15/10/2013 09:34 BST | Updated 14/12/2013 05:12 GMT

Cut EU Red Tape: Help Businesses Grow and Compete

In the Summer I was asked by the Prime Minister David Cameron to join a taskforce to report on what business thinks of the red tape that the European Union comes up with.

I've seen first hand how tied-up businesses can get while trying to understand how to comply with red tape, let alone cope with the actual form-filling. Most of the business owners I know just want to spend their time building their companies. Red tape can sometimes help to ensure a level playing field or protect consumers, but at its worse it is overly-complex, burdensome and unproductive.

I think red tape can be particularly problematic for small businesses - the requirements are disproportionate to the size of the company, and small companies usually don't have staff to cover all the specialist areas that the red tape rules cover.

Our taskforce asked business what they thought and we heard from over 100 organisations that showed us where the red tape wasn't working for them.

Today, my colleagues and I presented our report entitled "Cut EU Red Tape" to the Prime Minister and his Cabinet. We asked them to listen to what business has asked for and to sweep away unnecessary and onerous rules. I'll also be travelling to Brussels with Business Minister Michael Fallon to ensure that European leaders hear what British businesses have said.

This is what our report says.

First, we have come up with 30 specific recommendations where business has told us the EU needs to do better. There is something in this report for every business in every sector. Here are some of the proposals that impact small businesses in particular:

• Health and safety risk assessments are important, but the requirement to write them down is needless in a low-risk company - why waste time form-filling when it doesn't benefit anyone? Low-risk businesses should be exempt.

• We have heard consistently from businesses that they are struggling to cope with the burdens placed on them by EU employment legislation and a lack of clear guidance from the EU on how to comply. The starting presumption should be that very small businesses are exempt from all EU employment legislation or, where this is not advisable, special provisions should be made for them to have a regime that helps them comply in a manner that places lighter burdens on them.

• New data protection rules will likely cost small businesses £300m per year. The rules on paperwork need to be relaxed - specifically there shouldn't be a mandatory requirement for businesses to complete a Data Protection Impact Assessment.

• EU VAT returns and the process of applying for VAT refunds from other EU member states are complex. Small companies have to fill in vast amounts of paperwork and wait many, many weeks for refunds. The processes need to be simplified.

• We want the EU to move quickly towards implementing a fully functioning digital single market. At the moment only 10% of British consumers buy online from other EU countries. But EU GDP as a whole could rise by 4% by 2020 if cross-border e-commerce was made easier. How much could British businesses grow if EU customers found it easier to buy from us?

• We want a cap on credit card fees. Smaller businesses pay higher fees than larger ones and standardisation would help e-commerce retailers save billions. At the moment 'interchange fees', what the card company charges the seller, can be up to 2% higher, putting small companies at a big disadvantage.

Other proposals in the report cover food labelling, waste, the chemicals directive, clinical trials and more.

Second, we have created a 'common sense filter' for any new EU legislation. In summary:

• Any new rules must help - not hinder - business to become more internationally competitive.

• There should be a 'one-in, one-out' principle for legislation.

• The EU must calculate the cost impact of the regulation on business.

• New rules should be implemented across the European Union consistently.

• Very small businesses should be exempt wherever possible.

Small companies create 80% of new jobs in the EU, and our proposals would inject tens of billions of Euros in to the economy. We now ask European leaders to take the actions needed to ensure that business can focus on growing and competing, rather than paperwork-completing.


Other members of the taskforce are: Marc Bolland of Marks & Spencer, Ian Cheshire of Kingfisher Group, Louise Makin of BTG, Glenn Cooper of ATG Access and Paul Walsh of Diageo.