Last week, the business secretary Kemi Badenoch quietly announced yet another review designed to “cut burdens for businesses”. What she described as the ‘next step’ in the government’s programme of smarter regulation and deregulation is, by my reckoning, the 23rd attempt to free British industry from EU red tape since the Conservatives came to power in 2010.
The results so far have been disappointing. In fact, as far as I can see, the previous 22 – covered in a Yorkshire Bylines article last year – have failed to identify any significant candidates for scrapping although this hasn’t dulled the Conservative appetite for deregulation, hence Badenoch’s latest effort.
The former systems analyst at RBS and wealth manager at Coutts Bank said: “I want us to use our Brexit freedoms to scrap unnecessary regulations that hold back firms and hamper growth.”
Reports, reviews, challenges and initiatives
There has been no shortage of reports since Lord Young, David Cameron’s adviser on health and safety law and practice, published Common Sense, Common Safety in 2010 which heaped blame on the EU’s 1989 Framework Directive (89/391/EEC). Reports, reviews, challenges and initiatives of varying importance have appeared at regular intervals since, the most recent being that produced by Iain Duncan Smith’s Taskforce on Innovation, Growth and Regulatory Reform in 2021.
None seem to have uncovered any significant ‘unnecessary regulations’ that I can recall, yet here we are in 2023 with the Conservative Party still utterly convinced that British firms are somehow being ‘held back’ and economic growth ‘hampered’ by these mysterious EU regulations, like a dark cloud suspended permanently over the UK, leaving the rest of Europe bathed in sunshine.
Ministers come and go, each dissing their predecessors and launching new quests. It wouldn’t surprise me if Badenoch went so far as to accuse Jacob Rees-Mogg of being a member of ‘the Blob’ or at least colluding with it. The only remnant of Rees-Mogg’s time as minister for Brexit opportunities and later business secretary is the ditching of 587 retained EU laws (REUL) the vast majority of which have had zero impact because they were either irrelevant to the UK or had simply expired.
The terrible irony is that while pursuing this agenda of slashing red tape, ministers have added a mass of extra paperwork, specifically loading it on to Britain’s wealth creators, the very companies – both exporters and importers – that they are now relying on to restore economic growth.
The regulators under scrutiny
Badenoch now has Britain’s 90 regulators firmly in her sights and they are to be on the receiving end of an ominous “in-depth” review. This will seek to “ensure regulators are working efficiently and delivering on reforms needed to help grow the economy and protect consumers”.
Many of these regulators are themselves creatures of the Conservatives’ privatisation policy and designed to keep ministers away from interfering in the industries they regulate.
She also claimed that “39% of small businesses say red tape holds them back”, and I’m sure the figure is correct.
But we know how this works from an X repost/tweet by Giles Wilkes, who was a special adviser to No 10 under Theresa May and also worked at the Department for Business, Innovation and Skills (BIS):
Industry is calling for alignment
Badenoch’s task is a formidable one. British industry, virtually silent during the referendum campaign, is now singing like a well-drilled choir. They want to retain EU rules and continue to be aligned with their major customers and suppliers in the single market, the precise opposite of this government’s openly declared objective.
In 2020 the Chemical Business Association (CBA) said it was “vital that the UK’s chemical sector achieves a level of regulatory alignment with the European Union (EU) after Brexit that preserves its frictionless access to important EU markets”.
In June this year the then chair of Ford Tim Slatter, told the BBC that UK car manufacturers believe their future lies mainly in Europe and “Britain should continue following EU car regulations to avoid extra costs for consumers”.
More recently, Britain’s supermarket chiefs have written to Badenoch’s cabinet colleague Thérèse Coffey, the environment secretary, urging her to align with new EU regulations aimed at curbing the destruction of the world’s forests or risk their ability to export British-made produce to Europe.
In the last few days, the Investment Association, a trade body for the UK’s asset management industry, said Britain risked losing global competitiveness in its shrinking £8.8tn sector unless it aligned itself with EU rules. They claimed: “The scale of regulatory change over the past five years is of significant concern. It has already led some firms to look differently at the role the UK plays in their global operations.”
The British Chambers of Commerce say investment over the last six years has “flatlined” and a survey shows UK businesses are reluctant to make large investments in machinery and new technology “while barriers to trade with the EU remain in place”. This comes as the business secretary (the business secretary!) is actively working out how to raise more barriers.
Time is running out to find the burdensome EU red tape
There is no doubt Badenoch desperately needs some big ticket items after earlier this year abandoning Rees-Mogg’s reckless target of automatically sun-setting all REUL by the end of 2023 whether it was needed or not. Her move infuriated Conservative hardliners on the European Scrutiny Committee and damaged her own future leadership ambitions.
But more importantly, with the Conservatives set to lose the next election, time is running out to find anything in the UK’s Retained EU law remotely responsible for our lacklustre economic performance compared to continental rivals over the last few decades.
Badenoch’s smarter regulation effort will almost certainly be the final attempt. Keir Starmer is expected to call time on these endless and fruitless reviews to find so-called ‘burdensome’ EU red tape.
Brexit isn’t about to be reversed in 2024, but the direction of travel is going to make a very sharp about turn.