Examination of Witnesses (Questions 224-239)
20 MAY 2008
Q224 Chairman: Could I first of all welcome
you both. You have been sitting there listening to our earlier
exchange and we are going to follow some similar threads. Perhaps
I could like to start off by asking you what your experience is
of working with the BRE. What value does it add that would not
be there under the general better regulation agenda? Does it talk
and consult with regulators sufficiently? Is it organised in a
way that is helpful to regulators? Does it have the right people?
Ms Young: We have a robust relationship
with the BRE. We quite enjoy working with them, though we think
one of the main things that needs to happen is perhaps a period
now of bedding down, because we have had quite a lot of activity
and initiatives and the important thing now is to get those to
happen practically out on the ground in the regulated community.
We really need the BRE to help unlock some of the processes that
we cannot unlock as individual regulators or, indeed, as groups
of regulators working together; for example, getting better European
legislation. We do work across the Environment Protection Agencies
in Europe to try to influence European legislation, but we do
need the BRE to be more active in Europe to try to get some of
the very good philosophies of modern regulation that have been
developed over time. The Environment Agency, for example, has
been working for about ten years on better regulation, to try
to get some of those philosophies that I think are probably well
developed in some of the Northern European countries and in the
UK into Europe as a whole at legislative level. Our experience
certainly is that you cannot make silk purses out of sows' ears,
and if what comes from Europe is a sow's ear, we can embroider
it but it will still be an embroidered sow's ear when we come
to implement it. We need the good raw material. The other thing
we need from the Better Regulation Executive is a bit more co-ordination
on data sharing. Individual regulators can get together with data
sharing but I think there are some data sharing issues on a national
scale that the BRE needs to harness the whole of the regulatory
community around. That would be another area we would want them
to focus on for the future. A third one relates to the value of
regulation. Our concernand it was voiced in the earlier
sessionis that there has been too much emphasis on deregulation
rather than on better regulation, and on reducing administrative
costs and the burdens on industry rather than getting the right
balance between the hugely valuable social outcomes and public
outcomes that regulation is there to deliver, in environment,
health and safety or whatever. Now we need a joined-up communications
process between the regulators and the BRE to get over the message
that there has been major progress in improving regulation and
making it more streamlined and risk-based, though there is more
to do, but, also, that regulation is good for business. It reduces
costs, it reduces risks, it opens up new markets, it creates a
level playing field, and, therefore, the sense of disappointment
that the business community has in the better regulation process
so far is not borne out by the facts. We get good feedback from
the people we regulate on how they value the regulatory processes
that we are developing. We need to get a communications process
jointly between the regulators and the BRE that sells the benefits
of regulation and sells the real progress that has been made.
Q225 Chairman: You mention the technical
issues about dealing with EU regulation. In your particular field
does the BRE have the right people to assist in that?
Ms Young: I think they probably
do need a few folk who are more adept at understanding the big
picture of European regulation and wandering around the corridors
of power in the Commission, and, also, harnessing the regulatory
partnerships that already exist across Europe amongst individual
regulatory functions. We have very strong links in the environment
field and I know that the health and safety folk and some of the
consumer interest folk as well have strong links. Getting these
partnerships going to make sure, when there is a twinkle in a
Eurocrat's eye, that it is captured very quickly in a modern regulation
flavour and inserted very quickly right at the very start of the
process of developing European legislation.
Q226 Dr Naysmith: Good morning. We
met at the Health Select Committee a couple of weeks ago. I hope
you were satisfied with the outcome of that meeting.
Ms Young: Thank you very much
for your recommendation. I am very pleased about it.
Judy Mallaber: Is this a love-in?
Q227 Dr Naysmith: We exercised a
new function: scrutinising an appointment. Anyway, to today's
business: Do you think the BRE has a coherent strategy? Does it
properly think through the consequences of what it does and does
it have a proper plan for that?
Ms Young: I think it has been
very heavily driven by a need for business to be confident that
there is real action and outcome happening from the better regulation
process, that burdens are being reduced, that regulation is becoming
more risk based and streamlined. In a way, that has perhaps had
too much focus, to the detriment of also stating a clear case
for the right balance between deregulatory approaches and delivering
the goods from regulation. If you look at environmental improvement
over the last 15 years, it has been almost entirely driven by
regulatory processes and it has been hugely successful. What we
need to do and what the BRE strategy needs to do is to get these
public good outcomes and a better regulation process running alongside
each other, so that there is a clear value for both.
Q228 Dr Naysmith: Could you give
us an example from your area of work where maybe you have the
balance a little bit wrong?
Ms Young: I think a symptom of
it was the communication that went out around the Regulators'
Compliance Code. We had hoped we were going to have a joint communication
process on that which would stress the benefits of regulation
as well as the fact that the Compliance Code was going to keep
its heel on the throat of these damned out-of-control regulators.
I think the flavour that went out in the communication was: "Here,
business, is a mechanism for you to get your heel on the throat
of these damned out-of-control regulators" without stressing
the benefits that had already been delivered. The Compliance Code,
to some extent, was simply a codification of the work that was
already happening and things that regulators were already delivering.
We were a bit disappointed in that but there may well be other
mechanisms, regulatory mechanisms, but I am sure we could ponder
on those and put in additional evidence.
Q229 Dr Naysmith: If you have any,
that would be helpful. It is clearly very important to the environment
that regulation is good and that it is enforced.
Mr Mitchell: Perhaps I could add
that I think the BRE have not recognised that many businesses
welcome inspection. There is some research done by the National
Audit Office amongst the community that we regulate that says
that they welcome us inspecting them because it gives them the
reassurance that they are heading the right way if they do not
have necessarily the resources themselves and all the rest of
it. That did not come across at all in BRE's communications or
Q230 Dr Naysmith: That is interesting
because it leads on to my next question, which is what the role
of the BRE should be. We have had various suggestions from customers
and stakeholders. Should it be a policeman, a think tank, a deliverer,
a teacher or a co-ordinator? What do you think?
Ms Young: We certainly do not
think it should be a policeman. I think there is a role for gathering
together ideas in a sort of think-tank way. There is also a role
in facilitation across government and regulators of thinking about
regulatory approaches and helping us share good practice. There
is a strong role in selling the benefits of both better regulation
and regulation per se and, also, as we said, in influencing what
comes from Europe. All of those things are very valuable roles
that the BRE could carry out, but they need to carry them out
jointly with business and with the regulators.
Mr Mitchell: I would say their
key role is to be a champion for better regulation not less regulation,
and getting that balance right between better and more effective
delivery of outcomes versus just cutting the burden would be key
for them, I think.
Q231 Dr Naysmith: Surely that is
the role of being a policeman. We are building up quite a body
now of regulators. Should the BRE scrutinise regulators?
Ms Young: We have always had this
big hang-up about who regulates the regulators because if you
are not careful you end up asking who regulates the regulator
of regulators. It seems to me that if governments have the confidence
to set up properly constituted, well staffed, well governed regulatory
bodies, they ought to be fairly confident that that is the control
factor, that that is the reassurance that the regulatory process
will be good. Our board, for example, is very clear that it is
not prepared to have the BRE seen as an alternative accountability
mechanism. The accountability to Parliament and to ministers has
to be through the board that has been set up by a statutory mechanism
to take that responsibility, to reflect the public interest, to
reflect the interests of business, and to drive the regulator
in the right direction. We think there is a role for the BRE in
much more of a facilitation and championing role rather than that
of a policeman or regulator of regulators. In fact we will resist
the regulator of regulators role.
Q232 Dr Naysmith: We are very clear
now of what your views are on that. You heard a little of the
discussion we had with the previous people giving evidence about
the move from the Cabinet Office to BERR and whether it was a
good one or not. Do you have a view on that? They were tending
to say that it had lost a bit of status, I think, more than anything
else. What is your view?
Ms Young: We felt it was a bit
like giving childcare into the charge of Herod. There were two
very unfortunate signals given at the time of the transfer. One
was that the department responsible for business and enterprise
was in charge of a better regulation process aimed not just at
reducing the burden on business but on delivering proper outcomes.
The other was that for about three days at the beginning of all
that one of the ministers was called the minister for "deregulation"
until we kicked up a fuss and it was corrected to "better
regulation"which doesn't half give a bit of a clue.
I think that signal was unfortunate. Whether they have lost power,
I am not sure. While they were in the Cabinet Office, they could
be marginalised. I do not think being in the Cabinet Office necessarily
gave them additional leverage. BERR ministers are quite tough
and powerful. They have good ministers who have a voice, providing
they recognise that it has to deliver outcomes for the public
as well as reductions in burden for business. That is always going
to be a bit of an issue for a BERR minister because they have
very clear objectives in terms of business.
Q233 Judy Mallaber: Getting back
to the Herod question, whether the BRE puts too much emphasis
on deregulation and satisfying the business sector, do you have
anything to add on the specific ways in which you think the BRE
could move to redress the balance in ways that you have been describing
could be better.
Ms Young: There are a couple of
things. We get a very strong message from business that they want
streamlined and simplified regulation; not just a reduction in
administrative burdens but much more consolidation of a variety
of regulations on to a single model. That is part of the work
we have been doing with Defra and there is more to do on that,
getting a bit of support from the BRE to look at what common regulatory
models might be and also influencing Europe's approach to that.
We have additional evidence we could provide for the Committee
on work we have been doing with the European Environment Protection
Agencies on the barriers to good regulation in Europe and in the
UK and on a vision for modern regulation for the future, as to
what the prime objective ought to be that we are all approaching
in terms of our model for good regulation for the future across
the piece. It would be extremely useful for the BRE to help and
support that work. Also, this common communications process would
be extremely useful and would to some extent counteract the location
issue in BERR because it would mean that the BRE and, indeed,
BERR ministers would have to think a bit about what are the public
benefits that modern regulation is promoting. I think that would
Q234 Judy Mallaber: Are there any
other ways they could move towards making it look like it was
not just about business but about all the other areas you have
talked about: the environment, the public, consumer protection,
et cetera. Are there any other ways they could promote that? How
far should that balance go? You say they are not in contradiction
with each other.
Ms Young: No. Not playing to the
gallery would help. There is a bit of a feel that the messages
are all about business appeasement. Having messages that are also
about the benefits of regulation to business and the benefits
of regulation to the public. We have done a lot of work, again
with our environment protection groups across Europe, on the benefits
of regulation to business. Again, we can provide additional evidence
of that. I think getting those sorts of messages out, so that
everybody is clear that we are involved in a twin-track approach
of getting the outcomes and making that the most streamlined and
joined-up and risk-based regulatory approach we can possibly deliver.
Q235 Judy Mallaber: How far do you
feel constrained? Do you always have to say how it is good for
business, rather than being able to go full hell for leather and
say that they are about everyone else and not just business? Do
you always feel constrained to put that caveat on at the end?
Ms Young: I think it helps sell
the message but it is also true. That is the work we did with
the EU Environment Protection Agencies, to get the evidence globally
for good environmental regulation being good for business. I think
business is going to listen better if you have a good evidence-based
approach rather than just saying to them, "Stuff it, boys.
This is good for the public." There will be occasions when,
quite frankly, there is such a major public issue that we really
have to take quite a tough approach and business may not like
it. Then again, that is where the BRE needs to understand what
the outcome requirements are, because, otherwise, we get loose
talk about gold-plating but when you pick under the surface of
the gold-plating claim it is not always the case. Most of the
work that has been done so far in trying to find examples of gold-plating
have come up with remarkably little.
Mr Mitchell: I get the sense that
the BRE accepts the word of the business community without much
analysis; whereas if we say something about the balance between
outcomes and burden then a huge pile of analysis is thrown at
us and we have to defend our position very hard. I think they
could rebalance simply by being seen to critically evaluate the
evidence they get from both sides of the debate rather than predominantly
Q236 John Hemming: There seem to
be different views on whether regulators each have their own unique
client problems to deal with or whether there is a large degree
of generic overlap between these problems. Do you think the major
regulators already share best practice effectively? What improvements
could be made? Should the BRE have a role in disseminating best
practice or should that be left to the regulators to organise?
Ms Young: We have got much better
at sharing best practice, but we are a long way from being good
at itso I think that is a fair cop, quite frankly. It is
something that the BRE has helped with. To some extent, the regulators
now talk to each other more than they ever did, if only to gang
up against the BRE. Certainly there is a strong role for the BRE
in sharing good practice that needs to be developed. We all have
distinctive flavours but there are a lot of common regulatory
processes out there, and it is not just UK good practice it is
international good practice. The BRE did some really good work
on the administrative burden stuff, bringing together the folks
from Holland, Denmark, and other parts of Europe to just tell
us how they had done it. The scales fell from my eyes at that
point on some of the things that were clearly of benefit to business
that we had not quite clocked how important they were. I think
there is a real role for the BRE in helping us all get together
more and bringing in examples of good practice.
Q237 John Hemming: That sort of teacher
role, in other words.
Ms Young: A sharer and a facilitator.
We like to think we stand shoulder-to-shoulder with them rather
than them teaching.
Q238 John Hemming: You do not have
any meetings at which regulators talk.
Ms Young: There is a whole range
of meetings. At Ed's level there is a thing called RHINGand
I have never understood what RHING stands for. The heads of regulators
get together. There is also a meeting that the BRE sponsors with
the board level champions of regulators. Our organisations, particularly
those where we have common clients, get together to talk about
how we would regulate better together. For example, we have very
close relationships with the Health and Safety Executive on a
number of regulatory regimes. In the future we will have some
relationships with the LBRO. We currently have some relationships
with local authorities and other regulatory bodies but it is very
particular to particular regulatory regimes.
Mr Mitchell: We have made suggestions
where we specifically think the BRE could help us work closer
together. On occasion they have stepped back from that, so I think
there is more we ought to be doing between the regulators but
there is definitely more the BRE could be helping us to do as
Q239 Phil Wilson: Do you think the
BRE has the resources to engage in influencing EU legislation?
Do you think it is up to the job? Does it have the resources to
Ms Young: I think they need to
be pretty selective about what they do. Clearly there is a huge
amount of legislation coming out of Europe and most of it is very
particular to individual regulators. Where they can really play
a role is in influencing the better regulation initiative across
Europe. There is a clear programme. We think DG Enterprise has
got the message better than some of the other Commission directorates.
We have been doing some work with DG Enterprise to help sell this
vision of better modern regulation that we are peddling around
Europe at the moment. It is about getting some of the generic
principles of regulation in Europe sorted. The big problem in
getting better regulation in Europe is not just selling the principles
and the model at a Commission-wide basis but how the parliament
operates. The parliament comes in at a late stage and inserts
quite a lot of checks and balances in the regulation and that
often is the complicating factor. We just have to recognise that
that is the political process. It is a difficult one to overcome,
quite frankly, but certainly I find it difficult to judge whether
the BRE has the right people there at the moment or not, to be
honest. I do not think we could judge that.