Edmund Stoiber, speaking in 2009. Photo: Junge Union Deutschlands
Stoiber report: The dead hand of the European de-regulators
There is a strange group on the fringes of the European Commission called the “The High Level Group on Administrative Burdens”. This was set up in 2007 by the former Bavarian Chancellor and failed presidential candidate Edmund Stoiber, to advise the Commission on reducing “administrative burdens”.
So far it has produced over 40 reports, ranging from the bland and “bleeding-obvious” to the outright ridiculous. The main thrust has been that businesses are badly done by and small businesses especially so. Rules get in the way of the ability of businesses to operate and are a huge cost. The reports complain about “gold-plating” regulations and the need to remove “red-tape”.
Of course there is no actual evidence base for most of this and the European Market is meant to be based on common minimum standards. As a result must of the reports from the group have just gathered dust while the European Commission pursues its equally dangerous deregulatory agenda let by the UK and called “REFIT”. This has scrapped proposed new regulations on workplace carcinogens and musculoskeletal disorders.
Today the Stoiber group is publishing its final report before it is wound up at the end of the month. It is the usual predictable stuff, calling for targets for reducing regulatory costs, ensuring that any new costs are balanced with reductions elsewhere and a “think small first” principle exempting small and medium-sized enterprises (SMEs) from EU obligations as far as possible. This may all seem harmless but it is actually pretty dangerous. Firstly the report fails to recognise what regulation is about which is to give protection. In the case of health and safety and employment rights, that is to protect workers. The burden of health and safety failures falls firmly on the workers and so any assessment of the costs on benefits should look first of all on the benefit to those who are protected. That is not how Stoiber wants it to work. He wants impact assessments to measure the costs and benefits to business only. This is totally absurd and will make it virtually impossible to get any new regulation on health and safety.
The proposal to exempt SMEs is also bizarre. SMEs are not a tiny proportion of European businesses. Under the current definition, SMEs employ 66% of workforce but are responsible for 82% of injuries and 90% of fatalities. So any exemption for them will mean removal of protection from over half the workforce, many of whom are in the most dangerous occupations such as agriculture, waste and construction. There is no reason why workers in smaller businesses should have lower protection, or that smaller companies selling anything should have lower requirements. Why should a business be able to reduce their costs and risk the health of their workers (or customers) by having lower standards and protection simply because of its size? It does not make sense and makes a mockery of the idea of a “level playing field.”
Fortunately Stoiber did not get it all his way this time. Last year, after criticism of the way that the group was operating, they were forced to take on new members from outside the previous clique of business people. There are now representatives of consumers and trade unions. This report also has a “minority report” supported by four of them which states that the proposals have a clear deregulatory purpose and fails to look at the positive aspects of regulation. It points out that many of the recommendations are for new bodies which will themselves create a new bureaucracy and creating exemptions for SMEs will cause confusion and “greater regulatory complexity”. To top that, the European body representing SMEs (UAPME) has also said it is completely opposed to the Stoiber proposals. They told the Guardian that the report is “nonsense, a purely political declaration.”
It is clear that the report is little more than an attempt to appease Cameron and friends, but it is likely to backfire. The Commission has to recognise that much of the dissatisfaction with the EU is not about the regulations. The regulations on health and safety, employment rights and consumer protection have made a huge and very positive difference. It is about the lack of any connection with the lives and concerns of ordinary people. If the Commission does accept this report it is once again illustrate just how out of touch with working people the Commission is.
The Stoiber group is to be disbanded in 2 weeks time. Unfortunately, his efforts may have finally paid off: Jean-Claude Juncker’s Commission will introduce a new central position primarily devoted to the issue of cutting red tape. First Vice-President Frans Timmermans can issue a veto if he considers a proposed measure excessive. It does not bode well for any proposals where the aim is to protect workers or consumers.