Cost of EU Legislation for Britain

The Press Association is carrying the following report on the cost of EU legislation for the UK:

More than two-thirds of the cost of British regulation is laid at the EU’s door in a new report.

The total domestic and European regulatory burden on the national economy has been £176 billion since 1998, according to an Open Europe analysis of over 2,300 of the Government’s own impact assessments.

The amount is roughly the same as the country’s budget deficit, and 72% of it – £124 billion – results from EU-generated legislation, claims the report.

This means that EU regulation in the past eleven years has cost every UK household an average of £4,912, the report says.

Open Europe, the independent think-tank campaigning for EU reform, says domestic laws are 2.5 times more cost effective than EU regulations.

And while it acknowledges that the Government and the EU have taken “positive steps” to reduce the red tape burden, “the cost of regulation to the private and public sector keeps on going up every year”.

The annual cost of regulation has doubled each year since 2005, when the Government launched its “Better Regulation Agenda”, says the report, adding: “This is in no small part due to a failure to stem the flow of new, costly EU regulations.”

But the report makes clear that the share of EU regulation is actually falling: While the average share of regulatory cost derived from the EU has been 72% in the last 11 years, it was only 59% last year, compared with 65% in 2008.

Open Europe estimates the “benefit/cost ratio” of EU rules since 1998 at 1.02, meaning that for every £1 of expense on implementing an EU rule, only £1.02 of benefit has been generated.

In contrast, the report says the benefit/cost ratio for domestic law is 2.35, making it far more cost effective to regulate nationally than via the EU. At this rate, EU regulations “come dangerously close to failing an overall cost-benefit analysis”, the report warns.

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