Richard North, 12/08/2017  
 


Following on from the (issue-)illiterate piece by Marcus Fysh MP, another Tory MP, this one Charlie Elphicke, has added to the rotting pile with his own contribution.

With the silly season speculation about an "invisible planet" scheduled (by some) to collide with Earth and bring life to an end on 23 September, this leads me to my own speculative conclusion.

There really is an invisible planet out there – one to which an increasing number of Tory MPs have gravitated. It's called Planet Stupid, where a wealthy despot is bankrolling a competition for a million-pound prize for the MPs who manages to get published the most stupid article on the subject of Brexit.

The competition so far has been enormous, but Fysh and Elphicke are well up there with the leaders, alongside Daniel Hannan who is in pole position after the competition was extended to MEPs. There is no word as to whether it will be opened up further, to include Labour and Lib-Dem MPs but, if it is, there will be no shortage of candidates.

Somehow, I almost wish my fantasy was true. It would at least provide an explanation for the otherwise inexplicable phenomenon of so many MPs delivering the most extraordinary rubbish about Brexit, much of it flying in the face of known and demonstrable facts.

Thus we have Elphicke warbling about the need to define our own trade policy, with "full control of trade policy in goods and services" which, he declares, is "a key reason why we must have unfettered control of all our domestic regulatory authorities".  

Trade, he adds, is also about regulatory barriers and behind the border protectionism. These barriers particularly affect UK businesses, especially in the services sector. To that effect, he says, there is a lot "we can do to help our own exporters by making sure that our regulatory system is more competitive".

We know exactly where Elphicke is coming from here, joining in with his many "Ultra" friends in calling for "scrapping burdensome regulations". By such means, he endorses such stupidity as the argument that "leaving the Single Market would allow Britain to scrap 59 of the 100 most burdensome regulations on business, saving more than £4 billion". 

The really odd thing about all this is that one of the primary functions of MPs in parliament is to make laws (i.e., regulation), so you would think that they would have a basic understanding of its nature and application. After all, if they are making laws for the rest of us, they should know how and why they work – and especially Charlie Elphicke who, before being elected, was a tax lawyer.

It actually isn't that difficult to work out that, when it comes to international trade, much of the law produced is by no means "burdensome" but is, in fact, a trade facilitator.

To illustrate the principle, I am fond of quoting the EU's Classification, Labelling and Packaging (CLP) Regulation which sets the standards throughout the EEA for the labelling of hazardous chemicals.

No one in their right mind (not even a Tory MP) would go so far as to suggest that chemicals should not be labelled, so a law that requires that which should be done by any sensible supplier can hardly be considered "burdensome". But what does become problematic is when different countries define their own unique systems so that an international manufacturer can find themselves having to cope with dozens of different labelling systems.

Not only is there a direct cost element here, labelling requirements can become a very real barrier to trade, when consignments arrive at export destinations with the wrong labelling (for whatever reason) and are rejected by the customs authorities.

To address what had become a very real problem, therefore, the EU with the United Nations, cooperated to produce the Globally Harmonised System of Classification and Labelling of Chemicals (the GHS), which is now implemented internationally and, in the EU, by the CLP Regulation.

In terms of international trade, the effect of the regulation is that, as long as consignments of chemicals bear the harmonised labelling (including the standardised symbols), the authorities at the point of destination cannot refuse their entry on the grounds of inadequate safety labelling. And by this means, the regulation becomes a trade facilitator.

Another great favourite of mine is that infamous banana regulation. This is, in fact, a long-standing international marketing standard, the purpose of which is to enable buyers, thousands of miles distant from growers, to buy produce sight unseen and know what they are getting. 

The standard also gives the growers reassurance that, as long as their produce meets the standard, their claim for payment is valid and enforceable. They cannot be cheated by unscrupulous buyers arbitrarily changing the standard while the goods are in transit.

In Flexcit I wrote of my own research which showed that the official, standardised system of meat inspection came about as a direct response to the meat industry. Lack of uniformity, the industry argued, imposed "unequal liabilities" on traders and, where no inspection was carried out, "serious embarrassment" to honest traders was caused, "owing to the absence of any check on unscrupulous traders".

This was in 1922 and, since then, we have seen the growth in consumerism and increased involvement of the state in consumer protection and standard-setting. Thus, even though the medicines approval system is expensive to the point of being truly "burdensome", there is not anywhere any demand for its removal. Any relaxation in the requirements would be unthinkable.

Yet all of this seems to have passed by the Tory party "deregulators" who insist that the way to liberalise trade is to build a bonfire of regulation and allow some vast free-for-all that would, apparently, save nations and their traders billions of pounds.

The reality though is that the savings are to be found in more (and better) international regulation. Again in Flexcit I cite a claim that the global insurance industry could save "up to $25 billion annually" from harmonised regulation and consistent requirements.

The global pharmaceutical industry, with a turnover worth close to USD$1 trillion (2014), that could deliver annual savings in the order of $50 billion from international harmonisation of regulation. 

Elsewhere in the healthcare industry, there is $0.5 trillion tied up in inventory. Common standards applied globally could reduce obsolescence and inventory redundancy, cutting the amount of cash tied up in unnecessary stock and attendant storage costs, potentially saving $90-135 billion (USD) annually.

What is truly pathetic though is the infantile level of the debate that we're getting from Tory MPs. The "bonfire of regulation" rhetoric was coined in the 1950s by Winston Churchill and it has barely changed since. Even a 2009 report for the Conservative Party on regulation (The Arculus Report), scarcely mentioned its role in international trade.

It has been left to the much reviled EU to explore the role, while this working paper from 2001 deals with the argument at a level that would leave the average MP floundering.

We really are poorly served by this current crop of MPs. But if they insist on living on "Planet Stupid", we are not going to get much better. But where we suffer from their stupidity, they also lose any entitlement to respect. If they want more than contempt from right-minded people, they need to up their game.






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