by Michael Dugher
Despite the fact that the city broker ICAP, which was founded and run by David Cameron’s former treasurer Michael Spencer, has been fined £55 million by regulators over the Libor scandal, it has been confirmed that Mr Spencer will be attending the Conservative party conference in Manchester. This will give the Tory donor unrivalled access to both the prime minister and the chancellor. No wonder people say Cameron can’t stand up for working people, just a privileged few. Once again we find Cameron mixing with the wrong crowd.
The Commodity Futures Trading Commission in the US has found that ICAP brokers, including one known as “Lord Libor”, helped rig the inter-bank lending rate for a period of at least four years. And the Financial Conduct Authority in the UK has said that the culture at ICAP Europe Limited exacerbated the problem, which included a “heavy focus on revenue at the expense of regulatory requirements”. Indeed, it was discovered that the desk at the centre of the misconduct was not audited for four years.
Cameron fought tooth and nail last year to avoid launching a proper investigation into the rigging of interest rates and now it has come out that the company of one his biggest donors was heavily involved in the fraud. In the House of Commons in July 2012, Ed Miliband called for a two-part, judge-led inquiry into what happened as well as the wider culture and practices of the industry. But Cameron repeatedly refused. Why was it that he was so determined not to act?
Electoral Commission records show that Michael Spencer has donated a total of £4,804,681.46 to the Conservative Party. This includes £279,389.59 in person and £4,525,291.87 through his holding company IPGL Ltd, which owns a chunk of ICAP. He was also one of the “significant donors” who was given special access to the prime minister and the hancellor through private Downing Street dinners (the “dinners for donors” scandal) and as part of the Tories’ exclusive leader’s group.
Spencer was Cameron’s co-treasurer between 2006 and 2010 and he is still the chairman of the Conservative Foundation – an organisation set up to support the party’s financial future. The minister for the cabinet office, Francis Maude, even described Michael Spencer as a “personal friend of the prime minister and the prime minister’s wife”.
It is also worth remembering that shortly after George Osborne became shadow chancellor, he wrote an article for the Daily Telegraph talking about how he had recently had lunch at Michael Spencer’s office as part of an effort to “understand the issues facing the City”. Although he attacks Labour today for not regulating the financial services industry enough before the global crash, in the very same article Osborne complained that there was too much financial regulation on the City.
And of course the Tories still don’t get it today. Whilst Ed Miliband has been showing how Labour would help hard-pressed families and pensioners deal with the cost of living crisis – like freezing energy bills for people being ripped off by the energy firms – George Osborne has been helping the bankers struggling with their cost of living. And on the very same day that it was revealed Michael Spencer’s company would be fined over the Libor scandal, Osborne’s top priority was to argue against plans for a cap on bankers’ bonuses, taking a case to the European Court of Justice. My friend and colleague Stewart Wood put it best on Twitter on Wednesday evening:
“Tory Wednesday: defending big energy companies, court action to protect bankers bonuses, and a donor fined £55 million for market fixing #onyourside”.
It is clear that the right thing would be for the Tories to return all the money from Michael Spencer. But there are also many questions which remain around the extent of his access and influence on the Government. In the same way that Cameron has refused to disclose details about the access to Downing Street given to the cigarette lobbyist Lynton Crosby, by blocking Parliamentary questions and FOIs, it seems they are now equally unwilling to say what meetings Michael Spencer has had in government. That is why when the House of Commons returns in a week’s time, I will be tabling a series of questions to ministers about the nature and frequency of their meetings with Michael Spencer.
And, whilst we are at it, No 10 have yet to publish the ‘Chequers list’ of all those people David Cameron has met in Chequers. This is normally published in July but we have yet to see it. What are the odds that Lynton Crosby and Michael Spencer will have been wined and dined by Cameron in his country retreat?
As the Tories get ready to meet for their party conference, we once again see that one of the defining characteristics of David Cameron’s leadership is he consistently knocks about with the wrong crowd. Whether it’s dragging his feet over phone hacking or failing to take on the cigarette lobbyists or Libor fixers, Cameron has shown he can always be relied upon to stand up for the wrong people.
Michael Dugher is Member of Parliament for Barnsley East, vice-chair of the Labour party and shadow minister without portfolio