European Scrutiny CommitteeEvidence submitted the office of the City Remembrancer by the City of London Corporation (ESI 03)


1. Regulation and supervision of the City now largely stems from legislation which emanates from Brussels. Together with City practitioners, and their trade associations, the City Corporation takes a very close interest in such legislation. They regularly make their views known to UK regulatory authorities, the European Commission the European Parliament and through evidence submitted to select committees of both Houses. One of the ways in which the City believes better regulation could be achieved is through more rigorous Parliamentary scrutiny.

Parliamentarian Engagement

2. In their 2006 paper on the scrutiny of EU business,1 the Hansard Society noted that Committees and debates on the EU “tend to be unpopular and often poorly attended”. Whilst this is arguably less true now for large scale debates as a result of the current eurozone crisis, it remains the case for more specific debates on detailed topics and in European Committee. Certainly in the Commons, those with a detailed interest and knowledge of European matters tend to be a recurring minority. Encouraging more members to become involved in debating European matters would raise the profile of them and allow for greater scrutiny. In the Lords, The EU Committee’s reports have greater exposure and are routinely allocated debating time on the floor of the House which often attracts considerable cross party interest.

Previous Reviews

3. The City Corporation has contributed to a number of previous studies which have considered the subject of the Committee’s inquiry. Most notable perhaps is the House of Commons Modernisation Committee’s review in 20052 which included a proposal for a new European Grand Committee comprising MPs, peers, and UK MEPs. The City expressed concern at the time that whilst this was a welcome development, it was questionable how great an impact such a Committee would have if, as was intended, it would only meet four times a year. Infrequent meetings such as those envisaged risk becoming too generalised and at too late a stage to have a meaningful debate on issues of major importance.


4. The transposition of European instruments is also of interest and the Corporation has, for some time, been active in pushing for better scrutiny and the prevention of “gold plating” or over implementation of European instruments. The importance of ensuring that the implementation of subordinate legislation does not extend the obligations beyond those necessary to achieve compliance with the EU requirements is widely recognised. Failure to adopt such an approach risks compromising the competitive position of the City as against other financial centres. The Corporation is aware of the commitment successive Governments have undertaken to avoid “gold plating” of EU obligations and the instructions issued to departments in this regard. The view nevertheless remains that the manner in which subordinate legislation is framed does not always take the simplest approach, and that the situation would be improved by greater parliamentary oversight of proposed Statutory Instruments relating to financial services.

5. The Corporation would argue that even where secondary legislation is debated, parliamentary scrutiny of important Statutory Instruments still falls a long way short of a rigorous examination. Part of the difficulty in securing effective scrutiny is procedural in that debate on a Statutory Instrument is an “all or nothing” affair. The inability to propose amendments is a substantial limitation on the effectiveness of such debate as a policing mechanism.

6. It also affects the preparedness of those outside Parliament to engage with the scrutiny process, on the basis that their efforts should be directed at those who may be able to “make a difference” to the ultimate legislative outcome. Until Parliament is seen to offer the prospect of such a difference, the enthusiam on the part of those outside to provide input is likely to remain muted.

August 2012

1 Issues in Law Making 8: Scrutiny of European Union Business, Hansard Society Briefing Paper, February 2006.

2 Scrutiny of European Business, HC 465, Second Report of the House of Commons Modernisation Select Committee, Session 2004-05, March 2005.

Prepared 28th November 2013