Making Better Regulation work better for SMEs - The SME Test benchmark 2024
Executive summary
The reduction of regulatory and administrative burden for businesses and the better law-making process, for SMEs in particular, remain high on the European Commission’s political agenda for the new legislative term. Nevertheless, better regulation tools already exist and were further expanded with the introduction of new SME-dedicated tools, such as the SME Filter, and actions announced under the 2023 SME Relief Package.
On top of all these initiatives, the SME Test remains a key element of the law-making process as it seeks to identify potentially negative impacts of new legislation on SMEs and propose offsetting measures to minimise them. However, good intentions must be backed by a stronger political commitment: in practice, better law-making is still not considered a collective responsibility of all European Commission’s Directorates-General and all EU Institutions.
This year’s report intends to factor in the new elements introduced in the preparatory work for a legislative proposal and assess, once again, the extent to which the European Commission actually considers the impact on SMEs and the risk of potential additional burdens.
For this reason, 23 impact assessments (IAs) were analysed on the basis of the better regulation guidelines (2021) and toolbox (2023) by the European Commission. Based on these findings, the report provides recommendations for better policy-making for SMEs. Similarly to our 2022 analysis, this new report concludes that the SME Test is still not systematically and consistently applied across the European Commission’s services.
On a positive note, our 2024 analysis shows that almost every IA considers whether SMEs are affected by the proposal, even though this was the case only for fewer Calls for evidence (CfE) or Inception Impact Assessment (IIA). A vast majority of consultations were held in all EU official languages and allowed respondents to identify themselves as SMEs or SME representatives. Furthermore, other consultation methods were often employed, and SMEs’ views were generally fairly represented.
Other areas that are in need of improvement include respecting the 12-week consultation period and granular presentation of the information gathered during the consultations. The presentation of the impact of proposals on SMEs is not always clear, with 7 out of 23 legislative initiatives lacking a dedicated SME Test chapter.
Several sections of this report provide comparisons between the 2022 and 2024 editions of the report. The main findings of this year’s report are listed in a dedicated section. Based on this, policy recommendations are presented in Chapter 5.