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

Examination of Witnesses (Questions 89 - 99)


Ian Lucas

  Q89  Chairman: Let us begin officially by welcoming the Minister, Ian Lucas MP, Parliamentary Under-Secretary of State, Department for Business Innovation and Skills. Thank you very much indeed for, not only your written evidence, but also for coming and joining us. I should say that we hope to discuss a draft report the second Monday we come back in January and we are hoping to publish our conclusions, with the approval of the Select Committee, some time in February, early February, I would have thought. We have been focusing on impact assessments, as opposed to the wider issues of better regulation. With that brief introduction, could I ask you whether you would like to make an opening statement or shall we go straight into the questions?

  Ian Lucas: I think we should just go straight into the questions, if that is okay with you.

  Chairman: Good. Thank you. Lord Bradshaw.

  Q90  Lord Bradshaw: Good afternoon. There are new impact assessment guidelines and I think we are very interested to know about the quality of what has been done, whether you think that the costs and the benefits which are included in them are reliable and are the bases for the figures used transparent? Are we getting something worth having or is it just a lot of bureaucracy winding round?

  Ian Lucas: I think that we are getting something worth having, but not in all cases. There are impact assessments that have been made that have been very helpful to us and very helpful to UK Government departments in particular areas and, if impact assessments can be made at a European level in respect of European Directives, then that could be very helpful in preparing impact assessments for consideration in delegated legislation within the UK Parliament, so those are very, very valuable, but I do not think that all of the impact assessments that have been made at the present time are of sufficiently high quality. It is a relatively novel process within the European Union, and I think therefore that is not altogether surprising, but it is a valuable process. There are examples of it having been done very well. There is an example in air quality, for example, that has been very helpful. It will improve. We want to push ahead our agenda making it improve at a European level to assist us in legislation here.

  Q91  Lord Bradshaw: In your written evidence you go on to suggest the Commission is not producing impact assessments on all measures with significant impacts, but the Impact Assessment Board think that they are producing these. What are your thoughts generally on whether the impact assessments are yet addressing the most significant things, and do you know of any or think there are some things which should have been impact assessments and have not been?

  Ian Lucas: There is one particular impact assessment that has not been made on VAT electronic invoicing that we think is a significant proposal which the Commission estimates could actually bring about savings of €18 billion across the European Union. We think that is an example of there not having been an impact assessment done when it ought to have been done. We accept that there will not always be a compelling case for making an impact assessment where a relatively trivial amount is involved, but where there is a very significant impact we do think it is valuable. We accept that the impact assessments are being made in most cases, and they are very valuable and I think real progress is being made by the Commission in this regard, but there are still individual cases where the assessments have not been made and I think that is unfortunate. We hope to continue to persuade the Commission to take this agenda forward and ensure that, in every significant case, in every proportionate case, the assessments are made.

  Q92  Lord Bradshaw: Can I pick you up on electronic preparation of invoices?

  Ian Lucas: Yes, VAT electronic invoicing. The Commission adopted a proposal to amend its VAT Directive in January 2009. Firstly, the measure did not appear in its annual work programme and an impact assessment was not actually produced, despite it having significant impacts—as I say, at an estimated saving of €18 billion—and, therefore, we think that was an example where the position was not as we would have liked it to have been.

  Q93  Lord Bradshaw: The economy is in the actual collection of value added tax.

  Ian Lucas: That is right.

  Q94  Chairman: When Lord Adonis came to give evidence on infractions of the first railway package, he very kindly, subsequently, sent us a list of those countries who are not fully implementing the freight package. The reason I mention this is that it would be very helpful if you have in the department a list, say, over the last few years of absent impact assessments. It would greatly help the Committee to attach that as an annex to our report.

  Ian Lucas: I am sure that we would be very happy to investigate that and produce a list for the purposes of the report. I think it would be very valuable too.

  Chairman: Thank you very much.

  Q95  Lord Whitty: We have been talking about the Commission producing impact assessments. Do you also think that the whole range of proposals that come up in comitology should also be subject to the full impact assessment proposition?

  Ian Lucas: I think that any significant proposal that comes forward should be subject to impact assessment, whether it is through the comitology process or through the Commission's proposals for regulations and directives. Comitology is, essentially, delegated legislation which can be carried forward by the Commission, and it is important, therefore, that anyone who is scrutinising those proposals should be in a position to assess the impact of those proposals. I think, in those circumstances, it would be valuable to have impact assessments made, again, where it is proportionate and where the impact of the particular proposal is significant.

  Q96  Lord Whitty: They use the same process as the Commission use; they use the same resources as the Commission for drawing up the assessment.

  Ian Lucas: Yes, I think, essentially, it would be the Commission that would draw up the assessment in that particular case, as it would be with any other proposals.

  Q97  Lord Whitty: I think we are going on later to proposals which come up through the European Parliament, for example, which is a completely different process, but I will delay that one. The other thing I am interested in is the relationship between the European process and the British process of which, I think, our first take was there was not much. We did have an example from the HSE, who showed us that they prepared their impact assessment for UK regulation by directly extrapolating the figures from the one that the Commission had done at a European level, but they also said this was an extremely rare occurrence with the HSE. I am not really aware that this is a very frequent occurrence in any part of government, your own department or others. Is there a relationship between the work done at a European level and what might be followed through either in transposition or in British level directives?

  Ian Lucas: I sincerely hope there is, because, obviously, the proposals that are made at a European level directly impact on the UK in due course, and the earlier that one can engage with that process, then the more appropriate the legislation through the form of Directives coming from the EU will be. So I think early engagement when a draft proposal of whatever kind is made in the European Union should be facilitated by the UK Government. We want to be involved in that process because frankly, we take the rap when that comes through at the end of the day and the Directive or the proposal is unsatisfactory for UK business, UK consumers. In my job, the principle of engagement at every stage of regulation is very important and European regulation is no exception to that.

  Q98  Lord Whitty: I think the problem that is identified for me anyway, I am not sure about my colleagues, is that partly because the Brits have been earlier in the process of drawing up impact assessments (and there is a certain sniffiness about the European level, some of which you have reflected yourself) that actually most government departments want to use their own material and their own ways of drawing up impact assessments even if there has already been some work in Brussels.

  Ian Lucas: If that is the case, then I do not think it makes sense. Clearly, the proposals coming forward from the European Union will have a direct impact on the departments and, in due course, on businesses, consumers within the UK, and we cannot have people singing from different song sheets in respect of the same proposal. The engagement needs to happen between the European Union and the UK Government to make sure that when the implementation takes place at UK level we have got a sensible, overall cohesive proposal that is implemented in legislation within the UK.

  Q99  Chairman: Could you help us? It is not necessarily a request for written information, but can you share with us your impression about how other countries prepare their own impact assessments? I know the Commission, for instance, produces its own, but are the Brits almost unique in the thoroughness and the extent of impact assessments that departments produce for the UK Government?

  Ian Lucas: I think there is a different culture as regards UK impact assessments and I gather there are complaints about this sometimes. We are very figures driven in that we think that cost-benefit analysis in numerical terms is very important, and 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, and that is partly a cultural difference, I think, and a difference in the way that draft legislation is proposed. I suppose, from our point of view, the creation of impact assessments is a relatively novel process and it is a discussion that we are still having with other European countries to try and bring them on board. We have allies in this regard, but we have some people who do just not agree with it.

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