Services Directive "a step in the right direction" - Liz Lynne

4.01.54pm GMT Thu 16th Feb 2006

The EU Services Directive will increase opportunities for West Midlands businesses and workers even though MEPs opted for a diluted version, Liz Lynne, Lib Dem MEP for the region, said today.

The directive will open up valuable EU markets to services providers, and slash the red tape often faced by British businesses operating in other EU countries. But MEPs adopted a compromise text which diluted the European Commission's original proposal.

It had been estimated that the Services Directive could create 600,000 jobs and increase the EU's economic output by 1% to 3%. But under the compromise agreed today, growth and job creation may now be less than predicted.

Speaking in Strasbourg, Liz Lynne said:

"The Services Directive lost some of its teeth today, thanks to backdoor deals between the Tories and the Socialists which watered down the original intent."

"The big story today however is that we do at least have a Services Directive, and it's an important step in the right direction."

"The free movement of goods and services is one of the founding principles of the EU treaty. Until today, member states had been hopelessly divided on how to bring this about: now MEPs have provided the basis for an agreement."

Both social services and temporary work agencies were excluded from the final version of the directive passed today.

"I welcome the exclusion of social services - the most vulnerable in society need to be protected by high standards, and it's important these high standards are safeguarded in the UK."

"However the exclusion of temporary work agencies is a blow for West Midlands recruitment agencies that want to open up elsewhere in the EU. Temporary work agencies provide a useful role in a flexible labour market, and there is no reason why they should lose out."

It is worth pointing out that national laws designed to protect health and safety, minimum standards and safeguard the environment will continue to apply.

ENDS

Notes to Editors

1. The Services Directive today received its first reading under the EU's co-decision procedure, with Parliament amending the European Commission's original proposal. The directive will now be discussed by the Council of Ministers ahead of their March summit.

2. The EU's Austrian Presidency hopes the Council will reach a political agreement at the summit after, in June. The directive would then go back to the European Parliament for a second reading.

3. It is possible that the directive could be finally passed this year, but it will still take two or more years for member states to transpose it into national law.