Changing the Face of Business in the EU

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Changing the Face of Business in the EU

Taking an axe to EU red tape will free firms to drive growth and create jobs. Members of the business task force explain their proposal to rid the 28-nation bloc of unecessary red tape.

With the economic recovery across Europe in its infancy, it has become even more important for governments to tackle the many ways in which unnecessary regulation impedes hard-pressed firms, slows growth and makes us less competitive globally.

As European business leaders, we know how EU red tape holds us back and suffocates our potential.

Pointless, poorly-understood and burdensome rules consume our time when we could be devising new products, securing new customers and expanding. This has the biggest impact on the smallest companies, which creates 80% of all new jobs in Europe.

For this very reason, Glenn accepted the Prime Minister’s challenge: to identify what EU red tape to cut to get the EU working for business, not against it.

Today, Glenn amongst the 5 other representatives will present to the Cabinet 30 specific proposals to remove unnecessary EU rules. Practical action will save European businesses tens of billions of euros – freeing up potential for innovation, growth and job creation.

There are two clear priorities. First, to sweep away barriers in five important areas in the lifetime of a business – from starting out and hiring staff; to exporting; expanding; developing new products; and overall competitiveness.

Second, to prevent unnecessary legislation in the future by getting EU lawmakers to put business first and follow clear principles that should be the DNA of any new laws. There are 30 areas where we think the EU should prioritise action. Doing away with EU-wide requirements for small businesses to keep written health and safety risk assessments, even if they are working in a low-risk sector would benefit at least 220,000 UK firms and save businesses across the EU an estimated €2.7 billion (£2.2 billion).

Abandoning plans to force small businesses, such as one-man gardening firms, to pay fees to register to collect and transport waste could benefit 460,000 small businesses in the UK.

The European Commission should simplify employment law, abandoning plans to compel restructuring firms to pay for the retraining of redundant staff and to introduce complex new rules on employee consultation and subcontracting. It should exempt micro-enterprises from all new employment law proposals, where possible.

Creating a functioning, online single market demands abandoning unnecessary legal restrictions on cross-border e-commerce, simplifying labelling requirements and improving standards for cross-border parcel delivery. Firms that trade across borders face costly and confusing VAT requirements. The Commission should provide simpler and more accessible information so that businesses know they will get their money back.

And to those who argue that this is just about cutting regulation – it’s not. Some rules are needed to operate in a pan-European market, but they need to be pro-growth and pro-innovation.

For example, new rules to make credit and debit card [fees] fairer and more transparent would be welcomed, making it easier for retailers to know what they’re paying. It’s critical to address interchange fees now so there’s a fairer payments platform on which to build a European digital single market.

The business task force proposes a new set of “compete” principles to ensure that all new legislation is rigorously assessed to ensure that it is pro-growth. No new regulation would be accepted unless cuts of equivalent or greater value can be implemented, as pioneered in the UK with our “one-in, two-out” rule.

There are signs the Commission is moving in a more pro-business direction, promising to jettison obsolete or counterproductive legislation. If it is serious about a business-led recovery, it must turn those commitments into action.

At the European Council next week, European leaders must send a clear message to the Commission to listen to business and to go further and faster to reduce the burden of EU regulation and drive private sector growth. It’s time to take the brakes off the single market and make it deliver for business.

The Business Task force is comprised of Marc Bolland, chief executive of Marks & Spencer, Ian Cheshire, CEO of Kingfisher, Glenn Cooper, MD of ATG Access, Louise Makin, boss of BTG, and Dale Murray, CBE.