EU Referendum

Reality Check: What is the cost of EU regulations?

Quote from Open Europe: The top 100 European Union rules cost Britain £33.3bn a year.

The claim: The think-tank Open Europe, quoted by Vote Leave, calculates that £33.3bn is the annual cost of the 100 "most burdensome" EU regulations for the UK economy.

Reality Check verdict: The £33.3bn figure describes the projected annual cost of 100 EU regulations, without taking account of the benefits, estimated by Open Europe to be £58.6bn. There is no guarantee that regulatory costs would be much lower after a Brexit. The EU is involved in setting global standards in many fields, so the UK would still be bound by many rules if it left the EU.

Open Europe's calculations are based on UK government impact assessments.

The think-tank, arguing for fundamental reform of the EU, published its study last year.

The costs should be treated as ballpark figures. For example, one of the costliest regulations was the EU package on energy and climate change. But the UK failed to meet its targets on renewable energy, so the costs need to be reassessed.

Open Europe's co-director Raoul Ruparel, says that in 26 of the 100 cases the costs outweighed the benefits and in 31 others the benefits could not be quantified.

So, he told a London conference, "with more than half of the regulations there is no clear benefit". That being the case, Open Europe argues, "there is plenty of scope to cut regulatory cost to business and the public sector".

Most of the benefits derived from just three regulations.

One of those "big three" was about capital requirements for banks. And those rules for banks are mostly set out in Basel III, an international - not EU - agreement. Most likely, if the UK left the EU it would still have to comply with Basel III.

Single market rules

Mr Ruparel said "a lot of the regulations would probably be kept in Brexit".

The UK may have to stick to many EU rules in order to maintain access to the EU single market on preferential terms.

A cost/benefit analysis does not capture the full impact of any EU regulation.

It does not measure the value of a group of states all playing by the same rules, economist Martin Sandbu of the Financial Times argues.

It is hard to calculate how many potential exporters are put off by trade barriers, hard to measure the interconnected gains provided by all those operating in the single market.

Cultural, social or environmental benefits from EU regulations can also be hard to calculate.

There are many EU rules on animal welfare, for example. Are they worth the cost? Some UK farmers say it is unfair that those rules are not implemented equally EU-wide.

Last week, the Treasury Select Committee criticised the use of the £33.3bn figure (or £600m a week) saying: "It is not the net economic cost of regulation, nor is it a measure of the savings that would accrue to businesses as a result of Brexit."

"To assert this is misleading. To persist with such a claim, as both Vote Leave and Leave.eu have done, is a tendentious representation of the research on which it is based."


Read more: The facts behind claims in the EU debate


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