Matthew Elliott is Chief Executive of Business for Britain.
In today’s Sunday Times there is a letter (£), signed by 60 leading City figures, calling for a change in Britain’s relationship with the European Union. The letter, organised by Business for Britain, calls upon policymakers to ensure that the City “is always fundamentally regulated and controlled by the British people, through our elected representatives in Parliament, rather than by the European Union.”As a paper published tomorrow by Business for Britain will show, reform is urgently needed to protect the City from an EU more determined to skewer it than support it.
This might be a surprise to some – after all, some City-based lobby groups have invested a lot of effort in the last couple of years into trying to paint the City as staunchly pro-EU. However, there is growing evidence that UK interests in financial regulations are being consistently and systematically overruled by those of the Eurozone.
As today’s letter and tomorrow’s report make clear, the UK is currently facing a whole range of dangerous laws and policies: the Financial Transaction Tax, the Alternative Investment Fund Managers Directive, the Prospectus Directive, bonus caps, bans on short selling and the restriction of euro-clearing to Eurozone clearing houses are just a few examples of the dangerous laws that the EU is trying to introduce, laws that risk eroding the UK’s competitiveness.
Some may want to indulge in a bit of banker bashing but the city is one of our greatest assets that contributes nearly 14 per cent of the UK’s tax revenues. Revenues that pay for schools, hospitals and roads. We need to defend this asset in the same way the Germans protect their car industry and the French their agriculture.
We are often told by the pro-European camp that Britain must stay in and resist any changes to our membership. Apparently standing up for ourselves risks undermining “British influence”. A few years ago you could have made the case that we led the way in European financial legislation but, as the list of laws above shows, we can make no such claim today. Previously EU financial rules would replicate those of the UK. They were liberalising and pro-market, but now the needs of the countries weighed down by the Euro set the tone and direction of the rules.
Today the UK has been reduced to relying on the European Courts to try and block harmful rules and regulations. This is a failure in itself. The British Government is currently challenging four laws in the European Court of Justice – but it looks likely that three of these challenges will be dismissed by the Courts.
Some might say that the City deserves more regulation, that the Fred the Shred’s of this world deserve even more punishment. The problem is that the EU’s approach – to prohibit and ban rather than empower and improve the quality of supervision – will do nothing to solve the problems that caused the crisis of 2008. They will just leave us poorer. Finance is one of Britain’s premier industries, with £45 billion in invisible earning and provides employment to over a million people, many of whom work for small to medium sized businesses. The City is a diverse mixture and contains industries like shipping and insurance that we have lead the world in for centuries.
The time has come to take powers back from the EU. We need new protections against bad and dangerous laws that the EU is proposing. A future renegotiation team needs to go to Brussels and demand new safeguards to protect the City. Business is clear: the City should ultimately be controlled by those in the UK, not EU officials.