Standby to Repel Socialist Boarders

France’s freshly-minted Socialist administration plans to make “adjustments” to the impressive sole trading (Auto-Entrepreneur) scheme introduced by its conservative predecessors, because professional artisans and trades complain of “distorted competition”.

Petition to protect Sole Traders from a Socialist putsch

According to professional bodies there are currently some 1 million auto-entrepreneurs and one million crafts and trades firms registered with the authorities.

Sylvia Pinal, the new minister for artisans and commerce said the auto-entrepreneur scheme set up in 2009 under the conservative Sarkozy administration, “results in unfair competition with artisans and thus requires adjustments”.

She told L’Expansion she was committed to a formal review, consultation and reform. “This regime has in some sectors including trade and crafts led to unfair competition with professionals who are subject to social security and tax rules and different standards,” Sylvia Pinal told a meeting of the Standing Chambers of the Craft Trades (APCMA). Before any reforms however government will “review the existing system call for a report and hold consultations with affected organisations,” she added.

The status of sole trader under the auto-entrepreneur scheme has, since 2009, enabled those in full-time work, the unemployed, pensioners and students to set up a main or supplementary source of income to help sustain their families. It has found widespread acceptance because of simplified Internet-based procedures and a favourable tax regime.

But it came under fire in its first year from organised artisans and craftsmen who denounced it for “distorting competition”. APCMA’s Alain Griset said the scheme had been set up “without any real agreement from his members and had created many difficulties for artisans, craftsmen and the trades.”

He said the scheme “had without constraint allowed the legalisation of dissimulated jobs (workers hired by firms but officially classified as sole traders) while also offering specific benefits that distorted competition”.

Kit de l'auto-entrepreneur

Auto-entrepreneur kit (Photo credit: priceminister)

There are “slightly more than one million registered crafts and trades businesses that employ some 3.1 million artisans  with a total turnover of 300 billion euros,” according to the Mr. Griset.  Responding to him Mme Pinel admitted that the professional artisans network was “along with the Chambers of Commerce and Industry the second largest employment training organisation after the National Education system. More than 200,000 apprentices complete your apprenticeship training courses each year and 80% find jobs. Your role as a training body is thus critical and as such you play a key part in attracting young people and their families to the trades and crafts,” she said.

TOUCHE PAS – it ain't broke so don't 'mend' it

For his part Cyril Darrigade, Chairman of the Mouvement des Auto-entrepreneurs de France (MAEF) claimed that the auto-entrepreneur regime currently employed a million people as sole traders and said they generate an annual turnover of 4,364 billion euros. He said MAEF urged the Socialists not to impose heavy social charges and tax on the sole traders, as this would defeat the original intentions of encouraging a network of self starters.

The Fédération des auto-entrepreneurs (FEDAE) or auto- entrepreneurs federation, has responded to the increased volume of threats to the scheme with a petition on its website. It is encouraging all sole traders to sign it. The website here warns: “Attacks against the regime are increasing at a fast pace!” It points to a radio interview with the new president during the campaign in which François Hollande responding to a questioner, proposed severe restrictions on the scheme. He later hastened to assure FEDAE  he would not abolish the scheme.

Listen to his broadcast in the online podcast here: (16ème minute 30 secondes).

FEDAE says the scheme created jobs for some 162,000 young people in 2011 a year in which it generated more than 5 billion euros in sales (from all sole traders not just the number cited), and enabled the state to collect nearly 600 million euros in contributions. It said by March 2012 the scheme had  reached 1 million sole traders.

: Ken Pottinger

(Declaration of interest: the writer is an auto-entrepreneur)

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