Holding on to the crown jewels

A Labour MP told Lobbydog earlier that the Government was making a huge mistake with its European Financial Services Proposals.

The crux of his gripe was that the credit crunch was leading us to erroneously allow the EU to micro-regulate our biggest industry.

The MP, South Derbyshire’s Mark Todd, is not anti-EU and does not does not disagree with EU regulation ideologically.

But he argues that the EU doesn’t have the know-how to come up with rules for things like hedge funds, which they have little experience of.

“The difficulty is that we have the largest financial sector in Europe, is so far as we compete with the Americans, whereas many EU countries have smaller or non existent financial service sectors.

“Some of the models we follow are not common in those countries – in fact a lot of the most technical financial products are only sold through London.

“I just don’t see the benefits of letting the rulebook be written by a group of people that know little about the subject, but have an innate suspicion of the Anglo-Saxon model of financial services.”

I can already hear some people shouting that the problems we felt in this country through the recession were not so keenly felt in the EU, so why shouldn’t we let them regulate.

But don’t forget that the credit crunch erupted from the banking sector and in-part from insurance – regulations obviously need tightening there.

That doesn’t mean we should accept regulations of other parts of the sector where the model has not been discredited.