Bill Midgley column

Feb 22 2006 By Bill Midgley, The Journal

Debates in Europe, either in the Parliament or the Commission, tend to induce an outbreak of apathy, glazed eyes and a process of ignoring how our future lives are being shaped.

But in recent days there has been one debate which will have a marked impact on our economy in the North-East, and indeed across Europe. And that is about the Services Directive.

Nothing which comes out of Europe is ever straightforward, but the Services Directive was intended to create a single market in services, just as there is supposedly a single market in goods across the European Union. Why after more than 30 years as members of the EU the supposed "Common Market" still is far from that is a debate in itself, but nevertheless there has been a real attempt to open up the provision of services across the union. The new directive was intended to introduce the "Home Rule" rule; in other words, if a service industry was established in the North-East of England it would be the regulatory controls that applied in the UK that would affect that organisation, even if it were to operate in every country in the EU. This appears sensible but there has been a huge attempt to try to prevent this.

The opening up of services will create more employment. And bearing in mind that the UK relies upon service industries for its economic growth, this is an important opportunity.

Those against the proposals believe service industries would gravitate towards those countries that had a looser regulatory regime. Many organisations would thus be able to circumvent good practice, particularly in employment law.

That argument, however, ignores the fact that we are all supposed to be part of the same EU and under the same laws and the member states should work together for a better economic future.

It is perhaps unfortunate that the main opponents of the regime have been the trade union movement. To say the directive would affect employment rights and health and safety standards is untrue, in my view. We now have a watered-down directive and we need to see whether it will operate. But it has ensured that yet again European businesses will be uncompetitive against the rest of the world and that more service industries will look particularly to the Far East.

Short term views, yet again, bedevil attempts to expand our economy.