How many laws do you need for a single market?


           The people who like our current membership of the EU or want more involvement in EU matters rely on just two arguments. The first is that we have to stay in on the current basis because so much of our trade is with the EU. The second is we need to be in to have a seat at the table to influence all the rules and regulations.

             I have dealt recently with the misleading figures they use, looking at just the trade in goods and ignoring the big interest the rest of the EU has in exporting to us.  Today I wish to look at the strange EU idea that you need to have lots of common laws and regulations in order to trade with each other.

              This was the  Foreign Office and EU argument I first encountered when acting as The Prime Minister’s Chief Policy Adviser in the 1980s. The EU wanted UK consent to the Single European Act. This proposed the aboltion of our right to veto proposals, substituting qualified majority voting for a range of measures to do with trade, industry and commerce.

               I argued that there was no need to give away our veto over new laws in order to create a genuinely free market in the EU. All you needed was the simple rule, that if a product was of merchandisable quality in country A, meeting the rules in that country, it should be allowed for sale in the other countries of the EU. It does not mean people had to buy it, but why not trust each country to winnow out the dangerous or the false product, and let the market do the rest.

                  The EU insisted that it needed 272 new laws to make a single market. This was to be the “Single market programme”. Having lost the argument to keep our veto, I tried the compromise position with the UK government, that they should say they would only remove the veto for the 272 measures deemed to be necessary. Even that was thought too tough by the Foreign office. The government decided to back the Single European Act and the loss of veto on a permanent basis.

                       The problem with this approach is the EU can use the excuse of the Single market to push through all sorts of legislation that is not strictly necessary in order to trade. Subsquently Labour gave away many more rights to veto in Nice, Amsterdam and Lisbon, leaving the UK vulnerable to an avalanche of laws we did not seek or want.

                     Having the seat at the table has not succeeded in preventing too much law, or in getting poor or needless regulations removed. All UK governments have said they are pushing for deregulation in the EU, and for leaving more matters to national and local determination. Despite this, the body of EU law has risen at a very rapid rate.

                   Meanwhile China, the USA, Switzerland and many other non EU countries trade quite happily with the EU. They have no seat at the table. They do not find their goods excluded because they are not members of the club. The Single market concept has been made into a Trojan horse for more EU government and law making.  The City is about to fall almost completely under massive EU regulation.  There is little evidence that it will be drafted or deployed in a way that is helpful to protecting and enlarging London’s success in financial services.


  1. lifelogic
    November 17, 2011

    How many laws do you need for a single market? Very few indeed clearly.

    How many laws do you need for a single market if your aim are as those of the EU

    to draw as much power to the centre and away from the individual countries
    to create many well paid jobs for bureaucrats in Brussels and everywhere as possible in the regulation, civil service and lobbying industries.
    to give large businesses who lobby a competitive advantage over small ones and inside information.
    to have more and more reasons to keep drawing power and money to the centre, subvert local democracy and any competition between individual countries.

    Clearly you need as many as possible – good or bad it makes little odds.

    1. lifelogic
      November 17, 2011

      I see that now “Sir” Mervyn King cuts growth forecast to just 1% in 2011 and 2012 and predicts that ‘Journey to economic recovery will be long and arduous’ and one-in-three chance of double-dip recession.

      Optimistic on this as well as inflation then.

      Hardly surprising since Cameron has done virtually nothing to help the private sector or sort out banking and much to load industry with more taxes, regulations, 105 year old’s and other things making them less efficient.

      Also reported:- The Office for National Statistics said the number of British-born workers has crashed by 311,000 in a year. Foreign-born employees jumped by 181,000.

      Most new jobs are low paid generate little tax and much of the money paid with tax credits and similar doubtless leaves the country rather rapidly.

      When will the government finally do something to actually promote growth rather than strangle it?

      1. uanime5
        November 17, 2011

        Probably when the Tories focus on helping the poor, rather than the rich. The true cost of businesses keeping salaries low is starting to show.

      2. Bazman
        November 17, 2011

        Implying that the majority of low paid jobs are done by foreigners, but in reality huge swathes of the population are low paid and many cannot even get this work. How easy do you think it is to get this type of work?

  2. Mike Stallard
    November 17, 2011

    I believe we trade with the USA.
    But we do not have any seats in Congress.

    I also notice that the Franco-German bond is beginning to emerge as a nationalist, not an international unity. They have already taken over Greece and Italy. Now for the City of London! Move it to Frankfurt where it will be under proper control!

    This must be stopped now. The City is our main source of income. Lose that and it will be like a breadwinner losing their job. Who will pay for the 1,000,000 unemployed/unemployable? kids then?

    1. uanime5
      November 17, 2011

      1) The whole finance industry contributes 7% of GDP, so it is not and never has been our main source of income. Manufacture currently generates 11% of GDP.

      2) Why do you think Germany wants the City to move Frankfurt? The Tobin tax will also apply in Germany, along with the rest of the EU.

  3. A different Simon
    November 17, 2011

    Please ask Cameron whether he likes being belittled by the Germans and made to look like their flunkie ?

    Perhaps there is some residual euroscepticism left in his veins which will bring him to his senses .

    If he was smart he could get the country on his side over Europe , call a general election and consign Clegg and Huhne to the sidelines .

    Let’s hope things get completely intolerable very soon and that it acts as catalyst to expedite our freedom .

  4. Antisthenes
    November 17, 2011

    The euro-zone is heading for the rocks and sooner or later preferably sooner it will strike it is to be hoped that it will take the EU with it. One thing that this crisis has done is expose the fact that the EU is a socialist based systems with much that copies the old Soviet Union. The fall of the USSR and China abandoning communism and embracing capitalism was warning enough of the dangers of socialism. Yet those on the left and even some on the right failed to learn the lesson and continued to remain faithful to this discredited political and economic system. Once again we have the evidence of dysfunction caused by following the socialist path. Do we hear the political elite saying that we must abandon this socialist madness in the form of the EU? Do we hear anyone but the few sane and rational among us say we must return to democratic free market principles and that the left should never again be allowed to be in a position to impose their rotten system on us ever again? We do not, which does not bode well for any of us because if we continue as we are then we are all going to founder on the rocks as well.

    1. Tad Davison
      November 17, 2011

      Absolutely! And I always like to give encouragement to people who are on the right side of the argument.

      It’s good that we come to the same conclusions quite independently of each other. It shows we’re not eccentric as the Europhiles say. That is just a made-up description to make themselves look good at our expense. Yet they’re going to look mightily stupid themselves pretty soon, if that process hasn’t already started.

      Tad Davison


    2. uanime5
      November 17, 2011

      I don’t know where to start pointing out what’s wrong with this.

      1) Communism and socialism aren’t the same thing.

      2) Communist countries didn’t have welfare systems. They made companies employ everyone and forced the companies to look after their employees. Interestingly the US uses a similar system, except for the part about guaranteeing everyone a job.

      3) Who discredited socialism?

      1. Bazman
        November 17, 2011

        Socialism without electricity equals communism. To use the old joke.

  5. James Reade
    November 17, 2011

    Answer to question: As few as necessary to ensure markets function properly, i.e. there is equal power amongst participants. Just “letting the market” do the rest once you ensure products won’t choke children etc isn’t really enough – we have more laws than that for the UK single market, so why wouldn’t laws also be required for a European market?

    Sure, in an ideal world we’d just all get rid of all our tariffs and impediments to trade, and have a world common market, making the EU redundant in its most important respect, but I think we all know that even if we had a world common market, there would still be need for laws to ensure that the price mechanism could do the work to ensure the most productive outcome occurred with resources going to their most productive uses.

    Now in this, I’m not defending every one of the 272 EU laws, nor am I suggesting that there has to be complete harmonisation of everything necessarily, but the bottom line is that there has to be laws so that market participants keep to the rules of the game; there are in the UK, and there thus has to be in the EU.

    1. Antisthenes
      November 17, 2011

      Society always needs laws to keep people honest. What is does not need is regulations to save them from their own stupidity or that distort markets impeding the free flow of goods and services that encourages high pricing, reduction in choice and indifferent quality.

      1. James Reade
        November 17, 2011

        It depends on what you define by “their own stupidity”. Do you mean situations where the information required is just too complicated, e.g. with healthcare decisions?

  6. zorro
    November 17, 2011

    All too true as you have previously mentioned with the 1979 ‘Cassis de Dijon’ judgement as the ground rule….Does Cameron have the stomach to stand up to the Germans on the proposed City tax/regulations….Place your bets!


  7. Peter van Leeuwen
    November 17, 2011

    In order to have access to the single market, even American producers now comply with EU regulation about dangerous chemicals in products . A single country wouldn’t have achieved this protection. Who is to protect us from any poison in financial products, even for bankers too complicated to understand, as we witnessed in 2008?

    1. Mark
      November 17, 2011

      Not, I suggest, Michel Barnier – who has no prior experience of financial products at all. Would you entrust major heart surgery to a car mechanic?

  8. Bernard Otway
    November 17, 2011

    That is why we must LEAVE this monstrosity altogether,the Eu rules are a self justifying body
    their existance depends on more and more rules,whether they are necessary or not,one day I expect rules on the size of discharges allowed out of the human body with hefty fines and worse,BUT of course the officials and their political masters [which is which is a mystery]
    will be exempt on the basis that the proper natural functioning of their and their families
    bodies are a must to ensure the monster’s smooth running,meanwhile the hospitals will be full.

  9. Brian Tomkinson
    November 17, 2011

    Another compelling case for leaving the EU. We can expect nothing from the EU or our own government to result from the sham talk of repatriation of powers.

  10. Ralph Musgrave
    November 17, 2011

    Another argument against busting our guts to maximise trade with continental Europe (or anywhere else) is the diminishing returns argument. That is, even if one has tariff barriers, this won’t prevent trade where there are HUGE gains from trade.

    In other words reducing barriers from a modest level to zero simply makes possible international trade which does not bring huge benefits: like us buying Mercs and Renaults instead of “home made” cars.

  11. Mazz
    November 17, 2011

    … All UK governments have said they are pushing for deregulation in the EU …

    This Government does not have the GUTS to do what needs to be done. They are ALL TALK and NO ACTION. They have no creditability with the voters.

  12. Tad Davison
    November 17, 2011

    John, I don’t have a problem with that, and can see the strength of your argument. It is, after all, one that we Euro-sceptics frequently use because of it’s sound reason and logic. The BIG issue, is how to convince others, when they consistently and flatly refuse to accept what is absolutely clear-cut?

    I have complained bitterly about Europhiles that promise to engage us in a proper debate, then as soon as that debate is initiated, they walk away and shut-up shop. I can’t have a discussion with a brick wall, and it is that I find most frustrating.

    If, on the other hand, they can convince me of their own argument, and that it stacks up, I am quite willing to amend my own stance, but that hasn’t happened yet, and I don’t see it happening any time soon, because almost everything I have heard from them thus far, is baseless.

    I am not confident therefore, we will even begin to make an impact, until the entire edifice collapses around their ears. We cannot wake someone who is in a hypnotic trance, and won’t be woken. But we can’t entrust our nation’s prosperity to Zombies any longer, and there was clearly one of those on Channel 4 News last night, in the shape of the Business Secretary.

    Vince cable said, ‘The Tobin tax would be a tax on Britain to fund the European union, and we’re not falling for that one!’

    I really am staggered that he hasn’t recognised that we have been doing precisely that since joining, nearly 40 years ago! Britain’s contributions have been massive, and not in Britain’s best interest, but trying to get the pro-EU political elite to recognise that, is a daunting, if not impossible task.

    Tad Davison


  13. Bill Dale
    November 17, 2011

    EU enthusiasts used to rely on a third argument, the integration of states so that future European wars would be impossible. A lot was made of this argument, not heard much now.

    The now Lord Owen fronted a party political broadcast for the SDP back in the 80’s that led on this point, featuring WWII film.

    Some people (not in that broadcast) even referred to the two world wars as European civil wars.

    Now we seem to be down to the two pronged argument that Mr R has outlined.

    1. Tad Davison
      November 17, 2011


      I have heard this rather spurious argument too, about the EU being the best way to stop wars in Europe. Lib Dems seem besotted with it, and expound it at every opportunity.

      If they cared to check the European continent’s recent history, I think they’ll find peace in Europe for the past fifty years, had more to do with a nuclear deterrent. Not forgetting that Ronald Reagan broke the back of the Soviet economy, leading directly to the break-up of the Soviet Union, and the subsequent removal of the threat from former satellite states, who were then emancipated from the Soviet yoke.

      Curiously, the pro-Europeans would now wish to chain Britain to something very much akin to a Soviet bloc, where democracy is of secondary importance. An irreconcilable juxtaposition if ever there was one.

      All that is necessary for harmony, is for each country to adopt an equitable foreign policy, and that can be achieved through diplomacy, without full political matriculation, but try telling them that!

      Contrast what we could and should have, with the civil strife that is presently on the horizon, as a direct consequence of EU policy, and I think we can say, the EU hasn’t achieved very much.

      It is reported that Portugal will have a general strike on 24th November. We haven’t even seen the iceberg yet, yet alone it’s tip!

      Free trade is just as easy, without the reams of regulations which could be whittled right down to those that are relevant, with the discarding of those that aren’t.

      Tad Davison


      1. uanime5
        November 17, 2011

        I thought Reagan broke the back of the US economy, and Communism collapsed because Mathias Rust enabled Gorbachev to remove numerous military officials who opposed him and implement his reforms.

        1. Tad Davison
          November 17, 2011

          Many thanks. It’s true that Reagan did run up a massive deficit, and a plucky little German DID land an aeroplane in Red Square, but living in Cambridge, and having read a lot of interesting information, including studies by academics far more knowledgeable than I am, I think I’m on fairly safe territory. Be that as it may, the main point is that the Lib Dems keep bragging about how good the EU is for peace in Europe. To the contrary, I think we’re about to find out just how destabilising it is, with widespread civil unrest.

          Tad Davison


    2. Mark
      November 17, 2011

      Perhaps they’d care to explain ETA, the IRA, Red Brigades, Baader Meinhof gang, Madrid and London bombing…

  14. Disaffected
    November 17, 2011


    Good article that was very well articulated. This supports my view that we only have one option, namely to leave the EU. Civil servants are indoctrinated to help the UK become part of a pan European state.

    EU bureaucracy ironically allows us to trace millions of sheep or cows successfully at huge cost to farmers. In contrast the UK cannot trace hundreds of thousands, if not millions, of immigrants and asylum seekers.

    1. Mark
      November 17, 2011

      Perhaps instead of using eartags they could be given a mobile phone. They’re very effective tracking devices.

  15. frank salmon
    November 17, 2011

    My view was always that the EEC was a European Economic Catastrophe.
    It has turned out to be so, and we have contiruted little in the way of libertarian values with a seat at the table. It is time to leave and re-establish libertarianism in the UK.

  16. Martyn
    November 17, 2011

    “The City is about to fall almost completely under massive EU regulation”. If so, then what are we to make of the repeated government statements that ‘we shall not allow this to happen’ and if we cannot believe the government on this economically critically important matter, why should we believe anything it says?
    I read today that Italy has a new government which excludes any democratically elected representative of the people because, it is said, politicians would hinder their economic recovery plans. So it looks as though the elected houses of Italy might continue to meet, debate and decide issues, but only on the basis of what they are told to do so by the new government. So far as I can see, the only difference between Italy and the UK is that in Italy EU-sponsored mandarins now rule openly, whereas in our case the UK civil service mandarins advise (i.e. tell) Parliament what it can or cannot do in respect of EU directives without openly being seen to be in control. What price, then, UK democracy and why does the government continue to claim that it remains sovereign in these matters?

    1. forthurst
      November 17, 2011

      According to the DM:

      Explaining why his Cabinet contained no one from Italy’s fractious political parties, Monti said that his talks with party leaders led him to the conclusion ‘that the non-presence of politicians in the government would help it.’

    2. uanime5
      November 17, 2011

      Not really much of a threat to democracy. As long as the legislator can oppose the executive checks and balances are maintained.

  17. Shade
    November 17, 2011


    “…the strange EU idea that you need to have lots of common laws and regulations in order to trade with each other…”

    Not at all strange for an individual country – which is the whole object of the EU project. Maybe you are still thinking that we signed up to a “Common Market”. I think it has been obvious for over 30 years that we didn’t!

    The idea that you have to be at the heart of the EU to influence the laws that it passes that affect you seems extremely strange. If you are independent, you don’t influence the rules that affect you, you make them!

    I noticed that Cameron repeated the misleading statement that half our trade is with EU in his “Ich bin ein Sceptic” speech the other night. And talking of Germans, I heard one last night saying that the EU may even allow us to keep some of the Tobin tax collected in the UK – how jolly kind. He also seemed fairly clueless (or was it disingenuous?) about the effect such a tax would have on jobs and transactions – basically that it would have hardly any effect at all.

    Toodle pip

  18. Electro-Kevin
    November 17, 2011

    Complexity is nothing but a rich seam to the bureaucrat. Simple things become more complex in his hands.

    The first rule of the scientist, however, is to simplify complex things.

    Two different attitudes. Two very different disciplines. Which has been the most successful of Man’s endeavours ?

    I’d say the difference if measured in success is startling, wouldn’t you ?

  19. botzarelli
    November 17, 2011

    “All you needed was the simple rule, that if a product was of merchandisable quality in country A, meeting the rules in that country, it should be allowed for sale in the other countries of the EU. It does not mean people had to buy it, but why not trust each country to winnow out the dangerous or the false product, and let the market do the rest.”

    This is deceptively simple and works well for goods – it is known as the principle of mutual recognition. It was the default position following lots of free movement of goods cases at the ECJ during the 70s and 80s.

    The problem was that it doesn’t work so well for services. As the UK was, became more and still is, excellent at cross-border services, the principle couldn’t be accepted without question. For example, banking regulation was something which had at the time referred to, been at least partly subject to such a regime. It is one of the reasons why BCCI was able to get away with limited regulatory oversight by the Bank of England because it operated under a Luxembourg licence.

    In the services sector, if there is to be a single market there’s an argument that this can only happen if the rules for playing on that market are harmonised. However, getting harmonisation on banking regulation, company law and other basic elements of regulation (ie not the detailed fiddly stuff about specific products and services but the high level stuff) was practically unworkable even when there were only a dozen Member States. Vetoes on such things from Luxembourg or Mediterranean countries which were less closely aligned to business cultures in northern Europe shut off such harmonisation.

    The real issue is more about the extent to which the UK needed fully free trade with the rest of the EU. As in the examples of all the major non-EU countries with which we trade, perhaps the answer is that we only ever really need for trade to be “free enough”. That’s not particularly intellectually satisfying but maybe most realistic.

    How now do we secure “free enough” as a relationship with the rest of the EU? In practical terms it is hard to see how anything other than withdrawal plus negotiation of a UK-EU bilateral with a friendly EU negotiating counterparty would be manageable. That friendliness might itself be rather unrealistic to expect in the circumstances so Plan B might be to find a friendly EU state (eg Eire) to offer itself up as the conduit for UK-EU trade. But, if the EU has persisted with harmonisation, that still wouldn’t be a solution as Eire would merely be attempting to import and export non-conforming goods and services. Maybe losing our seat at the table is not a problem but it doesn’t solve the issue of having to abide by the standards and regulations set by the EU.

    Unless we were seeking freedom to be somewhat protectionist (which I’d expect goes against the grain of the sort of economics Mr Redwood prefers) freedom from the EU doesn’t offer all that much in our trading relationships. But, maybe a little protectionism for agriculture, fisheries and some subsidies for domestic industries is now in vogue…

    1. Bazman
      November 17, 2011

      Chinese car for you then. One of the many that are: ‘Aimed at the safer driver’. Not mentioning the other ‘less safe’ drivers. EU crash test legislation? It’s a war on personal choice!

    2. Mark
      November 17, 2011

      I’m not sure that I agree with you. I have provided my services internationally in several countries across the world, and learned relevant provisions of law and (just as important) local custom and practice to help tailor my inputs. The wider experience involved allowed me to discover things that worked well and things that worked less well. Sometimes you discover that something works much better than critics might expect, or that other things fall short. The wider experience allows (though does not dictate) better methods and laws to be developed more effectively than a collection of bureaucrats in a Brussels tower could possibly manage.

      BCCI (which I can recall being given the colourful name of (unflattering description of its peolpe-ed) Inc by one finance manager I came across some years before its demise) fell between stools: that would not be a problem for the UK outside the EU, because it would have had its UK branches treated as needing as much oversight as Bank Melli or Barclays or anyone else. Part of the problem was following the rules, rather than following your nose. The stench was a clue.

  20. uanime5
    November 17, 2011

    Switzerland and Norway can trade with the EU because they are a member of the European Free Trade Association (EFTA). They also partially obeys EU law.

    China has quotas to restrict how much it can export to the EU, such as the Multi Fibre Arrangement.

    Though the USA can trade with the EU there have been trade disputes due to protectionism that have been referred to the WTO (such as George W Bush banning steel imports from the EU).

    So if we want to freely trade with the EU without any quotas we have to obey EU laws.

    Reply: Not so.Some Non Eu countries have icnreased their trade more qucikly than countries inside the EU have.Tariffs are restricted to low levels by WTO

  21. Alan Wheatley
    November 17, 2011

    Does this not further illustrate why an a-la-carte menu is not on the table, and never will be.

  22. Bernard Otway
    November 17, 2011

    To Botzarelli,Question ? as has been asked by others,How do China ,India Brazil,Australia
    etc trade with the EU,and Why cant we do the same.The following German car manufacturers have factories in South Africa, VW,Mercedes,BMW,Audi,and Opel,they have to operate under South African HOMOLOGATION rules and export a lot of their product to the UK in right hand drive form,WITH NO PROBLEMS WHATSOEVER,these arguments are specious at best and misleading at worst,same applies to VW plants in Brazil and Mexico,IF the Eu tried to play hardball on this then the whole world trading order would collapse.I cannot for the life of me imagine the EU [Germany ] upsetting China and India,how many jobs would be LOST when the luxury marques lose sales in the rapidly expanding Chinese car market eg, Lexus and Infiniti are waiting like a hungry lion
    for such an eventuality with only a days sail away product,not to mention Korean cars,
    anyone checked a Korean car’s build quality lately,FIRST manufacturer in the world with a
    7 YEAR WARRANTY ? KIA,and if Honda decide to get serious in China and India I know which car I would prefer between a Golf and a Civic,never mind an AVENSIS toyota against it’s competition.

    1. botzarelli
      November 18, 2011

      The point is that all those non-EU businesses end up still being bound by the EU rules so the supposed benefit of being outside the EU and its red-tape is rather limited to freeing up trade within the UK.

      The real benefit is more that non-EU countries are able to apply different red-tape of their own which would make it harder for EU companies to export to them than it is for them to trade within the EU area. I’m not sure that that form of bureaucratic protectionism is really what anti-EU campaigners on the economic right can be asking for. It would be much more consistent with an anti-EU left were we to have one.

  23. Bernard Otway
    November 17, 2011

    Vis a vis Tad Davison above,reasoned arguments as I have laid out above CAN NOT be refuted,And I have enough examples to fill a book,so Pro EU people just stick their fingers
    in their ears and Yell LALALALA,just like children.That is the most annoying thing of all
    the local libdem lady candidate was reduced to tears by me at a meeting pre May 6th because she had NO ARGUMENT whatsoever to support the need to stay in the EU,and she expected to be an MP,putting people like this in the house would be like letting the seamen navigate Captain Bligh’s boat from Tahiti to Indonesia [4000 miles] and making HIM row,they would have ended up in the Antarctic.

    1. Bazman
      November 17, 2011

      Are you available for dinner parties Bernard? I do like to lower the tone at any party that needs it’s tone lowering too.

  24. forthurst
    November 17, 2011

    The Single Market has been extremely bad for this country. Quite apart from the CAP and fishing, already discussed, there have been problems with people and capital movements. In practice, many of our Utilities are now controlled by foreign governments whose incentive is to maximise yield rather investment for the long term. We have doctors and nurses who cannot be tested for either their language skills or their professional competance. The free movement of workers only makes sense as a step towards the abolition of the nation state; otherwise as a presumptive entitlement it has innumerable disadvantages, not least of which is uncontrollable unemployment levels.

    With regard to the matter of goods, it would appear that the EUSSR was only concerned with Health and Safety and Environmental Issues. They appear now to be regulating in detail mainly industrial and electrical products that we no longer manufacture as a result of the depredations of Tony Benn, the Industrial Reorganisation Corporation and Arnold Weinstock and of course Red Robbos. If they want to regulate our machine intelligence, they may find it’s on a take it or leave basis as the international manufacturers’ standards associations that ensure our gizmos work in all respects would not welcome input from dweebs in Brussels; they want to keep innovating and manufacturing rapidly to attract new custom.

  25. Kenneth
    November 18, 2011

    The regulations that have spring up from the single market are far too prescriptive. They have hindered innovation and favoured large companies over small.

    Large firms should be entitled to enjoy the scale of economies that come from being large – they deserve it as a reward for success.

    The problem with overbearing and prescriptive regulations is that they magnify this benefit beyond what the large firm would expect in the ‘natural’ free market.

    However, small companies have the benefit of being flexible. They may also concentrate on innovation or carving out niches as a way of nibbling away at the larger competition.

    Over-prescriptive product regulations tend to discourage such innovation as new designs and new methods often require the regulations to play catch up – a forlorn hope.

    This makes the big bigger, not in any natural free market sense but in an unnatural way, and keeps the smaller, innovative players at bay.

    The result is that we are gradually moving towards a Soviet production style where product specifications are set in stone. Worse still, as products are becoming less competitive and as welfare and employment costs are adding up, the eu quango is turning to creeping protectionism.

    We need to re-open the UK up to international competition in order to help mitigate inflation but also to make our products and services match-fit again.

    We must turn away from the command and control style of the eu and towards innovation and efficient processes.

    The protectionist route that the eu has taken will end in high inflation and poverty (real poverty, not BBC poverty).

    1. Bazman
      November 19, 2011

      Do tell what BBC poverty is? Not destitute on the street by any chance Ken?

      1. Kenneth
        November 19, 2011

        I believe the BBC prefers to define poverty as ‘relative poverty’.

        However it has lately dropped the word ‘relative’, rather like its tendency to drop ‘opportunity’ from ‘equal’ and it adds ‘far’ to ‘right’.

        1. Bazman
          November 20, 2011

          You would disagree with relative poverty which often includes poverty of opportunity? I suppose you would put forward that if you do not live like a person in the third world then you are not poor, which is as stupid as saying at least we are better off then you were in the 17th century.

          1. Kenneth
            November 21, 2011

            I disagree with terms being fiddled around so that no-one knows what the definition is anymore.

            Best to use an absolute value rather than a relative one.

            Destitution and disability may be better criteria for state help..before, that is, some bright spark comes along and invents ‘relative destitution’ or ‘relative disability’. As I wear specs I might even qualify myself.

        2. Bazman
          November 23, 2011

          You could have a point here Ken. I am more reluctant to give a quid to tramps who are walking around as opposed to the ones I often see lying down on the pavement with a map of Cyprus around them.

  26. BobE
    November 18, 2011

    This written by Guido. Its scary.

    Today Dave is off to see Chancellor Merkel as we learn that advance copies of the proposed Irish budget were circulating for approval in the Bundestag in Berlin before being seen in the Oireachtas in Dublin. Elected Irish politicians will rubber-stamp the budget once German politicians have approved it.
    German approved regimes have now been appointed in Italy and Greece, the Irish finance ministry is run by the Bundesfinanzminister with German “advisers” in Dublin acting as financial Gauleiters. In September 2009 the Irish government was instructed to guarantee the bad loans made by German banks who lent to the failed Anglo-Irish Bank and the Fianna Fáil government submitted, sacrificing generations of future taxpayers on the altar of the €uro. The Irish electorate kicked them out bringing in a Fine Gael government which promised to renegotiate the debts. In government Fine Gael too have bent the knee to Berlin.
    As smaller sovereign states succumb to the German finanz-blitzkrieg it is difficult to see how the interests of those nations outside the developing German co-prosperity sphere are well served by the EU, particularly given that France’s AAA credit rating looks about as secure as the Maginot Line. It is Britain’s age old role to be a check on German domination of Europe, if Germany wants to reform the EU in its own image the British people should be given a referendum on their continuing membership….

  27. James Reade
    November 22, 2011

    One question that recently sprung to my mind regarding this post John was this: You are so opposed to regulations regarding markets, you so often make out that the EU is a terrible tyrant in adding so many more rules and regulations that innocent and poor firms just have to put up with.

    So, given that, why does your government support restricting immigration? Why add that restriction? It’s only the EU stopping the UK government from being much more trenchant with immigration, which would be more harmful than the current additional caps have been to the UK economy.

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