COMMUNITY LISBON PROGRAMME: TRANSFER OF
Letter from the Chairman to Rt Hon Alun
Michael MP, Minister of State for Industry and the Regions, Department
of Trade and Industry
Thank you very much for Explanatory Memorandum
7721/06 on the transfer of businesses when their owners die or
retire. This was considered by Sub-Committee A at their meeting
on 13 June and was cleared from scrutiny.
The Committee have taken an active interest in the
Lisbon Agenda for Growth and Jobs and consider Commission documents
of this nature to be important in helping to promote best practice
across Member States. To this end, and given your acknowledgement
that "more could be done to further facilitate the successful
transfer of viable, small businesses" what steps have the
Government taken to assess the policies of other Member States
for their benefits vis a" vis those in the UK?
14 June 2006
Letter from Rt Hon Margaret Hodge MP,
Minister of State for Industry and the Regions, Department of
Trade and Industry to the Chairman
Thank you for your letter of 14 June to Alun
Michael, about the Explanatory Memorandum (EM) 7721/06 regarding
the Commission of the European Communities Communication on business
transfer. I am replying as this matter falls within my portfolio.
I am grateful to the Select Committee for clearing
the EM and note its request for information on the steps the Government
has taken to assess the benefits of business transfer policies
of other Member States.
As indicated in the EM, in an effort to ensure
a smooth succession of business ownership, the Government's 2004
"Passing the Baton" report sought to assist the business
transfer process by identifying the nature, extent and impact
of succession problems affecting businesses and made recommendations
for future action. The report was underpinned by research into
the international evidence on business transfer issues, both in
Europe and beyond.
Subsequently, the Government has been working
with stakeholders in taking forward the report's recommendations.
In the EU fora, the UK has actively participated on a number of
Expert Groups concerned with the business transfer agenda, particularly
that for buying and selling businesses. Specifically, the UK has
been reviewing the research that led to policy intervention in
other Member States and any evidence that established the value
of those interventions. We have found that Austria, the Netherlands
and Sweden, with the UK, lead in terms of quality of their research
and evidence on this subject. Other countries have tried specific
policy interventions with a more limited evidence base, but the
resulting interventions rarely demonstrated significant positive
effects. The UK is however continuing dialogue with the more "evidence-based"
Member States in order to constantly improve and refine policy
direction in this area. Moreover, further detailed UK research
on the workings of markets for buying and selling is due shortly.
We will be sharing and discussing the implications of this research
with EU colleagues.
Through existing and future research, the UK
is benefiting from broader learning that has taken place on business
transfer across Europe and beyond and is using it to shape UK
business transfer policy and developments. We hope that this policy
will pave the way for a more vibrant business transfer market;
with sellers rewarded for their efforts, buyers owning a business
that has a customer base and trading history and the UK benefiting
through a further boost to productivity.
1 July 2006