We have discussed before the current slow progress with the government’s One In, One Out approach to domestic rules. We have noted that EU regulaitonm is not included within this programme, and that continues to expand.
The arrival of Michael Fallon as Minister of State at the Department of Business is a good opportunity to review it all again. I am sure he wishes to beef up the programme. What obstacles will he face?
He inherits the ambitious Red Tape Challenge system. 6500 domestic regulations are being exposed to criticism and comment, linking them around major industry groups and taking those in turn. The aim is to “abolish or reduce 3000 regulations” out of this tally. The review will be completed by December 2013.
We are not told what the split might be between scrapping and reducing, an important issue. Nor are we told if the ones to be scrapped are in effect being replaced by new EU ones anyway.
Some of the ones to be scrapped apparently impose no costs on business, demonstrating that they are obsolete. I have no problem with them being swept away, but if they impose no cost their removal brings little benefit, other than a tidier and simpler list.
Some of the ones to be scrapped will be replaced by a single consolidated regulation. Again I have no problems with doing this, but it is unlikely to cut the burden by much.
What is needed is the reduction or removal of regulations that are costly, where their costs do not bring sufficient benefit to justify the financial demands they impose. So far we have been told they will remove the need for a paper driving licence, just requiring the plastic card; remove employer liability for any misconduct by customers under the Equality Act; lessen the costs and compliance needs with Employment Tribunals saving £40 m a year; and deregulate some live music performances.
What I fear the civil service have decided is to surrender gradually some UK domestic regulations, safe in the knowledge that bigger and better ones now apply from the EU anyway. Given the huge range and scope of EU regulation, and the inability or unwillingness of most UK governments to do anything about this, it is difficult to see that we need much domestic regulation any more. There are not many things the EU has not thought of controlling.
The role of the EU in governing us makes Mr Fallon’s task especially difficult. I wish him well with abolishing more of the old domestic requirements, but the big cost is increasingly to be found from Brussels. As we noted yesterday, if the UK abolished its own domestic financial regulation, there would still be a comprehensive EU system in place.
Total regulatory costs may be around £100 billion a year in this economy. Achieving savings of a few hundred millions of pounds, whilst welcome, makes little difference. The challenge is to find significant savings without leaving areas without protection where regulation can help.