We need to take a more active role within the EU, argues Martin Kearns, head of strategic policy at Tiuta plc

The UK’s position within Europe has always interested me. This is because, as a society, we seem to have a somewhat schizophrenic attitude to being part of Europe we acknowledge that we are within its borders and yet the vast majority of people on this island don’t feel part of it at all. For example, we talk of Europe and intrinsically we would not include the UK within that description. Indeed, the most any of us tends to feel remotely European is once every two years when the Ryder Cup is held when else would you see the European flag flown so proudly on these shores?

The fact is that our status as an island, our history of warring with most of our European neighbours over the past thousand years, our Empire-building, our close links to the USA, etc has all gone into a mindset which could be best described as ‘we stand apart and we don’t need you’. Look recently at our involvement (or perhaps lack of it) with the initial set up of the Common Market, building up to our current position within the European Union today, and there is plenty of evidence to suggest we are still very much in the following frame of mind: ‘We want to be in Europe but not governed by it’

Generations of politicians have attempted to tread this very tricky line: trying to show that the UK is at the heart of European matters, shaping European policy however when we don’t like the outcome, when we perceive that it is against our interests, we should have the right not to play ball. Unfortunately, this is a policy that is almost impossible to follow. You can’t really pick and choose a time to play a full part in European debate and politics, you begin to not be taken seriously and you certainly start to lose influence. It’s like being the referee in a football match, deciding that the game can start, only to take the ball home half-way through because you don’t like the way the game is going. Soon, one of the other players brings out their own ball, they elect their own ref and decide they can play without you

These thoughts struck me when I saw some of the headlines attached to the recent European Commission’s Directive on Credit Agreements Relating to Residential Property. Firstly, let me say that I believe there is a lot of guff talked about the European Union, particularly some of the more bonkers, media-friendly nonsense about, for example, bendy bananas and how there are so many impositions being placed upon the British by European bureaucrats all aboard the gravy train.

However, there is an important point in all this and that is the significant influence that European law has on this country. Indeed, the vast majority of the regulations currently hitting the financial services sector in this country come from European directives such as the one published at the end of last month. Which is why it is so vitally important that the UK plays a major part in shaping and formulating these sorts of directives because, quite frankly, there are a number of proposals outlined here that are not helpful and, in many ways, would deliver a far less robust regulatory regime and consumer experience than we already have in place in the UK. I’m thinking in particular of the suggested adoption of the European Standardised Information Sheet (ESIS) which would replace the KFI and is not really in the same league when it comes to the information it provides customers

There is also plenty in the paper about ‘remuneration schemes’ effectively looking at the payment of commission/procuration fees with the suggestion that this method could cause consumer detriment and should therefore be reviewed and probably scrapped. Other proposals, for example, in relation to advertising could set us back to a time when we had adverts and marketing with reams of small print – another retrograde step in my view. There are also proposals which could see the need for widespread regulatory authorisation for many firms which currently sit outside namely lead generators, comparison sites one thing seems certain, under these proposals, all bridging finance providers will need to be authorised, albeit when they are they will be able to transact across all European borders providing a substantial opportunity for many

However, the point is that clearly these proposals will have a major impact on all mortgage/short-term finance/secured lending stakeholders. The interesting thing for the UK is this comes about at almost the exact same time as the MMR and the regulatory authorities here have a major job on their hands attempting to knit the two together. Perhaps a major reason why there has been a push-back in terms of MMR over the past six months?

This all goes to show the importance of considerable influence being brought to bear on those that come up with such Directives – not just from a trade body perspective but those who represent the UK’s interests in the EU, be they MEPs, Commissioners, civil servants, etc. There will be some who would like a full-scale ‘retreat from Europe’ but this is unlikely in the extreme and therefore, given the amount of money we provide to the EU Budget and the major impact all European laws and directives have on the UK, does it not make sense to lighten the rhetoric somewhat and take a full and active part? Perhaps with this mindset we would be less likely to be impacted by Directives which do not reach the standards we already have and we will also be spared the need to cough up even more millions to take retrograde steps.