Our relationship with Europe has to change
Even the European Commission’s president José Manuel Barroso now accepts that this addiction to regulation has damaged the Continent’s competitiveness
Writing in this newspaper last week, José Manuel Barroso, the president of the European Commission, made a startling confession. He acknowledged that the Brussels bureaucracy meddled too much and had imposed far too many unnecessary regulations upon business. The commission, he added, should avoid interfering in “smaller things” and make sure that any new regulations are as “lean and clear as possible”.
His moment of epiphany did not last long, however. This week, we learnt that Brussels wants to harmonise the volume of lavatory flushes around the European Union; it has also been implicated in Whitehall attempts to change the acceptable level of sugar in jam.
Such regulatory nitpicking would be amusing, were it not indicative of a far greater problem. From ridiculous laws governing the straightness of cucumbers through to damaging attempts to place the City of London in a regulatory straitjacket, the economic benefits of EU membership have become increasingly hard to discern.
With the prospect looming of a referendum on the UK’s continuing membership, even Mr Barroso now recognises the baleful impact that decades of regulation have had on British public opinion. While matters of sovereignty and control of borders will feature prominently in any referendum campaign, the economic effect of a possible withdrawal will inevitably be the centrepiece of the debate. This is where the clash of opinion and of evidence will be loudest: pro-Europeans say there are three million jobs dependent upon membership, whereas sceptics reject this as scaremongering.
How business itself responds will be critical. It is the received wisdom that Britain’s bosses are implacably opposed to leaving the EU. This is almost certainly the case where the big multinationals are concerned: the CBI will shortly release a report expected to reaffirm the view that Britain is better off in than out, since many of its members fear an exit would affect access to trading markets and
However, a YouGov survey published yesterday by the campaign group Business for Britain found that these views are not set in stone. By a majority of 46 per cent to 37 per cent, the company bosses in question feel that the costs of complying with the single market outweigh the benefits of staying in the EU. By two to one, they also want to see our relationship with Europe based principally on trade, as we thought it would be when we joined the Common Market. Moreover, they seek the return of EU competences in key areas affecting business, something that would require treaty change. These include employment law and working time conditions, environmental regulations, and health and safety rules.
Doubtless, many of these companies would prefer to avoid the disruption and uncertainty associated with leaving the EU. But the idea that we should stay in at any price seems to be on the wane. In a recent survey by the CBI, bigger firms too said that they wanted to see the relationship reformed, with a reduction in unnecessary regulations and an end to the so-called “gold-plating” of EU legislation here in Britain.
Resolving the latter problem is the Government’s responsibility – and should be addressed much more purposefully than has so far been the case. Whitehall’s compulsion to supercharge already burdensome regulations has added billions to business costs at a time of financial hardship.
However, it is increasingly clear that the legislative processes that created this regulatory tangle also need to change – as does Britain’s wider relationship with the EU. Business wants reform, and our politicians say they do. The people – if asked – would agree. Even the European Commission’s president now accepts that this addiction to regulation has damaged the continent’s competitiveness. On Monday, David Cameron told the Commons that last week’s “red tape summit” in Brussels agreed “on the need to make more progress in cutting regulation and helping businesses across Europe to create jobs”. But we have heard this many times before. We need to see some results soon, or the arguments for staying in will become increasingly difficult to make.
