Select Committee on European Union Thirteenth Report

Letter from Patricia Hewitt MP, Minister for Small Business and E-Commerce, Department of Trade and Industry to the Chairman of Sub-Committee B

  Thank you for your letter of 19 January 2000 which dealt with The Government's response to the Sub-Committee's Report on Promoting Small and Medium Enterprises in the EU.

  I am pleased that the Sub-Committee concluded that on most points the Government and the Sub-Committee share an understanding of the opportunities and challenges facing SMEs and how Government can act in providing an environment which will allow SMEs to prosper.

  In response to the issues you raise directly, I should wish to make the following points.

  As I stated in my letter of 13 January, I see no clear case for the establishment of a European Small Business Agency. I see business support as an issue primarily for Member States to pursue, much as we are doing in the UK through the creation of the SBS. Nevertheless, it is vital that the interests of small firms continue to be promoted at the European level and to this end the Government is working hard for agreement at the Lisbon European Council for a Small Firms Charter. The aim of the Small Firms Charter is to produce within the EU a world-beating environment and capability for entrepreneurs and small firms through enhancing the regulatory framework and encouraging innovation and job creation through enterprise.

  My response of 19 January failed to reassure you on the issue of "gold-plating". I rather think there is less between us on this issue than may be apparent. The Government sees better regulation—minimising unnecessary burdens on business—as a key element of its policy towards SMEs. In certain instances going further than the minimum required by a directive may lead to the improvement of regulations and it therefore makes sense to proceed in that way. Whenever we do this, we look for clear justification and require demonstrable evidence that the benefits can outweigh the costs. We would therefore not wish to simply rule out such action as a matter of principle. Each case is dealt with on its merits, but we would only allow it in the small number of cases where it is properly justified.

  Regarding the Sub-Committee's recommendation that when gold-plating occurs it should be clearly marked as such, the Government is currently revising its Better Regulation Guide which will provide an opportunity to see how this might be addressed.

  I note that the Sub-Committee is still considering whether to investigate further one or more of the topics in the report and look forward to hearing whether I can continue to be of assistance in your consideration of the issues.

18 February 2000

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