Documents considered by the Committee on 24 January 2018 Contents

6Single Digital Gateway

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Document details

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

Legal base

Articles 21(2), 48 and 114(1) of the Treaty on the Functioning of the European Union

Department

Business, Energy and Industrial Strategy

Document Number

(38699), 8838/17 + ADDs 1–7, COM(17) 256

Summary and Committee’s conclusions

6.1Businesses 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.

6.2On 2 May 2017 the European Commission presented a proposal for a Regulation81 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 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.

6.3In a recent letter to the Committee on 6 November 201782 the Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy (Lord Henley) requested a scrutiny waiver to participate fully in the Competitiveness Council on 30 November. The Minister indicated that Member States were seeking a further watering down of the Commission’s proposal. He stated that the changes would have to reduce costs and introduce more flexibility in the provision of services for the Government to support the text.

6.4In its report on 22 November 2017 the Committee granted the Government a waiver.83 It also requested a detailed update on the outcome of Council and further information about the implications of exiting the European Union for this proposal, as well as information about how the Government intended to handle this issue post-withdrawal.

6.5On 14 December 2017 the Minister wrote to the Committee84 to inform us that a General Approach had been agreed by the Member States at Competitiveness Council on 30 November. The Minister summarises the changes that were made in considerable detail (provided in the final section of this chapter), which sufficiently addressed the UK’s concerns, meaning that the UK was able to support it.

6.6On Brexit, as with other elements of the compliance package, the Minister states that co-operation with the Single Digital Gateway is a matter for the future relationship, and asserts that, regardless of the UK’s future partnership with the EU, the Government “will continue to be supportive of reducing administrative burdens on citizens and businesses engaging in cross-border activity post-exit”, but does not provide any further information about the Government’s thinking on this issue.

6.7We thank the Minister for his detailed explanation85 of the General Approach86 that was agreed at Competitiveness Council. We note that the UK supported the proposal on the basis that the Council text made it less prescriptive and more flexible, notably with respect to the translation and information requirements, thereby addressing the Government’s concerns. The extended phased implementation timetable means that the more demanding provisions will not apply for between three and five years after the publication of the proposal in the Official Journal, making it highly unlikely that they will apply to the UK.

6.8In relation to EU exit, we note the Government’s assessment that the Regulation will not apply to UK post-withdrawal, and that it does not create any obligation on the Member States with respect to third countries. We observe that some of the information provided through the Gateway and national webpages which concerns EEA-specific rights and procedures may no longer be relevant to UK stakeholders; however, much of the information provided will remain relevant, and we thus accept the Government’s conclusion that the Regulation “has the potential to reduce the administrative burden for UK businesses and citizens engaging in cross-border activity in the Single Market following EU exit”.

6.9In terms of how the Government proposes to approach this policy issue post-withdrawal, the Government assures the Committee that, regardless of the UK’s future partnership with the EU, it “will continue to be supportive of reducing administrative burdens on citizens and businesses engaging in cross-border activity post-exit”; as to how it intends to do so in practice, the Government states that it is not possible to anticipate what arrangements would be appropriate until the detail of the future partnership has been agreed.

6.10We regret the lack of any acknowledgement from the Government of the importance of this issue, the logistical challenge that it presents, or any evidence to show that the necessary preparations are being made. Leaving the EU will, even if a close future relationship is agreed, lead to major changes across a wide range of policy areas which will affect the legal basis of cross-border activity of UK businesses and citizens in the EU27, and vice-versa. Providing stakeholders with accurate and up-to-date information about these changes will provide legal certainty, smooth the process of exit, and enable businesses and individuals to make informed decisions; failure to do so will render exit more disruptive than it needs to be.

6.11We therefore urge the Government to make a concerted effort to ensure that arrangements are put in place so that, at the moment of exit, businesses and citizens are able to easily access relevant up-to-date information about applicable rules and administrative procedures which relate to their cross-border activities within the EU27, and vice-versa. In order to make time for the necessary arrangements to be put in place, we suggest that this administrative matter, in which the UK and the EU have a mutual interest, should be concluded within the scope of Article 50 negotiations, not treated as an afterthought which can be settled following their conclusion.

6.12We now clear this proposal from scrutiny. We draw this report to the attention of the Business, Energy and Industrial Strategy Committee.

Full details of the documents

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), 8838/17 + ADDs 1–7, COM(17) 256.

Background

6.13Citizens and businesses need to comply with national rules whenever they travel, work, live or do business across borders. It is therefore important that they are properly informed about applicable rules, that they can access the appropriate assistance services and that they do not encounter unnecessary obstacles when dealing with national administrations. Unfortunately obstacles continue to exist for both citizens and businesses interested in moving to another EU country, or selling products or providing services in that country.

6.14Businesses must often dedicate significant resources to overcome these administrative barriers, which may act as a barrier to establishing a presence in another Member State. The Commission states that a business establishing a cross-border subsidiary and hiring employees spends approximately €9,700 on average finding out about and completing an average of eight common administrative procedures, which is 80% more than a domestic business would incur for the same procedures. Online information, when present, is not often available in languages other than the national one, considerably reducing accessibility for foreign users.

The proposal

6.15On 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).87

6.16The objective of the proposal is to remove obstacles that exist for both citizens and businesses exercising their rights in the internal market. The proposal aims to achieve this by creating a centralised digital access point, and ensuring all the relevant information and procedures are available online and of a high quality. It also sets out quality requirements for the assistance and problem-solving services already provided by Member States.

6.17The proposal comprises the following provisions:

a)The establishment and operation of a single digital gateway: the Regulation will require the European Commission to establish a common user interface integrated in a single portal;

b)Provision of information online: the Regulation will require Member States to ensure their national webpages provide citizens and businesses with easy access to high quality, comprehensive information relating to internal market rights;

c)Provision of procedures online: the Regulation requires Member States to have procedures related to internal market rights fully online and accessible by nationals from other Member States;

d)Problem-solving and assistance tools: the Regulation requires the Single Digital Gateway to bring all the existing problem solving/assistance tools in one place;

e)Quality requirements on information: the Regulation sets out quality requirements for the aforementioned provision of information, services and assistance tools and creates a user feedback tool to monitor quality;

f)Quality monitoring: the Regulation creates a mechanism to provide evidence of failures in the functioning of the Single Market;

g)Governance of the gateway: the Regulation creates a new technical exchange tool for exchanging evidence and establishes a coordination group composed of the national coordinators to support the implantation of the gateway;

h)Amends the Internal Market Information System: the Regulation amends the Internal Market Information System (EU/1024/2012) to allow Member States to share information collected from the gateway.

6.18The 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.

Scrutiny to date

6.19In his Explanatory Memorandum of 10 July 2017,88 the Parliamentary Under-Secretary of State for the Department for 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.

6.20The 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.

6.21On 20 October 2017 the Minister provided the Committee with an update89 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.

6.22On 6 November 2017, Lord Henley—Lord Prior’s successor—wrote90 to the Committee to request a scrutiny waiver to participate fully in the Competitiveness Council on 30 November. The Minister stated that it was clear that there would have to be “a further watering down of the proposal” to secure a qualified majority in Council.

6.23In its report on 22 November 2017,91 the Committee granted the Government a scrutiny waiver, and asked it to (i) provide an update on any General Approach that was agreed at the Competitiveness Council on 30 November, and (ii) to answer a number of questions about the implications of EU exit for this policy area. These included:

The Minister’s letter of 14 December 2017

6.24On 14 December the Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy (Lord Henley) wrote to the Committee to provide an update following Competitiveness Council on 30 November 2017, at which a General Approach was agreed. The General Approach is available online,92 as is the Minister’s letter.93

6.25The Minister states that the final text put forward by the Presidency “sufficiently addressed the UK’s concerns” and the UK was therefore able to support the General Approach. A summary of his account of the principal changes to the text is provided below.

Flexibility

6.26The Minister states that the UK was satisfied that the Council text introduced additional flexibility for Member States in rolling out online capability. Illustrating this point, he states that:

Implementation

6.27The Minister states that a key issue for the UK was having sufficient time to implement the new digital capability required by the Regulation. He reports that the General Approach staggers the implementation period for different provisions, with the most basic obligations on the Commission coming into force shortly after the Regulation is published, and the substantive obligations on the Commission and Member States coming into force in a phased implementation of two, three and five years. A five year implementation period applies to the most complex areas of the Regulation, such as making Annex II’s list of procedures fully online, providing access to online procedures for other Member State users in a non-discriminatory way and the “once only” technical system.

6.28This means that, even if the Government succeeds within the scope of Article 50 negotiations in negotiating a transition period until the end of 2020, the provisions in the Regulation will not apply to the UK before it leaves the EU. However there is a possibility that the following provisions of the General Approach (set out in Article 37), which apply two years after its publication in the Official Journal of the European Union, would apply to the UK before full exit took place: Articles 4 (Access to information on national webpages), 6 to 9 (Access to assistance and problem solving services; Quality of information on rights, obligations and rules; Quality of information on procedures; Quality of information on assistance and problem solving services), 13 (Quality requirements related to assistance and problem solving services), 14 (Quality monitoring), 15(1) to (3) (Common user interface), 16 (Repository for links), 17 (Common assistance service finder), 21(1) and (2) (User statistics), 22(1) to (4) (User feedback on the services of the gateway) and 23 (Reporting on the functioning of the internal market).

Translation requirements

6.29The original proposal included the requirement to provide a wide range of information and instructions in at least one other official EU language. The Minister states that the wording in the General Approach requires Member States to make certain information, explanations and instructions “accessible in an official Union language broadly understood by the largest possible number of cross-border users”. The Minister states that the UK may not be obliged to translate information into an additional language if English qualifies as a “language broadly understood by the largest possible number of cross-border users”.

6.30Further changes to the text mean that translation would only be required to enable users to understand the basic rules and requirements, as opposed to wholesale translation of all the information and instructions in scope, further reducing the volume of translation required.

Other changes

6.31The Minister highlights a number of other changes the Council text effects to the proposal. These include:

Response to the Committee’s questions

6.32The Minister also provides responses to the questions contained in the Committee’s report of 22 November 2017.94

6.33Asked by the Committee whether Member States were likely to make the same information and some of the electronic procedures available to non-EU users (i.e., UK users, post-exit) through their national websites, the Minister does not rule this out, but states that the proposal does not include any obligation to provide information or access to procedures to users outside the EU.

6.34In response to the Committee’s question as to whether Member States were likely to make English the second language in which they made the necessary information available, the Minister states that, although no Member State has disclosed which language(s) they would be likely to choose for translation purposes, at present 26 EU Member States (not including the UK) plus Iceland and Norway translate information on their Point of Single Contact websites into English.

6.35Asked whether Brexit created an incentive for the Government to seek a high level of ambition in relation to some aspects of the proposals (and, if so, which ones), the Minister does not directly answer the question, but suggests that the proposal has the potential to reduce the administrative burden for UK businesses and citizens engaging in cross-border activity in the Single Market following EU exit.

6.36In response to the Committee’s questions regarding post-withdrawal arrangements (i.e. whether the Government intends to negotiate continued cooperation/engagement with the Gateway, or to establish reciprocal arrangements designed to ensure that enhanced administrative support for UK and EU businesses who encounter difficulties) the Minister states:

Previous Committee Reports

Second Report HC 301–ii (2017–19), chapter 10 (22 November 2017); First Report HC 301–i (2017–19), chapter 7 (13 November 2017).


81 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 (8838/17).

82 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (6 November 2017).

83 Second Report HC-301–ii (2017–19), chapter 10 (22 November 2017).

84 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (14 December 2017).

85 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (14 December 2017).

86 Council of the European Union, Proposal for a Regulation … establishing a single digital gateway to provide information, procedures, assistance and problem solving services and amending Regulation (EU) No 1024/2012—General Approach (14401/1/17).

87 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 (8838/17).

88 Explanatory Memorandum from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (10 July 2017).

89 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (20 October 2017).

90 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (6 November 2017).

91 Second Report HC-301–ii (2017–19), chapter 10 (22 November 2017).

92 Council of the European Union, Proposal for a Regulation … establishing a single digital gateway to provide information, procedures, assistance and problem solving services and amending Regulation (EU) No 1024/2012—General Approach (14401/1/17).

93 Letter from the Minister, BEIS, to the Chairman of the European Scrutiny Committee (14 December 2017).

94 Second Report HC-301–ii (2017–19), chapter 10 (22 November 2017).




29 January 2018