Brexit dividend if we take back regulatory control
Excessive EU-mandated red tape has made our economy less productive and less competitive. While we will retain sensible regulations that ensure good standards, Brexit will allow us to save billions of pounds a year, and will be a particular boon to the engine of our economy -- small business. Let's reap that Brexit dividend!
Many opponents and critics of Brexit raise the repeal of European Union regulations after the UK Leaves the EU as something that will have a tangibly negative effect on British people and business.
Their case is made most often through the endless repetition of tedious and misleading horror stories about ‘chlorinated chicken’ and ‘hormone-filled beef’ from the USA flooding into our supermarkets -- both of which have already been categorically ruled out by ministers from the Department for Environment, Food and Rural Affairs (DEFRA).
More seriously, it has also been suggested leaving the EU may lead to an erosion of our environmental protections and safety standards.
None of these criticisms accurately represent what is being proposed and they display a very poor understanding of how regulations work and how they affect the behaviour of markets.
Setting our own regulations to reduce the burden excessive red tape places on British businesses is not borne out of a nefarious desire to lower standards, but is a passionate belief - supported by evidence and common sense – that fewer restrictions mean businesses are more productive.
Reducing the regulatory burden on businesses is not something which is only desirable for abstract or ideological reasons, but it is something which would have clear benefits to both British businesses and their customers. Every second a business - large or small – spends on ensuring they are in compliance with regulations, is time and money not spent on developing new products, selling and delivering services to customers or otherwise creating wealth. In this sense, regulations are like an additional tax on businesses.
According to research by the think-tank Open Europe, ridding Britain of needless EU regulations would save the economy £13 billion a year. However, what this figure doesn’t show is the degree to which these regulations entrench monopolies. Big businesses are much more capable of shouldering the burden which excessive regulations bring – including the cost.
They are able to employ whole departments to deal with compliance issues which smaller businesses or new entrants into a given sector are unable to do. Excessive EU-mandated red tape has made our economy less productive and less competitive.
This is not to say there should be no regulations at all. Rules which the Government set to maintain common sense health and safety standards, or aim to prevent the pollution of our air or waterways, should continue to be upheld once we Leave the EU. Brexit is an opportunity for our Parliament to set our own regulations - which may be stronger than those mandated by the EU.
This is something which is already the case in some areas. It’s the EU’s regulations which have minimal environmental or safety justification - such as those concerning the power of things like vacuum cleaners, lightbulbs and ovens - which must be repealed.
Additionally, with the regulatory state being returned to democratic control there is also a further benefit; protection from ‘regulatory capture’ - when the body which makes the regulations for a given sector is ‘captured’ or controlled by the big companies within the sector in question. The most prominent example of this is the privileged position given to lobbyists from the banking industry, with roughly 80% of ‘advisors’ to the European Commission on banking regulation working in the financial services sector.
This level of access by lobbyists has allowed large banks to influence the creation of regulations for their own benefit, primarily through passing regulations which solidify their position, and creating barriers which prevent new competition or by making it harder for competitors to stay in business.
Repealing thousands of needless EU regulations will free up our country’s businesses - large, medium and small - to do what they exist to do, which is to bring higher quality products to customers at competitive prices. This will bring tangible benefits - not costs - to every one of us, as prices fall and the economy grows.
However, this is not the only benefit. Once we Get Britain Out of the EU and take back control of the creation of our own regulations -- away from the so called ‘Level Playing Field’ -- we will be able set standards in accordance with our own needs and interests instead of the interests of the bureaucrats in Brussels.
Power over the regulations which govern our everyday lives must be made by those we elect. This is a principle which all Britons should welcome, irrespective of whether they voted for Brexit or not.
Joshua Mackenzie –Lawrie is a Senior Research Executive at cross-party grassroots campaign Get Britain Out
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