Examination of Witnesses (Questions 60-68)|
1 APRIL 2008
Q60 John Hemming: The BRE is suggesting
what to me is not a credible figure as the savings to business
from scrapping the need for private company AGMs. Do you think
it is a credible figure that people generally have saved £45
million by not having to have private company AGMs and is the
abolition of the need for a company secretary having any effect?
Mr Fell: This for me again is
all about chipping away at the baseline burden. Where we are coming
from on that is quite frankly that small businesses do not have
huge amounts of shareholders, so the cost of holding an AGM is
not immense to them in the first place, but it is a step in the
right direction. I think it is about getting as many of these
cumulative wins as we can.
John Hemming: I have had a small company
for a long time. We have not really had AGMs but we have documented
the AGM. That is the standard practice.
Dr Naysmith: That is right; I agree with
that. That is the process.
Q61 John Hemming: The process has
been to document the fact that one occurred and get everyone to
sign for it.
Mr Ehmann: Can I add to that?
I do not want to refer constantly to the Dutch and the Danish,
but the Dutch did find in their conclusions that one of the reasons
the reduction measures did not deliver everything they had hoped
for was that enterprises did not always comply in full with the
obligations that were abolished, which is essentially what you
are saying, and that employers have retained certain administrative
procedures for their own purposes even if there is no statutory
obligation for them to do so. I think what some of those show
is that unless you understand how businesses are operating on
the ground and will operate there is no point engaging in a process
of ticking figures here.
Ms Low: If we were seeing substantial
savings they would be reflected in things like our Burdens Barometer
and at the moment they are not there.
Q62 Chairman: But equally, if these
figures are so nebulous, does it not raise questions about the
accuracy of throwing out £66 million as your barometer?
Ms Low: No, because the Burdens
Barometer is based on impact assessments and the admin burdens
exercise was based on the Standard Cost Model and we say that
methodology is flawed.
Q63 John Hemming: In the case of
the private company AGM I am not sure that was ever deemed to
be in contradiction of the 1983 Act or the 1986 Act, whichever
Mr Ehmann: Nonetheless, John,
if only 43% roughly speaking of our membership are aware of that
John Hemming: I was not aware of the
Q64 Dr Naysmith: You are just in
the process of destroying my reason for existence by saying what
you are saying. I have been on this Committee for about seven
or eight years and you might something like say, "Get a life,
please", but we put through the changes to the fire safety
regime and it was probably the biggest change and the biggest
deregulationary reform that we have put through on this Committee.
It was not the most controversial. The most controversial one
was births, marriages and deaths registration which we eventually
had to abandon because it was too controversial. The fire safety
regime in 2007, in the summary of Departmental Simplification
Plans, claimed £53 million in savings from scrapping the
fire certificate regime as a result of the changes. Is that credible?
The reason I ask is that, instead of sending out fire officers
to investigate premises and the businesses having to pay for those
investigations, nowadays it is more of a self-certification and
there has been a big reduction in the number of visits required
to premises, so that must somewhere register as a saving, certainly
to larger businesses.
Mr Fell: I would agree with that
and I do not think on any of these measures we are saying they
are a bad idea; I think we are saying they are a very good idea.
From our perspective the costs are always going to be indicative
of where burdens lie and if it helps to focus attention on some
of these areas then that is a good thing, and I think that is
a much more useful exercise than arguing about the exact pounds,
shillings and pence that are attached to them.
Ms Low: I am afraid I cannot agree
with that. The Manchester Business School compiled this piece
of work and it is the only effective mechanism for quantifying
burden on business that exists. Over the years we have consistently
asked the Government to take over the database the Manchester
Business School holds and do it themselves but we have never been
taken up on that offer. I would say that the fire safety regulation
is a great example because it took six years, as you will well
know, and was as a result of good old regulatory reform of the
Act, and I get that to £67 million in savings.
Q65 Dr Naysmith: Of course, some
of the savings will be on the side of the Fire Service as well
because they can now do other things.
Ms Low: Which is a good win.
Q66 Dr Naysmith: Yes.
Mr Davenport: The big problem
with all of these figures is that if there are figures in there
which have a question mark on them, like the figures you were
mentioning, it calls into question the whole thing and that is
when it becomes a danger, because quite easily the whole thing
can be completely disregarded because of one set of figures, and
that is a concern.
Mr Fell: I would entirely agree
with that point about if they are wildly inaccurate then it discredits
the entire operation. What I was meaning though is it needs to
feel in the right ball park. We will all be noticing if it is
not and making noises about it. I think it is about making sure
that the focus is pointing in the right direction.
Mr Ehmann: I agree. I think the
abolition of the fire certificate was given to us last year by
the Better Regulation Executive and we wanted to use research
about whether businesses noticed the change, and we thought it
was unfair to just ask a simple question about has the regulation
got better, worse or is it much the same, but also to ask about
specifics and whether they noticed them. The removal of the requirement
to have a fire certificate I think registered about 70% recognition,
so it was the best of the three that we asked about, but still
you are talking about three in ten businesses not knowing about
that, which I think is quite strange. What you did see in the
follow-on question when you asked about these three issues that
had had a change, "In light of that do you feel the Government
is doing enough?", and whilst it was not 1% it was significantly
higher; it still was not a great figure, I must admit, was that
on those three issues what it demonstrated was that businesses
just had not really noticed those changes, and when you did explain
it to them there was a higher recognition and approval of what
the Government had been doing on this agenda.
Mr Davenport: If I can come in
there on a slightly different thing, I was involved with the Unfair
Commercial Practices Directive which is one that is going through
Parliament at the moment. That is going to remove 23 pieces of
legislation but it is very difficult to tell a business that 23
pieces of legislation have been removed because they are not going
to see it, and that is where the problem lies. It is about perception
and making sure that any figures that are issued have logic to
them. I listened to a programme that went out on the Birmingham
network television only recently and they were saying about the
amount of people that were sleeping rough, and we ended up with
in the whole of Warwickshire there were two people sleeping rough.
The reporter went round and within 20 minutes had totally blown
the whole thing out of the water and it discredits the whole situation.
I think exactly the same thing happened here.
Q67 Dr Naysmith: The fire safety
regime had, as I recall, something like 79 or 80 different overlapping
regulations that were wrapped up into one, which was much simpler.
Mr Davenport: Much simpler, yes,
which is what UCPD is doing.
Q68 Chairman: So despite the problems
that you have identified this morning you would still all concur
that Britain is a great place to do business in? Sure. We have
kept you here for an hour and three-quarters and you have been
very frank with your answers, for which we are extremely grateful.
Is there anything you would like to add in conclusion?
Mr Ehmann: I would simply leave
the Committee with the remark (paraphrased) of David Arculus,
which is that if all this process brings is government departments
feeling somewhat better about the burden that is not what we are
looking for here.
Chairman: Can I thank the four of you
very much for your attendance this morning and for your notes,
and hopefully for some follow-up notes on the points we have pressed
you on. If, during the course of this inquiry, other information
comes your way that you think would be helpful please feel free
to pass it on to us. Thank you very much.