The UK government is encouraging finance companies to lobby against proposed EU regulation on food speculation.
Over the last few years the World Development Movement (WDM) has been busy campaigning to get strong legislation passed in the EU to stop bankers from pushing up food prices through financial speculation.
This week WDM has uncovered more from the murky and interconnected world of bankers and politicians, showing how the UK government has been doing its best to rally the bankers to do the exact opposite.
Our new report reveals details of a series of meetings held by the then-financial secretary to the treasury Mark Hoban from 2010 onwards, urging finance companies to lobby against proposed EU regulation which includes provisions aimed at stopping speculation by banks and hedge funds pushing food prices beyond the reach of millions of people.
Mark Hoban and other treasury ministers encouraged the City to coordinate lobbying efforts with the UK government, and even travelled to European capitals to persuade other governments to oppose tighter regulation of the commodity and other financial markets following the financial crisis.
As Lord Newby (government deputy chief whip) put it:
“Although the UK government are active in the Council and in the European Parliament, they need the UK financial services sector to be independently active in those institutions as well. There was a period when a lot of senior people in the City felt so battered with the experience that they had following 2008 that they were not willing to put their heads above the parapet and make the arguments. I think that that phase is over, to a certain extent at least, and the government are encouraging them very much to do that.”
This mentality can only arise from huge and prevalent revolving door that exists between the top echelons of government and the financial sector. As Spinwatch has documented, these connections are extensive, with major commodity derivative traders like Goldman Sachs benefiting from strong connections with public officials in high places.
It’s not surprising given the profits that are at stake for the small minority of financial traders if effective legislation is passed: WDM calculates that the top 5 banks made £2.2 billion from food speculation between 2010 and 2012.
With the final legislation due to be decided this week, there’s never been a better time to tell the UK government that you’re siding with people not profit.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.