Examination of Witnesses (Questions 1-19)
MR JIM
MURPHY MP, MS
KATE JENNINGS,
MR ANTHONY
ZACHARZEWSKI AND
MR PAUL
HUGHES
13 DECEMBER 2005
Q1 Chairman: Good morning, Mr Murphy.
Welcome to our Committee. Could I first of all ask you to introduce
briefly your team and then we will start.
Mr Murphy: Chairman, on my right
is Kate Jennings, who is policy lead on the Regulatory Reform
Act and the manager of the proposed Bill on better regulation.
On my far left is Anthony Zacharzewski, Head of the Private Sector
Inspection Team and policy lead on the Hampton Review,
and Paul Hughes from the DCA, who is policy lead on the Law Commission
elements in the Bill.
Q2 Chairman: Thank you very much.
You have mentioned the Bill and we keep hearing about the Bill.
Is it due to be published . . . is the word "soon" or
is there a date now?
Mr Murphy: The phraseology of
government, as you know, Chairman, is "shortly". Things
fall into two categories: "we have no plans to" or "shortly"
and this one is "shortly". As we speak this morning,
I do not think there is a concluded date for the introduction
of the Bill. The Prime Minister talked at the CBI, I think the
week before last, in terms of early in the New Year, so I think
the assumption would be that that would be the latest of the introduction
of any Bill.
Q3 Chairman: We might presume, therefore,
it could be a little earlier. The review of the Act, it was originally
promised, would be in place in 2004, I think. What do you say
to those who would argue that the Government's case for changing
the processes is based on little more than anecdotal evidence
gathered from departments, some of which have little or perhaps
no direct experience of the process?
Mr Murphy: I think the Government's
case for the review is based on the evidence post 2001, and the
limited effectiveness of the Regulatory Reform Act 2001 and its
ability to deliver important regulatory reform but not everything
that was anticipated at the time. There are various reasons for
that, some of which I am sure we will explore in discussion. I
do not share the sense that it is based on anecdotal experience
of departments with no personal or direct involvement in this
agenda. The fact is that the Act of 2001 was too narrowly defined
in the sense of burdens. It made a very technical definition of
burdens and it did not allow uncontroversial Law Commission proposals
to be introduced. It really was not flexible enough, largely based
on the fact that there was this tight definition of burdens. So
I do not think it is based on anecdotal experience at all; it
is based on having a genuine, ambitious better regulation agenda
which sometimes collides with a rather narrowly drawn legal definition
of burdens. I think that is one of the main lessons from experience,
Chairman.
Q4 Chairman: By proposing to widen
the scope of the procedure, the Cabinet Office is suggesting constitutionally
significant changes to the way that primary legislation can be
amended. Aside from people within Government, who outside is demanding
that further discretionary powers be given to amend legislation
by Order?
Mr Murphy: In terms of the consultation,
there is a very strong welcome for most if not all of the proposals
within this agenda. The CBI, the Institute of Directors, the Law
Commission, the Law Society of Scotland, I think, would be amongst
the organisations who would say . . . I am not suggesting that
we should do exactly as they suggest, of course, but, in terms
of their analysis, most if not all of those organisations would
say that the current system does not deliver the type of better
regulation, the proportionate, targeted, risk-based regulation
that they wish to see.
Q5 Chairman: Have any of the consultees
suggested the opposite?
Mr Murphy: I think there are some
in the world of academia who have suggested the opposite: that
we are going too quickly; that the current situation does not
allow proper parliamentary scrutiny. [1]That
would be my assessment of anyone suggesting that we have gone
too far on this agenda. In terms of the consultation, as we talk
to businesses and we talk to others it has almost been one-way
traffic in the respect of saying: we need to make the parliamentary
scrutiny effective but we also need a delivery mechanism to match
the policy and the rhetoric in terms of delivering on what we
have pledged to do in terms of better regulation.
Q6 Chairman: Finally, before I invite
other colleagues to come in: it is a very complicated consultation
process, and you have described some of the responses, what work
has the Cabinet Office done on a proper cost-benefit analysis
of the process that is being proposed, or indeed, of the process
that is in place now? Some of the orders that came before my predecessor
committee had figures associated with them, but what sort of work
is going on genuinely to demonstrate to Parliament and the public
at large that this is a worthwhile procedure in terms of efficiencies
and gains?
Mr Murphy: In terms of any analysis
of previous estimates, it is a fair point to say that not enough
work has been done either by the Cabinet Office or by other departments
in terms of retrospectively validating the proposed savings and
efficiencies from RROs and the impact assessments. If I were to
be brutally frank, I think that is a weakness in the system. Impact
assessments in advance suggest likely savings and likely efficiencies
and there is not a retrospective challenge as to whether that
impact assessment has been accurate in its proposed savings plan.
I think that is a piece of work on which Cabinet Office and departments
across government have to do a good deal more work. I think that
is one of the lessons from this process that should be learned.
I should have mentioned that some of the trades union organisations
have raised reservations that if we go too far too quickly and
strip away some of the important protections that they rightly
have campaigned for through the years, they would, of course,
go into the column of being very concerned. But we seek to reassure
them that none of the better regulation agenda at all is about
stripping away protections for the environment, safeguards for
workers, for customers, for families; it is about retaining those
core safeguards but seeing if we can do things a good deal better
in terms of removing duplication and making it more targeted.
I think we have a job of work to do there with the trade union
movement but I am confident that it will be done because we are
not in any way challenging some of the safeguards that they have
fought to retain.
Q7 Dr Naysmith: Good morning, Minister.
It is a pleasure to have you before us. May I call you Jim?
Mr Murphy: Please.
Q8 Dr Naysmith: You said in answer
to Andrew's first question, presumably when talking about the
results of the review, that people have been complaining that
the 2001 Act defined things too narrowly and that you received
feedback that it was not flexible enough. I am sure at some stage
you have discussed this with the individual departments—they
must have contributed to the review as well as academics. I think
I am the only one left from your committee, but we used to get
the impression that some departments were much more enthusiastic
about the current process than others, and one or two of them
used it and used it well and were very pleased with it. Is that
reflected in the responses you received from Government departments?
Mr Murphy: First of all, congratulations.
Q9 Dr Naysmith: Surviving it!
Mr Murphy: I will ask Kate about
the departmental responses, but in respect of the previous Act
there was a sense, as I mentioned, that it was too narrowly drawn
legally in terms of the definition and did not allow—and
we may explore this, of course—what we perceived to be an
equal and more proportionate parliamentary scrutiny of non-controversial
issues. That strikes an awful phrase but, in terms of an easier
way of describing it, the sense was that we would need a quicker
way to implement non-controversial proposals while guaranteeing
parliamentary scrutiny. In terms of the departmental responses,
I will pass to Kate.
Ms Jennings: In terms of the detailed
question on the conduct of the review, we basically read all the
committee reports from both committees and we conducted review
sessions with all the officials who had been involved in delivering
all of the RRO proposals that have come forward, and, indeed,
the officials who have looked at taking the proposals forward
and have not been able to deliver them for whatever reason. It
was the unanimous view of all those officials that the current
process was technical in terms of the analysis of burdens and
there was an over-bureaucratic process. I think you are right
when you say that certainly some officials in some departments
were more proactive about using the powers that they had, but,
in terms of the flexibility of power and the ability to deliver
what people wanted to deliver efficiently and effectively in a
proportionate way, I think there was a unanimous feeling that
we had not got what we needed.
Q10 Dr Naysmith: It was my impression
that some departments who were enthusiastic about using it got
good results and some departments who were not, not surprisingly,
got them sent back regularly. I would have thought the ones who
were enthusiastic about using it are reasonably happy with the
current procedure.
Mr Murphy: As you would expect,
the standard answer would be that I cannot speak for other departments,
but the fact is that across government, if I were to summarise
government's collective opinion rather than offer a comment about
any individual department, there have been 27 RROs delivered and
there was a much greater ambition that the 2001 Act would deliver
more—as you know, there was a draft published list of what
was expected to be delivered—and that has not happened.
So collectively there is a sense that the 2001 Act is not the
right tool to get the job done and that is what we are concentrating
on now. As we go through the Bill process, we will continue to
have dialogue with other Government ministers. We had conversations
with a group of Government ministers yesterday about this agenda
and we will continue to do that. If that is genuinely what you
have had back, that is something we should look at as we go through
the parliamentary process of the Bill when it is published.
Q11 Chairman: That leads us very
neatly on to our next series of questions. With the Bill that
is to be published shortly—
Mr Murphy: Shortly!
Chairman: —it will need to be the
subject of some parliamentary scrutiny.
Q12 Gordon Banks: Thank you, Chairman.
Jim, if I walk out of here at half-past ten, it is not because
I am totally disgusted with your evidence but because I have a
standing committee to go to.
Mr Murphy: What happens if you
leave before half-past ten?
Q13 Gordon Banks: Then I really am
disgusted with your evidence! We expect the Bill to increase the
scope for ministers to repeal and amend primary legislation. Given
the constitutional significance of ministers being able to repeal
or amend primary legislation by Order, why is the Bill not subject
to full pre-legislative scrutiny? How can this be justified given
that the Regulatory Reform Bill 2001 was?
Mr Murphy: One of the things I
have got together myself is in terms of the timeline of the Bill.
The Chancellor in the Budget earlier in the year committed us
really to a pretty ambitious plan of delivery on better regulation.
We then had the election—which delivered an outcome—and
then the Regulatory Reform Bill was announced in the Gracious
Address on 17 May. We are in a position that basically we are
keen to deliver this Bill in the first session. The judgment—and
I accept that it is a judgment and others may take a different
judgment—was that to deliver it in the first session would
require us to progress in the way that we have done. Departments
are currently putting together the simplification plans in time
for the next year's pre-Budget report. If we were put in a situation
where we did not have a Bill in the first session, much of the
ambitious simplification proposals that are coming out of departments
would not have a tool to enable their delivery. Based on the analysis
of the 2001 Act, there would not have been an effective legislative
tool to deliver those simplification proposals. That is a reason
why we were keen to get the Bill, not only because we had said
we would do it but in a practical sense that was the reason why
we wanted to have that tool in place. Also, we are in a dialogue
with business. There does not seem to be a lack of analysis of
the nature of the problem. Business has a view, shared by many
in Government, that the analysis is there and what is needed is
a tool and some action to overcome the weaknesses in the current
system and implement that analysis. Looking at the Dutch model
of admin-reduction, risk-based regulation, all that saved—and
colleagues will know this around the table anyway—1% of
GDP, and we want to get on and start those savings next year.
We want to start having a more proportionate system of regulation
in the UK as of next year, 2006, if this Bill is passed, and also
we want to be able, in terms of the pre-Budget report next year,
to have a piece of legislation that can deliver the ambitious
simplification proposals that the departments are currently working
on. I accept it is a judgment, and those were the arguments that
we sided with that took us to the decision about the need for
pre-legislative scrutiny. Of course, in terms of the review of
the Act, the Better Regulation Taskforce has done an important
piece of work in terms of analysis of the terrain at the moment.
To sum it up, I think there is a vast amount of analysis, there
has been a huge amount of consultation with stakeholders and others,
and really at some point we just had to get on and deliver the
agenda, and the decision was to deliver the agenda in time for
next year's simplification plans.
Q14 Gordon Banks: It is obviously
very important to get this right now so that we are not looking
at it again in four years time. You obviously do not think that
pre-legislative scrutiny can give something to that agenda.
Mr Murphy: Being flippant for
a moment, pre-legislative scrutiny did not give us the agenda
four years ago, five years ago. We tried it with pre-legislative
scrutiny and we did not get the tools we need, so maybe by not
having it we will.
Q15 Gordon Banks: We have more proposals,
a different agenda coming from yourselves now.
Mr Murphy: In four or five years
time, for whoever is sitting in your place and whoever is sitting
in mine, a failure would be if they were to sit here and say,
"That 2006 Act"—as we hope—"did not
really deliver the tools that we needed for the job." As
the Bill progresses through its various stages and as the committee
reflects on the Bill and analyses the Bill, if there are specifics
that individual members of the Committee or the Committee have
that they would like to suggest, as the Minister I am happy to
listen to any specifics in terms of concerns about details within
the Bill. But, you are right, we cannot come back to this a third
time. I think stakeholders, business and others will rightly lose
the sense that the Government can deliver on this better regulation
agenda. You will know this from your own background, Gordon, as
a businessperson. Business basically says: "We've heard some
of this before. We've heard this sort of, `We're going to regulate
more sensibly, we're going to have a lighter touch'." There
is a degree of cynicism out there, so we have to get it right
this time and we are happy to do that in partnership with yourselves
if the Bill goes through its various stages.
Q16 Gordon Banks: Is there still
the intention to include the provisions from the Hampton proposals
in the Bill?
Mr Murphy: Which ones?
Q17 Gordon Banks: Less is More.
Mr Murphy: I cannot comment on
the content of the Bill that will be published shortly. If you
were to look at the consultation and summary of the consultation
responses that would give you a good pointer to what might be
in the shortly to be published Bill. In the main that is really
the terrain that we are in. In terms of the Bill, it is entirely
about giving government, the Department and its departments, the
tools to deliver on this better regulation agenda, which has moved
up the political hierarchy. It has become much more high profile
for various reasons and this Bill is intended to make sure the
Government can deliver on that agenda.
Q18 Chairman: If the Government is
so anxious about it, what is the delay?
Mr Murphy: What delay is that?
Q19 Chairman: In publishing the Bill.
Mr Murphy: I do not think there
is a delay. We are committed to publishing by early in the New
Year and we are still this side of Christmas.
1 See Ev 15
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