Silicon Valley Bank and how lobbying helped save thousands of jobs

Lobbying has a bad reputation. A string of both historic and more recent scandals, often involving serving or former MPs, haven’t helped.

But the situation with the UK arm of Silicon Valley Bank (SVB) highlights the benefit lobbying can bring to businesses, people and society. It demonstrates why lobbying is a vital part of our representative democracy.  

Limited presence, limited understanding

Few people may have heard of Silicon Valley Bank before the recent turmoil. But it had become a lynchpin of the UK’s tech sector, providing banking products start-ups may not have been able to find elsewhere. It held £6.7bn of deposits.

However, as the SVB crisis unfolded in the US, the Bank of England said the UK arm of SVB, while a going concern, would be put into insolvency. The institution, it said, had only a “limited presence” in the UK with “no critical functions supporting the financial system.”

The Bank of England could not have been more wrong. Unable to access deposits, hundreds of UK start-ups faced insolvency. Thousands of jobs were at risk, according to Mention Me founder Andy Cockburn, whose business had deposits in SVB.

Moreover, when so many tech companies support other critical industries and public services, such as the NHS, the failure of SVB could have been disastrous.

Intensive lobbying

Following the BoE statement, the tech industry started lobbying. They needed government to understand the importance of SVB to the UK tech ecosystem and the economy before it was too late.

Key messages rapidly emerged. The bank’s collapse would be “apocalyptic”, according to reporting from Politico. Hundreds of businesses would be unable to pay their employees. Businesses would close. Thousands of people would lose their jobs.

Employing one of the most potent weapons in the lobbyist’s armoury, tech executives formed a coalition early Saturday morning. Understanding that policymakers are more likely to listen when many voices come together, they created a “Save UK Tech Working Group” of almost 100 industry figures to organise their message to the government.

Next, those involved called on advocates, influencers and journalists to raise awareness and exert pressure. Sky’s Mark Kleinman broke the news of Andy Cockburn’s open letter, with 140 signatures from tech founders, warning chancellor Jeremy Hunt of the problem. 

Alongside, representatives from Coadec, Tech Nation, UK Finance, Innovate Finance and BVCA secured a virtual roundtable with science and technology secretary Michelle Donelan to make their case. Those on the call reported that the government ‘got it’ and reacted quickly.

A new owner

The lobbying campaign achieved its purpose. After a slow initial reaction and a vague understanding of the problem, the campaign helped the government get the implications of the potential failure of SVB. Moreover, while other factors also contributed, industry lobbying propelled the government to pull out the stops to help find a new owner.

While lobbying is sometimes a dirty word, it undoubtedly helped save hundreds of innovative businesses and thousands of jobs earlier this month, without the government spending any taxpayer money.

A version of this first appeared in PR Week