Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 320-340)


24 JUNE 2008

  Q320  Chairman: I mean in Brussels; I meant by that institutionally in Brussels!

  Baroness Vadera: It does have a physical presence in a manner of speaking in Brussels because of UKREP. There are members of UKREP who are specifically working on better regulation agenda; they are members of UKREP that come from BERR.

  Q321  Chairman: From BRE or just from BERR, there is a big difference.

  Mr Kohli: I do not think anybody from UKREP at the moment who has worked in BRE but there is somebody in BRE who has worked in UKREP; we have somebody in Slovenia because of the Presidency at the moment, who is a BRE member of staff. We have a strong presence through our colleagues in UKREP and we have a strong understanding of what is going on.

  Baroness Vadera: It is also important to understand how UKREP actually works, in that it is made up of a group of people who actually then have to represent all of the departments and all of the views and all of the agendas collectively in every single piece of work that is going on at the EU level. For example, when I go to the Competitiveness Council, almost all of the agenda recently that I have worked on because of the Small Business Act has been around better regulation; and I then work with the people doing the telecoms piece or the people doing the environment piece or the people doing the manufacturing and people worrying about oil prices—all of those individually I work with in UKREP in the context of better regulation, so that each of them has to bring the better regulation piece with them. So I believe it is represented.

  Chairman: You rightly predicted that we might raise HMRC, so I will ask John to ask the questions.

  Q322  John Hemming: Everything else is in the BRE remit, it seems, why not the taxman?

  Baroness Vadera: Because the taxman is not a regulator.

  Q323  John Hemming: There are burdens imposed on data provision on the like, and we talked about the police just now and the health service and we talked about all these different bodies; why not the taxman? Should the taxman be accountable to somebody somewhere for the amount of burden they place on people?

  Baroness Vadera: The policy cost, so to speak, of the taxman, if you were going to try and draw a parallel with regulation, the policy costs would be the tax piece, which has a different accountability system of its own. So then we are left with the admin burden piece, which is separate and different from the policy costs, so to speak. The view that was taken at the time was that because the two were linked that we should keep them all within HMRC; that they would however undertake an exercise that was based on the principles of better regulation as far as the admin burdens section of it was concerned. They undertook the exercise in very similar fashion on the same timescale—actually a few weeks before we started. They came up with a conclusion that was slightly different, which was based around the irritants as much as the absolute numbers and the absolute burden, and they have undertaken that exercise and they are accountable to the Treasury for that. If I may, not wearing the current hat, just say that I certainly looked at that when I was in the Treasury and held them to account for the delivery against those targets and it also had a business panel that did that for them. So they in fact do do the same thing, but it is slightly different and actually what transpired was that it was found to be slightly different in terms of the needs of business because of the structure of tax.

  Q324  John Hemming: So you are saying that you are entirely happy for them to remain outside of the BRE's remit?

  Baroness Vadera: I am happy for them to remain outside of the BRE's remit as long as they follow the principles of better regulation, and it is the job of the Treasury to ensure that it does so.

  Q325  Chairman: The Environment Agency spoke about initiative overload; the Food Standards Agency said that BRE at times appeared to be driven by the need to introduce new initiatives before older initiatives had time to deliver fully what was intended. Do you accept that criticism that there has been an initiative overload and do you plan to develop a more prioritised way of working?

  Baroness Vadera: I would accept the view that we push these agencies very hard and that they do not always like it; and that is just one of the facts of life that we have to undertake. I think that the regulatory budgets and the RES Bill and the Think Small First and the Admin Burdens target collectively make up an overarching framework that I think will get us to the right place. However, we will continue to drill down on specific aspects; for example, we are currently doing the Health and Safety Review and we think that this is a very important issue. It has been thrown up by all of the employers, not just in the business sector, as a huge irritant; and, by the way, not as something that always protects and has the best interests of people at work at heart because actually effective regulation improves the outcome. It is not that we do not want to regulate or we do not want to have safety, it is about how to do it in the best possible way, and if we have too many burdens then people are not as safe as they ought to be because there is just too much to cope with. So I would say that we understand that we are putting pressure on them but we have to do that in order to deliver.

  Q326  Chairman: But with all the programmes that you have got on at the moment, and making comparisons with the other institutions we looked at in other countries, the BRE really is not a huge organisation. Are your resources actually spread too thinly?

  Baroness Vadera: Perhaps I should ask Resources to answer.

  Sir William Sargent: Let me give you an overview and then Jitinder can give you some specifics. We work across three different strands. One is where we work with departments simplifying and modernising what is there. Secondly, working with departments to improve the new regulations and what is coming there and how we communicate them. The third item is in terms of working with people, their attitudes and cultures and regulation inspectors on the ground. We have a pretty significant team, size-wise. You will have noticed as you went around continental Europe that our team is actually pretty well resourced. We then draw upon other departments, so within BERR, for example, the economists and analysts are people we draw upon tremendously. If we take the Flanagan Review, we put people in there. So we are pretty good at leveraging what we have in terms of working with departments, encouraging them to do stuff, putting teams together, et cetera, so it is not purely our own team which is doing the regulatory reform work, generally it will be a collection of people gathered together on a particular topic—consumer law or health and safety is a very good example. The Flanagan Review was a good example of that. So from that point of view I think we are well resourced; I am very happy with it.

  Q327  Chairman: Because of the way you reach into departments and that some of your teams are not permanent appointees, they come in on an ad hoc basis, there is a relatively high turnover of the core people. Is there a risk of losing the sort of institutional continuity you are trying to create?

  Sir William Sargent: Not at all. One of the unusual things about BRE is that we were given pretty much a blank sheet of paper when we started and were encouraged to choose the best people from all sorts of backgrounds. So if I look through some of the people we have internally and have had in the past year or two, they have come from the World Bank, King's College, Unilever, London School of Economics, local authorities, a whole collection of businesses, Canadian, New Zealand and Australian Governments, etcetera. So we have drawn people in who have particular experience and value, and they bring a body of knowledge with them into the BRE from different parts of the community, so to speak, and then in turn of course, do not forget, they go back out into them. So what we are doing is bringing people in and absorbing their information. Most assignments internally are two years, which is not short-term. Short-term I think is the wrong expression, they tend to be two year stints, which is not uncommon in the Civil Service. Then they go back out into the various parts of the community, particularly the Civil Service. So from that point of view short-term is not a word I recognise.

  Q328  Mr Prisk: How many of those people have set up and run their own business, other than yourself?

  Sir William Sargent: A few. I am trying to remember the exact number of people who have been in and out of the place.

  Mr Kohli: People have been in and out. I cannot think off the top of my head how many people we have who have run their own business but I can think of at least one other person.

  Sir William Sargent: A lot of people have been in corporations, large and small. They may not have been the owner.

  Q329  Mr Prisk: You realise there is a difference between large and small?

  Sir William Sargent: Absolutely. A much higher average than you would normally find in a government department.

  Q330  Phil Wilson: Another question about perception really. When you discuss issues with other organisations, primarily it is about business, and Sarah Veale from the TUC said that whenever you meet it is basically around business issues, and I was wondering whether you would consider holding round-table dialogues with representatives from business and the unions, et cetera, to discuss matters such as discrimination law or the Working Time Directive. Is that the kind of initiative you would take on board?

  Sir William Sargent: From my perception, I have come on board from the private sector, but to me the public sector and trade unions are a very important part of my dialogue. So from the very beginning I have gone to Brendan Barber and Sarah Veale and other TUC people and started a dialogue, and in the beginning the nature of the relationship was, "This is all about diluting protections, taking away people's rights", and so forth. I was very clear that the work we do at the BRE is that you start with a set of protections, obligations and rights which are in the community which Parliament has passed over up to a hundred years or whatever and so they are pretty sacrosanct as far as I am concerned, and it is up to Parliament to alter or take them forward. It is our job to look at what is in place and the methods which have been used, to deliver those rights and make sure they are done in a very economically efficient way. So the answer is I do have a regular dialogue with the TUC.

  Q331  Phil Wilson: When you say you have a two-way dialogue—

  Sir William Sargent: Absolutely.

  Q332  Phil Wilson: You do not go along just to speak about business issues?

  Sir William Sargent: Just to give you the context, in my second year when we turned up—myself and Jitinder Kohli meets with them once a year and have "How are we doing" type conversations—and Brendan Barber was very complimentary. At the beginning he said, "I am suspicious, given your background and so forth", and in the second year he was saying, "You have stood by what you said in the first year." He certainly has not said to me since that his view has changed.

  Baroness Vadera: If I may say two things. One is that we do have a dialogue. There are things which have actually come out of that specific type of dialogue, for example, the Gibbons Review on employment resolution, which is actually now going through Parliament, which would not have come out except for being able to have that kind of dialogue. But it is very important to distinguish the BRE role from the policy department's role. If we are talking about a policy resolution around the Working Time Directive, it is the role of the policy department to ensure they are taking account of all the stakeholders' views and it is the BRE's job to do something specific around that, which is to ensure that we are clear, that the impact assessment is done effectively to ensure the outcome is proportionate and to ensure it is actually going to be enforced in a way which is the least administratively burdensome. So there are different roles and sometimes people tend to think it is the BRE's role to look at policy and it is not the BRE's role to look at policy.

  Q333  Judy Mallaber: You obviously do have a role in relation to consumers, the current Bill going through Parliament for example, looking at some of the local authorities' regulatory functions, which is specifically and potentially aimed at consumers. Do you regard yourself as having a role in relation to the individual citizen? To take a recent case example of mine, I have a constituent who is concerned about a divorce form which is really difficult to fill in. If I send that to you, is that within your remit and, if so, what are you doing to try and make life less irritating and annoying for the individual citizens? And can I pass a lot of my case work on to you?

  Baroness Vadera: I do not know about the answer to the latter, but I think it would be fair to say that the job of the BRE is to look at the burdens of regulation and the administrative burdens placed on everybody. As I said, it is not just related to business. There is a public sector element to that but again I would like to differentiate that policy leads have to be from the departments which undertake that policy.

  Q334  Judy Mallaber: But the administrative burden in relation to the individual citizen can be different from what they are getting via you looking at the regulatory burden in relation to public services; the individual sat there dealing with "bureaucracy". Is that something you regard as within your remit and, if so, how do you go about tackling that?

  Baroness Vadera: We have done some stuff, for example, on driving licences and the ease with which you can go about reapplying for things. That is already something that we have looked at and done something about and it has led to a significant easing of the burden.

  Mr Kohli: There are two ways in which citizens are affected by the programme. Firstly, we are always on the look-out for suggestions on how to improve regulation and, as you know, we have a website where we want people to give us suggestions, and you can use that website just as businesses and public sector workers. The other thing I was going to say is that indirectly sometimes, but still very importantly, the measures the departments are taking in order to meet their admin burden target have an impact on citizens. The Minister was talking about car tax, which is an example of an initiative which the Department for Transport has taken forward in order to meet its admin burdens target but actually would have a much greater impact on citizens than it does on businesses. Businesses own vehicles but actually citizens own vehicles as well.

  Baroness Vadera: I did not mean driving licences, I meant car tax.

  Mr Kohli: So you have those kinds of instances going on all the time. Departments are taking increasingly seriously concerns about the burdens on citizens. I know the Department for Work and Pensions has done a lot of work looking at the customers' experience, people who apply for benefits, to make that experience good. They realise that experience is not good enough; there are too many forms, there are too many processes, and it needs to get better. If you talk to a department like DWP about better regulation, they want it rooted in the work they are already doing around citizens and around their own staff, and they see businesses as being a third issue. That is fair enough. We are very pleased with the progress DWP are making, even if they are tackling the agenda in a slightly different way from other departments.

  Chairman: One final but rather important question.

  Q335  Dr Naysmith: Lady Vadera, if you have been reading the transcripts of our previous sessions you will be aware that a number of organisations have suggested that the BRE should take a lead in programmes for a better sharing of data between regulators. Do you have any plans for doing this? There is a Norwegian scheme, for example, which is a good model.

  Baroness Vadera: Personally, it is something that I have been very interested in for a long time. One of the recommendations of the Hampton Review was that we should look at the issue of data sharing. There are some constraints around the sharing of data—confidentiality and a number of reasons—which makes it very difficult. There are other constraints around IT systems which make it difficult, but there is in fact already quite a lot going on within those constraints which Jitinder and William can talk about but I personally would say that I think we should do a lot more and could do a lot more.

  Q336  Mr Davies: Have you looked in detail at how the Norwegians have solved those two problems?

  Baroness Vadera: Yes. I actually had a conversation with the Norwegian Minister about that, I would say, two or three months ago. I cannot remember exactly when. They did solve their IT problem in a way which I do not think we are going to be able to do. You have to remember it is, with no disrespect, a slightly different size of population, so it does have certain different models which cannot be applied in a wholesale fashion.

  Q337  Mr Davies: You are giving up, are you?

  Baroness Vadera: No. In fact, if you heard me correctly, you heard that I was, one, very interested in it, two, we were doing things and, three, wanted to do more. Jitinder is doing more because I keep pushing him to do more.

  Mr Kohli: She does indeed.

  Q338  Dr Naysmith: I am glad you are interested in it but one of the things you have to be absolutely certain of, and I am sure you have given some thought to, is the question of legal resources, so that you are absolutely sure what you are doing is the right thing to do, sharing data.

  Baroness Vadera: Yes, that is obviously one of the constraints. I think you can do some things around those constraints. I have to say personally, having looked at the Norwegian model, that we cannot solve the IT issue in the same way and we are going to have to be a little more imaginative about it.

  Mr Kohli: If you are looking at what the Norwegians are trying to achieve through Altinn, it is enormously similar to what David Varney's report sets out on transformational government. Their vision is around services and transactions with Government, not delivered around the way Government is organised but delivered around the way people run their own lives. That is very much how we are trying to do things. We want businesses to not have to read different bits of guidance and different bits of legislation, we want businesses to be able to access guidance on hiring a worker. It does not really matter whether it comes from this Act, that Act, or some piece of secondary legislation, what matters is what you have to do in those situations. That is exactly what David Varney's Report talks about and is not where Altinn is yet but our vision for is pretty much in exactly the same place as where Altinn is. The one important difference between Norway and the UK is that Norway has had for some time a centralised list of business enterprises which we do not have in the UK, what we instead have is a list at Companies House of registered companies, a list of VAT-payers with HMRC, and unless you can get these lists to talk to each other better it is very hard to get to exactly where Norway has got to. One of the things that HMRC is looking at as part of its work on as the lead in Government on this is around a single business identifier which would give us the building blocks to get us to where the Norwegians have got to.

  Q339  Dr Naysmith: As the Minister says, it is a much smaller country which means we have a much bigger challenge.

  Mr Kohli: Absolutely.

  Baroness Vadera: Yes, we do. I would tell you though that all businesses are not happy about data sharing with HMRC, so there is an interesting twist here as well.

  Q340  Chairman: Thank you very much for your comprehensive answers and for putting up with the cross-questioning of the Committee. We are hoping to publish our report before the summer recess so we will give you interesting reading for your holiday period, if you have a holiday.

  Baroness Vadera: Thank you very much. I look forward to it.

  Chairman: Thank you very much for coming.

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