Legislators are failing to scrutinise European legislation, and business believes the UK parliament is "asleep on the job", according to the Confederation of British Industry (CBI).

A package of parliamentary reforms to increase national influence over the EU – which now makes more than half the laws affecting UK firms – is now needed, the CBI has said.

Director-General Digby Jones praised the leader of the House of Commons, Peter Hain, for making scrutiny of Brussels a top priority issue for the select committee inquiry on House of Commons modernisation, but added the government's proposals have "not convinced business" that MPs will effectively assess EU legislation in future.

CBI members were in favour of Mr Hain's proposal for a Joint European Grand Committee, which would take public evidence from government ministers, MEPs and European commissioners. Firms said the Committee would raise the Westminster profile of European issues, but they pointed out that it would not provide regular in-depth analysis of EU proposals.

Mr Jones also said he wants MPs to "exercise more influence" over Whitehall goldplating and MEP voting patterns in the European parliament.

"When it comes to EU legislation, UK MPs have been asleep on the job. That is not acceptable for our country since more than half the laws affecting UK companies, and the jobs of millions, come from the European Commission," he said.

"The government has acknowledged the issue and put constructive proposals on the table but these do not go far enough. We need a more proactive approach from our parliament that tries to influence the initiatives at an early stage, not when it's too late to make an impact."

Mr Jones added: "Westminster never seems tuned into what Brussels or Whitehall are doing. We have the most successful economy in Europe. We do not want it damaged by regulations from Brussels that belong to a bygone era. MPs have a duty to respond. Our continued success in a globalised economy depends on it."

A reformed EU has to be our goal and the UK is now in a great position to advance an agenda for change, he added.

The CBI's comments come in a paper prepared by its influential Europe Committee. Companies see greater parliamentary scrutiny - a key proposal in the EU constitutional Treaty - as an important way of easing business concern about overzealous EU law-making.

The CBI paper calls for opportunities for interest groups to make timely representations to MPs on EU legislation. It says the CBI lobbies commissioners and MEPs directly but has few opportunities to lobby Westminster at a stage that might influence the outcome.

(gmcg)