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

Supplementary memorandum from the Department for Business, Innovation and Skills

Does the government use UK Impact Assessments in Council working group discussions?

  It is Government policy that departments develop a UK impact assessment as early as possible and that departments should include it in an explanatory memorandum to Parliament on a Commission proposal.

It is also Government policy that impact assessments must accompany any proposal to clear cross-Government negotiating lines on Commission proposals.

  Two recent examples where impact assessment informed were used by the UK in Council working groups are:

    1. Implementing Measure for External Power Supplies—this measure aims to reduce power consumption of power supply units; and

    2. Implementing Measures for Simple Set Top Boxes—this measure aims to reduce power consumption of devices that connect to a television and an external source of signal.

  To further encourage the use of Commission impact assessments in Council working group debates, the UK is hoping to work with like-minded member states to present a two-page summary of Commission impact assessment to ensure discussion starts with the Commission's views of potential costs and benefits. The aim is that illustrating the costs and benefits in a condensed format will make data more accessible and therefore increase evidence-based discussion in Council.

  To reinforce this, internal Government guidance on negotiating Commission proposals, also encourages UK officials to ask for a discussion of the Commission impact assessment in Council working groups.

Can you provide examples of where Commission proposals were not accompanied with an impact assessment?

  The Better Regulation Executive conducted informal consultation with a number of key EU facing UK departments and agencies in preparation for the Committee's inquiry. This showed that since the Commission extended its scope of measures subject to impact assessment at the beginning of the year, it more systematically produces impact assessments on measures in its annual work programme.

  Nonetheless, further improvement is undoubtedly necessary and we are working closely with both the Commission and like-minded Member States to ensure that more and more Commission proposals do have robust impact assessments. Three recent examples where the Government found a Commission impact assessment missing are:

    — A proposal on rules for VAT electronic invoicing—the Commission adopted a proposal to amend its VAT directive in January 2009. The measure did not appear in its annual work programme and an impact assessment was not produced despite it having significant impacts. The UK estimates this proposal could bring substantial annual savings to businesses.

    — A proposal on "clean cars"—in 2007 the Commission adopted a proposal promoting clean and energy-efficient road transport vehicles without an impact assessment.

    — A regulation agreed through comitology implementing part of the Official Feed and Food Controls Regulation came into force in January and created burdens on food businesses that import certain foods from third countries. No impact assessment was conducted by the Commission but the UK estimates this could bring total costs of between £10.2 million and £21.6 million with total benefits of between only £2 million and £2.3 million.

  Despite the obvious improvement in the quantity of impact assessments being produced by the Commission, the UK is working hard with like-minded Member States to encourage the Commission to go further in the following key areas:

    — ensuring that the Commission better quantifies costs and benefits;

    — ensuring impact assessments are produced on more comitology items with significant impacts by holding the Commission to its promise to do this;

    — ensuring that measures developed in response to the financial crisis are not rushed through without proper evidence of the costs and benefits. Here for instance we are working hard with Treasury to feed into the proposal to regulate hedge funds and other alternative investment funds;

    — ensuring that Commission Roadmaps and impact assessments better quantify costs and benefits;

    — ensuring that impact assessments are produced in a user-friendly format through the help of impact assessment summary sheets like we do here in the UK, containing the key information from the main impact assessment eg intervention options, costs and benefits; and

    — ensuring measures do not disproportionately affect SMEs by making sure the principles of the EU Small Business Act are applied in practice.

What evidence do we have of the European Parliament and Council conducting impact assessments on substantive amendments to Commission proposals?

  It is fair to say that the European Parliament and the Council do not have a good record of producing impact assessments on their own substantive amendments to Commission proposals.

  However it is worth noting that the Parliament has done more recently. It has produced seven impact assessments on its own substantive amendments. An example is of the Internal Market and Consumer Protection (IMCO) Committee requesting an impact assessment on substantive amendments to the proposal for a Directive on nominal quantities for pre-packed products. This impact assessment (1) clearly contradicted some of the Commission's claims, (2) helped to better understand and better explain to third parties the available policy options, and (3) was explicitly used by several Member States to reach a better compromise in the Council.

  Embedding the use of impact assessment in both the Parliament and Council is imperative and the UK is looking at ways to further this aim.

  The Government is working with like-minded MEPs to get formal agreement by key Committee Chairs to use Commission impact assessments at first committee meetings to discuss new proposals. In the Council, the UK is working with like-minded Member States to use a two page summary of the Commission impact assessment for a proposal as a basis for first discussion on a proposal.

  We are also working with upcoming presidencies to highlight why impact assessments should be discussed during working groups. The Government works closely with a number of other key Member States, including some who joined in 2004 to reiterate the importance of using impact assessments in the Council. At official, the UK has also sent better regulation secondees to work in the Slovenian, Czech and Spanish Presidencies to prioritise this work

  The upcoming review of the Inter Institutional Agreement on better law-making presents an opportunity to get renewed commitment from both the Council and Parliament to make more use both of Commission impact assessments and impact assessments on their own substantive amendments.

8 January 2010

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