Cut EU red tape to save billions, business chiefs tell Cameron

The European Union should cut or amend 30 pieces of red tape in a bid to ease regulation on British businesses, a panel of leading businessmen will warn the Prime Minister this week.

The Government-appointed panel, including Marks & Spencer chief executive Marc Bolland and former Diageo chief executive Paul Walsh, are set to tell David Cameron to push through changes at a European level which could save business billions of pounds.

High on the agenda to be axed are regulations surrounding chemicals, health and safety, and employment laws.

In the landmark report, entitled “Cut EU red tape”, the six-man panel, appointed by the Prime Minister in June, focuses on the best way to make the European market work as a single market, and how to make the EU competitive in the global race.

The report, due to be published on Tuesday, centres on five key themes: overall competitiveness, employment, barriers to expanding a business, barriers to trading across borders, and barriers to innovation.

The panel members, who also included Kingfisher chief executive Ian Cheshire, spoke to hundreds of companies across the UK, big and small, as well as lobby groups such as the CBI and the Institute of Directors, in addition to industry associations in countries including Spain, Holland and Germany.

Mr Cameron is set to welcome the report in a series of comments timed to coincide with its release, although it remains unclear exactly how many of the 30 recommendations he will take forward.

Their repeal remains far from certain, and he will have to work his European counterparts to begin the process, reports The Telegraph.

The report comes in addition to moves to end the so-called “gold plating” of EU regulations and the Government’s own Red Tape Challenge, which are estimated to have saved businesses some £1bn in reduced regulatory costs.

In order to assist Mr Cameron, the panel considered not just regulations that harm UK companies, but those which are a detriment to companies across the 27 member nations.

Speaking exclusively to The Sunday Telegraph, Mr Cheshire said: “One of the abiding things that came across is that regulations often start off as a very good idea, but lose their way in implementation.”

He said that the recommendations are key principles which will give the Prime Minister “a solid base” from which to start.

The panel was asked by Mr Cameron to “help identify where action is most needed to roll back EU red tape”.

Mr Cheshire said one area the report deals with is in chemicals, in particular the EU’s Reach regime to register and monitor chemical usage.

“This issue is massive for SMEs, who in some cases are thinking about having to manufacture outside Europe,” he explained. Changes to Reach from 2018 will make the regime more onerous – and Mr Cheshire said were likely to cost Kingfisher some £3m across Europe were they to come into effect.

“The question is, can you make Reach more business-friendly, especially for SMEs, and have a light tough regime?” he said.

Another area highlighted in the report is the EU’s onerous health and safety regime, which, Mr Cheshire said, leads to a “box-ticking mentality”.

“This is an example of where regulation has ended up divorced from real assessment of what we’re trying to do and why,” he continued.

The report includes a Europe-wide estimate that small firms could save €2.7bn (£2.29bn) were the stringent health and safety laws to be changed.

Other target areas include the time it takes to register new products, and generic cost issues increased by the higher regulatory burden EU companies face compared with rivals in the US or Japan.

The report even includes a seven-letter mnemonic, based on the word “compete”, designed to ensure that the report’s outcomes are easily remembered:

C – competitiveness test
O – one in, one out
M – measure impacts
P – proportionate rules
E – exemptions and lighter rules
T – targets for burden reduction
E – evaluate and enforce.

Mr Cheshire emphasised that the six panellists were very positive on some areas of the EU, such as the potential for a digital single market.

He said that there were “lots of like-minded people [across Europe] who would like to see a more effective, efficient EU”.

“We can construct this – as a European-wide conversation – it’s not just the UK hammering on the door.”

“The 30 recommendations represent a carefully ranked distillation of our thoughts of what is achievable, but there are many more besides,” Mr Cheshire said.