11 April 2016

Mark Boleat: Too often it’s the UK – not Brussels – to blame for the costly burden of regulation

It is clearly absurd to believe that, if Britain left the EU, there would be no regulation. It is also incorrect to assert that, if Britain left the EU, there would be no scope for reducing regulation, writes chairman of the policy and resources committee of the City of London.

Britain has always been good at gold plating, not just of EU regulation, but British regulation as well. Lawyers, consultants, and in-house compliance staff have enthusiastically embellished perfectly sound regulations either to protect their own positions or build up their own business and empires.

Equally, the government has not been blameless. The Working Time Directive, from which Britain has a substantial opt-out, is pretty harmless, but British gold plating added an extra five days holiday entitlement and onerous reporting requirements, which subsequently were dropped. It is absurd to think that, if Britain leaves the EU, the government will legislate to reduce minimum holiday entitlement by five days.

As far as financial regulation is concerned, there is no expectation in the industry that leaving the EU will lead to any reduction in the regulatory burden – except the misguided, if popular, cap on banker bonuses. Many of the new prudential requirements stem from global agreements in which Britain has been an active supporter and most of the conduct of business regulation is purely home grown. More generally, the government has made it clear that it wishes to have regulatory requirements that in many areas go well beyond EU rules.

And finally the referendum is producing a splendid example of gold plating through the Electoral Commission and what it defines as expenditure on referendum campaigning. It is interpreting this in such a way that it could catch company annual reports and AGMs, industry dinners, commercial conferences, equity research and published legal opinions.

This is a good lesson for those who believe that the word “regulation” must always be prefixed with “European”. If there is a desire to reduce the regulatory burden on British business, leaving the EU would not simply result in a quick win.

Full article on City AM

 

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