07/08/2014
The
Daily Mail and others today are reporting that the boss of one of the UK's biggest companies has said Britain should leave the European Union if it cannot renegotiate a better deal with Brussels.
This is Dr Nigel Wilson, chief executive of insurance giant Legal & General. He, we are told, has become the first boss of a FTSE 100 company to publicly suggest quitting the EU. He argued that the UK economy is "underachieving" by focusing too much on Europe rather than faster growing markets.
Legal & General is also a major investor in infrastructure projects and Wilson is complaining that his firm has "wasted" £150million "on complying with one European directive called Solvency II", which is making it more expensive for insurance companies to invest in infrastructure.
He thus articulates his "personal view" that the EU "has simply got too big now and it's very difficult to work with". He would like to see the UK "turn outward more towards the world".
That itself is rather strange, given his comments on the "Solvency II" package. Although of EU origin, this complex regulation on capital requirements in the insurance industry, running to 155 pages, has considerable international dimensions.
Specifically,
Directive 2009/138/EC implements recommendations from the International Association of Insurance Supervisors, the International Accounting Standards Board, the International Actuarial Association and nine other agencies alongside the World Bank and the IMF.
Furthermore, there is
considerable overlap with the International Financial Reporting Standard (IFRS) and, with future developments under
Omnibus II, we are seeing a gradual convergence of financial regulation on a global scale.
This makes the recent upsurge of concern about the EU from city sources rather puzzling. Financial services is nothing if not a global industry and regulation is increasingly being tackled at a global level. The EU, increasingly, is a downstream player, no longer initiating measures â as it was doing until fairly recently â but responding to global standards-setting initiatives.
But then
one finds the Legal & General has been particularly active in lobbying for "an appropriate outcome in the UK on Solvency II". With
Directive 2014/51/EU coming into force, one can see this as a form of special pleading, positioning the company to get a competitive advantage from recent regulatory developments.
Looking more closely at what Dr Wilson is saying, one then sees that he is not making a direct, unequivocal call to leave the EU, but simply setting up an option in the event that the UK can't do better out of the EU than it is at the moment.
For Dr Wilson, the price will undoubtedly be "an appropriate outcome in the UK on Solvency II", for which his support for continued membership of the EU will be assured.
In essence, what we are seeing â as we saw yesterday with Mr Johnson and his
sidekick - is a variation on the Cameron/Open Europe "renegotiation-reform" ploy. That leaves it wide open for a latter day conversion to the cause, when the a fudged "reform" is dropped on the table.
One sees recent events, therefore, as game playing â the corporate world exploiting public concerns about the EU to its own advantage, then to fall into line when a referendum looks certain, backing continued membership.
Even if these players were genuine about leaving the EU, though, the "outcome" they would be looking for is not one we would particularly enjoy. In the whole of his
108-page report yesterday,
Open Europe board member Gerard Lyons used the word "democracy" once, and that was only because it was in a quote from David Cameron.
Corporate Britain thus is not interested in the things we are concerned with. Its interests are not our interests, and its conditional calls for quitting the EU do not make it our friend. Without hesitation, they will ditch any vestige of euroscepticism if it suits them, leaving us to fight the battle on our own.
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