Politically and legally important
Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee; Culture, Media and Sport Committee; Transport Committee; Treasury Committee; and Women and Equalities Committee
Proposal for a Directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States as regards the accessibility requirements for products and services
Article 114, TFEU; QMV; Ordinary Legislative Procedure
Business, Innovation and Skills
(37371), 14799/15 + ADDs 1–8, COM(15) 615
2.1These are international provisions to ensure that people with disabilities can access products and services. The proposed Directive aims to improve disabled persons’ access to products and services, minimising existing and potential differences between Member States—such as the design of cash machines—as they implement the accessibility requirements of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). The Government has now confirmed its opposition to the proposal, believing that the case for EU-level legislation has not been made.
2.2When the Committee first considered the proposal, at its meeting of 13 January, the Committee did not consider that the objective breached the principle of subsidiarity—i.e. that it could be better achieved by Member States acting alone—although we noted that we will continue to review the proposal’s alignment with subsidiarity. We sought clarification from the Government about its concerns surrounding the Commission’s impact assessment and the potential impact on specific sectors.
2.3The Parliamentary Under-Secretary of State at the Department for Business, Innovation and Skills, Baroness Neville-Rolfe, has now responded to the Committee making a number of points, the details of which are set out later in this chapter.
2.4In summary, the Government remains so concerned about the quality of the impact assessment and the lack of evidence to substantiate the identified problem that the Government does not consider there to be a clear rationale for regulating at the EU level. The Government concludes that EU-level legislation appears to be premature and potentially burdensome on business at a time when growth remains below trend. In meetings thus far, the Government has been clear that the EU should not be legislating for a potential future problem that may never arise and it has raised concerns about the use of Article 114 TFEU (internal market) as the legal base.
2.5Among the sector-specific concerns highlighted, a recurrent theme is the danger that the legislation may not be sufficiently flexible to take into account future technological change. There is also concern about the links between this proposal and other EU legislation, such as the Audio Visual Media Services Directive.
2.6Discussions have been progressing among Member State officials, some details of which are publicly available. These reveal a number of points not included in the Minister’s letter, such as scope and definitions.
2.7The Government is now clearly opposed to the proposal on the basis that: there is insufficient evidence that a problem exists that needs to be tackled; it is inappropriate to legislate for a future problem that may never arise; and that an internal market legal base should not be used. We make three points in response.
2.8First, concerning the evidence base, we note from Council working group papers that the UK is not isolated in its concerns about the quality of the impact assessment, including evidence base. That being so, has the Government considered the option of joining with other concerned Member States to halt discussions until the Commission has returned with further evidence?
2.9Second, as regards the argument that it is not appropriate to legislate for a future problem that may never arise and that a single market legal base should not be used, we note that the Court of Justice has previously ruled that recourse to a single market legal base is possible if the aim is “to prevent the emergence of future obstacles to trade resulting from multifarious development of national laws. However, the emergence of such obstacles must be likely and the measure in question must be designed to prevent them”. While it is clear that the Government is yet to be convinced that the emergence of such obstacles is “likely”, the ruling would nevertheless suggest that the principle of legislating for a potential future problem is in fact acceptable. We ask that the Government elaborate its position in light of the case law. We also ask that the Government inform us what legal base it would advocate in place of Article 114, and why.
2.10We note from the Outcome of Proceedings of the Working Party on Social Questions on 1 April that the Council Legal Service was asked for its opinion on the internal market legal basis. We trust that the Government will be able to draw on the opinion, which was due by mid-April, in its response to us.
2.11Third, does the Government accept that there is a possibility of at least some regulatory divergence—whether or not these create obstacles to the smooth functioning of the internal market—as a result of Member States implementing the accessibility provisions of the UNCRPD in different ways? If so, given that the UN Committee on the UNCRDP has expressly requested EU-level legislation, and given the Government’s resistance to the legislative options, are there non-legislative ways in which the degree of such divergence could be mitigated, perhaps through some form of co-ordination mechanism?
2.12One of the concerns that the Government highlights is that the proposal may “lock-in” existing technology and unfairly exclude developing technology. Has this issue been raised in negotiations thus far?
2.13The Government will be aware that we published a Report on transparency of the Council of the European Union, including its preparatory bodies (working groups and Coreper—the Committee on which the 28 Member State Ambassadors sit), on 26 May 2016. We noted that the Council Rules of Procedure provide that information about proceedings in working groups may be released to the public. Given that release is discretionary, it is welcome that several notes on the “Outcome of Proceedings” of the Social Questions Working Party discussions on this proposal have been published. We note, however, that there tends to be a considerable delay between their restricted publication and their release to the public. Can the Government explain why—if a decision has been made to release them—there is such a delay in doing so?
2.14We note that, in early negotiations, the United Kingdom appears to have rejected the applicability of disability accessibility requirements to public procurement contracts. We would welcome an explanation of the Government’s position in that regard and its response to the Commission’s argument that this is simply a further clarification of the existing legislative framework for public procurement.
2.15The possible introduction of this legislation has implications for a number of sectors, including transport, banking and the audiovisual sector. We therefore draw this chapter to the attention of the Committees on Transport, the Treasury and Culture, Media and Sport. As a file with potentially significant implications for businesses involved in the production and sale of relevant products and services, we draw it to the attention of the Committee on Business, Innovation and Skills. Finally, we draw it also to the attention of the Committee on Women and Equalities given the disability access issues raised in that Committee’s oral evidence session with the Equality and Human Rights Commission on 24 November 2015.
2.16We retain the proposal under scrutiny and look forward to a response to the issues set out above, and a progress report on the negotiations, as soon as possible after the Council meeting on 16 June.
Proposal for a Directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States as regards the accessibility requirements for products and services: (37371), + ADDs 1–8, COM(15) 615.
2.17Details of the Commission’s proposal, the Government’s Explanatory Memorandum and our own views were set out in our Report of 13 January.
2.18In summary, the Commission’s proposal sets common accessibility requirements (but not technical specifications) for certain key products and services, which were identified by the Commission in consultation with citizens, civil society organisations and businesses: computers and operating systems; ATMs; ticketing and check-in machines; smartphones; TV equipment related to digital television services; telephony services and related equipment; audiovisual media services (AVMS) and related equipment; air, bus, rail and waterborne passenger transport services; banking services; e-books; and e-commerce.
2.19The Committee requested the following information from the Government:
2.20The Committee retained the proposal under scrutiny and drew the matter to the attention of the House and of the Committees on: Business, Innovation and Skills; Culture, Media and Sport; Transport; and Women and Equalities.
2.21The Minister’s letter reminds the Committee of the background to the proposal and the Government’s core approach to the issue:
“The main objective of the proposal is to support Member States in their obligations under the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) with regards to the accessibility of products and services. The proposal aims to enhance the proper functioning of the internal market and remove barriers to the free movement of accessible products and services within the European Union. The Government is committed to ensuring persons with disabilities are able to access products and services in the sectors identified in these proposals and beyond. We have put in place appropriate levels of regulation to ensure that products and services entering the market are suitably accessible without the need for an overly burdensome regulatory framework.”
2.22He goes on to address the Committee’s specific points and queries. On the Commission’s impact assessment (IA) and modelling, he writes:
“HMG’s biggest concern with the IA is the date of some of its source material and assumptions, which is six or more years old (from 2011 or earlier). This has meant that the IA does not take into account technological developments in recent years and the proliferation of smart technology, in particular smart phones. In addition, the Government is concerned that the IA has not been through the more rigorous Impact Assessment Board procedures, which were only introduced recently. The UK has raised these concerns with the Commission on more than one occasion but has not so far received a response recognising these concerns or suggestions about how to address them.
“More specifically, our analysis suggests the benefit calculations included in the Commission’s Impact Assessment (IA) are likely to be an overestimate. This is largely because of the broad assumptions used and a lack of sufficient sensitivity analysis undertaken.
“The cost/benefit calculations take two different approaches depending on the data available for products and services. There is either a top down approach, which calculates the size of the market affected, making some assumptions of the accessibility costs as a proportion of market size, and then looks to see how many countries might have regulations for the product or service concerned. A correction factor is then applied to represent the likelihood that the regulations in different countries will be similar or differ (100% implies all different, 0% all the same).
“The correction factors are detailed on page 62 of the IA and show that nearly half are at the 100%, implying that every country will require different adjustments, with the others falling between 25-30%. These factors are based on various different views and whilst some sensitivity analysis is applied this is very limited and is a key factor in determining future costs, along with an assumption about how many countries will regulate the given product or service. There are some very broad assumptions included in here, such as development costs as a share of turnover, accessibility costs as a share of development costs, and operating expenditure as a share of development costs to get a figure for ongoing development costs. Moreover, the IA does not spell out where these have come from or set out how these might vary by product, size of firm, or sector. As the discussion in Annex 1 of the consultation responses suggests, accessibility costs are low or even non-existent for some products and high for others. The accessibility costs are in many cases estimated as 1% of total development costs with no discussion of how this is estimated and no sensitivity analysis. The website accessibility cost calculations are particularly unclear.
“Additionally, the administrative burden is assumed to be a one-off cost in relation to supplying information on the accessibility features of the product or service to either the customer or surveillance authorities. It is assumed to take one 8-hour day (cost of €18/hour) to provide this information but it is unclear whether or how this is applied to each product or service. For some sectors the cost is assumed to be one day per firm and for others it is assumed to be ten days per firm, which appears to be an underestimate.
“It is also noted from the discussion of the consultation responses that only 54% of respondents saw a lack of common accessibility standards as a barrier to selling into EU member states, with both lack of enforcement and inter-regional variations being mentioned as additional barriers. These additional barriers would not necessarily be removed by harmonisation as national rules will apply to avoid issues of disproportionate burdens. Given the lack of evidence of a systemic problem, there does not seem to be a clear rationale for regulating at the EU level. If, in time, demonstrable evidence of a systemic single market problem was to come to light HMG would re-examine the issue. However, at the moment EU-level legislation appears to be premature and potentially burdensome on business at a time when growth remains below trend.”
2.23Regarding the Government’s plans for its own consultation, the Minister indicates that no consultation has yet been undertaken on the draft Directive. He explains: “We plan to engage with stakeholders once more details have been clarified by the Commission. Once conducted, we will share responses in summary form with the Committee”.
2.24On the legal base and subsidiarity, he says:
“The rationale of the Directive is to try to ensure the integrity of the Single Market is not affected by Member States implementing the UN Convention on the Rights of Persons with Disabilities (UNCRPD) in different ways. At the meetings thus far, the UK has made the point that we should not be legislating for a potential future problem that may never arise and we have raised our concerns for using Article 114 as the legal base.”
2.25The Committee asked for clarification of the Government’s concerns in relation to the impact of the proposal on specific sectors. On transport services, he writes:
“The economic value of accessibility improvements is not understood well but, anecdotally, we know that there is an unmet need in relation to some disabled people’s access to information about transport services.
“When considering the potential benefits of the draft Directive, HMG understands that its intended effect would be implemented fully in around eight years. This means that any impact on disabled people must be seen in the context of a world almost a decade from now. We are extremely concerned that the proposals as currently drafted will ‘lock-in’ existing technology and unfairly exclude developing technology, to the detriment of the intended beneficiaries of these proposals.
“Weighing against the potential benefits, HMG understands that a number of costs may be incurred, depending upon how the Directive is intended to be implemented. In particular:
“At this stage, it is difficult to know for certain whether other products will need to be altered in accordance with the Directive outside of their normal life cycle as HMG have not undertaken thorough analysis of this specific issue. It is likely, however, that given the pace of technological change including the introduction of smart ticketing and contactless payments, that the lifecycle of existing affected products and services is relatively limited. Websites and apps tend to be upgraded iteratively as operating systems and output requirements evolve, potentially meaning that accessibility considerations can be reflected more quickly, where the underlying approach allows it.
“For rail, the proposed Directive’s provisions do not appear to conflict with or contradict existing EU and national provisions contained in the Persons with Reduced Mobility Technical Specification and the Secretary of State’s Code of Practice on Design Standards for Accessible Stations. They do however go further than these – for example by requiring additional sensory measures on ticket machines. Disabled passengers across all modes currently receive assistance with any part of their journey, including the purchase of tickets.
“Rail operators and TVM suppliers are already developing improvements to ticket machines that will provide some, if not all, of the requirements set out in the Directive, for example, remote video assistance would enable information to be available via the machines in a second sensory format. The next 10 years are going to be transformative for customers in their experience of ticketing with a likely move towards purchasing their tickets on personal devices like smart phones.
“Given the timescale for implementation, it is likely that the natural lifecycle of affected products and services will result in a reduction in the net cost of ensuring that they are accessible in the future.”
2.26On audio-visual services, he writes:
“The EU Audio Visual Media Services Directive contains specific provision concerning the accessibility of audio-visual media services, requiring Member States to encourage audio visual media service providers to ensure that their services are gradually made accessible to people with a visual or hearing disability. The UK has implemented this provision, and has gone further with respect to television broadcasting, setting specific targets in terms of signing, subtitling and audio description.
“The proposed Directive has the potential to go much further than the existing provisions of the Audio Visual Media Services Directive, and indeed, beyond the provisions the UK has already put in place for television broadcasting. In HMG’s view, accessibility provisions pertaining to audio visual media services are best left to the Audio Visual Media Services Directive as the Commission’s IA does not clearly establish that there is a significant horizontal problem to address in this area. Further, this proposal does not appear to have taken into account the on-going review of the Audio Visual Media Services Directive as part of a wider series of actions regarding the digital single market; this review includes the current accessibility requirements.”
2.27On banking services, he writes:
“The Commission is consulting on a Retail Green Paper, which seeks views on how to improve choice, transparency and competition in retail financial services, and how to facilitate cross-border supply of these services. Accessibility, and a fragmentation of accessibility requirements, is not discussed in this Paper, indicating that accessibility is not considered to be an issue that needs addressing in financial services.
“Evidence has not been provided in the IA that demonstrates that banks do not operate in other EU Member States because they are prevented by divergent accessibility requirements. This raises doubts as to the existence of a significant trade barrier and fragmentation. It also raises questions as to why banking has been prioritised as a sector that particularly merits intervention.
“In the Government’s view, the assumption that harmonising accessibility requirements will actually increase competition in the EU is not evidenced, raising doubts about benefits to businesses, the single market, and to consumers.
“In addition, the impact assessment does not break down figures by country or by sector, so it is difficult to establish precisely what the impact on the sector in the UK would be. In regards to banking, the impact assessment notes that: ‘the cost for business to comply with … divergent national accessibility requirements [for ATMs] is estimated at €300 000’. This cost is not significant.
“Firms comply with the requirements in the Equalities Act (2010) and work is being done to improve accessibility in the banking sector. There is evidence that banks already compete on accessibility. Many major banks in the UK are already offering assisted-service devices (such as Automated Teller Machines (ATMs) and cash deposit machines), accessible branches and websites, and have plans for future developments. There are also industry initiatives to improve accessibility. For example, the financial services industry, together with charities and consumer groups, last year launched a Financial Services Vulnerability Taskforce in order to look proactively at the ways in which institutions can improve the experience of customers who might be in vulnerable circumstances.
“HM Treasury’s assessment is that the requirements of the proposal on ATMs are more prescriptive than the requirements on general banking services. The specificity of the requirements, including for alternative font sizes, colour contrasts, control of volume, may be particularly difficult and costly to implement, as it could render obsolete accessible ATMs that are already on offer or in development. The long life span of ATMs, and the necessary lead time for development, may also contribute to this. Regulation that is not technology neutral may not be future-proofed, possibly preventing companies from capitalising on developments in technology.”
2.28The Minister sets out the position on the negotiations as follows:
“Many Member States do not yet have a well-developed position on the proposal, in part due to the coordination challenges of the Directive being both cross-cutting and detailed in nature, as such the UK is engaging with their opposite policy leads in Member states in addition to interactions in working group.
“Given that many Member States are still coordinating positions amongst their various Ministries, there is an expectation that there will be no agreement before the Council in June where the Presidency is expected to give a progress report to Ministers. Negotiations will then continue again under the Slovakian Presidency.”
2.29The Minister notes that, as the proposals progress further, he will keep the Committee informed of any significant progress.
24 on this proposal.
25 Case C-376/98 Germany v Parliament and Council, 5 October 2000 and Case C-380/03 Germany v Parliament and Council, 12 December 2006.
26 , Working Party on Social Questions, 1 April 2016.
27 Eighteenth Report HC 342-xvii (2015–16), (13 January 2016).
28 , 4 May 2016.
1 June 2016