20 May 2015

Frans Timmermans has been ahead of the curve in recognising that the EU needs to stop interfering in areas better handled nationally or locally if it is once again enjoy the trust of its citizens (it is worth reading his interview with the Financial Times in which he describes his epiphany following the Netherlands’ rejection of the European Constitution). Since his appointment as the European Commission’s First Vice-President, he has began putting this principle into practice, and yesterday he formally launched the Commission’s Better Regulation agenda which aims to make the EU’s law-making more transparent and efficient. We assess its key points:

A new Regulatory Scrutiny Board: The Commission’s old in-house Impact Assessment Board will be replaced by a new Regulatory Scrutiny Board composed of six members – three of them appointed by the Commission and three independent experts – as well as a chairperson “independent from other Commission structures”. This is a significant and welcome step even if the new RSB falls short of complete autonomy. Open Europe has long argued for an independent board which would robustly scrutinise Commission IAs; we first proposed it in our ‘Out of Control’ report in 2009 and also included it in our Mandate to the new Commission.

Better scrutiny of amendments: Some of the most significant costs associated with EU regulations stem not from the Commission’s original proposals but amendments put down by the European Parliament (think bankers’ bonus cap) or the Council of Ministers. These amendments fall outside of the scope of the original impact assessments so Timmermans has proposed ad hoc, independent technical panels to “analyse whether an amended proposal is practical to implement, creates understandable rights and obligations for the interested parties, and avoids disproportionate costs”. This reform – also proposed by Open Europe back in 2009 – would be hugely beneficial, although under the Commission’s current proposal this would only be voluntary on the part of Ministers and/or MEPs.

Reviewing existing legislation: Implementing better processes for future legislation is all well and good but the stock of existing legislation, much of which imposes significant burdens on business, also has to be addressed. Thankfully, Timmermans is aware of this problem:

While the natural tendency of politicians is to focus on new initiatives, we must devote at least as much attention to reviewing existing laws and identifying what can be improved or simplified. We must be honest about what works and what doesn’t.

Timmermans has proposed expanding and strengthening the Commission’s existing REFIT programme (which has so far not yielded any spectacular results). A key element of this will be a new “inclusive stakeholder mechanism” which will bring together high-level experts from across the EU to collect suggestions for how to reduce the regulatory burden – the Coalition’s Business Taskforce report on cutting EU red tape puts the UK in a strong position to play a leading role in this exercise. The Commission will be obliged to react to any proposals and explain how it intends to follow up on them – in other words, there will be nowhere to hide.

Greater Transparency: Timmermans has also acknowledged the need for the whole process to be more transparent, promising that “all the windows will be open and the kitchen and cooks will be visible”. Crucially, stakeholders will henceforth be able to provide input throughout the full legislative cycle not just at fixed points. In addition, the Commission will for the first time also make implementing and delegated acts available for feedback. This might not sound very exciting but it is important – implemented and delegated acts lay down the finer details of how EU legislation works in practice. In the past, these have been hammered out behind closed doors with no transparency or accountability – for example the infamous ban on olive oil jugs in restaurants was precisely such an implementing measure. Again, greater transparency in EU law-making is a cause long championed by Open Europe.

Overall, this is a welcome package of proposals – Timmermans himself described them as “radical”. We think they have the potential to make a substantive difference although any ambitious pro-competitiveness drive will face stiff opposition from a coalition of vested interests. Nonetheless, the Better Regulation agenda offers UK businesses a good opportunity to highlight the EU laws which impose unnecessary and disproportionate costs on their businesses – time to get stuck in.