TaxPayers' Alliance Bulletin - 31st October 2008
The Burden of EU Regulation: Who's to Blame?
Against the background of worsening economic conditions and businesses struggling to remain solvent, earlier this week the TPA published a detailed study of the severe burden placed on business by EU regulations. The report reveals the true scale of EU regulations, and uncovers the fact that the pace of regulation is increasing at a record rate, with thousands of new regulations introduced each year. As well as over-regulation from Brussels, though, the report also studies the contribution made to the regulatory burden by "gold plating" in Whitehall. With regulation costing British business £150 billion a year, the report proposes three simple, practical ways to reduce the problem and therefore help British business to weather the economic storm, including introducing an EU Transparency Bill, sunset clauses and increased scrutiny. (Excerpts of Report are provided below).
Key Findings
- There are currently 16,980 EU acts in force. Between 1998 and 2007 there has been a net gain of 9,415 EU laws.
- In 2007, 3,010 EU laws became UK law, while only 993 EU regulations were repealed - a net gain of 2,017 extra laws.
- The rate of new EU laws has increased to a record speed, with a net gain of over 2,000 new laws in each of the last two years, compared to an annual average net gain of only 942 new laws between 1998 and 2007.
- Almost half of the extra 9,415 EU laws created in the last ten years have been introduced in 2006 and 2007. Despite EU rhetoric about reducing regulation, it is growing at a record rate.
- Whitehall also adds to the burden: at least 770 pages of UK Statutory Instruments will be needed to enact the 76 Directives passed by the EU in 2007. Assuming this as an average per year, then EU directives alone have necessitated over 7,700 pages of UK law since 1997.
- Despite the enormous amount of EU legislation, UK gold-plating and poor enforcement practices exaggerate the burden of regulation.
http://tpa.typepad.com/home/files/UK_and_EU_Regulatory_Burden_Embargoed_Monday_27_October.pdf
RESEARCH NOTE 36
BRUSSELS OR WHITEHALL: LOCATING THE SOURCE OF THE UK’S REGULATORY BURDEN
But what is driving the relentless rise in regulation? Conventional wisdom holds that the European Union is responsible; Tony Blair and Gordon Brown have both asserted that “half of all [...] new regulation comes from the EU”, and the Open Europe think tank has suggested that over 70 per cent of UK law originates in Brussels.4 Pro-EU groups, however, believe the source is Whitehall itself, highlighting the frequent elaboration and embellishment of EU law by British civil servants, adding unnecessary additional burdens to simple regulations.5
In fact the EU and Whitehall are both equally culpable. The EU overlegislates, and often drafts that law badly. In turn, UK governments use EU directives as vehicles for their own policy agendas, attaching numerous additional clauses and extending its scope (a practice known as ‘goldplating’).
Differing cultures of compliance and enforcement between member states then translate minor regulatory differences into significant disparities in regulatory costs.
Assessing the current evidence, and through a detailed examination of specific examples, this paper concludes that gold-plating is a central feature of the EU-UK legislative process. But the real problem lies more in the differing levels of regulatory implementation and enforcement across the European Union than with gold-plating. (p. 3)
...2.1 The European Union
A joint paper signed by the French, German and UK governments suggests that approximately half of all new regulations affecting businesses originate in the EU, a figure backed up by both the OECD and House of Commons Library.11 Gunter Verheugen, the EU’s Enterprise Commissioner, told the Financial Times in 2006 that the cost of EU law to European business is £405 billion a year.12 Open Europe estimates that 77 per cent of the major regulations passed in the UK since 1998 were wholly or partly driven by EU law.13 (p. 5).
The total bulk of active EU law now stretches to over 170,000 pages and comes in three main forms.14
Decisions are the least significant, constituting a very small percentage of the total and often addressed towards specific members.
Regulations make up the bulk of EU law, with 1,564 being passed in 2007 alone. These become UK law automatically, without the need for members to translate into national law.
Directives – 76 of which were adopted by the EU in 2007. These require members to transpose them into national law, making them the ideal vehicle for any potential gold-plating.
The financial cost of EU regulation – and EU derived regulations – vary from one to three per cent of UK GDP.15 Taking a middle point of two per cent (similar to Dutch and Danish estimates of their EU burden), this implies a burden of around £30 billion in 2007-08.16 (p.6)
The financial cost of EU regulation – and EU derived regulations – vary from one to three per cent of UK GDP.15 Taking a middle point of two per cent (similar to Dutch and Danish estimates of their EU burden), this implies a burden of around £30 billion in 2007-08.16 (p.6)
...2.2 UK gold-plating
Since joining the EEC in 1973, Whitehall and the UK government have consistently ‘gold-plated’ EU legislation during its transposition into national law, making regulations more burdensome than the EU intended them to be. Gold-plating involves over-implementing an EU directive, going beyond the minimum necessary to comply with the requirements of European legislation by:
Extending the scope, adding in some way to the substantive requirement or substituting wider UK legal terms for those used in the directive; or
Not taking full advantage of any derogations which keep requirements to a minimum; or
Providing sanctions, enforcement mechanisms and matters such as burden of proof which go beyond the minimum needed; or
Implementing early, before the date given in the directive.
(p. 7)
3.2 [BURDENSOME ENVIRONMENTAL] Landfill Regulations
Requiring 39 pages to transpose the 19 pages of EU Directive 1999/31/EC, the UK Landfill Regulations of 2002 are now a classic example of goldplating. By increasing the categories for defining waste, setting strict rules for the monitoring of landfill sites and establishing timetables for reporting, the burden of these regulations far extends beyond what was mandated by the EU.
...3.3 Motorcycle Tests [BURDENSOME INDUSTRY STANDARDS]
Efforts to harmonise road standards across the EU led to the 2000/56/EC directive on driving licences. Implementation of this 13 page document was unusually slow for the UK, eventually being transposed into the 18 page Motor Vehicles (Driving Licences) Regulations of 2003. The new regulations have caused consternation within the motorcycle licensing industry. (p. 11)
1 comment:
Is it a money crisis or a human nature crisis? Is human nature on trial?
First of all, so called free trade is not trade as historically defined and practiced. It is primarily about making production portable ready to be moved from place to place for the sake of cheaper labor. When factories come and go they leave behind conditions worst than before they came. Mexico and in many places in the Far East.
It is senseless to devalue labor and workers who are also consumers.
The cheaper imports come but this results in a new working poor class in the USA and underclass stayed frozen in time as Hurricane Katrina in New Orleans exposed. Both find it more difficult to afford even the cheaper imports at places like Walmart
Our economies based on making money on money instead of making things are burning out. The value of labor and workers as suffered a severe deflation cycle. This value is a real tangible asset and acts as a money standard especially when paper money is an intangible value requiring the manipulation of transactions to produce value.
Free traders keep harping about protectionism and how it caused the depression. In the roaring 1920s it was all about the manipulation of money values and we had both periods of free trade and tariffs. The stock market crashed in 1929 and it was about a money crisis and not about trade.
The Smooth Hawley act was passed in 1930 after the crash and free traders use this as an example of how protectionism causes depressions.
The Smooth Hawley never really got off the ground since there was a money crisis and no one had money to do much of anything but excite wars.
President Roosevelt was elected in 1932 and in 1934, he was given the option of raising or lowering tariffs in a new trade agreement act. This too was non-applicable because the money crisis. Then we suddenly were into the wars and President Roosevelt unleashed the Lend Lease Act to provide goods to our allies no matter what.
Roosevelt said he was not going to let the dollar sign stand in his way. In the ensuing years, the most awesome industrial power the world has ever known was created without money being the issue. This industrial power won World War 2.
The real core value of this industrial might was the value of workers and labor used as assets to create commerce.
Lets start telling it like it was and like it is too.
For more info and resources, see http://tapsearch.com/tapartnews/
http://tapsearch.com/flatworld/
http://www.bizarrepolitics.com/
http://www.therationale.com - asking is it a money crisis or is it a human nature crisis.
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