11 Statistics
| (27316)
6715/06
COM(06) 66
| Draft Regulation concerning structural business statistics
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| Legal base | Article 285(1) EC; co-decision; QMV
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| Document originated | 20 February 2006
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| Deposited in Parliament | 28 February 2006
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| Department | Office for National Statistics
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| Basis of consideration | EM of 16 March 2006
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information awaited
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Background
11.1 Regulation (EC, Euratom) No. 58/97 sets a framework for Community
statistics on the structure, activity, competitiveness and performance
of businesses. The Regulation has since been amended four times.
The document
11.2 The draft Regulation is to consolidate the existing Regulations
and to make a number of amendments to the regime. These amendments
are:
- changes to the four annexes, dealing respectively with a common
module for all businesses, with industry, with the distributive
trades and with construction, so as to increase the extent to
which service activities are covered by these statistics and to
reduce the frequency of collection for some variables —
typically from annually to once every four or five years. (The
annexes on pensions, credit institutions and insurance are unchanged);
- a new annex on business demography — the
births and deaths of businesses;
- a new annex on business services (which include
computer, legal, accountancy, consultancy, architectural and engineering
services) requiring information on the products or services sold
, and on the residence of the client — within the Member
State, elsewhere in the Community, or outside the Community;
- a new flexible module for the conduct of a small
ad hoc data collection of enterprise characteristics. This
is in response to criticism that from time to time data collection
has not kept up with changes in business; and
- provision for extension of coverage to include
the financial intermediation sector.
The Government's view
11.3 The thrust of the Financial Secretary to the
Treasury (John Healey)'s Explanatory Memorandum implies that Government
is not opposed to this proposal. On the detail of the draft Regulation
the Minister tells us that:
- in relation to the amended
common module annex, there will be little effect for the Government,
which for some time has required most of this information for
its own purposes;
- the information for the new annex on business
demography can be met by the Government from its business register,
without any additional burden on the firms concerned;
- the new annex on business services will require
data not presently collected in the UK. The Government recognises
that, with the growing importance of services, more information
on this sector will be necessary, but it will be seeking to ensure
that the burden to business is proportionate;
- the financial intermediation sector is not now
covered in the Government's annual business inquiry and work is
needed to ensure that definitions are appropriate to this sector's
activities; and
- although the proposal would require the provision
of less data than at present the Government will want to consider
whether the need for this information is such that collection
of it should continue in the UK.
11.4 The Minister tells us that there may be extra
costs for businesses covered by the new requirements on financial
and business services. In view of the importance of financial
services the Government regards any extra burden as a justifiable
compliance cost. As for other compliance costs these are unknown
at present. But the Minister points out that, except for business
services and in relation to the ad hoc module, they will
be offset by lessened requirements for many businesses and he
asserts "that the net effect of the changes is broadly zero".
11.5 The Minister also says, in relation to subsidiarity,
that the Commission claims this matter is within the exclusive
competence of the Community. The Government is taking legal advice
on the practical consequences of this before deciding its view
on the point.
Conclusion
11.6 Whilst acknowledging the utility of clarifying
the existing legislation on structural business statistics and
the case for extending its coverage, before considering the proposal
further we should like to:
- have an explicit statement
on the Government's support, or otherwise, for the proposal;
- hear of progress in ensuring that the business
services requirements are proportionate and that definitions in
relation to the financial mediation sector are appropriate;
- know about the Government's consultations
with UK business interests about the proposal, particularly in
relation to compliance costs; and
- hear of the outcome on the subsidiarity point
the Minister mentions.
11.7 Meanwhile we do not clear the document.
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