From the TUC

EU negotiations – Is Cameron’s support on deregulation built on quicksand?

08 Jan 2016, By

There is a lot in the press at the moment about David Cameron’s four demands on the European Commission for reform prior to the forthcoming referendum on Britain’s membership of the EU.

Most of the coverage has been about welfare payments to migrants but what about regulation?

The British demand is for “a target to cut the total burden on business”. This is seen my most commentators as being the easiest one for the European Commission to agree. In fact the vice-president of the Commission, Frans Timmermans has already openly called for a de-regulatory agenda and last month 19 members states (including Britain) sent a letter to Timmermans which seemed to back the UK demand for “burden reduction targets”. They do not specify what this would be but it may be based on the British attempt to force regulators to implement a “one in – two out” rule.

Unfortunately for David Cameron (and fortunately for us) it is not as simple as that. As with all the negotiations that are taking place in Europe at the moment the rhetoric and the reality are very different. Already, Timmermans has rejected any kind of quantitative target for reducing regulation, taking a different approach to Cameron. Many of the countries that signed the letter also have reservations. Portugal and Estonia have said that they will oppose any de-regulatory measures, only backing “better regulation” Other signatories have gone on record to say that they will oppose any attempt to remove any regulation in the field of employment rights or safety. This includes France, Greece, Sweden and Austria. In the case of the Swedes, their concern about regulations is that they don’t want regulations at EU level that provide less protection than their domestic regulations – they’re worried about levelling down rather than levelling up.

It is particularly significant, and ironic, that a number of countries refused to sign the letter for the reason that setting targets for a reduction of regulation would diminish national parliaments “right to regulate” and, as such, runs counter to one of Cameron’s other demands, which is for greater sovereignty. This included the Netherlands who hold the presidency of Europe at the moment.

That means that, while Cameron may get some nice wording that will appease his back-benchers, there seems to be no appetite at all from other member states for significant changes to EU legislation, and it is unlikely, so long as Britain stays in the EU that they will be able to make any major reductions in the current levels of regulation. However that is not really the point. Much of the damage has already been done with the European Commission already cutting back on new regulations. The number of new directives has halved in the past five years and this trend seems set to continue, as the European Commission’s most recent Work Programme abandoned 80 proposals and introduced just 23.

Finally, when we listen to the nonsense about the “burden” of regulations coming from Europe, it is worth remembering two things. Firstly, the cost of European regulation is massively outweighed by the benefits a shown on pages 28-29 of this report. Secondly, most of what Cameron is saying about the scale of European regulation is a myth. A study done by the House of Commons library showed that just 12.8% of UK legislation was EU-affected. All the rest comes from national governments, and despite claiming to be a great deregulator, the last five years of government led to an increase in regulation in Britain (see this earlier blog).