The Blog

Britain Is on for the Great Escape - That's Leaving the EU to Save the City

The City of London is a vital part of the UK economy and is under threat from the EU. I note to those who work in the City, Ukip is the only party standing up for you. Conservative voting records speak volumes.

The City of London is a vital part of the UK economy and is under threat from the EU.

I note to those who work in the City, Ukip is the only party standing up for you. Conservative voting records speak volumes.

In November 2012, David Cameron was hailed a hero as he vetoed a new treaty towards closer fiscal and political union. Two months later his own MEPs and cabinet colleagues admit that it was a hollow and futile gesture. Cameron's veto means nothing and it will not protect the City of London. There are two real threats - the Lisbon Treaty with majority voting and Conservative MEPs.

The Lisbon Treaty sets in stone Qualified Majority Voting (QMV) which means that our MEPs are easily out-voted by the new super eurozone. The immediate concern must be that the new eurozone will focus on the financial sector and impose a 'user charge' on our financial institutions. They can circumvent the Financial Transaction tax, that Britain has a veto on, and use a 'user charge' instead. This is a real and immediate threat that Cameron can do nothing about.

All 26 countries will press ahead anyway with closer fiscal and political union leaving the UK in the worst of all worlds. We are still members of this union but firmly on the outside of influencing events, we are more unpopular than ever and we are in a permanent voting minority. We will pay a heavy price as the very industry Cameron sought to protect will be the subject of retribution. The next time the bond markets twitch, a snarling Hollande will condemn the Anglo-Saxons and demand more legislation. We will be utterly powerless to stop this.

Conservative MEPs are not as dedicated to protecting one of the world's leading financial capitals as they like to pretend according to analysis of their voting records last year.

On the 11th November 2010, Conservative MEPs voted to support a proposal for a directive on alternative investment fund managers (A7-0171/2010). This directive saw the regulatory control of the UK financial sector pass to the newly created European Security and Markets Authority (ESMA). Previously, control of the UK financial sector was the responsibility of the UK government. The combination of increased regulation and the new powers of ESMA saw a number of hedge funds leave London for non-EU Switzerland. Supporting this directive has seen a loss of jobs and taxation from the City of London.

Despite initially opposing the creation of the EMSA, Conservative MEP Nirj Deva voted to support the directive as did Dr Kay Swinburne, Conservative MEP for Wales and spokesperson on economic and monetary affairs. She was recently reported as saying that there was an urgent need for or "constructive communications" over financial regulation.

Looking through the voting lists again, this time on the Short Selling Regulation, Syed Kamall MEP, hailed as a hero from the right of the Conservative party and 'defender of the City' , has said this about EU rules on short selling:

"Measures adopted by the European Parliament to crack down on sovereign debt "speculation" and "naked" short-selling will threaten investment in projects across the EU".

"Uncovered or 'Naked' sovereign CDS can be a crucial financial instrument used for hedging all kinds of investments across the EU. If we ban this tool then investment in Europe's struggling economies will risk drying up."

And then he turned up to abstain on a vote to regulate the sector across the EU...

Questions have to be asked about the Conservative Party's true commitment to protecting the City of London. Dr Swinburne, Mr Kamall and Mr Diva all talk a tough game but records show that they don't. Can the Tories be trusted to protect one of the world's leading financial capitals from further EU restriction and taxation? Given their current track record, I think not. Actions always speak louder than words.

Already City businesses are cutting back as they have to cope with misguided parts of the Alternative Investment Fund Management Directive and the Capital Requirements Directive. With the establishment earlier this year of the European Banking Authority and the Paris-based European Securities and Markets Authority, regulation of our financial service industries has passed to foreign lands. In this area of our national life, as in so many others, we are no longer in control of our own destiny. Even more unbelievable is that the assault on the City's industries has been rubber-stamped by Conservative MEPs. In the European Parliament they voted for the offending Directives with hardly a murmur of dissent.

And you're angry, very angry. It is slowly dawning on you that it's just not the Government standing up for your interests but you are powerless to act against EU regulations. I was at an investment industry party a couple of weeks ago where attendees were telling me they were furious with the EU interfering in their businesses and that their industry representative bodies were slow to react. You were shocked to hear that many of the members of the EU Commission were former Communist party members and that the majority of European Parliament MEPs were from the left-green-liberal federalist alliance - no fans of the City of London. Business cards were thrust at me asking for a presentation to their boards on what can be done to stave off the onslaught of regulation. The simple answer is nothing, other than to leave the EU.

What should happen next for Britain is that we should start to plan for The Great Escape, to leave the EU. We can then plan for real growth with a low tax and regulation economy; release our businesses from Brussels' red tape and bureaucracy; free our financial services industry from euro regulatory controls; take back control of what remains of our fishing industry and trade with the rest of the world. Oh, and Europe too, because they will still want to trade with us and we will still buy their Mercedes, BMWs and excellent food and wine.

In his booklet, 'How much does the European Union cost Britain?', Professor Tim Congdon argues that European exporters would like to seal as easily to British customers, and British exporters can sell as easily to European customers, as at present. Why would the other EU 27 states turn us down? Precisely because they have a surplus of trade with us. In 2011 imports from other EU member states came to over £261billion. So other EU member states had a surplus on their transactions with us of almost £28billion.

And what of Cameron's talk of repatriation of powers? Last Friday Internal Market Commissioner Michel Barnier commented that the UK cannot "repatriate" powers over financial services.

Barnier said: "The single market cannot be pick and mix. I have heard some people say financial services should be repatriated. It is clearly the wrong cause to fight for because financial services are an integral part of the single market and the single market is the heart of Europe.

Lastly, so far in 2013 , 84 separate legislative reports have passed through the European Parliament. The Conservatives voted in favour of 62% of these while Ukip voted in favour of 0%.

Big business and the Government peddle the lie that our future prosperity, jobs and peace rest with our continued EU membership. As Goebbels himself said "If you tell a lie big enough and keep repeating it, people will eventually come to believe it".