Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Select Committee
Proposal for a Regulation of the European Parliament and of the Council on establishing a single digital gateway to provide information, procedures, assistance and problem solving services and amending Regulation (EU) No 1024/2012
Articles 21(2), 48 and 114(1) of the Treaty on the Functioning of the European Union
Business, Energy and Industrial Strategy
(38699), 8838/17 + ADDs 1–7, COM(17) 256
7.1Businesses seeking to establish a commercial presence in other EU Member States, and individuals seeking to exercise their internal market rights in other EU Member States, must often commit time and resources to carry out multiple administrative procedures. Online information is often only available in the national language, increasing the cost of completing these procedures. These barriers combine to make it difficult for businesses, particularly Small and Medium Enterprises (SMEs), to expand into other Member States.
7.2On 2 May 2017 the European Commission released a package of legislative and non-legislative proposals designed to improve compliance with and enforcement of Single Market rules (the Compliance Package). This package included a proposal for a Regulation which would require the Commission to develop a more comprehensive, user-friendly, centralised portal for the provision of information and assistance to help citizens and businesses navigate the Single Market (the Single Digital Gateway).
7.3The aim of the proposal is to remove obstacles that exist for both citizens and businesses when exercising their rights in the Single Market. By creating a centralised digital access point, and ensuring that all the relevant information and procedures are available in a single place online, businesses and citizens should be better able to understand requirements involved in setting up business or going to study or work in another Member State.
7.4To enable citizens to effectively exercise their rights, the Single Digital Gateway must cover three layers, namely information, procedures and assistance services. The Regulation also sets out quality requirements for the assistance and problem-solving services already provided by Member States. It does not change the rules, regulations and procedures that Single Market participants must comply with in order to operate in the Member States, which are set out in a wide range of EU and domestic law.
7.5The proposal sits at the crossroads of the Single Market Strategy, which aims to improve implementation and enforcement of the Single Market and help SMEs scale-up their cross-border operations, and the Digital Single Market Strategy, which attempts to exploit the opportunities presented by digitisation.
7.6In his Explanatory Memorandum of 10 July 2017 the Parliamentary Under-Secretary of State for the Department of Business, Energy and Industrial Strategy (Lord Prior) welcomed the proposal, which he said would benefit businesses, particularly SMEs, and would potentially continue to do so after the UK leaves the EU, although UK participation would be subject to the outcome of Article 50 negotiations. The Minister stated that the proposal conforms to the principle of subsidiarity and that EU-level action is warranted.
7.7The Government’s EM also indicated that its main concerns related to the technical details of the Regulation—the obligation it would create to ensure that information is available in a second EU language, and the fact that the UK does not currently provide full online access to some of the thirteen procedures that are specified in the Regulation.
7.8On 20 October 2017 the Minister provided the Committee with an update in relation to this proposal. He clarified that the Government does not currently provide full online access, within the definition of the Regulation, to any of the procedures listed in Annex ll, and that it was seeking flexibility on this point. The Minister added that further analysis by the Government showed that the Commission had substantially underestimated the cost of the translation requirements that the Regulation would create, and that one way of addressing this issue would be to give the Member States greater flexibility over what they translated.
7.9The Minister states that the Presidency has been holding frequent Working Groups, and that there is an emerging consensus that the Single Digital Gateway concept could be welcome, although Member States have also identified a broad range of drawbacks in the proposal, and are looking for greater flexibility.
7.10The Minister indicated that the Presidency intends to seek a General Approach at the Competitiveness Council on 30 November, and undertook to write again in November to update the Committee on revisions to the text and to seek scrutiny clearance in advance of the Council.
7.11We thank the Government for its Explanatory Memorandum and thorough update on aspects of the proposal as well as progress in Council Working Parties.
7.12The Committee notes the Government’s support for “the benefits of the Single Digital Gateway for helping businesses, particularly SMEs, partake in cross-border trade, and for assisting citizens living and working in the EU” and its view that “EU-level action is appropriate in order to remove barriers to Single Market activity due to poor quality information or lack of online services, provided that it is proportionate and represents good value for money”.
7.13Although the Government appears supportive of the proposal’s broad aims, we note its assessment that the proposed Regulation “should allow Member States more flexibility to determine when translation is necessary to meet user-needs in a way that delivers value for money”. The Minister’s subsequent update clarifies that the UK does not currently provide full online access to any of the types of e-procedure that are described in Annex 2.
7.14Regarding the UK’s imminent exit from the European Union, we note the Government’s assessment that the Single Digital Gateway “will continue to reduce the administrative burden for UK businesses and citizens engaging in cross-border activity following our exit from the EU” and that, because the Regulation will only enter into force two years after its adoption as Union law, “the UK’s participation in the Gateway upon exiting the EU [will] be subject to the withdrawal negotiations”.
7.15In relation to the implications of withdrawal from the European Union for the Single Digital Gateway, we ask the Government to clarify the following:
7.16We ask the Government to write to the Committee by 17 November with an update on the General Approach that is likely to be sought at the Competitiveness Council on 30 November, providing a summary of any revisions to the text and outlining the Government’s developing position. We also ask the Government to respond to the Committee’s questions, although we will accept if the short time available before the Competitiveness Council means that the Government prefers to respond to these along with its post-Council update.
7.17In the meantime, we retain this proposal under scrutiny and draw it to the attention of the Business, Energy and Industrial Strategy Select Committee.
Proposal for a Regulation of the European Parliament and of the Council on establishing a single digital gateway to provide information, procedures, assistance and problem solving services and amending Regulation (EU) No 1024/2012: (38699), + ADDs 1–7, COM(17) 256.
7.18Citizens and businesses need to comply with national rules whenever they travel, work, live or do business across borders. It is therefore essential that they are informed about applicable rules, that they can find the appropriate assistance services and that they do not encounter any unnecessary obstacles when dealing with national administrations to ensure that they comply with the relevant rules.
7.19Despite this, significant obstacles exist for both citizens and businesses interested in moving to, selling products or providing services in another EU country. Finding relevant, accurate and understandable information online as well as being able to access and carry out administrative procedures online is crucial for those willing to use the advantages of the Single Market, but often remains complicated, time-consuming and expensive, if at all possible.
7.20The Commission provides documentation of these difficulties:
7.21Online information, when present, is not often available in languages other than the national one, considerably reducing accessibility for foreign users. Therefore businesses must often dedicate significant resources to overcome these administrative barriers, which may act as a barrier to establishing a presence in another Member State, particularly for SMEs.
7.22In September 2015 seventeen Member States called for an initiative enabling every business to succeed in the Single Market, by setting up a network of Single Digital Gateways (fully functioning e-government portals) to help businesses operate in other Member States.
7.23In January 2016 the European Parliament called for the development of a comprehensive Single Digital Gateway as a single end-to-end digital process for businesses to set up and operate across the EU. The single digital gateway would expand, improve and streamline all information, assistance and problem-solving services needed to operate efficiently across borders. The Single Digital Gateway does not aim to change the rules, regulations and procedures Single Market participants have to comply with. Member States or the EU will maintain their responsibilities to define them and to update the information available online.
7.24The scope of the information and procedures that must be made available to the Single Digital Gateway and on Member States’ websites is covered in the Annexes to the Communication.
7.25The Parliamentary Under Secretary of State for the Department of Business, Energy and Industry Strategy (Lord Prior) summarises the main provisions of the Regulation as follows:
7.26The Minister believes that the proposal conforms to the principle of subsidiarity, and therefore supports EU-level action:
“In the Government’s view, the proposal seeks to strike a sensible balance. Whilst the Commission will own and resource the central Gateway, Member States will still be responsible for their own websites and online procedures. Rather than centralising the provision of information and services relating to cross-border activity, the proposal requires Member States to meet a set of common standards. EU-level action is appropriate in order to remove barriers to Single Market activity due to poor quality information or lack of online services, provided that it is proportionate and represents good value for money, particularly in the provision of fully online procedures.”
7.27The Minister states that he recognises the benefits of creating a Single Digital Gateway, and that it will continue to be of value post-exit:
“The UK recognises the benefits of the Single Digital Gateway for helping businesses, particularly SMEs, partake in cross-border trade, and for assisting citizens living and working in the EU. We believe this will continue to reduce the administrative burden for UK businesses and citizens engaging in cross-border activity following our exit from the EU. In line with the Government’s Digital Strategy, the UK remains committed to supporting businesses and citizens through high quality online information and services.”
7.28However, the Minister also notes that the two year period following the adoption of the Regulation means that it is unlikely (on the Article 50 timetable) that it will apply to the UK before it leaves the EU:
“If the proposal is adopted before the UK leaves the EU it would directly apply in the UK. However, Article 37 of the proposal provides that the substantive provisions shall apply two years after entry into force. In the context of the two year negotiating period triggered by Article 50, the Gateway will only be operational once the UK has left the EU. The UK’s participation in the Gateway upon exiting the EU would therefore be subject to the withdrawal negotiations.”
7.29The Minister adds that:
“If the Regulation is adopted in 2018, the Commission foresee technical work and adoption of implementing and delegated acts in 2019. A beta (test) version could launch in late 2019, and the final gateway could be launched in 2020.”
7.30The Minister takes issue with one aspect of the proposed Regulation, which is the requirement to provide a wide range of information in at least one other EU language:
“The proposal includes the requirement to provide a wide range of information (set out in Annex I of the proposal) in at least one other official EU language. Whilst the UK Government recognises the benefits of providing information in a second language in certain circumstances, the proposal should allow Member States more flexibility to determine when translation is necessary to meet user-needs in a way that delivers value for money.”
“the Single Digital Gateway should not impose unnecessary costs on Member States. In particular, the cost of translating all national information within the scope of the proposal and keeping this translated content up-to-date would be significant.”
7.32The Minister also notes that “The UK does not currently provide full online access to all types of e-procedure [mandated by the Regulation]” and suggests that one possible way to mitigate this concern would be for service providers to join GOV.UK Verify, the Government’s identity assurance scheme”.
7.33On 20 October 2017 the Minister provided the Committee with a further update. This update consists of responses to questions posed by the House of Lords European Scrutiny as well as an update on progress in Council working parties.
7.34The chief points the Minister makes in response to the Lords’ questions are:
7.35The Minister (Lord Prior) also provides an update on discussions in the Working Group. He states that:
7.36The Minister adds that the Presidency has been holding frequent Working Groups and intends to seek a General Approach at the Competitiveness Council on 30 November. He states that he will write again in November to update the Committee on revisions to the text and to seek scrutiny clearance in advance of the Council
45 Study on information and assistance needs of businesses operating cross-border within the EU, Final Report, April 2017.
20 November 2017