Select Committee on Deregulation Minutes of Evidence

Examination of witnesses (Questions 40 - 52)



Mr Letwin

  40.  I would like to take you back to the remarks you were making about the Working Time Directive. In your opening remarks you mentioned that you were concerned with the question of whether we were relieving the public from old, UK regulations as corresponding and overlapping European regulations came in. Is it part of the work of the Task Force to look in principle at each area where the Government is intending to regulate because a directive has come upon us? If you do look at those, how do you introduce into the process of the European Select Committee and the European Standing Committee and so on for parliamentary inspection your views on potential regulation to match European directives? If I could just add one remark, if you are doing that, then this is somehow failing entirely to come through to those of us who sit on these Standing Committees. In a year of sitting on European Standing Committee B I do not think I have ever heard a reference to your Task Force, and now you have made these remarks and it occurs to me that that is an immensely important role that you might be performing. My question really is therefore aimed at whether you think it is one that the Task Force with its current composition and part-time nature is actually capable of putting or whether a separate Task Force would be necessary or whether this is something which the Unit is going to take on, or what.
  (Mr Haskins)  It is all about resource. Obviously the Task Force is very limited in what it can do. What we have done in the European thing is that we have had various discussions with the Austrians about our work and shown them what we have done. I have been to Vienna to discuss our approach to regulation with them. They are having a better regulation thing of their own in October which I am going to speak at. We have talked to the Germans about it to try and get the culture. Of course we have some huge cultural differences when we talk to the Germans about it because a German cannot live without regulation. To deny him regulation is to deny him bread and butter. One has got a problem there. The summit in Cardiff a fortnight ago it seemed to me was raising some interesting questions about applying regulations more intelligently, and the question of subsidiarity which arises particularly on that is how much of this European regulation is really relevant at a European level and how much of it can be brought down to local level. Specifically the only area that we have got involved in with a bit of discretion is on the metric avoirdupois argument. I think we have fluffed it a bit. It is a classic example where we as better regulators should be saying that whatever else we should be going for metric and not make life too complicated. The Government is making it very confused. It has not made up its mind either way. I think we have ended up with something which says that every citizen should be able to have metric and avoirdupois in front of them at every point. I think this may be a satisfactory interim arrangement but long term metrication is going to be the route.

Mr King

  41.  After we are dead!
  (Mr Haskins)  Yes. But this is what all these people, Anita Roddick and all, are terribly concerned about. One of the things the Government has got to stop doing is patronising people. To assume that every old person in the world is not able to work things out for themselves——I am amazed how people do work things out. A classic example of that was the BSE situation. The BSE crisis arose two years ago and all sorts of risks and dangers were talked about and people immediately reacted and stopped eating beef for a day or two, but very quickly people worked out their own solutions and one of the things I am interested in is the "nanny state" situation. I do not think to have a national register of nannies is going to make any sense at all, just the way I do not think it makes any sense to have 850,000 licences covering everybody who is producing food so that every Women's Institute, when they make a cake for a fete on a Saturday afternoon will not be able to make a cake without going and getting a licence. You ask an enforcer about that. I make pies and some of the pies I make, which are sold outside Old Trafford on a Saturday afternoon—through third parties, I should say—may not be entirely refrigerated to the umpteenth degree, but I would argue that the recipients of those pork pies, who may have had several pints of beer, are going to be able to deal with those pork pies without any difficulty. If you put those same pies in the same environment into an old people's home you will have problems. The issue of targeting comes into the thing when you are introducing regulations that apply right across the piece in public safety. Another bit of targeting is rail safety. You remember the terrible accident that took place in Paddington nine months ago. There was quite a lot of pressure from people saying, "The Germans have a safer rail system"—haha. As you know, we do not have an automatic signalling system. It is a pretty good one; it has been there for a hundred years. But everybody said, "Let us have the German system." Our system costs, I think I am allowed to say, an estimated three million pounds for a life saved. The German system put on their private line would be £18 million for a life saved. If you put the German system on that Cardiff line, the operator of the train says, "This is rather expensive. Put the fares up." Everybody jumps into cars, gets on to the M4, comes up to London, and ten times as many people are killed. There is a balance. These are very difficult issues for Ministers to explain. I can make comments like that but it is no skin off my nose if they disown me, but these are issues which are public issues which really Parliament has to take into account before rushing to make responses to public calamities. There is always a natural instinct to respond to a public calamity that way. The Lyme Bay boating accident was a classic example of it, where regulations were introduced. There was no need for them because the law itself dealt with the problem and somebody went to gaol as a result of it. But as a result of the regulation a lot of Outward Bound activities, which are perfectly healthy cultural things, were put outside the law, and we just have to be careful.

Mr Letwin

  42.  Is it the case that when the Government is contemplating a regulation to implement a directive, you do not in the normal course of events look at that and comment on it?
  (Mr Haskins)  The Prime Minister is keen that we do get an opportunity to do that. He is keen that he has an opportunity to do it. It is part of the wide complexity of Government to be able to have an early warning look at the thing. There is the issue of transparency. Take beef on the bone. The moment there is a problem the public will understand if, when you ask the Minister of Agriculture to make an instant response to it, he responds, whereas if you say, "Let us keep it quiet and look at this internally for two or three months", people do not feel happy about that. The answer to it is I think to assume that people are intelligent and say, "Right; here is the evidence. We are going to look at this. We are not going to make up our minds about this for two or three months, and then we will make up our minds having consulted properly." In my view that would have been the proper way to deal with the beef on the bone issue.
  (Mr Kidd)  Chairman, I could offer a couple of comments, again on the process. It comes back to the concept that if you give a man a fish he will eat for a day. From the Unit's point of view we try and work with departments. We do not seek to be Whitehall's police force, but we seek to give the right tools to our colleagues to get the right deals to the extent that one can within multilateral negotiation, and to give them the right tools then in terms of how you go about implementing the European Directives so that you do not double bank, as we would define this, you do not gold plate unintentionally, as we define it. There are some obvious examples where historically it seems that we have and some examples currently where we have chosen not to. I think introducing the Data Protection Bill rather than trying to graft the European Data Protection Directive on to the existing Data Protection Act is probably a case in point. The Task Force, in its report on consumer affairs, in addition to metrication looked at weights and measures law where we have not simply implemented the European Weights and Measures Directives, two or three, which run to about a dozen pages, but back in whenever it was interpreted those and decided what we thought it was that the community meant and wrote over a hundred pages of procedure. That was one of the things where the Task Force, looking at consumer law, said, "You do not need this. It is actually perverse. You have the counter effect, which is that people cannot understand what is being asked of them. You do not keep the right records and do not focus on the things that actually matter within that process." I hope as a mixture of system and selective observation we get through the worst of these.

Mr Stewart

  43.  My questions are really about the approach of the Task Force. I am particularly interested in this balancing act that you mentioned earlier. Can you give the Committee some idea of how you select areas of legislation to examine?
  (Mr Haskins)  Obviously we look at anything new that the Government is proposing. One of the things you do learn is that the critical element is to get the regulation right first time round. That is the most important thing of all. New legislation is thought out properly because once it is on the statute book—that is what you are here for—it is extremely difficult to get it off. We will comment either in short by the consultation process on any significant piece of new legislation coming out, of which there are many and there will continue to be many. That is the first point. The second approach is running sores: issues of continuous concern. We get a lot of people who are very unhappy about the way the charities are regulated and so we felt that because we get a lot of pressure from people about that we should look at it. Licensing is another running sore which we think we should probe. The first one is themes which are continuously coming to us. The issue of small business exemptions: we are always aware of that. The issue of Europe: we have to take account of that. There are about four or five themes cross-cutting interdepartmental ones. Any particular piece of legislation which has that sort of background I am interested in. What I am not interested in is the Task Force second-guessing Departments. In a way, if we do our job properly the Departments get it right in the first instance within their own area. In the long term I am not interested in a regulation which applies just to MAFF. Ideally MAFF should be able to establish their own way of dealing with it. Okay; they have to be audited, but to second-guess MAFF is not what we should be about. Where it gets interesting is where they get the cross-departmental issues which have to be balanced up and where different objectives may be pursued by different Departments. I think there is no difficulty in picking an agenda with this rather busy Government.

  44.  When in your opening statement you talked about bringing conflicting interests together you may be aware of course that one of the criteria against which the Deregulation Committee assesses deregulation proposals and draft orders is the question of necessary protection. In the list of tests of good regulation and the leaflet "The Principles of Good Regulation" are included balancing, often contradictory, objectives such as food safety and food supply. How do you approach a judgement as to whether regulation does maintain that balance?
  (Mr Haskins)  One point is you consult the people who are at the extremes of the balance so that if you take the food issue you consult the Consumer Association, and one of the interesting points that I am dealing with in regard to pressure groups is whom they are accountable to, their democratic legitimacy. One has to be very careful. You know more than I do that one distinguishes between those who have got some legitimacy and those whose claims are spurious. Broadly speaking it is fair to say that most consumer pressure groups have got at the moment at any rate the issue of safe food slightly ahead of affordable food, so therefore you go to some of the social pressure groups if you like who are interested in diet in parts of Glasgow where all the evidence is that affordable nutritious food is rather more important than bacteriologically safe food, and then you listen to them and you make a judgement. I do not see how else one can do it. One has to be guided by the principles. If the principles we have set down there do not stand up and do not test on the principle of proportionality, then we may change the principle. We do keep coming back to the five principles, which are consistency, transparency, targeting, proportionality and accountability. All the time we robotically keep saying these things to Ministers and saying, "Are you meeting those requirements?"
  (Mr Kidd)  Perhaps I could just add, Chairman, that the pass then does in a sense move to the Unit and to the Government to say in that case to the Ministry of Agriculture and the Department of Health. in our toolmaker role, here is a guide on better regulation. Here is how you should go about consolidating. Here is how specifically you should conduct the regulatory impact assessment. Here is how you should try and identify the risk, the alternative ways of dealing with the risks and the costs and benefits of each of those options in coming up with what seems the most proportionate response. It is going to depend case by case on the degree of certainty, whether there is an issue of scientific certainty or whether there is an issue of hard evidence.
  (Mr Haskins)  The BSE thing is a shadow over our total approach because it is all about regulation. It is affected by public perceptions. If the public perception of Government processes of regulation, and that includes scientific advice and all that sort of stuff, is low, then you tend to get an over-reaction and you get an over-regulatory demand from the public. I think we are in an over-regulatory state of mind at the moment because of the BSE crisis. We have got to get that back into balance. In order to get that back into balance we have to restore public credibility in the Government's regulatory process and that will not be done overnight. That is one of my main objectives, to help in that process.

Mr Randall

  45.  You were talking about liquor licensing. I was just wondering whether, with a set of regulations that has been built up over centuries, you might at some stage think it is going to be impossible to deregulate or to look at better regulation on that. Is it within the remit of your Task Force actually to suggest to the Government to look at primary legislation, start again if you like?
  (Mr Haskins)  It is, but whether they would listen to us would be another question. Licensing appears to me to be an area that politicians generally do not want to get into. The enforcers though are very dissatisfied, as you know, with the arrangements with the police if you take the ridiculous element about entertainment, that you drink up till 11 o'clock as long as you are not eating, but if you start eating you can continue drinking, and if you make a noise, what is the rule about playing a band after 11 o'clock?
  (Mr Kidd)  Then you have got to have entertainment but you cannot have more than two entertainers.
  (Mr Haskins)  There is also the area where Government is getting involved I think, and which I think is going to be quite interesting, in the area of social disturbance and noise, which is a very genuine public concern. Again it is full of regulatory problems and of course the issue of children and the supervision of children, what children should do late at night. The enforcers view this with some concern.

Mr Stewart

  46.  As I have already said, this Deregulation Committee has several criteria against which it assesses draft proposals.
  (Mr Haskins)  Better Regulation.

  47.  I am talking about this Deregulation Committee.
  (Mr Haskins)  Perhaps you should change your name too.

  48.  It has been thought about. We are ahead of the game. One of the other criteria is cost. The Deregulation Committee seeks to assess the cost savings consequent on deregulation proposals. Does the Task Force look to reduce cost burdens and, if it does, how reliably can such cost savings be estimated?
  (Mr Haskins)  Obviously affordability is a huge element in regulation, and in particular the area of public safety. Ministers are loath to talk about it. There has to be a trade-off between what we can afford and what we would like. It is part of our criteria to do this. The Department are meant to be doing this all the time themselves. It is for you to judge whether the criteria they use are convincing criteria. There seem to me to be an awful lot of claims about savings made by the previous Deregulation Committee which I would like to revisit and see if they had been tested in practice. I have to keep reminding you: we are a very part-time Task Force and we hit things in a somewhat haphazard way, but the principle of affordability and cost saving has been built into the system for some time.

  49.  What about the last part of the question? How reliably can you estimate cost savings?
  (Mr Kidd)  The answer there has to be that it will vary case by case. If I am speaking first wearing a Task Force hat, the focus is very much on the principles. The first thing the Task Force has to look at is the specific policy areas. It uses the principles as a template and tests the adequacy and the robustness of the legislation against the template rather than to say, "Here is liquor licensing. How can we save £50 million?" or, "What does it cost?", which might be an Exchequer view of the whole process. During the work we could for example seek to validate those where we could assess the impact of something which we have identified as being potentially disproportionate; having a perverse effect. I am reminded by the Chairman that when the Task Force was reporting on consumer affairs, another European Directive that the DTI is having to implement is on unit pricing, the concept not only of the price of the goods but the price of the biscuits per hundred grams. You are used to seeing it if you walk round the supermarket but they currently do it voluntarily. The Unit Pricing Directive extended that requirement to a wider range of goods, made it mandatory, but left Government some discretion in terms of which businesses, ie. whether small businesses need meet the requirements of that Directive. In that case the Task Force was able to find research done by the pharmacy sector saying, "It is going to cost us X per shop per thousand items to manually work and re-price. It is very simple for Sainsbury's to take the computer and flick the switch and get the new price. It is not for the corner pharmacy or for the corner greengrocer or whatever." We were able to take those figures, extrapolate them to the wider retail sector, and say, "Look, the potential impact of this on small retailers may be of the order of £70 million. You as a Government have to decide because you have this discretion: do you want to exercise a discretion? Do you want to use the exemption or do you not? What is the balance you want to strike between public information and the price per hundred grams of biscuits and the potential perverse effect which is losing local community shops in the communities that most rely on those shops for the people that most rely on local shops and do not drive to the supermarket?"
  (Mr Haskins)  It is a classic example of consumers always saying on the one hand they want smaller shops kept locally, but on the other hand they then say they want regulation to protect consumers, which actually disadvantages smaller shops at the expense of the large shops. You cannot have it both ways. The other cost I should mention, and the Treasury takes great interest in this as you can imagine, is that the Treasury likes to keep things away from taxation on to direct consumer consumption. That is why it wants the Food Standards Agency funded through a licensing process because that licensing process effectively means that the consumer would pay as opposed to the taxpayer paying, so there is a tension there. The Treasury more legitimately has got an interest in regulation and the way it affects the workings of the economy. They get very frustrated because they can control public expenditure, they can control taxes, but sometimes regulation has a perverse way of impacting unfavourably on the economy and the Treasury is baffled as to how they can get control of that. There is a definite macro-economic factor to regulation which is not satisfactorily dealt with.

Mr Chaytor

  50.  Can I bring the issue back to the point you raised at the very start which was concerning the autonomy or even the obstructiveness of individual Departments and ask you to comment generally on how you find individual Departments responding to the better regulation drive? I would ask you to say what you think is the best way to persuade or coerce Departments into acting more corporately and also comment on this question of redundant legislation. Later this morning we are meeting some colleagues from Australia and it was interesting that their committee structure includes a committee called the Redundant Legislation Committee. There must be a considerable amount of legislation from the 19th century or earlier as well as wartime legislation on the statute book that simply needs eliminating. Again, what is the best way we can get to grips with this rather than just leave it to the vagaries of individual Departments?
  (Mr Haskins)  I can answer the first question more easily than the second one. Generally, as you would expect, certain Departments respond to the approach better than others. This comes down to the human factor. Those who appear to me to have greater self-confidence are able to take on this process. Those Departments which feel under pressure or Ministers who feel under pressure are more suspicious and therefore there are some histories of some great Departments who shall be nameless who have been laws unto themselves in this area and that culture is changing. My predecessor, Francis Maude, tended to have a sort of Court of Star Chamber where he got the Departments in and put them under pressure. I am more inclined to do it by sweet reasonableness and saying, "Look; this seems to me the commonsense way of dealing with things. Do you not agree?" and for the most part we are getting somewhere on that. It is obviously early days and it very much depends on the amount of interest that we get from the centre, from the Prime Minister, on this if we are going to get Departments to respond to this, and indeed your own activities. At the moment, as I understand it, the onus is on the Departments to come to you and say, "Would you please help us to get rid of redundant regulation?" and they are loathe to do that because they fear they are going to lose valuable parliamentary time which they will be using to bring in even more regulations and there is that sort of trade-off on it. All I can say is that I have registered the point with the Prime Minister who does seem interested in the issue and I hope that he has asked the Chancellor to look at this issue and I hope that there will be more pressure on Departments as time goes on to make you much busier than you may appear to be at the present time in terms of unfinished work.

Chairman:  Has any member any other question he or she would like to ask?

Mrs Lait

  51.  Can I ask a quick question which has rather come to the fore recently, and that is the whole issue, which you have looked at, of childcare. Does your report on childcare look at all the varying different ages of consent? The Childrens Act goes up to 18, and of course you can get married when you are 16. This was a debate which we had the other day. Have you been asked to look at that, or have you looked at that?
  (Mr Haskins)  We have looked at it. We do not get asked to look at anything, we have been making our own agenda. So we have looked at that. I am not entirely sure what to say about it.
  (Mr Kidd)  We did look at it. There are two points on childcare. The first is that it really is about childcare—that is, the relationship between children in pre-school years, school education, public education and public childcare, and independent or for-profit provision (the nurseries, the babysitters, the role of the nannies and so on), rather than the government work on children's care homes and other things of that nature. The report which comes out, I think, on 7 July does address issues about particularly the over- and under-eights issue, not so much about 16-year-olds. Going back to the fundamentals of why do you have regulation, what is the issue you are trying to address, certainly one of the risks or one of the factors in taking a risk is a child's capacity to express his or her satisfaction or dissatisfaction, or fear, about an environment situation. I think the task force does observe that certainly once you get to over-eight-year-olds there is something of a consensus that children there are in more of a position and feel more empowered to speak up than with a child of three or four. So in that sense it begins to address and it begins to recognise that you can deal with the same risk, the same hazard, in a different way. You may not need to regulate all the supervision in the same way for 12- and 13-year-olds and after-school clubs, for instance, that you would for three- and four-year-olds in pre-school.


  52.  Thank you. That concludes the questions we have for you, Mr Haskins. I wonder if there is any final point you would like to make, anything you think we have missed asking you which you would like to make a point about before we close the session?
  (Mr Haskins)  No, I think it has been very helpful for me. It may be possible that we can perhaps co-ordinate our efforts more than we have done in the past and meet again, particularly after the Whitsun review, to see where the Government are going to put this sort of activity on the agenda and maybe see if our respective roles need adjusting appropriately.

Chairman:  Thank you very much. Can I thank you and your colleagues for coming along. I think it has been useful to us today. We ultimately hope to produce some report which hopefully will help the Government to go along the line. The two things—better regulation and deregulation—seem at some points to clash, but I think that obviously the Government was spelling out a clear message when it set up your unit as the better regulation unit. We hope that we have a lot of things in common, and we hope that we can help the Government to move along, because there are obviously a number of things which it will be in the national interest to move along in that direction. Therefore, can I thank you very much for coming along this morning. It has been very useful to us.

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