Britannia Radio

8 April 2009 Commission Changes Its Mind on Cost/Benefit Analysis Shortly after I became a member of the European Parliament I asked why the EU did not carry out cost/benefit analyses of their proposed changes in the law governing (now) 27 countries. This perfectly logical question elicited the astonishing answer that the Commission did not undertake cost/benefit analyses on proposed legislation because costs varied so much between one country and another! However, it seems now the commission is pretending to change its tune. WRITTEN QUESTION E-1062/09 by Ashley Mote (NI) to the Commission   Subject:  Cost of compliance   Does the Commission think that the cost to the British economy of implementing new EU regulations and directives over the last 10 years has been value for money?   The think-tank Open Europe has estimated the cost at £107 billion sterling, far more than the UK's gross contribution to the EU budget over the same period.   How do these figures compare with the cost of compliance in, say, France, which chooses to be far more selective about applying EU regulations and directives?     E-1062/09EN Answer given by Mr Barroso on behalf of the Commission (23.03.2009)   Whenever the Commission comes forward with a proposal for legislation, it does so on the basis that the envisaged benefits outweigh the expected costs. Since 2003 the Commission has been carrying out impact assessments to inform the development of its major initiatives and then publishing these alongside proposals, demonstrating to the wider public that the benefits do indeed outweigh the costs, and that the proposed action does add value to the EU as a whole.   The recent report by Open Europe about the costs of EU legislation is based on 2000 British impact assessments from the past 10 years on national legislation implementing EU law. Open Europe has added up all the expected costs cited in these impact assessments, but ignored the benefits (which in many cases the same players will enjoy). That makes its findings about the impact of EU legislation one-sided and unbalanced.   This is not the place to go into details about the methodology that Open Europe used for its report, about which many questions could be asked. What is clear however is that the number of EU legal acts which according to the report was adopted includes not only wholly new acts but also acts which are modifying existing legislation. It also includes Commission Decisions relating for instance to agreements with third countries and to expenditure on Structural Funds, agriculture, and research, which have nothing to do with the cost of regulation for companies. Furthermore it should be noted that although it is informative to monetise the costs of legislation for companies, these costs are very often opportunity costs rather than cash expenditure. Caution should therefore be used when relating such costs to things like the gross domestic product (GDP), tax revenues, or national contributions to the EU budget.   The Commission is not aware of any studies in other Member States which are comparable to the one that was carried out by Open Europe, and therefore cannot comment on the last question   To respond to, or comment on this Email, please email ashley.mote@btconnect.com