 of the 15 biggest corporate spenders (BP, GSK, AstraZeneca, Diageo, HSBC, Rolls-Royce, BT, Universal Music Group, and Aviva) signed a recent letter to The Times calling for the UK to remain within the EU in the 23 June referendum on the issue. The corporate-driven letter listed reduction of the burden of regulation and sign-off on international trade deals as reasons to oppose the so-called Brexit, topics which have been the focus of major corporate lobby campaigns.

The dominance of financial services is mirrored in the list of top-spending UK-based trade associations with finance preoccupying 7 of the top 15 spending associations. The Association for Financial Markets in Europe tops the list with a massive €8,000,000-€8,249,999 annual spend, (which is lower than last year's declared spend of more than €10 million). Also notable on this list are the British Bankers' Association, TheCityUK, and the Alternative Investment Management Association which represents hedge funds. In total finance-related trade associations based in the UK spend between €18,600,000 and €20 million, according to their lobby register declarations, and again this is far more than last year. Based on data on Integritywatch, they held over 50 meetings with the Commission elite between December 2014 and January 2016.

Sector Trade/ business association Annual lobby spend in € Full-time equivalent lobbyists Meetings with senior Commission reps
1 finance Association for Financial Markets in Europe 8,000,000 – 8,249,999 27 14
2 finance The Investment Association 3,000,000 – 3,249,999 14 9
3 finance British Bankers' Association 2,250,000 – 2,499,999 11.75 12
4 finance TheCityUK 2,000,000 – 2,249,999 5 16
5 energy International Association of Oil & Gas Producers 1,820,000 9.75 5
6 finance Association of British Insurers 1,750,000 – 1,999,999 5.75 4
7 music IFPI Representing recording industry worldwide 1,000,000 – 1,249,999 4.5 19
8 general Confederation of British Industry 900,000 – 999,999 11.25 24
9 finance ICI Global 800,000 – 899,999 1.5 2
10 finance The Alternative Investment Management Association Limited 800,000 – 899,999 5 5
11 law Law Society of England and Wales 700,000 - 799,999 11.5 0
12 food & drink Scotch Whisky Association 700,000 – 799,999 5.5 1
13 telecoms European Competitive Telecommuniations Association 650,000 5.5 22
14 engineering EEF, the manufacturers' organisation 600,000 – 699,999 4.25 1
15 climate The Prince of Wales's Corporate Leaders Group 600,000 – 699,999 5 1

LobbyFacts is not in a position to judge the precise accuracy of the data provided in the EU lobby register in terms of individual entries, although Transparency International has estimated that half the register data is flawed. A new study shows that those performing the role of 'public affairs heads of office' receive an average salary of €80,000 and €130,000 annually. The report, based on a survey of 30 EU public affairs/ government relations heads, found that the majority (69 per cent) earned a salary between €130,000 and €300,000. With such generous salary levels, plus activity costs, plus the cost of EU quarter property rents, it seems highly plausible that there is still a culture of under-reporting lobby spend in the register.

Of course, there is an over-reporting problem too. If you simply extract a list of UK-based lobby organisations from LobbyFacts, you will not immediately find the tables reported above. Taken at face value, the lobby register data, as ranked by LobbyFacts, indicates that the top UK spenders on EU lobbying are three universities, two recruitment consultancies, a local authority body, and a manufacturer of “composite components” all of whom declare €10 million or more annual lobby spend! These entries would appear to overstate the actual lobby activities conducted by these organisations and our tables above are based on 'cleaning' the data of such entries.

Now that the Commission has just launched a consultation on reform of the lobby register, the challenge of tackling the dodgy data in the register and improving the disclosure requirements for EU lobbyists is clear.

Meanwhile, as the UK referendum on a possible Brexit looms, it seems likely that financial services lobbyists operating in both London and Brussels, will only want to amplify their voices further.

These lists were produced by LobbyFacts and were accurate as of 7 March 2016.