Changing Europe

The European Parliament is in a state of flux, striving to improve its legislative processes and preparing for the accession of ten new members of the European Union. As chair of the Parliament’s environment committee Caroline Jackson MEP is in the thick of it, and her message is clear: “The main problem is that there is no cost/benefit analysis carried out by the Parliament of its own amendments, so we have complete freedom to add or subtract to legislation without any obligation to cost our decisions.”

While this is beginning to change through the process of ‘better regulation’, Jackson is not convinced that it has gone anywhere near far enough. To date better regulation has meant that in some cases the Commission is publishing assessments of proposed legislation on Europe’s SMEs. However, Jackson says these can be very slim documents indeed, with no evidence given of where the Commission has derived its sums.

While this may represent some progress, Jackson fears that an inter-institutional agreement signed in December “with great formality” by the Parliament, the Council and the Commission, may not be sufficient if it continues to allow each institution to perform its own analyses. “At the moment you can manipulate the brief and come up with the conclusions you want,” she says.

This issue has gained currency with the controversy over the proposed chemicals regulations known as REACH, with the industry contesting the results of the Commission’s cost/benefit analysis, and from which Jackson believes it has “cherry-picked the bits that it likes to some extent”.

An irresponsible system

Jackson’s solution is something along the lines of the US congress body, the Office of Management and Budget. Either way, she – along with industry across the Continent – is not happy with the status quo. “It is extraordinarily irresponsible to set up a system which allows the parliament to add amendments which can have huge financial consequences, and to have MEPs to adopt them with no knowledge of the consequences.”

Where this applies to REACH – and the disparity in the costs predicted by sector trade bodies and commissioner for the environment Margot Wallström are very wide indeed – Jackson’s advice to business is to take the battle to the Commission with solutions rather than complaints.

“Industry must not stand back and say ‘it’s for the legislators to sort out’. What they have to come up with is their own cost/benefit analysis. It’s not enough to say this regulation won’t work, it’ll be terribly expensive and everything will go offshore. Let industry come up with exactly what they think they can make work, rather than whinge.”

Jackson also believes that industry must become much more reactive. She describes lobbying organisation UNICE as “like a battle of Jutland dreadnought which takes about three hours to turn around” and it faces ” very sharply focused pressure groups, which are in the field early and are very nimble-footed”.

The UK also needs to do a better job of representing itself in Europe, and Jackson understands the Environment Agency chief executive Barbara Young’s desire to be more active in Brussels [Environment Business 91].

Lurking dangers

“I have a lot of sympathy for Barbara Young and the Environment Agency because what I think has happened in the past is that it has been handed tasks which DEFRA has negotiated and which it realises straight away are going to be very difficult and expensive to carry out.”

However, Jackson doesn’t lay all the blame at DEFRA’s door. In fact, she believes there are a number of factors at play. “Too much is being agreed at too fast a pace. And this is because – particularly when Michael Meacher was there – anything environmental was good in itself and had to be agreed as soon as possible because terrible dangers lurked in the bushes if you did not.

“But actually the terrible dangers are the dangers of neglect and anti-competitive practices, in that we in Britain have a tradition of high regulation and tight compliance, while other countries do as they do.” She believes this because of “a Protestant ethic” which says the law is the law and everything should be specified very heavily.

“This is a cultural difference so deep that it isn’t going to be easy to overcome. What we therefore need to do is move more in the direction of the rest of Europe, which is regulation with a lighter touch.”

However, she doesn’t think it will be easy. “Our officials are taught to apply the law in a particular way. Also, we are a very litigious society and if we have regulation with a light touch, very quickly someone is going to complain.”

The UK’s predilection for heavy-handed regulation is not something new, especially for those who’ve ever heard a speech by Digby Jones. And here Jackson is unwilling to lay all the blame on the government. “One must accuse business of the general whinge,” she says. “I can’t tell you how many times I’ve told business in my part of the world: don’t just whinge, where you think there are cases of uncompetitive practices, give me the facts.

Red tape

“We always have this campaign about red tape, and fine, I’m happy to help. But which red tape don’t you want? Business needs to tell me where in the environmental field it feels the red tape is unnecessary and can be unwound and thrown away. Where are you are not able to properly compete with people on the Continent because we are applying the law too rigidly or they are not? But I don’t get an answer.”
But Jackson is a firm believer that there are at least some net benefits for business from European legislation, and that proper analysis will prove this to be true. “The development of environmental technologies are something British companies could benefit from,” she says. “This is the missing part of the equation. DEFRA – and the CBI – could be looking at what is going to happen in terms of new legislation and identifying where the opportunities are for British business, flagging them up and doing something about it.”

Accession collision

Jackson is calling for change across the Commission and Parliament’s activities, and the both the attitudes of the UK’s government to the development of legislation, and the way it carries it out. But there are other changes about to overtake the EU – the accession of ten new states which will take place on 1 May.
“This is an absolutely unprecedented year in the EU,” Jackson says. “We’ve never admitted ten states at the same time, nor have we admitted so many very poor states. And we have never been so grudging in our welcome. At the very moment they are knocking on the door, we’re saying we want to shrink the budget.

“The situation will be complicated over the next five years by the fact that we look as though we’re going to admit Bulgaria and Romania in 2007, and Romania has huge environmental problems. If you look at whether they should be admitted on environmental policy, the answer is no, but the political imperatives are to bring them in.”

Lack of verification

But for Jackson, perhaps the biggest problem is the lack of an effective system of verification of how member states are complying with EU law. When the European Environment Agency was set up, member states “strongly resisted” a verification role. Jackson says: “In a sense the Agency is only able to report what the member states want it to report.”

What attitude the MEPs from the new member states take on environmental policy is obviously still an unknown. “They could be rather coldly realistic and say ‘it’s very interesting that you’re proposing yet more controls, but you must know we can’t possibly comply so we’re going to vote against it’,” Jackson says. “Or they may say ‘this is terribly important, we want to comply, but we haven’t got the money, so what we’re going to do is vote for the legislation – as tight a control as possible – and you have to give us the money’.”

Change is coming

Either way, change is coming and Jackson hopes it will be positive: “If the Commission is realistic we will see a new approach to the legislation it produces. Since the 1970s, we have had command and control legislation – you specify very tight targets and limits and the expectation is that everyone dances to the same tune. The Commission is getting the message that it is impossible to apply this universally.

“In some cases they will move towards general standards and hope that member states operate within them. That’s realistic, but the difficulty is that you then set in stone what could be a very anti-competitive, bumpy playing field – which leaves the UK with the best referees and the best rules.”

This bodes badly for British industry, but Jackson does see one definite plus on the horizon. “In terms of environmental policy, I think the accession states will come in with a Czech view or a Slovak view, rather than having three or four voices from each country – so within the parliament over the next ten years we may see an evolution into much more of a series of national voices.” And that could mean a much smoother ride for UK business.