John Longworth: Only through EU deregulation can we unleash the innovation Britain needs – News Block

John Longworth is a businessman and entrepreneur, Chairman of the Independence Foundation and the Independent Business Network, and a former Conservative and Brexit Party MEP.

The government’s abandonment of its earlier plan to end EU laws before the end of the year has caused considerable political consternation. This is not surprising in the context of the parliamentary process, but less so with respect to the practical benefit to business and the economy.

Sunsetting was what would become known in business as a “burning rig.” This meant that it forced action as otherwise the legislation would disappear. However, in practice, it was likely to lead to the maintenance of much of the law. With Whitehall making slow progress and ministers unwilling or unable to push through deregulation in their departments, it was unlikely to produce any significant results in practice.

So perhaps it is refreshingly pragmatic that Kemi Badenoch, the responsible Secretary of State, “bite the bullet” and opted for a different approach given the realpolitik she faced, even if that was itself the result of a failure of the ministers at all levels. .

The real test now, however, is what happens next. The removal of 600 minor and redundant rules does not constitute deregulation. For this reason, the Independent Business Network (representing family businesses – 85% of businesses in the UK are family owned or run) has produced an important report on what to do next about the deregulation of community law preserved. It sets out specific actions for significant deregulation through 100 retained EU laws and advocates for a common law framework.

Those who argue that we should align with the EU are barking up the wrong tree. Only 8 percent of companies export to the EU. It represents only 12 percent and is falling as a percentage of the economy. By contrast, 18 percent of the economy is traded with the rest of the world and a whopping 70 percent is domestic. It is in the latter where productivity growth would have a dramatic effect. Open trade will help, but removing the regulatory and tax burden is essential.

The dynamic alignment with the EU and the maintenance of existing legislation is convenient for those companies that wish to export to the EU, but a drag anchor for those that do not. It makes no sense unless it is a politically motivated policy to ease re-entry into the EU or to calm down an aggressive continental neighbor for fear of retaliation.

The idea of ​​re-entry is a chimera. Even if people mistake the sorry state of the nation in some way for Brexit, a re-entry attempt would run into the harsh realities of what it would require. Public sentiment would soon change. Meanwhile, we are missing out on massive growth opportunities through divergence. This is the worst of all worlds. The change has to come and if it is going to be done it is better that it be done quickly.

Deregulation matters. The impacts can be analyzed to death, especially by those who wish to thwart it. Removing bureaucratic burdens from companies frees up resources, improves productivity, and encourages risk-taking and investment. Through these things it facilitates growth.

This is particularly true for micro, small and medium-sized enterprises (SMEs) that have limited resources to deal with red tape and for whom the mountain of administration and bureaucracy can be overwhelming.

Only by enabling innovation, creative disruption, and entrepreneurship can growth be achieved. Economic growth is vital to the British people. It creates the wealth we need to pay for all the public services we want and supports real income growth. Without it, slowly over time, we will become a backwater unable to ensure our safety, behind in technology, unable to buy decent food, take vacations, enjoy the best medical care, or allow ourselves to stay warm.

If fully implemented, the proposed deregulation body will save billions of pounds and boost the economy. Think about this. If a measure requires a person to earn £15 an hour to implement it and they have to spend just three hours doing it per year at 4 million companies, that adds up to a cost of £180 million per year. There are hundreds of regulations, many of which cost much more time and capital investment. Furthermore, it frees up time for business and innovation, the lifeblood of our economy.

Businesses will judge the government by its actions. With thousands of staff available, it shouldn’t be impossible to jump-start a program created by a small group on behalf of their business network.