27 November 2015

An encouraging sign for the UK’s EU renegotiation

Ministers from 19 EU member states – including France, Germany, Italy and Spain – have signed a letter to European Commission Vice-President Frans Timmermans, essentially calling on the Commission to do more to reduce the burden of EU regulation on business by setting itself targets.

According to Politico, the letter was drawn up at the instigation of the UK. It reads,

You have demonstrated great ambition in the reforms you have already introduced and in your better regulation package of May 2015. But one particular – and essential – reform is still missing: we now need to establish targets for reducing the burden of regulation in particularly burdensome areas…Many member states have successfully introduced burden reduction targets in their national better regulation efforts which can inspire targets at a European level.

Generally speaking, this is an encouraging sign for the UK’s EU reform drive – of which cutting EU red tape should be a key plank, as we have long argued. While things were moving in the right direction since the appointment of Timmermans as Vice-President of the Commission in charge of better regulation, the key question was always what more David Cameron could achieve on top of what was already happening.

In particular, while the new Commission has already taken concrete action on future regulation – for instance by withdrawing 73 pending proposals that had been stuck in the legislative process for too long without being adopted – much less progress has been made on reducing the existing stock of EU laws. A major issue, given that, according to our own calculations, the Top 100 most burdensome EU regulations cost the UK economy £33.3bn a year.

In his letter to European Council President Donald Tusk earlier this month, David Cameron argued,

For all we have achieved in stemming the flow of new [EU] regulations, the burden from existing regulation is still too high. So the UK would like to see a target to cut the total burden on business.

It is therefore significant that, in line with the ‘EU reform heat-map’ we recently published, the message sent to the Commission by 19 countries shows that there is widespread support for the UK’s push to go further and faster on cutting EU red tape.

Details need to be fleshed out sooner rather than later

That said, the letter remains incredibly vague and does not offer any details as to how these targets would work in practice. This is hardly surprising, given the large number of signatories, but if this proposal is to have any meaningful impact, concrete plans need to be fleshed out sooner rather than later.

Since we published our first big report on the cost of EU regulation back in 2009, we have been floating a number of ways to get rid of unnecessary EU laws:

  • A ‘one in, two out’ system at the EU level – for every new EU law that is adopted, two existing ones need to go.
  • ‘Sunset clauses’ on all EU laws – a majority of EU countries have to agree to the continuation of a piece of EU legislation after a certain period of time, otherwise the law will lapse.
  • Change the regulatory culture within the EU institutions – for instance by envisaging incentives for EU officials directly involved in repealing EU legislation.
  • Introduce annual red tape reduction targets – similar to what is already happening with staff numbers in the EU institutions, or to what the Commission is asking member states to do with deficit and debt under the Stability and Growth Pact.
  • Give groups of national parliaments the power to demand that certain EU laws be scrapped.

In other words, there is no shortage of ideas – and the letter proves that the political will to get rid of unnecessary EU regulation is there too. There are no excuses not to act.