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Internal Market in Services (EUC Report)

My Lords, first, I thank the noble and learned Lord, Lord Woolmer of Leeds and his committee for all their hard work and reading in producing this report and I defer to the detailed knowledge that many of the committee members have shared with us in today’s important debate. We on these Benches always welcome the opportunity to discuss the reports of the committees of this House. I have said before regarding such discussions that I, too, regret that we so often do not get the chance to consider them closer to their publication date. The debate has focused predominantly on the service directive and on opening the service market in Europe. It is essential, we would all agree, to meet the goals of the Lisbon agenda, to make the European Union the most competitive and dynamic economy by 2010. The committee’s sixth report concluded that, as a result of the service directive, total consumption in the EU would increase by around 0.6 per cent, the equivalent of some €37 billion and that that would lead to an increase in total employment of up to 600,000 jobs. I was interested in all of the four points made by the noble Lord, Lord Giddens, especially regarding outsourcing, in his well-argued speech. I would expect no less from him. As many of your Lordships have stressed, the directive aims to create jobs, raise economic activity, quality and choice—and lower prices. Service industries generate more than 60 per cent of the EU’s wealth, as the noble Lord, Lord St John of Bletso, said. Small and medium-sized businesses employ some 70 per cent of the workforce, many of them in the service sector. The service directive, therefore, should encourage EU businesses to expand from their home markets to deliver services in other member states. Expansion in business support services will assist new companies, particularly in the new member states, to grow more quickly. It would increase competition and business costs should decline across the EU. We agree with the committee that it would be a great loss to the UK’s economy and prosperity if the provisions of the directive were not implemented, especially the controversial ““country of origin”” principle. As my noble friend Lord Inglewood said in his eloquent speech, as did the noble Lord, Lord St John of Bletso, a combination of labour unions and other special interest groups have stoked up significant opposition against the ““country of origin”” principle. A few employers’ organisations are worried about increased competition and they, too, have been critical of the measure. Supporters of protectionism should not be allowed to stand in the way of economic prosperity. Will the Minister say what measures the Government have taken to assist British businesses who have a comparative advantage in the service sector? What have the Government done to ensure that the service directive is fully implemented? Finally, despite the statement by the noble Lord, Lord Roper, how are the Government using their EU presidency to secure the safe passage of the service directive? We support the report and again congratulate the noble Lord, Lord Woolmer, and his committee on producing it.