Impact Assessments in the EU: room for improvement? - European Union Committee Contents



1.  The European Union's Better Regulation agenda, running since 2005, is intended to simplify legislation which is already in existence, to cut red tape and to reduce administrative burdens for businesses. In 2005 this Committee published a report on the agenda[1] and since then the initiative has developed. The time is right to reassess the agenda. This report focuses in particular on the production and use of EU impact assessments as the majority of the evidence we received highlighted their importance. This was an exploratory inquiry, intended to discover the views of key stakeholders on the current functioning of the impact assessment regime and to identify areas where further, more detailed, examination, either by this Committee or others, would be valuable.

2.  This report was prepared by Sub-Committee B, whose members are listed in Appendix 1, with their declared interests. They received evidence from the witnesses listed in Appendix 2, to whom we are grateful.

3.  We make this report to the House for debate.

The Better Regulation agenda

4.  The Better Regulation agenda comprises a number of measures to simplify existing EU law and to ensure that new law is introduced only where necessary and proportionate. These measures have included a codification of the EU law, a focus on reducing administrative burdens for businesses, greater emphasis on consultation and the use of impact assessments as a fundamental part of the lawmaking process. In January 2009 the Commission issued its Third Strategic Review of Better Regulation in the European Union[2]. It reported that between 2005 and early 2009 the Commission's codification programme had resulted in the simplification of 142 acts, reducing the acquis by about 10%.[3] Open Europe warned us that "this does not tell us anything about the content of the removed pages, nor if the content had an actual impact on businesses in the first place" (Open Europe, p 63).

5.  With regard to reducing administrative burdens (the costs to businesses of collecting and transmitting information purely as a result of legislation), the Commission introduced a target, endorsed by the European Council in 2007, of reducing burdens to businesses by 25% by 2012. To this end, they have recently issued a Communication on the Action Programme for Reducing Administrative Burdens[4] studying the impact of 72 acts. The Communication states that, since 2005, 33 proposals have been adopted with a potential saving to businesses of €5.7bn. The Commission estimates that a further 18 measures awaiting adoption could save a further €30bn. Part of the attempt to reduce burdens is the principle of "Think Small First", enshrined in the Small Business Act[5] of 2008, that is, in framing legislation, to take particular account of the position of small and medium-sized enterprises (SMEs). The Third Strategic Review highlights mechanisms for achieving this, including the exclusion of micro-enterprises from the scope of EU accounting directives and a revision of the VAT Directive to allow electronic invoicing.[6]

1   European Union Committee, 9th Report (2005-06): Ensuring Effective Regulation in the EU (HL Paper 33). See also European Union Committee, 22nd Report (2007-08): Initiation of EU Legislation (HL Paper 150), which also discusses the use of impact assessments.  Back

2   5791/09, COM (09) 15. There appear to be no immediate plans for a fourth review. Back

3   Ibid. p 3 Back

4   15019/09, COM (09) 544 Back

5   11262/08, COM (08) 394  Back

6   Op. Cit. p 4. A "micro-enterprise" is an enterprise employing fewer than 10 people and with an annual turnover or balance sheet of less than €2 million. Back

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