Dr Lee Rotherham is the author of Land of the Superwake, second edition available on Kindle, and has twice been a Conservative parliamentary candidate.
There is a pernicious myth spreading in the lazy fringes of politics right now. This is a fairy tale about Brussels red tape.
Storytellers say that it is too difficult to unravel, so one should not try. It is impossible to know the entire list as new examples are being discovered under the sofa. And, in any case, no one should really make any changes: breaking away from the EU copybook is inherently bad. Consequently, all this should be forgotten about.
Such sweet words are a mirage, a parody of events convenient for anyone whose silent agenda is to rejoin the EU. Indeed, Barnier made the very point casually when he visited London last week.
This much is true: EU regulations and directives form a major block of domestic legislation and generate enormous business costs. We know this because Whitehall’s own past internal audits revealed it, an area I’ve been tracking since the days of John Major.
Today’s collective amnesia in SW1 can be attributed to two factors. The first is staff churn: our civil service moves people on after a short period of time. This facilitates retention but inhibits both corporate memory and subject efficiency.
The second reason is a strategic embarrassment. Old audits listed red tape whose remedies were defined in official language as “out of scope” only by EU membership. The official policy was to continue EU membership, so they went to the filing cabinet.
Then there is that anti-Brexit corporate lobby. Excessive EU red tape exists partly because business and special interest groups lobbied Whitehall and Parliament. Even those who opposed regulation, their interests, absorbed costs, to strangle emerging competitors.
Today we appreciate EU red cape spending due to considerable lobbying by Eurosceptics introducing officially published Regulatory Impact Assessments (RIAs). Sometimes, these enter the realm of fiction, especially as the precautionary principle is cast against an industry that has any casual advantage. In contrast the cost columns tended to be more strongly calculated, perhaps because they were proven by the doomed to pay them.
Together, these make timely reference points for reformers today – if you know where to dig and what search terms to use. A specific example that is in the public domain should inspire MPs. In 2011, DEFRA published a preliminary departmental cost-benefit analysis of red tape and its sources. Ministers were looking for a quick win for the Red Tape Challenge, a program run across Whitehall to build regulatory efficiency. These results were updated in 2015.
So what did DEFRA’s latest known audit find? The updated review contains 428 sets of regulations, of which no less than 53 percent (227) derive from EU or international law.
The direct cost to businesses of all regulatory burdens was estimated at £5,771 million a year. Estimated direct benefits were £2,065m per year, with net costs of £3,706m. An astonishing 79 percent of the total expenditure was linked to the EU (with few international agreements, although those were also implemented through the EU).
We even know where the sectoral emphasis is. The main sectors affected are listed as fisheries and forestry (19 percent), manufacturing (21 percent), and water (35 percent). Business costs were 86 percent policy costs and 14 percent admin. Eleven regulations with a burden of over £100 million a year accounted for 62 per cent of expenditure.
If you dig deeper, the estimates of direct benefits look questionable An innovation “benefit” is £276 million a year arising from potential subsidies. Estimates are made for economic gains arising from the assumption of improved public health by reducing sick leave. Over a billion years the benefits of biodiversity have somehow evolved from accretion to sites of special scientific interest.
The costs of the Common Fisheries Policy to British industry, consumers and the environment are excluded. But for all those failures, which suggest the benefits of red tape could be much greater, the combined analysis presents a huge head start.
Overall, what the review produced was a horizon-scanning audit that precisely contained the department’s regulatory burden. It reviewed the regime (or area), listed key EU regulations if at source, identified transposing regulations, determined other domestic regulations affected, and estimated individual ancillary costs.
Thus DEFRA’s audit incidentally created a priority target list for post-EU deregulation. By listing the relevant legislation it enables auditors today to deal not only with EU red tape but also with departmental gold plating, where an over-cautious Whitehall has added further burdens to reduce the chances of being embarrassed by the Luxembourg courts and not fined. Compliance Both types of overregulation require fixing – ‘don’t do it’ and ‘do it again but mildly’.
The chronic EU red tape knotweed thus exists. A review that I have seen with my own eyes does not yet officially exist apparently. When the librarian kept saying there was always trouble finding them!
Armed with such evidence, ministers have no excuse for failing to deliver. Similar documents will sit in other departmental archives across Whitehall, the assessments of desk officers recording their disempowerment before decisions are made higher up in Brussels, poorly drafted and poorly-conceived.
At this point, a small number of sincere public servants are shying away from their identification and reassessment. I am not convinced that these missionaries of necessary reform are getting the attention they deserve across the various departments. If so, it would prove an absurd management failure, since half the answer is already there.
Without that priority and drive, deviations will only happen by accident. The simple reality of Brexit will mean we avoid future EU costs. But bad old laws have to be amended or scrapped, and huge historical opportunities have to be embraced.
Meanwhile, in Brussels, Commission officials in 557 obscure committees, closed to lobbyists, are still drafting new laws. 150 council working groups secretly exchange endless small prints rolling along the conveyor belt. About 2,500 new laws are churned out of the Brussels sausage machine every year (depending on how you count). And Britain and the EU, and more worryingly Ulster and Britain, suddenly diverge.