Former Chancellor Spent Last Week in Role Seeking Post-Brexit Financial Advice from World’s Largest Asset Manager BlackRock

Former Chancellor Spent Last Week in Role Seeking Post-Brexit Financial Advice from World’s Largest Asset Manager BlackRock

BlackRock said it attended a meeting at the request of the Government to form a relationship with Nadhim Zahawi

Nadhim Zahawi spent part of his last week as Chancellor seeking advice and “continued support” from the world’s largest asset manager on the Financial Services and Markets Bill and a number of other UK issues, Byline Times has learned.

It was reported at the time that Zahawi would lobby for US and British companies to work closely together to develop small and advanced modular reactors and meet his US counterpart, Janet Yellen, to discuss the stepping up of exports of oil and gas to Britain to ease rising energy bills and plug the gap left by Russian supplies.

He also met with leaders of the New York Stock Exchange; Larry Fink, head of the investment company BlackRock; and banks including HSBC and Barclays in what The Times described as “an effort to reassure the American business elite about Britain’s prospects under a new leader”. 

A Freedom of Information (FOI) request by Byline Times can reveal some of what was discussed in those meetings.

Zahawi sought the views of Fink on a number of issues including the FS&M Bill, productive finance and new technologies. The meeting notes, under ‘points to make’, state: “The Bill seizes the opportunities of Brexit by tailoring financial services regulation to UK markets to bolster the competitiveness of the UK as a global financial centre and deliver better outcomes for consumers and businesses.”

The Bill is currently awaiting its third reading in the House of Lords. 

Under Fink, US-based BlackRock has grown into the world’s largest asset manager with around $9.5 trillion in assets under management including ownership of more than 7% of the S&P500 stock market index. Meanwhile, its UK subsidiary is also the largest in the country by assets managed.

The Government told Byline Times that there is “nothing untoward” about such a meeting and BlackRock explained it attended at the request of the Government to form a relationship with the former Chancellor.

But that relationship would be short-lived, as he would be replaced around a week later, on 6 September last year, by incoming Prime Minister Liz Truss.

Byline Times has previously reported how the embattled former Conservative Chairman’s own leadership campaign was backed by an investment manager linked to the offshore tax haven of Bermuda. Zahawi received £62,500 from Khaled Saïd – representing the full amount that appears to have been received by Zahawi’s campaign.

At the time the story broke, Zahawi was under intense scrutiny over his own tax affairs, having been forced to pay £4.8 million in unpaid taxes and penalty charges. The controversy surrounded his family’s alleged use of an offshore trust. Zahawi denied any wrongdoing. 

There is nothing in the Treasury’s FOI response to Byline Times to suggest any undue influence over government policy. But some of the meeting notes were redacted due to concerns around how a full disclosure would impact the UK’s relationship with the US and how such disclosure could be “detrimental” to the “ongoing development of government policy”. 

Some of that discussion revolved around the launch of the UK Long Term Asset Fund (LTAF) in March – designed to invest efficiently in long-term assets. “We welcome BlackRock’s continued support on the LTAF”, the FOI response stated. 

BlackRock maintains that its support revolved around replying to public consultations and public statements on why it believes it will provide simpler access for UK defined benefit pension savers to long-term private market investments. The company manages the pensions of more than 11 million people in the UK.

The minutes of Zahawi’s meeting also reveal how Stephen Cohen, BlackRock’s head of EMEA, is a member of the UK’s Productive Finance Working Group (PFWG) steering committee, which aims to develop practical solutions to the barriers to investing in long-term, less liquid assets.

BlackRock said that its views are often sought out on national and global financial issues, due to the depth of its experience and understanding around them. This includes sitting on industry committees such as the PFWG.

Zahawi also asked about BlackRock’s partnerships with Crypto firms, Circle and Coinbase, and how asset managers can best support the transition to net zero – but the response was redacted. 

In July, around a month before the former Chancellor flew to the US, he helped launch the Energy Bills Support Scheme with £400 for each household. But just one senior Treasury official spent more than 10 times that amount on the US trip. The Treasury’s transparency data shows how the individual spent £4,588 on business class flights, alongside food and accommodation. Zahawi’s own expenses claim was double that amount at £9,708.

Nadhim Zahawi’s office did not respond to a request for comment.

A Treasury spokesperson said: “There’s absolutely nothing untoward for the Chancellor of the world’s sixth-largest economy to meet a major financial services firm to discuss opportunities for US companies to invest in the UK. All meetings have been declared in transparency reports.”