Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 160-180)


13 MAY 2008

  Q160  Mr Davies: Do you have a continued structured dialogue with the NFU about deregulation or the regulatory burden on farmers?

  Mr Gregg: We do indeed. In response to their suggestion that they would like to participate more in this agenda, we responded to their idea of setting up an agricultural monitoring group. One of the issues that has generated that is now being looked at is the issue of record-keeping on farms—a particular burden that we are aware of—so we are looking to work jointly with them on that. In addition, it is true to say that we endeavour to make sure that those that are generating policy and producing impact assessments actually get out there and see what life is like in the real world, so it is not just a case of talking to representative bodies but also of going out there and experiencing it for real. The forthcoming code on consultation will actually help to make sure that the formal processes of engaging with stakeholders and collecting their views becomes slicker and more efficient and more visible in terms of departments understanding and responding to ideas that are coming from business.

  Q161  Mr Davies: I would like to stay on the Defra issue, Mr Gregg, because that is the Department about which I get most complaints in my constituency in terms of regulatory burden. You said in your memorandum and you have already said this morning that you are on target to meet your 25% reduction, but then in paragraph 1 of your document you say that though you got rid last year of 800 statutory instruments you introduced 1050 more—in the 2007 period. So you reduced the number of statutory instruments by 800 and increased it by 1050, which is a net increase of 250. How does that reconcile with the idea of you reducing the regulatory burden?

  Mr Gregg: In terms of administrative burden, that is about the burden of filling in documentation and reporting—the administrative processes which to an extent are in some sectors a relatively minor proportion of that. In terms of the generation of statutory instruments, a number of those are revocations, as you have kindly identified; a number of them are technical amendments, so they might be updates of charging regimes; they might be implementation of the EU's annual agreement on total catches and quotas for the fishing industry. It is very difficult to look at a headline number of statutory instruments and make assumptions from that. The report we have placed in the Library of the House on SIs that have been promulgated since 2000 to date we have endeavoured to categorise and identify to help people such as yourself understand where these are coming from. They are not regulatory innovations; they are developments of existing regulatory frameworks.

  Q162  Mr Davies: Right, but you understand the cynicism created by a department that says it is reducing the regulatory burden, and on its own evidence they are increasing the number of statutory instruments on that basis! To what extent are you still suffering from gold-plating of European directives?

  Mr Gregg: The Davidson Review looked at gold-plating. I do not think that the Defra arena was one that came in for major spotlighting. Clearly, there were recommendations on the waste area, which I think we have responded to extremely positively. Gold-plating is something that is an understandable response from business. We do seek to ensure that at the domestic level and when implementing at the EU level, we are taking a balanced proportionate approach, particularly to those things that impact on business, and those are things like the touch points in terms of inspections, the monitoring activities and returning of data.

  Q163  Mr Davies: You are telling me it is balanced and proportionate and all these nice words, but you are not telling me you do not gold-plate. You do gold-plate—you are admitting that!

  Mr Gregg: We do not gold-plate; we comply with the requirements of—

  Q164  Mr Davies: You add additional burdens that are not required in the Directive, which other Member States, if they are implementing in a minimalist way, might not be legislating for at all.

  Mr Gregg: We will consult with business in formulation of our negotiating position relating to an EU directive. In regard to some of the legislation that emerges from Europe we have no discretion whatsoever on how it is implemented, and neither do other Member States. In some areas, yes: how we technically go about implementing that legislation is down to domestic legislation, and in that process of designing the detailed regime we will consult widely, and we are anxious to make sure that it is proportionate and it is not gold-plating.

  Q165  Mr Davies: Why can you not just give me an assurance that you will not gold-plate; that you will take these directives in which we have taken part in a formulation in Brussels in the decision-making process, and implement them minimally so that we do not create additional cost burdens and reduce the competitiveness of our own farms or our own businesses in relation to the rest of the Single Market?

  Mr Gregg: Gold-plating for me personally is a phrase that requires some definition.

  Q166  Mr Davies: Adding to; adding something other than the minimal required by the European directives: that is what I mean by gold-plating.

  Mr Gregg: There are some areas where the general public and business are looking for the UK to not only comply but go further than compliance. I am thinking of areas such as animal welfare, where EU legislation would say, "Here is the minimum", but the British public would expect the United Kingdom to go slightly further.

  Q167  Mr Davies: This is exactly the problem, Mr Gregg, and I am glad we have had this exchange because it is very revealing for anybody who wants to follow it. We obviously are committed in Defra to a continual policy of gold-plating. The argument about animal welfare is quite simply this: if we create greater compliance costs in this country because of higher animal welfare regulations, we will not improve the sum of animal happiness by one iota; it would simply mean that that type of activity moves somewhere else in the Single Market, where it can be legally carried on, where they have guaranteed access to the UK market, with a lesser compliance cost. All we would have done is shifted business to the rest of the Single Market, and we will not have improved animal welfare. However, this is a long and complicated subject, and I am glad that at least we have revealed that you are not committed to getting rid of gold-plating—at least I am sorry you are not going to do that, but I am glad you have revealed what the truth of the matter is. Sometimes the statements we get from Defra are a bit ambiguous. Can I put to you a final point on forms? If I may, and my colleagues will indulge me, it would be quite useful if I were able to quote this document Cutting Red Tape, the Defra Simplification Plan, because it is very revealing. "The 2005 Hampton Review found that overlaps in regulators' activity resulted in too many forms and too many duplicate information requests." Gosh, right, it recognises the problem. "It recommended that the Department should substantially reduce the need for form-filling." So I read on, hoping to hear that you had reduced the need for form-filling—no, no, no! You say: "Following research commissioned by Defra"—so you have responded to one report by commissioning another—"and an internal scoping review carried out in Spring 2007"—so you carried out an internal scoping review as well—"on the extent of form-filling requirements across the Defra network, the Department"—this is priceless, Mr Gregg, is it not? "The Department is looking at introducing a new strategic approach to minimising the form-filling burden that it imposes on business." So you had a review in 2005 which said there was a problem, that you were imposing too many regulations—that was three years ago. All you have done since is spend a lot of money on new reviews and new reports, and all you are doing as a result is "looking at introducing"—not planning on introducing, let alone "have introduced"! Is that not a pretty pathetic response to what has now been generally recognised as a serious problem?

  Mr Gregg: I am glad that you have got a full copy of the report, and I would point you towards the areas where we highlight improvements which have led to administrative burden reductions, and are not only being on track to meet the 25% admin burden reduction target, but we have exceeded 29%, much of which flows from administrative processes such as form-filling. The environmental permitting side has reduced both the length and complexity and data requirements involved in that particular area. The single payments system—an awful lot of effort has gone in by the Rural Payments Agency to streamline that process and reduce the level of form-filling. I sit on a committee representing Better Regulation that looks at the statistical requirements that the Department requires in order to have evidence-based policy-making. There has individually, as part of the Simplification Plan been a major step towards reducing the number of forms and the content of those forms in terms of data requirement and removing duplication. We have reviewed the way we have forms. We know that we have a lot and there are some that are no longer used. There is now a strategy in place which will ensure that the efforts that have taken place within the context of the Simplification Plan fit within an ongoing strategy that will take us beyond 2010.

  Q168  Mr Davies: That is just a lot of generalised aspiration, I think. Let me ask you a very precise question: you say in this document that the Department is looking at introducing a new strategic approach, which I said is a very inadequate response after three years of thinking about it: when are you going to decide whether you are introducing a strategic approach and what that strategic approach will be?

  Mr Gregg: I am glad you highlighted the "new" strategic approach, because we did have an ongoing strategic approach as part of our Better Regulation agenda. The new strategy is being discussed now. Provided we can identify the—

  Q169  Mr Davies: When are you going to take action, Mr Gregg? This problem was identified in the Hampton Review in 2005 and you have been simply going round in circles ever since. When are you actually going to take action?

  Mr Gregg: With respect, I bring you back to the fact that we have taken action. We have delivered substantial savings on business, reported in that report you have in front of you. We are—

  Q170  Mr Davies: In what timescale will you be able to send this Committee a copy of your new strategic approach?

  Mr Gregg: I will, with pleasure, supply through the Clerk to the Committee an update on where our review is at, and we will take care to make sure that we signal in that when we hope to complete and publish our strategy. But we would like to take time to work with stakeholders to make sure that that strategy meets business needs.

  Mr Davies: We look forward to that. Thank you very much.

  Q171  Gordon Banks: I should say first that none of my questions are directed at DWP but I am engaged in SPPS work, and I think I should make that clear. We are told from information provided to us that 54% of HSE forms that have been scrapped have saved something like £250,000, but in the next year nine forms will save £20 million, and Defra are claiming £44.6 million through different retailer record-keeping requirements. I suppose the first question I would like to ask is to the HSE. Why not do the £20 million first because of the significant impact, if it is nine with a £20 million saving; but also I have got issues on the absolute accuracy of the savings and how it is determined that nine equals £20 million; 54% equals £250,000. They are very precise figures and there does not seem to be a margin of error in there or any scoping band.

  Mr Podger: That is down to me! Fair enough! First, I will just explain that although the 54% of forms seems a large number, which it is, actually it is in relatively small sectors which affect only a small population of businesses; so the consequence is the impact of the further nine further forms which relate to for example to registering a factory, which affect a much higher population of businesses. That is the reason for this apparent disparity. The answer probably is that if you are moving in a small sector it is much easier to make progress quickly than in a large one, for the reasons we have been discussing before, because you have to do a wider consultation before you can make progress. Equally—and I would not see this as a criticism of us—it is very sensible to take the low-hanging fruit first. As you can see from what we are doing, we are engaged in further form reduction, which will mean a major increase. We have done a major decrease in our forms before the present exercise of admin burdens came along at all, so it is important to see this as part of the process. The costs are indeed estimates, and they are very rounded figures, as you can see. They reflect the best estimates we could get through the Administrative Burden measurement exercise.

  Q172  Gordon Banks: Do you think it is better to see £20 million then between 18 and 25 or whatever the numbers might be—that it is better to arrive at a firm number?

  Mr Podger: As you will know well, and as the Committee will know well, the whole issue has been extensively gone through in this whole exercise because inherently the numbers are estimates. I know the PAC had a hearing on this at which this was made very clear by the people who gave the figures. I have no problem in saying the figures are estimates; they are inherently so. That has always been presented, how this particular exercise was done.

  Q173  Gordon Banks: Would it be better saying £20 million is a fixed number than saying between two scopes?

  Mr Podger: My suspicion, to be honest with you—and I am not a statistician—is that it would be quite difficult to provide a margin of estimates given how the figures were originally derived. The process, which again is known to you, was largely by approaching businesses themselves for estimates. Therefore, it is more difficult, as you rightly say to me—you can normally say it is between 18 and 22; but to be frank with you I think this particular exercise is costed in a way that does not lend itself to that approach.

  Q174  Gordon Banks: Mr Gregg, in relation to Defra claims of £44.6 million through lifting retailer record-keeping requirements in relation to TSE, how credible is that figure?

  Mr Gregg: I would echo Geoffrey's comments. It is credible. It uses a standard approach that is capable of being audited. Its accuracy and the impact on individual businesses is more fluid, but your point about giving a range—we are looking at a collective across-stakeholder summary of "these are the savings". If you are running a business, you are interested in your component of that. I think the saving is realistic. It was significant and it reflected an improvement in an overall strategy on dealing with that particular issue.

  Q175  Gordon Banks: Mr Wilmore, in regard to the 30% drop in information requests that the Department of Health are enjoying, how can we be sure that that drop in requests does not negatively affect the quality and reliability of the information and the statistics that are gathered?

  Mr Wilmore: That is a very important point, and there are two ways we can do that. The Department is undertaking a review of informatics at the moment and is expecting to publish the results at around the same time as Lord Darzi publishes his review in the summer; and that is really looking at the effectiveness of information flowing through the system and trying to strengthen the role of the information centres in health and social care, which has an important function in quality, assuring the data at the source of collection; so the recording of data for example in hospital trusts and the accuracy of the records, which is an important point in terms of administrative data, is an exercise that would have to go on regardless of the number of data collection, so it is a slightly different dimension in terms of the collections we are looking to pull or streamline are those that we set up some time in the past for the purpose or where there is not a clear need for the data at the moment, or subsequent data collections have gathered something very similar. So it is not about reducing the quality of data; it is about reducing the number of collections or collections that duplicate each other.

  Q176  Gordon Banks: Mr Podger, relating to the earlier evidence about sharing of best practice or not, as the case may be, do you think people are working in silos, that the regulators are working in silos; that they have their own individual client problems to deal with; or do you think there really is this generic overlap that we would all aspire to? Is best practice being shared effectively from your point of view? If it is not a perfect world in that area, what improvements could be made? Should you have a role in disseminating best practice?

  Mr Podger: I think personally that historically regulators have tended to work in silos, and I speak as somebody who was a regulator for a previous organisation, for the Food Standards Agency, in an earlier life. One of the things that BRE can take considerable credit for is what they have done to, frankly, move us all away from this particular way of working. You will be aware that BRE have published a series of Hampton compliance reports, where they looked at the five major regulators to see whether they were Hampton compliant. One of the things I thought they imaginatively did was not only to conduct these reviews with NAO colleagues, but they invited people from other regulators; so in a sense each regulator started doing a peer review of another regulator. This is extremely valuable because it is all too easy to believe that one's own sector is unique and peculiar, and nobody else can understand it; and actually I think it was a very valuable exercise. I think the NAO and BRE are about to publish individual reports or overall lessons. The other thing that is true is that precisely because of the pressure from the BRE over Better Regulation, the regulators themselves now meet regularly together with BRE so they do not just meet bilaterally, they meet together, which exposes a whole series of issues. I do not think it is any secret, but we also meet together to prepare ourselves for the next challenge. All of this seems to me to be a considerable step forward. That is not to say that I should tomorrow go and run the Financial Services Authority because I think that would be extremely unwise for a variety of reasons! However, it is to say that actually—that was not in any way a candidature notice!—there are things which are common to regulators, and we gain from that kind of exchange.

  Q177  Gordon Banks: How long has this coming out of silos been in operation?

  Mr Podger: I would say probably in the last two years. I joined HSE two and a half years ago, and I would say it is within the last two years.

  Q178  Gordon Banks: Is there some way you measure the effect of coming out of your silos?

  Mr Podger: That is a very good question, and I think the answer is what alterations we all decide to make as a result of seeing what other people are doing. It seems to me that that is the most effective measure. It is a process that has only just got started in the last two years, and it is one we need to build on. It is important to encourage exchanges between regulators.

  Q179  Mr Davies: What you say is very convincing about the benefits of exchanges with other regulators or peer reviews, but I wonder to what extent you have contact with other regulators in other countries, for example in the United States or other countries where there may equally be lessons to be learned on both sides.

  Mr Podger: We do. We are a party to something which has the horrid acronym of SLIC within the European Community, which looks at various labour organisations, because on the whole in Continental Europe they have labour organisations as opposed to health and safety ones. Indeed, that is an area that is very beneficial to us in learning how other people go about it. Frankly, we can see whether people can find better ways of doing things, what risks they identify and new ways of working—and also, to be frank, practices that we would not want to follow—for example, manic inspection and enforcement, which you can find.

  Q180  Mr Davies: How often do you meet with SLIC?

  Mr Podger: SLIC meets, if I remember correctly, around four times a year. It is very much about going out on inspections; it is not just sitting in a room like this; people go out and see what is going on. That is very helpful and we ourselves have some other bilateral contacts with other regulators in similar fields to ourselves.

  Chairman: Gentlemen, that has been an enlightening morning. Thank you very much for your contributions. If there is any other information you would like to place before the Committee, please feel free to write to us and to clarify any of the points, or add, in the way Mr Gregg offered to, to Mr Davies. That would be extremely helpful. Thank you very much for your frank responses.

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