Memorandum by Malcolm Harbour MEP
In 2002, the European Commission launched a
comprehensive programme to simplify and improve the regulatory
environment. In 2003, the EU institutions agreed to an Inter-institutional
Agreement on Better Law-Making, setting down how they can work
together to legislate better.
These programmes have done much to improve the
quality of legislation but more needs to be done by all the EU
institutions to better meet the commitment to Better Regulation.
Firstly, the aims and objectives of better regulation need to
be more effectively communicated. There are still many people
involved in European policy-making, including MEPs and civil servants,
who do not understand the value of better regulation or how to
employ it in their work. Therefore, the European Commission could,
for example, considering supplying all MEPs with their Better
Regulationsimply explained booklet which can be found
on their website but has not been widely disseminated. Secondly,
with a new commission appointed, it is important that better regulation
stays on their list of priorities. All the commission designates
have now been sent their lettre de mission (http://ec.europa.eu/commission_designate_2009-2014/mission_letters/index_en.htm),
outlining their objectives for the next term. It is concerning
that the letters refer simply to the "smart regulation agenda"
since this does not seem to reinforce the commitments and guidelines
established in the last Commission. A lot of progress has been
made in encouraging the better regulation agenda within the Commission
and it would be important to seek assurances for President Barroso
that he is still committed to the agenda.
An important part of making better laws is having
a comprehensive understanding of their impacts. However, although
the Commission has extended the requirement to do impact assessment
beyond initiatives in the annual Legislative and Work Programme,
there is still no mandatory requirement on the Commission to carry
out an Impact Assessment before the introduction of a legislative
An impact assessment is a crucial part of the
legislative process. Without one, the European Parliament, Council
and stakeholders are unable to see the Commission strategy behind
the proposal or the implications for legislation. It is also important
in determining whether there is a need for EU legislation in the
first place, if it is consistent with the principle of subsidarity
and whether there is real "EU value added."
There are also concerns with the quality of
the impact assessment. An impact assessment can only add real
value if it comprehensively analyses both the costs and benefits
of a proposal. But, on too many occasions, an impact assessment
is used as the "end" of the process rather than as a
means to the end. Therefore, many impact assessments seem to be
moulded to fit the commission thinking rather than the other way
around. This is simply not a basis for better regulation.
That said, since 2006, the Commission's internal
Impact Assessment Board (IAB) has done much to improve the quality
and methodology of Commission impact assessments. Their work should
be welcomed. However it should be noted that the IAB only has
a role in determining the conformity of the impact assessments,
in line with the Commission's IA guidelines, rather than assessing
whether the final legislative proposal properly meets the results
of the impact assessment. Therefore it could be worth investigating
whether value would be added by extending the remit of the IAB
in this way.
There have also been suggested proposals to
make the Impact Assessment Board truly independent, operating
outside the institutional structure of the European Union. This
could better objectively audit the better regulation agenda. For
example, the legal affairs committee in the European Parliament
(JURI) have recently requested authorisation to draw up an initiative
report on Guaranteeing independent impact assessments.
Better stakeholder consultation should also
be encouraged as an important principle of a good impact assessment.
In the past, many DGs have stuck rigidly to the 8 week minimum
consultation period but often without adequate dissemination.
This means that stakeholders, particularly small and medium enterprises
can not prepare themselves in time to make a formal response.
The more stakeholders involved in the original consultation, the
more comprehensive the impact assessment and the less need for
substantive amendments to the final legislative text.
Impact Assessments should also take account
of specific impacts. This is already the case for impacts on SMEs
through a so-called "SME test" but this idea could be
developed in other areas. For example, the European Commission
could look into new ways to eliminate remaining barriers to a
complete Single Market by introducing a "Single Market Test."
In this case, the smooth functioning of the Internal Market depends
on the policies and legislation not just from DG Markt but for
many different DGs in the European Commission and a "Single
Market Test" could be a useful principle to ensure coherence
and strategy from the Commission.
Therefore, it is very clear that whilst a lot
of progress has been made by the Commission to improve the pre-legislative
process, a lot more can and should be done.
Post legislative process
The European Commission also have an important
part to play in the post legislative process, which forms an important
piece of the Better Regulation jigsaw.
Legislation should be viewed by the European
Commission as a circular process, in which ex-post audits should
be an indespensible requirement. The audits will show whether
the legislation meets or surpasses the original impact assessment
and if not, identifying where it requires amendments or recasts
to ensure that it meets it's original objectives.
This evaluation technique would help the Commission
in undertaking their ambitious simplification programme, by helping
to identify where legislation is overly complex in certain areas
and needs to be reviewed or repealed.
We are pleased that the Commission President's
political guidlines for the next Commission (http://ec.europa.eu/commission_barroso/president/pdf/press_20090903_EN.pdf)
included an explicit reference to this post implementation audit
The European Parliament
The European Parliament, like the European Council,
also needs to play their part in ensuring that quality legislation
emerges at the end of the legislative process.
However, Parliament committees are still not
taking their commitment to better regulation seriously. Firstly,
there is no obligation under the inter-institutional agreement
for the Parliament to scrutinise Commission Impact Assessments.
Secondly, MEPs frequently table amendments to legislative texts
without fully understanding their impact. This is against principles
of better regulation laid out in the Inter-Institutional agreement.
However, there is scope for the Parliament to
take initiatives if it chooses to do so. For example, the Internal
Market and Consumer Protection Committee (IMCO), chaired by Conservative
MEP Malcolm Harbour, has been at the forefront of the better regulation
agenda in the Parliament. 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. The Committee have already carried
out impact assessments, where substantive amendments have been
made to a Commission proposal. For example, when MEPs in the committee
tabled changes to the Nominal Quantities for Pre-Packed Goods
proposal, the committee commissioned an impact assessment of their
amendments. In this mandate the IMCO committee have asked the
Commission present the full Impact Assessment of any legislative
proposal to the committee, at the meeting when the proposal is
first introduced and before MEPs examine detailed proposals. This
has now happened on 4 occasions, and has led to MEPs demanding
more detailed information and questioning a number of issues.
However, these techniques have not yet been
adopted by all committees in the Parliament and there is still
some reluctance by all Committee Chairs to examine an impact assessment.
Unfortunately, some accept the Commission argument that there
is sometimes not enough time to draw up an Impact Assessment.
However, if the Commission cannot carry out a comprehensive costs
and benefits analysis, then the Parliament shouldn't be working
on the proposal. MEPs have duties as policymakers to properly
understand all the implications of the legislation and not to
rush into the unknown, and produce bad laws.
Although the European Parliament is not formally
involved in the enforcement of legislation, MEPs should also play
a role in the post-legislative process. Committees have resources
at their disposal to carry out post-implementation reviews through
strategic own-initiative reports, public hearings, workshops and
studies. Since the post-legislative process plays an important
part of the better regulation and simplification agenda, 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.
Therefore, although the Parliament plays a crucial
role in delivering the better regulation agenda, much more can
be done. MEPs still have a limited understanding of the principles
of better law-making and how they can employ it in their committee
The European Council/Member States
The European Council have often neglected their
duty to better regulation. It seems that only a few Member States
are committed to the better-law making agenda, with many others
failing to see its added value. Like the European Parliament,
the European Council have agreed to do impact assessments should
they ask for substantial amendments to Commission proposals but
are yet to fulfil on this commitment.
With a possible renegotiation of the inter-institutional
agreement in 2010, the fact that better regulation is not a priority
for many Member States is worrying. Although many of the principles
have not been followed by Member States, the economic crisis has
shown just how important principles of better regulation have
become to stakeholders. A renegotiation of the inter-institutional
agreement should signal it's relaunch with more pragmatic examples
of how the European institutions can see the agenda through.
After legislation is agreed by the EU institutions,
then Member States need to work in the spirit of better regulation
when implementing EU legislation. This means that the Delivery
of Better Regulation relies largely on their efforts.
However, it should be noted that the recent
competitiveness Council conclusions on Better regulation show
some improvement and indicate that Member States are still determined
to the agenda. We await the results with interest and hope the
Member States meet some of the ambitious targets they set.
9 December 2009
9 This evidence is submitted by Malcolm Harbour, Chairman
of the European Parliament's internal market and consumer protection
committee, on behalf of the Conservatives in the European Parliament. Back