Thursday 22 June 2023

Longworth collides with reality

John Longworth is still banging his deregulation drum, something I expect he'll be doing until the day he dies. As chair of the International Business Network (IBN), he has published quite a lengthy report, launching it with an article in The Daily Express, not known for its serious coverage of anything and this is no exception. His article doesn’t actually mention which specific EU laws he wants to see ditched but the report, surprisingly enough, does. It’s not clear that Longworth produced the report himself or even understands it.

The report is 109 pages long, looks professional, and reads well. Its purpose according to his foreword is to set out a "pragmatic approach to the reform, elimination, and retention of regulations and to their integration into a common law framework."  What is apparent is the sheer scaling back of ambition and the trivial savings that are being forecasted.

Longworth reminds us that in 2015, Open Europe found that the cost of 100 EU regulations on the British economy stood at £33 billion and that professor Patrick Minford had shown that around 6% loss in growth took place during the years the UK was a member of the EU all as a "result of excessive EU regulations."

But since leaving the EU "we have seen little divergence from existing Brussels regulations."

The first few pages are taken up with a rehearsal of all the old arguments about EU red tape strangling UK businesses and efforts by the government - and there have been many - to ditch it all. 

It's when the report gets into specifics that we see the paucity of it all. Take the Artificial Optical Radiation – Directive 2006/25/EC - which he has raised before, this apparently has "an annual cost to businesses of £1.5 million (best estimate with a range of £0.8m to £2.3m) (£2.2m at 2023 prices), including costs associated with risk assessments and providing information to employees, we believe there is scope to reform the implementing SI."

It's not even chicken feed.

Supplying PPE (Personal Protective Equipment) to a wider group of workers than employees, including casual workers under Personal Protective Equipment at Work (Amendment) Regulations 2022 (S.I. 2022/8) costs businesses, charities, and voluntary bodies £43.2 million per year. Hardly, eye watering is it? 

He looks in detail at the use of ladders in The Work at Height Regulations 2005 (S.I. 2005/735) and gives the recommendation to exempt self-employed people whose work activities pose no potential risk of harm to others. According to the impact assessment, this "could save £65,000 a year (2009 prices) for individuals newly set up as self-employed, who might otherwise have spent time familiarising themselves with their obligations under health and safety law and further annual cost savings of £870,000 (2009 prices) for established self-employed individuals from not having to keep up-to-date with health and safety requirements. At a minimum SMEs and the self-employed should be exempt from the Working at Height Directives."

On Waste Management: "Directive 2008/98/EC introduced some additional administrative burdens and costs for SMEs. Under the subheading Small Firms Impact Test in the impact assessment for S.I. 2011/988140: "the costs of application of the waste hierarchy and the requirement for registration as a lower tier carrier will result in a small increase in costs for new businesses”, and total additional ongoing costs for businesses were estimated to range from £1.2m to £4.6m p.a. (£1.6 to £6.3m at 2023 prices)."

The IBN believes "food products sold online by SME businesses should not require physical product labeling, where the food information is provided in full online to the purchaser. This leads to unnecessary costs for small business producers and distributors."

Cosmetic Products – Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products costs businesses "around £19.6m" (£23.25m in 2023 prices) noting that this will affect "around 241,000 businesses."  Peanuts for each business.

The only really substantive EU law mentioned is the Working Time Directive - costing up to £5.2 billion a year but the IBN says, " However, we would not prescribe how the Working Time Directive should be reformed."  File that one under 'Too difficult.'

Longworth wants to zero rate VAT on a lot of stuff like:

  • electrical goods;
  • electricity and gas;
  • heating oil & solid fuel for businesses;
  • stationery;
  • postal services (Royal Mail/ other licensed operators);
  • taxi fares;
  • CDs and DVDs; and
  • Renovations and extensions;
  • food and drink supplied for consumption on the premises (at restaurants,
  • cafés etc.)
This is when the chancellor is desperate for as much revenue as he can get to service our £2.5 trillion national debt.

Most of the recommendations are, as far as I can see, hardly earth-shattering and some may even be worthwhile but is the price we are paying in lost trade worth the minuscule savings? More importantly, will any of them turbo-charge our productivity?  I really cannot see that they will.

None come anywhere close to the £33 billion a year that we were supposed to save by ditching all these 'burdensome' EU rules. I wonder if a small selection of these proposals on the side of a bus in 2016 would have had the same appeal as Boris Johnson assuring voters that we could save £600 million a week?

Somehow I doubt it.  

Longworth and reality have finally collided.