EU metric change will cost tyre industry £billions

And of course that's just for starters.

Auto Industry picks up the warning from Tyre Trade News that the previously deferred EU Directive 80/181 now ‘threatened’ for 2010 intends to banish imperial measures, to the detriment of the tyre industry, which still uses inches to describe rim sizes while expressing tyres’ section width in millimetres.

Given the hundreds of thousands of tyre manufacturing moulds in existence around the world, says the magazine’s e-mail newsletter, “the gigantic cost and inconvenience of conversion would only be matched by its huge unimportance”.

Indeed, that's exactly the point.

For example, North America will stay with its inches for a while longer so that will mean maintaining strictly separate inventories for Europe-destined products, the sidewalls of which will need to be untainted by any non-metric markings or symbols. Pounds per square inch will be out as a gauge of pressure.

“There may be no more love of the inch than one has of the centimetre,” continues the magazine, “but we should be left to accommodate both for as long as it makes economic and commercial sense. The criminalising of the one in favour of the other serves no purpose and will cost billions of dollars which industry and ultimately the consumer will be charged with … If enough tyre manufacturers (and these are not the only ones who will be affected) complain about this to their governments and enough governments have the will to impress their concerns on Europe's legislators it may still be avoided.”

Note the mechanism here. Business should lobby its governments to go cap in hand to "Europe's legislators" - our unelected masters.

More government waste

Wat Tyler picks up newspaper reports of

• £10,000 spent on day trips for a convicted pedophile
  
  
• £2bn blown on Millenium duds - ... More than half the projects have either closed, opened late or encountered serious problems... Chris Smith, Labour’s first culture secretary, said in 1997 that millennium projects would “reflect the aspiration and achievements of the British people as we cross the threshold of the year 2000”. That's more of our money down the drain then.
  
  
• PFI hospitals will cost £45bn more over the next 30 years. Chunks of the NHS are locked into these costs whether they continue to use these hospital buildings or not, at a time when government wants (rightly or wrongly) to decentralise more healthcare to community facilities and GPs.
  

More mess over Bulgarian & Romanian workers

Discussed by Open Europe, too dense to summarise. Read it and scratch your head. Farmers have been challenging the competence of the Home Office.

Hmm.

The true cost of public sector pensions

David Farrer at Freedom and Whisky blogs on the subject of public sector pensions.

A big chunk of the private sector pension problem, he writes, is Gordon Brown's tax raid on pension funds made as soon as Labour came into office in 1997. Reversing that would fix most of the problem for the private sector.

But Gordon needs all that cash to pay for the massive public sector benefits.... Divide £1,025 billion by 6.7 million. The average pension liability per "public" worker is £152,915. In the private sector it's £71,812. The public sector pension costs are so much higher because the benefits far exceed those typically found in the private sector.

Does any of this matter - apart from the damned unfairness of the whole thing? After all, the government can just pay future pensions at the time out of current taxation. I think it does matter. An aging population implies extraordinarily high levels of taxation in the future. We should be treated like adults and be told the true size of the liabilities that are being incurred. The private sector must disclose almost everything. Why won't the government?

This is the boring stuff of which governing - as opposed to politics - is made.

REACH directive again

Richard North notes that the REACH directive (Registration Evaluation and Authorisation of Chemicals) has been picked up by a US commentator at The Corner. That American writer initially follows The Telegraph's report by focusing on Cameron (surely its least interesting aspect), but then notes that

The REACH directive would have severe consequences for American businesses too, which is why this issue is important here. The EU is seeking to regulate for the US too - this is one particularly outrageous example. Cameron's pusillianimity on such a serious economic issue is exceptionally disappointing. It looks like both HM Treasury and the Department of Trade and Industry will become mere branches of the Environment Ministry in any Cameron government.

Of course, as we have seen before, the unelected officials of the EU glory in their ability to lead the world in regulation. These few bureaucrats can create and force through hugely expensive dirigiste directives based on dodgy science - and because they are mandatory for one of the world's biggest economies, importers across the world have to comply, and the regulations become de facto standards for manufacturing across the world.

This is the aspect which Mr Murray in the US has failed to understand. It won't be Mr Cameron's environment minister who calls the shots, but the Brussels bureaucracy.

We know already that thousands of animals will die in this retrospective testing of chemicals which have no known ill effects (or they would have been banned already). We also knew already that this was the brainchild of Mr Meacher (another strong indicator of loopiness). We can now add to the picture from The Telegraph's report.

Melvyn Whyte, the chief executive of Whyte Chemicals, a distribution company, said the proposal was "arduous and expensive and not necessarily effective".

He said REACH rules were 1,200 pages long with 6,000 pages of guidance to companies about how to comply.

Taxes, taxes, taxes

Before we look at some of this weekend's wheezes for new taxes, let's see where some of our money is going.

I have blogged before on over-regulation. The Better Regulation Commission warns government to be wary of knee-jerk reactions to hard cases. One instance is highlighted by the Manifesto Club in today's Telegraph. "A new law passed last Monday ... will make it a crime for unchecked adults to work or volunteer with children, punishable by a fine of up to £5,000." Once you are cleared, the writer adds, "there are then 100-page child protection booklets to read for guidelines".

It all costs money.

It's also reported that speed camera fines are being used to buy plasma TVs and t-shirts.

Avon, Somerset and Gloucestershire safety camera partnership spent £326,400 on publicity, £81,700 on accommodation, and just under £500,000 on administration.

Hampshire & Isle of Wight spent £86,524 on publicity and appointed a public relations officer, while Cheshire spent £50,000 on refurbishment. Warwickshire spent more than £500,000 on processing costs, £105,450 on management and administration, and £116,693 on communications. Essex ran up an £8,855 bill for photocopying, spent £9,052 on smartboards and £7,495 on a plasma screen and miscellaneous software. Derbyshire budgeted £15,000 for "promotional items" and £250 for staff T-shirts.

The figures also show huge differences in average running costs and profits of cameras in each area. In Hertfordshire, a camera costs £73,167 to maintain and makes a profit of £113,334, while in Lancashire the equivalent figures are £8,972 and £12,615.

A text book example of public sector costs expanding with no checks. The telegraph adds that

The Government has presided over the introduction of about 7,000 cameras which caught nearly two million motorists last year, raising £120 million in fines. Traffic police have been cut by 11 per cent in the same period.

Channel 4's Despatches showed how road mending contractors try to rip off Devon council, and claimed that other councils don't employ anyone to do the checks that Devon makes. So how much are other authorities being ripped off? (Incidentally, the name of Balfour Beatty seemed to come up rather a lot.)

No wonder our taxes have to keep rising to pay for our bloated public sector - whether it's Devon Council running a monopoly on selling seats (expensively, of course), or the woeful and anti-democratic Standards Board, chaired by Sir Anthony Holland may his name live in infamy.

But never fear, you public sector pipsqueaks with your fat pensions, you should be well provided for. The talk now is of green taxes to come - for our own good, of course.

Politicians love talk of green taxes because it gives them a new toy to play with, a whole new field for regulation and legislation and telling us what to do. The public hasn't tumbled yet to what behavioural changes this new faith based zeal may require of us.

Not that this new hair-shirt-we're-holier-than-the-rest-of-you-do-as-we-say-at-your-expense preaching backed by sanctions will do the world any good.

It is extraordinary to consider that if every light in Britain were turned off for good and every gas-guzzling suburban citizen decided to live like Swampy, all the eco-slack would have been picked up by China in 13 months.

But there's always council tax, where Labour shows signs of intending to bleed the property owning classes to further its cherished expansion of the state.

And where is the opposition to this?

Britain's move to a high tax economy

Martin Wolf joined this debate in the Financial Times yesterday (subscription only), claiming that Britain is moving towards higher tax with no debate.

The country is heading ... towards high taxes, inefficiently raised and wastefully spent.

He reminds us that "the UK has become a significantly higher tax country since the mid-1990s, while taxation has moved in the opposite direction in most other high-income countries".

By 2007 UK's [public] spending will be 45.9% of GDP, fractionally below the eurozone's average of 46.8%, but almost 11 percentage points highrer than in Australia and nearly 7 percentage points higher than in Canada.

But the UK spends less on pensions than most eurozone countries.

Its spending elsewhere must, therefore, be generous by all but the standards of the world's most highly taxed countries.

The UK, he says, "seems to have moved, without serious debate, towards a political consensus in favour of a high-tax, high-spending state even though there is next to no confidence that the state knows how to spend money well" (my emphasis).

Thatcherism looks ever more like a brief interlude between Butskellism and something that may be called "Browneronism".

Margaret Hodge again

Today the underpowered Margaret Hodge receives a roasting from Jeff Randall, which merely scrapes the surface of her uselessness (nothing about Islington, nothing about falsely accusing an opponent of being psychologically damaged) but once again the real interest is in the Financial Times, which reports that she is to be asked to reveal the cost of her new Companies Bill provision.

The amendment - requiring directors to include in their annual business review information on "persons with whom the company has contractual or other arrangements which are essential to the business of the company" - has provoked a backlash from business and investor groups.

Business will demand a costed rationale for the amendment in a meeting with Margaret Hodge, industry minister, on Monday.

As the paper remarks, "All government proposals are supposed to be subject to a regulatory impact assessment, with new laws introduced only if this analysis shows their benefits outweigh their costs".

The article concludes with the breathtaking news that

The Department of Trade and Industry promised that a new regulatory impact assessment for the bill as a whole would be produced to coincide with the legislation going onto the statute book when it gains royal assent.

And the paper leaves it hanging there. But RIAs are intended to help the country reach a view on a proposal before it is voted into law, not afterwards.

The government is openly thumbing its nose not only at business - the ultimate source of all that money it loves to spend - but also at its own procedures of good governance.

This really is rubbish governing. If they followed their own discipline, then maybe - just maybe - we could be spared fiascos like the waste of £5m on the abandoned non-emergency 101 call number reported by Wat Tyler.

Some hope.

Boris knocks Tory policy (again)

Boris has done it again. He starts today's Telegraph piece by saying he understands why Tories can't advocate lower taxes, and then proceeds in great detail to explain how one lower paid RAF employee is saddled with crippling taxes.

He concludes that -

I think it's true that much of Middle Britain is suspicious of "tax cuts" as a political slogan. It's true that people want good hospitals and schools.

But then much of Middle Britain doesn't feel the impact of tax in the way that low-paid personnel in the Armed Services feel it, and it is people like the helicopter lady who should have the first call on our protection and support.

The truth is that the state is just too large. Policy should not be about jiggling at the edges of tax burdens with subtle redistributions, but rather about sharply reversing the trend to higher taxes and greater centralisation and control.

That's why I support The Taxpayers' Alliance. So should Boris.

So what did happen about the Companies Bill?

The Financial Times reports that

The prime minister came under pressure in the Commons yesterday to pledge he would not be swayed by business lobbying into a U-turn over the companies bill when it goes to the Lords next week. Margaret Hodge, the industry minister, provoked a furious business backlash this month by introducing an amendment to the bill requiring directors to reveal relevant information on suppliers.

A Labour MP pressed for an assurance that the new provision would not be altered. The FT reports

Mr Blair then appeared to suggest the bill was based on the 2004 Warwick agreement struck between Labour and the unions, in which politicians offered new employee rights in return for the unions' backing for a policy package. "The commitments we set out in the Warwick agreement which form the core of this bill, they are commitments we have said we will honour and we will," the prime minister said.

The Department of Trade and Industry said last night the deal with the unions was relevant to the supply chain amendment. "The Warwick agreement recognised the importance of narrative reporting. The bill implements this commitment."

But business reacted with bemusement to Mr Blair's argument that the wide-ranging company reform, previously presented as principally a deregulatory measure, had the Warwick agreement at its core.

So was it a political ambush, as suggested yesterday, or a carefully planned provision in line with the Warwick principles?

And why did Alistair Darling - pencilled in as Gordon Brown's Chancellor - say on 15 September, "The government does not intend to make significant changes to the bill"?

Did they set out to con the business lobby, or did they have a late change of mind. And why?

Oops

I managed to delete everyone's comments by mistake. Apologies to everyone except the spammer.

The EU auditors do it again

The report in The Times suggests that the Commission has improved the control of its own immediate spending but that big discrepancies are still turning up in EU countries.

Half the cattle that Slovene farmers said they owned, so qualifying them for special EU cow and beef grants, did not exist, the paper reports. A quarter of their sheep and goats were equally invisible. Nine payments worth €2 billion to olive oil producers in Spain, Greece and Italy last year were either inflated or wrong.

The auditors discovered that two thirds of the 95 EUfinanced regional projects that they examined, which include new roads and bridges, contained “material errors”. These ranged from a lack of proper invoices for expenditure being reclaimed to declaring costs that had no relation to the scheme being funded. There are also considerable variations in the way that national authorities apply EU rules.

Last year Poland simply gave a warning to anyone who did not apply good farming practices. Under EU law, they should have been fined almost €1 million. In Greece, farmers’ unions input agricultural data into insecure computer systems that can be modified externally at any time.

What's the lesson? Standards differ across the EU and these sprawling expenditures are too huge to be monitored properly, especially since we know that OLAF is ineffectual at best.

Nor is it easy to see any plausible reforms which could deal with this expensive problem. The institution is just too big.

The Bulgarian/Romanian immigration foul-up

Nothing to add to the general derision surrounding the government's so called solution to this conundrum, but Open Europe's comment sums it up -

Both the main parties are indulging in junk politics here. A £1,000 pound on-the-spot fine? Migrant workers are unlikely to carry such sums, and indeed unlikely to even have bank accounts. If they say they have no money the Government are certainly not going to throw them in our already overcrowded jails. Other accession workers are not covered by the fine. So why not just claim to be Polish or Estonian? How many translators are the police going to employ?

What do we ultimately want? People to come here to work rather than to claim benefits, and to be able to throw out criminals. But what have we ended up with? Many people will be working illegally, they will still be able to claim up to £10,405 a year in benefits and the Government, ludicrously, is unable to throw even criminals out of the country. Liam Byrne’s admission on Newsnight that it would be “very difficult” to evict criminals from the UK was genuinely pathetic.

The only satisfying thing about the situation is that John Reid’s attempt to get headlines saying how “tough” he is has already turned into a media disaster, with the Government (quite rightly) being hammered by the press for introducing a system that won’t work.

Open Europe cannot, of course, swallow the only logical conclusion, that it's our very membership of the EU which removes our ability to control our borders.

That Companies Bill clause

I suggested yesterday the new clause suddenly added to the Companies Bill showed the civil service mindset. Not at all, according to the FT, who trace it to a backbench Labour MP ambush.

Either way, it shows the shallowness of the government attitude to deregulation. They are prepared to pass onerous new regulations without consultation at the drop of a political hat.

UKIP silent on big issues, recruits idiot

The cost of regulation may be the heart of the economic case against the EU (see next post), but UKIP hasn't commented on it at all, or on the recent Open Europe survey of UK businesses.

They do run an item that "Brussels wants 60-hour limit on working week" (copied from The Telegraph, actually). That's not a limit which seems likely to trouble their webmaster.

We also learn from an Evening Standard piece they've copied that "The outspoken TalkSport broadcaster [Whale] will challenge Ken Livingstone for the capital's top job in 2008 as the UK Independence Party candidate". He will "recruit advisers ranging from Peter Stringfellow to Lord Archer", which strikes me as a pretty narrow range. Enough said.

Deregulation is a lie

This is a boring post. All it does is to stress an important truth.

I commented before on the report of the Better Regulation Commission, which called for a new attitude to risk.

The body is named the Better Regulation Commission. Not the Lesser Regulation Commission. This is the Verheugen approach, to merge a few regulations and call it better regulation, but he can't even manage that.

Why is this apparently boring topic important? Because the cost of regulation is the heart of the economic case against the EU.

As Ruth Lea points out succinctly, the single market costs outweigh the benefits.

The Single Market's regulations do not come cheap. Günter Verheugen, EU commissioner for enterprise and industry, recently announced that EU regulations were costing the European economy some €600bn a year (this was almost twice as high as previous estimates). €600bn is some 5.5pc of total EU GDP, equivalent to the size of the Dutch economy....

In 2003 the Commission published its assessment that EU GDP in 2002 was around €165bn higher than it would have been without the Single Market. Even after allowing for the extra GDP growth since 2002, this means that the benefits are less than a third of the costs.

Commissioner Barroso claims his is a free market commission. But, as Christopher Booker points out,

The Commission is so set on stamping out the hated non-metric system that, as of January 1, 2010, it is imposing a total ban on what it calls "supplementary indications" – i.e. any mention of inches, pounds or other non-metric units in advertising, labelling, catalogues, manuals and the like.

In other words, says Booker, any US company wishing to sell to the EU will have to set up separate inventories and warehousing to ensure that its products carry no reference to non-metric units.

Any European firm wishing to sell to the US will not be allowed to refer at all to the units its American customers understand. This in itself will be illegal under the US Fair Trade and Packaging Act, which permits use of metric units only so long as they are accompanied by a US non-metric "translation".

And remember, these are the people who brought you the REACH directive and the RoHS directive. So any suggestion that this Commission doesn't favour regulation is a lie.

The British government is no better. There have been 33 Acts of Parliament and at least 1000 regulations introduced so far this year, doubtless most of them without debate. Gordon Brown says the Treasury will cut the cost of its regulations by 25%, in line with the policies of Holland and Denmark, and now Germany. This from the man who has increased the complexity of the tax system to unprecedented levels.

And now what has the government done? Today's main FT headline, unusual in its bluntness, said

Industry slams new law on disclosure

The government rushed through this big change to the Companies Bill last week without any warning or consultation. Now, the minister is the ineffable Margaret Hodge, who is clearly inadequate to this sort of challenge and doubtless played no part in the exercise at all. So what we are seeing is the mindset of the civil service, which has been calling the shots here.

Mr Blair in his response to the BRC report called for a national debate on our attitude to risk. This for him is a convenient way to kick the issue into the long grass (has the government got no view?). But alas! a huge botched, bloated regulation is about to be placed in his in tray. Tsk tsk, a decision.

And, sadly, there will be more to say about the BRC report.

Arguing for lower taxes

The Taxpayers' Alliance comments on the latest YouGov poll suggesting that voters still don't favour big tax cuts.

As we have repeatedly argued on this blog, when low-tax campaigners focus narrowly on abstract economics, they don't win. When they engage in a debate on whether people want tax cuts if that means cuts in health and education, they don't win. And when the debate is deliberately focused on whether people want lower taxes or whether they want stability (which is really like asking "do you want to keep your job?"), they don't win. None of this should come as any surprise to anyone. This is the ground the Conservatives have been fighting on for years.

That, they say, is why low-tax campaigns have to focus on how tax cuts benefit ordinary families, not concepts like "the economy" and certainly not businesses.

The TPA's recent opinion research programme showed clearly that the best argument in favour of lower taxes was the one that stressed how lower taxes would give people more money to spend on their own priorities. The research also showed that the tax cuts people were most in favour of were those which focused on ordinary families - raising the threshold at which people start paying top rate tax, abolishing / reforming inheritance tax etc.

The message also needs to be banged home repeatedly that the government is an intrinsically bad spender.

This is a week when Wat Tyler reported that the NHS spent millions of pounds last year removing tattoos, £55m was spent on bungled prosecutions, over £1bn of debt has been written off at the Child Support Agency, and convicts are being paid by the Prison Service to play Scrabble, look after fish tanks and learn the guitar.

Plenty of scope for savings, plenty of scope for indignation too.

BBC shows more green bias

BBC Radio 4's 6 o'clock news tonight reported on a WWF report saying nations consume unequal amounts per head (this is news?) and we need to curb our consumption now.

These green bodies take a great deal upon themselves. Have they never heard of the price mechanism? What difference would wholesale change in the UK make in the light of rising global consumption, especially in the so called BRIC countries (Brazil, Russia, India and China)?

Could they find no one to criticise these conclusions? How hard did they try?

This is the second evening running where we have seen green bias from the BBC.

Yesterday Radio 5's Drive interviewed a woman advocating lower speeds on motorways to cut carbon emissions. Again, are there any arguments against this? - because the interviewer certainly didn't put them. Indeed, she agreed that the total savings would be significant.

Well, here are some.

1. What will be the costs of the extra time it takes people to reach their destinations?

2. How significant would such a cut be in terms of world carbon output? Not everyone supports this government strategy.

She could also have asked whether any countries had similar proposals.

These are examples of the institutional bias of the BBC we read about at the weekend. Good that they're admitting it, but disappointing to see it in action two evenings running.

Wasting police time

Congratulations to PC David Copperfield on having a book published on the back of his blog. The book sounds a must read, and you can get it from Amazon.

The blog medium gives people on the ground a chance to speak easily and anonymously to their colleagues and to the public at large about what's going in in their field.

All power to the policeman and his blog.

Overkill from the ... Better Regulation Commission

If you want e-mail updates from their site, you have to supply a password. Why?

An official writes

A good question. We use passwords so that users can log-in with some level of security to update their details, or unsubscribe.

Admittedly, at the moment, the BRC are only offers emails updates via the site, so passwords probably seem like security overkill. But if BRC decide to over more services via a single registration (particularly if they ask users to enter details or prefereneces) then we do need to provide a log-in method and some level of security....

In other words, we are causing you extra work now in case we decide to do something different in the future. And this from the people whose job is to try to make your life simpler.

The Tory Tax Commission

Comment from Wat Tyler, The Economist, and the Taxpayers' Alliance (much of this making the TPA's own points but still worth reading).

The document itself (176 pages) is here.

And now it's energy saving

David Miliband may approve (well, it diverts attention from the farce at the Rural Payments Agency). As the FT announced on Monday's front page, the European Commission proposes to set energy saving standards in directives which it expects will become norms around the world.

So much for Commissioner Barroso's claims that the Commission is becoming more market liberal in its policymaking.

The plan proposes 75 measures aimed at "slashing energy waste by 20% by 2020".

Targeting buildings, transport and manufacturing, the scheme proposes a series of new directives from 2007 to 2012 that would force car makers to cap CO2 emissions at 120 grammes/km, link national car taxation to vehicle efficiency and harmonise EU25 tax credits for clean technology firms.

The raft of proposed measures - many of which will require member states and MEPs' approval - would also impose mandatory standards on 14 groups of household products ranging from lightbulbs and TVs through boilers and see goods labelled with eco-credential stickers to help change consumer tastes.

Tim Worstall quotes The Telegraph -

Under the plan, the Commission will begin issuing a stream of directives next year setting out "minimum energy performance standards", or "eco-design requirements" for 14 priority product groups.

They will include boilers, water heaters, consumer electronics, copying machines, televisions, standby modes, chargers, lighting, electric motors and other products.

As he points  out, "if this goes anything like past plans have they'll specify the technology to be used and in a decade's time we'll all be stuck with something out of date". Not to mention agencies arguing that something producing waste heat is in fact a space heater.

However, Margaret Beckett welcomed it. The UK tradition is to ration on price with a bit of government arm-twisting on the side but we seem condemned to the clunky prescriptive approach again. So much for this week's optimism from the chairman of the Better Regulation Group.

And there's probably fat chance of any political opposition. Green Cameron doesn't do economics and the LibDems are pro EU. And UKIP? They're exercised about the Dartford Toll Bridge.

EU costs v benefits

Richard North summarises a Times piece by Tim Worstall where he manages to source a European Commission estimate of the benefits of the single market programme.

While Gunter Verheugen, the EU enterprise commissioner, complains that compliance with Single Market regulation costs €600 billion a year, Tim has found out that the commission boasts only that the Single Market benefits the economies of the EU to the tune of €164.5 billion a year.

Losing €600 billion to get €164.5 billion back in order that the politicians can enjoy and exercise their power is not something which passes a cost-benefit analysis, writes Tim.

Now you might think they'd be interested in this on planet UKIP. Nope.

Anti-tax campaigns should focus on waste

BBC News Lite (the BBC1 6 o'clock version) sent a reporter to an Essex shopping centre yesterday to see if a few passers-by preferred more spending on the NHS, tax cuts, or more spending on the environment.

There were no numbers - naturally - but apparently the NHS ran out a comfortable winner.

Perhaps this item wasn't wholly insignificant after all. Perhaps tax campaigns at high street level shouldn't be focusing on tax at all, but on government waste.

For instance, Wat Tyler has picked up the story on The Daily Propaganda about the Energy Saving Trust -

The EST has cost us £135m in the last two years, in exchange for which it has pumped out almost as much half-baked eco propaganda as the BBC.

And its recommended eco-car is "more carbon generative than a bog standard Ford Focus 1.6D.... So that's £70m pa on a quango that's so useless it's actually encouraging the very behaviour it was supposed to stop."

These examples have to be dripped into people's heads so that the government becomes a byword for its profligacy with our money.

Regulation again

Yes, I know, yet another post about regulation. But the annual cost of £100bn is too huge to ignore.

The Head of the Better Regulation Commission (BRC) claims that the government has "the most comprehensive better regulation programme undertaken anywhere in the world". This is absurd, as one look at Holland and Denmark shows. Germany has now also adopted their target of cutting the cost of regulation by 25%.

Indeed, despite this wonderful government attitude, "there have been 33 Acts of Parliament and at least 1000 regulations introduced so far this year". By their results shall ye know them.

There is froth in the Commission's recommendations, but two stand out -

1. Change our national approach to risk: Emphasise the importance of resilience, self–reliance, and innovation; separate fact from emotion; balance necessary levels of protection whilst preserving reasonable levels of risk
   
2. Empower individuals to take more personal responsibility for risk: Give the responsibility for managing risk to those best placed to manage it; embark on state regulation only as a last resort and when nothing else will work; examine areas where the state has assumed more responsibility for people's lives than is healthy or desired.

“The BRC contends that the root cause of our over–reliance on regulation is a flawed dialogue between government and society about risk and how to manage it. What is risk? How far should risk be reduced? What is necessary protection? Protection from what…by whom…at what cost… to whom? Our report looks into these issues and uses a series of case studies to illustrate the extent of the current problem. We also set out proposals for remedying the situation.”

We shall be looking at these in future posts.

Forget "a campaign against inconsistencies and absurdities", which will only tinker at the edges.

The BRC urges the government to come clean with the public about risk and regulation, about where ownership and responsibility should start and stop. It needs to spell out that there are costs as well as benefits of risk reduction measures. It must explode the myth that the government can and should manage all risk. It must admit that zero risk is unachievable, unattainable and undesirable.

This will require government to take on people like Polly Toynbee - and probably many Labour MPs - for whom more regulation is a badge of a higher civilisation.

And - ahem - let's not mention the EU. Much of the regulation just cannot be repealed while we remain members.

The BRC is probably spitting into the regulatory wind.

Costly failure at the Rural Payments Agency

This is old news, but the National Audit Office has just reported.

In summary, it had to take on nearly 400 extra staff when it had been expected to cut 1,800 jobs as part of the government's Gershon efficiency drive, and added £387m to the cost of a new scheme for paying subsidies to farmers in England.

It's a catalogue of basic project errors. The agency failed to scope the project properly, fixed on an ambitious strategy, set an earlier deadline than required under EU law, and reduced its headcount before the new scheme was introduced. It had no contingency plan in case things went wrong, and ignored repeated warnings from the Office of Government Commerce that it was in danger of failing.

Margaret Beckett, who was Environment Secretary, and Lord Bach, the farming minister, were both warned that the scheme would not work in June 2005, seven months before it was due to come into action. But they did not invoke a contingency plan. The FT adds -

There was also a substantial risk that the European Commission would refuse to reimburse Defra fully for the cost of the subsidy, because of errors and procedural mistakes. The department has already estimated that up to £131m might be disallowed.

The NAO said efficiency savings from the new scheme might be only £7.5m over the four years to 2009, compared with the £164m forecast by the agency.

Meanwhile, the former chief executive is still drawing his £114,000 salary more than six months after he was removed from the post. A Defra spokesman said: "Mr McNeill is on paid leave of absence until the department is in a position to agree the terms of his departure".

Er ... what about our money, Mr Miliband?

A government internet accommodation service?

No, this is not a joke about a government trawl to find another house for John Prescott.

£10 million of our money has been spent on an internet accommodation service which produced 428 bookings this summer.

VisitBritain, the national tourism agency, confirmed that millions of pounds of public money had been spent developing a new internet tool to boost online bookings for English hotels and B&Bs. But

A VisitBritain spokesman insisted that EnglandNet had been fully operational only from last month, even though work on it began in 2002.

Tim Worstall asks some good questions. Incidentally, don't try to find EnglandNet. It's not a website.

"Execs: Ditch EU bossy boots"

Open Europe has picked up commentary on its survey of businesses' attitudes to the EU.

They summarise Commissioner Mandelson's interview on PM thus -

Peter Mandelson attacked Open Europe.  He claimed  “This was a poll designed by and conducted on behalf of the no to Europe campaign, very hardened anti-Europeans... designed by the no campaign even though it was technically carried out by ICM.”  

He cited the findings of a poll for the pro-euro “Business for New Europe” group, chaired by his colleague Roland Rudd: “Interestingly it contradicts a YouGov poll of 50 Chief Executives… [which] showed 68% believed the single market has been good for British business.  70% said enlargement has been good for British business. 78% saw it as in their businesses’ interests to be in the EU, so I think if you go to those business leaders who in the main conduct in and through Europe you get a very different view to the impressions - and I quote impressions - found by this poll for the no to Europe campaign.”

Challenged later in the interview to name a single regulation the EU had repealed as part of its much-hyped “deregulation drive”, Mandelson was unable to give a single example.

Open Europe then add their own comment -

It’s no surprise that the BBC allowed Peter Mandelson to repeatedly describe us as the “no to Europe campaign” without challenging him.  It’s no surprise either that they then allowed him to cite the findings of a poll for his own “Business for New Europe” group as if it were from an independent polling agency. It was slightly surprising that he couldn’t name a single regulation which the EU repealed or wanted to repeal (so much for 1997-style instant rebuttal).

It’s ludicrous for Mandelson to compare our poll of 1,000 Chief Executives with his poll of 50 business people: when Mandelson talks about what “68% of business” thinks what he really means is just 34 people.  In other words, his claim that “business leaders” overwhelmingly think the EU is doing a great job is based on a lead of just nine people. And yet this statistical nonsense goes totally unchallenged on the BBC…

The FT comments that the increase of onerous EU financial services regulation means that, “It is in the service sector, with the City of London at its heart, that sentiment has most turned against the EU.” 

The FT leader is feeble. First, it says, the Commission has to be held to its promises to respect subsidiarity, to properly assess the impact of new laws and to roll back unnecessary old ones. Second, UK ministers will have to fight harder. And ... er ... that's it. The FT's got the same disease as Open Europe. What they want is probably impossible. So then what?

The Sun reports the survey more robustly, under the heading
Execs: Ditch EU bossy boots

BRITAIN’s top boardroom bosses want us to quit the European Union, a poll suggested yesterday.

They want to take back powers from Brussels, claiming red tape costs millions of pounds a year.

Nearly two thirds of 1,000 chief executives quizzed prefer simple trade deals to the current political bloc.

Fifty four per cent say over-regulation “outweighs” single market benefits. And 52 per cent say the EU is “failing”.

Just a third polled by ICM for think tank Open Europe called it a “success”.

Next chief exec Simon Wolfson said: “There are just far too many prescriptive regulations coming out of Brussels.

“This regulation doesn’t seem to be doing either business or employees or consumers much good.”

City financier Michael Spencer — tipped as the next treasurer of the Tory Party — added: “In the City, people are becoming more and more sceptical about the value we are getting from it all.”

Meanwhile, EU Commission president Jose Manuel Barroso urged Britain to opt to be at the heart of Europe or “sulk in the periphery” during a speech in London.

Meanwhile, as all the commentators note, the silence from UK politicians is deafening. And - to judge by its website - news of the survey has not filtered through to UKIP yet, though it is reported by the Speakout campaign.

We will surely be hearing more of this survey.

Toynbee gets it slightly right

Today Polly Toynbee is claiming that "Only a fully secular state can protect women's rights", a striking contention but one she loses sight of during her piece.

Tim Worstall rightly criticises two telltale phrases in her piece, personal "choice" (i.e. hers is right), and public officials and their clients (she means masters).

What's unusual about today's piece is that Ms Toynbee is half right, once she has got past her notion that feminist liberationism can point in only one direction. (If daughters choose to rebel by taking the veil that is their - odd - choice, which is fine in most circumstances).

Where she's right is in opposing the Blair government's support for faith schools. She rightly traces this to Blair's personal religious faith (maybe it stems from Mrs Blair's as much as from his).

Religions should not be supported with taxpayers' money. Religious segregation in education is divisive. Thus by the wrong route Ms Toynbee stumbles onto the edge of a far more important issue than the veil.

That issue is the continuing scandalous failure of the school system. The government has no idea how to address this. Its central policy goals are wishy washy. It does not even know what its core aims are.

Thus the prime minister's personal favouring of faith schools slips through because it cannot be tested against any rigorous policy framework.

His personal conviction on this issue will cause divisions in society for years to come, for which he will be personally responsible. If there is one argument for a wholly secular state it is Mr Blair.

Climate change consensus?

Ruth Lea attacks the notion that the consensus is always right, and then briefly summarises a new paper from a Danish scientific team.

The latest DNSC research shows how cosmic rays from exploding stars can encourage cloud formation in the earth's atmosphere. As the Sun's magnetic field, which shields the earth from cosmic rays, strengthened significantly during the 20th century the average influx of cosmic rays, and hence cloudiness, was reduced over this period. The resulting reduction in cloudiness, especially low-altitude clouds which have an overall cooling effect, could, therefore, be a highly significant factor in the last century's global warming.

If this proves to be a significant causal factor, adaptation will have to be the order of the day. More broadly, it would suggest how fragile is humanity's hold on life.

REACH directive fundamentally flawed

The other day I highlighted the REACH & RoHS directives as examples of spectacularly bad regulation. A letter to the FT today attacks the logic at the heart of REACH. The writers say

The concepts behind Reach are fundamentally flawed and thus the proposal cannot be fixed. It should be rejected outright. The programme's "substitution principle", which prevailed in the environment committee draft, is one example. It is based on the idea that regulation can prompt industry to find products that are superior to "dangerous products".

If the substitutes were really superior, they would prevail in the marketplace. Mandated substitutes are usually not used voluntarily because they carry trade-offs - higher prices, reduced product quality and increased level of product failures. In some cases, mandated substitutes are actually more dangerous.

The banning of DDT offers an example of why we should not trust regulators to mandate substitution. This pesticide was banned in many places based on faulty information about its health risks and because people assumed that substitute controls like bed nets could do as well to fight malaria. After DDT use halted, malaria rates skyrocketed and millions of people have died from the disease every year since. Some nations are returning to DDT use for malaria control, but it is tragic that so many people have to die first. The Reach programme, unfortunately, shows that policymakers still have not learnt from that tragic mistake.

This is not a complete argument - it might be a legitimate aim to rebalance the calculation by making safety issues more important. DDT, for instance, is not without its disadvantages. But the writers are probably right to suggest that this process is much too cumbersome.

As I suggested before, many rabbits will agree. So will many more bosses, in time.

The EU is too expensive

The main story on the front page of today's Financial Times is headed Brown and Cameron battle over business. Then there's the mandatory picture, and over on the right we have Business chiefs say costs outweigh benefits.

This is a report of Open Europe's survey of businesses, with the opening paragraph

Most UK chief executives want Britain to renegotiate its membership of the European Union and take back powers from Brussels, the biggest survey of its kind for years found.

59% felt the regulatory burden was generally increasing. Remarkably, 35% said it was staying at about the same level. Perhaps no one told them 50 new business regulations were introduced on 1 October.

54% said the burden of extra regulation has outweighed the benefits of the single market. This included 51% of the businesses that do "a lot" of trade with the EU. 35% said the benefits of the internal market have outweighed the cost of extra regulation for their company. For the EU as a whole, of course, Commissioner Mandelson estimated the value of the single market at €150m, while Commissioner Verheugen says regulation is costing €650m.

52% agreed with the statement that “The EU is failing. Britain will be more prosperous and secure if we keep the Pound and take back powers from the EU”. 36% agreed with the statement that “The EU is a success. Britain will be more prosperous and secure if we join the Euro and give more powers to the EU”.

Respondents were asked, “Do you think that Britain should or should not renegotiate the existing EU treaties so that they are reduced to trade and association agreements only?” 60% thought it should, 30% thought it should not. Even the largest businesses (250+) supported
the idea by a margin of 52% to 37%, and those who do a lot of trade in Europe, by 55% to 38%. Interestingly, the FT report does not reveal the extent of repatriation of powers respondents were looking for.

Of course this option is completely unrealistic, especially at a time when many EU politicians want more curbs on business rather than fewer.

Reportedly Commissioner Barroso is to ask

Does the UK want to shape a positive agenda, which reflects its own agenda, or be dragged along as a reluctant partner? Do you want to drive from the centre or sulk from the periphery?"

By putting these two stories at the top of its front page the FT is effectively saying to Brown and Cameron in their battle over business, well here's a big item on the business agenda.

Maybe Commissioner Barroso should be careful what he wishes for, especially since Mr Cameron's score for trust is a net +1 (reflecting how little he has said), while Mr Brown scores a whopping net -31. He will have ground to make up, and what better whipping boy than the Commission.

Polly the regulator

We saw previously that Polly Toynbee believes the answer to our immigration problem is an army of wages inspectors. Yesterday in The Guardian she returned to her defence of business regulation.

The piece is typical Toynbee, with plenty of examples provided to bolster a wrong core argument. Quotation would be easy but tedious and I'm not contracted to deliver a fixed number of words. Her central thesis is that unfettered business activity is not a sign of a civilised society. And of course that's true, but it's a straw man, for her opponents do not argue for abolition of all business regulation.

Indeed, as Martin Wolf suggests in his more austere FT piece (subscribers only), it is not an all or nothing issue, but a matter of the increasing number of regulations, the straws that strain the camel's back.

For the sake of his argument Wolf assumes that each new regulation may in itself be desirable - though this is not so. Wolf is less interested in the detail, so let us put to one side nonsenses like the REACH and RoHS directives. But he argues that it is the sheer speed of introduction of new regulations which is a danger signal.

The problem with this mature shape of argument is that it deals in shades of grey rather than Toynbee's black and white. It's hard to deliver a killer argument that this particular shade of grey is markedly worse than that slightly lighter shade. And the argument relies on a basic understanding of how businesses, institutions and the economy actually work. To Toynbee all this is a black box, so you don't have to consider the effect of bringing in 50 new business regulations on 1 October.

It's not only small business which has problems keeping up. Yesterday'