11 Smart regulation in the European Union
| (32067)
14421/10
COM(10) 543
| Commission Communication: Smart Regulation in the European Union
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| Legal base | —
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| Document originated | 8 October 2010
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| Deposited in Parliament | 14 October 2010
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 28 October 2010
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| Previous Committee Report | None, but see footnotes
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| To be discussed in Council | No further consideration proposed
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
11.1 The better regulation agenda comprises three different strands.
In the case of new legislation, Commission proposals are now accompanied
by impact assessments, which seek to justify the course of action
suggested, and to provide an analysis of the various costs and
benefits: in the case of existing measures, it involves both a
Rolling Simplification Programme (where consideration is given
to reducing the volume of legislation through re-casts, codification
and consolidation, and the withdrawal of obsolete measures) and
steps to reduce the burden imposed by those measures remaining
in existence.
11.2 In the latter case, the Commission put forward
in January 2007 an Action Plan,[30]
suggesting ways in which the administrative burden could be reduced
by 25% by 2012. In essence, it proposed that the administrative
burden resulting from EU legislation and its transposition should
be measured using a Standard Cost Model, and appropriate proposals
drawn up in 13 priority areas[31]
accounting for the "vast bulk" of the burden arising
from EU law. In addition, the Commission identified ten fast track
items, which it said could result in a fairly swift reduction
of €1.3 billion, to which special priority should be given.
11.3 This Plan was endorsed by the European Council,
and our predecessors subsequently drew to the attention of the
House a number of progress reports provided by the Commission,
including its Third Strategic Review of Better Regulation,[32]
in which it had said that it would present Sectoral Reduction
Plans for all 13 priority areas, and propose before the end of
its mandate additional measures in order to achieve the 25% target
in 2012. It duly sought to do this in a Communication[33]
in October 2009, and to provide an over-view of what has been
achieved so far.
11.4 That document said that an EU baseline measurement
of the administrative burdens stemming from Community legislation
and from related national measures had been completed, and that
this was estimated to be €123.8 billion at the start of 2005.
It also found that a very high proportion of these burdens stemmed
from two policy areas (taxation and company law), thus vindicating
the decision to concentrate on key priority areas; that information
obligations generally impose a proportionately higher burden on
small and medium-sized enterprises; that the degree to which businesses
find those obligations irritating very often had no relationship
to the burdens imposed; and that nearly one-third of burdens were
because of "gold-plating" by Member States and the inefficiency
of their administrative procedures.
11.5 The Commission then assessed the progress made
towards reaching the 2012 target, and said that major steps had
already been taken since 2005, with possible reductions going
far beyond 25% having already been identified. These included
measures already put in place or proposed, which could involve
a reduction of €7.6 billion; measures proposed and pending
adoption, which could add €30.7 billion; and preparatory
work which could lead to an additional 31 measures with a reduction
of €2.1 billion: together, these could amount to €40.4
billion, equivalent to 33% of the total estimated burdens, with
some being addressed exclusively at EU level, and others requiring
joint action with Member States.
The current document
11.6 The Commission now says that the recent economic
and financial problems have confirmed that regulation has a positive
and necessary role to play in the operation of markets, but that
there is a need to address incomplete, ineffective and underperforming
regulatory measures, and to limit the burden on business to what
is strictly necessary. It says that it believes that it is now
time to step up a gear, and for better regulation to become smart
regulation embracing the whole policy cycle, and it accordingly
sought in the current document to outline what this will mean
in practice (and how it will be achieved).
QUALITY OF REGULATION THROUGHOUT THE POLICY CYCLE
11.7 The Commission suggests that its investment
in impact assessments is paying off in terms of the quality of
new measures, but that it is the existing body of legislation
which creates the greatest benefits and costs, and that smart
regulation policy will therefore attach greater importance to
evaluating its functioning and effectiveness.
Improving the stock of EU legislation
11.8 The Commission recalls the substantial benefits
which have arisen already from the Simplification Programme, and
says that these must continue at both EU and national levels in
order to complete that Programme by 2012. However, it adds that
a broader approach, taking account of all factors which determine
the efficiency and effectiveness of legislation, is needed, and
it says that it is therefore merging its efforts to reduce administrative
burdens with those to simplify legislation, and to mainstream
this into its approach to managing the existing stock of legislation.
It says that a key tool will be ex post evaluation, which should
become an integral part of smart regulation, thereby improving
the quality of policy-making and helping to identify new opportunities
to simplify legislation and reduce administrative burdens. However,
it cautions that evaluation of individual initiatives is not always
sufficient, and that a more strategic view, involving comprehensive
evaluations of the kind carried out in the "Health Check"
of the Common Agricultural Policy, is often required in order
to identify the cumulative effect of legislation.
11.9 In particular, the Commission suggests that
this will involve:
- ensuring that all significant
proposals for new or revised legislation are based on an evaluation
of what is already in place;
- carrying out "fitness checks" launched
in 2010 in relation to the environment, transport, employment/social
policy and industrial policy, and extending this to other areas
in 2011;
- finalising the administrative burden programme
by 2012, and using the experience gained from this in the evaluation
and policy-making process;
- improving consultation websites for stakeholders;
- inviting Member States wherever possible to waive
obligations for small and medium sized enterprises.
Ensuring the quality of new legislation
11.10 The Commission says that its Impact Assessment
Board (IAB) has been a key element in providing independent quality
control of its impact assessments, and that, in a recent Special
Report, the European Court of Auditors has confirmed that this
constitutes good practice, has been helpful to the Council and
European Parliament in considering proposals, and has validated
the Commission's integrated approach to such assessments. It also
refers to the improvements which the Court has suggested, and
says that:
- it will seek a positive opinion
from the IAB before a proposal can be put forward for a decision
by the Commission;
- it will publish roadmaps for all proposals likely
to have significant impacts;
- it has developed specific guidance for assessing
social impacts;
- it will reinforce the assessment of the impact
of fundamental rights, in order to reflect the new legal status
of the relevant EU Charter;
- it will continue efforts to improve the quantification
of benefits and costs when possible.
Improving implementation of legislation
11.11 The Commission says that, whilst Member States
are primarily responsible for implementation, it works closely
with them, both in adopting measures to assist in this process
and in accelerating infringement proceedings. It says that it
will:
- strengthen the analysis of
transposition, implementation and enforcement in ex post evaluations;
- further develop the use of Implementation Plans
for new EU legislation, and request Member States to be more transparent
on how their national law transposes Directives;
- improve the efficiency of the EU Pilot which
seeks to provide answers to questions on EU law;
- explore how to improve SOLVIT[34]
and promote it further to SMEs.
Making legislation clearer and more accessible
11.12 The Commission says that it intends to scrutinise
all new legislative proposals to ensure that they are set out
in simple language, and that it will continue to codify, recast
and consolidate existing texts and to repeal obsolete provisions.
Also, it will seek to improve electronic access to the full body
of EU legislation through a new EUR-Lex portal.
SHARED RESPONSIBILITY
European Parliament, Council and advisory bodies
11.13 The Commission notes that the European Parliament
and Council have a key role in delivering smart regulation, both
in adopting more rapidly proposals aimed at simplification and
reducing the administrative burden, and in providing more often
impact assessments for any substantive amendments they suggest.
The Commission also considers that the European Economic and Social
Committee and the Committee of the Regions can make an important
input to the preparation of impact assessments.
Member States
11.14 The Commission says that action at EU level
is not in itself sufficient, and that smart regulation must also
be implemented at national level, not least in certain key fields
(such as company law and taxation) where most legislation is national
in origin. It notes that, under the Lisbon Treaty, national parliaments
contribute to ensuring a higher quality of EU legislation by checking
the application of the subsidiarity principle, but it observes
that, whilst some Member States have made progress in reducing
the administrative burden, few have in place a system as wide-ranging
as that of the Commission itself. It also points out that:
- the Court of Auditors has suggested
that national impact assessments could usefully complement those
done by the Commission, and help Member States with transposition
and enforcement issues;
- where Member States avail themselves of the provision
in the Lisbon Treaty allowing them to present proposals relating
to judicial cooperation in criminal matters and police cooperation,
these should be accompanied by impact assessments;
- Member States should involve stakeholders when
discussing measures to implement or transpose EU legislation.
STRENGTHENING THE VOICE OF CITIZENS AND STAKEHOLDERS
11.15 The Commission says that consultation is an
essential element of smart regulation, and that, although stakeholders
appreciate its efforts in this area, many have asked for longer,
and more accessible, consultation periods.. It points out that
the current 8 week consultation period is often only one part
of a longer process, but that it will nevertheless:
- increase the public consultation
process to 12 weeks as from 2012;
- carry out a review of its consultation policy
in 2011, so as to explore how to improve the quality of consultation
documents; make better use on Internet-based tools; make best
use of consultation channels in Member States; and make better
use the consultation process to collect data and evidence for
impact assessments.
The Government's view
11.16 In his Explanatory Memorandum of 28 October
2010, the Minister of State for Business and Enterprise at the
Department for Business, Innovation and Skills (Mr Mark Prisk)
points out that the
publication of this Communication follows an extensive strategy
of UK influence, including a joint report with Denmark and the
Netherlands in March 2010, and a contribution to the Commission's
consultation on smart regulation at the end of June 2010. He says
that the Government welcomes the Commission's latest plans to
reduce the regulatory burden on business, and that the proposed
extension of the minimum consultation period from 8 to 12 weeks
in 2012 is one example of a substantial improvement resulting
from UK lobbying, which will enable smaller businesses and individual
citizens to feed into policy-making. However, whilst the Government
recognises the encouraging progress which has been made in the
Communication, it is also keen to see the Commission keep its
promises on smart regulation, and it will therefore continue to
engage positively with the EU institutions and other Members States
to shape the delivery of these commitments, with the intention
of embedding more evidence-based policy making throughout the
EU institutions.
Conclusion
11.17 In common with earlier documents on this
subject, this Communication seeks to take forward the welcome
aim of simplifying EU legislation, and the way in which this is
implemented by Member States. As such, it is of obvious interest,
and, whilst we are content to clear it, we think it right to draw
it to the attention of the House.
30 (28354) 5924/07: see HC 41-xi (2006-07), chapter
6 (28 February 2007). Back
31
Agriculture, annual accounts/company law, cohesion policy, environment,
financial services, fisheries, food safety, pharmaceuticals, public
procurement, statistics, taxation/customs, transport, working
environment/employment relations. Back
32
(30411) 5791/09: see HC 19-xi (2008-09), chapter 9 (18 March 2009). Back
33
(31052) 15019/09: see HC 19-xxxi (2008-09), chapter 8 (11 November
2009). Back
34
This is an on-line problem solving network in which Member States
work together to solve without legal proceedings caused by the
misapplication of Internal market law by public authorities. Back
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