George Osborne did the right thing last week. This is not a party political statement but a comment on what UK plc needs from those who lead it and their attitude to dealing with European regulation. The signal the Chancellor sent in attending the European Council of Finance Ministers in the first few days of his tenure was unmistakable – Britain is here to do business.
Osborne went to Brussels with little hope of being able to win the hedge fund vote. The deal was sealed well before the general election – but the final stages were postponed until after it for the convenience of the then Government. However, just by showing up, he did more than previous incumbents of No 11 who, in my opinion, stayed away too often and we lost influence as a result.
If UK financial services and the advice profession are to emerge strongly from the aftermath of the banking crisis, the biggest threat we have to fend off is the tsunami of new regulatory, tax and capital-adequacy proposals now ricocheting around Brussels.
Too often we have been outflanked by French and German interests, not because they are better lobbyists but because they have a clear plan and a cohesive vision for the future they are trying to create. We have sought to rely on a veto and a tactic of little engagement. This simply leads to poor outcomes for the UK, as witnessed in the hedge fund directive.
We need a strong view and a positive vision that protects the UK financial services industry. There is nothing to be ashamed of in this – being a good European does not mean sacrificing national interest but representing it.
Aifa is acutely aware of the dangers of over-regulation. Most regulatory proposals now emanate from Brussels and we must engage with them at that level or be forced to argue over the mere details of implementation by the time it reaches the FSA.
In a recent speech, Hector Sants spoke of a future where the rules came from Brussels and the FSA was a home state supervisor implementing them. If that is to be the case, we need more engagement by our politicians, regulators and trade bodies working for a common purpose.
The UK model is different to that in continental Europe. It is for us to explain that this has not occurred to the detriment of clients but to better serve their needs. Silence may be golden in some circumstances but today we need to give voice to something far more engaging – a clarion cry for a prosperous, competitive UK financial services.
Chris Cummings is director general of the Association of Independent Financial Advisers