CHAPTER 8: CONFIDENCE BUILDING MEASURES
AND SURVEILLANCE |
166. Clearly, for some people, or in some circumstances,
choosing a supplier who comes from another Member State will be
a matter of concern. Just as with any new choice, for example
choosing a new domestic electricity supplier in the circumstance
where you have never previously had that choice (or never exercised
it), consumers may be wary. A few scare stories in the press may
be enough to dissuade others from trying out new suppliers in
this way. The same may well operate for businesses also (as in
the famous adage "No one ever got fired for choosing IBM").
Unnecessary caution could stifle the growth in cross-border supply
167. It should also be borne in mind that no-one
will be forced to buy services from a business established in
another Member State but providing its services on a temporary
basis in another Member State. It will be a matter of consumer
choice for the consumer. Such service providers will inevitably
have to work harder to persuade customers that it offers a good
quality, reliable service and value for money. Critics of the
draft Directive sometimes appear to give neither consumers or
service providers too much credit for rational behaviour and enterprise.
168. Problems might arise in the area of poor
work, or inadequate safety procedures or even simple lack of knowledge.
What does the draft Directive propose in order to address such
169. Article 26 deals with information provision
to service recipients. Member States are charged with making information
available on name, address, registration and authorisation particulars,
professional titles, VAT registration, etc. The information may
be supplied by the provider, or through other means. The Member
State is also required to ensure that some details, such as service
features, price, etc are also supplied. Articles 27 and 28 relate
to professional insurance, guarantees and after-sales guarantees.
Where particular risks to health or safety arise, Member States
are required to ensure that providers are covered by professional
170. As regards quality, "Member States
take accompanying measures to encourage providers
to take action on a voluntary basis in order to ensure the quality
of service provision
" (Article 31). Member States
are also enjoined to give each other mutual assistance in respect
of points of contact, speedy supply of requested information,
confirmation that a supplier is established and exercising its
activities in a lawful manner, etc. (Article 35). In particular
it should be noted that Member States are responsible for supervising
their suppliers who are operating temporarily in another Member
State under the Country of Origin Principle.
171. Nevertheless, significant concerns remain.
In evidence, whilst some welcomed the idea of "single points
of contact", several were concerned that the proposal would
become an additional tier of bureaucracy, complicating the administrative
procedures. There was significant concern that there would be
no, or inadequate, supervision of enterprises operating in another
Member State on a temporary basis, and further that this would
have an impact upon high quality suppliers who would be tarred
with the brush of "cowboy" operators.
172. We put these concerns to the Minister. We
asked "how you currently think the Mutual Assistance Framework
would work". The Minister's response emphasised the preliminary
nature of the Commission's thinking on this subject, along with
the need to ensure that any solution did not lead to more bureaucracy.
He also pointed to the SOLVIT tool,
something raised by others, in particular Mr Harbour (Q 424) in
discussion. The Minister asserted that "the information necessary
[for provision of Mutual Assistance by the UK] largely exists
within the Government or regulatory sphere
" (DTI supplementary
173. We further enquired as to how the UK Government
would know whether and when a UK-established business is undertaking
"temporary" activities in another Member State. The
evidence that we received on this point was not sufficiently specific
to allow us to understand fully how the UK Government planned
to address this issue (DTI supplementary written evidence).
174. The United Kingdom may be less prepared
in this area than other Member States, by nature of the general
business surveillance regime. In Member States where there is
considerable regulation of service activity and providers, regulatory
authorities are likely to have a clear picture of the set of providers
and some further information about, or at least indicators of,
their competency. In such Member States, the problem may be more
the consolidation and simplification of this information where
it is requested in different ways across various levels of bureaucracy
(central, local, etc), so as to comply with the "single point
of contact" requirement.
175. In the United Kingdom, for better or worse,
a less regulated regime operates. No Governmental body (we believe)
keeps a list of hairdressers or plumbers, for example.
If this is so, a response coming from another Member State as
to a particular operator engaging in hairdressing there on a temporary
basis may find limited information is forthcoming from the Single
Point of Contact or from a mutual assistance provision (the DTI?)
in the UK. Much depends upon how these matters are organised and
much will need to be done to support UK SMEs seeking to export
their services within the EU. We are doubtful that the changes
the United Kingdom may need to make in registering or providing
information on service businesses that wish to trade in other
Member States on a temporary basis has been fully grasped.
176. More generally, it is clear to us that the
mechanism of Mutual Assistance at present lacks an incentive structure
on Member States that would make it work effectively and swiftly.
If the Service Directive is to have an impact, it is necessary
that greater attention is paid to these important issues of confidence-building.
177. In this respect, we welcome the concern
of the Committee on the Internal Market and Consumer Protection
of the European Market (e.g. Recital 38) to ensure that adequate
supervision of service providers is effected. However, we are
at the same time anxious to avoid issues of over-regulation and
of possible bias against providers from another Member State.
Therefore, it is not clear to us that their proposed solution
of supervision by the country of destination is necessarily the
178. More generally, we view this area as one
of the rather under-explored aspects of the draft Directive.
47 http://europa.eu.int/solvit/site/index_en.htm Back
Of course, CORGI has a list of plumbers authorised to do gas-fitting.
But there are many non-CORGI providers of plumbing services. Back