The truth about EU regulation

An argument I’ve always taken on with eurosceptics is the effects on business of EU regulation. Open Europe took umbrage at an article I wrote in the Yorkshire Post a few weeks ago, which questioned their wild assertions that EU regulation was out of control and crushing British business, in particular their claim that EU regulations will cost the UK £356 billion by 2018, the equivalent of £14,300 per household.

However, new analysis by the British Chambers of Commerce (BCC) indicates that EU regulation actually accounts for a tiny proportion of regulatory costs on business (0.1% in 2007-8). Indeed, according to the BCC, who should know a thing or two about how regulation affects businesses, the net cost to business of EU regulation was only £1.9bn, i.e. about £31 per person.

The BCC research also indicates that the ‘better regulation’ drive by both the European Commission and Government have, although derided by the Tories, had an effect. Having analysed 246 impact assessments on regulation affecting business in 2007-8, the BCC research states that the Government managed to cut more than £1bn in administrative costs on business.

Even hese figures, of course, don’t factor in the massive benefits to business and consumers of the European single market, estimated by the European Commission to be as much as 2% of national GDP.

The point is that, to misquote Stephen Fry’s General Melchett in TV’s BlackAdder, regulation isn’t a dirty word. Firstly, having one single set of common rules, instead of 27 different sets of national regulation, can actually cut red tape for business. Moreover, a sizeable proportion of EU regulation on matters ranging from water quality to vehicle licensing would exist at national level if the EU did not exist. The other point is that some regulation saves lives (such as banning the use of asbestos in buildings) or, in the case of the Temporary Agency Workers Directive, provides extra rights and social protection for workers,

As legislators, we don’t always get it right, and there are many ways in which the European Parliament, Government and our national parliament could improve the scrutiny and development of European law – from the initial Commission proposal to the final legislation. But research by such an authoritative business voice as the BCC (which, incidentally, also shows that EU regulation accounts for about 20% of regulation on British business, a far cry from David Cameron’s comment that “almost half of all regulations imposed on our businesses come from Brussels”) should certainly knock eurosceptic scare stories on the head.

Nonetheless, it would great to think that, faced with the evidence, the Tories, Open Europe, and Taxpayers’ Alliance will now admit that they were talking nonsense. Forgive me if I don’t hold my breath, though.