Open Europe Blog

Today sees the release of the Business Taskforce report on cutting EU red tape in an effort to boost competitiveness. As our previous work on EU regulation suggests – the Taskforce is picking up on many of our suggestions – this is a push we are very much in favour of, particularly at a time when squeezing out every bit of economic growth possible is vital for economies across the EU.

The report proposes 30 wide ranging reforms to cut EU red tape.We’re still working our way through the detailed suggestions but we’ve included some initial reaction below, which we’ll update as we go.

  • The task force backs the full implementation of the EU’s Services Directive. This could deliver up to a €230bn boost to EU GDP, according Open Europe estimates. However, we have suggested the EU should go even further and push for the introduction of the ‘country of origin principle’ which could increase further gains to closer to €300bn (2.3% of EU GDP).
  • Open Europe welcomes the push to exempt small businesses from burdensome legislation, although more needs to be done to address existing issues with social and employment law.
  • In a report from 2011, Open Europe estimated that EU social policy (i.e. EU social and employment legislation and EU health and safety rules) cost the UK economy £8.6 billion a year. The figure is heavily driven by a few very costly EU Directives – most importantly the Working Time Directive and the Temporary Agency Workers Directive. However, some health and safety laws stemming from the EU also represent a net cost to the UK economy. This is the case, for instance, for the Control of Vibration at Work Regulations 2005 and the Control of Noise at Work Regulations 2005.
  • The task force has adopted Open Europe’s recommendation that low-risk firms be exempted from the obligation to regularly update their health and safety risk assessments.
  • Looking for ways to improve EU-wide competitiveness and the European business environment, as the report recommends, rather than looking for specific UK opt-outs is likely to increase the chance of support from like-minded EU countries.
  • Creation of a digital single market could be vital, particularly from the UK perspective with over 70% of UK citizens having bought products or services online but only around 10% having done so across borders.
  • Open Europe recommended adopting a ‘one in, one out’ rule for EU regulation back in 2010 and continues to support such a move as suggested by the task force’s report.
  • On-going assessment of the impact of regulation is vital. For example, the benefits of many regulations are based on assumptions or forecasts and while probable or viable at the time, these do not always come to pass. EU regulations on environment and climate change are a prime example of this. With circumstances shifting it is important that regulation is flexible.
  • The Taskforce also adopts out proposal that Commission proposals which don’t come with a robust Impact Assessment, clearly showing the need for and benefit of the law, should be dropped. We agree that more effective use of Impact Assessments is vital and giving the EU’s so-called Impact Assessment Board (IAB) more teeth (which we has long advocated) and the power to ‘red flag’ harmful EU proposals (e.g. the ban on olive oil jugs) would be a positive start. The focus of the IAB must be to ensure high methodological standards so that approval of a regulation depends on its merits, not political motives (for example, major problems with the Commission’s proposal for a financial transaction tax emerged after it had been tabled and undergone a Commission impact assessment).

These ideas deserve the support of like-minded EU member states at a time when policymakers are desperately seeking ways to improve Europe’s growth and competitiveness. It is essential that these good ideas are followed by concrete action to reduce the existing and future burden of EU law on European and British businesses.

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