A top European Union official has warned of significant consequences for Britain's financial services industry and access to the single market if it votes to leave the bloc.
Britain would become a "supplicant" and end up with worse trading terms, Jonathan Hill, the EU's financial services chief and a former leader of Britain's upper chamber of parliament from Prime Minister David Cameron's Conservative party, said on Tuesday.
Cameron negotiated a "new settlement" with the EU last month in a bid to persuade Britons to back staying in the 28-country bloc when they vote in a referendum on EU membership on June 23.
The settlement includes safeguards that make it harder for eurozone countries to impose regulation on the City of London financial district, Europe's biggest banking centre.
Hill, said countries such as Norway that are outside the EU are in a position of "fax diplomacy" and being supplicants.
He told the UK parliament's Treasury Select Committee that he could not see why a Britain outside the bloc would get better trading terms for its financial sector than existing benefits.
"We would get worse terms ... it's a problem for the industry," Hill said, adding Britain outside the EU would still have to implement EU rules if its financial services wanted to do business there, but would have no say over their shape.
"Were we to leave, the consequences in terms of financial services and access to the single market would be very significant."
Remaining EU states would want to use their competitive advantage when negotiating UK access to the single market as German and French financial services have different preoccupations to the City of London, he added.
And some securities clearing businesses were already "hedging their bets" by thinking of acquisitions elsewhere in the EU, Hill said.
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