EU Referendum


EU Regulation – empty games


24/10/2013



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Entrepreneur Roger George (pictured above) employs 24 people at his shop in Brussels, which sells British goods, we learn from the BBC, which then has him complain that "red tape is a constant drain on his business".

The epic quote in the short film, though, is George blandly telling us: "We're not sure at times, whether it's EU generated or Belgium". This is a rather troublesome observation for a prime minister who, today, is taking a group of business persons to meet his counterparts at the European Council in Brussels, to complain about the very thing they know not from whence it comes.

For us at the sharp end, it is tremendous sport trying to work out the origin of any particular regulatory impost, with a huge range of possibilities to work from. Those who recall our book, The Mad Officials will know that, starting at the very bottom, we have a large number of official-invented requirements. Some exist as guidelines but some reflect only transient fashion amongst enforcement officials. None exist anywhere in any statute.

Next in the regulatory hierarchy is the mountain of nationally-derived law and only then do we have EU law. Some is transposed into UK law losing its identity, but much is now coming to us on the form of stand-alone EU Regulations. These, as every euro-nerd will know, have "direct effect".

In and amongst that lot, we have this curious creature known as "gold-plating", where the British government adds significantly to the burden, superimposing on the imposts from Brussels requirements of its own.

Then, hidden in EU law (and, indeed, our own), is the increasing heft of international or "soft" law. This originates in a myriad of agreements, conventions and treaties, the origins of which are often completely obscured, so much so that the Muppets in Open Europe seem completely unaware of its existence.

Despite this, the Great Business Leaders accompanying Mr Cameron to Brussels today are carrying with them a missive complaining of the burdens imposed on them. One of the greatest obstacles to growth, they say, "is problematic, poorly understood and burdensome European rules that all too often encumber business".

Thus do they declare: "It's vital therefore that any EU regulation necessary for the single market is pro-growth and pro-innovation, enabling not hampering businesses to create jobs and pave the way toward economic recovery".

Sadly, though, if you took these "leaders" aside, which include John Longworth, John Cridland and Simon Walker, respectively directors general of the British Chambers of Commerce, the CBI and the Institute of Directors, you would be appalled at their ignorance. Give them a representative selection of "regulations", and not one would be able to split them into their parts and identify the national, EU and international components. 

Then there is the matter of enforcement. Poor law, sensibly enforced, can be tolerable. But even good law in the hands of small-minded zealots can be a nightmare. Much of the burden small businesses suffer is through inappropriate or clumsy enforcement.

Overlaying this is the matter of regulatory philosophy. Broadly, there is a choice between prescriptive, tick-box style legislation and the broader, discretionary "goal-setting" approach. This is the difference between having a long list of detailed regulations on, say, workplace safety, or one general law - such as the requirement to maintain a safe, healthy workplace - leaving it to the businesses to decide what is necessary.

When it works properly, the "goal-setting" is undoubtedly better, but it imposes far greater demands on the skills and judgement of enforcement officials, and needs commitment from business proprietors. For this and a multitude of other reasons – not least the ease of performance monitoring – the general preference is for prescriptive law.

What one tends to find, though, is a Janus-like approach. Business will tell you it prefers "goal-setting" regulation, when it actually wants lax enforcement and freedom to cut corners. On the other hand, if the law is to be rigorously enforced, the certainty and predictability of the tick-box approach is often preferred, reducing the need to focus on the issues concerned.

But nothing of this will be discussed in Brussels. When you start exploring such matters with civil servants, with ministers and with "business leaders", their eyes glaze over. You see attention wandering, papers being shuffled and covert glances at watches. Very soon the interview is over and you don't get invited back.

This is not surprising. Regulation is a complex issue, encompassing law, human psychology, and any manner of technical and practical skills. Governments are rarely good at it and business neither understand it nor wants to put the effort into making it work.

The result, therefore, is what we see today – a glossy charade of silly men and women, more interested in grandstanding than in getting to grips with an issue which is entirely beyond them.

For them, there is some utility in being seen to be concerned, but there is absolutely no intent nor capability to solve any of the real problems of over-regulation. That would require hard work, understanding and the expenditure of a degree of political capital that no government – and certainly not this government – would dream of investing.

So it is that, as Mr Cameron goes to Brussels with his coterie of business people, he is wasting his time, theirs, and ours. And the whole world knows it to be a charade, which is why there is so little media or public interests. We have become weary of their empty, pointless games.

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