To regulate or not to regulate, that is the question …

Guest blog by the Embassy’s Economic Attaché.

One thing we hear a lot about these days is regulation. Regulation this, regulation that, it can be good or bad, national or international, too much or not enough. Views may depend on where you stand: employer or employee, big multinational or local SME, left or right or centre. But there does seem to be a growing consensus that regulation should be ‘smart’, or ‘better’, or ‘common sense’, or whatever you’d like to call it.

In EU circles the European Commission last week presented its REFIT programme, looking at areas where it made sense to regulate more, less or not at all. The UK welcomes this and has just carried out a similar exercise, but gone even further, with a Business-led Task Force set up by the Prime Minister launching a new report on cutting EU red tape.

Six top business leaders proposed a new set of principles that could be used as a checklist – or a kind of ‘common sense filter’ – against which new rules could be tested before they’re agreed. These so-called COMPETE principles would check, for example, that rules passed a Competitiveness test, and that they would be Measurable and Proportionate. (If you want to know what the rest of the letters stand for, you’ll just have to click on the link!)

In producing the report, the Task Force consulted 90 businesses and business organisations in the UK, and  a further 20 business groups across Europe. They were asked what would help in creating jobs and growth. Their answers helped the Task Force compile 30 recommendations for cutting red tape, including giving employers and workers more flexibility to agree between themselves how certain issues in the labour market should work; improving guidance on the chemicals Directive REACH, so smaller companies find it easier to apply; and making it easier to provide services across borders within the EU.

The UK has already done a lot of work at home to reduce the impact of domestic regulation whilst preserving the benefits, for example, through the Red Tape Challenge. And no, that’s not a sporting event, but rather a consultative exercise that promotes open discussion on how to ensure regulation achieves its aims in the least burdensome way possible. The UK has also introduced a One-In, One-out (and now One-in, Two-out) principle, so for every new regulation introduced, one (or now two) old ones should be withdrawn.

The Business-led Task Force was keen to publish its findings now, given that European leaders will be talking about Better Regulation when they meet in Brussels on 24-25 October. We hope that this report can provide an important contribution to the debate.

So, to regulate or not to regulate? That is, of course, always the question …