Documents considered by the Committee on 28 March 2018 Contents

5Subsidiarity and Proportionality in relations between the European Commission and National Parliaments

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny; further information requested

Document details

Annual Reports for 2016 concerning (a) relations between the European Commission and National Parliaments; (b) Subsidiarity and Proportionality

Legal base


Exiting the European Union

Document Numbers

(a) (38916), 11021/17, COM(17) 601; (b) (38917), 11018/17, COM(17) 600

Summary and Committee’s conclusions

5.1These two complementary Annual Reports cover different aspects of the relations between the Commission and National Parliaments. Document (a) covers different forms of political dialogue between the Commission and National Parliaments. Document (b) looks at how EU institutions apply the principles of subsidiarity and proportionality. Enshrined in Article 5(3) TEU, the subsidiarity principle requires that that the EU should only act where such action cannot be sufficiently achieved by Member States. The proportionality principle seeks to ensure that EU action will not exceed the minimum necessary to achieve the Treaties’ objectives.

5.2Document (a) reviews the political dialogue between the Commission and National Parliaments, which covers Opinions (including Reasoned Opinions),47 “green card” mechanism usage,48 bi-lateral visits and multi-lateral conferences and meetings. It notes that 620 Opinions were submitted in 2016, showing a marked increase of 77% in Opinions from 2015,49 with 70% of the Opinions coming from the top ten most active chambers.50 There was a sevenfold increase in Reasoned Opinions from only 8 in 2015 to 65 in 2016.

5.3Most political dialogue between the Commission and National Parliaments in 2016 concerned the following documents:

5.4Document (b) reviews how subsidiarity and proportionality have been applied at three stages of the EU pre-legislative process: at the publication of the roadmap/inception impact assessment, then the impact assessment and finally the Explanatory Memorandum. In line with the EU’s 2015 Better Regulation Agenda, the emphasis is on identifying difficulties in complying with either principle at an early stage of the decision-making process. The document also reviews the different tools used to assess subsidiarity and proportionality.51

5.5Further details of both documents are provided in paragraphs 5.9–5.21 below. The Government welcomes “the Commission’s commitment to proportionality, and subsidiarity and the measures they continue to take to ensure that these are upheld”. Concerning the 20 Opinions (Reasoned and by political dialogue) submitted by the UK (17 from the House of Lords, 3 from the House of Commons), the Government was “pleased that the UK Parliamentary chambers remain engaged in this process and are able to influence the decision-making process”. In 2016, the House of Commons issued two Reasoned Opinions: on the reform of the electoral law of the EU52 and on Aviation Security Screening Equipment.53

5.6We welcome the Minister’s words of support for the participation of the UK Parliament in the EU decision-making process during 2016, through the submission of Reasoned and Political Dialogue Opinions. We are glad that the Minister considers that:

“Written and Reasoned Opinions provide National Parliaments influence to shape decisions, and dialogue between Parliaments and the Commission, and a respect for subsidiarity and proportionality are a vital part of this.”54

Further, when referring to the submission by the House of Commons of a Reasoned Opinion on Aviation Security Screening Equipment amongst other Opinions55 submitted by both Chambers, the Minister comments: “We are pleased that the UK Parliamentary chambers remain engaged in this process and are able to influence the decision-making process.”56

5.7We assure the Minister that we remain committed to carrying out our role in ensuring subsidiarity compliance until the UK Parliament loses that right on 29 March 2019, when it is no longer the Parliament of a Member State. However, we are uncertain whether the Government’s position—that it will continue to support both Houses in exercising that right until Brexit—is being communicated effectively across Whitehall. We were disappointed to receive last week an initial letter from the Parliamentary Under Secretary of State for the Environment dated 21 March 201857 proposing a motion that would not support the Committee’s recommendation that the House submit a Reasoned Opinion to the Presidents of the EU institutions. in relation to the Proposed Directive on the quality of water intended for human consumption.58 To submit a Reasoned Opinion in relation to proposed EU legislation is a right that the chambers of the UK Parliament hold under the EU Treaties,59 independent from any right of the Government to make its own views known in the Council on subsidiarity compliance. We expect the Government to facilitate that right and not to obstruct it, particularly at a late stage in the process. We therefore welcome the Government’s reversal of that initial position.60 In particular, the confirmation from the Parliamentary Secretary of State for the Environment that the Government will table a motion for the Reasoned Opinion debate on Monday 26 March which supports the submission of the Opinion to the EU institutions by the Clerk of the House.

5.8As currently drafted, the EU’s draft Withdrawal Agreement text does not permit any formal participation of the UK Parliament in EU decision-making during the implementation period. We ask the Minister to confirm whether the Government intends to agree any informal arrangements to enable some form of dialogue between the UK Parliament and the EU institutions on new measures proposed after Brexit but which could apply to the UK before the end of the implementation period.

5.9We note with interest that there appears to have been some improvement in the Commission’s responsiveness to Reasoned Opinions submitted by National Parliaments, as outlined in paragraphs 5.20–5.22 of this Report chapter. The timing and quality of Commission responses to Reasoned Opinions was an issue which our predecessor Committee addressed in 2013.61 It is likely that this improvement at a time when Reasoned Opinion numbers increased in 2016 compared with 2015 is partly attributable to streamlining initiatives set out in the Commission Work Programme at the time and reflective of the EU’s Better Regulation initiative.

5.10These non-legislative annual documents raise no direct policy or legal issues in themselves. For this reason, we are content to clear them from scrutiny but look forward to the Minister’s response to our question in paragraph 5.6 above.

Full details of the documents

(a) Annual Report 2016 on relations between the European Commission and National Parliaments: (38916), 11021/17; COM(17) 601; (b) Annual Report 2016 on Subsidiarity and Proportionality: (38917), 11018/17; COM(17) 600.

Document (a)

5.11The use of Reasoned Opinions saw a marked increase, with 65 in 2016 up from the 8 submitted in 2015. Most of these Reasoned Opinions discussed the following documents:

5.12The Annual Report compared the original and final texts of two proposals following communications with National Parliaments in 2016, thus highlighting two case studies, as outlined below:

i)Proposal to establish a European Border and Coast Guard66—This new Agency would be created from Frontex and authorities in Member States responsible for managing the external border. The ten Opinions received reflected concern over possible encroachment on sovereignty and competency of Member States’ border management,67 specifically that the Council, not the Commission/Agency, should approve urgent external border measures, and the text was amended to reflect any proposals from the Commission/Agency would be adopted by the Council.

ii)Anti-Tax Avoidance Directive68—This proposal contained five legally binding measures on hybrid mismatches to prevent exploitation of national legislative differences to avoid taxes in the Single Market. The seven Opinions, including the two Reasoned Opinions, required the Commission to address a variety of points individually: lack of flexibility; lack of an impact assessment; limitation of scope; impact on small and medium-sized enterprises; and divergence from the Organisation for Economic Co-operation and Development (OECD) approach on third party hybrid mismatches. Each of these points was addressed by the Commission through responses and alterations to the Directive were made to reflect recommendations on scope and OECD recommendations.

5.13The Report details the progress of the second “green card” invitation for the Commission to create European level corporate and social responsibility principles.69 The Commission’s response noted its proactive initiatives concerning corporate social responsibility with stress on regulations both past and ongoing in several sectors. The Commission used the November 2016 Communication on Next Steps for a sustainable European future to reiterate its commitment, focusing on concrete actions, policy approaches and monitoring of the process in Member States and international bodies.

5.14The dialogue with regional Parliaments was also reviewed in the Report, with mention of the Committee of the Regions, which has been vested with more subsidiarity monitoring responsibilities.70 Some Regional Parliaments submitted options to the Commission, joined the delegation of regional Parliaments that met with First Vice-President Timmermans or held individual meetings with President Juncker and Commissioner for Regional Policy Creţu throughout the year.

5.15The report concludes by reiterating the Commission’s commitment to closer and deeper relations with National Parliaments with its proposed “Future of Europe” debate meetings and White Paper.71

5.16Document (b) outlines feedback tools such as the Commission’s ‘Lighten your load—Have your say’ website and the Regulatory Fitness and Performance (REFIT) Platform have improved public engagement, and resulted in REFIT’s recommendations for the 2017 Work Programme on “how to simplify and reduce regulatory burdens of existing EU legislations”.

5.17Subsidiarity is analysed by the Commission in new legislative and non-legislative initiatives, evaluating areas where the commission does not have exclusive competence or where relevance and value may be needed. Analysis focuses on the objective and whether it can be met at a lower level and the pros and cons of EU action over local action. Qualitative and quantitative (as much as possible) deliberations include; “the geographical scope, the number of players affected, the number of Member States concerned and the key economic, environmental and social impacts”.

5.18Proportionality is reviewed in the impact assessments, evaluations and fitness checks and are required to consider:

5.19The Commission’s Regulatory and Scrutiny Board examined 60 impact assessments (see section 5.4), determining that 15% (9 cases) needed more work in analysing subsidiarity and/or proportionality. The Commission published 43 evaluations and Fitness Checks, the individual dossiers and measures pertaining to these 43 were analysed in the report.

5.20Other EU institutions’ actions were also covered in the report, including:

5.21The report notes that there were a variety of means used by the Commission to respond to Reasoned Opinions, including:

5.22Three of the proposals that received the most Opinions as outlined above in paragraph 5.10 were reviewed, along with and the Commission responses to the Reasoned Opinions. Concerning the posting of workers Directive, the Report noted the key areas of concern raised by Reasoned Opinions:

“(i) that existing rules were sufficient and adequate, (ii) that the Union was not the adequate level of the action, (iii) that the proposal fails to recognise explicitly Member States’ competences on remuneration and conditions of employment and (iv) that the proposal’s justification with regard to the principle of subsidiarity was too succinct.”

In response to these issues the Commission initiated bi-lateral and multi-lateral engagement, in which the Commission determined that the principle of subsidiarity had not been infringed on in this case as the posting of workers was, by definition, a transnational issue.

5.23Similarly, the Commission responded to the Reasoned Opinions that asserted the Dublin Regulations’ corrective allocation mechanism infringed on Member States’ competence on relocation of asylum seekers, detailing why the mechanism was in line with this principle.

5.24However, the Commission did note the merits of the arguments raised in the eight Reasoned Opinions concerning its proposals for the establishment of a Common Consolidated Corporate Tax Base, specifically that Member States wished to maintain control of their corporate tax systems. The Commission set out in its replies to the National Parliaments its reasons for the two proposals.

5.25In its conclusion, the Annual Report reiterates the significance of the principles of subsidiarity and proportionality, and notes that the increase in Opinions submitted in 2016 indicates an increased interest and commitment from the National Parliaments of Member States.

The Government’s view

5.26In an Explanatory Memorandum of 27 July 2017, the then Minister for Exiting the EU (Baroness Anelay) provides the Government’s view on both documents:

While the UK remains an EU Member State, we continue to view subsidiarity and proportionality as crucial principles that should be at the heart of the work of the European Commission and the other EU institutions.

“We welcome the Commission’s commitment to proportionality and subsidiarity, and the measures they continue to take to ensure that these are upheld. They remain essential principles by which the EU must abide to ensure EU legislation is effective and proportionate. These annual reports are a valuable mechanism for promoting accountability in the policy-making process and transparency for the manner in which the EU institutions adhere to the principles of subsidiarity and proportionality.

“The Government notes the large increase in Opinions issued by National Parliaments in 2016. Although this is in part due to substantial decreases in 2015, it remains encouraging that National Parliaments are prepared and willing to engage the Commission during the legislative process, and that the Commission takes such Opinions into account during policy-making, as evidenced by the reports. Written and Reasoned Opinions provide National Parliaments influence to shape decisions, and dialogue between Parliaments and the Commission, and a respect for subsidiarity and proportionality are a vital part of this.

“As per the annex to the report on National Parliaments, the UK Parliament submitted 20 Opinions (17 from the House of Lords and 3 from the House of Commons) of which one was a Reasoned Opinion from the House of Commons (regarding aviation security screening equipment). The House of Lords issued the thirteenth highest number of Opinions, and a quarter of the highest (the Italian Senate at 81). We are pleased that the UK Parliamentary chambers remain engaged in this process and are able to influence the decision-making process.

“An assessment of the specific policies referenced in the report show that these are accurate summaries of both the concerns that the UK raised and how they were addressed. We are also content with the accuracy of the summaries of meetings and engagements, and the actions being taken by the various EU institutions to meet the principles.

“As an EU Member State it is the right of the UK to raise concerns it may have on whether the principles of subsidiarity and proportionality are being upheld in the legislative process, and will continue to do so. Departments will continue to raise with Parliament any policies where they assess the principles of subsidiarity and proportionality are not being upheld by the EU institutions in proposals, and outline any concerns they have.”

Previous Committee Reports


47 The Annual Report sets out the criteria for a Reasoned Opinion: “according to the definition in Protocol No 2, an opinion must clearly state a breach of subsidiarity and be sent to the Commission within eight weeks of the transmission of the legislative proposal to National Parliaments”.

48 The “green card” mechanism is a means for Member State Parliaments to invite the introduction of legislative proposals or amendments.

49 However, 2015 saw the lowest number of Opinions (350) since the subsidiarity control mechanism was introduced by the Lisbon Treaty in 2009 (Report 12 October 2016).

50 The Senato della Republica of Italy submitted the most Opinions in 2016 with 81, the House of Lords by contrast submitted 17.

51 impact assessments, evaluations and fitness checks, consultations with the Subsidiarity Expert Group, REGPEX (a sub-network of the Subsidiarity Monitoring Group), a Conference on Subsidiarity, Better Regulation and Political Dialogue hosted by Italy in 2016 and finally decisions made by the Court of Justice of the European Union.

52 Reasoned Opinion of the House of Commons on a Proposed Council Decision adopting the provisions amending the Act concerning the election of the members of the European Parliament by direct universal suffrage 3 February 2016.

53 Reasoned Opinion of the House of Commons on a Proposed Regulation establishing a Union certification system for aviation security, 26 October 2016.

54 See para 23 of the Minister’s Explanatory Memorandum.

55 The House of Commons submitted two not just one Reasoned Opinion in 2016, see paragraph 5.5 of this chapter.

56 See para 24 of the Minister’s Explanatory Memorandum.

57 See the letter from the Parliamentary Under Secretary of State for the Environment Dr Thérèse Coffey of 21 March 2018.

58 Eighteenth Report HC 301–xviii (2017–19), chapter 1 (7 March 2018).

59 Article 5 of Protocol No 2 on the application of the principles of subsidiarity and proportionality.

60 See the letter from Kate Green MP on behalf of the Chairman of ESC to the Parliamentary Under Secretary of State for the Environment to Dr Thérèse Coffey of 21 March 2018 and the Minister’s response to the Chairman of 22 March 2018.

61 See Correspondence between Sir William Cash, Chairman of ESC to Vice President of the Commission between 26 June and 24 July 2013.

62 The Commission received 25 Opinions on this Programme, 9 individual ones and one Joint Opinion from 16 chambers.

63 This Directive triggered the third use of the ‘yellow card’ procedure, a mechanism set out in article 7(2) of Protocol 2 to the Treaties, which allows a National Parliament to object to proposed legislation on the grounds of subsidiarity, with 23 Opinions total, including 14 Reasoned Opinions.

64 This proposal for ‘corrective allocation mechanism’ to be added to the Dublin Regulation regarding asylum received 14 opinions, including 8 Reasoned opinions

65 The two proposals aimed at protecting pa-EU online consumers and expanding EU on-line businesses’ sales, the former received 11 opinions and the latter received..This included 8 opinions covering both proposals and one Reasoned Opinion.

66 Proposal for a Regulation of the European Parliament and of the Council on the European Border and Coast Guard and repealing Regulation (EC) No 2007/2004, Regulation (EC) No 863/2007 and Council Decision 2005/267/EC

67 Article 18 of the Commission proposal.

68 Proposal for a Council Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

69 This “green card” initiative was signed by eight (later nine) chambers, led by the French Assemblée Nationale.

70 Article 5(3) of the Treaty on the European Union: “Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”

71 COM(2017) 2025 final.

3 April 2018