Asset managers have paid UK politicians hundreds of thousands of pounds for speeches and advice over the past 12 months as investors desperately search for an edge as Britain messily negotiates its departure from the EU.
Political figures on both sides of the Brexit divide — including Boris Johnson, Iain Duncan Smith, David Davis, John Redwood, Damian Green and Ken Clarke — received thousands of pounds to share their insights with UK and US investment companies.
The payments made by fund managers to politicians — on top of their basic MP salaries of £79,468 — have drawn criticism from consumer rights champions.
“It is hard to see what value these politicians add,” said Mick McAteer, co-director at the Financial Inclusion Centre, a consumer advocacy group. “Investment managers would be better off not wasting money, and focusing on reducing costs for investors.”
Since April 2018, asset managers have paid MPs at least £126,000 in speaker fees and more than £110,000 for advice. Politicians are required to disclose additional income in the publicly available register of members’ financial interests.
The biggest payment by an investment company was made to Mr Johnson, the former foreign secretary and a probable contender for leadership of the Conservative party, who received £94,507 from GoldenTree Asset Management, a New York hedge fund manager, for a speech in November. He also received travel and accommodation, details of which were not disclosed.
Mr Johnson was scolded by a parliamentary committee this week for failing to declare, in a timely fashion, income from a property he co-owned in Somerset.
Mr Duncan Smith, the former Conservative leader who backed Brexit, was paid £5,000 by PineBridge Investments for a speech in September last year; £3,000 by State Street Global Advisors for a panel discussion in November; and £4,500 by UBS for a speech at a hedge funds conference in the same month.
Mr Clarke, the Europhile Tory backbencher and former chancellor, received £6,000 for a speech at WisdomTree’s annual investment conference in January. The exchange traded fund manager revealed in a tweet that the talk covered Brexit and its effect on the UK.
Almost all the politicians receiving sizeable payments were Conservatives, though Vince Cable, the outgoing Liberal Democrat leader, earned £3,000 from State Street Global Advisors for a speech, which was paid directly to a local charity.
Mr Green, a former close ally of prime minister Theresa May, was paid a total of £7,000 for two briefings at Janus Henderson. “I gave advice on the current political situation, with particular emphasis on the progress of Brexit, for senior staff,” Mr Green told FTfm.
Politicians also received thousands of pounds’ worth of hospitality from fund managers. David Davis, the former Brexit minister, accepted a paid-for trip to Davos, the World Economic Forum’s annual get-together in February, from Standard Life Aberdeen.
The trip included flights costing more than £1,000, a £714 airport transfer and accommodation worth £3,141. Keith Skeoch and Martin Gilbert, SLA’s joint chief executives at the time, also attended Davos. Mr Davis spoke at an SLA briefing, for which he did not receive a fee.
SLA said it was “strictly apolitical”, adding: “We occasionally invite policymakers and politicians from across the political spectrum to speak at events, such as our diversity summits and investment forums. Guests listen to their views and question them.
“David Davis spoke at a breakfast at the World Economic Forum. The guests at the event represented a range of different institutions and views and quizzed Mr Davis on Brexit.”
Mr McAteer said voters and investors did not have a favourable view of close relationships between politicians and fund managers. “The investment industry is one of the lowest rated by consumers on a range of measures including trust. There is also a well-documented crisis of trust in politics,” he said.
“The image of a cosy financial relationship between the City and Westminster politicians will do nothing to improve trust in either.”
Politicians also received a total of more than £500,000 in declared income for their roles as employees and directors of investment companies last year. These included Mr Redwood, who received close to £220,000 for his role as chairman of the investment committee at Charles Stanley, and Jacob Rees-Mogg, who received more than £180,000 from Somerset Capital, the boutique emerging markets specialist he part owns.
MPs do not have to declare dividend payments but 21 partners of Somerset Capital shared £25.3m in the 12 months to March 2018.
