"Financial Services are a vital and essential part of the UK economy. We must use the development of Banking Union not merely to safeguard but also to advance this sector."
The government may be nervous about an amendment proposed by Bill Cash MP, Chairman of the European Scrutiny Committee, but in it Bill raises two very important points that the government should welcome. First, that safeguards need to be in place, and second, that the current proposals are probably illegal unless accompanied by treaty change. This gives the UK the chance not only to secure safeguards, but also to go further and secure real advancement for UK interests in the financial services sector.
The real opportunity for the UK here is not in just securing watertight safeguards, but in demanding advancement for UK financial services. This sector is worth 10 per cent of our annual tax take; it employs over a million people across the UK. The UK accounts for over 40 per cent of EU wholesale financial transactions. This is our most important sector and we must not just defend it, but also seek EU support for its further expansion into developing markets.
I want to see the government press for three things: first, legal safeguards for the single market (to prevent eurozone members putting up protectionist barriers to UK financial services); second, an emergency brake for the UK in financial services (where legislation that potentially harms this key UK industry could be halted and referred to the European Council to be decided by unanimity); and thirdly, that the EU should seek opportunities for the advancement of financial services, for example through a binding commitment to negotiate a free-trade agreement in services with China and other fast growing developing markets.
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