THE Government’s red-tape czar yesterday called on the European Union to improve its business regulation or face long-term economic decline.

David Arculus, the chairman of the Better Regulation Task Force, said that the new European Commission represented “the best chance of change that Europe has ever had”.

The policies that the Government had pursued to lower the burden on business should be spread across the EU, although that might mean hiring more bureaucrats in Brussels, he told a conference organised by the Institute for Economic Affairs in London.

Mr Arculus, who is also chairman of mmO2 and Severn Trent, called for “high-quality impact assessments” on all EU proposals. New EU legislation should be easier to amend and there should be mandatory consideration of alternatives to legislation, he said.

He called for an independent organisation to monitor and audit red tape and said: “There need to be sufficient Commission civil servants to carry out these functions and to progress the simplification agenda.”

He told the conference: “Where the Better Regulation Task Force leads, I hope others will follow. Otherwise the EU will face serious problems of the relevance and effectiveness of its regulation, which I don’t think will benefit its citizens or its future.”

Asked what would happen if red tape continued to grow, Mr Arculus said: “I think the consequences for Europe are extremely serious.”

Europe’s economy could decline to half the size of the US over the next 20 years if the tide of regulation was not stemmed, he said.

The new European Commission, including commissioners such as Peter Mandelson and Günter Verheugen, was more receptive to the need to tackle the regulatory burden than previous administrations, he said.

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