As the financial markets, contrary to the scaremongering of the political and economic establishments, have already recognised, the potential economic benefits of Brexit are substantial.

The most obvious is the saving of our massive net financial contribution to the European Union. In this context I am constantly astonished to hear representatives of British universities, whom one would expect to be reasonably intelligent, bemoaning the prospective loss of EU money. There is no EU money. It is British taxpayers’ money, recycled via the EU. And since we pay into the EU budget roughly £2 for every £1 we get back, it is an appallingly costly form of recycling.

Then there is the newfound freedom to negotiate mutually beneficial trade deals with the major world economies, something that the EU has been engaged in for years – indeed, for decades – and has singularly failed to achieve.

But probably the biggest single benefit is the ability Brexit will give us to engage in a thoroughgoing programme of intelligent deregulation.

The European Union indulges in excessive regulation for three self-reinforcing reasons. In the first place, that is the nature of bureaucracies everywhere, and the European Commission is the ultimate bureaucracy. In the second place, it is an article of EU faith that “more Europe” is always desirable, and all too often “more Europe” is seen as more European regulation. And in the third place, Brussels is one of the two world centres of corporate lobbying (the other is Washington).

 There may be no single regulation that stands out as being particularly damaging, but the cumulative effect is substantial. Examples include the system of “CE” (conformité européene) marking on goods, which frequently imposes excessively burdensome standards on all EU companies, including small companies which do no business at all outside the UK. Then there is the notorious Working Time Directive, which limits the hours that employees can work, even if they wish to earn more by working longer.

This is potentially so damaging to small businesses that the UK managed to secure an opt-out from its most restrictive provisions. But the European Commission is determined to remove the UK opt-out. It has already tried to do so on two occasions, and sooner or later, were we to remain in the EU, it would succeed.

The vast and ever-growing corpus of EU regulation causes economic damage throughout the EU. But it is particularly damaging to the UK and to UK SMEs since we have in this country a more rigorous insistence on the rule of law and its implementation than is the case in many, if not most, of the EU’s member states. That is, in itself, a virtue, and should not change. But it makes the escape from the EU regulatory burden all the more important.

David Fuller's view

I assume that Lord Lawson is correct on the very important point made in his second paragraph above.  If so, it is all the more surprising that so few commentators have mentioned this throughout the Brexit discussions. 

(I emboldened the second paragraph in the article above.)

Here is a PDF of Lord Lawson’s article.