TaxPayers’ Alliance says jump, Express says ‘How high?’

Some very sparkly EU red tape.

Sorry, this is going to be a very dry post today. I mean, unless you enjoy poring over lists of Government regulations in which case this will be your favourite blog post on the entire interweb.

The Express, and only the Express, today leads with “UK’s £10bn bill for EU red tape“. Clearly we’ve been buying a lot of tape.

The typical rent-a-quotes are out in force in this article; Philip Davies MP says:

“The vast majority of businesses don’t have any dealings with the EU. It’s particularly galling that they have to bear the costs of the regulations. When people realise how much the EU costs they will come to the conclusion that we would be better off out.”

The TaxPayers’ Alliance (whoops, wrong link) meanwhile pops in to add:

“The cost of the red tape now exceeds the value of the business it is intended to regulate. It’s sheer madness, and not why we joined in the first place.”

Firstly, if you think the entirety of the British economy is now worth less than £10 billion, you are probably not a reliable source of economic information. Secondly, this article is oddly long on anger, short on facts.

The source of this information was pretty hard to find – they certainly didn’t state it anywhere in the article, and almost all the information online are copies either of the original article, or the Taxpayers’ Alliance blog post about it.

Eventually, I tracked it down to Hansard, buried in some written questions submitted to Parliament by Philip Davies himself (Column 239W, Business:  EU law). Mark Prisk, Secretary of State for Business, Innovation and Skills, was asked what the cost of implementing government regulations were. He replied £27.8 to £30.3 billion, of which 31% was for EU regulations. 31% of £27.8 to £30.3 billion is indeed £8.6 to £9.4 billion. So far, so good.

Of course, this is only half the story. Working backwards through Hansard, you eventually find that Prisk was referring to the delightfully titled Second Forward Regulatory Program report, which sheds light on several important details. First of all, the report covers all regulations that are expected to come into force after April 2010 – even ones that will not come until effect until after May 2011. So already, there’s one faulty fact; this is not the annual cost of regulations at all. Over the year Apr 2010-2011, the cost to the economy of  these regulations is £9.3 to £10.5 billion. Assuming EU regulations make up 31% of that, that’s only about £3 billion per year.

Secondly, these are regulations of every sort – not just business regulations, but all sorts of other things which aren’t really regulations at all; to keep railway passengers safe, to upgrade the Severn Bridge to accept credit cards, to adjust visa restrictions on nationals of Caribbean countries. A lot of others are things that no-one could really object to taxes being spent on – making sure tower cranes don’t collapse, stopping companies from dumping animal waste in rivers, upgrading fishermen’s radios to make communications with coastguards clearer. Finally, there’s an awful lot of regulations which the government claims break even or turn a net profit; liberalisation of fireworks transport laws, energy efficiency, consolidating anti-discrimination bills into a single Equalities Bill, making apprenticeships more accessible and so on.

Quite a few of these bills are from Europe, too. EU timber import/export regulations, according to the government, stimulates the economy to the tune of a whopping £600 million a year. Harmonising credit laws protects UK consumers is expected to improve personal wealth by £170 million, at a cost of only £60 million, while EU regulations to force banks to lend more carefully should lever us £100 million further from recession.

This year is an unusually expensive one too, according to the report, because of a couple of hefty environmental regulations, such as the introduction of smart metering (a one-off payment of £1.3 billion) and extending Carbon Emission Reduction Targets (£3.6 billion). Once they are in effect, both are expected to bring benefits on the order of half a billion per year.

So, even taking all that into account, what’s our benefit from EU regulations?

This year, the government expects the country to receive a benefit of £11.4 to £11.8 billion thanks to regulation – a net profit to the country of between £0.9 billion and £2.5 billion. If EU regulation makes up around 31% of that (odds are it will make up quite a bit more, since smart meters and carbon certification are both domestic regulations, not EU ones), EU regulations have had at least £0.3 billion net gain to the country, and perhaps as much as £1 billion.

Over the entire period covered by the report, the EU’s £9.3 to £10.5 billion cost is outweighed by a £9.6 to £11.8 billion benefit.

I suppose “UK’s £0.3bn profit from EU red tape” doesn’t really have the same ring to it.

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