House of Commons - Modernisation of the House of Commons

Select Committee on Modernisation of the House of Commons Written Evidence

Note from the Clerk of Delegated Legislation

IMPLEMENTATION AND TRANSPOSITION OF EU LEGISLATION

Where does legislation come from?

1. In their Foreword to the Better Regulation Task Force's December 2004 report, Make it Simple—Make it Better—the benefits of simplifying EU legislation for citizens and businesses, David Arculus and Michael Gibbons repeat the observation that "about half of all major legislation in the UK originates in Europe"[46] It is hard to find evidence to support this statement, not least since there is no agreed definition on what constitutes "major" legislation. [47]To take the Bills introduced in this Session's Queen's Speech, for example, apart from the European Union Bill only a handful of Clauses refer explicitly to European Union legislation.[48] A recent written Answer indicated that only 16% of statutory instruments laid before Parliament in 2004 were made under section 2 of the European Communities Act 1972.[49]

2. A European Directive may give rise to several statutory instruments, or a single instrument might implement several Directives.[50] EU Regulations which have direct effect require no transposition into UK law but may yet require changes to UK law to enable their enforcement. Some statutory instruments may update references to EU Directives without changing the law, as happens not infrequently in financial matters. According to the House of Commons Library—

3. The terms of reference of the House of Lords Select Committee on the Merits of Statutory Instruments, appointed on 17 December 2003, include a power to draw the special attention of the House to an instrument which it considers to be inappropriately implementing European Union legislation.[52] As I mentioned in my oral evidence to the Modernisation Committee in September 2004,[53] this has led to a requirement for Departments to explain how they are going about implementing their European obligations.[54]

Transposition Notes

4. The Cabinet Office is at the moment revising its Transposition Guide, which will set out principles for handling Commission proposals for directives, and in transposing agreed directives into UK law. Since November 2001, UK legislation enacting European legislation is accompanied by a Transposition Note explaining how the Government has transposed the main elements of the relevant European directive into UK law or proposes to do so.[55] Statutory Instrument Practice now requires an explanatory memorandum to accompany each statutory instrument subject to affirmative or negative resolution, and for a Transposition Note to be attached to the explanatory memorandum on a statutory instrument, explaining in broad terms the approach to transposition, highlighting any difficult areas.

5. Although the Select Committee on Modernisation of the House of Commons did not explicitly address the question of Transposition Notes in its 1997 Report on Explanatory Material for Bills,[56] it had set out in its earlier Report on The Legislative Process its view that "there would be considerable value in the production and publication by the appropriate Government Department of a guide to the main provisions of the legislation"[57] The Committee recognised that some choice would have to be made between simplicity and comprehensiveness, but stressed its view that "the paramount consideration must be the production of a document written in plain English"[58]

6. The Modernisation Committee may wish to consider whether Transposition Notes should be included as a matter of course in the Explanatory Notes on relevant Bills, as well as being attached to Explanatory Memoranda on statutory instruments.

Scrutiny History

7. Statutory Instrument Practice requires that where an instrument implements EU legislation, Departments should include in the Transposition Note a brief scrutiny history of when it was considered by the EU Scrutiny Committees.[59]

8. The House of Lords Constitution Committee's Report on Parliament and the Legislative Process recommended that Explanatory Notes on all Bills giving effect to EU obligations should provide information on the scrutiny undertaken at an earlier stage by the European Scrutiny Committee in the Commons and by the European Union Committee in the House of Lords.[60] As Lord Grenfell, the Chairman of the EU Committee, told the Lords Constitution Committee—

9. The House of Lords Constitution Committee considered that an important point of principle was involved, namely "that we should not be taking primary legislation through the House in ignorance of what had gone on before".[62] The Lords Committee's view was that "the better the House is informed about the purpose and provisions of a bill, the greater the potential for effective scrutiny and ensuring that the measure is fit for purpose".[63]

10. The Modernisation Committee may wish to consider whether Transposition Notes on Bills should also include as a matter of course the scrutiny history of legislation originating from the EU legislative process.

Use of Transposition Notes—a Commons Merits Committee?

11. Transposition Notes provide a potentially useful analysis for the use of Members as well as researchers, interested parties and the general public. There is, however, no systematic requirement for Transposition Notes to be subjected to formal parliamentary scrutiny. It is up to Members to make such use of them as they will.

12. In 1996, the Procedure Committee recommended a package of changes to parliamentary consideration of delegated legislation, including the establishment of a single Commons Sifting Committee to consider and assess all SIs laid before Parliament.[64] In 2000, the Procedure Committee re-visited its predecessor's Report, endorsed the 1996 package and called for rapid progress to be made in their implementation. [65]In its 2000 Report, the Procedure Committee reported that the 1996 proposals had been endorsed by the Royal Commission on the Reform of the House of Lords, chaired by Lord Wakeham, which had argued that "the logical course could be to establish a Joint Sifting Committee".[66]

13. With regard to the Royal Commission's proposal that the sifting of SIs should be entrusted to a Joint Committee, the Procedure Committee considered that this might be a sensible way of avoiding duplication of effort, but its view was that measures would need to be taken to ensure that recommendations relating to Commons business were taken by the Commons members of any such committee alone.[67]

14. As Members of the Modernisation Committee will recall, Mr Robin Cook's December 2001 Reform Programme suggested that—

15. The Modernisation Committee's Report of September 2002 stated its intention to return in the following Session to the issue of scrutiny of secondary legislation, including the possibility of a sifting committee, adding that "in assessing such a proposal we will wish to monitor the experience of the similar committee in the House of Lords".[69]

16. In March 2003 the Commons Procedure Committee welcomed the Lords' decision to appoint a sifting committee, but emphasised its view that it would be advantageous for discussions to begin immediately with a view to establishing a Joint Committee for sifting delegated legislation from the outset. The Procedure Committee's view at that time was—

17. Later in 2003 the Procedure Committee expressed its disappointment at the Government's decision not to accept its recommendation that sifting should be undertaken by a joint committee from the outset.[71]

18. In the event, the Lords Select Committee on the Merits of Statutory Instruments which has developed its own methods, naturally tailored to the needs of the Upper House, began issuing reports on statutory instruments from April 2004.[72]

19. The Modernisation Committee may wish to bear in mind the scrutiny of Transposition Notes as a possible task for any future Commons sifting committee.

How are we getting on with meeting our EU obligations?

20. The European Commission keeps a public record of progress of national measures implementing directives, with a calendar for transposition of Directives, and details of infringements, on its Eur-Lex website—

http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm

21. Among the Directives with deadlines expiring in January 2005, for example, are 1999/77/EC on asbestos restrictions, 2002/85/EC on speed limitation devices and 2003/92/EC on insurance mediation. Every two months the Commission publishes a league table showing overall performance by each member state in implementing Directives (see Annex 2 (not printed)).

Gold-plating

22. Gold-plating arises when EU Directives are interpreted by Member States more strictly than the minimum Commission requirement. Mr Richard Corbett MEP raised this with the Modernisation Committee—

23. In recent evidence to the European Scrutiny Committee, another MEP thought that this was a peculiarly British problem—

acquis communautaire

24. Mr Michael Jack, the Chairman of the Environment, Food and Rural Affairs Committee, suggested that a departmental select committee could have a role where a Directive allowed member states sufficient room to manoeuvre—

25. In giving evidence to the Lords Constitution Committee, Mr Douglas Hogg described the way he had instructed MAFF officials to go about presenting information on transposition of Directives for ministerial decision—

26. The Foreign and Commonwealth Office commissioned a study carried out by Mr Robin Bellis, a retired Government lawyer, the results of which were published in November 2003.[77] Mr Bellis' analysis included comparisons with France, Spain and Sweden. His suggestions included:

the "copy-out" of ambiguous EU legislation into UK law (rather than elaborating the text with clarifications);

further strengthening of departmental drafting expertise;

establishment of an independent body of lawyers with drafting expertise at the EU level, independent and appointed in the same way as judges and advocates-general of the European Court of Justice.

27. Commenting on the Bellis Report, the Foreign Secretary said—

28. In his statement of 11 February 2004, which pre-figured the Leader of the House's memorandum to the Modernisation Committee, the Foreign Secretary raised the gold-plating issue—

29. The Government's response to the Bellis Report was set out in the 2004 Pre-Budget Report (see Box). [80]The 2004 Pre-Budget Report also made other significant announcements about implementation of legislation affecting business, including common commencement dates on 1 April and 1 October each year, already in place for employment law and from 2005 to be extended to health and safety, work and pensions, company and consumer legislation.[81]

30. The Modernisation Committee may wish to consult the Liaison Committee on whether scrutiny of Government Departments' annual implementation plans for European legislation should be a "core task" for departmental select committees.

31. While the terms of reference of the Joint Committee on Statutory Instruments preclude its commenting on either the merits of a statutory instrument or the policy behind it, among the grounds on which it is required to determine whether the special attention of the House should be drawn to an instrument, with a report giving its reasons, are:

(vi) that there appears to be a doubt whether it is intra vires or that it appears to make some unusual or unexpected use of the powers conferred by the statute under which it is made;

(vii) that for any special reason its form or purport calls for elucidation;

32. The Government's plans "to mirror as closely as possible the original wording of the directive except where there is a clear justification for doing otherwise, having regard to the impact on business and the workability and fit of the legislation in its domestic context"[83] could lead to more use of "copy-out" of obscure or ambiguous language in European Directives. The Modernisation Committee may wish to note that the terms of reference of the JCSI already provide for safeguards against defective drafting, the lack of elucidation and the unexpected use of powers.

33. It has to remembered, however, that ultimately the European Court of Justice is the sole arbiter over the interpretation of directives. There are risks in trying to resolve uncertainty by using more precise language in expressing a European obligation in UK law, since the view taken on what the Directive actually means may not necessarily be shared by the ECJ. It follows that the UK could be in danger of being found guilty of inadequate implementation in such cases and possibly even liable in damages for any consequences. It can be argued that the aim of removing uncertainty in Directives through more specific national implementation is a mirage, and a dangerous and potentially costly one at that.

34. The Government's commitment in the 2004 Pre-Budget Report to publish revised transposition guidelines for European legislation "early next year" is being taken forward by the Cabinet Office, as referred to above. The first edition of the Cabinet Office Guidance in March 2003 followed on from the European Union's Better Regulation Action Plan of June 2002, which was itself informed by the work of the Mandelkern Group.[84]

Extract from Pre-Budget Report December 2004: Regulating only when necessary: EU legislation

3.40 The Government does not go beyond the minimum requirements of European legislation unless there are exceptional circumstances, justified by strong cost benefit analysis and extensive consultation with businesses. A good example is the 2001 Money Laundering Directive. The Government is putting in place safeguards to ensure that strict adherence to this approach will be continued in the future, and in addition the Foreign and Commonwealth Office has proposed a range of measures to ensure that Parliament has a greater and more effective role in scrutinising draft EU legislation. Following the Bellis report, commissioned by the Foreign Secretary, which compared transposition practices across Member States, the Chancellor and the Foreign Secretary are today setting out new measures to continue to ensure that businesses do not face unnecessary burdens from European law. In future:

all emerging European legislation, and measures to implement this legislation in the UK, with significant costs for businesses, will be given tough scrutiny by the Prime Minister's Panel for Regulatory Accountability (PRA);
the transposition of European directives into UK law must avoid costly additions to the requirements for businesses, meet only the minimum standards and scope necessary to comply with the European legislation, and take advantage of derogations when less burdensome for business, except where there is a strong cost benefit rationale for doing otherwise, specifically approved by PRA. Transposition should mirror as closely as possible the original wording of the directive except where there is a clear justification for doing otherwise, having regard to the impact on business and the workability and fit of the legislation in its domestic context. The Government will publish revised transposition guidelines for European legislation early next year;

a comparison with other Member States' approaches to transposition will be required during implementation so that the relative burdens of different approaches are well understood, and the Government will be exploring the scope for introducing this on a comprehensive basis, and for sharing best practice across Member States, with the Commission;

all departments will publish annual implementation plans for European legislation, so that the effects on UK businesses are transparent;

legal advice will take into account the policy context consistently and rigorously, with specific consideration of the costs and benefits for businesses;

the Government will take into account the approaches taken by other Member States when implementing directives and the potential impacts on the competitiveness of UK businesses; and

the Government proposes to work with the European Commission and other Member States to create stronger enforcement mechanisms, which will provide incentives for Member States to implement legislation on time.

Publication of Transposition Notes

35. There is at present no reliable place where the general public can find Transposition Notes. Some Departments include them in the Explanatory Memoranda accompanying statutory instruments which appear on the www.hmso.gov.uk website but there is no requirement for Transposition Notes, unlike consultation documents or regulatory impact assessments for example, to be displayed on a Department's website.

36. The Modernisation Committee may consider that it would be helpful to Members and committees of the House of Commons, as well as to the general public, to have a central EU transposition website on the Cabinet Office website with links to each Department's own sites with full texts of Transposition Notes, as well as to the Departments' annual implementation plans, the HMSO site, the parliamentary scrutiny committees and the European Commission's periodic reports on implementation.

CONCLUSION

37. Once the Cabinet Office has published its new version of the guidance on transposition, there might be a case for a focussed parliamentary inquiry into implementation of European directives. The Better Regulation Task Force's December 2004 report, Make it Simple—Make it Better—the benefits of simplifying EU legislation for citizens and businesses, studied a few concrete examples in food labelling, data protection and pollution control. Similarly, the Bellis Report examined how the groundhandling Directive (competition at airports) and the electronic signature Directive were implemented in the UK, France, Spain and Sweden.

38. This note includes a few suggestions where the Modernisation Committee might consider working with the grain of current arrangements and planned developments in Whitehall to press for greater openness of information about how European proposals lead to UK legislation. Greater awareness of the scrutiny history of primary and secondary legislation, for example, might build up over time a wider appreciation of the role and consequences of scrutiny Committee decisions at each stage from European proposal to UK implementation.

Liam Laurence Smyth

7 February 2005