Lobby group smallbusiness|europe looks back at the European Union's business-related activities during 2005 and forward to what's to come in 2006.
The sobering findings of the 2000-2010 Lisbon Strategy mid-term review early in the year formed the backdrop to the EU institutions' work during 2005. It also provided the catalyst for a refocusing of the policy agenda onto the creation of jobs and growth. Now, at the turn of the year, it is worth looking back at specific EU policy developments during 2005 and those that lie ahead in 2006 to assess whether such broad, pro-business brush strokes bear closer scrutiny.
The commission introduced several regulatory reform initiatives during 2005 that are essential to creating jobs and growth, notably the revised impact assessment guidelines, the latest exercise to simplify existing legislation and the withdrawal of a number of obsolete or inappropriate pending proposals. However, a considerable culture change across the executive's services is still required if these commendable developments are to have an effect on the institution’s day-to-day operations.
The Presidency of the EU was held first by Luxembourg and then the UK during 2005. The first half of the year was dominated by the national referenda on the draft EU constitutional treaty, which scuppered attempts by Luxembourg to secure agreement on the EU budget. The UK's term was launched in a blaze of publicity following a dynamic performance by Prime Minister Blair in the European Parliament in June. Subsequent delivery during the presidency has been hindered by the fallout from the Dutch and French 'no' votes, the German election saga and the ongoing dispute over the budget and many observers believe that the UK has missed an opportunity to oversee much needed reform.
However, in mid-December, the Council succeeded in reaching a political agreement on one of the most complex and contentious pieces of EU legislation ever, the REACh chemicals legislation. Despite improvements for SMEs, particularly in the registration phase, some concessions were made to environmental groups. UK SMEs will now look towards the council to improve those parts of the proposal which, in their current form, could prove problematic.
Meanwhile, the European Parliament’s Internal Market & Consumer Protection Committee made progress on the Services Directive, a cornerstone of the Lisbon Strategy. After lengthy debate, the committee refrained from significant amendments to the underlying principals behind the commission's proposal. UK SMEs will be working hard to ensure a similar outcome at plenary in early 2006. More generally in 2006, the SME community will be seeking evidence that the positive commission reforms to the regulatory process are being translated into more business-friendly outcomes. The commission's annual work programme is slimmer than in recent years. One of the key items for the UK SME community will in fact be a non-legislative initiative: a green paper consultation on the evolution of labour law. Other entries in the work programme that are of relevance to SMEs include public procurement, access to finance and health & safety at work.
Beyond the work programme, the commission will continue to contribute to a number of ongoing policy proposals from recent years. Of these, the statutory review of the 1993 Working Time Directive remains of great significance to the UK SME community, for whom the crux of the issue is whether the opt-out from the 48 hour maximum average working week will be retained. The parliament voted on the commission's proposed revision in May, calling for the opt-out to be phased out. The evolution of this dossier now depends largely on the member states and the volition and stance of the Austrian and Finnish governments during their six month EU Presidencies.
Priorities for the Austrians and Finns include the single market (notably finalisation of the Services Directive), further progress on impact assessment and simplification and finalisation of the Competitiveness & Innovation Programme. The Austrian Presidency, in particular, is demonstrating a strong awareness of the views and requirements of SMEs, which augurs well.
UK SMEs will remain keen to support the work of the European Commission’s SME Envoy, Maive Rute, in ensuring that all services of the commission are systematically taking into account the small business dimension when drafting policy. The success Ms Rute enjoys in meeting this challenge is central to the development of a more enterprise friendly European policy environment and she will need constructive, ongoing input from business representatives.
Elsewhere, UK SME representatives and other stakeholders will be pressing the European Parliament and member states to convert their positive words on regulatory reform into deeds, notably by referring to impact assessments when amending commission proposals. There are some signs of improvement, but the parliament and council remain a long way behind the commission in this process.
On 10 November 2005, leading UK SME representatives travelled to Brussels for a meeting with European Commission Vice-President, Günther Verheugen. This date also marked the launch of the commission’s new SME policy communication and the message from the representatives to the vice-president was one of support for his emerging efforts to develop a more business friendly policy environment.
In 2006, the UK SME community will be working more closely than ever with EU politicians and officials to ensure that they build on these positive developments and work towards a framework that enables smaller businesses to create the jobs and growth that Europe needs.
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