Until recently national markets for services have been sheltered from competition. The EU internal market programme provides an opportunity to reduce service market fragmentation and make European services as a whole more competitive in world markets. Successful implementation of the pro gramme may be accompanied by some relocation of producer services within the Union. A recent study suggests that this would not raise undue concern among the member states, In this paper it is suggested that there is a potential conflict between evidence for a wider dispersal of producer services within the British space economy (and the benefits that it rep resents for the process of regional economic restruc turing) and any centralization tendencies in relation to a European-wide market. This will reassert the hegemony of London and the South East which will ensure that Britain capitalizes upon the EU internal market programme but at the expense of a continuing improvement in the range and quality of producer services in the provincial cities and regions.
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