Bureau Recommends: Taxpayers foot the bill for banks’ lobbying

RBS’s use of PR companies is far greater than its private competitors, says report.

Britain’s two state-owned banks – the Royal Bank of Scotland (RBS) and Lloyds Banking Group – hired eight separate lobbying and public affairs companies last year, an investigation by the Independent revealed today.

Despite making significant losses, the banks have paid PR firms ‘hundreds of thousands of pounds a year’,  the investigation found. RBS lost more than £750m in the last six months, while Lloyds reported £3.3bn of pre-tax losses in the six months to June.

The news comes following an undercover investigation by the Bureau, published in the Independent last month, which revealed how a PR firm claimed to have access to the heart of Government.

Today’s report uncovered that RBS, which is 83 percent owned by the taxpayer, paid six firms last year: APCO, Finsbury, Bell Pottinger, Open Road, Lansons, and Certon Enterprise.

Lloyds – 41 percent owned by the taxpayer – hired Burson Marsteller and College Public Policy – the second being later replaced by Hanover.

Neither bank would disclose the nature of the work carried out by the firms.

However, the extent of their use, says Independent Whitehall editor Oliver Wright, ‘will fuel concerns that the banks are using taxpayers’ money in an attempt to water down banking reforms and planned caps on executive pay.’

There is a ban by ministers on other recipients of taxpayers’ money hiring PR companies to lobby Government.

Downing Street sources said it ‘seemed ridiculous’ for banks such as RBS and Lloyds to be spending shareholder money on PR consultants, but they insisted that any attempted lobbying would not influence ministers.

However, Tamasin Cabe, of the Alliance for Lobbying Transparency, described the revelations as ‘offensive’ while Labour said they were ‘outrageous’.

‘It is hard to explain how a state-owned company should need lobbyists to lobby the state,’ said Jon Trickett, the shadow Cabinet Office minister. ‘They should be spending their money providing better services for customers.”

Read the full story here.