UK must lead the way in reforming Europe to make it easier for businesses to create jobs and growth
As part of a comprehensive package of reforms to make the European Union more competitive, the UK’s oldest business group is calling for a strengthening of the ‘yellow card’ system, which allows member states to send back flawed proposals to Brussels.
The ‘yellow card’, created by the Lisbon Treaty, allows national parliaments to tell the European authorities when they are acting in areas that could be better dealt with by individual countries. If a third of parliaments send back a ‘reasoned opinion’ saying that a proposal breaks this important principle of ‘subsidiarity’, the European Commission is obliged to review its plans. This tool has only been used successful on two occasions since it was introduced in 2009, and the IoD says it needs to be strengthened.
By reducing the number of member states needed to trigger a review from a third to a quarter, and increasing the time they have to send back an opinion from eight to twelve weeks, the IoD argues that the UK and other EU members would have a much better chance of blocking unwelcome interventions.
The proposal is contained within the latest in its series of IoD manifesto papers, GE2015: The IoD’s Key Priorities for EU Reform. Other much-needed reforms include:
- Extending the ‘emergency brake’ mechanism to cover future social and employment law, so that the UK can protect the flexible labour market which kept unemployment low during the recession.
- Re-establishing the post of EU Chief Scientific Adviser, or giving EC departments their own advisers, as is done in the UK. European Commissioners must have reliable, de-politicised guidance on the scientific evidence on important issues like genetically modified crops and endochrine disruptors.
- In the UK, creating a new law to allow companies to challenge the UK government when it has ‘gold-plated’ EU Directives, implementing them in a way which creates unnecessary burdens.
Allie Renison, Head of EU and Trade Policy at the IoD:
“We believe it is possible to get the reforms in Europe that will enable business in every country to become more competitive, create more jobs, and lift the continent out of the economic doldrums. But politicians in the UK must focus on specific goals, and realise that they can only achieve what is needed for the whole EU by working with their counterparts in other member states.
“These proposals contain a mix of practical recommendations which can be implemented immediately and more ambitious objectives for the longer term. Europe’s unemployment crisis will only be solved through job creation in the private sector, so the EU must be reformed to create the right conditions for business to flourish.”
In addition to the measures above, the IoD is also calling for the changes to the way the EU operates to make sure it focuses on facilitating trade and unleashing business innovation:
- Embedding an 'innovation principle' in EU policy-making to ensure legislative proposals do not over-regulate against risk, to the detriment of creativity and competitiveness.
- Getting serious about Single Market enforcement and linking member state performance to structural reform recommendations.
- Mandatory legislative review clauses for all new EU directives and regulations.
Read the full report here