By Daniel Hunter
Prime Minister David Cameron has today (Tuesday) welcomed radical business-led proposals to cut back EU regulation and to unleash the potential of the EU single market, helping European businesses to thrive in the global race.
Thirty recommendations, drawn up by a task force comprising six heavy-hitters from the UK business community appointed by the Prime Minister, were presented to Cabinet this morning. They have consulted over 100 business voices across Europe and drawn on over 250 ideas for EU reforms.
The task force’s report, ‘Cut EU red tape’, sets out how the EU could promote enterprise and boost growth by sweeping away poorly understood and burdensome rules and preventing similarly pointless legislation in the future.
Welcoming the report, Prime Minister David Cameron said: “It’s vital that business can take full advantage of the EU’s single market. But all too often EU rules are a handicap for firms, hampering their efforts to succeed in the global race. Business people, particularly owners of small firms, are forced to spend too much time complying with pointless, burdensome and costly regulations and that means less time developing a new product, winning contracts or hiring young recruits. I’m determined to change that and to get the EU working for business, not against it.
“That’s why I got this Taskforce together, so we could establish from business what they really need. This report makes clear that there are lots of simple and practical ways to cut EU red tape and save businesses across Europe tens of billions of euros.
“We must now persuade our European partners and the European Commission to listen to business and to move faster to reform the way Europe regulates. At next week’s European Council, I’ll be calling for a clear commitment to sweep away unnecessary bureaucratic barriers and to unleash private sector growth - helping to secure the economic recovery for all.”
The group focused on barriers to growth in five areas of business activity - from starting out, to exporting, to expanding, to developing new products, to overall competitiveness.
Proposals to cut EU red tape include:
- Scrapping EU-wide requirements for small businesses in low-risk sectors to keep written health and safety risk assessments. These record-keeping requirements cost businesses time and money. This would benefit at least 220,000 UK small businesses and save businesses across the EU an estimated €2.7 billion.
- Reforming employment law where it prevents firms from creating jobs, and abandoning plans to introduce complex new rules on employee consultation and subcontracting.
- Exempting micro-enterprises from all new employment law proposals where possible.
- Abandoning plans to force small businesses such as one-man gardening firms and carpenters to pay fees to register to collect and transport waste, even when the materials involved are harmless and the quantities small. Abolishing these rules could benefit 460,000 small businesses in the UK and many more across Europe.
- Taking urgent action to simplify costly and complex chemicals regulation, which threatens the competiveness of hundreds of small firms.
- Boosting e-commerce, including by simplifying labelling requirements and improving standards for cross-border parcel delivery.
Further proposals for EU measures to support growth include:
- Rapid agreement of faster approval processes for the pharmaceuticals industry through the new clinical trials regulation.
- Fast-tracking measures to set a maximum cap on the fees that could be applied to card, internet and mobile payments, thus reducing costs for retailers and SMEs and through them for consumers, providing a clear, comprehensive framework to cover card, internet and mobile payments.
The report also proposes a new set of ‘Compete’ principles to ensure that all new EU legislation is rigorously assessed to ensure that it is pro-growth. This would include not accepting any new regulation unless cuts in costs to business of equivalent or greater value can be implemented, as pioneered by the UK government’s ‘One-in, One-out’ and ‘One-in, Two-out’ rules.
The work of the task force will inform the government’s work to reform the EU to make it more competitive. It will also help shape longer-term thinking about the impact of EU regulation on growth in the UK.
The six business leaders were appointed by the Prime Minister in July as part of the government’s drive to cut bureaucracy and promote growth. They are:
- Marc Bolland, Chief Executive M&S
- Ian Cheshire, CEO Kingfisher
- Glenn Cooper, Managing Director, ATG Access
- Louise Makin, CEO BTG
- Dale Murray CBE, Entrepreneur and Angel Investor
- Paul Walsh, Diageo
The group was chaired by Business Minister Michael Fallon.
Michael Fallon said: “Unnecessary interference from Brussels still restricts the creation of new jobs, slows growth and makes Europe less competitive globally. By adopting the common-sense measures set out today, the EU can send a clear signal that it is on the side of the hard-working businesses that will drive and sustain economic recovery.”
Dale Murray said: "Small businesses are disproportionately impacted by red tape. It's disheartening to see a business tied up trying to comply with pointless rules. All businesses want to focus on the real work of selling more products, making their operations more efficient and employing more people."
"Bureaucracy is inversely correlated with innovation. By removing red tape, we can free business up to create more products, more growth and more jobs."
Glenn Cooper said: "I am excited by our report’s proposals, particularly the way in which we’ve drawn on great experience to get to the real issues of solid improvement to EU regulations. Our report sets out in plain language what needs to be done, to ensure EU business can "COMPETE" globally. I am determined to see these changes through, and do all in my power to support this. Business needs to be dynamic and proactive, not stifled with over regulation.”
Paul Walsh said: “I urge the EU Commission and European governments to implement these proposals, which will help free up British and European business to grow and compete more strongly in the global economy.”
Louise Makin said: “It is vital for our economic growth that European regulations do not hinder business but instead help us achieve success by providing incentives for innovation and support our ability to access new markets. I hope that the European Commission will consider all of these recommendations as a priority and implement them as soon as possible.”
Ian Cheshire said: “We need to consolidate the single market if Europe is to compete globally. European rules start with good ideas but can lose their way when they are implemented. This can have unintended and damaging consequences for business and growth. When you have a vast footprint in Europe, and if you're trading across multiple EU borders, smooth implementation and certainty of a level playing field is what is needed.”
Marc Bolland said: “With this report we’ve been seeking the broad voice of business, in particular focused on SMEs, to maximise growth opportunities”.
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