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Hedge fund laws threaten London’s future as financial hub, Boris warns
Sri Carmichael and Katharine Barney09.07.09
Boris Johnson and George Osborne today warned the Government that London's future as an international financial centre was in danger from new EU red tape.
The Mayor and shadow chancellor told Business Secretary Lord Mandelson that the tighter regulation proposed for hedge funds would drive London investors to cities such as New York, Singapore, Hong Kong and Geneva.
Mr Johnson said he was so concerned about the changes he had sought an urgent meeting to personally lobby EU Commissioners.
In separate speeches to an economic recovery conference in London, the senior Tories blamed government ministers for failing to protect the capital's interests in allowing ill-conceived legislation be formulated that would strangle its financial sector.
They said the new supervision regime for hedge funds, private equity and venture capital would be stricter than the rest of the world and weaken Europe's competitive position. London would be worst hit because it was home to 80 per cent of European hedge funds.
They argued tough regulation was needed to prevent another financial crisis, but it had to be set at a global level to ensure a level playing field.
Mr Johnson said the Government needed to work harder to protect London's financial industry, arguing that German ministers would automatically challenge any EU directive that threatened its car industry and the Swedish government would do the same for any rules that hampered the flat-pack furniture sector.
Mr Osborne said: “The Government has been totally wrong footed on these issues.
“The Chancellor and the Treasury have been almost entirely absent from the debate in Brussels, and now they are rushing to catch up. They have been asleep on the job. They have let the City down and the British economy down.”
He promised that a Conservative government would engage more actively in shaping the European regulatory agenda.
Lord Mandelson acknowledged that ministers had “to work hard to get the regulation right” for a stable, competitive UK financial services sector.
But he argued that looser rules were not the answer and called for a “culture change” in boardrooms that would involve “a bit more old fashioned banking”.
UKIP pointed out Tory MEPs voted for the new EU directive last year, while they were the only party that voted against it. UKIP MEP and former mayoral candidate Gerard Batten said: “It's great that Boris is supporting the City in this way but a shame the Tories didn't when they had the chance.”
Reader views (7)
Boris Johnson's concern for Hedge Fund sharks would be nothing to do with his "Deputy Mayor" Kit Malthouse, of course: http://www.alphastrategic.co.uk/ir/aps/ir.jsp?page=board
- Helen, West London
The EU envy London's pre-eminent position as a financial centre. Germany and France know that an economically weak Britain strengthens them politically, enabling them to exercise greater authority over the whole EU.The UK is in grave danger, as a country on the geographical periphery of continental Europe, of becoming marginalised, and even more subsumed into this wholly artificial undemocratic, financially corrupt organisation. Financial services are our strength, giving us income, status and leverage in the wider world. We've surrendered our fisheries, our farming, our right to make many of our laws. We must not surrender the City to Brussels.
- Ronold, London
Steve S clearly does not appreciate the benefit of Hedge funds to the UK. Whilst they is a real need for tighter regulations to believe the EU can provide that is bordering on the obscene.
The EU have not satisfied their own auditors for 14 years, with billions of Euro's unaccounted for each year, to 'organised' fraud.
I agree with Vince it's time to dump the EU. It seems that 84% of Cameron's Tory MP's and Candidates appear to be at odds with his European approach and if push came to shove would want out also, just like the majority of the UK.
Mr Mandelson's former EU Commissioner colleague, Labour Peer, Lord Kinnock even sacked the Chief Accountant of the EU for trying to stop the loss of member funds. So for Mr Mandelson to try and claim the moral high ground is patently absurd.
Boris Johnson is right to speak out if these funds are lost as described in the article, London will cease to be the hub for Europe and most of the world, allowing the EU to effectively take over a centralising of EU banking, leaving Britain out in the cold.
- Robert Feal-Martinez, Swindon, England
Is this the same same financial sector that brought the country to its knees? If so, then good riddance, and Bumbling Boris and Gorgeous George should jump ship to.
- Steve S, London
The wild ride we had in the finanacial sector is now over. There is nothing that can be done to change that... People just have to get their mind around it.
- Harvey, Barbados
Gerard Batten of UKIP is right to point out the inconsistency of Conservative Party approaches on this issue. It is hypocritical of the Tories to shout now - and in any event too late - when others like UKIP have been warning for over a decade about the on going steamroller approach to total control of financial law (and the City) by the EU. Gradually accumulating more power until the trap is shut. The Tory idea of "engaging" to shape the EU regulatory agenda is pure rubbish and meaningless. We are already more than engaged. We are married. And it is time for a divorce.
- Damian Hockney, london, uk
Well past time to dump the interfering EU.... We do not need it.
- Vince, London, West London
