Financial Times, 23 October 2007

European Union over-regulation is damaging Britain's competitiveness

From Ms Ruth Lea.

Sir, I read Simon Tilford and Philip Whyte's letter ("EU is gaining in importance to UK", October 22) with interest.

I was a great supporter of the single market in the late 1980s. But it is now clear there are major problems with its implementation. Even on official figures the costs are substantially outweighing the benefits. According to Günter Verheugen, European commissioner for enterprise and industry, EU regulations were costing the European economy some €600bn a year. Meanwhile the single market's benefits are estimated to be a disappointing €225bn a year. This strikes me as an extraordinarily bad deal for business.

There is little doubt that the EU's over-regulation is damaging Britain's international competitiveness in the rapidly changing world of the 21st century. Europe's contribution to world gross domestic product will continue to shrink and, if Britain is fully to prosper, British business must be free of the EU's regulatory shackles. Of course, there have been attempts to lessen the burden on businesses but they have failed to make much headway. Mr Verheugen, no less, has complained that any attempts at deregulation have been thwarted by powerful civil servants within the Commission.

Disappointingly, the EU's reaction to globalisation is still one of protectionism: consider the common agricultural policy and remember the wholly unedifying behaviour of the EU in "bra wars" and "shoe wars". Moreover, the recent removal of "free and undistorted" competition from the objectives of the Lisbon treaty flies in the face of modernity.

Of course, Britain will remain a valued trading partner of the EU - much to the EU's advantage, by the way - but let us not forget that Britain's future also lies beyond Europe's borders.

Ruth Lea,
Director,
Global Vision,
London SW1P 3QL