Britain can ‘fight back’ against EU’s ‘self-destructive war’ over City, says former MEP

EU 'second-tier superpower' following Brexit claims Buiter

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Britain officially left the European Union in January after the Brexit transition period came to an end last year. Writing in The Telegraph, Daniel Hannan said before Brexit some resented the EU for its “heavy-handed regulations” on financial issues.

He wrote: “There were two contradictory feelings toward the EU in the City before Brexit.

“On the one hand, it was resented for its heavy-handed regulations, which often put London at a competitive disadvantage vis-à-vis New York, Singapore and Shanghai.

“On the other, it was thanked for providing Britain with a semi-captive market on its doorstep.

“The former view tended to dominate among funds and start-ups, the latter among banks, especially large banks.

“It is fair to say that the City’s institutional voices – the trade associations, the London Corporation, CityUK – were overwhelmingly in the second camp.”

Lord Hannan serves on the UK Board of Trade and is a Vice-Chairman of the Conservative Party responsible for its international relations.

He explained how some institutions wanted to take advantage of the UK’s “new regulatory autonomy” after the Brexit vote in 2016.

However, he highlighted how others sought to preserve as much of the EU’s system as they could.

Lord Hannan added: “That argument has now been settled by Brussels itself which, acting largely from pique, has refused to grant Britain the equivalence that it offers to China or Mexico.

“That decision will hurt the EU more than it hurts Britain, reducing the access of Continental firms to the world’s best money markets just when Europe needs to recapitalise.

“Britain, understanding that protectionist measures mainly hurt the places that impose them, has not been so foolish as to retaliate in kind. But we can’t stop the EU from self-harming.”

Lord Hannan also cited a quote from the Governor of the Bank of England who said: “I’m afraid a world in which the EU dictates and determines what rules and standards we have in the UK is not going to work”.

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The former MEP said the UK is now free to “make its way in the wider world” by setting up its own rules and regulations.

He claimed Britain can “fight back” against the EU’s “short-sightedness” and “self-destructive war on the City”.

Lord Hannan added: “Happily, there is now a voice for those in the industry who want to make use of our new freedoms: CityUnited, which is run by the former CEO of Liffe, Daniel Hodson, and to which I am an adviser.

“Its aim is to structure regulations and taxes in such a way as to maintain Britain’s dominant position.”

The new post-Brexit lobby group aims to “combat and negate the EU’s actions” by “promoting bold new initiatives to exploit the UK’s expertise in financial services”.

Earlier this month, Dominic Raab told the BBC that the City of London’s biggest competitors post-Brexit will be the US and Asia, not the EU.

He said: “The crucial question for the EU, while it may be able if you like to nick a bit of business here or there from the City, but the problem is the measures they will take to achieve this will undermine their own competitiveness.

“The challenge to London as a global financial centre around the world will come from Tokyo, New York and other areas rather than those European hubs.

“Particularly if they start to erect barriers to trade and investment.”

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