Minister for Europe speaks at British-Polish Business Centre

Minister for Europe, David Lidington, speaks at British-Polish Business Centre at a Better Regulation event in Warsaw

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Minister Mariusz Haładyj, Mr Ryszard Petru, Chairman of the Association of Polish Economists, ladies and gentlemen, it is a pleasure to be here at the British-Polish Business Centre, and thanks to British Deputy Head of Mission, Sarah Tiffin for that kind introduction.

At the start of this month, I was in London having just returned from a visit to Estonia, where I had been discussing the situation in Ukraine, and ideas about what the priorities should be for the new European Parliament and Commission over the next five years.

Had I been in Warsaw on 1st May, I gather the place to be was Łazienki Royal Baths Park, where President Bronisław Komorowski was planting a Freedom Oak to mark ten years of Poland’s membership of the European Union.

Britain is proud to have been one of the champions of enlargement.

Poland’s immense success in the intervening years shows just how right that policy was.

We are now working together in the EU to achieve freer and fairer trade for businesses and consumers.

We are partners in NATO, some seventy years after British and Free Polish soldiers fought together in France after the D-Day invasion.

And we stand firm in protecting our shared values of the rule of law, democracy, freedom, order and decency.

It is in Ukraine most recently that these values have come under threat.

Poland and the UK have been among the leading EU nations in supporting Ukraine, which on Sunday will take an important step towards its new future when it votes to elect a new President. It is vital that this vote is allowed to proceed in a free and fair manner.

In many ways, it has been Poland’s example that has inspired people there.

From a similar baseline in 1992, incomes in Poland have risen to three times those in Ukraine now. Poland is currently the sixth biggest economy in the EU, and has been one of the fastest-growing.

And a substantial part of the reason for this has been its decade-long membership of the European Union.

I have been asked here today to talk about ‘boosting jobs, growth and competitiveness’.

The British view, and the view of many in Europe, is that competitiveness should be the number one priority for the next Commission when it starts its work in November.

Working to achieve more open trade will be critical in achieving this goal, because we live in a changing world and we will not be able to maintain our living standards and our standing in the world unless we do so.

90% of global growth is set to come from outside Europe in the coming years. We need to use Europe’s weight as the largest marketplace in the world to win trade deals with strategic allies like the US and Canada, but also with fast-growing emerging markets in Asia, the Americas and Africa.

Our number one ambition must be to land the Transatlantic Trade and Investment Partnership (TTIP), which could bring up to €119 billion a year to Europe’s economies.
And we need to look at how we can trade better between ourselves.

We know the single market is a proven and powerful tool to lower prices and increase competition. We should deepen the single market in areas such as services and digital, on which our future prosperity depends.

And the threat from Russia has underlined how urgent it is for us to diversify our energy sources and improve our energy security, whether by using oil and gas, shale gas, nuclear or renewables.
My second point is that we cannot make Europe more competitive unless we work together to improve our business environment.

The British Confederation of British Industry (CBI) in a survey of several European nations found that 60% would bring back production to Europe if the regulatory environment were improved.

British Prime Minister David Cameron last year set up a Business Task Force to look at where we could make improvements. Poland’s Lewiatan was among the business organisations from across Europe that fed in.

Their message came across clearly.

Regulation has been stifling innovation, restricting SME growth and placing unnecessary burdens on firms – just at the time we need them to be expanding and generating the jobs and growth we all need.

This is particularly the case for the small and medium-sized enterprises which make up the vast majority of all businesses and employ two out of every three workers in Europe.

On average, while a big company will spend €1 per employee to comply with a regulatory duty, a medium-sized enterprise might have to spend around €4 and a small business up to €10.

We resolutely support the Commission’s REFIT Programme which is aimed at reducing and streamlining unnecessary regulation.

President Barroso has noted that the administrative burden caused by EU regulation was cut by tens of billions of euros in the lifetime of the current Commission, which we welcome.

But we need to move further and faster on this, because we could save businesses billions more if we do.

We were delighted Prime Minister Tusk was able to attend the launch of Business Task force’s report in October, where we made 30 recommendations for improvement to EU rules. While I won’t read out all of them, they look at how to address barriers to:

• competitiveness,

• starting a company and employing staff,

• expanding a business,

• trading across borders, and

• innovation.

Suggestions from Polish businesses in the report included reducing the obligations on the reporting of nano-materials in cosmetics, which are currently impossible to fulfil; and more proportional rules on Country of Origin labelling for food.

And in the last seven months, seven of our recommendations have been taken forward by the Commission. Among the progress we have seen to date:

• In December, practical and proportionate rules on Country of Origin Labelling for Food were agreed.

• Rules on traineeships will now be left to employers, so they don’t limit opportunities available to young people.

• After a successful and joined-up approach from the UK and Poland, the Commission in January adopted a non-binding Recommendation on shale gas instead of binding legislation, which might have threatened investment and undermined opportunities for jobs and economic security.

• And we agreed a streamlined approach for Clinical Trials, which should be formally agreed in the next few months. This will help make the EU a more attractive place for Pharmaceutical companies, where we face challenges from the US and Asia in innovation.

By streamlining regulations, we are telling the world we are open for business, that we support innovation and are ready to make life easier for our world-class entrepreneurs.

We should be looking to scrap one unnecessary piece of regulation for every regulation that is added. We also need rules that are proportionate, and tested before they are implemented to see how they might impact on competitiveness.

This doesn’t mean that we don’t need any regulation – of course we do – but we need to make sure that we get the balance right between supporting smaller businesses and protecting the consumer and the environment.

As the UK and Poland push for a more open and competitive Europe, it’s helpful to know that we have allies in this.

Chancellor Merkel said in London in February this year that the European Union must become stronger, more stable and more competitive than it is today. Italian Prime Minister Renzi is also passionate about a better business environment.

I think we are seeing growing consensus not only about the need for change but on what needs to be done.

Pushing the next Commission to focus on rebuilding Europe’s competitiveness and better regulation should be the foundation.

Better regulation will support small business, create jobs, enable innovation and ensure that Europe’s place in a rapidly changing world is secured.

It will help strengthen and deepen the single market for services and digital – which has the power to be truly transformative.

I look forward to working closely with my Polish colleagues as we address these issues together, building on our long-standing friendship, our strong and durable partnership, and in the service of our mutual interests.

Thank you.

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Published 20 May 2014