David Cameron, pictured with Angela Merkel. Image: Flickr / Number 10
Nobody likes the thought of 'red tape', over-regulation, and excessive 'administrative burdens'. But what about rules to protect workers, the environment, and food safety? Actually, these are two sides of the same coin and right now a war is being fought in London and Brussels ostensibly against the former but actually against the latter.
Despite the self-promoted image of David Cameron standing up for Britain against the EU’s so-called bloated bureaucracy, there are some remarkable synergies between his record and that of the European Commission, especially in the area of deregulation and cutting 'red tape'.
In the UK, the deregulation agenda embarked upon by the coalition hasn’t received the attention it deserves. What is often branded “better regulation” has been a remarkable ideological project driven by the belief that very little should stand in the way of business doing business.
In 2013, Cameron set up the Business Taskforce to “to get bureaucracy out of the way of business” at both the national and EU levels. Headed by six business leaders and a government minister, it came up with 30 proposals to slash EU regulation and seven principles to be used to evaluate new EU proposals. This recipe for 'red tape' reduction includes a competitiveness test. To pass, legislative proposals must show they boost European competitiveness, and a one-in, one-out system (for every new regulation, an old one must go). It also includes an overall target to reduce regulatory 'burdens' on business, and to exempt small and medium businesses from EU law wherever possible. The report was presented at the October 2013 European Summit and it seems it went down rather well.
One year on, the taskforce reported that 10 of their original proposals had already been approved. These included the downgrading of a proposed regulation on shale gas to a light-touch recommendation; new rules reducing the number of environmental impact assessments; and the withdrawal of the soil directive. George Monbiot described the torpedoing of this directive as a coup for the government and the UK National Farmers’ Union (NFU). The taskforce further reported that progress was underway on an additional 10 areas.
As the New Economics Foundation put it in a recent critique, the “Better Regulation agenda has lost the plot and now creates significant social and environmental risks … the current approach aims only to reduce the ‘volume’ of regulation and systematically undervalues social and environmental risks, costs and benefits.”
But the UK government's drive to cut 'red tape' goes even further. The new Deregulation Act which recently passed into law with little publicity “provides for the removal or reduction of burdens on businesses, civil society, individuals, public sector bodies and the taxpayer.” It forces those exercising specific regulatory functions to have regard for the desirability of “promoting economic growth”. Such regulators could include: the Care Quality Commission, Drinking Water Inspectorate, Environment Agency, Equality and Human Rights Commission, Food Standards Agency, Health and Safety Executive, Ofsted, and many, many others. The law is new so what this means in practice is not yet clear, but it is a worrying development. Speaking during a House of Lords debate on the legislation, Lord Tunnicliffe said: “if our fears comes to pass, [this] could wreak havoc.”
The Cameron deregulation agenda is not so far removed from what is going on in Brussels. As exposed by Corporate Europe Observatory, 'better regulation' started under former Commission president Jose Manuel Barroso and is now being doggedly continued by his successor Jean Claude Juncker and his right-hand man, Frans Timmermans, the “better regulation” commissioner.
Particularly worrying for trade unions is Timmermans' alleged proposal to introduce public consultation on European social partner agreements. The unions suspect that he is putting this procedure in place to “neutralise” the elements of EU law that allow European employers’ federations and trade unions to make agreements within their sectors. These agreements cover health and safety, lifelong learning, working conditions and more. Both trade unions and employers’ federations have criticised the leaked proposals as “highly inappropriate”.
At a meeting in April, Timmermans heightened anxiety among the social partners by declaring that unlike his predecessors, his 'better regulation' proposals would not include new social or environmental laws. He stated: “It is not polite to slag off previous Commission's work, but our Better Regulation is focussed. We are here to lessen the burden on small and medium-sized companies, nothing else.”
This all plays right into the hands of those like David Cameron who want free rein to tear up progressive labour and environmental laws, creating a patchwork of rules across the EU, and a race to the bottom as companies shift to the least regulated environments. Trade unions are calling this an attack on (what remains of) Social Europe.
Now a leaked version of Timmermans' proposals sheds further light on his plans, expected to be launched in May. The leaked document says: “The European Parliament and the Council should ... mirror the Commission's commitment to Better Regulation, as must Member States when implementing Union law.” In essence, this will mean governments and MEPs will need to submit their proposals for substantial changes to legislation to experts who will assess “the likely impact and regulatory burden before any final decision”. Friends of the Earth Europe’s Paul de Clerk called the proposal “a huge power grab”, while Cécile Toubeau, of NGO Transport & Environment said: “the Commission is demoting the two democratically elected EU bodies ... to the role of Yes Men.”
Meanwhile, the Commission's REFIT programme carries on. Started by Barroso in 2012 and now being revamped by Timmermans, REFIT (the regulatory fitness and performance programme) promises further efforts to cut 'red tape', and has been a major focus of corporate lobbying. EuroCommerce, BusinessEurope, EuroChambres, the European Roundtable of Industrialists and many others have all been very active.
If this wasn't enough, this whole approach could be locked in for the future via the EU-US trade deal (TTIP). Regulatory cooperation will bind EU countries into lowest common denominator regulation and a scaling-back of progressive regulations, while ensuring that business holds sway over future rules. Issues not resolved in the trade negotiations themselves could be revisited later on, through the “Regulatory Cooperation Council”, consisting of a handful of officials from the EU and US with enormous influence to halt legislative proposals deemed bad for business. These officials would have their say ahead of elected parliaments. The idea was initially put forward by BusinessEurope and the US Chamber of Commerce.
In March 2014, Cameron said: “Let me set out some of the key [demands from the EU]. Powers flowing away from Brussels, not always to it ... Businesses liberated from 'red tape' and benefiting from the strength of the EU’s own market … to open up greater free trade with North America and Asia.”
This is Cameron's vision for the EU, and unfortunately, it is not far from the Commission’s. As workers, consumers and citizens from the UK and across the EU, we should be worried. The deregulation agenda is being pushed by big business working hand-in-hand with politicians and it needs to be opposed.
Politicians should not be doing the business of business.