It’s not just the economy, stupid.
It’s everything, stupid.

The British Chambers of Commerce has published a report showing that the Coalition still has a long way to go to tame the state’s mania for excessive regulation.

Red Tape Challenged? reveals that 42% of new regulations are not covered by the Coalition’s One-In, One-out (OIOO) rule for regulations. This is because they concern tax or the environment or come from the European Union. Such a high figure – if it continues – will make a mockery of the Coalition’s aim to be the first administration to leave office having reduced the volume of regulation.

Equally disappointing, the study argues convincingly that the current volume of regulations is still  too high and that the process for passsing regulations is still flawed. The Government’s Statement of New Regulation, published in September 2011, showed that the net regulatory cost to businesses in the UK is £45 million for the October Common Commencement date. We are still strangling our wealth producers in red tape.

The situation is not totally bleak. There has been some progress with the introduction of the OIOO policy, the deregulatory measures on employment law and the Regulatory Policy Committee’s work.

Yet the problem is far from under control. The scrutiny of regulations is weak without a ‘guardian’ to ensure it is being delivered – the BCC argues this role should go to the Better Regulation Executive.  ‘One-in, One-out’ has potential to have a big effect, but the current exemptions and lack of transparency with Impact Assessments make it difficult to police. Brussels is still churning out proposed regulations especially over employment and health & safety.

In a timely warning, BCC Director General John Longworth writes “To be blunt, businesses the length and breadth of the country are yet to feel any concrete or positive change. Only substantive reductions in the regulatory burden will give companies confidence and enable them to plan for future growth with certainty and clarity.”

Indeed.

I just attended the inaugral AGM of the All-Party Parliamentary Group for EU reform, which was well attended by colleagues from across the range of opinion, all concerned about the effect of EU regulation on jobs and the economy. I asked that we consider democracy and the classical rule of law as the subtext to all our detailed work.

Via the website, EU Fresh Start:

UK citizens want co-operation and free commerce with our partners in the European Union, but a majority believes that too much power has been transferred to Brussels; in areas ranging from policing to employment law, from Health and Safety to financial regulation, our citizens want more control over their own lives.

The Fresh Start Project will work with MPs across party lines, along with leading ‘think tanks’, interest groups, Lords, MEPs and constitutional experts to:

1. Examine the options for a new UK-EU relationship;

2. Set out what this new relationship could look like;

3. Establish a process for achieving change; and

4. Build political support to make it happen.

I incline to the view that the EU is an unaccountable technocracy beyond redemption which should be abolished for the sake of all Europe, but I am prepared to support moves in the right direction.

Syed Kamall MEP recently reported on EU regulation of the City:

Having made a scapegoat of the City – and with no willpower to establish a new regulatory framework which would eliminate the moral hazard of banks being too big to fail – the last Labour Government quietly handed over the keys to the City to the European Union…

In January the new authorities started operations, and it is only now that many in the City are waking up to the fact that their new masters no longer even reside in London…

…

This year we face a barrage of new legislation, justified by the Commission as necessary to ensure pan-European supervision of pan-European economic activity. In the spirit of politicians blaming bankers for their own failings, they are currently pushing through a new regulation on short selling and credit default swaps. The French Green MEP taking the lead on this dossier in Parliament wants a full ban on uncovered sovereign CDS and even wanted to extend this to corporate bonds. Little thought is given to the consequences of such measures – such as fewer cross border investments as investors can no longer cover their positions by short selling sovereign debt.

Last night, I pushed to a deferred division a related motion without debate in the Commons:

4 SHORT SELLING AND CERTAIN ASPECTS OF CREDIT DEFAULT SWAPS [No debate]

Justine Greening

That this House takes note of European Union Document No. 13840/10 and Addenda 1 and 2, relating to the draft Regulation on Short Selling and certain aspects of Credit Default Swaps, and No. 7379/11, relating to the corresponding Opinion of the European Central Bank; and supports the Government’s position that proposals should not impact market efficiency and liquidity, in particular in relation to sovereign debt.

A number of us voted ‘no’ today but we shall see how many and who tomorrow. For the moment, as ever, it seems that in relation to the EU, resistance is futile.

In related news, the Commons will debate later “the UK’s Convergence Programme, for the purposes of section 5 of the European Communities (Amendment) Act 1993″. From the Treasury website:

As part of the Europe 2020 strategy for smart, sustainable and inclusive growth, Member States will submit a National Reform Programme outlining their structural reform plans in April every year. This, alongside Member States’ Stability and Convergence Programmes, will align reporting on fiscal and structural policies as part of the new EU surveillance structure known as the EU Semester.

What a mess.

Brought forward. I was challenged last night to advocate flat taxes. Here’s one of my previous posts which does so. Another is here (you will have to forgive the oversize graphs).

The Georgian recipe for “an amazing transformation”:

• Low and flat taxes
• Legislative commitment to reducing the government’s fiscal footprint (IE spend less!)
• Deregulation and cutting red tape
• And thereby suppressing corruption
• Unilateral free trade: no import tariffs or barriers of any kind
• Very flexible labour legislation
• No sector or industrial policy of any kind
• No subsidies, no preferences, no exemptions – no market-distorting practices
• No currency and capital controls
• Sound monetary policy with hawkish anti-inflationary stance

See also: Tory conference: Georgia’s Prime Minister makes surprise appearance.

Hat tip to Dr Tim Evans