Former UK Treasury chief joins Japanese banking giant amid Government lobbying concerns

Szu Ping Chan
Fri, 1 December 2023

Sir Tom Scholar is to chair Nomura's European operations from next April

Former Treasury chief Sir Tom Scholar has been hired by Japan’s biggest investment bank Nomura but will face restrictions that prevent him from lobbying Government officials.

Sir Tom, who was sacked as Treasury permanent secretary on Kwasi Kwarteng’s first day as Chancellor, will join Nomura to chair its European operations.

However, a ministerial watchdog recommended that limitations to his role be imposed by Nomura to ensure he does not have any “unfair influence of access to government”.

The advisory committee on business appointments (Acoba), which assesses roles taken up by former ministers and civil servants, raised issues about the appointment in advice released on Friday.

In a note published alongside the announcement, Acoba said it was “concerned about a former senior HM Treasury (HMT) official advising a large financial institution, not least as a result of the access to information and influence he may be seen to offer”.

Sir Tom, who joined the Treasury in the 1990s, had served in the top role since Brexit. However, he was fired by Liz Truss’s government in September 2022 after the former Prime Minister vowed to change “Treasury orthodoxy”.

Acoba addressed his senior position in Friday’s statement: “Given Sir Tom’s role at the very centre of HMT, there are risks attached to his potential to offer unfair influence or access to government.

“This is especially relevant as Nomura has an active interest in UK government policy that is currently under discussion.

“The Committee noted there is already a relationship between the organisation and HMT and is a stakeholder in its policy work.”

Acoba’s recommended that Sir Tom should have “no direct engagement” with the government on its behalf.

Nomura said it had accepted the advice and agreed that Sir Tom would also have no involvement in lobbying officials “and its arm’s length bodies” until the end of 2024.

Acoba’s recommendations are non-binding but are designed to prevent those with insider information from engaging in lobbying.

However, the watchdog added that “significant changes in government” meant that “the opportunity for him to offer an unfair advantage is limited”.

It also noted that HMT said it had “no concerns with this appointment”.

Acoba, which is chaired by Lord Pickles, the former Conservative chairman, said: “There remains a risk he could be seen to offer Nomura unfair access and influence, particularly if he was to contact the Government on Nomura’s behalf in any capacity.

“The committee’s advice is therefore that Sir Tom should have no direct engagement with the UK government on behalf of Nomura.”

Former Conservative chairman Lord Pickles now chairs the advisory committee on business appointments - Eddie Mulholland

Although Acoba’s advice is non-binding, Nomura said it would follow its recommendations. A spokesman said: “Nomura will abide by the recommendations set out by Acoba.”

As a top investment bank, Nomura engages with HMT’s financial services teams, alongside the rest of the banking sector.

Sir Tom said he did not meet with Nomura during his time at the Treasury.

It is one of the banks responsible for buying government gilts when issued by the Debt Management Office (DMO).

Nomura’s strategy in Europe is mainly focused on dealmaking and net zero financing.

Sir Tom joined the bank on Friday and will succeed David Godfrey as its European chairman from next April.

Sir Tom said: “I am delighted to be taking on the role of chair, particularly at this pivotal moment for the Japanese economy, which brings significant growth opportunities for Nomura, both globally and in the UK.

“I look forward to steering the board and the senior management team as they navigate these exciting challenges.”

Kentaro Okuda, Nomura’s chief executive, said Sir Tom had enjoyed a “long and distinguished career in the British civil service and Nomura will no doubt benefit from his extensive knowledge and understanding of the financial sector.”

Sir Tom also served under Gordon Brown before moving to Washington as Britain’s representative at the International Monetary Fund and the World Bank, where he was stationed between 2001 and 2007.

He returned to the UK to work as Mr Brown’s chief of staff, returning to a senior post at the Treasury at the height of the financial crisis.

Sir Tom also served under Rishi Sunak when he was chancellor.

He was sacked days after Ms Truss entered office and it later emerged that he had received a £450,000 severance payment.