JP Floru: We should gold-strip EU legislation retrospectively

By JP Floru.

More than one year ago Business Secretary Vince Cable announced an end to the practice of “gold-plating” of EU Directives. Sadly this does nothing to reverse the gold-plating of the past. According to Open Europe, the acquis communautaire – that is the total body of EU legislation - is now 170,000 pages long. 100,000 of those pages came into existence in the last ten years. If we retroactively reduced gold-plating, the impact and resulting growth would be much greater than what is currently planned. And it wouldn’t cost the Treasury a penny.

It is unclear who coined the word gold-plating with regards to Whitehall’s practice of adding extra regulations to the tsunami of Directives from Brussels. In his book The Great Deception, Christopher Booker describes how he exposed the practice in his 1992 Telegraph Article “Who’s that lurking behind the Brussels book of rules?”. John Major became so alarmed by what was first dubbed “Bookerism” that he appointed no less than Michael Heseltine to head his deregulation offensive. “Who better for hacking back the jungle”, Major said at his party conference in Brighton. “Come on Michael, out with your club, on with your loin cloth, swing into action”. Deregulation was one of Major’s flagship policies. In the next four years not a single regulation implementing a Directive was changed.

European Directives are not precise enough to be implemented directly into domestic law. They therefore require additional national legislation. It is widely known that in certain EU countries both implementation of, and adherence to the law is taken with a big pinch of salt. In Britain, we do the opposite. With uncharacteristic Teutonic Zeal, Whitehall adds to and refines EU Directives – thereby adding and refining the burden of regulation on free enterprise to a very unique British Standard. This is extra scary for two reasons. Firstly, the Directives themselves are often insufficiently scrutinised and are sometimes approved unread at the Council of Ministers. Secondly, there is insufficient scrutiny of Statutory Instruments, by which civil servants and ministers add regulations surplus to EU requirements.

It is difficult to assess the amount of gold-plating that is going on. The Taxpayers’ Alliance went into some detail in its report (pdf). "Brussels or Whitehall: Locating the source of the UK’s regulatory burden". One way of measuring gold-plating is the number of words used to implement a Directive. A study found that the UK’s ratio was 334%; Germany’s was 310%; and France’s just 93%. However, this only identifies elaboration. To truly assess gold-plating one would need to analyse every Directive and its implementing legislation. Gold-plating can take many forms: expanding the scope or the definitions; not using the exceptions allowed for in the Directive; introducing excessive enforcement; and implementing the Directive earlier than is required.

Studies which analysed specific Directives concluded that gold-plating was going on; but that it sometimes simply resulted from the lack of clarity of the Directive, or the addition of the government’s own priorities. In the latter case “Directives from Brussels” can be a handy excuse for regulation-happy ministers. And what may be just as damaging as the gold-plating is the excessive enforcement regime which is applied in the UK. Inspection and reporting requirements can be competitively damaging if other nations have a more lax approach.

In December 2010, Vince Cable announced that he would stop the practice of gold-plating in accordance with the Coalition Agreement. Early implementation will be avoided; the Directives will be directly added to UK legislation without adding to them; and European legislation will be reviewed every five years. On paper he is implementing what think tanks like the Taxpayers’ Alliance, Open Europe, and the Adam Smith Institute have been recommending for a decade. Especially sunset clauses – which force governments to constantly re-assess the effectiveness and desirability of implementing legislation – are thought to be effective. We will have to wait and see what comes of these good intentions.

We could do even more by retroactively reversing the practice of gold-plating through gold-stripping. Yes, it would mean going through existing implementing legislation one-by-one, and reducing its extent and enforcement to the bare minimum as required under the Directive. I am sure that we can redeploy some civil servants who are experts in drafting legislation implementing Directives towards gold-stripping the same.

Gold-plating by Whitehall has sometimes been used by Europhiles to deflect from a problem of far greater magnitude: the avalanche of regulations which come down on us from Brussels. Still, tackling gold-plating is absolutely worth it. The retroactive gold-stripping of EU legislation implementing EU Directives would create growth without costing the Treasury a penny. Sadly, deregulation remains like jaguar sightings on jungle hikes: something rather splendid which is always promised, but in reality elusive and very exceptional.