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Boris battles Brussels bureaucrats

STRIDING down the European corridors of power in Brussels yesterday, Boris Johnson looked every inch the City&rsquo;s knight in shining armour. The London Mayor has styled himself recently as one of the lone champions of Britain&rsquo;s financial services industry, with his outspoken views on abolishing Labour&rsquo;s new 50p tax rate, his vehement support of the Crossrail project and now yesterday&rsquo;s trip to Brussels to lobby against a piece of draft EU legislation &ndash; the directive on Alternative Investment Fund Managers (AIFM) &ndash; which is set to cripple London&rsquo;s sizeable hedge fund and private equity community if published in its current form.<br /><br />Yet where, you may well ask, are Boris&rsquo;s political allies in all of this? David Cameron and George Osborne weren&rsquo;t on the train with the Mayor to Brussels yesterday; they haven&rsquo;t exactly been gushing at the prospect of shelling out taxpayer billions for Crossrail; and they&rsquo;ve admitted that abolishing the 50p tax rate won&rsquo;t be a priority should the Tories come to power, as looks extremely likely. They were even the first to attack the non-doms, even before Labour adopted the idea.<br /><br />&ldquo;I have a doctrine of unlimited political capital,&rdquo; says Boris with characteristic gusto, kicking back in Eurostar economy class with a can of Stella on his way back from Brussels.<br /><br />&ldquo;I think that you are elected to say what is in the interests of your constituency &ndash; in my case London &ndash; and I don&rsquo;t particularly mind if people accuse me of senselessly sticking up for rich people. I don&rsquo;t do it because I want to stick up for the guys with big bonuses, I do it because of the hundreds of thousands of people in London and the wider UK economy who depend on a successful City.<br /><br />&ldquo;But they Cameron and Osborne are playing a different game&hellip; I am speaking as London Mayor, and it&rsquo;s my job to be the champion of the City.&rdquo;<br /><br />He is adamant that the Tories are behind the City all the way, making the point that the 50p tax issue is far more important for London than for the rest of the UK, since the proportion of people affected in London is four times higher.<br /><br />&ldquo;George is on record strongly opposing the way the AIFM directive has been framed,&rdquo; he added yesterday. &ldquo;And I have a very clear understanding that out of all the projects the Tories might review, Crossrail is about the most secure.<br /><br />&ldquo;David and George understand the need to stick up for the financial services industry in London, and there&rsquo;s not even cigarette paper between us on that.&rdquo;<br /><br />Yet for all Boris&rsquo;s beating of the City drum, he is keen for London&rsquo;s bankers to take responsibility for their role in the crisis, not retire back behind the same weighty bonus packages of old.<br /><br />&ldquo;Everybody understands the need for competitive pay but it seems incredible to me that institutions which have been bailed out by the taxpayer should be awarding huge sums to their staff,&rdquo; he says.<br /><br />&ldquo;They&rsquo;ve got to understand that it&rsquo;s not right and the public will not understand it. They&rsquo;ve either got to exercise self restraint or they&rsquo;ve got to make a vivid display of their obligations to the wider society.&rdquo;<br /><br />In Brussels yesterday, however, it was a matter of defending a corner of the financial services industry which was blameless in the recent economic Armageddon &ndash; the hedge funds and private equity firms of London, which will take a considerable hit from the proposals in the AIFM directive if it is passed as law.<br /><br />&ldquo;This directive, as it is devised at the moment, is penalising a sector that was not directly implicated in the financial services crisis,&rdquo; says Boris.<br /><br />&ldquo;There is scope for taking the good bits out of the directive &ndash; the single passport element for fund management across the EU, for example &ndash; and trying to whittle out the more damaging parts, such as the fact that non-EU domiciled investors will no longer be able to participate in the European alternative investment market as they have done in the past.&rdquo;<br /><br />And for a start, it appears that our City champion&rsquo;s grab&rsquo;em-by-the-throat attitude is working.<br /><br />&ldquo;It&rsquo;s been very positive,&rdquo; he muses, taking a last long swig from his beer.<br /><br />&ldquo;Nobody in their right mind would pretend that this story is at an end, but frankly, I&rsquo;m much more encouraged at the end of the day than I was at the beginning.&rdquo;