A Conservative MP has received thousands of pounds for consultancy work for one of the big City investors controversially granted priority access to shares in the privatised Royal Mail, The Independent can reveal.
Fidelity Worldwide Investment, the fund manager, employs Sir John Stanley – a Privy Councillor and a minister during the Thatcher years – as a consultant “on financial services”, paying about £300 an hour, according to the Register of Members’ Interests.
The firm has also made a succession of substantial donations to the Conservative Party. Last year they amounted to £75,000, after £100,000 paid in 2012, £75,000 in 2011 and £200,000 in 2010, the year of the last general election.
Including the 2009 figure of £150,000, Fidelity has sunk in excess of half a million pounds into Conservative Party coffers over a five-year period.
It also gave £50,000 to the successful No campaign in the run-up to the 2011 referendum on adopting the “alternative vote” for elections to Westminster. The No campaign was supported by senior Conservatives including the Prime Minister, David Cameron.
Sir John, whose work for Fidelity involves “attending meetings as necessary and advising on business opportunities and risks” – typically receives £1,800 a month for between five and seven hours’ work. He is due to step down as MP for Tonbridge and Malling at the next general election after more than 40 years in the House of Commons .
The Royal Mail flotation has proved hugely controversial after the shares soared by 38 per cent on their first day of trading – netting millions for a select group of City investors, including hedge funds, while thousands of small private investors missed out on the flotation after a £10,000 cap was imposed on them. Yesterday the shares closed at 538.5p, more than 50 per cent above the float price.
The Government had intended to keep secret the names of the private investors granted priority status in the privatisation, but was forced to reveal them this week after months of pressure.
The scale of the gains enjoyed by City investors has sparked a political storm, with the Labour leader Ed Miliband claiming the some of the investment firms involved had been handed a “golden ticket” to make a “fast buck” by selling out quickly.
Fidelity, known as a long-term investor, was not among them, and has been pressing companies in which it invests to force their executives to hold on to free shares through “long-term incentive schemes”.
It said it had disclosed its political donations and Sir John, whose office did not respond to a request seeking comment yesterday, had disclosed his work for the firm.
However, it did not say whether the flotation had been discussed with Sir John during the course of that work.
Fidelity said: “Our political donations are fully disclosed and are a matter of public record as is our relationship with Sir John Stanley. The nature of his consultancy and fees paid are fully disclosed by him. Separately, with regard to the Royal Mail IPO [initial public offering], we were allocated preferential shares because we are a major financial services institution and leading investment company. Fidelity Worldwide Investment participated in the Royal Mail IPO, remains a shareholder in Royal Mail and now owns substantially more shares than it did at the time of the float.”