Examination of Witnesses (Questions 160-180)
MR RICHARD
GREGG, MR
TREVOR HUDDLESTON,
MR GEOFFREY
PODGER AND
MR GILES
WILMORE
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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