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Analysis

EU business reform: A threat or a promise from Britain?

European businesses are hampered by "problematic, poorly-understood and burdensome" rules.

At least, that was the verdict of the "Cut EU red tape" report released amid much domestic fanfare this week by UK Prime Minister David Cameron's so-called Business Task Force.

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By a convenient coincidence, UK business minister Michael Fallon is in Brussels today (17 October) to meet European Commission President Jose Manuel Barroso - it is not hard to guess what will be on the agenda.

Cameron set up the Task Force, which comprises six leading business bosses, in June.

Its report says that scrapping requirements for small firms to write down health and safety risk assessments could save them €2.7 billion. It also urges the EU to go further by promoting a single market for the bloc's burgeoning digital economy and securing a trade deal with the United States.

"We looked across the life-span of a business and at the regulatory barriers faced by small businesses and entrepreneurs," says Marc Bolland, one of the report's authors.

The report's 30 recommendations have been whittled down from over 250 individual suggestions from businesses, which Bolland says represents "a real cross-section of the business community."

Bolland is the chief executive of Marks and Spencer, still one of the UK's biggest retailers and among its most iconic brands.

A Dutchman who was named as businessman of the year by British daily The Times in 2008, Bolland was at pains to stress that the report is "politically neutral" and is about reflecting the views of business, not domestic politics.

"It's not our role to be political but to present the regulatory framework that faces businesses. The report is not our judgement as such but a reflection of over 100 business voices," he told this website.

But nothing is "neutral" when it comes to Britain's relationship with the EU.

The main findings and tone of the report are broadly reflective of what Cameron would like to secure in talks on EU reform: A more liberalised single market, with particular focus on the EU's fast-developing digital economy, and an ambitious EU/US trade deal would both be close to the top of his wish-list.

In truth, the report contains little that will surprise.

The recommendations are almost exclusively focused on minimising the bureaucratic burden on businesses, particularly when it comes to health and safety regulation. There is also plenty that the commission either intends to do or believes it is already doing.

In fact, the commission swiftly put out a press release in President Barroso's name broadly endorsing the paper, but offering a gentle reminder that the EU executive is already acceding to its requests.

"In the last five years, the European Commission has slashed the cost of administrative burdens by €32.3 billion and scrapped 5590 legal acts," Barroso said, adding for good measure, that "I also want to make sure that the EU does not meddle where it should not." 

It is hard to oppose the so-called "Compete" principles which the Task Force says should guide EU lawmaking.

Most people would agree in principle that small businesses should avoid expensive bureaucratic overheads, though trade unions and NGOs will baulk at the prospect of workplace rights and environmental standards being watered down even further.

Campaign groups on both sides of the Yes/No divide if an EU referendum is held were welcoming.

But Business for Britain, a group which is positioning itself to help run the No campaign, has published other research claiming it would take the average Briton 92 days to read the 3,580 pieces of business-related EU regulation that has been published since Cameron became Prime Minister in May 2010.

While the Task Force paper sets down a clear marker, more interesting is what happens next.

Cameron has the perfect opportunity to tout its wares at next week's EU summit, which has little else on the agenda, and will probably be dominated by gossip about the possible successors to Barroso and EU Council chief Herman Van Rompuy.

If Cameron plays his cards right, Germany's Angela Merkel and Dutch Prime Minister Mark Rutte could be sympathetic allies, with both having publicly expressed frustration at what they perceive to be EU over-regulation in recent months.

For the moment, Cameron's tone remains one of support, albeit heavily qualified, for Britain's continued EU membership.

"It’s vital that business can take full advantage of the EU’s single market," he said on Tuesday (15 October).

But, as ever, there was a veiled threat in his remark that "I’m determined to change that and to get the EU working for business, not against it."

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