Conservative MEP Vicky Ford has become the first senior figure in her party to plot a detailed plan for the UK to reform EU financial services regulation.
Writing in Banking 2020: A Vision for the Future – a New Economics Foundation book published this week – Ford, shadow rapporteur on major directives on bank capital rules, deposit guarantees and mortgages, outlines a number of changes she thinks the UK should demand to remain in the EU.
Ford says the importance of financial services to the UK means it must have its own veto over new rules, as outlined by the eurosceptic Fresh Start group of more than 100 Conservative MPs.
She wants reform of EU processes with more impact assessments and scrutiny of laws.
Ford calls on the UK parliament’s Treasury select committee to have an early role in scrutinising new rules.
Her plan would include a stronger rapid-appeals process against EU rules such as introducing foreign secretary William Hague’s plan to upgrade the EU “yellow card” power.
Currently, if nine member state parliaments are in agreement, they can force the European Commission to reconsider rules. However, Hague wants this scenario upgraded to a “red card” veto.
If these demands are not met, Ford says the UK could reach a “tipping point” on financial services and decide to leave the EU.
Ford says: “The legislative process is often poorly understood by those outside the Brussels bubble who underestimate the powers held by MEPs who can amend and shape the text.
“There is a lack of transparency in the legislative process. MEPs, especially those from larger groups, often only work on limited pieces of the legislative jigsaw and re-regulate what has already been covered in another dossier.”
EU reform has been hotly debated since prime minister David Cameron promised to renegotiate the UK’s relationship with the EU before holding an in/out referendum on membership by 2017.
As part of the process, the Government will complete a “balance of competencies” review by autumn 2014 to assess which EU powers would be better undertaken at national level.
Conservative MP John Redwood rejects Ford’s plan and says: “I do not think this is a renegotiation where you take one or two powers back and say ‘Job done’.
“I want no tinkering because what we need is a new relationship with the EU built on trade and political co-operation.
“If we had that, we would be free to make our own decisions on financial services without all these difficulties.”