Business chief warns on EU red tape

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The Independent Online

The UK's professional and financial services sector could suffer serious damage because of "heavy-handed" regulation from Europe, a business leader said tonight.

John Cridland, director-general of the CBI, said a number of proposed regulations from Brussels in areas including corporate governance and taxation could hold back firms.

"The likely effect of many of Brussels' current proposals will be to damage the UK's prospects for growth. Nowhere is this more acutely the case than for professional and financial services, which are being bombarded with unwarranted regulation," he told CBI London's annual dinner.

He highlighted the "damaging consequences" for London of the proposed financial transaction tax, which he dismissed as "a Brussels revenue-raising exercise."

Mr Cridland added: "The tax would be an incredibly blunt instrument, one that would increase the cost of capital for businesses, hold back their growth potential and raise minimal revenue in return.

"It's a policy that will penalise the UK as Europe's leading financial centre, diverting activity to financial hubs like New York, Singapore or Hong Kong."