Select Committee on European Scrutiny Nineteenth Report


PROGRAMME FOR ENTERPRISE AND ENTREPRENEURSHIP


(21202)
8134/00
COM(00) 256

Commission Communication containing proposals for a Council
Decision on a Multi-Annual Programme for Enterprise and
Entrepreneurship (2001-2005).
Legal base: Article 157(3) EC; consultation; unanimity
Department: Trade and Industry
Basis of consideration: EM of 17 May 2000
Previous Committee Report: None
To be discussed in Council: 18 May 2000
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested

Background

  8.1  The Commission presents the Multiannual Programme for Enterprise and Entrepreneurship as a major instrument for achieving key goals over the next five years for a competitive and dynamic EU economy. It has identified five objectives which, it says, will translate broad policy aims into a specific programme of activity, tailored to the needs of small and medium-sized enterprises (SMEs). These objectives are targeted on those areas where the EU's enterprise policy faces its main challenges:

  • to promote entrepreneurship "as a valuable and productive life skill, based on customer orientation and a stronger culture of service";

  • to encourage a regulatory and business environment that takes account of sustainable development, and in which research, innovation and entrepreneurship can flourish;

  • to improve the financial environment for SMEs;

  • to enhance the competitiveness of SMEs in the knowledge-based economy; and

  • to ensure that business support networks and services to enterprises are provided and co-ordinated.

  8.2  The activities to be supported by the programme will include:

  • the development of policy through the identification, exchange and implementation of good practice;

  • development of a statistical and technical understanding of the needs of business;

  • information support services.

  8.3  The intention is that this programme should build on the experience of the Third Multiannual Programme for SMEs (1997-2000)[26] and the independent evaluation of it which we considered last year[27]. One of the recommendations of the evaluation was that the Business Environment Simplification Task Force (BEST) could be further developed. The Commission now proposes that it should be replaced by a more broadly-based initiative, to be called BEST Procedure. The acronym will no longer be relevant.

  8.4  The key challenges which the new programme is designed to confront are identified in the Communication as:

  • raising the profile of entrepreneurship as key to the new economy;

  • promoting an innovative business environment;

  • stimulating new business models in the e-economy;

  • getting more from the internal market;

  • cutting red tape; and

  • new methods of co-ordination: benchmarking, monitoring and concerted action.

  8.5  A radical proposal for cutting red tape, put forward in the Communication, is that there needs to be an evaluation, on the basis of experience, of the whole acquis. The Commission believes that five years is a "challenging, but broadly achievable" time to achieve this. It is not mentioned specifically in the Actions Foreseen annexed to the draft Decision.

  8.6  There are also plans to improve business impact assessment procedures. The Commission says that in the past what has been lacking has been "not intention but clout". In the United States, the Office of Management and Budget of the White House has the authority to stop legislation and to insist that a cost-benefit analysis be made, it says. It will, in future, "insist that legislative proposals can only be adopted if business impact has been properly assessed prior to launching the proposal."

  8.7  Other related initiatives on enterprise policy, on which the Commission is working, are identified in the Communication as:

  • a comprehensive eEurope Action Plan, by June 2000;

  • a benchmark exercise on entrepreneurship and innovation to be launched by June 2000, with first results presented by December 2000;

  • the European Charter for Small Enterprises, to be endorsed by June 2000; and

  • a review of EU financial instruments to redirect EU funding towards high tech start ups and other risk capital initiatives.

The Government's view

  8.8  The Minister of State for Energy and Competitiveness in Europe (the Rt. Hon. Helen Liddell) says in her EM that:

    "The Government endorses the strategic direction of the Communication and the proposal for a Council Decision. The drawing together of work on enterprise policy and Multi Annual Programme with other relevant initiatives, notably the UK-inspired Lisbon Council decision to develop a European Charter for Small Firms, is welcome. The document identifies the right strategic direction for action in Europe and makes an important link between strategic thinking and delivery of results through the Multi-Annual Programme. The Government welcomes the higher profile given to sharing best practice through benchmarking, peer review, seminars and conferences."

  8.9  The Commission says that small scale activities have had to be dropped from the programme. This is in line with its policy, following criticism from the Court of Auditors and the European Parliament, to limit its work to what it has the management capacity to handle. The Minister says that the UK supports this shift but will press the Commission for a clear statement on which of the existing measures is to be discontinued, in time for an assessment to be made before the December Industry Council of the impact of this change. It will also press the Commission to develop a more detailed plan of action.

  8.10  The Minister notes that no indications of the financial implications are given in the documents but that the Commission has undertaken to attach a financial statement to the final text.

Conclusion

  8.11  We welcome the shift in this proposal towards a more focussed programme aimed at developing and implementing policy measures and away from small scale, low-impact support measures. We somehow doubt that there will be any appetite for evaluating the acquis, but we are particularly pleased to note the Commission's declaration that it will take a firm line on impact assessments.

  8.12  Since the EM was drafted, the final text of the Communication has been issued, to which a financial statement is attached. We ask the Minister to provide us with a Supplementary EM with her views on the budget proposed, and we ask her to tell us whether she expects the draft Recommendation to be amended before Common Position. If so, we ask her to provide a further EM or a letter in due course when the text is in a final or near final state, before it is put to a Council with a view to agreeing a Common Position.

  8.13  Until we have the Minister's reply, we shall not clear this document.


26   (17124) 6141/96; see HC 51-xix (1995-96), paragraph 1 (15 May 1996). Back

27   (20319) 9739/99; see HC 34-xxix (1998-1999), paragraph 15 (27 October 1999). Back


 
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