Prime minister to hand Lords seat to ICAP founder Michael Spencer

18 January 2020, 14:50 | Updated: 18 January 2020, 16:07

The ICAP billionaire Michael Spencer is to be handed a peerage by Boris Johnson, paving the way for one of the City's most prominent figures to finally join the House of Lords.

Sky News has learnt that Mr Spencer - who was arguably the most successful treasurer in Conservative Party history - is set to be among a cluster of new Tory peers named on the Dissolution Honours List in the coming weeks.

Westminster sources said this weekend that Mr Spencer was "virtually certain" to be on the list.

His appointment would come four years after a previous attempt by David Cameron to ennoble him ended in failure amid political acrimony.

Earlier efforts to hand Mr Spencer a peerage were blocked over ICAP's involvement in the Libor rate-rigging scandal, which saw the interdealer broker fined £60m in 2013 by regulators in London and New York.

The City tycoon, however, was never personally implicated in any wrongdoing, and last year secured a significant victory when the European Court of Justice quashed a bid by Brussels to levy a further multimillion pound fine on the company he used to run.

Writing in The Sunday Times shortly after that verdict, Mr Spencer accused watchdogs of using massive penalties to disguise their own shortcomings.

"The other [firms] all paid up without murmur, despite the flimsiness of the case.

"We challenged the decision because we knew we had not engaged in any cartel behaviour and the whole investigation was designed to deflect attention from the failings of regulators to spot the financial crisis coming."

Several ICAP employees were charged by the Serious Fraud Office for their alleged role in the Libor scandal, but the case against them collapsed shortly after coming to court.

Having seen off the question marks against his reputation, the decision to ennoble Mr Spencer will come as little surprise.

He was among a group of substantial donors to Mr Johnson's leadership bid last summer, and over a long period has given millions of pounds to the Tories.

Friends estimate that he helped raise in excess of £100m for party coffers during his four years as treasurer, which culminated in him helping to corral the funds that took Mr Cameron into Downing Street in 2010.

Mr Spencer is now firmly part of the Conservative establishment, having been appointed earlier this month as chair of the Thatcherite think-tank, the Centre for Policy Studies.

One ally of the businessman said that while his close links to the Tory leadership - and deep pockets - had helped resurrect his chances of a peerage, he would also make a significant contribution to the upper chamber.

"Michael voted to remain in the EU referendum but he is a pragmatist and someone who cares deeply about the future of the country," a source close to Mr Spencer said on Saturday.

"He has a broad array of interests and he would be a valuable member of the Lords."

Mr Spencer is also a notable philanthropist, having helped to raise hundreds of millions of pounds for charities through private donations and the annual fundraising days staged at ICAP's offices.

Since selling NEX Group, ICAP's successor company, to the Chicago Mercantile Exchange in 2018 for £3.9bn, Mr Spencer has invested small chunks of his fortune in start-up companies.

His family office vehicle now holds stakes in businesses such as Elvie, a manufacturer of female health products, and Veridium, a biometric fintech company.

It also holds a stake in The Tote's parent company and Chapeldown, Britain's largest winemaker.

If he is confirmed on the latest honours list, Mr Spencer will join the ranks of City grandees in the Lords, who include the likes of Lord Green, the former HSBC Holdings chairman and trade minister; Lord Lupton, the former Greenhill investment banker and also a one-time Tory treasurer; Lord Myners, who was parachuted in as a Treasury minister by Gordon Brown during the financial crisis; and Lord Rose, the former Marks & Spencer boss.

Reports have suggested that a new crop of peers will be announced before the end of the month, although the list could still take until February to emerge, according to Westminster sources.

It is expected to be dominated by former MPs, with the former Cabinet Office minister David Lidington and ex-Tory chairman Patrick McLoughlin tipped to be among those ennobled.

The nomination of new members of the Lords will inevitably provoke controversy given that they will almost certainly take the chamber's membership above 800.

Rebecca Long-Bailey, the Labour Party leadership contender, has vowed to abolish the Lords if she were ever to become prime minister.

The House of Lords Appointments Commission, which scrutinises political nominations for peerages, is not thought to have raised any objections to Mr Spencer's name being on the list.

A Downing Street spokesman declined to comment on Mr Spencer this weekend, while a spokesman for Mr Spencer also declined to comment.