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24 March 2015

Reuters: Leaving EU would be 'disastrous' for Britain - Standard Life chairman

"It would be disastrous for London and the UK if the UK were to leave the single market," Gerry Grimstone told a conference on how to maintain Britain's competitiveness as a financial centre. Standard Life is Britain's fourth-biggest insurance company.

Prime Minister David Cameron has promised a referendum on the Britain's EU membership if his Conservative Party wins national elections in May.

But Robert Oxley, campaign director of Business for Britain, a eurosceptic business group, said Grimstone was wrong to "join in the scaremongering that life outside of the EU would be disastrous for the UK."

"To attribute the City (of London's) success to EU membership as some do is deeply disingenuous and ignores the ongoing damage of EU financial regulation," Oxley said.

Grimstone, who also chairs TheCityUK, which promotes Britain as a financial centre, said the EU's desire to make the single market more effective by creating a "capital markets union" (CMU), would boost Britain.

The CMU aims to make it easier for companies to raise funds for growth on markets and ease the bloc's heavy reliance on banks for money.

Britain's financial services minister, Andrea Leadsom, said the government backed EU plans for CMU but that it would "not be shy" of standing up to any measures from Brussels it did not agree with.

Britain successfully challenged a policy from the European Central Bank which required clearing houses that handled large amounts of euro-denominated securities to be based in the single currency area. Unchallenged, it could have forced clearers in Britain, such as LCH.Clearnet, to shift operations to continental Europe.

"I am very happy to say the European Court of Justice has agreed with us. It's the sort of stand the government must continue to take to protect the single market," Leadsom said.

An increase in levies on bank balance sheets announced last week in the British government's budget sparked criticism that it could harm London's competitiveness and could even spur some banks to shift their headquarters elsewhere.

Douglas Flint, chairman of HSBC declined to address this point directly and gave a broader response.

He told the conference that if British government efforts to ensure London remains competitive are successful then that would make a "very, very significant contribution to attracting the world's largest financial services firms".

Full article on Reuters

© Reuters

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