18 May 2015

Top 100 EU regulations cost the UK economy £33.3 billion a year

Open Europe’s Vincenzo Scarpetta appeared on Bloomberg’s Countdown show discussing the cost of EU regulation to the UK economy. Vincenzo presented Open Europe’s extensive work on this issue, particularly focusing on our list of the Top 100 costliest EU regulations – whose price tag has risen to £33.3 billion a year. In a quarter of cases, including the Temporary Agency Workers Directive and the Energy Performance of Buildings Directive, the UK Government’s own impact assessments state that these regulations impose a net cost on the UK economy. For a further 31 regulations, including the Working Time Directive and the Alternative Investment Fund Managers Directive, the UK Government did not quantify the estimated benefits. All this shows there is plenty of room for manoeuvre to cut the regulatory burden on businesses across Europe.

Widespread support for de-regulation across the EU

Vincenzo noted that there’s “plenty of scope and support for a solid de-regulation drive” at the EU level. Even France, often depicted as the biggest potential obstacle to David Cameron’s EU renegotiation, has said it would welcome proposals to cut EU red tape and bureaucracy. Importantly, the European Commission is moving in the right direction since the appointment of former Dutch Foreign Minister Frans Timmermans – who is clearly sympathetic to the UK’s EU reform agenda – as Vice-President in charge of better regulation. Timmermans has taken on board some long-standing Open Europe proposals, including the establishment of an independent Regulatory Scrutiny Board whose approval would be needed before EU legislative proposals are submitted to national governments and MEPs for negotiations.

Regulatory costs wouldn’t disappear overnight in case of Brexit

Vincenzo stressed that the cost of EU regulation would not instantly disappear if the UK were to leave the EU, and cited Open Europe’s estimate that – under a politically feasible scenario – the UK could save £12.8 billion by de-regulating post-Brexit. He also dismissed claims made by some that, after Brexit, the UK should aim for a relationship with the EU similar to Norway’s – noting that Norway has to comply with 93 of the Top 100 costliest EU regulations, without any say over the design of those rules.