Leaving EU is chance to cut red tape costing £200bn a year, says think tank
RED tape could be costing the UK more than £200billion a year, according to a think tank that is calling on Boris Johnson to use the opportunity of Brexit to bring about “meaningful change” to the “regulatory state”.
A paper by the Institute of Economic Affairs (IEA), which champions free market economics, warns that EU laws are being transposed “en masse” into UK law as part of the Brexit process and that regulators are “pouring cold water” on suggestions of reforms.
The think tank suggests the Government appears “unwilling” to question whether regulators have helped to improve society or simply “intruded disproportionately and ineffectively”.
It is planning to publish detailed studies of individual regulators, such as the Information Commissioner and the data watchdog, and identify red tape that could be cut. An initial paper by Victoria Hewson, the think tank’s head of regulatory affairs, warns that regulations are being judged on their “intentions” rather than their results, and that the rule of law risks being “undermined” by “weak mechanisms” to hold regulators to account.
Ms Hewson claims that official costbenefit analyses of watchdogs such as the Information Commissioner are
“unsatisfactory” because they “do not attempt to capture the dynamic impacts on innovation and competition”.
The paper states: “Using the highlevel methodology previously applied by the Better Regulation Executive, the total cost of regulation in the UK today would be estimated at about £220billion per year. Such estimates are of limited value, however, as it is difficult to calculate macro costs and benefits, and dynamic effects on markets, or quantify the costs to individual freedom and democracy.”
Ms Hewson said the IEA programme will include new work to calculate the cost of red tape to the economy. She said: “By attempting to quantify the impact regulations have on the economy, as well as the rule of law and personal freedoms, the regulatory affairs programme will contribute to the ongoing discussion around the UK’s future relationship with the EU as well as general discussion of red tape in the UK.”
Mr Johnson, while foreign secretary, backed a Telegraph campaign to cut EU red tape. Speaking in March 2017, following the referendum on Brexit, Mr Johnson told MPs: “It will be an opportunity for this country to get rid of some of the burdensome regulation that has accreted over the last 44 years. I applaud the campaign.”
Last year The Telegraph revealed that the Prime Minister was working up plans for an overhaul of government procurement rules once the UK leaves the transition period in December. The Prime Minister intends to axe EU rules which require the Government to award contracts to companies based on the lowest price. Small UK businesses have long complained this leaves them outcompeted by foreign firms offering bargain basement rates.