10 Better Lawmaking 2006
(28698)
10556/07
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COM(07) 286 | Report from the Commission: "Better Lawmaking 2006" pursuant to Article 9 of the Protocol on the application of the principles of subsidiarity and proportionality (14th report)
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| Legal base | — |
| Document originated | 6 June 2007
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| Deposited in Parliament | 14 June 2007
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| Department | Department for Business, Enterprise and Regulatory Reform
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| Basis of consideration | Minister's Letter of 15 July 2007
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| Previous Committee Report | HC 41-xxx (2006-07), para 2 (11 July 2007)
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| To be discussed in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared, but further information is requested
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Background
10.1 Under Article 9 of the protocol to the EC Treaty on the application
of the principles of subsidiarity and proportionality, the Commission
is obliged to publish annual reports on the Community's legislative
activities.
The Document
10.2 This is the Commission's 14th annual report on "Better
Lawmaking", which provides an overview of the principal developments
in Community lawmaking during 2006. The report focuses on better
regulation efforts in the European Community over the past year,
reviewing the implementation of the Commission's Better Regulation
action plan of 2002 as revised in March 2005 and the inter-institutional
agreement on "Better lawmaking" of December 2003. This
is followed by an examination of the application of the principles
of subsidiarity and proportionality by the Community institutions.
Better Regulation
10.3 The report sets out the main developments in 2006, presented
according to the respective activities of the key parties in the
process — the Commission, the other EC institutions and
the Member States. The general conclusion of the report is that
better regulation continued to be a high priority in 2006 with
the launch of several new initiatives.
10.4 In November 2006, the Commission presented a
strategic review for the better regulation agenda, identifying
the progress made and the challenges ahead. The main challenges
include improving the quality of impact assessments, measuring
administrative costs, simplifying the stock of Community legislation,
withdrawing out-of-date proposals and reinforcing consultation
with stakeholders.
10.5 In 2006 the Commission carried out 67 impact
assessments, launched an external evaluation of its impact assessment
system and established an Impact Assessment Board working
directly to the President to act as a quality control mechanism.
It also integrated the EU Standard Cost Model for the measurement
of administrative costs into its impact assessment guidelines
and proposed the launch of an Action Plan to reduce administrative
burdens on the EU by 25% by 2012, which was endorsed by the Spring
Council on 9 March 2007.
10.6 In 2006 the number of Commission consultations
increased by 23 compared with the previous year with 129 Internet-based
consultations via the web portal "Your Voice in Europe".
The Commission also carried out a consultation on its minimum
standards for consultation. Responses indicated that feedback
on input received could be improved and more efforts to reach
a broader range of stakeholders should be made.
10.7 In 2006 the Commission withdrew 68 proposals
which it had identified as no longer being up-to-date during the
2005 screening exercise; it also identified a further ten for
withdrawal in 2007. In addition, the Commission adopted 33 simplification
proposals. 23 initiatives foreseen for 2006 were carried over
until 2007. In November, the Commission announced 43 new simplification
initiatives. For the first time simplification initiatives were
included in the 2007 Commission Annual Work Programme.
10.8 The European Parliament held a plenary discussion
on better regulation in April and May 2006. It adopted a package
of five resolutions on the topic. Both Parliament and Council
are increasingly making use of Commission impact assessments in
negotiations.
Subsidiarity and Proportionality
10.9 The Report provides an overview of how well
these principles have been respected in 2006. In May 2006 the
Commission decided to send its new proposals and consultation
papers directly to the national parliaments, inviting them to
react.
10.10 The principle of subsidiarity was referred
to in two judgements delivered by the Court of First Instance,
but in neither case did the court find the principle had been
infringed.
10.11 Possible infringements of proportionality were
analysed in several judgements, and in some cases the Community
measures were annulled in full or in part because the principle
had been infringed.
Legislative activity in 2006
10.12 The total number of Commission proposals in
2006 was 474 compared with 439 in 2005. The number of regulations
rose from 182 to 189, and the number of directives rose from 27
to 98. The latter increase can be partly explained by proposals
to prepare for the accession of Romania and Bulgaria, and because
there were more codification proposals (22). The most proposals
were in the area of trade policy (73).
The Minister's letter
10.13 When we originally considered this report together
with the Government's Explanatory Memorandum in July of this year,
we were not wholly convinced that the Commission's better lawmaking
agenda was improving Community regulation. We asked the Minister
to comment on a number of recent proposals which seemed to impose
additional, rather than reduce existing, burdens. We drew particular
attention to the draft Directive (28656) providing for sanctions
against employers of illegally-staying third-country nationals
which we considered on 4 July and which seemed likely to impose
a substantial administrative burden on employers.
10.14 The new Minister at the Department for Business,
Enterprise & Regulatory Reform (Lord Drayson) has now replied
to our request. In his letter of 25 July 2007 he writes as follows:
"Pat McFadden, the Minister for the Cabinet
Office before the ministerial reshuffle, submitted an EM 10556/06
on the Commission's 14th Better Lawmaking Report 2006
on 26 June 2007. I understand that you are withholding scrutiny
clearance of this EM pending further information. Since the Department
for Business, Enterprise and Regulatory Reform has now taken over
responsibility for better regulation from the Cabinet Office,
I am writing to you to respond to your questions.
"EU better regulation has been a top priority
for this Government and, overall, I believe that under the leadership
of Commission President Barroso and Vice-President Verheugen real
improvements are being made to the way the Commission thinks about
regulation. Indeed, there are numerous dossiers where application
of better regulation techniques, in particular use of impact assessment,
is leading to better policy outcomes. The Commission's recent
proposal on Solvency II is just one example of regulation which
should reduce burdens on business. In developing their proposal
the Commission undertook extensive formal and informal contact
with a wide range of stakeholders and produced a high quality
impact assessment which made a material difference to the quality
of the proposed directive. The approach to supervision of insurance
groups is a fundamental change in the prudential framework which
should enable insurance groups operating in the EU to gain the
benefit of the diversification between the companies in the group
and give them greater flexibility in terms of capital allocation
across the group. In addition, administrative burdens on groups
should be significantly reduced. The outcome should be lower regulatory
costs across the EU insurance market (the 20 largest groups in
the EU account for 50% of the total direct insurance premia written)
and a more competitive EU financial services sector.
"The use of an impact assessment has also made
a positive difference in other areas. As the Committee may be
aware, impact assessment work on the chemicals regulation (REACH)
help to reduce the cost of the final proposal by €660 (£440m),
compared with the Commission's original proposal. Similarly, comprehensive
analysis of economic costs and benefits of the options in the
Commission impact assessment on the Air Quality Thematic Strategy
led to the level of ambition of the proposal being set at €7.8bn
(£5.2bn) per annum compared to around €18bn (£12bn)
in earlier drafts. Furthermore, it is likely that policy outcomes
from Commission impact assessments will continue to improve. Early
indications are that the Commission's independent Impact Assessment
Board is playing an effective role in strengthening quality control.
In addition, the Commission recently commissioned an independent
evaluation of its impact assessment system which has come up with
options for further improvements, aimed, for example, at better
consultation and more extensive use of quantitative economic analysis.
"The agreement to a target to reduce administrative
burdens stemming from EU legislation by 25% by 2012 was a significant
achievement of this year's Spring European Council on 9 March
2007. While there can be no doubt that this target is ambitious,
experience from the Netherlands and Denmark shows that it is possible
to meet this type of challenge. The UK Government lobbied hard
to secure agreement to this target and I am determined to give
support to the Commission to help it to deliver it. My officials
have already given the Commission advice on the technical aspects
of the measurement and they will continue to share the lessons
we learnt from the UK measurement exercise. We will also endeavour
to provide the Commission with suggestions of where burdens could
be reduced in due course.
"In reference to the draft directive providing
for sanctions against employers of illegally staying third-country
nationals, I understand that the European Commission has carried
out an impact assessment on the proposal and the Home Office is
currently co-ordinating a cross-government response, which includes
impact assessment work. As you will be aware, the UK Government
is currently studying the proposal carefully to decide whether
we should opt into this EU Directive and the Minster (sic) responsible
has undertaken to write to the Committee when a decision is made.
I do not believe that this proposal alone jeopardises the attainment
of the Commission's overall administrative burden reduction target.
While cutting red tape is of central importance, it is inevitable
that some legislation will create information obligations for
business. We are also committed to ensuring that administrative
burdens resulting from EU law, as a whole, decrease. If new administrative
burdens arise because of new legislation, we will press for this
to be offset by equivalent decreases in other areas. I hope this
responds fully to the Committee's questions."
Conclusion
10.15 We thank the Minister for his detailed reply.
It would be optimistic to conclude that our doubts about the effectiveness
of the Commission's current better regulation agenda have been
dispelled, but we have no further questions to the Minister at
this stage and are content to clear the document. We ask the Minister
to keep us informed through updates on the Commission's progress
in implementing its better regulation programme.
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