Memorandum by Federation of Small Businesses
(FSB)
The Federation of Small Businesses (FSB) welcomes
the opportunity to respond to this call for evidence. The FSB
is the UK's leading non-party political lobbying group for UK
small businesses existing to promote and protect the interests
of all who own and/or manage their own businesses. With over 200,000
members, the FSB is also the largest organisation representing
small and medium sized businesses in the UK.
SUMMARY OF
KEY AREAS
OF INTEREST
TO FSB MEMBERS
— European Commission Communication
on Future Single Market Policy.
— European Commission Communication
on the implementation and enforcement of EC environmental legislation.
— European Commission mid-term review
of both industrial policy and the modern SME policy.
— Follow-up to the European Commission
Green Paper on the Evolution of Labour Law.
— European Commission's Better Regulation
measures.
— European Commission Proposal for
a Regulation on Enhancing Supply Chain Security (not included
in Commission's 2007 Work Programme).
COMMENTS OF
A GENERAL
NATURE
1. The FSB welcomes the European Commission's
Annual Legislative and Work Programme for 2007. In particular,
we appreciate. the Commission's commitment to producing an improved
and more focused programme for 2007. We hope that this will facilitate
greater inter-institutional cooperation, particularly in the area
of Better Regulation.
2. The FSB is encouraged by the decrease
in legislative proposals and is pleased that the European Commission
is heeding the advice of business organisations that Better Regulation
ultimately means less regulation. The FSB's response to specific
Better Regulation proposals is outlines below.
3. However, the FSB questions the Commission's
commitment to become more accountable, transparent and effective
as stated in the 2007 Work Programme. Whilst this might be the
overall intention of the European Commission, the FSB has found
from past experience that previous work programmes have failed
to mention highly controversial proposals for legislation. More
details of this are given below.
COMMENTS OF
A SPECIFIC
NATURE
4. The FSB contributed to the European Commission's
Public Consultation and Hearing on Future Single Market Policy
and we look forward to the Commission's forthcoming Communication.
It is the FSB's belief that the benefits of the Single Market
project have not yet filtered through to the small business community.
The FSB campaigned actively for the adoption of the Services Directive
and now sits on the UK government committee overseeing the transposition
of this Directive in the UK. However, we believe that more can
be done to extend the benefits of the Single Market to small businesses.
5. Therefore, we would like to see the Commission's
Communication deal with the issue of gold-plating, which can generate
disparities and unfair competition across the EU. The Commission
should promote the use of "correlation tables" to make
the implementation of EU rules by member states transparent.
6. Secondly, the Commission needs to make
serious efforts to rationalise the bodies and agencies that assist
businesses to access the Single Market, and where necessary report
unfair practices that contravene Single Market rules. Greater
emphasis must be put on coordinating SOLVIT, Innovation Relay
Centres, Euro Info Centres and other agencies as well as promoting
their existence to the small business community.
7. The FSB believes that the Commission's
Communication on the implementation and enforcement of EC environmental
legislation could have a significant impact on its members.
8. The FSB waits with interest to see what
will result from the Commission's mid-term review of both industrial
policy and the modern SME policy. We hope that the Commission's
greater emphasis on policies that generate employment will be
reflected by an increased commitment to place SMEs and the centre
of this initiative. It is a widely accepted fact that if every
small business in the EU created one more job, unemployment would
be eradicated. However, this has not always been reflected in
concrete actions to make it easier for SMEs to set-up, survive
and prosper.
9. The FSB has cautiously welcomed the European
Commission's Green Paper on the Evolution of Labour Law and it
looks forward to contributing to the public consultation that
will culminate in a Commission Communication.
10. The FSB believes that the Commission's
Green Paper asks some very pertinent questions regarding the extent
to which existing regulations hinder enterprises and productivity.
We are also pleased that consideration is to be given to reforming
the organization of working time to provide greater flexibility
for both employers and employees.
11. These questions are central to solving
Europe's unemployment crisis, as well as boosting innovation.
Economies in the 21st Century are driven by SMEs, which today
represent Europe's main job creators and innovators. The FSB will
seek to put the interests of SMEs and their employees at the heart
of the debate about the evolution of labour law.
12. However, the FSB is concerned that the
Commission's Green Paper may result in a reassessment of the concept
of self-employment. Attempts to re-define and regulate self-employment
could lead to a disincentive to entrepreneurs and ultimately result
in fewer business start-ups.
13. The FSB is also concerned by the reference
in the Green Paper to a "floor of rights" for the working
conditions of all workers regardless of the form of their work
contract. Whilst this sound relatively innocuous, experience shows
that this could result in a raft of unnecessary social legislation
that ultimately prevents small businesses from employing more
staff and growing their businesses.
14. Finally, the FSB welcomes the prominence
that the Commission's Work Programme gives to the issue of Better
Regulation. Furthermore, we welcome acknowledgement elsewhere
by the Commission that EU legislation costs the business community
€600 billion every year.
15. The Commission has set itself a massive
task in simplifying, codifying and screening legislation and legislative
proposals. Furthermore, its ongoing commitment to conducting impact
assessments is to be welcomed. However, the FSB is concerned that
without an independent audit of impact assessments it will be
difficult to maintain their quality.
16. It is clear that Better Regulation underpins
that Commission's 2007 Work Programme. Unfortunately, the Commission
cannot deliver the intended benefits of Better Regulation without
the cooperation of Council and Parliament.
17. For this reason, the FSB is calling
on the European Council to adopt the Commission's proposal to
set a target to cut the burden of regulation for businesses at
EU and national level by 25 per cent by 2012. Furthermore, we
would like to see all unresolved legal proposals annulled at the
end of each European Parliamentary term, in addition to deadlines
being set on Parliament and Council for simplifying existing regulations.
PROPOSALS NOT
INCLUDED IN
THE EUROPEAN
COMMISSION'S
WORK PROGRAMME
18. Whilst the FSB welcomes the direction
and much of the content of the Commission's 2007 Work Programme,
we remain very concerned that it does not include all important
legislative proposals. In particular, the European Commission's
Proposal for a Regulation on Enhancing Supply Chain Security (27/02/2006
COM (2006), 79), which has not featured in previous Commission
work programmes and does not feature in the Commission's programme
for 2007.
19. This Proposal could potentially affect
any business operating in a supply chain and could, according
to the European Commission, cost an average medium sized business
an extra €131,000 per annum in running costs. For a proposal
of this magnitude to be omitted from the Commission's work programme
leads the FSB to question the Commission's commitment to Better
Regulation.
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