Examination of Witnesses (Questions 300-319)
BARONESS VADERA,
SIR WILLIAM
SARGENT AND
MR JITINDER
KOHLI
24 JUNE 2008
Q300 Mr Davies: It has been contested
and I will give you some references if you like.
Baroness Vadera: The idea was
to ensure that there was sufficient focus and clarity on the issues
around regulatory reform. It therefore became a part of a new
department which has regulatory reform in its name. There is now
a Secretary of State for Regulatory Reform; there is a junior
minister—me, in this instance—focusing on regulatory
reform. It is a key part of the agenda for competitiveness of
the British economy, both the public and private sectors both
of which have efficiencies we need to extract and get our competitiveness
up, and it was therefore a part of the department that is structured
around competitiveness. It was important for it to be close to
and to be able to use and leverage off the relationships of one
major stakeholder, which is business, and we believed that it
would therefore create this clarity and focus in highlighting
what it needs to do by giving it something that is its own department
in this. It is business enterprise and regulatory reform.
Q301 Mr Davies: I do not know that
I personally find it immensely convincing because what has actually
happened is that you have taken the BRE away from the heart of
government, the centre, the Cabinet Office, which has a droit
de regard as it were across the whole government machine that
is objective as to any individual department and put it within
the silo structure in one of the silos in government. There have
been two lines of criticism about this. One is that it has involved
you in being captured by the business and enterprise aspects of
the BERR and so you become excessively concerned with business
burdens and with relieving business, which is a very noble cause
to which we are all devoted, but that you have tended to neglect,
therefore, other aspects of the de-regulatory agenda, particularly
those affecting the general public and the environment, that kind
of thing. The second line of criticism I have seen is that it
has made you less effective in the EU because it is the Cabinet
Office that essentially drives the agenda in terms of what we
are saying in The Council of Ministers on what our priorities
are in the EU; and that you have not, therefore, been able to
play as strong a part as you might have done in the parallel exercise
that the Barroso Commission have undertaken to try to deregulate
or better regulate at the EU level. How do you respond to those
two quite separate criticisms, but both of which emerge from or
are directed at, this change of structure?
Baroness Vadera: I already gave
an answer in part to the first element is why we are perceived
to be captured by business. I do not believe that we are captured
by business; it is a process of making decisions in government
that we come to a decision collectively. I have worked with the
BRE from before I became a minister and joined BERR and I am perfectly
well aware of how it functioned and what it did while it was in
the Cabinet Office and obviously what it does now. I do not believe
that it is captured by business, or has been in any of these two
institutions, and I do not perceive that there has been any change
in that at all. I do not think that is the case because of the
way in which we make decisions which is that actually we do have
to balance it. It is better regulation, it is not de-regulation,
it is not just being captured, but it is also meant to be analytical
and if people are not rigorous and analytical they will certainly
find that I will be on their case. I just want to come on to the
point about the EU. I really very strongly refute that. I think
that the BRE has been incredibly successful at the EU level and
I would like to give you one example. It was successful in getting
the EU to undertake the Admin Burdens exercise for itself for
EU legislation. But, more recently, since it has moved we have
been successful in persuading the Commission and the Member States
in the Small Business Act of putting better regulation as a central
piece. So in the Small Business Act when there was a lot of discussion
around whether it should be around a whole bunch of other things,
which included all sorts of subsidies of finance and everything
else, what we have managed to do is put as the central
centrepiece of the Small Business Act that there is going to be
better regulation around Common Commencement Dates, around specific
issues of "think small first", which are based on the
UK model. So basically what the BRE has already developed has
now influenced what the EU is going to do for the Small Business
Act; so this accusation is actually not borne out by any reality.
Q302 Mr Davies: So are you aware
that Defra has given us evidence that they think that your move
from the Cabinet Office to the Business Enterprise and Regulatory
Reform Department has diminished your influence in Brussels?
Baroness Vadera: I would not accept
that for a single second and if Defra have—
Q303 Mr Davies: You would not accept
it but are you aware of it?
Baroness Vadera: I was aware that
you have had some interesting discussions with Defra during the
hearings, about which I have read because I read some of the transcripts
and some of the material that was provided to me. But I would
also say, as I said before we are not always popular with departments
and it is not our job to be popular with departments.
Q304 Mr Davies: No, it is certainly
not your job necessarily to be popular. As a good minister I am
sure you are alive to sentiment in your own department. Would
you say that it is a general consensus among the officials who
work for you and up to you that the move from the Cabinet Office
to the Business Enterprise and Regulatory Reform Department was
a good and sensible one?
Baroness Vadera: My sense of it,
quite honestly, is that people were a little bit destabilised
at the start but they settled down very well, and my sense of
the mood—which I think Jitinder and William would be better
able to speak to because they represent the people you might be
worried about—is that it is very upbeat now because they
have seen that we are having an impact.
Q305 Mr Davies: And your assessment
is that this move has increased your leverage on the government
machine, your ability to influence departments in the right direction
so far as regulatory reform is concerned; is that right?
Baroness Vadera: I believe that
it has given us a higher profile; I believe that having a Secretary
of State has allowed us to focus on this issue at the Cabinet
level. I believe that I have been able to use the Secretary of
State and other leaders—
Q306 Mr Davies: Would you give me
a direct answer, please, to my question? Do you believe on balance
that it has increased your leverage on government?
Baroness Vadera: Yes.
Q307 Mr Davies: Do you agree with
that, Mr Kohli?
Mr Kohli: Yes, I do. I do not
believe that we would have made regulatory budgets happen in a
document other than the Enterprise Strategy. It is looking into
a crystal ball and trying to guess, but that would have been significantly
harder from within the Cabinet Office than it has been here. But
as Shriti said, it has of course been destabilising. Going from
one building to another building, all learning brand new systems—
Q308 Mr Davies: Mr Kohli, we all
know about that; the question is whether people think it is a
worthwhile exercise, whether the result is worth the effort and
the short-term disruption, and you are telling me that you think
they do think it was a good idea and worth, therefore, the disruptive
costs. You agree with that too, Sir William?
Sir William Sargent: Absolutely,
yes.
Q309 Mr Davies: Let me move on to
something else that does relate to the EU, and it is the issue
of gold plating. Have you in the BRE at any stage done a quantified
study of the legislative initiatives that have taken place in
this country—largely they would have been statutory instruments—in
response to our obligation to implement EU directives, which have
been implemented minimally—in other words what has been
transposed in domestic legislation has been the minimum required
to implement the Directive concerned—and those which have
been implemented with additions, with some incremental material
added at the initiative of the British bureaucracy. Have I asked
the question in a rigorous and clear fashion?
Baroness Vadera: Yes.
Q310 Mr Davies: If so, can you give
me an answer to it?
Baroness Vadera: We have not done
a quantitative study, we have done the Davidson Review, which
looked at the practice of what had happened and attempted to drill
down into various areas to give us a view. So it was not a comprehensive,
quantitative study because nobody has done a comprehensive quantitative
study of legislation at all.
Q311 Mr Davies: Why not? You are
in a position to do it.
Baroness Vadera: It would be impossible
to do because we would be doing it for a long time. The Administrative
Burdens target study took us a year or 18 months to do. But when
we looked at the methodology of how best to do this we came up
with what was eventually done by the Davidson Review. The Davidson
Review found that obviously there were instances of gold plating—there
clearly are. There are some departments I see from the transcript
that you found had a greater prevalence of doing that than others;
but, nevertheless, it was not as widespread as you might think—the
IoD I understand told you that it was not as widespread as you
might think—but there clearly are instances where it is
done. We have therefore done two things, one of which is to give
clear guidelines of what ought to be done and how things ought
to be transcribed. The second is to ensure more rigorously that
we do impact assessments for the elements that are additional
and extra and that they are justified.
Q312 Mr Davies: Those two points
are important and I want to come on to them. But it is also important
for us to have a picture of what the current position is, and
we are talking now in terms of mere vagaries. You say, "It
is not as extensive as you think." You do not know half of
what I think; I actually do not know how extensive it is, I do
not have a clear picture myself. Even you as a minister do not
have a clear picture. We are talking about more extensive or less
extensive than someone might say or someone might think and this
seems to be a very unsatisfactory situation where we do not actually
know the extent of the problem, either in absolute terms ie how
many of these directives have been implemented a non-minimalist
fashion; and we do not have any picture in inqualitative terms
of what is the actual burden of the additional regulation which
we have taken on board and imposed on our citizens of this country
which will not necessarily have been imposed on other Members
of the Single Market in the course of the same Single Market Programme.
Those are two very serious questions and you are telling me that
after all the years of the BRE's existence you are still no way
to helping us to reach an answer to them; is that right?
Baroness Vadera: No, I am not
saying that. What I am saying is I think that it would be disproportionate
to try and find a single number that gave you the answer, "Yes,
the answer is 12" or 42 or whatever it might be.
Q313 Mr Davies: Do you have an idea
in terms of order of magnitude? Is it 100% addition—
Baroness Vadera: If I may finish
answering your first question, you said that you were concerned
about the quantitative and I have given you the answer to the
quantitative; and you were concerned about the qualitative, and
I do not accept the few that we do not have a qualitative sense.
We do have a qualitative sense, it is set out in the Davidson
Review and I would be very happy to show it to you, and give you
a sense of that, which gives you a good qualitative sense of what
is actually happening. There are certain departments—you
have grilled one of them, I was delighted that you grilled one
of them specifically on the issue of gold plating. But in the
main we are finding that there is not a problem and there is nothing
wrong with having individual regulations if they are found to
be proportionately correct, that we ought to be doing them, and
if they have been through an impact assessment. So the process
that we have in place to ensure that things do not happen when
they are not justified are the impact assessments. It cannot be
the case that everything is not justified if it is gold plating—it
is simply not justified under any circumstances.
Q314 Mr Davies: I gather there are
some Members of the Union that take the line—the Italians
take the line—that they should just implement these directives
in a minimalist fashion. It seems to be to be a rather attractive
model.
Baroness Vadera: That is like
saying you should never have any regulation; we cannot decide
anything—
Q315 Mr Davies: No, no, that we should
never take advantage of the European directive to add domestically
conceived additions to it. If there is a case for a domestically
conceived regulation in that area it should be justified independently
of the directive and from the EU.
Baroness Vadera: It is justified.
I am sorry, it is justified independently. It says very clearly
in the impact assessment, "Is this an implementation that
goes beyond the minimum?" So separately taken out as a line.
Would you rather that we set up a completely separate piece of
legislation for domestic regulation as opposed to EU regulation?
That does not really go with the principles of better regulation
and Common Commencement Dates.
Q316 Mr Davies: One last question.
You said you had a qualitative and not a quantitative view of
the extent of the problem.
Baroness Vadera: Yes.
Q317 Mr Davies: Can you give me an
answer quantitatively in terms of orders of magnitude? Do you
think that the element of gold plating, as I say, if it is 100%,
let us say half of the regulations in these areas are in fact
of domestic conception rather than minimal enforcement of the
directive? Is it 10%, is it 50%? Do you have something in terms
of orders of magnitude that you can tell us about your private
perception, your intuitive perception based on your experience?
Baroness Vadera: My perception
would be that it is significantly lower than 50%, which is the
first number that you threw at me; and I would say that it would
be above the 10%. I would say again that the most important thing
is that each element of a legislation has to be justified through
the impact assessment, regardless of its origin—the origin
is not as relevant as the fact that it is proportionate and justified.
Q318 Mr Prisk: With regard to your
plans for regulatory budgets for departments can you give us a
yes or a no whether or not European legislation would be included
within those proposals?
Baroness Vadera: Yes.
Q319 Chairman: Finally on this section,
have you contemplated the BRE having a physical presence in Europe?
Baroness Vadera: I would take
the view that it does have a physical presence in Europe.
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