Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 140-159)


13 MAY 2008

  Q140  Chairman: Is the 25% target too broad-brush, or does it work for you all?

  Mr Gregg: Can I take up on that one? Defra was considering what it could do in terms of Better Regulation and how we could respond to the voice of stakeholders who were saying "There is all this form-filling; reading voluminous guidance is consuming all our time and we do not have time to do business"; so I think we anticipated a target centrally. We looked to a 25% target in the fairly early stages. It is something that has to be achievable, but it must be stretching; and 25% is pitched at about the right level: it does not leave any of us feeling comfortable and it is quite a struggle to meet that target and make a difference. Too easy a target does not have that impact and does not help raise the culture changes that are necessary. I think making it a net target domestically has really forced us to think hard not only about the flow of legislation but about our existing stock, because departments do want to achieve outcomes and do sometimes need new mechanisms to do that; and therefore anything new that is coming forward we need to find offsetting savings. I think it has been a very good discipline like that; and I think the level at which it is pitched is about right. The unanswered question is—when we, all four of us, and our colleagues have succeeded in 2010, what will be next and what might the expectation be?

  Q141  Chairman: That is precisely what I was going to ask next. Mr Huddleston, let us assume you hit your target—you say you are ahead of your target: when you have hit that goal, what is on the stocks next? What are you planning?

  Mr Huddleston: We are planning to try and exceed the target fairly significantly because although 2010 is the point which we are working to at the moment, if we look beyond that, certainly in DWP, we have a significant regulatory burden that will be associated with the new system of personal accounts, which is due round about 2012. We have roughly quantified what that burden is going to be. We are trying to get well ahead of the target so that when we are looking at things in net terms, we are still staying within that 25% envelope. So our deregulatory review of private pensions that took place last year has identified some areas where we can get further savings we think. We think we can probably get some further savings from further simplifications to statutory sick pay. All of that is really saying that 2010 is only a date, if you like: if 25% is going to mean anything, you have to look over a longer horizon.

  Q142  Mr Davies: It is a most fascinating response! Did I understand you to say that actually you were trying to get ahead of the 25% reduction target so that you would then have, if you like, some credit at the bank and you would then be able to regulate some more subsequently without breaching the 25% ceiling: is that what I heard you say?

  Mr Huddleston: Not quite but something similar to that. I am saying this is a net target.

  Q143  Mr Davies: It is the most revealing insight into your office's approach to the 25% target I have ever come across!

  Mr Huddleston: Can I clarify? It is a net target so the idea is to find savings if you are going to impose costs—

  Q144  Mr Davies: I can see exactly—if you set that target, you can play this game; and if you can succeed in getting ahead of the 25%—one would have hoped of course—and that would be very naive, I know—one would have hoped that you would have been so committed to the principle of deregulation for its own sake that you would have wanted to get to 25% and get beyond and stay improving, getting to 30%, 35% or what-have-you. On the contrary, what you are doing is interpreting the 25% target as something which, once you have got to it, once you get above that, you will then have some credit at the bank and be able to regulate some more, which is what you really want to do, I suspect!

  Mr Huddleston: I do not think that is what I am saying; it is certainly not what I meant.

  Q145  Dr Naysmith: That is the area that I was going to explore next with all four. Are there plans already to reduce the flow of new regulation, particularly statutory instruments, or at least ensure that the net burden is reduced, because we assume that other regulations will come along—not just because there is a gap appearing, but it will probably happen in the natural course of our activities because that is what we do in order to introduce laws and regulations? Quentin has already touched on that, so I will switch to the supplementary. There appears to be a consensus that influencing European legislation at an early stage is probably the best way of controlling the flow of new regulation—the earlier it can be the better, and achieving Better Regulation as well. Beyond simply agreeing that it is a good idea, what are your four departments doing to influence that kind of regulation and statutory instruments and European legislation?

  Mr Wilmore: In the Department of Health it is mainly around the medicines industry again, where the European regulations have an impact. We have already seen some benefits through the savings we have had on the ABR targets already by simplifying European regulations. We will continue to work more closely with the BRE to keep a weather eye on where those will impact on the Department, because much of the regulation of the health Service is not subject to wider EU regulatory legislation; it is quite a specialised area that impacts on the Department of Health.

  Q146  Dr Naysmith: I would have thought that European legislation on working time has a huge effect!

  Mr Wilmore: Yes, sorry, in terms of working time—that is pretty much played through the service of the doctors' hours targets now and there are of course implications, but we do not foresee that changing in the future.

  Q147  Dr Naysmith: Even though it will have a huge effect still—junior doctors still have more regulations to come, have they not?

  Mr Wilmore: Yes.

  Q148  Dr Naysmith: Is it that they are going to happen, and that is it?

  Mr Wilmore: No, no, I am not saying that. I am saying is that we are aware of the direction of travel there so we have already got plans in place in terms of the workforce implications for that. It is not that we are expecting new regulations that we are unaware of that would impact on us.

  Mr Podger: I think the major tide of European legislation in the health and safety field has temporarily at any rate abated, so we are rather more in the business at the moment of trying to, frankly, help our European Commission colleagues in meeting their targets for reducing administrative burdens. We have had some success, for example, in relation to the Electromagnetic Fields Directive, which has now been delayed because we and others doubt the evidential base for it. We have suggested simplification proposals to the Commission on directives that are already in force, which they have actually—

  Q149  Dr Naysmith: I did not know about that. Are they bringing in electromagnetic regulations from Europe?

  Mr Podger: Yes, indeed.

  Q150  Dr Naysmith: Even though, as you say, the evidence base is not very strong?

  Mr Podger: Indeed so; and this has been a cause of considerable difficulty; but we and others have succeeded—very unusually in my experience—in persuading the Commission to not proceed with their proposal.

  Q151  Dr Naysmith: Thank goodness for that! I am sorry, I interrupted you.

  Mr Huddleston: I guess there are not very many EU regulations that impact on our burdens on business. Our usual tactic is to get involved as early as we can to head them off. That is all I would add to that.

  Q152  Dr Naysmith: Do you think it works well? Are your antennae well enough tuned to pick up these things at an appropriate stage?

  Mr Huddleston: These are fairly few and far between. They tend to be on the pensions side, and we are in early on those and are very successful.

  Mr Gregg: I think it would be true to say that we are probably quite experienced in the area of EU legislation. A lot of effort goes in jointly both through the UK permanent representation from Defra officials back in home and from the Better Regulation Executive in trying to influence the European agenda directly with director generals—and we have had commendable success, I think, in this part of the 2005 UK presidency in getting regulating better on to the agenda. DG agriculture are certainly right on board; there are very encouraging signs now from the environment side; and I think we work with DG Enterprise, which leads on the European 25% target, albeit that that target is not due to be delivered until 2012 and its make-up is slightly different in that it is specific about certain areas of EU legislation, a lot of which Defra leads on. As well as with the Commission, I think we are increasingly working successfully with other Member States. Comitology issues mean that the UK alone cannot achieve anything without support from at least a blocking minority. A recent example is the proposal on the Soils Directive, which had impact not just on the Defra agenda but on other agenda in Government departments. I think there was a slight sigh of relief that the proposals, as they sat, were successfully blocked, the UK being part of that, and work is continuing on trying to find something that balances things better. It is an ongoing collective effort with other Member States and with the Commission, and with business—because we should not underplay the impact that business representatives in Brussels can have, both at the UK level and collectively at the European level in taking the message to the European Parliament and to the Commission when the ideas are still at the gestation phase. By the time that the Commission proposal emerges you could say you are 80% too late, so that early action is important.

  Q153  Dr Naysmith: Is there a good working relationship between business representatives in Europe and yourself?

  Mr Gregg: There is. We could always be better, and we could step back and think about the challenge from Europe. About a third of the flow of new legislation has sprung from Europe. Looking forward, it is likely to be two thirds—we have got to take that more seriously and take a step back and look at the strategy of how the UK engages with the European legislative machinery. Are we effective in a partnership with business, both UK businesses but also European businesses? Are we effective with Member States in getting alliances that are like-minded, so we talk to others just than the Dutch, who are clear leaders in this field?

  Q154  Mr Davies: How do you communicate with your stakeholders, including business, to make sure that they are properly aware of Better Regulation initiatives?

  Mr Wilmore: In relation to business, we work through particular sectors, again mainly the medicines and pharmaceutical industry, through a roaming initiative and also for social care providers through representative organisations such as the National Care Association. With our public sector stakeholders the main mechanism is a provider advisory group that sits alongside the concordat I was talking about earlier, which brings together independent health and social care and NHS provider bodies and allows them to feed back to us the bureaucratic and burdensome irritants within the system which they have to face and their suggestions for reducing that. That is mainly around overlap and duplication of collection of data. That is a body that is supported by the Department and the Healthcare Commission, our deregulatory body which is the formal voice of stakeholders in health and social care; but we equally have a number of mechanisms and regular engagements as well.

  Q155  Mr Davies: Mr Podger, how do you make sure that the Health and Safety Executive communicates with business and victims of your regulations?

  Mr Podger: I would not myself describe people in those terms, but leaving that point aside it is fair to say that we, like Giles, have quite a variety of devices. For example, we have a small business trade association forum which has got 51 members and it is chaired by one of our board members, Judith Donovan, herself a small business person. They do therefore get very much of an inside look into HSE and they are able to make their points strongly and forcefully.

  Q156  Mr Davies: How are the 51 members selected out of whatever it is- three or four million businesses?

  Mr Podger: Basically the chair of the forum, Judith Donovan, who as I say is a board member and not a member of HSE staff, actually has quietly gathered about herself as many people as she could from the sector.

  Q157  Mr Davies: She selected them.

  Mr Podger: She has invited—

  Q158  Mr Davies: You did not ask people like the Small Business Association or the CBI or something to—

  Mr Podger: No, we do indeed do that as well. Sorry, when I say she selected them—in a sense everybody who sought to join has joined; it is not that we have thrown people out of the blue—we have made a lot of effort with small businesses, who are the most difficult people to reach we find and I do not pretend otherwise. We have also made a lot of effort working with representatives from businesses in particular sectors: for example, we have on our website now 29 different sets of advice on how to do simple risk assessments for small businesses—hairdressers or whatever—which basically says, "It does not have to take a long time and it is pretty straightforward; and this is how you go about it". We try and use the Web a lot, and I find that small businesses do access the Web a lot to get basic information. Like other colleagues, we have major links with all the major organisations, and we form specific ones on specific issues.

  Mr Huddleston: At the highest level, the strategic level, the Better Regulation Stakeholder Group chaired by our Minister, pulls together representatives from the CBI, small businesses, TUC, Association of British Insurers, to give us a high level insight into the future direction of travel of Better Regulation.

  Q159  Mr Davies: How often does that body meet?

  Mr Huddleston: It meets with Ministers on a half-yearly basis and with officials between Minister's meetings. More generally, I guess, very intensive stakeholder engagement with businesses occurs on specific policies, for instance the development of personal accounts; there has been a massive programme of engagement with businesses, both large and small, to pin down the issues of design, and similarly we involve businesses in looking at statutory sick pay as a policy. It is a fairly well-embedded culture.

  Mr Gregg: Collectively, in terms of the Better Regulation agenda, publication of the Simplification Plan and the discussions that take place with businesses, and putting them together, is the main communication mechanism. At the strategic level we have periodic stakeholder workshops. We recently had one with energy producers where the focus was on the Better Regulation agenda. There are formal groups such as our ministerial challenge panel on regulation, which includes representatives from business. We have recently responded to representations from the National Farmers' Union and others in relation to land managers. We have an agricultural monitoring group relating to regulatory burdens there.

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