It’s time for the City to stop ignoring Brussels
DID we not learn anything from the great British fridge fiasco? You remember those surreal months, when TV bulletins lead every night with the giant fridge mountains swamping the countryside, growing by the hour. And it was all because Britain sent a junior official into the Brussels lion’s den, and his London bosses not only didn’t listen to him, they didn’t know who he was. That poor junior official – if I remember rightly his name was Kevin – knew it would be a recipe for chaos to ban the disposal of fridges containing CFCs while Britain had not a single facility to remove the chemicals. But to the mandarins and ministers in London, Brussels was “over there” and so could safely be ignored.
So it was Britain at its most normal useless when the AIFIM directive on hedge funds was written by French officials at the request of a Danish socialist while Britain, which has an 80 per cent market share, was not aware of what was happening. As a European Commissioner said when the Mayor and I met him, the previous government had to be “dead with the worms eating [its] flesh not to notice.” He was palpably relieved to meet a senior British politician to engage with.
Now that Brussels is controlling the regulation of our most important industry, ignorance is not bliss, but unaffordable. Although Britain is the banking, securities, insurance and occupational pensions capital of Europe, no British person was appointed chair to the new European Banking Authority, the European Securities and Market Authority, or the European Insurance and Occupational Pensions Authority. The chairmen, appointed last week, are Portuguese, Italian and Dutch, and there is not a single British representative on the board of the EBA. City practitioners are shocked.
The solution isn’t difficult. We have the most people with financial services experience in the EU, and we should be flooding the three new European super regulators with staff (including those from the FSA). According to figures from theCityUK, we have 12 per cent of the EU population, but just five per cent of all European Commission officials – we need a programme to double that. The government must scan senior appointments coming up over the next few years, and have a strategy for getting British people in place. We should put top people up for the top jobs, not just any middle ranker whose arm we can twist. Having experience of Brussels should be a prerequisite to promotion, rather than Brussels being a career cul de sac. And industry should play its part, offering staff for secondment to ensure we get the regulation it needs. If we carry on ignoring Brussels, it isn’t Brussels that will suffer. It is us. Just as happened with the fridges.
Anthony Browne is an adviser to the Mayor of London