Myners dismisses hedge fund fears over new EU directive

Former Treasury minister claims Labour's negotiation team succeeded in watering down proposals

Lord Myners, the ex-Treasury minister, hit back yesterday at fears that if proposed new EU hedge fund laws go through unchanged in Brussels this week they will damage London.

The former minister said: "There isn't anything left in this directive which will threaten the viability of the UK hedge fund industry or the long-term position of London as the centre of that activity. I'm not just about defending the previous Government's legacy, but we worked hard to stop the worst excesses of this directive."

Lord Myner's comments come as the new Chancellor, George Osborne, prepares for his first Ecofin meetings in Brussels tomorrow when the Alternative Investment Management Directive is due to be debated and passed by ministers before it goes to the European Parliament in the autumn.

Privately, Treasury officials agree that most of the proposals have been watered down under the previous government, but Mr Osborne is still under immense pressure from leading hedge fund trade associations to reject some of the regulations which they claim will hurt London, and undermine Europe's competitiveness.

Both the previous and new Treasury teams have been negotiating to stop the "passport" part of the directive which requires all hedge funds to register in all the countries where they operate. As more than 80 per of the hedge fund industry is in the UK, the passport will affect London-based funds the most and will add to costs.

In a letter to all MEPs, the trade bodies were still lobbying last week for last-minute changes. They are urging leniency in particular on the "third party" proposals that would place controls on non-EU funds.

But, said a source, Mr Osborne and his Treasury team are not optimistic they will get the necessary majority to make the changes. "It's a question of mood. We want to make the general point that in a single-market the principle of passporting between countries should be allowed. But the mood in Europe – particularly in Germany and France where public anger is still being directed at hedge funds – is not going to allow this to go through."

The UK expects the backing of only the Czech Republic out of the 27 EU member states.

The crucial vote was postponed until this week to avoid the UK election and any further political horse-trading over the directive which has divided opinion among EU members.

French and German politicians have been the most determined to drive through the changes, claiming that hedge funds and private equity activities worsened the financial crisis.

The proposals also concern the US Secretary of State, Tim Geithner, who has already warned that they could lead to a continental rift as they will lock US funds out of Europe.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower