Examination of Witnesses (Questions 336
- 339)
MONDAY 22 OCTOBER 2007
Ms Kitty Ussher, Mr Gareth Thomas, Mr Mark Paskins
and Mr Julian Farrel
Q336 Chairman: My name is
Lord Freeman, the Chairman of the Committee. We are very grateful
indeed to both Ministers, Ms Kitty Ussher MP, Economic Secretary
to the Treasury, and Mr Gareth Thomas MP, Parliamentary Under-Secretary
of State, Department for Business, Enterprise and Regulatory Reform.
It is kind of you to come and help us in our inquiry. We are intending
to try and publish a report hopefully in January after the Commission
has produced its own conclusions on the review of the workings
of the Single Market. We have been at this for almost six months
and have a few more months to go, including visiting Mr McCreevy
and we hope someone from the President's Commission office in
Brussels some time in December. We hope that we can keep these
proceedings, because you are busy ministers, to about 45 minutes.
I have asked my colleagues to ask their questions briefly and
we would appreciate a fairly brief response. Are there any opening
statements you wish to make or shall we plough straight in?
Mr Thomas: I am quite happy to go straight in.
Q337 Chairman: We will also
refer to Ms Ussher first in terms of giving a response but we
would like a response, if appropriate, from both Members to each
question. It is entirely up to you if you wish to pass one on.
We now have a European Union of 27 Member States. Is it really
feasible or practicable to expect the Single Market over the coming
years to deliver all the benefits that we have expected with a
much smaller group? Does size matter?
Mr Thomas: Perhaps I can pick the question up.
I think we can expect the Single Market to continue to deliver.
We think it has already delivered substantial benefits. Our estimates
are that some 225 billion EUR of additional wealth have been created
and some 2.75 million new jobs. We think it is right that the
review is taking place. The research we have done suggests there
are further benefits that can be secured, for example in the liberalisation
of the network industries. Some estimates we have carried out
suggest that some 95 billion EUR of additional wealth and some
360,000 additional jobs are potentially possible as a result of
full liberalisation. The Single Market is delivering but there
are additional benefits to come.
Kitty Ussher: Since BERR leads on the Single
Market our intention was that I should just come in on those questions
relating to financial services, unless you particularly wanted
to probe whether there was a wedge between us, which I can assure
there is not.
Q338 Chairman: Could you clarify,
Mr Thomas, whether the mere extension in size is causing insuperable
or difficult problems in terms of creating these benefits?
Mr Thomas: I do not think it is creating insuperable
problems. Each time the single market has been extended you add
enforcement challenges obviously for the Commission but we do
not think they are insuperable. We think the reason for the review
is not so much just around enforcement issues but also a sense
that there are further benefits to be gained from further liberalisation
measures within the Single Market, as I have described, in terms
of energy for instance but also a recognition that there are new
players internationally, China and India obviously, and we need
to continue to strengthen our markets in Europe to deal with those
other global competitors.
Q339 Lord Geddes: To an extent
my first question is a follow-up and that is to probe with you
what institutional—and I emphasise institutional—constraints
exist on delivering the Single Market. Has that been exacerbated
by the enlargement process? Depending on your answer to that,
does the Commission, in your opinion, have the right tools for
delivering the Single Market? Can it get over those institutional
constraints if there are any?
Mr Thomas: I do not think there are huge institutional
constraints. As I said in answer to Lord Freeman, when you extend
the market to new countries, as has happened, you have additional
enforcement challenges but I would not have said they are insuperable.
We want to see a strengthening of the Single Market across all
27, not just those countries to whom the Single Market has been
extended. In a sense, there is a role there for making sure that
Member States and the Commission, as well as the Parliament, are
continuing to work to the same objective. I will give one example,
if I may, to demonstrate that point and that is in the implementation
of directives where the Member States, through the Council, have
now agreed that the transposition deficit should be reduced from
1.5% to 1% in 2009 so that Member states collectively will have
to implement 99% of directives on time and the Commission will
have to monitor the extent to which that is happening. We see
that as a good thing in itself, something that will strengthen
the Single Market but obviously, as it is over a wider number
of States, there is that additional challenge as well.
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