Michael Spencer

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Michael Alan Spencer (born 30 May 1955, Kuala Lumpur, Malaysia) is a British billionaire businessman; the chief executive of ICAP, the FTSE-100 listed world's largest interdealer broker. He is also the owner of spread-betting firm City Index, through his private investment vehicle IPGL.

In the Sunday Times Rich List 2008 ranking of the wealthiest people in the UK he was placed 62nd with an estimated fortune of £1,150 million.[1]

Spencer masterminded a dramatic increase in funding from financiers to the Tories ahead of the 2010 general election. In total, the Tories raised a spectacular £35.5m in the 10 months beforehand – twice as much as Labour - and cleared their debts.

Conservative Party donor and persuasive City fundraiser

Spencer was Conservative Party treasurer from 2005 until he stepped down in October 2010. He reportedly 'masterminded an aggressive charm offensive' which saw funding from the financial services sector soar - from £2.7m in 2005 to £11.4m in 2010. The City now accounts for more than half the Tories' funding - 50.8 per cent in 2010. [2]

The party's biggest financial services donor was private investment company IPGL - of which Spencer is the majority shareholder, along with his wife and family trusts. It gave £806,864 to the Tories during Spencer's stint as treasurer. IPGL owns 18 per cent of Icap. Another Spencer offshoot, Intercapital Private Group, donated £365,000, while BSN Capital Partners, a hedge fund that is an associate company of Icap, gave the Tories £170,000. [3]

Spencer is a member of The Leader's Group, the premier Conservative Party supporter group. Through an annual membership fee of £50,000 donors are able to secure access to leading members of the party.

Exerting pressure for lower taxes

Cuts to corporation tax and the 50p rate

In November 2009 Spencer was quoted in an interview with the Financial Times that he was "hopeful" of even deeper cuts in corporation tax than George Osborne had already signalled, from 28 per cent to 25 per cent. "I am hopeful that, over the next parliament . . . we will get corporation tax down towards the 20 per cent level."

Spencer told the FT he was speaking in a personal rather than an official party capacity. The FT however pointed out that "his call for a further 5 per cent cut - costing an estimated £4.8bn, without allowing for any offsetting increase in economic activity - chimes with signals sent by the Tory leadership".

So far, his hopes have been partially met. In March 2011 the new Coalition government's Budget brought a 'surprise cut' in corporation tax by two percentage points to 26pc from April 2011 (double the previously proposed cut), along with the announcement that by 2014, corporation tax will be reduced to 23pc (instead of decreasing to 24pc over four years). [4]

Spencer has also consistently spoken out strongly against the 50p tax rate brought in by the previous Labour government. In the same interview he said: "I believe and I hope and I expect that that will be reversed in the foreseeable future."[5]

Dining with the PM ahead of the 50p cut in the 2012 Budget

In March 2012 in the wake of another 'cash for access' Sunday Times sting operation, this time on Tory party co-treasurer Peter Cruddas, the prime minister David Cameron published details of "three occasions on which significant donors have come to dinner in my flat". Michael Spencer was one of those donors, having taken his partner to a 'social dinner' with the Camerons at Number 10 on 27 February 2012, [6] just weeks before the cut to the 50p tax rate was announced by George Osborne in the 2012 Budget.

Fury at the EU's Financial Transactions Tax

More recently he has made clear his fury at plans for the proposed 'Tobin' tax that would charge a fee for every financial transaction. In August 2011 he said such a tax would be prohibitively expensive, and that he was prepared to relocate ICAP out of the UK if European leaders pushed ahead with plans to introduce this financial transaction tax.

"This tax would destroy the City and cost the Exchequer billions, but it would benefit Brussels. Companies like ICAP will simply move elsewhere outside the EU if Nicolas Sarkozy and Angela Merkel push ahead with this silly tax." [7]

Keeping the City sweet for the Tories

Before the last election the Tories and David Cameron were wary of being seen to be giving too many concessions to big business, against the backdrop of public outrage about greedy bankers. Spencer however told a meeting of business chiefs that 'the City should not be unduly concerned by his party leader's rhetoric on bankers. The Conservatives were "very, very well aware" of the importance of the City and "realise it has to be nurtured", he said.

Telegraph leader writer David Hughes blogged: "My hunch is that Osborne is using Spencer as an outrider to re-assure the City in particular that regardless of the state of the public finances, taxes will be lower under the Tories – and in particular that the hated 50p rate that kicks in on April 1 next year will be short-lived. We shall see." [8]

Embarrassing fines

In January 2011 Spencer's spread-betting firm City Index was fined £490,000 by the regulator, the Financial Services Authority (FSA) 'for failing to report thousands of trades and incorrectly reporting nearly 2million more'. Sixty per cent of trades completed by the company between November 2007 and September 2009 had been "improperly" reported.

"This failure is a serious breach of our rules because it can have a damaging impact on our ability to detect and investigate suspected market abuse," said Margaret Cole, the FSA's director of enforcement and financial crime. The regulator said the penalty would have been £700,000 but was commuted because the company agreed to settle early. The failings came to light only after the FSA queried some of the reports being sent to it by City Index, leading to the discovery that 1.97m trades had been incorrectly reported over a period of nearly two years.

City Index told the Telegraph newspaper that what the FSA described as "fundamental errors" were caused by a new IT system and said its faults were "historical errors". "[We have] introduced improvements which will ensure that the error is not repeated. City Index is fully compliant with the FSA's rules on transaction reporting and no client was affected." [9]


  1. Sunday Times Rich List 2008 online edition
  2. Nicholas Watt, City bankrolled Tory election campaign guardian.co.uk, Tuesday 8 February 2011 22.01, acc 18 Dec 2011
  3. Zoe Wood, [http://www.guardian.co.uk/politics/2011/feb/08/tory-donors-financial-services-ipgl Conservative party's biggest donors in financial services sector revealed, guardian.co.uk, Tuesday 8 February 2011, acc 18 December 2011
  4. James Hall, Budget 2011: Surprise cut in corporation tax 'will stimulate growth', 24 Mar 2011, acc 18 Dec 2011
  5. Jean Eaglesham and Richard Milne, Tory treasurer expects taxes to be slashed, Financial Times, 30 November 2009
  6. http://www.guardian.co.uk/politics/2012/mar/26/cash-for-access-dinner-guest-list, guardian.co.uk, 26 March 2012, acc same day
  7. Louise Armitstead, Icap boss Spencer's fury over EU transaction tax plans, 22 Aug 2011, acc 18 December 2011
  8. David Hughes , Is Michael Spencer's tax message authorised?, 30 November 2009, acc 18 December 2010
  9. Harry Wilson, FSA fines City Index £490,000 for trading reporting errors, Telegraph, 21 Jan 2011