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Tuesday, May 08, 2012

Cable gets it 100% right on EU regulation (almost)

Vince Cable: Unimpressed by the Working Time Directive

In a nice contrast to the doom, gloom and cynicism which all too often characterise the European debate, here's some much needed can-do spirit from UK Business Secretary Vince Cable. The topic - how to cut down on EU regulation - is a favourite of ours (sad, we know). In a piece for the Telegraph, Vince described a recent meeting in Vilnius, where, apparently, 15 member states, going under the catchy name of the "Like Minded Group", agreed to work towards less cumbersome and more business friendly EU regulation.

Cable attacks the "dreadful economics" and "illiberal" nature of the Working Time Directive in particular and EU social and employment laws in general (at least by implication). But he concludes "the tide is turning":
"Beyond the Like Minded Group, Spain and Italy want the EU to focus more single-mindedly on a growth agenda, including deregulation. Last November the European Commission agreed to attack the regulatory burden with exemptions for micro businesses. And earlier this year, following sustained UK lobbying, we achieved agreement in Brussels to exempt around 1.4 million UK small businesses from burdensome EU accounting rules...I discovered in Vilnius that we are not on our own. We are part of a new progressive European majority replacing the dinosaurs of the past."
This is good stuff, and as we have argued repeatedly, exactly the type of measures that the UK Government should push for (nicely tying in with our piece, also in today's Telegraph, on how the UK should be actively courting Germany in a bid to put free trade at the heart of what the EU does).

However, Cable also rules out a scenario is which the UK "could carve out a comprehensive opt-out of all EU employment legislation", saying that "in practice it is difficult to see how Britain could on the one hand continue to enjoy the benefits of the Single Market, worth £3,500 a year per UK household, while on the other refusing to engage on difficult issues."

It's of course true that it would be politically very difficult to get a carve-out from EU employment law. It's also true that EU employment law acts as a 'subscription fee' for the UK's participation in the single market. But as we set out in our recent paper on EU employment law, where does that argument take you? Should the UK then accept other sub-optimal policies such as the CAP and CFP as that, after all, is part of the 'package deal'.

This position also assumes that EU membership for the UK (and other member states) is "Pareto optimal" i.e. there's no other possible outcome of European cooperation that makes every member state at least as well off and at least one member states strictly better off. Looking at how well Europe is working at the moment (ehum), that is clearly not the case. It's therefore right for the UK to consider the division of labour between member states and the EU in employment law - and other policy areas as well.

But in any case, it's a positive that Cable and the UK government are active in this area. Lets hope they keep up the good work...


martinned said...

Actually, it assumes that the current "deal", including CAP, etc., is Pareto optimal at the level of significant sub-national constituencies. The French don't defend CAP because it is in the best interest of France, but because it is in the best interest of a key French constituency: the French agriculture sector. Fisheries are a different story, but all the others (also regional funds, structural funds, etc.) are "side-payments", which turn a Kaldor-Hicks efficient deal into a Pareto efficient deal. (Look it up if this jargon doesn't ring a bell.) CAP was a side-payment for the French in the 1960s, and the regional and structural funds were a payoff for the Spanish and the Italians in the 1990s and 2000s. We can try to reduce them, we can try to make them less inefficient, we can try to reform them, but we should not forget that at their core they are a fair part of a quid pro quo. We subsidise their farmers and in return they let us sell them our stuff.

Anonymous said...

Asking your gaoloer -- the EUSSR --to loosen your chains is not a can-do attitude.

Rather, it is a capitulation to your own captivity.

As for the 3,500 pound per year "benefit" to UK people that Cable cites -- it's a lie. (Logically, the UK could not be a donot nation AND make a profit.)

This is no surprise, since Cable is a liar.

christina Speight said...

Anonymous has it right. Cab;e froths at the mouth and does not deliver.

As for enjoying the single market and the putative "Fee"| for doing so, since they sell more here than we do there we just charge for access to OUR market as our "Fee". Cable has very little brain it seems too.