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Report on the Economie Law of the United Kingdom

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Report on the Economie Law of the United Kingdom Report on the Economie Law of the United Kingdom VOLUMES COMPETITION- APPROXIMATION OF LEGISLATION SERIES - 1174 20 1 A report on the economie law of the United Kingdom is a necessity: the finalization of the preceding study on economie policy from the standpoint of economie law is in effect the preparation for its completion and a more profound examination of its legal implications having regard ta the functioning of the Common Market. The report details the economie law of the United Kingdom in accordance with a certain number of broad guidelines. First of ali there exists in the current phase of the development of the Common Market a growing neccessity for the Member States ta coordinate the objectives of their economie policies and ta concert action on the instruments which may be used ta achieve them. A systematic comparative study of national economie legislations is also necessary from another importantstandpoint. Experience gained in the general field of approximation of laws has demonstrated that the differing framework provi­ sions or national economie guidelines can only be understood within the general context of national economie law and that only in this functional context it is possible ta determine the repercussions on the Common Market of the present differences. Report on the economie law of the United Kingdom by Terence Daintith Professor of public law in the University of Dundee with the assistance of Elizab~th J. C. Carstairs, LL.B., University of Edinburgh Volume 5 STUDIES Competition - Approximation of legislation Series No 20 Brussels, February 1974 Notice to reader The figures in square brackets refer to the bibliography on page 125 Foreword This report on the economie law of the United Kingdom is part of a larger study undertaken at the request-of the Commission of the European Communities by university professors who are specialists in this field. It covers the nationallaws of the Member States of the Community. Given their practical value at a time when the future of the economie and monetary union is being discussed and having regard to their great scientific significance, the separa te national reports together with the comprehensive report have been made public. Hitherto there has been no comparative study of the economie law of the Member States according to the same schema. Neither has any attempt to sythesize these laws yet been undertaken. This volume which covers United Kingdom economie law completes the volumes dealing with other economie laws and the comprehensive report. These works are to appear both in the original language and in the French and German languages. As the analysis of the ·legal situation in the Member States of the European Communities is based on common criteria and a common schema the individual expositions and the comprehensive report therefore forma coherent whole. Author's acknowledgments The author is conscious of having accumulated many debts, both intellectual and of other kinds, in the course of preparing this report. His principal debt is undoubtedly to Elizabeth Carstairs, of the Centre of European Govemmental Studies at Edinburgh University, who, as his research assistant, was responsible for researching and drafting the greater part of Chapter 5 of this report. He would aiso like to express his thanks : to the Commission 's Directorate-General of Internai Market for waiting so patiently to receive this long overdue piece of work; to his wife and family, who waited patiently to see the end of this work; to the au thors of the other reports which form part of this project, and in particular to Professer VerLoren van Theme.at as general edit or, for the guidance of their example, which has made participation in the project a splendid educational experience; to the officiais of the Department of Trade and lndustry, the Treasury, the Scottish Office and the Bank of England who responded so helpfully to his requests for information and explanation on numerous points of detail; to Alan Reid and J. Allan Stewart of the Confederation of British Industry, who read the interim version of this report in typescript and made valuable suggestions; to colleagues in the Law Faculties of Edinburgh and Dundee Urtiversities who gave him help and advice with matters falling within their particular spheres of interest; and last but far from least to Violet Hendry, Joyce Soutter and Helen Dignan, who patiently typed and re-typed it. Without this generous and effective assistance it is certain that this work would have exhibited far more and more serious faults and shortcomings than those which presently disfigure it, and which are attributable solely to the author himself. Alyth, Perthshire, February 19 74 TABLE OF CONTENTS Part one - Introduction . 9 1. Dimensions of the study . .. 11 1.1. Time . 11 1. 2. Space . .. : . 11 2. The definition of economie law . 12 3. The global objectives of United Kingdom economie policy. 13 4. Fundamentallegal principles for the organization of the economy. 13 4.1. The absence of constitutionallimitations . 13 4.2. The absence of inherent executive powers. 14 4.3. The absence of broad delegations of power by the legislature to the executive . 15 4.4. The unimportance of substantive principles . 15 5. Sourcès. 16 Part two - Analysis of economie law . 19 Chapter 1 - The legal framework of ect>nomic forecasting. 21 Chapter 2 - State intervention in the economy: Global and indirect methods . 23 2.1. 'Planning': the general framework . 23 2.2. Coordination of short-term measures . 24 2.3. Coordination of medium-term measures. 25 2.4. Global methods of control. 26 2.4.1. Budgetary policy . 26 2.4.2. Public expenditure . 27 2.4.2.1. Central govemment expenditure . 27 2.4.2.2. Local authority expenditure. 28 2.4.2.3. Public enterprise ex~nditure . 29 2.4.3. Monetary policy. 31 2. 5. Indirect instruments of policy . 3 2 2. 5 .1. Public enterprises . 3 2 2.5.2. Public contracts . 34 -5- Chapter 3 _:.._ Financial inducements provided by the State . 3.7 3 .1. Tax preferences, allowances and exemptions. 38 3.1.1. Incentives to investment . 38 3.1.2. Incentives to saving . 39 3.1.3. Incentives to the restructuring of industry . 39 3.1.4. Incentives to scientific research . 39 3.2. Direct government expenditure . 39 3.2.1. Assistance in aid of regional policy. 41 3.2.2. Assistance in aid of employment and training. 43 3.2.3. Assistance for industrial research and development. 44 3.2.4. Assistance in relation to exports . 45 3.3. Assistance to particular economie sectors . 46 3. 3 .1. Agriculture . 46 3.3.1.1. Rationalization of structure. 47 3.3 .1.2. Improvement of landholdings, equipment and production methods. 4 7 3.3.1.3. Technical and scientific services and assistance. 48 3.3.1.4. Facilitating provision of finance for agriculture . 48 3.3.2. Fisheries . 49 3.3.3. Shipbuilding. 49 3.3.4. Aerospace . 50 3.3.5. Assistance in aid of extraction and processing of minerais . 51 3.3.6. Assistance to the computer industry . 51 3. 3. 7. Assistance to the film industry . 52 3.3.8. Housing . 52 Chapter 4- 'Contrats de programmation'. 55 Chapter 5 - Regulations of general application . 57 5.1. Institutional regulation . 57 5.1.1. Comprehensive arrangements . 57 5.1.2. Specifie trades and professions . 58 5.2. Regulation related to short-term economie policy . 58 5. 2 .1. Priees and incarnes . 58 5.2.1.1. Counter-inflation policy . 58 5.2.1.2. Permanent controls over priees . 60 5.2.1.3. Permanent controls over wages. 61 5.:2.2. Control of credit. 61 5.2.2.1. Hire purchase terms control . 61 5.2.2.2. Statutory control of borrowing . 62 5.2.2.3. Control of bank lending . ..
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