Mats Persson is Director of Open Europe.
Broadly speaking, the UK Government has two tools at its disposal to achieve its aims: budgetary policies and regulatory policies. But while one will feature heavily in the debate leading up to the general election, the other will be almost completely absent.
This is unfortunate, because as boring as it may sound, regulation matters. Good regulation can free up markets, increase liquidity and boost stability and consumer confidence – all of which are needed in the wake of the crisis, not least in financial markets. Bad regulation can have the complete opposite effect, ultimately hurting jobs, growth and competitiveness at a time when we can least afford it.
Open Europe this week published a study – based on over 2,300 of the Government's own impact assessments – which showed that regulation has cost the UK economy £176 billion since 1998. Of this amount, £124 billion, or 71%, had its origin in EU legislation. This cost is unnecessarily high.
We also found that despite some good efforts by the European Commission and UK Government to streamline regulations, the cost of red tape continues to rise every year. Since the UK Government launched its 'Better Regulation Agenda' in 2005, the annual cost of regulation introduced since 1998 has doubled, now standing at £32.8 billion, 59% of which stems from EU legislation.
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