Not cleared from scrutiny; further information requested
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action Plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses
Business, Energy and Industrial Strategy
(38697), 8770/17 + ADD 1, COM(17) 255
1.1On 2 May 2017, as part of its “compliance package”—a group of measures designed to improve compliance with and enforcement of Single Market rules—the European Commission adopted an Action Plan for the reinforcement of the SOLVIT network. SOLVIT is a free of charge service provided since 2002 by each EU Member State. It works under short deadlines and provides solutions to EU/EEA citizens and businesses when they are experiencing difficulties with having their EU rights recognized by public authorities, particularly while moving or doing business across borders within the EU.
1.2The Commission proposes, variously, to use EU funding opportunities to improve the quality of SOLVIT and to provide better legal support to the network, to increase awareness-raising activities, so that the network is better used and to ensure that the network collects information about the most recurrent problems, which would be used to inform future regulatory and enforcement activity.
1.3In the Government’s Explanatory Memorandum of 10 July 2017, the then Parliamentary Under-Secretary of State (Lord Prior) indicated that the Government supported the Action Plan, but thought that a higher degree of ambition was required in order to “address more effectively problems that are outside of SOLVIT Centres’ scope, or situations they are unable to influence satisfactorily”. On Brexit, the Minister stated that “While the UK’s involvement in the SOLVIT network after EU exit has yet to be determined, effective enforcement of the Single Market will remain important for UK businesses.”
1.4In its report on 13 November 2017 the Committee concluded that the legal changes arising as a consequence of the UK’s withdrawal from the European Union would likely give rise to increased demand for informal cross-border dispute resolution of the type currently provided by SOLVIT. It said that there was a strong incentive for the Government to ensure that this demand was met, as otherwise some UK businesses might unnecessarily relocate part of their operations abroad.
1.5On 5 December 2017 Lord Prior’s successor at BEIS (Lord Henley) replied to the Committee’s report. The Minister states that the Commission has already begun implementing elements of the Action Plan. He adds that, at the Council working party at which the Plan was discussed, Member States “expressed a united and strong front in calling for the Commission to go further, in particular in relation to its own involvement in following up unresolved cases and providing expert input”. However, unless a Presidency chooses to bring forward Council Conclusions on the subject, it is unlikely that there will be any further significant developments beyond expert-level discussions between SOLVIT Centres, who will monitor progress.
1.6On Brexit, the Government’s assessment is that:
1.7The Government states that it is committed to ensuring that appropriate arrangements are in place to meet the needs of UK business in the future partnership; however, it declines to provide further information about what it considers to constitute appropriate arrangements, on the basis that the needs of UK businesses and citizens for informal cross-border dispute resolution post-exit will be “partly dependent” on the shape of the future partnership. The Government states that discussion of these arrangements must therefore wait “until we have agreed the detail of the future partnership”.
1.8We thank the Minister for his letter, and for the clarification it provides. We are nonetheless concerned by the lack of any indication as to whether the Government accepts that there will be an increase in the need for informal dispute resolution arrangements post-exit, as well as the lack of any sense of what the “appropriate arrangements” that it seeks to include in the future partnership might look like.
1.9We note the Government’s caveat that it will not be possible to anticipate these arrangements until the detail of the future partnership has been agreed, because the future partnership will partly determine the needs of UK business; however, the Government also states that it is committed to ensuring that appropriate arrangements are incorporated into the future partnership itself, implying that the matter will be settled not after, but during, the negotiations—a more sensible arrangement in our view.
1.10We also observe that, despite the uncertainty about the detail of the future relationship, the Government has committed to leaving the EU Single Market and the Customs Union, which provides sufficient clarity to begin to frame the issue. The legal changes which flow from this decision will alter the basis on which many UK businesses and citizens operate within the EU. Even if a “close” relationship is retained, the shift from the status quo (membership) will lead to an increase in cross-border complications, and to increased demand for information, support and informal dispute resolution arrangements of the type that are currently provided by SOLVIT.
1.11The Committee also notes that it is possible that negotiations will not reach a successful conclusion, and that the UK could leave the EU in March 2019, without any withdrawal agreement or framework for a future relationship in place. Were this to happen, the demand for assistance from businesses and citizens encountering cross-border difficulties would increase suddenly and dramatically, although the likelihood of having arrangements in place with the EU27 to manage cross-border disputes informally would be low.
1.12We therefore consider it imperative that the Government, if it has not already done so, begin to prepare for a significant increase in demand for informal dispute resolution services post-Brexit. We also consider that a contingency plan should be developed for provision of support to UK businesses and consumers in the event of a no deal scenario.
1.13We ask the Government to clarify:
1.14We retain this document under scrutiny pending clarification of these points. We request a response by 28 February 2018.
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action Plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses: (38697), 8770/17 + ADD 1, COM(17) 255.
1.15The Commission’s proposed Action Plan includes the following recommendations and commitments:
1.16In the Government’s Explanatory Memorandum of 10 July 2017, the then Parliamentary Under-Secretary of State (Lord Prior) indicated that he believed the Commission’s Action Plan would improve the functioning of SOLVIT as a Single Market enforcement tool, and particularly welcomed plans to improve the legal support provided to SOLVIT Centres and to use the evidence of SOLVIT cases to inform future policy and enforcement measures.
1.17However, the Minister also indicated that the Government believed the proposals “should go further”. To this end, he said that the Government would support “an improvement in the interaction with Commission services, CHAP (the Commission’s register of complaints and enquiries), and Pilot and national SOLVIT Centres”; “a connection between SOLVIT and the Commission for the follow-up of unresolved cases and systemic problems”; and “including problems repeatedly raised in SOLVIT cases on the agenda of the relevant Council Working Party so that real, long-term solutions can be found”.
1.18In its report on 13 November 2017 the Committee observed that:
1.19The Committee asked the Minister to explain what action the Government intended to take to address these concerns.
1.20On 5 December 2017 Lord Prior’s successor as Parliamentary Under Secretary of State at BEIS (Lord Henley) replied to the Committee’s report.
1.21In response to the Committee’s request for an update on progress in Council working groups, he states that there has been no discussion at Council working parties since the Commission’s presentation to the Internal Market working party of 9 June 2017, at which Member States “expressed a united and strong front in calling for the Commission to go further, in particular in relation to its own involvement in following up unresolved cases and providing expert input”. The Minister notes that a small number of Member States requested Council Conclusions on the Action Plan, but that the Estonian Presidency did not take this further, and no further discussion is currently expected. The Minister’s assessment is that it is “unlikely there will be any further significant developments beyond expert-level discussions between SOLVIT Centres, who will monitor progress”.
1.22The Minister notes that the Commission has already begun implementing elements of the Plan.
1.23On Brexit, the Minister states that the Action Plan concerns “improving enforcement of existing Single Market rules” and is therefore “not within the scope of Article 50 Exit Agreement discussions”. Of SOLVIT itself, the Minister states that “The UK’s participation in the SOLVIT network more generally is not considered a withdrawal issue and so will not be addressed in the Article 50 Exit Agreement”.
1.24Of continued UK participation in or cooperation with the SOLVIT network, the Minister notes that the Prime Minister has proposed an implementation period which would use existing EU rules and regulations as a framework. He states that “the mechanisms for administering these rules and regulations, including SOLVIT, could continue to apply during this period”. The Minister also states that “continued participation in or cooperation with SOLVIT beyond the implementation period would depend on whether this was appropriate for the future partnership”.
1.25In response to the Committee’s questions about future arrangements regarding informal cross-border dispute resolution after the UK has left the EU, the Minister states that “the needs of UK business will be shaped, at least in part, by the type of partnership to which the UK and EU27 agree in negotiations” and that it is “not possible therefore to anticipate what arrangements would be appropriate until we have agreed the detail of the future partnership”. However, the Minister adds that “the Government is committed to ensuring that appropriate arrangements are in place to meet the needs of UK business in the future partnership”, seeming to imply that these arrangements will be settled during negotiations of the future relationship, not after they have concluded.
1 European Commission Press Release, Commission takes new steps to enhance compliance and practical functioning of the EU Single Market ().
2 Action Plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses .
3 Commission Recommendation 17.9.2013 on the principles governing SOLVIT .
4 Explanatory Memorandum from the Minister, BEIS, to the Chair of the European Scrutiny Committee ().
5 First Report HC 301-I (2017–18) (13 November 2017).
6 Letter from the Minister, BEIS, to the Chair of the European Scrutiny Committee ().
7 Joint Report from the negotiators of the European Union and the United Kingdom government on progress during Phase 1 of negotiations under article 50 TEU on the United Kingdom’s orderly withdrawal from the European Union ().
8 Action Plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses .
9 Explanatory Memorandum from the Minister, BEIS, to the Chair of the European Scrutiny Committee ().
10 First Report HC 301-I (2017–18) (13 November 2017).
11 Letter from the Minister, BEIS, to the Chair of the European Scrutiny Committee ().
19 December 2018