New ComRes poll finds that 69% of managers at UK finance firms support a British veto on EU financial rules even if it reduces access to the Single Market
Open Europe has today published a new ComRes opinion poll – the first poll to survey managers from UK financial services firms on EU re-negotiation – which finds that seven in ten (69%) financial services professionals support the UK having a veto on future EU financial services regulation even if that risks reducing business opportunities in European markets through decreased access to the Single Market.
500 financial services professionals were polled between 28 November and 7 December, before last week’s EU summit where David Cameron vetoed an EU Treaty change after other leaders refused to insert safeguards on the Single Market and financial services.
As Open Europe sets out in a new report, “Continental shift: safeguarding the UK’s financial trade in a changing Europe”, published last week, financial services remain vital to the UK economy, accounting for a £35bn trade surplus and a £54bn tax contribution last year. Open Europe’s report notes that the EU market – while offering benefits to the UK – is likely to offer limited new growth opportunities for UK financial sector firms, at a time when opportunities elsewhere in the world are on the rise.
- Overwhelming support for a UK veto on EU financial regulation even if it reduced market access to the EU: The ComRes survey finds that 69% of financial services professionals say that they would support the UK having a veto on future EU financial regulation and other financial measures, even if it risked reducing their firm’s market access to one or more EU countries.
- Concerns about the cost of EU regulation: The poll finds that 56% of financial services professionals think that, on balance, the costs of EU financial regulation currently outweigh the benefits of the Single Market to the City, while 31% disagree. Over the next five years, 62% expect the costs of EU regulation to outweigh the benefits of the Single Market, while only 24% disagree.
- 70% think the UK should renegotiate the EU Treaties to safeguard the City: While the Single Market is seen as important, surprisingly, a full 70% think that the UK Government needs to renegotiate the existing EU Treaties to safeguard the City of London, limiting agreements to trade and association only.
- Eurozone-only financial transaction tax (FTT) would have a negative effect on finance firm’s UK operations: Given that the UK and other non-euro countries are opposed to an EU-wide FTT, the likelihood of a eurozone-only FTT being proposed has increased. If the eurozone went ahead with its own FTT, without the UK, finance professionals think this would still have a negative effect on UK firms. 55% say it would have a “negative effect” on their UK operations. If an EU-wide FTT, including the UK, was introduced, 48% of financial services professionals say they would consider moving some of their activities to outside the EU.
- UK regulators are perceived to have a better understanding of financial markets than EU regulators: In contrast to EU-level regulation, financial services professionals are less likely to agree (40%) that the costs of UK-derived Financial Services Authority (FSA) regulation outweigh the benefits, than disagree (47%). Only 22% of respondents agreed that the EU institutions have a better understanding of how financial markets operate than the UK’s FSA, while 62% disagree.
Open Europe’s Director Mats Persson said,
“Clearly, even though UK financial firms still consider the Single Market to be important, David Cameron has strong business support in seeking safeguards over EU financial measures in future EU negotiations.”
“What’s certain is that the financial services industry has huge concerns about the cost of regulations coming out of Europe and is also concerned about a financial transaction tax, even if such a tax were pursued only within the eurozone. Whether he was right or wrong in blocking an EU Treaty, Cameron must now continue to work to make sure that new EU regulation does not hinder trade, growth or employment.”
“It is however important that we learn the lessons of the regulatory failures that led to the financial crisis. It’s interesting to see that despite the UK authorities wanting to go further in some areas of regulation, for example on banks holding more capital to protect the economy and taxpayers from further meltdowns, they are still more trusted amongst UK financial players than the EU institutions. This shows that the debate is not about more or less regulation, but smarter control of financial markets and who is best placed to impose that.”
ComRes surveyed 500 financial services professionals (manager level and above) in London online between 28 November and 7 December 2011. ComRes is a member of the British Polling Council and abides by its rules.