Professor Tim Congdon
Bruges Group research shows that the EU’s financial regulations are set to destroy thousands of well-paid jobs in the City of London. The EU now threatens the long term prosperity of the City of London and, by extension, the London and UK economies.
How is Britain to remain a well-paid, successful and influential nation in the 21st Century world economy? We should be concentrating on such activities as financial services, marketing, design, advertising, legal work, accountancy, publishing, journalism, business information, the arts and the various forms of management consultancy. We should also want the UK to be the headquarters for companies with production facilities across the globe.
Yet threats are emerging to Britain’s long-term prosperity. In September the European Commission submitted new and sweeping proposals for a European Systemic Risk Board. This is to include the so-called “European Banking Authority”, which is to have far-reaching powers. In the current proposals they include the authority to close down a particular bank or insurance company, regardless of the views of the UK’s own regulators.
The proposed Directive on Alternative Investment Fund Managers, which in practice means managers of hedge funds and private equity funds, is interventionist and prescriptive. Not only will it cramp the operations of alternative investment managers who have long records of good performance, but also it will cause the relocation of well-paid and talented professionals to centres outside the EU.
Britain’s exports of international financial services grew by 15% a year for over 15 years, a really serious growth industry in which the UK is a world leader. The EU will ruin this.
How many people will be affected? Total employment in international financial services in London is approaching ½ million people. There may be about 250,000 in the Square Mile itself. Around 20% – 25% of those will be affected by the EU’s plans with the potential loss of tens of thousands of well-paid jobs. These jobs – like those in manufacturing – will be forced out of the UK; losing Britain many talented professionals. Almost certainly the financial services industry will go to Asia.
We must do everything we can to put pressure on our politicians to hold a referendum on the Lisbon Treaty after the forthcoming general election.