eurealist.co.uk

Whistling in the Wind?

The Adam Smith Institute report on regulation is well worth reading, but as the report states..

“The apparent readiness among British politicians to tackle the problem of regulation is encouraging. But on past evidence one is bound to ask whether this will translate into positive action”

There seems to be no way that politicians will really be prepared to tackle the regulatory influences As the EU Constitution enshrines the acquis communautaire and places more power in the hands of the Commision a call for a massive culling of that body of EU competence or controls on the Commision are very unlikely to be met with appreciation in the halls of Brussels which has echoed with the opposite cry for more EU regulation for the past half century.

The report makes the case that “While both Labour and Conservative politicians claim to want to cut ‘red tape’, their record in office has been to produce more regulation, rather than less. And suggests that “Perhaps having regulations in place makes politicians feel less vulnerable to uncertainty; perhaps the concentrated interest of those who demand new regulations are politically stronger than the diffused interests of the public who will pay for them”. Offering an old fashioned notion that “Perhaps the idea that liberty itself has value, needs to be reinstated”.

“The accretion of regulations seriously hampers the way an economy functions.
Regulations are invariably created to achieve some ostensibly laudable aim, such as
improved health and safety standards in the workplace. Yet all too often, regulations
(and their enforcement by officials) become over–burdensome or even counterproductive. Over–regulation depresses corporate profits, consumes valuable management time and saps entrepreneurial morale. It makes the UK less attractive to multinationals. Far from adding value, the ‘regulated state’ erodes wealth creation — and reduces the taxable base on which government services depend.

Small businesses are especially burdened by regulation. They should deal with a single inspector for tax and a single inspector for all other regulation. If a single person cannot explain the rules a small business has to follow, it is obvious that those rules are too complicated to be effective. Small businesses should be compensated for the administrative burden that regulation imposes upon them. This is not state aid but simply a partial reimbursement for the information that businesses are forced to provide; and a measure to impose some discipline on government departments regarding the burden they impose.”

As reported in the FT the report “identifies three main sources of regulation that impinge on UK citizens, namely, the EU, Whitehall and regulatory agencies, such as the Financial Services Authority and Ofcom. A similar position applies in other EU member states. If we are to succeed in reducing the regulatory burden, we need to ensure that fewer new regulations are passed, that existing ones are rationalised, and that enforcement does not become overzealous”

In terms of the cost to business, the Treasury estimates that over half of all new legislation with a significant financial impact on UK business now derives from EU law. If we are to lift the regulatory burden we must tackle the main engine behind its recent growth. From our analysis of the regulatory labyrinth, we concluded that a series of radical reforms were required.

First, the most effective way to tackle the phenomenon of gold plating - when implementation goes far beyond the minimum necessary to comply with a directive - is to scrap directives (or framework laws as envisaged under the new Constitution). The EU’s legislative institutions should be required to focus on issuing clearly drafted regulations, which can be applied without further interpretation by each of the 25 member states. As we researched our report we soon realised that gold plating is the inevitable result of seeking to transpose EU directives into member states’ domestic statute books. In a properly functioning single market, a regulation should be clear from the outset. If it fails to meet this test, it should not be introduced.

Second, it is essential that we introduce regulatory impact assessments for all new EU regulations that impinge on business. Such scrutiny aims to establish whether the net benefits from a new regulation exceed the compliance costs. Our suspicion is that many do not pass this straightforward test. Indeed, Peter Mandelson, the EU’s trade commissioner, told last year’s Confederation of British Industry annual conference that the cost of EU-generated red tape was roughly double the economic benefits generated by the single European market.

Third, if new EU regulations can be demonstrated to pass the regulatory impact assessment hurdle, sunset clauses should be built in to review whether these regulations have achieved their stated goals, three years after they were implemented.

Fourth, we can reflect on the US experience and oblige the European Commission to report annually to the European Parliament on the total costs and benefits associated with EU regulation. The Office of Management & Budget has reported in a similar fashion to Congress on a yearly basis since 1997.

Fifth, we should establish within the Commission a regulatory oversight unit to evaluate all significant regulatory proposals. If it is to exert any influence, such a body will need to have a real decision-making authority (as with the Regulatory Oversight Office in the US). It will also require sufficient funding to perform its role and be separate from the regulatory agencies it monitors.

Sixth, we need to radically prune the acquis communautaire. The UK government has set out some ideas on how this could be achieved. In financial services, the EU’s Financial Services Action Plan has attracted considerable criticism. In this context, the crucial regulations that need to be simplified are the first investment directive, the capital adequacy directive and the money laundering directive.

The Six Presidency Initiative - which sets EU priorities for the next three years - claims it will seek to cull outmoded Union rules. Charlie McCreevy, the internal market commissioner, said that he was prepared to abolish legislation that had proved to be damaging. We have offered to submit a list of suitable candidates for Mr McCreevy’s attention.

The initiative should be welcome news to the 10 new accession states. Many of them were only recently freed from the yoke of Soviet central planning. Having liberated themselves from unwelcome state intrusion, the last thing they desire is a raft of EU regulatory measures imposed on them by overzealous bureaucrats.

French referendum Yes side to get four times more airtime than No.

CSA the French media commission has decided to allocate air time based on the number of seats held by the political parties. This will be seen by the Yes campaigners as a fair judgment, because it reflects the popular vote gained by the parties at the election.

The faults rest, firstly, in the fact that those parties did not gain their votes solely because of their stance on the EU Constitution, but on any number of policy positions which would have been considered by the French voters. Also as the referendum is about replacing the Constitution this transcends any party political position, it is a simple Yes or No debate. Thus to allocate air time in this way is according to MP Henri Emmanuelli obviously undemocratic, especially as it results in the Yes campaign being given four times the coverage as the No campaign.

Whilst Chirac has called for all Frenchmen to take part in the debate, the CSA intervention has ensured that the TV coverage will be slanted heavily in favour of the Yes side of that debate.

In the UK the BBC and other broadcasters have not yet come to a decision on how to allocate airtime. But as we have already seen in the North East Regional Assembly referendum, with groups campaigning for a yes vote spending twice as much as the no campaign. The opinion that the funding or the coverage of these debates should be based on the political party standing in parliament, and not their position on the Constitution is already being considered. This disregards the fact that many Conservatives would vote for the Constitution and many Labour supporters would vote against, and the much deeper consideration that this referendum is not about which party we wish to be the government of the country, but about the very nature of government itself.