Informal Competitiveness Council

Lord Johnson of Marylebone Excerpts

Monday 8th February 2016 Written Statements

[The Minister for Universities and Science (Joseph Johnson)]

My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills (Baroness Neville-Rolfe) has today made the following statement.

The Informal Competitiveness Council took place in Amsterdam on 27 and 28 January. The UK was represented by Minister of State for Universities and Science (Joseph Johnson) on day one (Research) and myself on day two (Internal Market and Industry)

The research day began with Bill Gates giving a keynote speech on the importance of public research and development in overcoming global societal challenges. He gave examples of work by the Gates Foundation, including the recently announced work with the UK to expand research into malaria that will see £3 billion committed over the next five years. Mr Gates highlighted that clear policies on open access to research could help stimulate innovation.

This was followed by a discussion on the current environment for innovation; there was a debate about the need for a visible return for taxpayers and a focus on funding excellence in research.

The discussion turned to how the current research funding programme (Horizon 2020) could be improved. A number of suggestions were put forward, including: simplification of the programme process, leading to faster decisions; simplification of state aid rules; encouragement of open innovation; better communication; and better skills support for businesses (for example in marketing) to allow successful innovation.

In the afternoon, the debate focused on how legislation can facilitate research and innovation. The digital revolution and ageing populations were noted paradigm shifts that will create both opportunities and threats. To allow opportunities to be grasped the EU must both reduce the amount of regulation and improve the quality of the regulation that remains. Ultimately, EU rules need to be as flexible as, or more flexible than, those of our global competitors.

The Commission confirmed that the number of initiatives in the EU research programme has reduced from 130 in 2014, to 23 this year and that state aid rules have been updated and are more flexible than before. It agreed that efficiency and innovation are the means to create jobs, and that the real challenge for the EU is to develop legislation that can create new opportunities from disruptive technology and innovation.

The Internal Market and Industry Council meeting started with an evening event that brought together Ministers and entrepreneurs who had been invited to the Council by each member state (the UK invited Mr Riccardo Zacconi, the CEO of King, the computer games developer behind games such as Candy Crush Saga). Gunther Oettinger, Commissioner for the Digital Economy and Society opened the discussion with a speech on the digitising of industry and noted that he would shortly be bringing forward a strategy on this issue in April. During the discussion a number of themes were explored including the wide range of different business models that were being disrupted or created by digitisation. A number of entrepreneurs emphasised the need to make it easier for start-ups to access markets in other member states. Many of the entrepreneurs also discussed the importance of a skilled workforce, noting that the diversity of talent within Europe was a significant advantage.

The plenary programme started with short speeches by two businesses leaders: Herna Verhagen (CEO, PostNL) and Corinne Vigreux (co-founder of TomTom). They highlighted the importance of digitisation in driving innovation and expansion into new business models, which in turn led to new jobs.

Ministers then held two breakout sessions in small groups focused on upcoming Commission proposals related to the single market. In the first, on geoblocking (discrimination based on grounds of country of residence), Ministers agreed that it was important to make clear that discrimination has no place but there should not be extra burdens on businesses, and there was broad agreement that the Commission’s proposals should cover business-to-business transactions. Vice-President Andrus Ansip, responsible for the Digital Single Market, made clear that the proposal was not intended to lead to uniform pricing nor to an obligation for businesses to deliver goods throughout the EU.

The second breakout session focused on the proposed services passport. The chairs noted that there was consensus that the passport could be useful in reducing barriers to businesses wanting to trade across borders but that it should not lead to additional burdens. There needed to be analysis of the existing barriers and a suggestion that the passport could then be introduced in stages. While it was appropriate to have national rules in some areas, there was a need to increase transparency about different national requirements and potentially to undertake some further harmonisation in certain areas. The UK noted the importance of tackling regulatory barriers as well as administrative ones via the passport initiative. Others noted the relationship between the passport and the proposed analytical framework for assessing the proportionality of regulations on professionals. Commissioner Elzbieta Bienkowska responsible for Internal Market and Industry noted that she expected to be able to share more detail of the Commission’s thinking on the passport soon.

The final agenda item was a plenary discussion on the collaborative economy. The Chair of OuiShare Fest, Francesca Pick, in an invited speech, highlighted the prevalence of cross-border business models in the collaborative economy, but noted that there were challenges of regulatory uncertainty in respect to consumer rights, liability, labour rules, and tax. Many member states noted the consumer benefits from the new and innovative services being offered. The UK agreed that the collaborative economy could deliver significant benefits to consumers and workers, and could play an important role in opening the labour market to those who might otherwise be excluded. It noted that there was still a need to regulate these businesses, but that regulations may need to be updated so as to enable these new business models. It highlighted the best practice work done by the UK body, sharing economy UK and their Trustmark initiative, which Vice-President Katainen asked to explore further.

[HCWS516]