Examination of Witnesses (Questions 1-19)
MR JIM
MURPHY MP, KATE
JENNINGS AND
SARAH HULCOOP
7 FEBRUARY 2006
Q1 Chairman: Can I, on behalf of the
Committee, welcome you, Minister, and your colleagues and thank
you for coming. We appreciate what a busy diary ministers have,
so we are grateful to you for coming along. Can I just remind
you that this session is being web-cast, so any sotto voce
comments you may make after you have heard a question may not
be as sotto voce as you would wish. We are obviously concerned
about the effects of the Bill which you will be dealing with this
Thursday, so we have got a number of questions to ask you. Could
I start by asking you if you want to make a statement. The Committee
has had a copy of your memorandum, but is there anything at the
outset that you wish to add to that?
Mr Murphy: I do not think so,
Chairman, apart from to introduce my two fellow witnesses this
afternoon: Kate Jennings, who is the head of the Bill Team; and
Sarah Hulcoop, who is from the legal team, offering legal advice
in respect of the Bill. I have already given evidence to the Regulatory
Reform Select Committee and I am delighted to have the opportunity
to do so again here today.
Q2 Chairman: Could I just ask something
about your attitude to the Bill as it wends its way through its
parliamentary passage. Are you taking an open-minded and flexible
attitude on this, rather as a minister might do if it was pre-legislative
scrutiny, or do you take the view that the Bill encompasses your
conclusions and you would be pretty much seeking to keep the Bill
as it is?
Mr Murphy: I think we have arrived
at the Bill through a period of, whilst I accept not pre-legislative
scrutiny, consultation, particularly with business organisations
through last summer. As you will know, Chairman, there is a consensus
that the 2001 Act, whilst worthy in its sentiment and its ambition,
because of the way it is structured, the review of the 2001 Act
has suggested that we needed to have a different set of structures
and a different way of implementing a more ambitious Better Regulation
Agenda. However, and quite rightly, the Regulatory Reform Select
Committee, to which, as I mentioned, I gave evidence in December,
has produced, I think, an excellent report[12]
with, I think, 17 recommendations, 12 of which relate directly
to the content of the Bill and five, I think, relate to the terms
of reference of the Regulatory Reform Select Committee. I am sure
you would not expect me, Chairman, to have specific and detailed
responses to the Select Committee's report which was published
yesterday, but what I would say is that we think that many of
those recommendations have a good deal of merit and we are minded
to see just how we can take on board the specific suggestions
made by the Regulatory Reform Select Committee on the basis that
that Select Committee, as you know, Chairman, has done an excellent
job in scrutinising many of the, 27 orders that went through the
House and it would be right that we take into account their experiences
and the sentiments and recommendations that they have come up
with.
Q3 Chairman: Thank you for that. Is this
not just the sort of legislation though that ought to perhaps
be referred to a special standing committee?
Mr Murphy: That is a decision
ultimately that business managers will take and, as you will be
aware, that is not our role in the Cabinet Office. Our sense is
that careful scrutiny both through the Commons and the Lords would
not make that necessary, particularly on the basis of the number
of stakeholders within Parliament who quite rightly are expressing
an interest and we have been able to give evidence and exchange
ideas, so, whilst it is not our role and it is an issue for business
managers, it is not something that we are initially attracted
to.
Q4 Annette Brooke: Minister, you did
mention structures briefly just now, but I wonder if you could
give us your own view why the Regulatory Reform Act actually did
fail to meet its set objectives.
Mr Murphy: I am happy to give
you my own personal views and then there are the views of all
of those stakeholders, business, the public sector and the voluntary
organisations, who have their own sense as to why it did not achieve
what they hoped it would achieve. We only have an hour or so,
so I will try and be as quick as possible with this answer. My
own view is that the 2001 Act was a reflection of the ambition
at that time. It was a sense that the sort of super-affirmative
procedure would deliver a substantial number of regulatory reform
orders and the review of the Act has shown that that is not the
case. Now, why has that been so? My own sense is that the 2001
Act too narrowly defined the burden, that it had to be a legal
burden, and it could not, for example, lift the administrative
burdens, of which we know there are very substantial amounts across
public sector, business and the voluntary sector. I think one
of the biggest criticisms that has come across is the rather narrow
definition of a burden. The other wider issue though is I think
that there is a culture, to be frank, across Parliament, government
and the Civil Service which is that there is a lot of, quite rightly,
energy and effort on introducing new regulations, and politicians
of all parties get elected on the basis that, "If there's
a problem, I'll try and help fix it". There are very few
politicians, though there are some, but very few, who say, "Send
me to Parliament and I will try and make sure that government
and Parliament does less", so it is an issue of the culture
of politics. It is also an issue of the culture of the Civil Service
and I do not wish to make any criticism of the Civil Service at
all, and I know Kate will not take this personally, but the head
of a bill team is, quite rightly, a position of some responsibility
and prestige. To be the person in charge of bringing through a
regulatory reform order, or an order which we are talking about
now, is not part of the culture and there is inequality of prestige
there partly because, and only partly because, many departments
do not have a sense that putting in the effort, the energy, the
resources and the time will lead to their suggestions and their
simplification proposals being implemented on the basis that they
sometimes sit on the shelf. Now, I do not want to make a party-political
point on this, but across governments throughout time sensible
recommendations and simplifications have not been able to get
space in a very crowded parliamentary cycle and what we are hoping
to do, learning from that experience, is to have a wider definition
of the burden and providing a structure which we think will ensure
that departments have a genuine expectation that their sensible
simplification proposals will find a route in influencing the
legislative and administrative burden in the UK. That is my own
sense, but of course stakeholders, voluntary, private and public,
have offered their own assessments as to their feelings of the
weaknesses in the 2001 Act. There have been important advances,
but not enough.
Q5 Annette Brooke: Are there any specific
reforms that the new legislation will enable you to bring in which
will really make a difference?
Mr Murphy: I think the two biggest
which I mentioned just now would be, firstly, that we are in a
process of what is called, and I am sure we should have a better
title for this, but it is called the "admin burdens project"
which is seeking to analyse the overall figure in the UK economy
of administrative burdens on business and then, having identified
that figure, for the first time ever setting targets for its reduction.
That is following on from the Dutch and the Danish approach to
this where they have had some success. Now, our economy, in terms
of its scale, is much greater and we are seeking to learn from
their experience and perhaps go a little further. The second is
that every government department has been encouraged/directed
that by November they have got to come up with their own simplification
plans of unnecessary bureaucracy, unnecessary admin burdens, outdated
legislative arrangements. The Health & Safety Executive, Defra,
I think, and the DTI are the first three that have come up with
their proposals, those are already in the public domain, and every
other government department will have to do likewise. So the implementation
of the admin burdens project, removing a lot of the administrative
burden on business, and then these department-by-department simplification
plans are the two areas where we would expect a very significant
driver of the orders under the new Bill and those have not been
there in the past. It is just a different level of ambition in
terms of the Better Regulation Agenda.
Q6 Ms Clark: The Government is presenting
this Bill as a successor to the Regulatory Reform Act. How do
you respond to the argument that, rather than a logical improvement
to the previous regime, this Bill raises fundamental constitutional
questions about how Parliament should consider primary legislation?
Mr Murphy: I read that press release
as well from the Regulatory Reform Select Committee and, as I
say, I have a genuinely excellent working relationship with the
Regulatory Reform Select Committee. It is the case that we are
seeking to go further and more effectively than the 2001 Act allows.
It is not about redrawing any constitutional arrangement. In fact
every protection in the 2001 Act will remain, every single protection
will remain, and of course, as part of the Regulatory Reform Select
Committee's recommendations, if there are sensible ways in which
we can strengthen some of those protections, then we are minded
to do so, so the protections remain. It is in some senses about
allowing Parliament to decide what is the most appropriate scrutiny
because, whilst a minister will say, and it is not just ministers
in the Cabinet Office of course, but ministers across government,
"We have had public consultation which is statutory and here
are the conclusions of the consultation and, as a minister, my
analysis is that this is not controversial, there is wide stakeholder
support for this", the minister could recommend negative
or affirmative procedure on the order, but the Select Committee
itself can recommend a higher level of scrutiny, and that is an
important protection. Ultimately it can kick the whole thing out
and say, "We do not believe that this fits the right of Parliament
and protections of Parliament to legislate in a sensible way".
Ultimately the Regulatory Reform Select Committee and, I think,
the Delegated Powers Committee in the Lords have this right either
to suggest, "The Minister is recommending too light a scrutiny",
or indeed, if the committees are unhappy with the nature of the
suggestion, they can effectively veto it and that will give, we
sense, a real protection to Parliament in the way that it has
at the moment, so those protections are there and will remain.
Q7 Chairman: But that is not actually
in the Bill, is it?
Mr Murphy: It is not on the face
of the Bill and it was not on the face of the Bill, as I understand
it, for the 2001 Act. It was by ministerial statements during
the debates in the Commons and, I suspect, in the Lords as well,
Chairman. That is an undertaking that no one has suggested in
the past four years, that there has been an attempt in any way
to walk away, even an inch away, from it. It is one of the issues
that the Regulatory Reform Select Committee have made a recommendation
on and, Chairman, we are going to reflect on that as to whether
there is a way to offer further reassurance. I anticipate you
would accept that, in the 24 hours we have had since the Committee
produced its report, we are not in a position to be specific about
that, but we are looking at ways to offer further reassurance,
but underlining that at no point in the past four years since
the 2001 Act has there been a suggestion from the select committees
that we have sought to move away in any way from that ministerial
undertaking, but, if there are further things we can do to offer
you reassurance, we are minded to work in a way to do that.
Q8 Ms Clark: The Bill does, however,
provide that it cannot be used to legislate on certain subjects
and it presented some of those areas, such as imposing taxes and
creating new criminal offences with penalties of more than two
years' imprisonment. Can you suggest other subjects for which
you believe it would be inappropriate to use the provisions of
this Bill?
Mr Murphy: That is a dangerous
question. I can sense that your legal training is trying to trip
me up there! The obvious answer is things like changing the asylum
process, but we are not going there because the commitment we
have given repeatedly, and I have given again to the Regulatory
Reform Select Committee, is that we will give a guarantee that
we will not do anything highly controversial. Now, that will be
a learning process, as it was in 2001, as to what is perceived
to be highly controversial. If you are asking me to speculate,
there will be a general acceptance that substantial change on
a contentious area of policy should not be brought through in
this way. However, if, for example, under immigration policy there
was a way in which we could merge 10 of the forms into one form,
no one would say that would not be a sensible simplification.
Therefore, whilst the attraction is to say that we should do nothing
in this area because it would be highly controversial, to say
that we will do nothing on an area of government responsibility
or within a department perhaps would reduce our ability to introduce
simplification on bureaucracy and admin burden, so our commitment
is very clear, that we will not seek to do anything which is highly
controversial. The Select Committee will make a judgment on that
and the Select Committee can veto any recommendation from a minister.
That is why I am not tempted to say what you maybe anticipate
me saying which is that here are specific areas because, within
those areas, there is an anticipation that we can cut the bureaucratic
burden and simplify the administration of important areas of government
responsibility. If there is a commonsense way of doing that and
there is consensus on doing that, I think we should use this new
arrangement to implement those sorts of simplifications and reductions
in admin burdens.
Q9 Chairman: You have used the words
"highly controversial", so does that mean that under
this procedure, if it gets through, you are prepared to be controversial?
Mr Murphy: The Committee will
ultimately decide what they believe to be suitable for this process
and the commitment we have given is "highly controversial".
I think, was it Lord Falconer or someone, and I only say this
in a joking way of course, but Lord Falconer said, "How do
you define this? It is a bit like defining an elephant in that
you do not know how to define or describe it, but, when you see
it, you know what it is". In terms of what is controversial
or highly controversial, a minister will make a judgment, but
only after there has been a statutory public consultation with
all stakeholders, that is then analysed, and the committees of
course even at that stage will know of any recommendations coming
because they will be informed of the consultation on a proposed
order. Then, ultimately, when the minister analyses all the responses
as part of the consultation, there will be an initial assessment
as to what is reasonable, what is controversial and what is highly
controversial. The minister will lay a draft order and relevant
select committees will say, "It doesn't feel right".
They may say, "It feels as if it is going too far",
or they may feel it contains one specific clause or one specific
aspect which they are uncomfortable with and, ultimately, based
on the Regulatory Reform Select Committee's recommendation, we
are looking at ways in which, for example, if we can construct
a way in which specific amendments can be taken on board, that
may be our way ahead. Ultimately, the sanction that select committees
have is, "It doesn't feel right. You have overstepped what
we anticipated and we are not willing to give our consent to this
going forward either in the way you propose", so it should
not be a negative, it should be an affirmative order or it should
be super-affirmative, "or it should not go ahead at all".
That is the way we anticipate this working at the moment, Chairman.
Q10 Mr Gauke: We have moved away, I think,
from the Better Regulation Task Force review of the old regulatory
reform orders, when it talked about the need to extend what you
had so that non-controversial orders could be simplified to now
where we are talking about "highly controversial". Is
there not an argument for the Bill only to apply to non-controversial
matters and actually saying so explicitly within the terms of
the Bill, which I do not believe it does?
Mr Murphy: Well, this is a difficulty,
as your Chairman has already identified quite appropriately, as
to how to define it. If you were on the face of the Bill to say,
"non-controversial", I think the Bill would become a
book in terms of defining what "controversial" and what
"non-controversial" are. One of the strengths of the
2001 Act, which, as I say, had its weaknesses and I have shared
with you my personal assessment of what those weaknesses were,
but one of the strengths, was that it allowed a proper working
arrangement between whichever government minister and department
and the relevant select committees. Through a process of evolution
of what is controversial, highly controversial and what is reasonable,
it allowed accommodation of stakeholder consultation, ministerial
assessment and select committee recommendation to decide where
the centre of gravity is on controversial or highly controversial
and it is our sense that that is still the correct way to progress
so that in time a select committee, government and stakeholders
will effectively establish where the line is. The lesson from
the 2001 Act is that that was done really pretty effectively and
the Regulatory Reform Select Committee certainly mentioned that
they see that as one of the strengths, I think, in the current
process.
Q11 Mr Gauke: Correct me if I am wrong,
but I do not think there is anything within the Bill which says
that the committees charged with the consideration of a draft
order have a right to say, "This is too controversial".
Mr Murphy: I could not draw you
to the verbatim quote. Someone will perhaps give me a copy of
the Bill from which I can give you the verbatim quote, but it
says that the committee is "charged by the House", which
is the phrase I recall from the Bill. I think it is all—
Q12 Mr Gauke: And they can just throw
it out on the basis of being too controversial?
Mr Murphy: Yes, absolutely, and
there is a committee in the Commons and a committee in the Lords.
As I say, there are three tiers of scrutiny within the committee,
negative, affirmative and super-affirmative, so they can either
move it up one, or move it up two in fact, so they can move it
from negative to super-affirmative, or indeed they could just
say, "We don't think this is suitable at all for this committee",
and we are back to the drawing board to seek an alternative way
of implementing the order.
Q13 Chairman: Before this session is
over, could you point us to where in the Bill this undertaking
is contained?
Mr Murphy: Of course.
Q14 Chairman: If it is not on the face
of the Bill, are you giving us a firm pledge that the relevant
committee would have an absolute veto in this area if it felt
the subject matter was too sensitive and politically controversial?
Mr Murphy: I can give you that
undertaking, absolutely.
Q15 Sir Robert Smith: Minister, have
you actually found the part of the Bill?
Mr Murphy: That is what we are
looking for just now, sorry, Sir Robert!
Q16 Sir Robert Smith: I thought you might
have found it already. If it is somewhere in the Bill and you
can find it, let us know. You said that the Regulatory Reform
Select Committee report has a lot of merits in it. When do you
think you will be publishing your response to it?
Mr Murphy: I think there is a
timetable which is kind of dictated by parliamentary events. I
do not think it would be appropriate to go into the standing committee
deliberations of this Bill not having produced a response, and,
rather than saying a week, three days, 10 days, I think in terms
of the dynamic of Parliament, we have to have that produced in
good time to allow the Standing Committee to reflect upon it.
Q17 Sir Robert Smith: If it looks like
it is going to take you more time to give a considered response,
would it be worth the procedures of the Bill being put on hold
while you wait for that response?
Mr Murphy: I do not anticipate
that, and I have already had numerous conversations arising from
the Regulatory Reform Select Committee report and recommendations
and we are developing our response pretty quickly. We will be
in a position whereby we will produce our response in good time
in advance of the Standing Committee beginning its work. However,
if it is an issue where we have not got the sort of syntax correct
or we are just adding detail, I think we will produce a general
steer certainly as a minimum in advance of the Standing Committee's
consideration of the Bill.
Q18 Sir Robert Smith: We have discussed
the scope of this Bill and the orders that could come from it.
Which of the bills announced in the Queen's Speech in May could
not have been introduced in the form of an order under this Bill
if it had been in force?
Mr Murphy: Without going into
the details of the Queen's Speech, the type of thing that could
not be implemented under the previous arrangement which perhaps
could now would be the very substantial effort that is going to
be made on the administrative burden process. In order to estimate
the cost of admin burdens, project team has contacted over 200,000
businesses in the UK to try and identify what are the headline,
most significant and common admin burdens. Currently, within the
2001 Act, in the way it is defined, that work would not find a
legislative vehicle or would not find a parliamentary process
to implement an awful lot of it, and similarly again from the
simplification proposals. Ultimately, the sort of what are defined
as "flagship bills" in the Queen's Speech, it would
not be my anticipation that the Government would seek to introduce
any of those through this way and, ultimately, the Committee would
decide.
Q19 Sir Robert Smith: But a future government
could decide to do immigration, asylum and nationality, police
and justice and agreement to the European Constitution under this
process if it wanted to try?
Mr Murphy: I think it would be
pretty foolish to try.
12 Regulatory Reform Committee, First Special Report
of Session 2005-06, Legislative and Regulatory Reform Bill,
HC 878. Back
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