Small business will be judge of Refit

Any assessment of Refit's success will be primarily be down to SMEs, writes Anthea McIntyre.

By Anthea McIntyre

08 May 2015

When I asked commission first vice-president Frans Timmermans how he intends to assess whether or not his plan for better regulation has been a success, his answer was clear - small and medium-sized enterprises (SMEs) will be the judge. 

The regulatory fitness and performance programme (Refit) is not a silver bullet to sweep away unnecessary and burdensome red tape. However, it is a useful running check on progress and ambition, or lack of it. Refit is an important first step to help ensure that legislation is doing what it was intended to do and identify any unintended consequences. 

Refit is not a new creation of this commission, and it has already achieved a lot. But it can do more and we must be ambitious. The commission's indication that the maternity leave directive should be considered for withdrawal is promising.


It is important that we have the right provisions available to react quickly and repeal and review all legislation to ensure that we can take into account innovation and technological advancements. Parliament's employment and social affairs committee opinion will need ot highlight our goal, which is to create more jobs.

No legislator, or regulator, should make rules for their own sake. To make setting-up or running a company more costly or time-consuming not only damages European businesses and European competitiveness, it damages peoples' career prospects and their prosperity.

Action for SMEs is particularly important: 85 per cent of new jobs in Europe are created by SMEs and they account for 67 per cent of private-sector employment. We must do more to recognise the importance of SMEs to economic growth and also understand the pressure excessive red tape puts on small employers. The commission should prioritise action in those areas identified in the 'top 10' most burdensome laws for SMEs.

We must also be clear that health and safety legislation is essential for our workforce and compliance should be a key priority. No one wants to make work less safe. Simple, clear, appropriate rules are easier to comply with and would increase safety at work. 

Nevertheless, we should examine whether health and safety legislation is actually clear and easy to comply with and ensure duplication is removed. Furthermore, evidence-based policy solutions are essential to ensuring regulations achieve what they set out to do.

The use of impact assessments is an important element in ensuring legislation is appropriate, proportionate and fit for purpose. The work of the European parliament's research service in this area is most encouraging and should be more widely used to systematically assess the commission's impact assessments.

A more specific use of sunset clauses - giving a clear end date to new rules - to ensure reviews of whether legislation is fit for purpose would also be welcome. The commission should look to examples from the member states in how they have reduced administrative burden. 

For example, in the UK, the government has achieved ambitious burden reduction with its 'one in, two out' rule. This means that whenever new legislation is introduced, if there is a compliance cost, policymakers must remove or amend existing regulations so that £2 are saved for every £1 of costs incurred.

An annual burden reduction target for the commission would be a useful tool and a clear measure for assessing their performance.

From a start full of promise, we are now entering a phase when we should see action from the commission, and Refit will be an important litmus test. I hope parliament's report on the topic will set ambitious targets for a simplified and rationalised regulatory environment. We will then look to SMEs for their judgement.

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