Businesses list EU red-tape threats
Published 15/10/2013 | 00:31
Business leaders across Europe are crying out for red tape to be slashed, ministers were told as a report on Brussels bureaucracy was presented to the Cabinet.
Prime Minister David Cameron said the dossier of legislation and regulations which are hampering firms would "help to shift the debate" in Europe.
The Government-commissioned report by business leaders highlighted the 30 worst threats to small firms.
The Prime Minister has sent the document to the leaders of the other EU member states ahead of a summit next week.
To underline his intent, Mr Cameron took the unusual step of inviting the authors of the report to present their findings to the weekly Cabinet meeting in Downing Street.
Entrepreneur Dale Murray told the Cabinet: "This is not just the view of British business.
"We had submissions from a lot of European businesses, as well as business organisations.
"The response has been quite fantastic."
Kingfisher boss Ian Cheshire told ministers they were "pushing at an open door" on deregulation and the UK could "construct a business alliance" urging action.
The group, which included Marks & Spencer chief executive Marc Bolland, painted a stark picture of the impact of bureaucracy, especially on smaller firms.
They said "problematic, poorly-understood and burdensome European rules" slowed production, job creation, sales and innovation and left Europe trailing international trading rivals.
Among the priorities for action in the report was tougher enforcement of the EU services directive to prevent some member states exploiting flexibility to impose "unjustifiable barriers" to trade.
It called for small businesses in low-risk sectors to be exempted from keeping written health and safety assessments and one-man gardening and carpentry outfits from having to register to transport waste.
Other targets of the report were fears of "overly strict" new rules for labelling meat with its origin of both rearing and slaughter, plans to force food firms to cover the costs of quality controls, country of origin labels for non-food products and the £300 million UK impact of new data protection rules.
Plans for extended EU-wide maternity leave rights would cost UK businesses £2.5 billion and should be halted, it suggested, and the working time directive should be made clearer on issues such as leave not being allowed to carry over and workplace "on-call" time not counting as working hours.
A proposed cap on seller fees on card, internet and mobile payments should be fast-tracked, the report concluded - and added another 66 areas of concern to its 30 priority reforms.
On top of its recommendations for immediate action, the taskforce proposed a "common sense filter" to ensure new regulation was pro-growth and could be balanced by cutting red tape elsewhere.
Mr Cameron said it was an "excellent report".
Opening the Cabinet meeting, he said: "A lot of people have spoken and written about how we need to cut EU red tape but I can't think of a report that has gone into more detail about exactly how to do it.
"The strength of the report is it has got both the principles that need to be applied in dealing with EU regulation and legislation, what needs to change, but also a whole lot of very clear, very specific examples."
In a meeting with the business representatives, he said: "I think this will really help to shift the debate."
He said people could not "run away" from the principles and practical examples set out in the report.
As well as calling for regulations to be scrapped or stopped from coming into force, the report highlighted areas where progress should be accelerated, including the single energy market and the services directive.
In a letter to fellow leaders ahead of next week's European Council meeting, Mr Cameron welcomed existing European Commission efforts to cut red tape but said there was "still much more we must do".
"I firmly believe that we need to go further and faster. And we must also put business at the heart of this debate, listening to what they need to successfully compete in the global marketplace," he wrote.
He said the report was a "useful contribution to our discussions" and said he hoped the summit would "commit to more concrete measures to get rid of the unnecessary regulation which holds our businesses, and Europe, back".
Business Minister Michael Fallon is to lead a delegation of taskforce members to Brussels ahead of the summit to discuss the report with the Commission.
"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," Mr Cameron said.
"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."
European Commission president Jose Manuel Barroso insisted it had "been listening to the concerns of businesses and other stakeholders for some time" and had already significantly reduced red tape.
"In the last five years, the European Commission has slashed the cost of administrative burdens by 32.3 billion euros (£27.4 billion) and scrapped 5,590 legal acts," he said.
"And we are determined to go further.
"Common rules are essential to make the single market work properly but I also want to make sure that the EU does not meddle where it should not and member states do not add additional burdens.
"This month we will present a new standard VAT declaration to reduce the burden for SMEs (small and medium-sized enterprises). We are pushing to simplify procurement rules. By the end of 2014, the Commission will have completed 47 evaluations or fitness checks on regulatory burden.
"If companies have further problems with individual pieces of legislation, the Commission will look to resolve them".
CBI chief policy director Katja Hall said: "The taskforce has made significant strides to pinpoint areas of concern for business and now the Government must champion this cause with other member states."
Steve Radley, director of policy at EEF, the manufacturers' organisation, said: "Today's report sets the agenda for the European Council that industry was seeking.
"Many of our fellow EU members are waking up to the damage that unnecessary and badly thought-out regulation can have on investment, job creation and growth. Now is the right time to build a coalition for change to make the EU work better for growth."
John Allan, national chairman of the Federation of Small Businesses, welcomed calls for changes to health and safety risk assessments, privacy laws and new environmental regulations.
"These are areas that impact adversely on small firms and which FSB members have expressed deep concerns about," he said.
"We now urge the Prime Minister to work with allies in Europe to make the case for change and to support these firms in their efforts to create jobs and prosperity."
Peter Wilding, director of British Influence, said the report was a "significant step in the right direction".
"The Government should take this report forward now to champion a better regulation agenda by building alliances for reforms at EU level."
Matthew Elliott, chief executive of Business for Britain, said the report was "a very useful start" and called for the taskforce - or another body - to continue the work.