The chances are you don’t think about Brussels a lot. Few of us do. It is something that happens. Over there, with a safe invasion-preventing stretch of sea in between. Trying to comprehend the incomprehensible gives us a headache, and so it is best not to try.
The trouble is that Brussels matters. A lot. Particularly if you work in financial services. It is quite likely that what is happening in Brussels will decide how big your profits are.
We discuss at length what London MPs think about banks, but the reality is that it doesn’t really matter. Almost all financial services regulation comes from Brussels now.
Largely unnoticed by the political and media class, Brussels has unleashed a tsunami of legislation and regulation at Britain’s most profitable, biggest tax-paying industry.
It is not just MiFID II, and the three new EU supervisory authorities. There is packaged retail investment products legislation, the insurance mediation directive, the securities law directive, market abuse directive, the financial activity tax, the European Market Infrastructure Regulation and then more on short selling, OTC derivatives, e-signatures, and so it goes on.
All this legislation – being haggled over by the European Commission, the European Parliament and the Council of Ministers – is aimed four-square at an industry where the UK is overwhelmingly market leader in Europe, and which is critical to our future growth. Get this wrong, and it could cost us hundreds of thousands of jobs, and tens of billions in tax.
But we are barely at the table. The financial services industry is not properly geared up to cope with this new deluge, and punches below its weight. The UK government has quite rightly called on the industry to do more to fight its corner in Brussels; the industry in return insists the government must not relinquish its responsibility to fight for a key sector of the UK economy. In truth, the government and industry must march together arm in arm: each has too much to lose if we don’t win in Brussels.
Anthony Browne is a board member of theCityUK. firstname.lastname@example.org