By Maximilian Clarke
Heavy-handed regulation coming from Europe could do serious damage to the UK’s professional and financial services sector, which is crucial for jobs and growth, the CBI’s Director-General John Cridland said last night (Thursday).
Speaking at the CBI’s London annual dinner, attended by the Mayor Boris Johnson, Mr Cridland, will warn that the likely effect of many current EU proposals “will be to damage the UK’s prospects for growth.”
Highlighting the economic importance of the capital, and particularly the professional and financial services sector, which accounts for 10 per cent of economic output and employs a million people, Mr Cridland will say:
“London is a jewel in our crown. Its entrepreneurs and innovators are as good as any. And London’s leading business sectors offer us the best hope for high-end jobs, value add and export growth.
“Its creative industries are a real success story, and one with plenty more chapters to come. And we have world-beating business, professional and financial services companies. We mustn’t countenance any policies that hold them back.”
But he will warn that a number of proposed regulations from Brussels risk doing just that, including: the Financial Transaction Tax, Solvency II, the Capital Requirements Directive, audit market reforms and EU proposals on corporate governance.
And he will call on European Commission President Barroso to ensure he is “working with business, not against it. And that means boosting professional and financial services firms, not battering them with costly reforms.”
In particular, he will highlight the damaging consequences for London of the proposed financial transaction tax, which he dismisses as “a Brussels revenue-raising exercise, and one that will hit London disproportionately hard.”
Looking at the consequences of the tax, Mr Cridland will point to the European Commission’s own official impact analysis, which shows it could dent EU gross domestic product by the equivalent of more than €100bn a year:
“The tax would be an incredibly blunt instrument, one that would increase the cost of capital for businesses, hold back their growth potential and raise minimal revenue in return.