EU body backs UK moves to reduce regulatory burdens on small businesses

A top EU body tasked with reducing regulatory burdens on business has today (15 October) backed a UK-led agenda to exempt smaller businesses from a raft of EU laws.

The so-called shredding spree proposals have been supported in a report published by Edmund Stoiber, the Bavarian former prime minister who chairs the EU's expert group on slashing red tape.

The report, presented by outgoing Commission President Barroso, says that small businesses can save over €35billion per year if regulatory burdens can be reduced.

It also supports calls for more rigorous impact assessments to be carried out on legislation, and for national governments to be discouraged from 'gold plating' EU legislation to make it more burdensome than intended.

Its key recommendations include setting a net target for reducing EU regulatory costs, introducing a system of offsetting new burdens on businesses stemming from EU legislation by removing existing burdens from elsewhere, and rigorously applying the 'Think Small First' principle and competitiveness test to all proposals with SMEs and micro-businesses be exempted from EU obligations as far as possible.

UK Tory MEP Dr Sajjad Karim has drafted several reports for the European Parliament on how EU law can reduce the burden on businesses – and especially entrepreneurs.

His report first set out the principle that the smallest businesses should be exempt from EU legislation unless there is a strong argument for their inclusion. He has also called for a 'one in, one out' approach to law so any new proposal is offset.

Dr Karim said: "Cutting red tape is an agenda that the commission is taking seriously. There is a long way to go but it is clear that we are making progress in ensuring that full consideration is given to the impact that EU law can have on businesses.

"EU law is often pro big business, but anti market, because it shuts out the little guy and favours the multinational corporations that have the luxury of compliance teams and banks of lawyers.

"We want entrepreneurs to devote their time to growing their businesses, taking on new staff and growing the economy. Every minute they are forced to consult a lawyer or an accountant amounts to lost productivity in the economy.

"Jean Claude Juncker's Commission must take this agenda forward in the next five years. With his Vice-President Timmermans in charge I believe we will see a real effort in the coming years to reduce the burden on business and to ensure that EU law is only in place when absolutely necessary."

However, the UK Independence Party was less impressed with the report, with its MEP Margot Parker saying: "Today’s recommendations by the EU’s High Level Group on Administrative Burdens is nothing but a gimmick, a stack of non-binding recommendations and promises with just one purpose: to convince Britain that the EU can end its compulsion to produce thousands of regulations every year."

Further reaction came from Pawel Swidlicki, a research analyst with the UK-based Open Europe think tank, who said,“This report contains many welcome proposals for cutting the burden of EU red tape on Europe’s economy, and combined with the nomination of Frans Timmermans as Commissioner for better regulation, it is clear there is a real opportunity to create a more enterprise and business-friendly single market.

"However, the challenge for the new Commission and for national governments will be to take concrete action. The fact that the Commission is resisting independent scrutiny of its cost estimates for new EU regulation suggests there is still some way to go.”

Elsewhere, Luc Hendrickx, director of enterprise policy at UEAPME, a trade association representing 12m small firms in Europe, said: “What’s the point in any legislation if you’re exempting ninety-nine per cent? It’s nonsense, a purely political declaration.”

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