FSB Warns That EU Services Directive May Increase Regulatory Burden On Businesses

by Robin Pilgrim, LawAndTax-News.com, London

04 March 2005

In written evidence submitted to the House of Lords Select Committee on the European Union on Wednesday, the UK's Federation of Small Businesses warned that the EC's plans to improve internal trade in the EU are in danger of backfiring.

Speaking with regard to the proposed directive on services in the internal market, which aims to reduce administrative burdens and to simplify the process of starting up a new company in another member state, the FSB suggested that there is a risk that the directive will inadvertently add to the regulatory or financial burdens of small companies.

Giving one potential example, the Federation cited a proposal which calls on member states to ensure that the recipient of goods receives information on consumer protection, and expressed concern that member states will pass this burden on to businesses.

FSB European Affairs Chairman Tina Sommer went on to explain that:

“UK small businesses struggle to enter new European markets because EU Laws are drawn up unevenly and inconsistently throughout the member states. Only about 1% of small businesses consider the EU or other export markets as being their main customers and markets."

She added:

“Small businesses would welcome any moves to reduce the red tape differential and facilitate trade in services within the EU. But there is a danger that the services directive proposed by the European Commission will backfire creating a whole new layer of red tape as it attempts to harmonise regulations in certain sectors.”

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