Waiver granted; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy 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
10.1Businesses 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 SMEs, to expand into other Member States.
10.2On 2 May 2017 the European Commission presented 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). 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. The Regulation does not change the rules 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.
10.3In 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 considered that EU-level action was warranted. Nonetheless, the Minister indicated that the Government had a number of concerns about the technical details of the Regulation – particularly 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.
10.4On 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. He indicated the Presidency was expected to seek a General Approach at the Competitiveness Council on 30 November, and undertook to write again to seek scrutiny clearance in advance of the Council.
10.5On 6 November 2017, Lord Henley – Lord Prior’s successor – wrote to the Committee to request a scrutiny waiver to participate fully in the at Competitiveness Council on 30 November. The Minister indicates that the last two Working Groups have shown that there are still significant concerns among Member States about the proposals’ scope and prescriptive requirements as well as their cost implications, with wide support for a more balanced approach. Although the Presidency has attempted to address some of these concerns in its latest text, the Minister states that it is clear that will have to be “a further watering down of the proposal” to secure a qualified majority in Council.
10.6The Minister indicates that the changes will have to reduce costs and introduce more flexibility in the provision of services for the Government to support the text, and provides detail about the specific changes that the UK will advocate in the remaining weeks of negotiation which precede Competitiveness Council. Given that most other Member States appear to share the UK’s concerns, however, he envisages “few circumstances in which the UK would not be able to support the text put to a Council vote”. On this basis, the Minister requests a waiver to participate fully at Council. He undertakes to update the Committee afterwards.
10.7We welcome the Government’s update on progress in relation to the Single Digital Gateway Regulation and Council Working Group negotiations regarding this proposal. We note that the other Member States broadly share the Government’s concerns about the proposal’s “wide scope, prescriptive quality requirements, tight timescales and high costs”, and that the Government believes that there will have to be a further watering down of the proposal to secure a qualified majority in support of the text. We also note the Minister’s objectives in the remaining weeks of negotiations, which centre upon reducing costs and introducing more flexibility.
10.8On this basis we are willing to grant the Government a scrutiny waiver for the Competitiveness Council on 30 November (or, if timings change, the relevant Council meeting at which the file is discussed) on the condition that the changes made to the text are broadly in line with the objectives outlined by the Minister in his letter: i.e., the text becomes more flexible regarding translation requirements and service provision, reducing implementation costs.
10.9Regarding the UK’s imminent exit from the European Union, we note the Government’s previous 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”.
10.10Despite this waiver, we believe that further clarification and analysis of the implications of withdrawal from the European Union are needed in relation to this proposal. We therefore ask for responses to the previous questions on this point, which we reiterate below:
10.11We ask the Government to provide the Committee with a post-Council update by 17 December 2017, including an account of significant changes to the text, the extent to which it accords with UK objectives, and how the Minister voted. We also ask that the Government respond to the above Brexit-related questions in the same letter. In 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.
10.12Citizens and businesses need to comply with national rules whenever they travel, work, live or do business across borders. It is important therefore 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.
10.13Despite 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.
10.14The Commission provides documentation of these difficulties:
10.15Online 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.
10.16In September 2015, 17 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.
10.17In 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.
10.18The 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.
10.19The Parliamentary Under Secretary of State for the Department of Business, Energy and Industry Strategy (Lord Prior) said that the Regulation included the following key provisions:
10.20The Minister recognised 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.”
10.21However, the Minister also noted that the two year period following the adoption of the Regulation meant that it was unlikely (on Article 50 timetable) that it would apply to the UK before it left the EU.
10.22The Minister also indicated that the Government had concerns about the requirement to provide a wide range of information in at least one other EU language, and suggested that “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 Minister also noted that the UK did not currently provide full online access to all types of e-procedure mandated by the Regulation.
10.23On 20 October 2017 the Minister provided the Committee with a further update. This update consisted principally of responses to questions posed by the House of Lords European Scrutiny as well as an update on progress in Council working parties.
10.24The Minister’s key observations were that:
10.25In relation to Council Working Groups, the Minister stated that:
10.26The Minister added that the Presidency had been holding frequent Working Groups and intended to seek a General Approach at the Competitiveness Council on 30 November. He stated that he would write again in November to update the Committee on revisions to the text and to seek scrutiny clearance in advance of the Council.
10.27On 6 November 2017, the Parliamentary Under Secretary of State at the Department of Business, Energy and Industrial Strategy—Lord Prior’s successor, Lord Henley—wrote to request a scrutiny waiver to participate fully in the Competitiveness Council on 30 November.
10.28The Minister provides a summary of the last two Working Groups, which suggests that there is a consensus among the Member States in the Council that the proposal needs to be scaled back:
“The last two Working Groups have revealed that there are still significant concerns among Member States about the proposal’s wide scope, prescriptive quality requirements, tight timescales and high costs. Even Member States, such as the UK, that are advanced and ambitious in the provision of e-government services, are seeking a more balanced approach. In particular, several Member States have pushed back against the non-discrimination, ‘fully online’ and translation requirements. Member States have raised concerns about the pace of the negotiations and the length of the implementation period. The Presidency has attempted to address some of these concerns in the latest revised text (for example, by extending the implementation period for certain obligations from two to four years), but it is increasingly clear that there would have to be a further watering down of the proposal to secure a qualified majority in support of the text by end of the month. Our view is that these changes will have to focus on reducing costs and introducing more flexibility in the provision of services.”
10.29Setting out the Government’s approach to the file, the Minister states that in the remaining weeks of negotiations, prior to Competitiveness Council, the Government would focus on amending the proposal to provide greater flexibility for Member States so as to ensure better value for money. Specifically, he states that the Government would:
10.30The Minister concludes that the Government would monitor progress carefully in upcoming working groups to determine whether enough had been done to address the UK’s concerns ahead of a potential General Approach. However, he observes that, as the UK’s concerns were shared by most other Member States, and the Presidency desired to make rapid progress, he could envisage “few circumstances in which the UK would not be able to support the text put to a Council vote”.
10.31The Minister therefore requests a scrutiny waiver to participate fully at Council on the condition that he update the committee afterwards.
First Report HC 301–i (2017–19), chapter 5 (13 November 2017).
55 Letter from Lord prior to Sir William Cash
56 Study on information and assistance needs of businesses operating cross-border within the EU, Final Report, April 2017.
59 Letter from Lord Prior to Sir William Cash
60 Letter from Lord henley to Sir William Cash .
28 November 2017