Following a hard fought campaign business organisations today broadly welcomed the European Parliament vote to create a single market in services. The British Chambers of Commerce, Institute of Directors and Federation of Small Businesses said the services directive will make it easier, faster and cheaper for SMEs to provide services across borders, and will ultimately help to generate growth and jobs.

Adopted measures that will be good for business include a single point of contact in each member state where service providers can register for market access;  also member states will no longer be able to force businesses to open an  office or branch when they merely wish to test the market in question.

However, the measure could have gone further and the gains could have been greater.  The vagueness of the text and the absence of the country of origin principle will mean that the protectionist instincts of some member states could still prevail. 

The business groups condemned the tactics of the trade union movement in making unfounded claims to polarise the debate and block important parts of the measure. In fact, the directive will not affect national rules on minimum rates of pay; it will not affect paid holiday rights; it will not affect maternity leave; in fact it will not affect employment rights at all.  Also health and safety standards will not be affected across the EU. 

David Frost, Director General of the British Chambers of Commerce said:

“We are disappointed that the directive has been watered down largely down to scaremongering by some trade unions.  The country of origin principle, coupled with the protections provided by the Parliament, would have led to more growth and more quality jobs.”

Miles Templeman, Director General of the IoD, commented:

“Although we would have preferred a more ambitious Directive, we are determined to make the best of the positive measures approved by the Parliament. Single points of contact and a ban on requiring businesses to be formally established before they can trade should help our members to test other EU markets. It could and should have been more, but we welcome what we’ve got.”

Tina Sommer, EU and International Affairs Chairman, Federation of Small Businesses, said:

“It is now time to draw a line under the acrimony and scurrilous rumours that have surrounded this directive.  The Council and the Commission should be emboldened by the cross party support that this directive has received and should maximise its full potential for SMEs.”