Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents

1 Better Regulation

Committee's assessment Legally and politically important
Committee's decisionNot cleared from scrutiny; recommended for debate in European Committee C; further information required
Document details(a) Commission Communication: Better regulation for better results — An EU agenda

(b) Commission Communication: Proposal for an Interinstitutional Agreement on Better Regulation

Legal base(a) —

(b) Article 295 TFEU; QMV


Document numbers

(a) Business, Innovation and Skills

(b) Foreign and Commonwealth Office

(a) (36885), 9079/15 + ADDs 1-2, COM(15) 215

(b) (36888), 9121/15 + ADD 1, COM(15) 216

Summary and Committee's conclusions

1.1 On 19 May 2015 the Commission published its package of measures intended to refresh and take forward its work on better regulation. It comprises:

·  an overarching Communication, document (a), the themes of which are increased scrutiny of, and consultation on, EU legislative proposals. Details are outlined below;

·  an accompanying Commission staff working paper Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook.[ 1] This is the second edition of the scoreboard which reviews the 164 initiatives for simplification and regulatory burden reduction identified by the Commission under its rolling REFIT programme;

·  the Commission's internal Better Regulation Guidelines, which it has been applying since 19 May 2015, and is complemented by a series of downloadable web-tools comprising the Better Regulation "Toolbox". The Guidelines draw on public consultations carried out in 2013 and 2014 on the previously separate guidelines on impact assessment, stakeholder consultation and evaluation;

·  a proposal for an Interinstitutional Agreement on Better Regulation (IIA), document (b). This would set out the commitments of the European Parliament, the Council and Commission concerning better regulation, interinstitutional relations and the legislative process as outlined in more detail below; and

·  a proposed Common Understanding on Delegated Acts, annexed to the IIA, which repeats the reassurance for Member States of early input into the delegated legislation procedure found in a similar 2011 document, and also sets out, for the first time, some guidelines for determining when procedure for the Commission to adopt EU subordinate legislation should be the delegated legislation procedure or the implementing legislation procedure, as outlined in more detail below.

1.2 It is vitally important that the EU legislates only when necessary; and that such legislation is high quality and evidenced based. EU legislative practice must ensure that this is the case. The statements of intent and commitments contained in these documents are welcome, but only go so far. They need to be put into practice rigorously. The fact that this new package is so substantially based on existing programmes and agreements indicates that this has not been the case in the past. We consider that this package needs to be accompanied by a change in attitude by all the EU institutions concerned.

1.3 Given the importance and wide ranging nature of the package we recommend it for debate in European Committee C. In the meantime these documents remain under scrutiny.

1.4 In advance of that debate we ask both Ministers who have submitted an Explanatory Memorandum (Anna Soubry and Mr David Lidington) the following general questions:

·  How they think the package could be strengthened?

·  What practical steps they envisage to ensure that it is rigorously applied?

·  The extent to which the package represents, as has been asserted by some commentators,[ 2] a power grab by the Commission by limiting the autonomy of the European Parliament and the Council in operating the legislative process?

1.5 We welcome the creation of a Regulatory Scrutiny Board which is stronger than its predecessor Impact Assessment Board. However we note that the Communication envisages the Commission being able to take action "in the absence of an adequate supporting impact assessment" whereas the Guidelines require a positive opinion of the Board before internal interservice consultation in the Commission can proceed. We ask the Minister for Small Business, Industry and Enterprise (Anna Soubry) to clarify the circumstances in which the Commission can table a legislative proposal in the absence of a positive opinion from the Board, and whether she considers that this aspect of the package needs strengthening.

1.6 We welcome increased consultation and transparency in the legislative process. We draw attention to three aspects of this package which could affect scrutiny of EU legislation by this Committee:

·  "inception impact assessments" could provide an evidential base on which to start early consideration of compliance of a legislative proposal with the principle of subsidiarity. We therefore ask the Minister for Europe whether he will press for these to be drawn to the attention of national parliaments. At present the proposed IIA only envisages that the final results of Impact Assessments will be made available to national parliaments;

·  the Commission's intention to include a more through explanation in its explanatory memoranda as to how a legislative initiative meets the twin tests of subsidiarity and proportionality responds to a consistent call from our predecessor Committee in its reasoned opinions, which itself was based on the grounds that this was a Treaty obligation which the Commission had been failing to meet;[ 3] and

·  our predecessor Committee drew the attention of the House to the difficulties of scrutiny due to the prevalence of documents being classified as Limité. This makes scrutiny of trilogue negotiations involving the European Parliament, the Council and the Commission particularly difficult. Increased transparency during the legislative process would alleviate this difficulty, but we note, with disappointment, that paragraph 28 of the proposed IIA retains the equivocation of its 2003 predecessor as to the obligation of the institutions to be transparent in respect of trilogue negotiations. In this context we also draw the attention of the House to the fact that the European Ombudsman has opened an inquiry into the transparency of trilogues based on her concern that they be conducted in a manner which can be reconciled with the requirements as to the transparency of the legislative procedure, set out in Article 15(2) and (3) TFEU.

1.7 It is disappointing that the IIA does no more than "reiterate the role and responsibility of national Parliaments as laid down in the Treaties". We understand this is also an active concern of the Dutch Parliament. We welcome the Minister for Europe's statement that "The Government believes that there is much that can be improved in engagement between the EU institutions and national parliaments and will continue to underline the importance of this issue for the UK during the IIA negotiations and elsewhere".   We ask the Minister for Europe what specific amendments to the proposed IIA he will seek with a view to enhancing the role of national parliaments.

1.8 We welcome, in principle, guidance clarifying the divide between the delegated legislation procedure and the implementing legislation procedure in the proposed Common Understanding. Up to now the Government has favoured the implementing legislation process over the delegated legislation process because the former affords more effective Member State input into the formulation of the proposal for EU subordinate legislation. We ask the Minister for Europe for his view whether the ongoing commitment to making better use of national experts meets this concern and, if not, what changes he will be seeking to the proposed Common Understanding.

1.9 We note the Minister for Europe's view that the "Member States should also preserve full autonomy over plans for implementation". We ask him how this should be reflected in the proposed IIA.

Full details of the documents: (a) Commission Communication: Better regulation for better results — An EU agenda: (36885), 9079/15, COM(15) 215, + ADDs 1-2; (b) Commission Communication: Proposal for an Interinstitutional Agreement on Better Regulation: (36888), 9121/15, COM(15) 216, + ADD 1.

The Communication

1.10 The significant new components of the better regulation agenda envisaged by the Commission in this Communication are:

·  "Roadmaps" and "inception impact assessments" intended to give stakeholders the chance to provide feedback and prompt them for relevant information, right from the very start of work on a new initiative;

·  twelve-week public consultations when preparing new proposals and when the Commission evaluates and carries out "fitness checks" of existing legislation;

·  an invitation from the Commission to citizens and stakeholders to provide feedback during the eight week period national parliaments have for delivering subsidiarity reasoned opinions;

·  an indicative list of proposed delegated acts to be published online with draft texts open to the public at large on the Commission's website for four weeks in parallel to the consultation of experts in the Member States. The same will apply to proposals for important Commission implementing legislation;

·  a new "Lighten the Load - Have Your Say" feature on the Commission's Better Regulation website to give the public a chance to air their views and make comments on existing EU laws and initiatives in addition to the formal consultations the Commission undertakes;

·  an improved explanatory memorandum accompanying each Commission proposal for legislation[ 4] addressing how better regulation principles have been applied, its impact (particularly on SMEs), the views of stakeholders, and a more through subsidiarity and proportionality explanation;

·   the replacement of the existing Impact Assessment Board of the Commission by a Regulatory Scrutiny Board with more personnel resources, some independent members and a remit extended to the checking of major evaluations and "fitness checks". Should the Commission wish to proceed in the absence of an approved impact assessment it will publicly explain why; and

·  the REFIT programme to be refreshed by focussing on serious sources of inefficiency and regulatory burden, providing quantitative estimates of benefits, embedding it in the annual Work Programme and creating a "REFIT Platform" to provide a basis for inclusive work on a common agenda. It will involve high level experts from business, social partners, and civil society appointed through an open and transparent process as well as experts from all 28 Member States, the European Economic and Social Committee and the Committee of the Regions.

1.11 The Commission uses the Communication to call upon the European Parliament and the Council to commit to better regulation, including by prioritising legislation emerging from the REFIT programme, carrying out impact assessments on any substantial amendment which they propose, and to include systematically in every new act provisions for monitoring and future evaluation. It also calls upon Member States to avoid "gold plating".

The proposed Interinstitutional Agreement

1.12 This proposal is intended to replace an existing 2003 Interinstitutional Agreement on better lawmaking and the 2005 Interinstitutional Common Approach to Impact Assessment; and to supplement continuing Agreements on codification (1994), the quality of drafting (1999), the use of the recasting technique for legal acts (2001);[ 5] plus Declarations on practical arrangements for the co-decision procedure (2007)[ 6] and on explanatory documents (2011).[ 7]

1.13 The significant elements of it are:

·  it would re-iterate the importance of the ""Community method", transparency of the legislative process, democratic legitimacy, subsidiarity, proportionality, legal certainty and simplicity, clarity and consistency in the drafting of legislation";

·  it would seek to re-enforcement the EU's "annual and multiannual programming", including by the Commission and the European Parliament exchanging views on the "the main elements guiding the preparation of the Commission Work Programme" on the basis of a letter from the Commission President;

·  the three institutions would agree to identify proposals from the Commission's Work programme that will receive priority treatment, and there would be regular in-year updates;

·  the Commission's impact assessment process would commence with consultation of stakeholders, to address whether EU action is needed and to map out alternative solutions using quantitative and qualitative analysis. European Parliament and Council consideration of legislative proposal would start by consideration of the Commission's Impact Assessment and any substantial proposed amendments to the Commission's proposal would be subject to an impact assessment. The final results of the impact assessment process would be made available, including to national parliaments;

·  any of the three institutions would be able call for an independent panel to assess whether a substantial proposed amendment to a Commission proposal meets the requirements to "be comprehensible and clear; allow parties to easily understand their rights and obligations; include appropriate reporting, monitoring and evaluation requirements; avoid disproportionate costs; and be practical to implement";  

·  an eight week consultation with stakeholders would follow the publication of a proposal and its impact assessment, in parallel to the period for subsidiarity consideration by national parliaments;

·  a provision that "The three institutions agree that proposals for significant amendments or development of Union legislation should be rooted in robust prior evaluation of the efficiency, effectiveness, relevance, coherence and value added of existing law and policy" would be supported by monitoring, evaluation and reporting requirements in existing legislation;

·  the Commission would reiterate that it will include in its explanatory memoranda explanations of the choice of legal instrument and how the proposed measure is justified in the light of the principles of subsidiarity and proportionality and are compatible with fundamental rights;  

·  the institutions would be a co-ordinate of the legislative process and transparency by making public "their preparatory and legislative work … in an appropriate fashion" and by ensuring "an appropriate degree of transparency of the legislative process, including of trilateral negotiations between the three institutions"; and

·  Member States would be asked for better and more transparent implementation, making clear any addition national gold plating.

The proposed Common Understanding on Delegated Acts

1.14 The proposed Common Understanding would clarify when the delegated legislation procedure[ 8] should be prescribed for subordinate legislation in parent legislation, and when the implementing legislative procedure.[ 9] The following should be adopted by the delegated legislative procedure: (a) any amendment of the parent legislative act, including annexes, (b) the addition of further substantive rules and criteria, (c) establishing procedures (i.e. a way of performing or giving effect to something) that involves a further policy choice, (d) determining the type of information which must be provided or supplementing the obligation to provide information. The following should be adopted by the implementing legislative procedure: (a) authorisations, (b) establishing details of procedures to ensure uniform conditions, (c) the format of information to be provided, and (d) work programmes and implementing financial instruments.

1.15 It would also reinforce prior consultation in respect of proposals for delegated acts by envisaging consultation with outside experts and experts designated by the European Parliament, in addition to the current commitment to consult experts designated by Member States; and require the Commission to summarise the results of consultation in the explanatory memoranda for proposed delegated acts.

The Explanatory Memoranda

1.16 In her Explanatory Memorandum of 4 June the Minister for Small Business, Industry and Enterprise summarises the Communication, the guidelines and the State of Play and outlook on REFIT. She recalls that many of the commitments in the Communication respond to recommendations called for in the COMPETE principles advocated in the October 2013 report of the Prime Minister's Business Taskforce report ("Cut EU Red Tape"). She generally welcomes the Communication and the commitments it contains, and more specifically:

·  welcomes the call for the burden of Council or European Parliament amendments to proposed legislation to be assessed, as a step towards the compilation of an annual statement of the cost of new EU regulation recommend by the Taskforce;

·  welcomes the wide range of evaluation activity planned as part of the REFIT programme; and

·  indicates that the Guidelines implement the UK's top priorities.

1.17 In his Explanatory Memorandum of 25 June the Minister for Europe summarises the IIA under the headings of better regulation, inter-institutional relations and the legislative process. He generally welcomes the IIA but makes the specific observations:

·  the Government will engage constructively with the institutions to ensure that new legislative proposals address sufficiently the needs of Small and Medium-sized Enterprises (SMEs) and micro-enterprises; to strengthen quality control of Impact Assessments: and to encourage EU burden reduction efforts, ideally through a burden reduction target;

·  the implementation of EU legislation by Member States should provide sufficient flexibility to address individual national characteristics. Member States should also preserve full autonomy over plans for implementation; and

·  the Government believes that there is much that can be improved in engagement between the EU institutions and national parliaments and will continue to underline the importance of this issue for the UK during the IIA negotiations and elsewhere.

Previous Committee Reports


1   "REFIT" stands for the Commission's Regulatory Fitness and Performance Programme first proposed in December 2012. Back

2   As reported by Euractiv. Back

3   Article 5 of Protocol 2 On the Application of the Principles of Subsidiarity and Proportionality. Back

4   Except implementing legislation. Back

5   To prevent the need to refer to multiple amending instruments. Back

6   Design to encourage early agreement to legislative proposals. Back

7   Concerning information to be provided by member States of their transposition of EU directives. Back

8   Article 290 TFEU. Back

9   Article 291. Back

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Prepared 30 July 2015