Enterprise needs liberalism but are the Liberal Democrats liberal?

The Liberal Democrats should be applauded for focusing on business in their new policy paper, Enterprise in a fair society. In the context of the current economic crisis, the document reminds us that businesses produce the wealth that not only raises living standards, but also funds health, education and so on – a lesson arguably ignored by New Labour as they burdened firms with more and more taxation and red tape.

There are some excellent ideas. Of particular note is a proposal to incorporate a sunset clause into each new business regulation so that it is time limited. This could be an effective measure to rein back new rules that often prove costly and counterproductive.

Yet there is a problem here – that the majority of new regulation in the UK comes from Brussels. In this context the commitment to end the ‘gold plating’ of legislation from the EU is very welcome. Nevertheless, it is difficult to see how the sunset clause could be applied to directives set at supranational level. And while greater influence is sought over European policies, the experience of the current europhile government does not augur well in terms of the ability to prevent highly damaging EU initiatives.

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