CHAPTER 3: USE OF IMPACT ASSESSMENTS
Influence on Commission thinking
62. The justification for the production
of impact assessments by the service which is also developing
the associated proposal is that the two processes can feed into
each other and policy development can take account of findings
from the IA at an early stage. The Government raised a concern
about the production of IAs by consultants, rather than in-house.
They argued that it "brings risks, as it separates the development
of an impact assessment from the development of the associated
policy proposal. The Government believes that more should be done
to ensure that the two processes (IA and policy development) are
brought closer together" (p 44).
63. The Impact Assessment Guidelines suggest
that policy leads "should use [their] IA actively when presenting
the merits of the proposal during the legislative process."
The Commission described how "[a]s Commission services become
increasingly aware of the necessity to start the impact assessment
work early, the influence of the impact assessment process on
the content and quality of the proposals will increase accordingly"
(p 25). Professor Radaelli argued that IAs are produced
early enough to "stimulate learning among the different Directorates
General" (p 2).
64. As to the type of learning and influence
stimulated by an IA, Professor Radaelli described "a
kind of a trade-off between impact assessment as the document
that contains only evidence and objectivity and impact assessment
as support and justification for what an organisation wants to
do" (Q 2). Malcolm Harbour MEP argued that "many
impact assessments seem to be moulded to fit the Commission thinking
rather than the other way around" (p 59).
65. As early drafts of legislative proposals
and impact assessments are not published, it is difficult to determine
exactly how a proposal has been changed in the light of the IA.
However, some of our witnesses suggested that the IA rarely leads
to a proposal's being dropped. Open Europe said that they "have
identified only three cases where an EIA [European Impact Assessment]
has actually led to a proposal being aborted" (p 64).
Professor Radaelli suggested that often "the 'do nothing'
option and the 'non regulatory' option are sandwiched and superficially
appraised only to show the superiority of the chosen regulatory
option" (Q 6). The Government suggested that "there
is little evidence that inclusion of the do-nothing option leads
to its selection as the preferred policy option" (p 44).
However, the Commission pointed to a proposal regarding witness
protection, which had been included in the 2007 CLWP, in which
the IA concluded action was not advisable, the findings of the
IA being subsequently published as a Commission Working Document
in November 2007 (p 26).
66. Analysis of the effect of IAs on
Commission thinking would be difficult given that early drafts
of IAs and legislative proposals are unpublished. The "do
nothing" option will inevitably lead to a proposal's being
dropped only rarely, due to the parallel production of the impact
assessment and draft legislation. A comparison of Roadmaps and
adopted draft legislation might shed some light on the issue,
as would a comprehensive assessment of the weight given to the
"do nothing" option in Commission IAs.
Influence on UK Government thinking
and the production of UK IAs
67. In addition to the EU impact assessment,
the Government also produce their own, targeted at the impacts
at UK level. These are a vital part of the process of parliamentary
scrutiny. While we were conducting this inquiry we also scrutinised
a proposal for a Regulation on Biocides, for which the UK impact
assessment seemed to have been produced in an unusual way. That
IA calculated the costs and benefits to the UK by using the figures
provided by the Commission divided by six (because the UK has
a sixth of the EU biocides market). We invited officials from
the Health and Safety Executive to give evidence to this inquiry
to explain why they had produced the IA in such a way, and, more
generally, how they are normally produced, and subsequently used,
at UK level.
68. Steve Coldrick explained that the
UK assessment was produced using those figures because the proposal
"came forward a lot quicker than we actually anticipated,
in the context of the intelligence we had had at that time"
and that the IA was intended to inform a UK-level consultation
exercise aimed at producing a more developed IA (Q 78). The
consultation invited comments on those extrapolated figures and
Mr Coldrick explained "the use we have made of the impact
assessment firstly is in fact to help us get out as comprehensive
a consultative document as possible, within the short time that
we had. Secondly, to gauge the validity of the Commission's position
and its assumptions". Within the HSE, such direct extrapolation
from Commission figures had not been used for around 10 years.
69. The production of the final UK IA
on the Biocides Regulation is in hand, and we look forward to
seeing it. However, the consultation process has not been straightforward,
as Lord McKenzie of Luton, Parliamentary Under-Secretary of State
for Work and Pensions, explained in his letter to us of 13 November.
We asked Robin Foster of the Health and Safety Executive why he
thought the consultation had proved difficult. He said:
"We elicited views from our stakeholders
in two separate ways. We had a consultation exercise, and we had
an open meeting of stakeholders, which was actually very positive
and very useful
When it came to the section on impact assessment,
I was there really trying to encourage people, 'Tell us what you
think, give us information that we can use to improve it'. Although
they had been really helpful throughout the rest of the meeting,
in contributing to issues about the biocides directive, we just
could not enthuse them, they had very little to say" (Q 83).
70. We recognise that the Biocides
Regulation was something of an unusual case and welcome the fact
that the Health and Safety Executive are currently gathering their
own evidence in preparation of the UK impact assessment. Clearly,
the EU assessment should inform the Government's own impact assessment;
but it is crucial that the Government assess the quality of data
in the IA and gather their own data where appropriate, rather
than simply taking the Commission's data and shrinking them to
Impact Assessment of amendments
71. The 2005 Inter-Institutional Common
Approach to Impact Assessments, which is currently under review,
states that the European Parliament and the Council will take
into account the Commission impact assessment when examining proposals
and that they will "carry out impact assessments, when they
consider this to be appropriate
prior to the adoption of
any substantive amendment".
72. Almost all our witnesses suggested
that the European Parliament and the Council are not taking impact
assessment as seriously as they should. The Government said "[b]oth
Institutions have committed to assessing the impact of their substantial
amendments, however this is not happening consistently in the
Parliament, and not at all in the Council" (p 43). Professor Radaelli
said that "[a]t the moment the common approach to IA of the
three main EU Institutions is not working well. It is there in
terms of desire but implementation is random, I would say"
73. The Minister told us that, while the
Commission had developed expertise in producing impact assessments,
"I do not think that capacity is particularly there within
the European Parliament as yet" and, in regard to the Council,
"I am not sure whether the individual Member States would
be seen as sufficiently impartial to be able to produce their
own impact assessments, although I think that is better than having
no impact assessment, quite frankly. So I think the source of
the impact assessment is perhaps less important than the fact
of the impact assessment" (Q 117).
74. There are two aspects to the European
Parliament's use of impact assessments. The first is the attention
they give to the Commission assessment of each proposal. The second
is the production of their own assessments of amendments they
might wish to propose.
75. Sub-Committee A of this Select Committee
took evidence on the Alternative Investment Fund Managers proposal
from Sharon Bowles MEP, Chair of the European Parliament Economic
and Monetary Affairs Committee. That committee had examined the
Commission impact assessment and found it wanting. They therefore
commissioned their own assessments of the original, unamended,
proposal. The first IA dealt with marketing and distribution issues,
while the second was a cost-benefit analysis of the changes proposed
by the draft Directive. Ms Bowles explained that her committee
were not satisfied with the Commission IA as it had clearly been
prepared in haste: "Several people mentioned this when we
debated it in committee and because there was enough money in
the budget we decided
that we would have an impact assessment of our own".
Ms Bowles explained that the assessments did not take into account
any amendments by the committee (which, at that point, had not
been proposed) but suggested that "nevertheless it may well
point to the way forward in terms of what those changes should
76. Malcolm Harbour, Chair of the Internal
Market Committee (IMCO), reported similar activity:
"IMCO has undertaken Impact Assessments,
where the Commission have failed to produce one. For example,
on the Consumer Credit Directive, the committee commissioned a
study on the 'broad economic impact' of the proposal,
because the Commission had refused to provide a new impact assessment
for their modified proposal" (p 60).
77. However, Mr Harbour argued that
European Parliament committees are not consistently taking account
of Commission impact assessments. He told us that "Parliament
committees are still not taking their commitment to better regulation
seriously" (p 60) and that "there is still some
reluctance by all Committee Chairs to examine an impact assessment"
(p 61). Although we have seen evidence that Mr Harbour's
and Ms Bowles's committees are examining Commission impact assessments,
it is not clear to us how often this happens across the Parliament
as a whole.
78. Mr Harbour suggested that the
Parliament should not even consider proposals for which a comprehensive
cost-benefit analysis had not been carried out by the Commission
(p 61). The Federation of Small Businesses made a similar
suggestion that any document which had not received an adequate
impact assessment "should be sent back to the previous stage"
and not considered by the Parliament (p 13).
79. The Government argued that "the
Council and the European Parliament should play a greater role
in holding the Commission to account when it fails to comply with
its guidelines and produce an impact assessment of sufficient
quality" (p 43).
80. In the Inter-Institutional Common
Approach, the Parliament committed to carrying out assessments
of its own substantive amendments, although it was left to the
Parliament to determine, at a political level, which amendments
it regarded as "substantive".
81. The Parliament may commission an impact
assessment at any stage of its consideration of a proposal. At
first reading, this could be done before amendments have been
adopted in a committee, between committee adoption and adoption
by the plenary, or after adoption by the plenary. Assessments
of amendments could also take place at second reading.
82. Malcolm Harbour reported that IMCO
had carried out such IAs, giving as an example the Nominal Quantities
for Pre-Packed Goods proposal (p 60).
However, it seems that this is a rarity. By December 2008, it
seems that only seven such assessments had been carried out.
Professor Radaelli pointed out that the European Parliament
had previously not had the capacity to carry out assessments,
although "some capacity has been built
over the last
two or three years or so" (Q 5). Currently, it seems
that EP impact assessments are almost exclusively commissioned
from external consultants, as in the in the examples cited by
Malcolm Harbour and Sharon Bowles.
83. Dr Italianer explained the Commission's
position: "we think that when there are important amendments
it would also be of use for members of the Parliament and
for Council ministers, for that matter, to use the same techniques
to analyse what the impact of the various amendments would be"
(Q 63). The Minister agreed that it is "hugely important"
that IAs are performed on significant amendments because "the
assessments have to be made on the proposal that is actually going
to be implemented" (Q 116).
84. Professor Radaelli spoke of the
scale of the task assigned to the Parliament, saying it "is
supposed to perform a task that is much more ambitious than the
task asked of other parliaments of the EU, like the national parliaments.
Note that we are asking the EP to perform an impact assessment
of its own substantive amendments. That is a tall order"
(Q 7). He suggested that the need was not for the EP to replicate
the IAs of the Commission, "recalculating costs and benefits
when the EP introduces substantive changes: I would say the EP
would do this IA only to its own advantage", but that assessments
should be performed on "whether the overall logic of intervention
has been modified, whether the regulatory logic behind the option
has been altered by the amendments" (Q 8).
85. There was some suggestion that the
Commission could make use of its capacity for producing IAs to
assess certain of the Parliament's amendments. Dr Italianer
thought this might be feasible, particularly where amendments
touch on technical matters. He said that "[t]he Commission
has already offered to look at such requests
instance the changes in the Parliamentary process are changes
in certain parameters that can be easily simulated with economic
models, then that could certainly be done" (Q 64). He
suggested that the other Institutions were not inclined to take
advantage of this offer, because "they might perhaps have
had the idea that the analysis might not be completely unbiased"
86. The Minister made the same point,
noting that "the suggestion may be madecertainly not
by methat [the Commission] might try to defend their earlier
position rather than give informed advice on an amendment"
(Q 116). However, the Government would welcome it if the
Commission could play such a role (Q 116). Professor Radaelli
warned about a "confusion of roles" which might be created
if the Commission started undertaking such assessments "especially
for amendments that go against the initial proposal of the European
Commission; it would be either legal contortionism, a kind of
torture, or a fiction for the policy officers of the Commission"
87. We welcome the actions of certain
European Parliament committees in commissioning impact assessments
where they feel the Commission assessment is inadequate. This
would constitute a "political" holding to account, in
addition to the role of the Impact Assessment Board in assessing
the adherence of IAs to the Guidelines. The relationship between
the two may warrant further study.
88. We are, however, concerned to hear
that the Parliament may not be consistently taking the Commission
IA into account when considering proposed legislation.
89. The European Parliament does not
seem to be adhering as fully as possible to its commitment in
the Inter-Institutional Common Approach to perform impact assessments
of substantive amendments. We recognise that this is an ambitious
task and that the Parliament may not have the resources to do
this consistently. However, we would encourage the Parliament
to perform assessments in a proportionate manner where appropriate.
Council of Ministers
90. As with the Parliament, the Council
is also supposed to produce assessments of its proposed amendments.
The Government told us that this is not happening at all (p 43).
Given that the Council does not currently produce impact assessments
of its amendments, we wondered what use Member States made in
Council of the Commission impact assessment and of their own assessments.
91. The Commission's written evidence
referred to "the recent initiative by the Czech Presidency
to promote the use of IA in Council Working Group discussions,
following a similar initiative by the Austrian Presidency in 2006.
The current Swedish Presidency has also indicated that it will
make greater use of Commission impact assessments" (p 25).
Other witnesses suggested that there is little discussion of IAs
in the Council and working groups. The Government said that "[i]n
Council working groups and committees of the European Parliament,
debates regarding impact assessments remain the exception rather
than the rule" (p 43), while Professor Radaelli
said "working parties are too focused on negotiation and
bargaining to switch to the evidence-based logic of impact assessment
and take it seriously" (p 3).
92. Robin Foster of the Health and Safety
Executive confirmed this opinion. In regard to the negotiations
on the Biocides Regulation he reported that:
"[t]he Swedish Presidency invited comments
[on the Commission IA], the UK submitted a six-page document,
broadly critical of the impact assessment, but acknowledging all
the work that had been done. Denmark submitted a one-page document
broadly supportive of what the UK said
and that was it.
When it came to discussing the impact assessment in the Council
Working Group, this is the Environment Council, there was very
limited discussion" (Q 78).
93. As some Member States produce their
own national impact assessments of proposals, we were interested
to know whether these could, in some sense, be regarded as de
facto assessments of certain amendments the Member States
wished to propose. Dr Italianer said that to the extent it
serves as a "pars pro toto
it could give a good indication of an amendment and so
in that sense I think it could help the decision-making in the
Council" (Q 65). He warned, though, that "there
are some policy proposals where there is a distribution issue
between Member States". Citing a proposal to reduce CO2
across the EU he continued:
"there was a distributive issue involved
there: who is going to bear the cost; who has to achieve which
CO2 reductions? In that case it is a little bit of
a zero sum game. If one Member State has to reduce more than another
in that case an individual impact assessment
would perhaps be of less use because it would be to the detriment
of another Member State" (Q 66).
94. In reality, it seems that neither
Commission nor Member State impact assessments are much discussed
in Council. Robin Foster told us that "[w]e will certainly
use [the UK IA] to formulate our amendments" but "we
will be rather cautious about deploying cost-benefit assessment
in the negotiating meetings themselves, and the reason for that
is experience, which says that there are many Member States who
will visibly recoil if the UK advances pure cost-benefit arguments
in the meetings" (Q 81).
95. When we asked the Minister for Better
Regulation if impact assessments should be discussed in working
groups and the Council he said, "I would be concerned if
they did not" (Q 120). The Government subsequently provided
us with two recent examples of the use of IAs in working groups:
the Implementing Measures for External Power Supplies and for
Simple Set Top Boxes (p 53). The Minister did, however, acknowledge
that it is not always easy to discuss a proposal in such terms,
stating that "I think that that creates some disagreements
sometimes with other European countries because they do not think
that that numerical cost-benefit analysis is as valuable as we
think it is" (Q 99).
96. The Minister told us that the Government
had been trying to promote greater use of impact assessments in
the Council and working groups and that he had been in contact
with his German counterpart with regard to working more closely
on Better Regulation. He also told us that the Government had
met with European Parliament committee chairs (QQ 102 &
97. We conclude that the Council should
produce impact assessments, but understand the political hurdles
involved. With regard to Member State impact assessments, with
due caution about their possible applicability Europe-wide, we
would be interested to see how they might be used to assess amendments
proposed by Member States in Council.
98. We are concerned about the apparent
lack of discussion of impact assessments in working groups and
the Council. We urge the Government to promote their use further.
99. The impact assessment process takes
place at the beginning of policy formulation, but better regulation
should also take into account the evaluation of regulation once
it has been implemented. The Council of Ministers acknowledged
this in May 2009, when it called for the Commission to provide
for ex-post evaluation and "undertake comparison of
intended and actual effects of approved EU legislation".
100. The FSB argued that "[p]ost
implementation reviews of EU legislation should therefore happen
in every Member State" (p 14) while Malcolm Harbour
stated that "[l]egislation should be viewed by the European
Commission as a circular process, in which ex-post audits
should be an indispensable requirement" and that "the
Parliament's committees should make better use of their resources,
by providing some of the qualitative and quantitative evidence
needed to review the impact of legislation" (p 60).
101. The Minister told us that ex-post
evaluation is not "happening as much as it needs to"
but also suggested that "[i]t is something that we in the
UK Parliament do not do very well, and that is assess the legislation
that we have already passed
and really ensure that the effect that it was intended to have
it has had and, if it has not, why not. I think our culture is
such that we do not really think as politicians in those terms"
102. Dr Italianer told us that the
Commission are "strongly encouraging our departments to engage
in ex-post evaluation because whenever they are reviewing
legislation for which they are responsible, the natural starting
point should be ex-post evaluation before they go into
a new impact assessment" and that "I would expect that
several years from now many of [the impact assessments] would
be the subject of an ex-post evaluation when it comes to
the policy review process" (Q 74). He also spoke of
completing the "policy circle" in order to "get
into place this chain of ex-ante and ex-post evaluations"
103. We welcome the Commission's commitment
to carrying out ex-post evaluations as they are crucial
to improving legislation. However, it was not clear how often
the Commission was carrying them out. We recommend that further
work be done to determine their current use and how they are integrated
into the legislative cycle. We urge the Government to promote
the further use of ex-post evaluation and encourage the
Commission to disseminate their evaluations more widely.
22 Op. Cit. p 11 Back
COM (07) 693 Back
EU Sub-Committee B, Correspondence with Ministers: http://www.parliament.uk/hleub Back
Inter-Institutional Common Approach to Impact Assessment (2005),
paras 13-14: http://ec.europa.eu/governance/better_regulation/documents/ii_common_approach_to_ia_en.pdf Back
In 2006 a specific budget line was created, initially allocating
500,000 to European Parliament committees to fund impact
assessment-related activities. Since 2008, this has been subsumed
into an "expertise budget", totalling 7,500,000
that year. Back
Op. Cit. Q 375 Back
Op. Cit. Q 380 Back
Study requested by the European Parliament's committee on Internal
Market and Consumer Protection, Broad Economic Analysis of the
Impact of the Proposed Directive on Consumer Credit, April 2007:
Impact assessment was requested by the European Parliament's Committee
on Internal Market and Consumer Protection, Impact Assessment:
Parliament's Amendments to a Commission Proposal on Nominal Quantities
for Pre-packed Products, November 2: http://www.europarl.europa.eu/activities/committees/studies/download.do?language=en&file=22172.
This was carried out before amendments were adopted by IMCO. Back
These were, at first reading, Priority Substances in Water Directive,
Working Time Directive, Interoperability of the Community Railway
System II Directive, Air Quality Directive, Nominal Quantities
for Pre-Packed Products Directive; and at second reading, Waste
Framework Directive and Batteries and Accumulators Directive.
As reported in Impact Assessment: The European Parliament's Experience:
A Stock-Taking Report of the Common Approach to Impact Assessment
produced by the European Parliament Conference of Committee Chairs
in December 2008. Back
Part for the whole. Back
Council conclusions on Better Regulation: 2945th Competitiveness
Council Meeting, 28 May 2009: http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressdata/en/intm/108145.pdf Back
There are, however, proposals for better post-legislative scrutiny
in the UK. See, for instance, Post-legislative Scrutiny-the Government's
Approach, Cm 7320 2008: