The credit for this is particularly due to Brendan Bayley (Treasury), Mike Duignan (Financial Services Authority), Cliff Dammers (International Personal Management Association), Chris Huhne (rapporteur to the European Parliament), Inel Bureat (European Banking Federation) and Asuncion Caparros (ABN Amro). Lessons must be learnt from this tortuous process if corporate and financial services directives are to improve and avoid damaging the UK's advanced financial and business practices.
In essence, these lessons are that there must be quicker and better coordinated action by UK 'stakeholders' and that they must direct the bulk of their lobbying at convincing their EU counterparts rather than at the UK Government.
Why is this? It is no coincidence that four out of the six individuals mentioned above do not have a UK remit. Qualified voting means that the UK cannot even block a proposal that is damaging to UK business without the support of a significant number of other EU states. Many other negotiators and the EC have only the haziest idea of how international markets operating from London work. They are often hostile to those markets or desire to repatriate business to their own countries. Other states have different market environments, in a number of which retail investors have been abused and many of which are characterised by a lack of financial services conduct of business rules and other codes of conduct, such as the Combined Code, causing regulators to press for rigid and restrictive rules.
The response from 'stakeholders' has sometimes not been timely or focused. In addition, in the fog of the various proposals and counter proposals, representative bodies have had extreme difficulty in obtaining informed and coherent feedback on technical issues from their members. These members have also demonstrated a limited willingness to make focused representations to key European decision-makers or to engage in a dialogue with their EU counterparts. Often, senior representatives have been unable to deliver the promised reliable 'coal face' evidence. Most businesspeople prefer to make money rather than fight wars better left to someone else. When lobbying has been undertaken it has occasionally reeked of smugness and complacency and has been directed at the UK's own negotiators, rather than the decision-makers who must be won over. Furthermore, confidentiality must be respected, as press leaks have generally been counterproductive.
The solution lies in the hands of those most directly affected by a particular directive. To have any real influence on the final form of a directive, representative bodies must develop a relationship with their EU counterparts. They need to ascertain from them the environment in which they work and their resulting priorities, as well as explaining the needs of the UK and international markets. Senior executives must take the lead in these discussions, as they are taken more seriously than representative bodies. Information obtained must be fed back to the UK's negotiators in a timely and effective manner. Also, where there are common interests, they need to be clearly brought to the attention of the negotiators of the other state because, even if the EC accepts the UK's position intellectually, opposition by a significant number of states will prevail.
Huhne has shown the importance of an enlightened rapporteur to the European Parliament, which holds a veto of sufficient power to carry real weight in the negotiations. Therefore, it is vitally important that the parliament member rapporteur is provided with a coherent proposal, supported by convincing evidence, which could be adopted by the parliament.
As for the UK Government's role, it clearly cannot take part in lobbying efforts within other EU states. However, the expansion of its teams to enable more time to be spent liaising with individual groups on the twists and turns of draft directives and their effects would be worthwhile. This will provide UK representatives with more opportunities to learn about the views of interest groups in other states. Finally, the Government should make it more explicit at the outset that if those affected are not willing to take the steps necessary to identify, justify and promote their case, they will have to live with the consequences.