Let’s burn EU red tape and embrace era of prosperity
For decades before the referendum business groups such as the CBI, the British Chambers of Commerce (BCC), the FSB and others pursued avidly moves to cut, improve or avoid regulation.
Successive governments have responded to this with varying degrees of success (mainly failure). I was a member of Margaret Thatcher’s deregulation task force but even her government found deregulation difficult largely as a consequence of the quiet resistance of Whitehall, the fact that much of the problem was created in Brussels and the EU was beyond reach and that the leader of the assault on regulation was Michael Heseltine, who as far as I could see had no real intention of deregulating anything. Plus ça change, as they say in Belgium.
The Cameron government’s attempt of “one in one out” and then “one in two out”was noble but had little impact because the big regulator, the EU, was off limits and that is half of the statute book at least.
By 2010, before I became director-general, the BCC estimated that the cumulative cost to British business and the economy of EU regulation was in excess of £80 billion. The BCC stopped producing their EU red tape tracker that year because they felt that no one was listening and yet it remained the number one concern of businesses up and down the country, especially among medium and small businesses and for entrepreneurs.
Now at last Brexit provides an opportunity to do something about it and in so doing provide a huge boost of up to 2 per cent of GDP, according to Economists for Free Trade, by reducing red tape by just a third. So why suddenly is there a deafening silence from the business groups who should be clamouring for deregulation?
Well it turns out that the big multinational corporations that the CBI represents actually like regulation, at least the stuff they already have. They don’t want change — it enables their well resourced regulatory departments to “game” the system and keep out competition and, of course, maintains the importance and value of those departments who are the ones generally asked the question about the desirability of regulation. Let us not forget that it was the CBI and the TUC who signed up to the Working Time Directive to maintain their status as EU social partners behind the backs of other business groups.
All the business groups favour the EU: it is bureaucracy speaking to bureaucracy and none of them want to appear to be pro Brexit by pressing their long-held (although it now appears hypocritical) campaigns for business deregulation.
The clamour from real businesses for deregulation remains as strong as ever. It should be noted that all of the business groups combined represent only one quarter of UK business, even if you believe their membership claims.
So, what are these regulations, present and future?
The Working Time Directive prevents Britons from working overtime and made us poorer as a consequence. It all but kneecapped the haulage industry as foreign companies undercut the UK by not following the rules. Overall it added billions of cost and made UK companies less competitive in world markets.
The same can be said of the Temporary Agency Work Directive (not to be confused with zero hours contracts) which reduced job opportunities for those who liked to work seasonally or at specific times and significantly reduced the flexibility of business to meet peaks and troughs in the economy.
Both of these reduced productivity.
The anti-science predisposition of the EU and the “precautionary principle” has led to the inability to try out potentially life-saving drugs and has put back innovation in the areas of genetic modification. It also threatens fracking and innovative energy solutions. All of this prejudices areas in which Britain leads and the EU is making us poorer by denying us this potential. How many other areas of innovation in IT, AI, genetics and medicine, to name but a few, will the EU outlaw like some latter-day papacy faced with a new Galileo?
The diesel scandal is an example of an EU regulatory system rigged in favour of certain EU members, sacrificing human health and animal experimentation on the altar of a false green agenda — after all the UK is 3 per cent of global GDP so we could be totally non-carbon producing and not even “move the dial” in terms of global man-made emissions. It was known 40 years ago that dioxin producing, toxic diesel, was harmful to human health, but the EU chose to ignore this.
What nonsense has been talked about chlorine-washed chicken and trade deals with the US. Just as with generically modified crops, the very prosperous US population seem to be thriving and not many appear to have two heads. What is laughable about the anti-EU deregulation brigade in the UK is that they don’t seem to realise that they drink chlorinated water every day, from the tap and in their coffee and tea. That bagged salads are regularly washed in chlorinated solution to kill listeria and E. coli. If chlorine-washed chicken means less of this, and of salmonella and campylobacter and therefore a reduction in the annual deaths and illness from these, then I say bring it on.
Bureaucratic EU requirements that demand excessive paperwork and tick-box exercises, such as the Ergonomics Directive, which requires the recording of the seating arrangements of workers, or MiFID II in the financial services sector, with all of its data recording generally ignored by clients, are just as corrosive on productivity and competitiveness. These are also costly distractions from the practical and responsible organisation of work and information.
All of these examples are just the tip of the EU regulatory iceberg.
Once we are rid of the Orwellian EU nanny state, we can get back to having attractive light bulbs, powerful vacuum cleaners, which the EU regulators limited in favour of the German manufacturers, and we can frack for gas while the Germans continue to burn the worst polluting fuel, lignite.
We don’t have to have regulatory divergence after Brexit, but we can where it suits us. Thereby we can improve people’s lives, their enjoyment and prosperity and we can improve the possibility of trade across the world, a world in which EU trade represents just 13 per cent of our GDP and shrinking.
Let us embrace a renaissance in science, innovation, work and prosperity, away from the inquisition of the EU regulator.
John Longworth is co-chairman of Leave Means Leave and former director of the British Chambers of Commerce
February 16th, 2018: The Times