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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1272-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE REGULATORY REFORM COMMITTEE
THE OPERATION OF THE REGULATorY REFORM ACT
Tuesday 16 November 2004 RUTH KELLY, MP, MR SIMON VIRLEY and MR PHILIP CLARKE Evidence heard in Public Questions 1 - 42
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Regulatory Reform Committee on Tuesday 16 November 2004 Members present Mr Peter Pike, in the Chair Mr Russell Brown Brian Cotter Dr Doug Naysmith Brian White ________________ Witnesses: Ruth Kelly, a Member of the House, Minister for Regulatory Reform, Mr Simon Virley, Director of Regulatory Impact Unit and Mr Philip Clarke, Head of Regulatory Reform Strategy Team, examined. Q1 Chairman: Good morning. Let us start a couple of minutes early because I know you need to be away promptly. You are very welcome here and I hope it will be a useful session for you and for the Committee. Would you like to introduce your team? Ruth Kelly: Thank you, Chairman. First of all, it is good to have a chance to come in front of this Committee and discuss some of the issues arising from the Regulatory Reform Act. In particular, I would like to say a few words about the letter I wrote to the Committee on 13 September. I have with me this morning Simon Virley, who is Director of the Regulatory Impact Unit; and Philip Clarke, Head of the Regulatory Reform Strategy Team in the Regulatory Impact Unit. As you know, I am the newly appointed Minister with responsibility for promoting and developing the Government's better regulation agenda. I would just like to say that this really is a key priority for me and it was something that, on my appointment, the Prime Minister himself was very keen to emphasise as a key aspect of the job. I have been struck, when looking over this area, about the open constructive nature of the approach taken by the Committee and the good relations between officials and your Committee, Chairman, which is really valuable from my point of view. I hope we will manage to continue such a relationship. May I just say a few words about the working of the Regulatory Reform Act. Regulatory Reform Orders are a crucial part of the Government's Regulatory Reform Agenda, and there is some decent progress to report. We have now delivered 20, I believe, Regulatory Reform Orders, and 28 have been laid for either initial or final scrutiny. All the Orders we have made have fixed specific problems and reduced burdens. Some, including the Business Tenancies Order and the licensing proposals, have delivered substantial benefits for business - some £6.5 million per year in the case of Business Tenancies, and £9 million per year for the licensing reforms. There are also some very important Orders on their way through the process at the moment - not least Fire Safety and Patents. I am sure you may want to talk more about some of those later. Chairman, as you and the Committee will be aware, the overall number of RROs delivered to date is less than we had anticipated or hoped for. Back in 2002 the Government set itself a very challenging target of 60 RROs by the end of the financial year 2005/6. In this year's Spending Review we have set ourselves, I believe, an equally challenging target of 75 Orders by March 2008. The 2005/6 target was always going to be one which was difficult to meet. On the basis of current trends, I think it is highly unlikely that we will actually manage to achieve that target, despite the work being done by officials in the Regulatory Impact Unit and others. We have sought views from other Departments on some of the barriers that exist to increasing the flow of RROs. The issues raised were set out in my letter to the Committee. Issues were raised about the workings of the Act, including the two-year rule and an express power to sub-delegate, and some procedural issues, like the need for mandatory presentations and streamlining RRO consultation documents. I look forward very much to hearing the Committee's views on those proposals. I have not yet taken any decisions about how the Act could or should be amended at this stage and I will not do so without this Committee's input into that process although, as you are no doubt aware, the Prime Minister has indicated a willingness to act if it is thought an amendment to the Act could achieve greater regulatory reform. Of course, RROs are just one part of our better regulation agenda. We have delivered over 300 of the regulatory reform measures listed in the Regulatory Reform Action Plan. The Prime Minister and the Chancellor both strongly support this agenda. As the Committee will also be aware, the Prime Minister recently chaired a new Cabinet Committee called the Panel for Regulatory Accountability. I chair meetings of a separate ad hoc Panel between those chaired by the Prime Minister on a quarterly basis. We have also been working hard to improve the way in which policy proposals are developed and consulted upon. We have now got to the point where every Government proposal that goes out to consultation has an RIA attached to it, which presents the costs and benefits of different options; and we are now working to improve the quality of each Regulatory Impact Assessment. Moreover, over three-quarters of Government consultations are now more than 12 weeks in length. This year Departments, for the first time, have had to report on their performance on the better regulation agenda in their departmental annual reports. These are available for scrutiny not just by Members of Parliament but also by the general public. There is progress to report - not only in terms of regulatory reform, but also in terms of transparency and accountability. In conclusion, I would like to thank the Committee members for the very co-operative and helpful way in which they have worked with the Government and with officials over the past year. I am sure that we all share the desire to make full and effective use of the Regulatory Reform Act. I look forward very much to hearing your views as to the operation of the Act and whether it could be improved and to working together over the coming months. Q2 Chairman: Thank you. Obviously you referred to your letter of 13 September and the two annexes, Annexe A and Annexe B. We did, of course, have a previous letter from your predecessor on 22 July. You will be aware that when the 2001 Act went through there was an argument as to whether there should be an annual review, an annual report, and it was agreed that there would be a review after about three years. Is it the Government's intention at any stage to publish a report on what has been done, and perhaps have a debate in the House on the progress and use of the Regulatory Reform? You will of course appreciate that the Act of 2001 replaced the Deregulation Act of 1994. Ruth Kelly: Yes, I certainly think there should be a proper review of the Act at some point - the question is: at what point? As I understand it, officials before I arrived in this job were already in exploratory discussions with Departments about the operation of the Act and taking evidence from them, which informed the letter which I then set to this Committee in September. It is my view that a proper review of the Act should probably wait until a major proposal has fully passed through scrutiny by this Committee and reached its final stage; and that will probably take a little bit longer than that. Once that has been done I think there is a case for a thorough review. Q3 Chairman: You referred in your opening comments to the Prime Minister, and we all know the Prime Minister said he is prepared to amend the Act to get rid of redundant regulation. You have obviously indicated at the moment there is no firm decision on the type of reforms to be made. Would it be true to say that the Prime Minister to date has been disappointed by the numbers; that we actually have not delivered the level of regulatory reform and the removal of burdens that this Government would have wished to have seen? Ruth Kelly: I can only talk from my point of view and my understanding of his view of the better regulation agenda, which is that we have moved forward; that he wants to see the outcome of better regulation and regulatory burdens reduced wherever possible; that the RRO process should be one key part of a process to deliver those outcomes. I do not think I certainly would sign up to a view that says it has to be delivered via an RRO if it is to serve the appropriate purpose. However, I think both I and the Prime Minister share the view that the RRO vehicle is potentially an incredibly important part of the process and could be more fully used; which is why I think there is a case for examining this operation to date and hearing your views, and why officials were talking in some depth to other Departments about its use so far. I think its full potential has not yet materialised. Q4 Dr Naysmith: One reason for commenting here is to give my apologies to the Minister, for whom I have a great deal of respect. I have to be in Bristol for one o'clock to give a speech and will be leaving shortly. The Chairman has graciously allowed me to ask you a question. My question relates very closely to what you have just been saying. We think on this Committee we have been underused and we have not really been supplied with enough material on the way through for us to get our teeth into and produce a better performance, and that will emerge later on in other questions. One of the ideas I had and put to one of your predecessors was that one of the sources of getting ideas for reforming regulation is Members of Parliament themselves - many of whom say that "It would be nice to get rid of this, that or the other and improve it". I suggested it would be a good idea if we produced a leaflet or some kind of information to give to Members of Parliament. I know something along that line has happened but has not been very effective; I wonder if you would agree with me? Ruth Kelly: I certainly think that Members of Parliament could be better used to identify areas where reform might be appropriate; and that is something we should fully consider. We also have to explore all the other channels, of course. One of the most important things we can do is not only by the Regulatory Impact Unit producing the sort of quick guide that they have for Departments, but also working very closely with the Legislative Programming Committee to see whether there are proposals which come forward in Bill form which could actually be taken through in RRO form; and working very closely with Regulatory Reform Ministers in each Department to fully explore the potential of RROs. You are absolutely right that MPs are potentially a very valuable input into this process. Q5 Chairman: The Prime Minister referred on 18 October to the CBI and said he would be scrutinising Departments' records on regulation, and now you are obviously in this post. Would it be true to say that as a result of moving into this position the Government is up-profiling the use of the regulatory reform procedure to really make sure that Departments are addressing what they could perhaps achieve by using the 2001 Act? Ruth Kelly: Yes, I think regulatory reform, better regulation and removing burdens of regulation are really a key priority of the Prime Minister, and of the Department of Trade and Industry as well, when it comes to the business agenda. The question for us is: how do we best deliver that, whether it is through an RRO - and the potential there, as I say, I do not think it has been fully utilised and we could make more of it, and there is a case to consider of whether there have been any barriers to its operation - but also through other mechanisms as well. As you rightly say, this is a key priority. Q6 Brian Cotter: My apologies for arriving late. I probably have a fundamental misunderstanding of the whole thing, but when it came forward in the last Parliament to say we were going to have a strengthened and more effective Committee I, from my bench, supported that idea but colleagues in the Conservative (official) Office, whom we do not see, did not support it; but it does strengthen their position in not coming to the Committee, in that they do not feel we are addressing enough the issues that perhaps matter to people. I am probably rehearsing what has happened before but it is a concern. I was speaking at a dinner last week and, as they do, somebody said, "3,444 regulations come down the line", and in my speech I said, "I could of course go through all those regulations and read them out to you but I'll say something more interesting". I think there are an awful lot of people out there who are looking to something more transparent happening. We all know what the Prime Minister has on the agenda that we should see, and that there are various initiatives. I know we have talked about this before, but as a Committee we cannot seem to initiate things and, equally, the Minister has just said that MPs are some of the best people to try to put things forward. I think on these benches (and, if you like, from those who are not present) there is this feeling we really would like to get stuck into certain things and not just be tinkering around the edges. That is all I can really say about that and am probably just reinforcing what other people have said. It is very difficult being on the Committee where you are waiting for things to happen down the line which do not appear, or when they do you slightly lose interest. "This is not really what I went on the Committee for". I am prepared to support this concept, difficult as it may be to get things kick-started and get parliamentarians engaged in trying to cut back on regulation but you have to start somewhere. We did think a number of people on this Committee were going to step up here and be able to be more proactive, which is a contradiction of what the Committee is supposed to have been doing. Ruth Kelly: We have not yet seen a major item taken through this Committee. I think when the Fire Safety Bill comes through there will be a real tangible concrete output of this Committee which will serve as a useful model of what can be achieved. There are other proposals, such as Civil Registration - and I know there is an issue which we have to address. I have a firm view if that were taken through this Committee it would show again a really sizeable piece of legislation which could be updated and reformed by this Committee. What we really need is concrete examples in practice we can point to as a model of what this Committee should achieve. The RRO process is very highly valued. It was in the Queen's Speech last year, for example - which is a sign of the weight that the Prime Minister puts on it - and also in his CBI speech, which the Chairman referred to earlier. It is also my view that there are really quite significant areas to the sort of legislation that can be put through this Committee at the moment. If there was a feeling that some of those barriers should be removed, or that we could address them in some way, then we would get more of this sort of big bold legislation coming through the Committee sufficient to keep everybody very occupied with real tangible outputs which we can point to as real achievements. Q7 Chairman: Finally, obviously we see it as a second track legislation that is available to Government Departments. Has the Government made any study of what other countries do, because certainly some countries like Canada and Australia do what Mr Cotter says and have a very much proactive role and the committee can push for things to be done, rather than have to react to proposals that come before them? Mr Virley: We do monitor what other countries are up to on their regulatory reform agenda. We certainly pay a great deal of attention to what is happening in both European countries as well as Australia and in the USA. Of course, all their own arrangements reflect their particular constitutional set-up. The OECD do regard some of our regulatory practice as being at the forefront of regulatory reform, but I think there is more we can do in the areas you have suggested in terms of promoting the use of the Act and getting more initiatives from Members of Parliament. Q8 Brian White: If you take Canada or Australia they are both Westminster-style and you are not even addressing some of the issues they are looking at. Mr Virley: For example, on promoting the issue with Members of Parliament we did run an MP seminar earlier this year and I believe about 60 Members of Parliament did come along to that, which was one effort we have been making to try and raise the profile of this Act with Members of Parliament. Ruth Kelly: Some of this is about the culture of the Civil Service and whether there is as much kudos attached to delivering regulatory reform, particularly through an RRO, for example, or deregulation, as there is for passing a Bill or an Act and identifying a piece of legislation. That is a problem which is endemic in the British Civil Service but probably not as bad as it is in some other countries. One thing we have got to do is change the culture of the Civil Service, which we are trying to do through the reform of the Civil Service programme and through introducing the idea of looking at RROs directly into the training courses of civil servants. Brian White: I will not ask you why you are putting a barrier to that in this draft Civil Service Bill. We will come to that subject another time. Q9 Mr Brown: Good morning, Minister. You say that the lack of a rule-making power is probably the most common barrier to Departments using the regulatory reform procedure to deliver large scale reforms. Would not the introduction of such a power widen significantly the scope for amending primary legislation by subordinate legislation? It might lead to less specific provision in an RRO itself leaving a good deal of the law to be specified later by ordinary Statutory Instrument. Do you not think such a change might be regarded as being constitutionally significant, rather than merely tidying up some minor aspects of the present power? Ruth Kelly: This is probably one of the most significant barriers to the whole use of the RRO procedure at the moment and prevents large-scale proposals being brought forward to a significant degree. Most large-scale proposals, or a lot of them, need within them a power to sub-delegate. There have been examples, as far as I am aware, of proposals which have not gone down this route expressly because of a lack of this power - for example, the draft Housing Bill which was prepared by the Law Commission, which would have reformed the law on residential tenancies, and some Defra proposals as well on inshore fisheries - enforcement did not go through the RRO procedures because of the lack of a power to sub-delegate. I think it is probably a symptom of the fact that they are large Bills rather than they are particularly controversial, constitutionally significant and that they need this extra power. You are right, it is the sort of novel idea that the RRO process could be used to embody this power; and it might be the case that if were reformed in that way then an additional safeguard would be needed in some form. For example, it might be necessary to incorporate an affirmative procedure process for debating any subsequent use of that power. I think there is a case for really looking at this very closely. Q10 Mr Brown: In your letter of 13 September you state that Departments feel that the need to identify an activity which is affected by existing burdens can prevent proposals being made. Can you give us an idea of how frequently this is the case? If the requirement were removed would that not expand significantly the scope of the power to impose new burdens? Do you think that, if the reference to activity were removed, some amendment should be made simultaneously to the limit the scope of the power to impose new burdens? Ruth Kelly: This is the fact that an RRO can only perform legislation which has the effect of imposing burdens affecting persons in the carrying on of an activity, as far as I understand it. It is that reference to the "activity" which has proved a hurdle in some cases, to the use of the RRO procedure because the term "activity" (as far as I understand it) has a legal significance which means that it cannot refer to people in a passive capacity - for instance, recipients of a benefit or so forth. One example where that proved to be a barrier that I can cite is a proposed reform to the law relating to personal insolvency, where it was not considered that insolvent persons performed an activity. There does not seem to be much rationale behind the fact of having it referred to as an activity rather than defined in some other way. That is one area where I think it could be useful to clarify. Q11 Mr Brown: You have given an indication this morning that Departments have questioned whether the deregulatory focus of the Regulatory Reform Act is appropriate in the context of a power which is aimed at the reform and improvement in legislation. How does the wish to move the Regulatory Reform Act away from the deregulatory focus sit with the Prime Minister's announcement that he wishes to amend the Regulatory Reform Act to push deregulation? Ruth Kelly: The Prime Minister not only wants to see the removal of burdens but he also wants to see regulatory reform. It is that better regulation agenda that this Government is committed to first and foremost. As the Chairman pointed to in his opening comments, the RRO process replaced a previous process which focussed solely on deregulation; but this has a different underlying rationale, which is to streamline and reform regulatory processes but in a way that brings benefits. I do not see that that previous focus has to be maintained in the same form. Q12 Mr Brown: That obviously brings me on to certain anxieties, in some respects at least. Do you agree that the aim of the regulatory reform power is "the reform and improvement of legislation"? Would the adoption of the various suggestions in your letter of 13 September be tantamount to creating a general power to amend the law by ministerial order? If not, what limitations would there be on such a power? Ruth Kelly: Power to do what? Q13 Mr Brown: What it is doing is creating a general power to amend the law by ministerial orders. Ruth Kelly: There are a number of safeguards in the operation of the Bill and there is no proposal, as it were, to weaken those safeguards which are to do with necessary protections, rights, freedoms and benefits to the public and so forth. I think those protections are completely appropriate. Q14 Mr Brown: The gist is that there is this additional power in the hands of ministers which they have not had until now? Ruth Kelly: We are looking at this with an open mind and welcome your views on how it should operate in practice but, clearly, we need appropriate safeguards as to the operation of this process and that is the sort of thing we will keep foremost in our minds when examining the issue. Q15 Mr Brown: Am I correct in saying that you believe there should be a general power to amend the law by subordinate legislation? Ruth Kelly: I think there is a case for looking at whether there should be the power to sub-delegate, which I think is what you are referring to. If this power were taken then I think there is also a case for saying, "Should there be counterbalancing safeguards?" One counterbalancing safeguard might be the use of the affirmative procedure where a debate would take place if that power were used, for example. Q16 Brian White: If any subordinate legislation from an RRO had to come through this Committee would that be acceptable to you, rather than just using the JCSI normal process? Ruth Kelly: I think this is I something I have a totally open mind on actually. If the power were conceded then I think there is a case, as I said, for looking at counterbalancing safeguards. I have suggested one but there may be others, and we will certainly listen to the Committee's views on how that should operate. Q17 Chairman: This is certainly an issue which could be looked at in the review? Ruth Kelly: Yes. Q18 Chairman: In your letter of 13 September you state that Section 2(1) of the Regulatory Reform Act may prevent Departments from using the process to reduce Government bureaucracy. Are you able to identify any areas where the Government may like to be able to remove burdens on Ministers of Departments by way of Regulatory Reform Order? Ruth Kelly: Yes, it is slightly unclear as to why it is the case that we should not be able to remove burdens on Ministers or Departments. That in itself strikes me as probably quite a good thing if thereby you can devote more time and energy into improving frontline services and so forth as we are a Government committed through the Gershon Review. I obviously will listen to what the Committee has to say about this, although I think the removal of a burden on a Minister or a Department in itself might be a good thing, provided the costs and benefits were properly examined and the proper scrutiny took place and so forth. If it were the view of the Committee that it is a reasonable objective to try and remove the burdens on Ministers and Departments then it might be possible to introduce an additional safeguard that the RRO also remove a burden on some third party, so that its value on a third party would also be very visible and transparent. My personal view is that sometimes removing burdens on Ministers and Department is no bad thing. Q19 Chairman: You suggest that there might be a new power to correct errors and omissions. There is already provision for the removal of inconsistencies and anomalies and the making of incidental and supplemental provision. Why do you think errors and omissions might be necessary? Do we have a lot of poor quality legislation that needs to be changed fairly speedily? Ruth Kelly: I do not think that is the case. Inconsistencies and anomalies at the moment while not defined precisely are interpreted, I believe, in a rather narrow way. There is no reason why errors and omissions could not similarly be interpreted in a pretty narrow way. I would envisage the power to correct errors and omissions only being used in any event if Parliament were satisfied that the safeguards had been properly maintained and the proper procedures had been followed, and no necessary protections were removed. I do not see it as a huge opening up of the RRO process. I just see it as trying to widen slightly what is a very narrow interpretation at the moment of inconsistency and anomaly. Q20 Brian White: One of the barriers you did not raise in your letter was the time and pressure on Parliamentary Counsel. Is it not time that we market-tested Parliamentary Counsel rather than keeping the closed shop we have got at the moment? Ruth Kelly: I certainly agree that there is huge pressure on occasion on Parliamentary Counsel and something I have come across certainly in relation to this - and in other Government Departments as well I think they are always aware of the pressure on Parliamentary Counsel. I am not going to go much wider than my brief and interpretation in there pursuing your line of questioning; but I would point out the fact that additional resources were granted to Parliamentary Counsel in the Spending Review as a result of what are widely acknowledged pressures in the use of Parliamentary Counsel. Q21 Brian White: RROs take a lower priority than Bills - that is the point I am making. If you are going to increase the RRO procedure are you not going to need to address the issue of Parliamentary Counsel? Ruth Kelly: It is a good point and that is something we should look at in the review. Mr Clarke: As part of the discussions we have had with different Departments we did go and talk to the Parliamentary Counsel, so we have been talking to them as well. We will take their views into account. Q22 Chairman: You refer to the two-year rule, and you will know that the two-year rule was an improvement of the position in the 2001 Act. Obviously there are problems of over-frequent legislative amendments, but what is your view that the two-year rule is a problem? Ruth Kelly: There are two aspects of the rule, as I understand it: the first is that RROs cannot reform any Act of Parliament which is less than two years old; but the second is that it cannot reform any provision of an Act of Parliament if the provision has been substantively amended within the previous two years by an Act or by a Statutory Instrument. It is the second part of the rule which I think is of more concern, partly because it is a moving target and it has given rise to a number of issues; and partly because if there has been a Statutory Instrument laid by another Department it is actually quite hard sometimes for a Department laying an RRO to notice that it has been done, or is about to be done. A huge amount of work can go into an RRO and then a Statutory Instrument is laid and all of that work is put on hold for another two years. I think there is a case for looking at that because sometimes the Statutory Instruments which are laid are quite minor amendments in practice. To give an example, the NHS Charities RRO I believe was amended by Statutory Instrument and that itself gave rise to a problem. Q23 Chairman: Could you give us a list of ones where problems arose? Ruth Kelly: Yes. Q24 Brian White: One of the things you suggest, Minister, is that the 60-day scrutiny period is either too long or too short, depending on the complexity of the Order. Could you just expand on that and say how you envisage not having a 60-day period would work, and how would you judge whether an Order required two days or 200 days? Ruth Kelly: I think there is a case for looking again at the 60-day time period. It clearly works well for the majority of proposals; but I think there is a case for trying to make it slightly more proportional, as you say, to whether a Regulatory Reform Order is quite small or whether it is looking at something which is really a very big piece of legislation. What my view is of a process that might work is that a consultation document is published and a decision is made on the basis of the consultation document; although I would propose that the Committee would take a final decision as to whether the proposal in front of it were a large one or a small one. I think there is room for debate on whether and how this could work in practice. I think the idea of trying to make it slightly shorter for fairly minor RROs and then to give the Committee a longer period to scrutinise fairly major RROs is sensible. Q25 Brian White: We have had ones quite recently with Fire Safety where we thought it was reasonable and then things have come out in the consultation period. Would not having that debate up-front negate that kind of opportunity for looking at it in more detail? Ruth Kelly: I do not think so because at the moment, as I understand it, strictly there is a 60-day limit. As I understand it, officials from the Cabinet Office have been as helpful as possible to the Committee, for example for laying large proposals before parliamentary recesses and so forth. That will not always be possible, especially if the flow of large regulatory reform speeds up. I think it is a case of making a commonsense decision on whether the proposal is a pretty large scale one that might need more time, or whether it really is quite a much less significant proposal which could be done in a shorter time. Q26 Brian White: If we took something like the Sunday Trading proposal, do you have any thought as to what you think would have been the appropriate time, or the Civil Registration proposal? Ruth Kelly: To take Civil Registration, which I know a bit more about because I dealt with it in my previous job as well, that clearly is a major proposal which would benefit from very serious scrutiny. It would be the sort of proposal where I expect the Committee to say, "We could probably benefit from more than 60 days really examining and scrutinising this properly". Q27 Brian White: Can we move on to the targets. You have indicated you want to get to 75 by March 2008 as opposed to 60 by next year. As short a time ago as March 2004 your predecessor was saying you were on course to reach the 60. How should we judge that we are on course to reach 75 by 2008? Ruth Kelly: A target is one aspect of the issue which is delivering better regulatory reform. In the end I think the Government should be judged on whether it delivers better regulatory outcomes rather than the process which is followed. Of a number of proposals which were identified as potentially going down the RRO route, I understand that quite a lot have been pursued by other means, partly because of some of the barriers that relate to the operation of the Act and the RRO process; and only three have actually been dropped. In fact the outcomes have been achieved, even if the RRO process has not been used for all of them. Q28 Brian White: Why has the target not been set in terms of the outcome rather than in terms of the inputs? Ruth Kelly: I understand that the target is one of a series of indicators of whether the Regulatory Reform Agenda is working. I must say, I would prefer to concentrate on the outcomes rather than meeting an arbitrary target. It should probably be seen as an aspiration rather than a target, because of this point that we really are trying to focus here on outcomes. Simon has already mentioned some of the work that the Regulatory Impact Unit is doing with the Departments to identify proposals which might benefit from going through the RRO route. I have talked about the culture change and the planning process which I hope will help the RROs gain greater visibility within Departments, the quick guides which have been issued and so forth. We also talked about potential in the review for looking at some of the barriers to the operation of the Act. I think if we do all of these things we have the potential of seeing a lot more RROs flow in due course. Q29 Brian White: Is not one of the things officials in many Departments have had to raise, and we have had course to raise in some of our reports, the lack of understanding by some Departments of the RRO process? Is that not a major barrier, the fact that you have not got officials to understand the process? Ruth Kelly: I think it is a barrier. In my letter to you I have pointed to specific barriers to the operation of the Act. I think you are absolutely right to talk of the culture, and the culture of Departments as a barrier in itself. It is our job and our challenge to try and increase the visibility of RROs, to raise understanding of the RRO procedure within individual Departments, and proactively to work with them to identify proposals which could benefit from going down this route. That is one of the key objectives of the Regulatory Impact Unit. Q30 Brian White: Which Department tops the Cabinet Office's league table of performance? Ruth Kelly: I do not know how many specific RROs have been done by each Department, but we are trying to engender an overall culture change. Q31 Brian White: It was perhaps a lighthearted remark but highlights a serious point that there are some Departments which are fairly good at bringing it forward but there are others we have never heard of. There is also the situation where some Departments do not use RROs but are putting in SIs, which increase bureaucracy. Are you addressing those issues? Ruth Kelly: We are. You are absolutely right to point to the need to really scrutinise Departments' regulatory proposals. When the Prime Minister chaired the PMPRA recently together with the Chancellor - the Prime Minister's Panel of Regulatory Accountability - it is a really powerful way of scrutinising the performance of an individual Department, scrutinising directly the Cabinet Minister, and trying to identify proposals which should be streamlined where deregulatory impact should be maximised, and where outdated regulations should just go or not be brought, or new regulations not be brought forward. Q32 Brian White: Is not one of the issues you have got, that the barriers to introducing new bureaucracy through SIs is very low, and the barriers to reducing bureaucracy through RROs is quite high. Should that not be reversed? Ruth Kelly: That is what we are trying to do, to make it much, much easier for regulatory reform/deregulatory proposals to be brought down the RROs route. Q33 Brian White: But the SIs are still too easy to introduce, and primary legislation is still going down the route of having SIs that are very easy to introduce. Should not the barriers to SIs be raised? Ruth Kelly: The question is: is there sufficient scrutiny of SIs? We are trying to introduce much greater scrutiny of SIs through this new mechanism of PMPRAs and the meetings I chair in between those quarterly meetings of PMPRAs. Mr Virley: If I could just add to that. The Better Regulation Taskforce, the National Audit Office are also assessing what Departments have done in terms of their regulatory performance each year. We are now running training seminars for all Departments in terms of RROs, and getting RROs into the Civil Service training programmes to raise that awareness. Q34 Brian White: When you have got a situation with the DfPS bringing forward new bureaucracies and removing opportunities to access birth and death certificates during the adoption process and you have the Treasury introducing birth and death RROs and the two are in conflict, what does the Cabinet Office do about it? Ruth Kelly: Clearly there is a process for reconciling policy differences between Departments, which all Departments have to go through; and it is not just through the Cabinet Office Executive, it is actually through the Domestic Affairs Committee process which is chaired by the Deputy Prime Minister, where conflicts, in policy terms, are ironed out. Q35 Brian White: The policy overall is not in conflict, it is the implementation of that policy through the bureaucracy which is the problem? Ruth Kelly: But the ONS has consulted with all other Departments, as I understand it, on its Civil Registration forms to make sure that other Departments are brought into this process. I cannot comment on the individual issue at the DfES because I understand that the ONS has gone through it. Q36 Brian White: This is one of the questions we asked the Minister last week when he came before us. There are issues like that. What is the actual process the Cabinet Office use to try and resolve that conundrum? Ruth Kelly: It is a DA Committee process. We will look at all those issues where potential policy as an implementation of those policies may be in conflict. Q37 Brian White: I am probably one of these sad people who actually reads the Civil Service Agreements, the technical notes and the efficiency technical notes, but there are an awful lot of things in there which could be brought about to reduce bureaucracy and reduce regulation. Whose job is it to go through that and to look for the opportunities for regulatory reform? Ruth Kelly: The Departments are first and foremost in the frontline here and it is up to me as the Cabinet Office Minister responsible for better regulation on an ad hoc basis to scrutinise Departments and their regulatory performance, but also for the Prime Minister in his capacity as chairing the PMPRA to put individual Departments in the spotlight. It is first and foremost the responsibility of individual Departments. Q38 Brian White: If select committees were looking at those PSAs and holding those Departments to account that would help your job? Ruth Kelly: Yes, absolutely. Q39 Chairman: On the issues of our procedure at the moment, it provides for a debate if this Committee has a division on a decision that we are reaching, or if we reject something (which we never have so far) and the Department decides to go ahead when there is a longer debate. On the Fire Safety one, which is a major one, which does amend 57 Acts of Parliament, the Committee quite clearly indicated in the report they felt there should be a debate at some stage, probably in Westminster Hall. Do you think when we do the review it would be a nonsense for this Committee to artificially divide to cause a debate - and in fact we did consider it on one occasion when we felt there should be a debate; but should there not perhaps be a process, if the Committee feels there are 659 MPs and the issues warrant a little bit more than a fourth Whip decision; we are happy with it but believe there should be a process where we could say there should be a debate, and on Fire Safety we have recommended some amendments and are waiting to see what comes back from ODPM? Ruth Kelly: That is an interesting proposal. Clearly we try and reach a consensus between the Committee and the Government when taking Regulatory Reform Orders through and try and resolve any difference during their passage. I think that is just the sort of issue we could look at in the review process: that we look at these on a case by case basis and we can make a recommendation if we think there should be a debate. I think this is the sort of issue we would be prepared to consider in the course of a review. Q40 Brian Cotter: On the one hand I approve very much of not having too much paperwork produced - although in your last paragraph you have said that when laying proposals for scrutiny Departments have to copy a large amount of papers, so it is good if they do not have to do so. As a general point the paper needs to be distributed to the general public and very often, with people like ourselves and staff, through electronic transmission seems to be the best way. Minister, as I have the opportunity to sum up the argument, there has been a Regulatory Impact Assessment ever since I have been in Parliament and we have seen improvements in that direction, and those improvements are to be welcomed. This is a general comment, if I may, on Bills and this process as well: why is it so difficult to actually produce Regulatory Impact Assessments, or is it seen to be a burden, if you like? It is a very key issue indeed - that no Government should produce something without really knowing what impact it has. If you do not have the aptitude to say, "We must look at the impact first, and then decide whether to do it second", it is a concern. I do give credit to this Government that you have improved but there is always room for improvement? Ruth Kelly: I completely agree that we need to make the RIA process work as well as possible. The issue that I identified in my letter is that we do not have a consistent process for the RRO process as applies to the rest of Government when bringing forward legislation; and that there is only a requirement on the Government producing legislation for an RIA where there is an impact on businesses, charities and the voluntary sectors; whereas the RRO process requires an RIA for all proposals. The issue is not whether we need to understand the impact, because we do; it is a question of whether the formal RIA procedure needs to be gone through, which is quite a burdensome process, when a really thorough cost benefit analysis might be just as good a way of gauging whether the reform is needed or not. This is a proposal really just for those proposals which do not impact significantly on businesses, charities or the voluntary sector. Q41 Brian White: This process has one benefit that none of the other legislation has, which is the requirement to use plain English, which I think is actually a benefit. In your review are you going to be looking at extending that to other pieces of legislation? Ruth Kelly: I think the review will be about the operation of the RRO process itself. However, I take your point that using plain English is something we should encourage wherever possible. Q42 Chairman: Minister, can I thank you for coming along this morning. There are a few small points we will follow up on, because we have several more items but the major issues we have raised. I recognise if I were answering Questions in the House I would want to get away. We will thank you for your evidence this morning and follow up the other issues in writing. All the main issues we have covered today. Thank you very much. Ruth Kelly: Thank you, Chairman. |