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Is this last call for those boozy lunches for London’s financial services industry?


Workers in the City have long enjoyed the tradition of a "cheeky" lunchtime pint or after-work drinks in a nearby pub. However ever since insurance market Lloyds of London decided to ban staff from drinking alcohol in working hours this week, the tradition of doing business over a beer has come become the subject of some sober discussion across London's financial firms.

While some have supported the decision, saying drinking affects performance and discipline, others have hit back at Lloyd's decision, calling the ban "drastic". The move has led to speculation that more financial services firms could follow Lloyd's ruling.

"It has been years since I last had a drink during working hours, but banning goes too far in my opinion," Gabriel Sterne, head of global macro research at Oxford Economics told CNBC via email.

"There must be better ways to manage performance."

Chris Ratcliffe | Bloomberg | Getty Images

Earlier this week, Lloyds issued a memo to staff prohibiting alcohol consumption during office hours. The memo, as obtained by the Evening Standard said, "The London market historically had a reputation for daytime drinking, but that has been changing and Lloyd's has a duty to be a responsible employer, and provide a healthy working environment. The policy we've introduced aligns us with many firms in the market."

The memo further added that drinking alcohol affects individuals differently and a zero limit is therefore simpler and more consistent in line with the "modern, global and high-performance work culture" that the insurer wants to embrace. The ban is expected to apply to the Corporation's 800 employees but will not apply to brokers or underwriters from other firms based in the building.

Employees hit back at bank's latest measure with one employee telling CNBC on the condition of anonymity that the move is drastic and can impact business. They went on to add that several deals are struck during these lunchtime drinks and the ban is not appreciated by many, especially the sales team.

The source also said it was very difficult to keep checks on who goes on out for a drink. "How are they going to check? People go out to get their lunch and they might stop for a pint and come back to work. How do you check? Would they also get a breath analyzer now?"

Roy Mehta | Taxi | Getty Images

A spokesperson from Lloyds of London told CNBC on phone that the drivers of this decision are primarily wanting to reflect better working practices, not just in the City, but across workplaces in the country.

"We fully appreciate that for people in the insurance sector, the lunchtime drink is still part of their working day, but for the Corporation, we believe that it is right to reflect what is the norm for more people, especially those coming into the workplace for the first time, where drinking during working hours is unusual."

The move may be aimed at bringing about discipline among employees at Lloyds of London but it also sheds light on the strong drinking culture in the City.

Will this impact business?

However, lunchtime drinking is also at the heart of industries like insurance, hedge funds, private equity, while investment banks that find it easier to grow relationships over an informal pint in a pub than in boardrooms.

"Sometimes to get a deal to go through you need a number of meetings with your client and we are talking about heavy volume deals here," a financial services professional working in one of the leading investment bank in London told CNBC on the condition of anonymity due to the sensitive nature of the topic.

"There is also a lot of competition outside with other firms so you need to develop a friendly relationship with your client and a quick drink in the pub or a nice three-course meal with some fine wine is always easier to get that started.

Adam Berry | Getty Images

Tony Catt, an Independent Financial Adviser has criticized this move and has said that this was not really enforceable.

"Most companies will already have procedures to deal with drinking in the work place and drinking problems. There would also be guidance about the behavior when representing their employer in public and this would also include drinking alcohol in moderation," Catt told CNBC via email.

He further explained that a lot of business is undertaken in pubs and social networking and a total ban would make this more difficult.

"The Bribery Act already curtails a lot of corporate entertainment and has had a significant effect on how providers and advisers deal with each other," he said.

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