RegulationDec 2 2015

Osborne warns Brexit could leave UK vulnerable

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Osborne warns Brexit could leave UK vulnerable

The UK’s continued membership of the EU could prevent the government from protecting financial stability, George Osborne has claimed.

The chancellor was speaking while giving evidence to the Treasury select committee, which has been conducting an inquiry into the impact of EU membership on financial services.

Mr Osborne said: “UK consumers and UK taxpayers benefit from certain common European standards because that protects us from poorly regulated standards in other jurisdictions.

“That said we do have concerns going forward, particularly as the eurozone continues to integrate, that the essential national role of protecting financial stability could be put in jeopardy.”

He gave the example of the EU rules which cap banker bonuses to 100 per cent of pay or 200 per cent with shareholder approval.

Mr Osborne said: “The bonus cap in my mind has been entirely counterproductive. It has led to higher base pay and just means that if things go wrong it is harder to get the money back.

“That’s an example of unfortunately not getting everything you want in the EU.”

Adviser view

Paul Stanfield, chief executive of the Federation of European Independent Financial Advisers, said: “The aim of a common financial market and the aim to support cross-border services is a very good one but we are presently a long way away from it.”