In defence of EU regulations

b3

Thanks to those pencil pushing killjoy’s in Brussels we’re not allowed to let children work in factories like this anymore!

In amongst the bigoted BS about migrants, the Brexit brigade will often trot out the phrase freeing us from burdensome EU regulations. It was a central part of Michael Gove’s rambling speech (which for some reason reminded me of Marlon Brando’s monologue from Apocalypse Now) regarding Brexit (he also made various wild claims, such as the fantasising that the EU will break up if the UK leaves…and then claim that the UK will get a better trade deal from a now non-existent EU….rather than a worse deal from 24 different countries!).

This is a falsehood, because if there’s one thing that we can guarantee will happen post-Brexit, its that the UK will still be subject to many pages of EU rules (oh, and EU citizens will still be able to come over here in unlimited numbers…oh and we’ll be paying for the EU to administer all of that too). Why? Well firstly because there is no way the EU will sign a free trade deal with the UK if we don’t, nor indeed will any of the other trading blocks. But also because it is in the UK’s interest to keep those rules….unless you fancy turning the country into North Korea!

File_Share of all deaths caused by accidents, EU-28, 2012 (%) Health2015B

Thanks to “burdensome EU regulations” accidental deaths are falling across the EU

What the Brexiters don’t mention is that these “burdensome” EU regulations are mostly devoted to setting safety standards , protecting the environment and workers rights. In other words stopping kids being exposed to dangerous chemicals contained within toys (or air pollution), making sure food doesn’t poison us, preventing workers being maimed at work and making sure you aren’t impaled on the steering column in the event of a car crash. So unless there’s anyone whose okay with taking a few chances (i.e. you want to expose your kids to carcinogens and see workers losing hands and feet at work like back in the old days), I suspect most of these regulations will be staying. Not least because so much trade depends on it.

Let us take the car industry by way of example. Across the EU car makers, or the producers of car parts, are subject to a long list of regulations. These rules keep us safe and mean that despite the fact that year on year the number of cars has been growing, the number of road deaths have been falling for some time now. And as I discussed on my energy blog a few years ago, the benefits of these regulations are all too easy to see.

euroncap3

EU regulations help keep car drivers safe, while also allowing vehicles like this British made car to be exported more easily, while keeping insurance premiums down

I would note that the EU rules relating to vehicle safety are (arguably) weaker than those in the US (we’ll discuss the reasons for that later), notably in that they don’t absolutely require a vehicle crash test (simulations and calculations to prove safety will do) for cars sold in small volumes. This loophole is crucial to many smaller UK car makers (think Caterham, Morgan, TVR, etc.) who rely on it to stay in business (and why importing UK made sports cars into the US is a bit of a minefield).

These rules on vehicle safety are not dictates from Brussels, but are the result of years of negotiation between governments, safety bodies, academics, car makers and insurance companies to try and find a compromise that everyone is happy with. These regulations are important because car companies and insurers rely on them both in terms of setting bench marks for acceptable levels of safety that they can design too (while giving insurers the confidence to insure those cars). But also to back them up in court, they will often cite “complying with all specified safety standards” in the event of a lawsuit. So long as they can prove their car was within the regulations it means that A) a lawsuit is less likely to succeed and B) there are legal liability limits to how much they can be made to pay out. However, if for some reason the court finds that they failed to meet the regulations (as has happened in the past), the sky is the limit. Lawsuits with eyewateringly high pay outs have been the end result.

So if post-Brexit the UK government were to follow Gove’s advice to relax or in anyway loosen the “burdensome” EU rules on vehicle safety, the end result would be the collapse of the UK car industry. Insurers would refuse to insure UK made vehicles, the EU and US authorities would ban the sale of UK made cars or car parts within their borders and the driving public would stop buying them (after all which car are you going to drive your kids around in?). UK vehicle manufacturers would have to move abroad (or ignore the UK rules, adopt the EU rules and pay the costs of arranging for inspection and enforcement themselves).

Similarly the aircraft industry is tightly regulated (and again, the US FAA regulations are arguably stricter than those in Europe). “Airsafe” parts are quite literally “reassuringly expensive” as a result. So much so there’s actually a big black market in counterfeit or non-standard aircraft parts, which the authorities (and the airlines) are trying to crack down on. And again, the airlines, aircraft makers, insurance industry and the regulators themselves (who have been sued in the past for not regulating airlines enough!) all rely on these rules both to protect planes and passengers (airlines don’t like losing aircraft, not a good business model to go around killing your customers!), but also protect themselves from lawsuits and limit their liability in the event of an air crash. If an airline or aircraft maker breaks these rules or is found in non-compliance, the result is usually a massive payout, customers boycotting your planes and usually the collapse of the airline in question.

Economist.planesafety

So again remove these “burdensome” EU regulations and you’d have all of the UK’s aircraft industry and airlines relocating overseas, under threat of them being banned from US or EU airspace if their planes included any cheap British knock off parts. And of course the insurance companies would refuse to insure these aircraft and passengers would likely refuse to fly in them.

Finally, let us consider food. Listen to the Brexiters they’ll have you believe Brussels has 26,000 words devoted to regulating cabbages (not true! As the Beeb’s “more or less” discusses). Farmers represent a problem for the leave camp. Country folk are naturally conservative and distrustful of foreigners, but many farmers are heavily dependant on both EU farm subsidies and trade with the EU. Indeed studies have shown that in the event of Brexit farmer incomes will be on average £34,000 worse off and food prices will increase.

The leave camp have tried to counter this by preposterously suggesting that much of the increased food price will go to farmers (actually it represents an increase in their costs as they find it more expensive to important consumables from the continent) and that subsidies will remain (I’ve yet to hear a single mainstream politician confirm that the UK government can afford to pay such subsidies).

Ignoring such obvious fallacies, the leave camp also try to claim that farmers will be freed from EU “red tape” by voting to leave. In which case, I hope farmers like the taste of their own produce, cos its all you’ll be eating from now on! Much of this “red tape” relate to food safety and environmental protection, so the EU will immediately ban all produce that does not meet its standards (as likely will other trade bloc’s too). And you would even struggle to sell such produce within the UK. Supermarkets know their customers. They know that customers will react to the slightest hint of risk when it comes to food safety by boycotting said products. Customers also demand that products meet various environmental standards (dolphin friendly Tuna, fair trade coffee, free range eggs, no GM crops, etc.). There’s been enough food scares in the past for them to know not to take any chances and the would cease to stock any food that they know that even a minority of customers will refuse to buy.

So I’m afraid, these EU rules and reg’s will be staying and as noted earlier, like Switzerland and Norway, we’ll be paying the EU to send bureaucrats to the UK to make sure we are compliant. Indeed I would argue the other way, in the event of Brexit don’t make our rules weaker than the EU, make them stronger. You will recall I pointed out that in some areas US regulations are actually stricter than those in the EU. In part this is because the US is a more litigious society, so the regulations have been tightened over the years to match this. On which point, the UK tends to be fairly litigious compared to the continent. So post-Brexit we’d expect a natural creep upwards of regulations, rather than downwards.

However, some accuse the US of using its tough regulations on trade as a defacto means of protectionism. They know US firms have to set the bar pretty high to meet the demands of US consumers, so it makes no odds to them if the rules are strict……but it might make a Chinese competitor think twice before entering the US market (or allow them to halt the sale of UK made Cadbury chocolate bars). To those Republicans who say “big government get off my back”, I say can you sign the following legal disclaimer in which you accept full personal liability and responsibility for any injury, death, maiming, disability, dismemberment, loss of livelihood, destitution or HMO refusal (due to “prexisting conditions”) that may impact on you, your family, children, partners, pets or acquaintances from big government getting off your back.

So in a post-Brexit world, I would argue the opposite would be a sensible strategy, make the UK reg’s stronger than the EU’s to protect UK trade. Okay those very same neo-liberal types arguing for Brexit will be rolling around and chewing the carpet when they realise what they’ve gotten themselves in for, companies will whine a lot about red tape and all this form filling, but it would be a entirely rational decision. Of course, push things too far and companies will eventually get the hump and leave the UK for countries that are less heavily regulated.

There is a happy medium between enough regulation to keep us all safe and keeping the insurers and financial services industry happy, but not burdening companies with too much red tape. If only we had some sort of organisation that could find that happy medium?..oh ya we do, its called the EU!

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One thought on “In defence of EU regulations

  1. Pingback: Why we need the EU | daryanblog

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