Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 255-259)


24 JUNE 2008

  Q255 Chairman: Can I welcome you here for the session of evidence, Minister; it is a pleasure to have you here; and Mr Kohli again, and of course for the first time Sir William Sargent—congratulations on your knighthood.

Sir William Sargent: Thank you.

  Q256  Chairman: As you know, we are coming towards the end of our evidence gathering session and it is appropriate that we should use this opportunity to probe the Minister directly on a number of issues that have cropped up during our inquiry. Can I first of all simply ask you, Minister, does the BRE have sufficient high-level backing and, if so, who provides it? What incentives and levers does it have at its disposal to encourage departments to regulate better?

  Baroness Vadera: The BRE was in this current form set up on the recommendation of the Hampton Review, which was instigated by the then Chancellor and now the Prime Minister, so I think it would be fair to say that it has backing at the highest level. It obviously has the Prime Minister's backing; it is very core to what we need to deliver for competitiveness and productivity, so it has the Chancellor, it has the Secretary of State for BERR and we have Cabinet discussions about regulation, so it has very high-level backing. I think it is also important to note that William, who is both the Chair of BRE but also a business person in his own right, has authority and has institutionalised authority as well as his own personal authority, which is around the fact that he can write to the Prime Minister, have access to the Prime Minister if he feels that there are problems and he can attend certain Cabinet Committee meetings, etcetera. I think that in the system as a whole, in my experience of the system as a whole people react and respond to procedures and institutionalised structures, so we have those as well around things like the impact assessment or certain policies around SMEs coming in, having to be thought about in a different way; or, as we hope we will go on to discuss at some point, our regulatory budgets. There are other processes in place like our clearance processes, so I think that the system tends to respond to these institutionalised structures which the BRE has the ability to influence, to use as a lever to influence outcomes.

  Q257  Chairman: Does the Panel for Regulatory Accountability have a role in supporting BRE to push through its initiatives at departmental level?

  Baroness Vadera: My experience of the PRA is that it has always been a very good sanction for people. There are a number of things that actually do not get through the system just because people know that it is hanging over them, the possibility that they would have to go through quite an accountability system; so it is not something that is very easy to publish or to give you a list of, but certainly from my experience of it I know that there are a lot of things that have been withdrawn or restructured, or impact assessments have been reconsidered because officials across Whitehall have known that they are going to have to come to the PRA and account to them if they did not do that.

  Chairman: We will come back to that relationship with the departments later.

  Q258  Dr Naysmith: Good morning, Minister. Does the government still believe that replacing the Better Regulation Committee with the Risk and Regulation Advisory Council was the right thing to do?

  Baroness Vadera: Yes, I think it does. The BRC has been great and we had taken forward basically the reviews and the work that it had recommended. The most recent thing that we have implemented from it is obviously around the regulatory budget—that was first discussed in 2005. One of the interesting things that came out of BRC was that there was a general view that actually the underlying structural problem was around the perception of risk in society as a whole and that if you did not get that quite right and people always had a knee-jerk reaction to risk then we would have problems around regulation, and how was it that we were going to change that sense of culture and acceptability. So actually it was the BRC's recommendation that there was something done around risk and there was a risk report that it did, which was in fact done by Rick Haythornthwaite who then obviously became the head of the new Council that replaced it.

  Q259  Dr Naysmith: So who now provides the high-level strategic thinking one stepped removed from actual administration? Who provides the strategic feed-in to your programme?

  Baroness Vadera: The people who have always provided it, which is the government because whatever you might say about it—and we very much valued the work of the BRC—it was in the early days of quite an ambitious programme and we worked very closely with the BRC, so it was not as if it all came out of just the BRC. But if you were to ask me who I actually thought drove the regulatory agenda in the last six or seven years I would say it was the government that drove it. Obviously in discussions with business, which we continue to have in very different fora, individually in departments and also collectively through the Business Council. Each department has a panel, and as the Minister for Regulatory Reform I meet with businesses to specifically talk about ideas around regulation, so we have that interaction already.

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