Select Committee on European Union Fortieth Report

CONSUMER POLICY 2007-2013 (9909/06)

Letter from the Chairman to Rt Hon Ian McCartney MP, Minister of State, Department of Trade and Industry/Foreign and Commonwealth Office

  Your Explanatory Memorandum (EM) dated 14 June was considered by Sub-Committee G on 6 July together with the separate EM submitted by the DoH on the parallel amended Proposal for the public health aspects (9905/06), about which I have written separately to your colleague Rosie Winterton.

  We note that the amended Proposal (reference 9909/06) replaces the earlier Proposal (reference 8064/05), about. which I last wrote to Rosie Winterton on 19 May and which can now be released from scrutiny.

  So far as the amended Proposal (reference 9909/06) is concerned, we note that the Government prefers the division into separate public health and consumer protection programmes, as now proposed. We also note that the new programme is less ambitious than its predecessor, reflecting the reduced budget allocation.

  At first sight, the amended Proposal does seem to be an improvement on its predecessor but we welcome the Government's assurance that specific programme proposals, as they emerge, will be tested to ensure that they meet the requirements of subsidiarity.

  We also note the Government's concern over the focus on a "high level of consumer protection". We agree that this should be clarified and that what matters is that the programme should be effective, in-line with the better regulation agenda and concentrated on those areas where action at EU-level can have the most impact. We also agree on the need for rigorous evaluation and monitoring of the programmes, so long as that does not involve excessive bureaucracy.

  Your EM does not say how long the Department expect the new round of stakeholder consultations to take, but we look forward to a revised RIA based on the results of that consultation in due course.

  We would also welcome an indication of the likely timescale for Council consideration as soon as the Finnish Presidency have made that clear.

  The new document (reference 9909/06) will be retained under scrutiny pending your reply.

6 July 2006

Letter from Rt Hon Ian McCartney MP to the Chairman

  Thank you for your letter of 6 July 2006 on EM 9909/06. I am now writing to further update you and the Committee on progress with this draft decision, on the clarifications we have received from the European Commission and on the proposed timetable that will reach political agreement at the 25 September Competitiveness Council.

  Since my Explanatory Memorandum of 14 June 2006, there have been two Council Working Groups during which Member States have expressed support for the amended draft decision and welcomed the split of the consumer and health programmes. The Finnish Presidency has announced they will seek to reach political agreement on 25 September.

  During the working groups, we have sought clarification on the continued "better" consumer protection focus of the programme. The Commission has reassured us that the focus on "better" consumer protection, rather than a "high level" of consumer protection, is retained throughout the programme.

  The reference to a high level consumer protection is intended to be consistent with the relevant language in Treaty Article 153 and to cover the wider range of actions that now sit under two rather than four objectives.

  Stronger evaluation measures have been included in the amended programme and we will press for better regulation principles to be taken into account as individual initiatives come forward. Other Member States have supported us in highlighting the importance of better regulation.

  As stated in my Explanatory Memorandum of 14 June, we will also ensure that initiatives are tested against subsidiarity principles in order that action is taken at the most appropriate level.

  In December 2005 my Department conducted an informal consultation of the original joint proposal with stakeholders. In June, we repeated this one-month informal consultation in light of the revised proposal. We received a small number of responses from consumer, business and academic stakeholders who supported the split of the programme and were generally supportive of the measures. Consumer bodies expressed some concern about the reduction in the proposed budget, and business pressed to be regarded as a stakeholder in all consumer issues (which the Commission have confirmed at our request). Those consulted supported the use of the Public Health Executive Agency; on the basis that it will not be a policy-making body. There was also support for, and against, the development of a European Masters degree. A final regulatory impact assessment will be produced once a final text has been agreed in Council.

  With reference to the Public Health Executive Agency, the Commission have confirmed that this body will be used solely for the administrative and technical implementation of the programme. The Commission considers the use of the Public Health Executive Agency to be a prudent use of resources, as investment has already been carried out in setting up the agency. Using it for the implementation of consumer policy would lead to greater economies of scale. Given that the agency will not set policy but rather implement it, we are satisfied that this is a sensible use of current resources.

  The development of three or four integrated European Masters degrees, funded by the Commission, has been of concern to the UK. This initiative falls within the actions related to consumer education. Last year the Commission carried out a study that concluded that there was a need for a European-focused Masters degree. This degree would be offered by a consortium of universities located in three different countries (one of which must be in a new Member State).

  The UK suggested that the Commission could use their report's findings as a catalyst to encourage consumer organisations, business and the academic sector to fund their own courses, rather than relying on EU funding. The Commission responded that while such an initiative might be commonplace in the UK, a different culture persisted in other Member States where such alliances in the field of education were difficult to achieve. The Commission also stated that the modular nature of the Masters would mean that business could pay to take advantage of particular courses, widening the pool of those who would benefit. The imminent introduction of the EU consumer protection cooperation regulation (creating a network of authorities enforcing EU-wide consumer legislation) would also mean that there would be a significant number of officials increasingly enforcing Community legislation who could benefit from the Masters degree courses (or its constituent modules).

  While we remain to be fully convinced that this is the most effective use of resources, we recognise that this represents a small sum in the overall budget (€800,000 per year) and that many other Member States are in support of the proposal. We are also sensitive to the fact that the UK has the most university courses within the EU, where a consumer-related focus is featured, covering issues such as management, law and economics; and that other Member States offer fewer opportunities. We are reassured that this funding is only planned for the first three years of the Masters programme and that they are expected to be funded independently, once they are established.

  The UK is broadly supportive of the programme as our main concerns, relating to the merged programme and the need for improved evaluation techniques have been supported by the Council, the European Parliament and accepted by the Commission.

  On this basis, we would seek to support political agreement at the September Competitiveness Council and I would welcome your urgent agreement to clear this programme from scrutiny before the summer recess. I would be happy to report to the Committee any developments on this programme as it is implemented.

17 July 2006

Letter from the Chairman to Rt Hon Ian McCartney MP

  Thank you for your letter dated 17 July which was considered by Sub-Committee G on 20 July.

  We are glad to see that the Government has secured satisfactory clarification at Working Group meetings on most of the items raised in our earlier correspondence.

  We share the Government's doubts about the value of the proposed European Masters Degrees in consumer protection matters. Ideally, we would have wanted a fuller explanation of the rationale and justification than we have been given so far. But as you point out, only a relatively small part of the overall budget has been earmarked for this element of the programme.

  We also note that the Commission's view that the degrees may be of more value to other Member States than to the UK and that the modular nature of the course would make it particularly useful for business personnel and Government officials. You also point out that the degrees will only be funded for the first three years in any case. That being so, we agree that it is hardly a sticking point. But we remain sceptical and will want to see a thorough evaluation of the results when the three funded years are up.

  We are therefore willing to release scrutiny to enable the Government to support the political agreement expected at the September Competitiveness Council. But we will expect you to report on the outcome of the Council meeting in due course.

20 July 2006

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