For some UK firms, red tape spreads from London

Brexit backers say EU laws hurt British business

SITTINGBOURNE, England, June 6, (RTRS): Troy Barratt, a small business owner in this southeastern English town, has a list of labour, energy and safety regulations that add to the costs of his precision metal fabrication firm.

But unlike opponents of Britain’s membership in the European Union, he puts the blame on London rather than Brussels.

“By far the biggest frustration I have is with home-grown laws,” Barratt, managing director of Contracts Engineering, said as laser-cutting machines sliced into sheets of steel in his firm’s workshop in an industrial park about 60 kms (40 miles) east of London, close to the mouth of the River Thames.

Barratt, a 36-year-old former investment banker from the United States, points to a new UK pension contribution system for his 26 employees and duplicative checks on electrical equipment that advisors recommend he carry out in order to meet separate sets of British rules.

He also cites commercial power tariffs that are among Europe’s highest because London raises extra tariffs to help fight climate change.

As the country prepares for a June 23 referendum on whether to leave the EU, the “Out” campaign says rules made in Europe jar with Britain’s traditionally free-market approach to business, hurting profits and hobbling economic growth.

The growing weight of EU legislation represents a threat to the country’s sovereignty, it says.

Yet many employers say it’s British rules, coupled with the sometimes overly rigorous British implementation of EU rules, that are their main hindrance.

Two examples often cited by business have nothing to do with the EU: last year’s surprise announcement of a 38 percent rise in the minimum wage by 2020 and a planned new levy to pay for apprenticeships.

While Britain ranks among the easiest countries in the world in which to do business, the Confederation of British Industry warned the government of Prime Minister David Cameron late last year against intervening too much in the labour market.

Estimating how many British laws actually originate in Brussels is part of the fierce debate around the referendum.

A parliamentary analysis in 2010 found the EU was behind between 15 and 50 percent of laws and regulations in Britain, depending on the definition of what constitutes a law. Some EU rules Britain has signed up to have no impact locally, such as those which concern Southern Europe’s olive industry.

Central to the “Out” camp’s case that British business is tangled up in Brussels red tape is a study by pro-market thinktank Open Europe which estimates that the EU’s 100 most burdensome rules cost British businesses 33 billion pounds a year to comply with, in areas ranging from the labour market to financial regulation and renewable energy.

Open Europe said by way of comparison, that is more than Britain usually raises each year in council tax, which is levied on households across Britain and is a major source of tax revenue.

“Just think of how much more success our economy could have if we had the power to reduce the burden of red tape and replace pointless EU rules with sensible domestic regulation,” said Priti Patel, a government minister who broke ranks with Cameron to campaign for a British exit.

By halving the impact of EU social and employment laws, Britain could create 60,000 new jobs, she said.

The “Out” campaign also points to situations where EU law duplicates UK regulation.

Patel said EU rules on how long selfemployed truck drivers may spend on the road, how often they must take breaks and how companies must keep records of their driving time were just one example of duplicative legislation and cost British business 100 million pounds a year.

Jack Semple, head of policy at the Road Haulage Association, said the industry agreed on the need for such rules but the EU legislation meant firms had to keep two sets of records, adding to costs.

Yet, many of the biggest problems faced by hauliers were due to British decisions, Semple said. He cited high fuel duties, insufficient investment in roads and a requirement that vehicle roadworthiness tests were conducted only by civil servants. The government said recently that it will drop this tests rule.

“Most of the really big issues for the industry are about UK regulations or the application in the UK of Brussels regulations,” he said.

Britain often goes above and beyond EU requirements, even if its social laws are not as generous as in other countries in the bloc, such as France or Italy.