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London Evening Standard: Fat-cat lobbyists ‘forced pension climbdown’

British Prime Minister Gordon Brown

Brown handed powerful lobbyists a better deal on pensons.

Paul Waugh, Evening Standard
12 February 2008, 2:23pm

Rich businessmen managed to persuade Gordon Brown to water down plans to curb their ‘fat cat’ pensions, it emerged today. 

A secretive lobbying group, made up of the head of Britain’s most powerful corporations, used breakfast meetings at Downing Street to steer government policy.

Documents released under the Freedom of Information Act show the heads of BP, Unilever, HSBC Shell and British American Tobacco, have used their private access to protect the pensions of the ultra-rich and influence other policies. The exclusive club, known as the multi-national chairmen’s group, consisted of fewer than 10 executives.

Downing Street has been forced to release the prime ministerial documents after a two-year battle. They show the executives also wanted Tony Blair, then Prime Minister, to lobby President Bush to treat corporations more favourably in return for supporting the invasion of Iraq.

Mr Brown first refused to water down his proposals but nine businessmen in the group sought to go over the Chancellor’s head at a meeting with Mr Blair on 2 September 2003.
Before the meeting, Geoff Norris, Mr Blair’s special adviser on business, had briefed him, writing: ‘The group … would like to discuss with the Prime Minister whether there was any prospect of movement on this issue …’

Executives at the meeting, including Lord Browne, then of BP, Arun Sarin of Vodafone, Sir John Bond, then of HSBC, and Sir Christopher Hogg, then of GlaxoSmithKline, said the proposals would drive businessmen away from Britain.

The lobbying, allied with protests from other business groups, forced Mr Brown to rethink. Within months, he had loosened the proposed cap on pension pots. The extra tax will be payable only on pension savings over £1.8m and will not come in until 2010.

The delayed start date allows more time to re-arrange finances. Mr Brown also cut the tax rate from 60% to 55%.

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