Lord Hill wins financial services post in new European Commission

"But my starting point is that there is much work to do to build on the important legacy of Michel Barnier to ensure we have stable and well regulated financial markets. As President-elect Juncker has stressed, nothing is more important in the years ahead than creating the right conditions for jobs and growth, and I look forward to playing my part in that task and in building a stronger Europe."

However, the Conservative peer, a former PR man and close friend of Mr Cameron, will be overshadowed by a powerful new economic post as Mr Juncker centralises the commission around a group of seven powerful “super vice presidents”.

The existing single or internal market department of the commission, headed by Michel Barnier, the current French commissioner, is to be broken up and stripped of responsibility for financial regulation which becomes a new department under Lord Hill.

He will have to fight a major battle to keep the EU's financial services policy focused on market liberalisation rather than it being subordinated to eurozone stability as the European Central Bank becomes a powerful banking regulator at the end of the year.

The flagship of his five year term, which begins in November, will be "capital markets union", a major shake-up of the financial sector that has big implications for the City.

David Cameron's spokesman said: "We welcome president-designate Juncker's announcement of the new European Commission-designate.

"We have made the case for an economic portfolio for Lord Hill and I think that is what we have seen in today's announcement.

"What we see here - unlike in the previous Commission - is a stand-alone financial services portfolio that also brings with it elements of financial stability that were previously in another portfolio. It will be this portfolio that is looking at financial services issues in the single market, but also issues such as banking union, which have always been thought of as having particular relevance to the eurozone.

"We are seeing that being led by a Commissioner from a non-euro member-state. I think that speaks to the point that the Prime Minister and others have been making about the importance, as we go ahead with reform of the EU, of ensuring that the voice of countries that are not in euro and will not join the euro - such as the UK - are fully represented."

^{Jean-Claude Juncker (Bloomberg)}

Mr Juncker said that his new commission, which includes five former prime ministers, would take on a powerful political role in the next five years.

"I have never had the idea that commissioners are high civil servants. They are politicians," he said. "This will be a revolution."

Pawel Swidlicki, of the Open Europe think tank, hailed Lord Hill's appointment as "an important victory – and more than Cameron might have hoped for".

"Just as importantly, this role will give the UK a voice in how further Eurozone integration affects the single market in financial services across the entire EU and the City of London. With key court cases on bankers’ bonuses and clearing the euro currency in London looming, the UK Commissioner could have a big impact," he said.

“Overall, the UK can be cautiously optimistic about the new Commission which contains a number of heavyweight figures who share the UK’s economically liberal and pro-trade outlook. Key posts such as Internal Market and Competition have gone to non-euro member states, while the inclusion of the reformist Dutch former Foreign Minister Frans Timmermans who will be responsible for ‘better regulation’ and who has spoken out against EU over-interference, is particularly positive.”

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