Small Businesses condemn Nuttall

Date published: 23 January 2012

A Bury Euro-MP has been warned that publishing inaccurate information about EU policies could discourage people from starting their own businesses.

Claims made by UKIP's Paul Nuttall last month that EU laws would require small businesses to hand over €25,000 before they can start trading have been dismissed as untrue.

Mr Nuttall, who is also the deputy leader of UKIP, described the proposal as "outrageous" and an example of "unnecessary EU interference".

But Liberal Democrat MEP Chris Davies says that there is no truth in the UKIP suggestion and described Nuttall's claim as "irresponsible".

He claims that the EU requirements had been in place for more than 30 years and affected only Public Limited Companies with shares traded on the stock market.

The Federation of Small Businesses confirmed this interpretation.

Tina Sommer, FSB Chairman EU and International Affairs commented: “It is clear that this directive only applies to PLCs and not to limited companies, which make up more than half of our members (57%).

“Nowadays it is hard enough for small businesses to start up and survive without knocking confidence further.

“Publishing the wrong information is severely discouraging small businesses, especially start-ups.

“While this deters the individual business, spreading false information could damage the recovery of our economy as a whole.”

Chris Davies accused his fellow MEP of mounting a campaign against the EU that ignored facts and took no account of consequences.

He said:"UKIP's hatred of the European Union has long passed the point of being rational, but they should check their facts before making announcements that can damage British business confidence."

Paul Nuttall's (UKIP MEP for the North West) responce to Chris Davies is:

“The legislation as it was written was not at all clear as to the scope of the new rules, it spoke of all business.

“However after we spoke to the Ministry they confirmed what Mr Davies contends in that this rule will only effect PLC's (and merely underwrites pre-existing British law).

“However, legislation which impacts upon all small business start-ups pre-exists in many EU member states such as Belgium, and therefore combined with the sloppy drafting of the European legislation this led to the confusion.

“The text of the report states:

‘The laws of the Member States shall require that, in order that a company may be incorporated or obtain authorisation to commence business, a minimum capital shall be subscribed the amount of which shall be not less than EUR 25 000.’

“As you can see it fails to distinguish the size of the business in question.”

http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2011-0348&language=EN  

“This story should have been removed from my website at the time we were able to confirm through the DTI the limits to the Directive's scope. I thank Chris for bringing the matter to my attention so I am able to remove the inaccurate story from my website. It should have been done before."