PN250506B

Embargo: Immediate Thursday 25th May 2006

Contact: Owen Williams 020 7219 8659

LORDS EU COMMITTEE SATISFIED WITH SERVICE DIRECTIVE COMPROMISE

The House of Lords EU Committee has today written to Lord Sainsbury, Minister of State in the Department for Trade and Industry, to give their support to the new EU Services Directive.

Lord Sainsbury is next week due to attend the EU Competitiveness Council in Brussels where the agreement on the Services Directive may be given the green light. The Lords Committee has given him their backing in supporting the approval of the Directive.

The Committee's Chairman, Lord Woolmer of Leeds called it "a workable compromise. It is a step forward in liberalising the services market in the EU, but there is still more to be done."

Background to the Committee's letter

In 2004, the European Commission published its proposals to create a genuine, liberalised internal market in services. These proposals were met with vocal opposition in some EU Member States, were substantially amended in the European Parliament in spring 2006 and these amendments were largely accepted in the Commission's revised draft.

The House of Lords EU Internal Market Committee held an inquiry into the original draft proposal last year, and was broadly supportive. The Committee has carried out a follow-up inquiry into the revised draft from the Commission, which may be agreed next week at the Competitiveness Council. Following evidence sessions with the Minister, representatives of business, unions, lawyers and MEPs, this letter provides the Minister of State with the Committee's emerging conclusions ahead of the Council.

The struggle to liberalise services has brought into sharp focus the tensions which can exist between social concerns and the pressing need to liberalise markets across the EU. It is clear that a balance must be struck between these needs.

A compromise text has been reached between the Commission, the European Parliament and the Council of Ministers. Witnesses the Committee heard from were unanimous in viewing the compromise as something that all parties can live with.

Well over 40% of the UK economy and its workforce will benefit from the opportunities opened up by this Directive. It should add around £8 billion to national output, bringing greater choice and improved value for individuals and businesses in the service sector.

Notes to Editors

1. The Lords EU Committee's original report on the internal market in services Completing the Internal Market in Services, was published in July 2005 and is available here:

http://www.publications.parliament.uk/pa/ld200506/ldselect/ldeucom/23/23.pdf

2. The full letter to Lord Sainsbury can be found here.

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