EU regulation and the UK economy John Springford Centre for European Reform

A fair assessment? Patrick Minford: cost of EU regulation of 9- 25% of UK GDP. Open Europe, using UK government impact assessments: 1.02 benefit/cost ratio. Impact assessments do not attempt to quantify the benefits of reduced trade costs arising from common regulation/mutual recognition. These are not insubstantial.

World Bank ESCAP database Trade costs between Britain and the EU, the rest of the OECD and emerging economies (IMF definition)

World Bank ESCAP database Countries' contribution to falling UK trade costs, annual average, Weighted by UK trade.

The gains from ‘de-Europeanising Britain’ If regulation is to count as a cost of EU membership, two conditions must be satisfied: – Costs outweigh benefits – including the extent to which shared regulations boost trade with the EU. – The UK would have no such requirements if it left the EU.

The gains from ‘de-Europeanising Britain’ Levels of product market regulation, OECD EU rules do not appear to impose rigid harmonisation on the union as a whole. Over time, the level of regulation in other member-states has converged on Britain’s liberal approach, rather than the other way round.

The gains from ‘de-Europeanising Britain’ Levels of labour market protection, OECD Continental European countries embrace markedly higher levels of employment protection than the UK and other Anglophone countries. Employment protection legislation is only slightly more restrictive in the UK than it is in the US or Canada, and less so than in Australia.

The gains from ‘de-Europeanising Britain’ The British working week: Labour Force Survey, 2013 The Working Time Directive has a limited impact on hours worked The statutory right to four weeks’ paid holiday a year is probably more costly to GDP – but a brave government would abolish it.

The gains from ‘de-Europeanising Britain’ The quality of regulatory regimes, OECD rankings European Commission’s regulatory regime has a poor reputation in the UK. But the OECD ranks its rule-making process higher than the OECD average – and similar to that of UK and Australia, which the OECD ranks highest.

The gains from ‘de-Europeanising Britain’ Far from certain that Britain would reduce most environmental standards after an exit: The UK has a more ambitious system of carbon pricing than that countenanced by the EU as a whole. To maintain the current level of access to EU markets, Britain would have to sign up to many of the EU’s rules. As a non-participant in the EU’s institutions, it would have little say over the rules’ drafting. Norway applies 93 of Open Europe’s list of the 100 most expensive EU regulations, including social and environmental standards. In short, the idea that leaving the EU would be a supply-side liberation for the economy is wishful thinking.