EU Referendum

EU regulation: a bundle of burdens?


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Later today we're going to be regaled by stories about Hague's audit of EU competences, with the Telegraph getting in first, reporting on the "burden on British businesses" arising from EU law.

The Financial Times is also running the story, telling us that the competences review has turned into a technocratic stocktaking exercise rather than a flashpoint for further Tory demands. It is, the paper says, to be presented by Lady Warsi, Foreign Office minister, in a written statement to the House of Lords today, while MPs are away from Westminster.

I think the FT "take" is closer to reality than the line offered by the DT - which is doing its usual drum-beating for the europlastics - although I note that both papers rely on a "comfort quote" from Open Europe to tell them what to think, as if this organisation has any better insight than the rest of the ill-informed commentators that we have to suffer.

Their input, however, gives Autonomous Mind his own entry point, observing that Open Europe is the media's "go to" source, while UKIP – which should be dominating the play, is nowhere to be seen.

This is perfectly valid comment, as the idea of excessive EU regulation is meat and drink to UKIP and it should be very visible, explaining to the media the significance of the findings to come. But, although the Japanese have contributed to the process, I don't think UKIP even put in a submission. If they have, they have kept very quiet about it.

Largely, the party seems to reply on Tim Congdon to produce the sort of thing I would have been saying about ten years ago, but have since had second thoughts about.

While we are assailed by endless complaints about the cost of regulation, what we so very rarely hear is the other side of the coin, where regulation saves money or – as indeed it does – facilitates trade. Trade agreements are, essentially, built on regulation, to the extent that it becomes the lubricant which makes international trade work.

This, of course, is why the Hague exercise is being called the "balance of competences", purporting to show the net outcome of regulatory exercises, assessing the benefits against the costs. But what is limiting the utility of the exercise is the extraordinary ignorance exhibited about the nature and source of our laws.

For instance, in the comments section of the Telegraph piece, we saw a reference to this report retailing the views of the CEO of Ford of Europe, Stephen Odell. This man is complaining that current EU regulations "make an average car approximately twice as expensive as it otherwise would be", an assertion which has to be extremely questionable.

Yet, of all the sectors of economic enterprise, vehicle regulation is the one which is most absorbed by international standards-setting agencies. Increasingly, the responsible body is the World Forum for Harmonisation of Vehicle Regulations, administered by UNECE. The cost of regulation is certainly there, but it cannot be attributed wholly to the EU.

One therefore has to ask though whether the European CEO of a global vehicle manufacturer can be so ignorant of the sources of regulation affecting his industry? And, I am told at the highest level, the answer is an unequivocal "yes".

This ignorance is a disease prevalent throughout Europe. Elsewhere in the world, there is an acute consciousness of the role of international standards-setting bodies, but in Europe, under the stifling blanket of the EU, the unchallenged assumption is that trade regulation and much else necessarily emanates from Brussels. So pre-eminent is the EU in the field that no-one even thinks to ask for the source of EU regulation. 

The point is of very great significance when one is assessing the respective costs of EU membership, and the costs (as well as the benefits) of belonging to the global trading community. The regulatory costs of the EU are probably substantially less than we think, but then the EU is most certainly less important than we think – so much so that in many respects, we could do without it.

So impoverished is the debate about regulation though that very few if any of the studies we have seen are of any value. And it is likely that the "competences" exercise that we are to see later today will also be fatally flawed.

Speaking personally, as one who has spent a lifetime enforcing and then studying regulation, I am struggling to understand the complexity of the issues. But even in my ignorance, I think I know enough to understand that we are extremely poorly served by the pundits who would seek to instruct us.

And, by the end of this day, I have a horrible suspicion that we will be none the wiser.