What do you mean you haven't got time?

For anyone who didn't catch our press summary this morning, the Government has admitted that it will not carry out an Impact Assessment (IA) on the EU's proposed new Directive on hedge funds and private equity - otherwise known as the Alternative Investment Fund Managers Directive.

The idea of an IA is to weigh the costs and benefits of proposed regulation to see if it is worth it.

In response to an FOI request by Open Europe, the team at the Treasury confirmed that,

"because of the foreshortened time scale on which the directive is being negotiated, we will not be publishing a formal impact assessment."

Foreshoretened time scale? Well, the proposal is certainly being rushed through at a worryingly fast pace. It's widely acknowledged that the Commission, in the wake of the financial crisis, was under immense pressure from the European Parliament and some member states to quickly produce a Directive on hedge funds (never mind that most commentators agree that alternative investments funds were not a cause behind the crisis as even the Commission's press release on the AIFMD states). The result was a very poorly drafted, unworkable and inconsistent draft Directive.

This is precisely why a good, robust Impact Assessment is so essential. The "foreshortened time scale" and the poorly drafted Directive make it even more important that the Government (in a transparent manner) assesses what the proposal will actually mean in practice and how it can be improved.

But does the Treasury really not have time? The proposal was tabled on 30 April, and will be subject to revisions and negotiation throughout the summer and autumn. We know EU documents can sometimes be a bit of a snooze-fest but surely there is a crack team at the Treasury who can put a partial IA together during this time period?

Government guidelines explicitly state that "any proposal that imposes or reduces costs on businesses or the third sector requires an Impact Assessment" and the BERR Department for Business, Innovation and Skills website instructs Ministers to "make use of the UK Impact Assessment when lobbying other member states to win support for the UK position."

In fact, back in 2003 Tony Blair promised:

"no proposal for regulation which has an impact on business, charities or voluntary bodies should be considered by Ministers without a regulatory impact assessment being carried out."

This might all seem a bit obscure, but it's extremely important. A rigorous IA can identify potential costs and benefits of EU proposals and identify the impact on jobs, competiveness, growth and the rest of it. Used properly, it can inform UK negotiators when arguing over the details of important EU rules in high-level meetings in Brussels.

Last year, we spent six painful months going through over 2,000 of the UK Government's IAs. In the subsequent report, we recommended that the Government use IAs as a bargaining tool, to lay out which aspects of EU proposals would be unworkable, or that would impose un unacceptable cost. Of course, this would require a rigorous IA produced in time to inform the UK negotiating position - which, again, is what the Department for Business also recommends.

As we've said before, if this were a proposal that affected the French agriculture sector or the German auto industry it would have been strangled at birth. Although the UK Government finally has begun to pay some attention to the AIFM directive, it needs to do far more to show that it's willing to fight the UK corner on this one.

Starting with an assessment of what the hell it's all about.