Gov't 'lacks interest' in EU regulation debate

In an 84-page report, entitled The Future of EU Financial Regulation and Supervision, the House of Lords European Union Committee criticised the government for not doing enough to influence the debate on supervisory reforms.

Lord Woolmer of Leeds, chairman of the committee, said the government's thinking on role, powers and structure of a European supervisory body appeared "less than fully developed" and said this needed to change if the UK was to have any influence on its implementation.

He said: "It would have been helpful if the government had thought through coherently not only its concerns but its own positive way of addressing those, somewhat earlier in the day."

This was a view reiterated by the opposition who claimed that "ill-thought through" regulations could damage London's financial services sector if they were not challenged.

Mark Hoban MP, shadow financial secretary to the Treasury, said: "It is the Treasury's job to make sure that new directives go through a proper process. The fact that it is not happening confirms Conservative fears that that the Treasury is absent from the debate in Europe on the future of finance."

However the Treasury denied this stating that it had been fully engaged at a European level.

Jason Knauf, spokesman for the Treasury, said: "The chancellor attended a meeting of European finance ministers last week and directly addressed these issues and has been working for improvements. The prime minister is going to the European Council meeting on Thursday and Friday where the discussions will continue so we have been pretty clear in what our views are."

Richard Burger, a solicitor for law firm Mills & Reeve which specialises in regulatory issues, said a lot of people in the financial sector were currently fighting for their jobs and therefore did not have time to get involved in the debate on EU financial regulation which was a major concern.

He said: "I am not sure there is enough being done out there to publicise financial reforms to financial regulation and whether the government is being proactive enough in bringing the debate to the fore."

Simon Morris, partner of law firm CMS Cameron McKenna, said the House of Lords EU Committee had "hit the nail on the head" when it said that the UK government had not set out its own thinking to influence reforms.

He said in his opinion the government needed to work harder and exert more pressure on Europe to get the policy changes it needed.

He said: "The picture we are getting at the moment is that the government is too weak and distracted."

Andrew Strange, director of policy for the Association of IFAs, said he opposed this view and felt that the UK had been fully engaged in the regulatory debate.

He said: "There has been a significant degree of discussion on this. It was even on the agenda at the G20."