Treasury Committee ‘must tackle EU constraints on City’

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Leading Conservative backbencher Jacob Rees-Mogg says the Treasury Committee must examine EU handbrakes on the City of London.

Rees-Mogg was one of five Conservatives elected to the Treasury Committee in late June, and is also a partner at investment firm Somerset Capital.

He says: “We need to look at how European regulation and UK regulation mesh together.

“There have been some contradictions in the past and some misunderstandings from Europe of what the City of London actually gets up to.”

As an example, Rees-Mogg cites changes resulting from the Alternative Investment Fund Managers Directive, which entered UK law in July 2013.

He says: “One of the things that came about a year ago was a change in how fund managers valued funds and gave the legal responsibility to investment managers, away from their independent valuers – often the custodians – which was about bringing funds into the auspices of EU regulation.

“But that changed a very prudent principle of previous regulation – that fund managers did not value their own funds.

“It’s little things like that that are quite technical and specific, but can have an unintended effect, and we should be looking at how EU regulation and our own domestic regulation match.”

Also elected to the committee were Stephen Hammond, Mark Garnier, Chris Philp and the leader of Eurosceptic group Conservatives for Britain Steve Baker.

Tories on the committee are known to be hopeful it can also serve as a forum for debate on an EU referendum, promised by the end of 2017, but currently undated.

“The committee potentially has the ability to bring an extremely influential analysis of the EU and the costs and benefits,” one member told Money Marketing.

“A report from the committee in that area could be a major contribution to the debate, and it might have more authority in terms of the numbers than almost anyone else.”