Embargo: 00:01 Friday 8 February 2008
Contact: Owen Williams 020 7219 8659


The House of Lords European Union Committee has today warned that the effectiveness of the European Single Market is at risk of being undermined by poor implementation of legislation by Member States.

In its report into the European Commission's review of the Single Market the Committee warns that the Single Market, often seen as one of the great achievements of the EU, is failing in many areas, as countries have not adequately introduced liberalisation of trade and economic competition. The Committee argues the failure to properly implement the Single Market has particularly affected small and medium sized businesses.

The Committee does not feel the current failures of the Single Market should be tackled by increased European legislation. The Committee highlights a growing desire for a 'regulatory pause' among business and instead recommends fuller implementation of current Single Market regulations and greater help in this process from the Commission.

The Committee asserts the importance of strong regulatory authorities, operating independently of government, to ensure that consumer interests and the openness of domestic markets are maintained. This is of particular importance with new member states and other EU members where government has a large stake in domestic industry and a potential motive to protect those industries.

The Committee looked in detail at the markets for energy, telecoms and financial services and raises concerns about the remaining market barriers in these markets.


The Committee points out that for businesses and citizens to benefit fully from a single energy market it is crucial for it to be competitive and open.

In order to achieve this, the Committee recommends that Member States work to separate the production of energy from its distribution. This unbundling of energy products would mean that organisations could no longer encompass both network and supply businesses within the energy market. This would prevent network operators from discriminating against third party providers delivering energy to consumers.

The Committee calls for strong and independent regulatory regimes throughout the Member States and for increased co-operation between these National Regulatory Authorities.


The Committee contrasts the open and dynamic way the Single Market operates in relation to the new technologies of telecoms with the more static market for traditional fixed line telephony.

The Committee argues that the relative success of the Single Market in telecoms indicates that there is no need for a European telecoms regulator as proposed by the European Commission. It states that deficiencies in the more traditional telecoms market would be best tackled by a more thorough enforcement of current regulations rather than any new legislation or regulatory bodies.

Financial Services

The progress to a Single Market in retail financial services has been disappointing. The Committee points out that a functioning Single Market in financial services is a prerequisite for an effective Single Market generally as it should ensure the most efficient allocation of capital across the European economy. The Committee calls for the abolition of barriers preventing increased cross border activities by retail financial services providers.

Commenting, Lord Freeman, Chairman of the Lords EU Committee on the Internal Market, said:

"The Single Market is often heralded as a European success story, however, we have real concerns that it is being undermined by continuing economic nationalism and failure to implement fully European Single Market regulations.

"There is little appetite for increased EU legislation. What is needed now is for Member States to do more to ensure they have a robust and independent regulatory regime that promotes the Single Market and does not act to protect 'national champions'."

Notes to Editors

  1. The report Single Market: Wallflower or Dancing Partner - Inquiry into the European Commission's Single Market Review, is available from The Stationery Office, House of Lords European Union Committee (Sub-Committee on the Internal Market), 5th Report of 2007/08, HL Paper 36
  2. The report will be available online shortly after publication at:
  3. The members of the Committee who conducted the inquiry were:

Lord Freeman (Chairman)

Lord Lee of Trafford

Lord Bradshaw

Lord Mitchell

Lord Dykes

Lord Paul

Baroness Eccles of Moulton

Lord Powell of Bayswater

Lord Fyfe of Fairfield

Lord Rowe-Beddoe

Lord Geddes

Lord St John of Bletso

Lord Haskel

Lord Walpole

Lord James of Blackheath

Lord Whitty

For copies of the report or to request an interview with Lord Freeman, please contact Owen Williams, Committee Press Officer, on 020 7219 8659.