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European Financial Services Proposals

Part of Oral Answers to Questions — Foreign and Commonwealth Office – in the House of Commons at 6:37 pm on 1st December 2009.

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Photo of Sarah McCarthy-Fry Sarah McCarthy-Fry Parliamentary Secretary, HM Treasury 6:37 pm, 1st December 2009

I thank all hon. Members for their participation in this debate. There has been a theme, in that the hon. Members for Sevenoaks (Mr. Fallon) and for South-West Norfolk (Christopher Fraser), and others, said that they did not believe that the Government were engaged. I disagree and assure them that the Government have been, and continue to be, heavily engaged at official and ministerial levels. Indeed, over the past months UK officials have consulted on and discussed the key legislative proposals with numerous member states. Those meetings have informed others of our positions and enabled us better to understand our European partners' views. We have strong working relationships and regular dialogue throughout the EU.

On hedge funds, the alternative investment fund managers directive, which has been mentioned, is a key example of a situation in which the Commission's initial legislative proposal was unacceptable. As a result of significant work by officials and Ministers, however, we have seen considerable improvements to it, and my noble Friend Lord Myners has personally committed a substantial part of his time to achieving a good outcome for the UK on EU directives. He has had useful discussions with many EU stakeholders, including Members of the European Parliament, the Swedish presidency and the incoming Spanish presidency.

Many hon. Members spoke about the timetable, and we were very clear that national Parliaments needed time to scrutinise the proposals. The Chancellor's view at the October ECOFIN meeting was that October was far too early to sign up to a general approach, but we always said that we would aim for agreement on the complete package by December, and that was included in the explanatory memorandum.

The timeline was set out at the June European Council. We hope that tomorrow, ECOFIN will agree on the general approach, which will then become the Council negotiating position through the European Parliament. The European Parliament, through its Committee on Economic and Monetary Affairs, will agree its negotiating position; the Council presidency, the Commission and the European Parliament will identify, if necessary, a compromise position; changes will be approved, or otherwise, by ECOFIN in the spring; and the European Parliament will vote on the agreement. That is the timetable.

The hon. Members for Fareham (Mr. Hoban) and for South-West Norfolk, and many others, spoke about last week's Commission appointments. I think that those decisions, and those taken by the European Council, are good for Britain, good for Europe and good for Britain in Europe. We have, in Baroness Ashton and her appointment as High Representative for Foreign Affairs and Security Policy, someone who gives Britain a powerful voice in the Commission and the Council, and she is the only commissioner to have a key role in the Council, too. As vice-president of the Commission, she will have a central and important role in driving progress across the full range of issues. She will be able to speak up on and have influence over all the issues, including those that matter most to the British public-economic recovery, security and tackling climate change.

On the appointment of Monsieur Barnier, it seems strange that some Frenchmen are wonderful and some are not. People are happy to quote Monsieur de Larosière but not so happy with Monsieur Barnier. I hope that hon. Members will note what he said in an interview on the radio yesterday:

"I know the importance of the City. I know the importance of this major financial centre for growth in Britain and the economy of Europe as a whole."

Stuart Fraser, the chairman of the policy and resources committee of the City of London Corporation, has said:

"I have every confidence that, together, we can forge a constructive working relationship."

We believe that in his hearings before the European Parliament, Monsieur Barnier will demonstrate his commitment to valuing and promoting the interests of the City of London as Europe's principal financial centre.

In addition, Britain will have a number of senior official posts in the new Commission. Monsieur Barnier has asked the President of the Commission, in the course of the next rotation of director general appointments, to appoint an official he knows well and has worked with before-Jonathan Faull. President Barroso has said that he intends to appoint a senior British official to lead work on economic and financial issues in his cabinet. We understand from Monsieur Barnier that there will be a senior Briton in his cabinet dealing with financial services, and that he will want someone who is known to the City.

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