UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 474-ii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

REGULATORY REFORM COMMITTEE

 

 

GETTING RESULTS: the better regulation executive and
thE impact of the regulatory reform agenda

 

 

Tuesday 29 April 2008

MS SARAH VEALE, MR PHILIP CULLUM and MR STEVE BROOKER

Evidence heard in Public Questions 69 - 120

 

 

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Oral Evidence

Taken before the Regulatory Reform Committee

on Tuesday 29 April 2008

Members present

Andrew Miller, in the Chair

Gordon Banks

John Hemming

Judy Mallaber

Dr Doug Naysmith

________________

Memorandum submitted by National Consumer Council and Trades Union Congress

 

Examination of Witnesses

Witnesses: Mr Philip Cullum, Acting Chief Executive, Mr Steve Brooker, Senior Policy Adviser, National Consumer Council, and Ms Sarah Veale, Head of Equality and Employment Regulation Department, Trades Union Congress, gave evidence.

Q69 Chairman: Unusually for this Place, we are ahead of time. Perhaps we could make best use of the time by asking you to introduce yourselves now, before we get on to the formal questions.

Ms Veale: I am Sarah Veale, Head of the Equality and Employment rights Department of the Trades Union Congress.

Mr Cullum: I am Philip Cullum. I am Acting Chief Executive of the National Consumer Council.

Mr Brooker: Steve Brooker. I lead the NCC's work on regulation and consumer redress at the NCC.

Q70 Chairman: Thank you very much. Perhaps I could ask both organisations the same questions: What do you think the BRE's role should be? Should it be that of a policeman, think-tank, deliverer or teacher? Should the BRE concentrate on developing one major strategic vision or should it pursue a number of goals based on what is likely be a good use of its time? Do you believe the BRE has a good grip on its own objectives? We are asking questions similar to that of all our witnesses and we are particularly interested in your answers.

Ms Veale: You suggested a combination of teacher, policeman, think-tank, and I suppose that fairly accurately sums up what their role is. I do not think there is anything particularly wrong with that. I think it is quite useful to have a body that combines those different mechanisms. I am not sure that I would really particularly describe it as a think-tank. I have not seen evidence of philosophical thought about the better regulation process in any obviously detectable way, but I think that is something that is needed in government. We do need an organisation that is capable of seeing regulation as something that is done cross-government and has a huge impact on all sorts of people. I think it is seen as being the police by some other government departments. I am not quite sure how that would work because I am not quite sure what sanctions they can impose in the end. That would depend entirely on how the Government see it and how seriously the Government intend to take it. My answer would boil down to: It can do all those things if it is given the support of the Government to do them, but it is a little bit hard to see, certainly on the think-tank point, how it has any serious role as a government think-tank on regulation.

Q71 Chairman: Do I deduce from that you think they perhaps ought to act as a think-tank?

Ms Veale: I am not sure they should. In a sense I regret the demise of the Better Regulation Commission which had a much clearer strategic role and encompassed a whole range of different organisations who were represented on it. Of course there is a successor body but that has a rather different, though not entirely detached role. I think the BRE now has been left on its own to an extent but also tucked into a particular government department. I think it is probably still rather finding its way.

Q72 Chairman: Do you think it should concentrate on one strategic vision or pursue a number of goals?

Ms Veale: They are not mutually exclusive. Any organisation like that should have a strategic vision and I think that is what it is struggling with at the moment. That is obviously going to be conditioned by political thinking and where the Government want the whole thing to go, but, also, it should have specific goals because within a strategy you need to have markers and aims and objectives that you work towards. Given that it is supposed to be pan governmental, you obviously have to have nuanced goals to cope with different departments' work. You cannot have a one-size-fits-all goal. You can have a strategy but the goals themselves have to be far more bite-size chunks and specific things to do. Different departments have different records in terms of success with regulation and they have very different types of regulation to administer and to produce. It is very different doing work that regulates business from doing work that regulates animal health or something: there is a connection but the two things would require a very different goal-setting, I would have thought.

Q73 Chairman: Leaving aside where it fits in government - and we will come on to that in a moment - do you think it has a firm grip on its own objectives?

Ms Veale: I would like to think it has. It strikes me, from the outside, as being a fairly self-confident organisation. We see what they publish. I think it is early days yet to assess how much of a grip they have on what are some relatively different objectives now they have moved into a different department, so I think it would be unfair of me at this early stage to comment on that.

Q74 Chairman: Philip Cullum, would you like to go through the same three areas?

Mr Cullum: Yes. In terms of the role, I agree with Sarah's view that perhaps policeman is not quite the right word, but we would agree with the idea of some sort of internal audit function trying to encourage the right kinds of culture and behaviour across government in terms of regulation and developing a sophisticated understanding of what better regulation is all about and how you create it. We see other roles for the BRE, certainly holding the rein between both people like central regulators and government departments, one of the things that constantly surprises us as a generic consumer body is the extent to which regulators do not seem to talk to each other. We are aware of some fairly good things that regulators are doing at times which other regulators are entirely unaware of and do not seem to be learning from. I know there is a joint regulators group for some of the central regulators and economic regulators but there still does not seem to be that sort of sharing. It would be a real opportunity for the BRE to do it.

Q75 Chairman: Could you give an example of what you mean?

Mr Cullum: Some of the examples we see - and Steve my colleague is about to start work on a project called Rating Regulators, where we are going to look at seven regulators and see how effectively we think they are doing the business for consumers. In terms of some of the things we have already found: the way in which the Food Standards Agency is very open in terms of its governance - and we are not aware of any other regulator doing that; the extent to which the Financial Services Authority has embraced the principles of taking a more principles-based approach to regulation and Treating Customers Fairly; some of the work from Ofcom on additional charges and how they should be fair and transparent - and I say again, some of which is clearly applicable to other regulators but does not seem to have been adopted by them; the Human Fertilisation and Embryology Authority's fantastic programme of consumer engagement. There are lots of quite good things going on but there still does not seem to be that learning across the patch. We would not be as pessimistic as Sarah on the think-tank. I am not sure I would use the word "think-tank". Our paper talks about "ideas entrepreneurship" - which is perhaps a more pompous way of saying think-tank - but, having worked with the BRE, we do see signs of them trying to fulfil that role and doing it quite successfully. Steve led, with the BRE, a project called Too Much Information Can Harm, which was really about the way in which regulators often use information requirements as a default approach when, from a consumer perspective, sometimes the last thing you need is another load of bumph. It is about trying to say: How can we use information as a regulatory tool effectively? When is it right to use it and when is it not right to use it? We drew several things from that experience. One was the extent to which the BRE was becoming a more open and collaborative organisation but another was the extent to which they were rightly trying to change the way that all sorts of regulators, both in government departments and in sectors, think about how they regulate and what are the most effective tools.

Q76 Chairman: A strategic vision, or should it pursue a number of goals?

Mr Cullum: Clearly it does have some sort of vision about what it thinks better regulation is all about. How it then pursues that. I guess people running organisations would say, "You have one vision but you may have a number of goals beneath that which are consistent with the vision." We would say that the goals are: trying to change some of the culture; getting a better understanding of regulatory tools; opening up more understanding about what better regulation means; developing a real understanding of consumer and business behaviour and how people will respond to particular types of regulation. That all goes back to the vision of promoting better regulation. The issue we have - and it perhaps relates to the point about where it is based, so we will not go there just yet - is whether the integrity of the better regulation vision is being endangered in some way through the rhetoric at the moment. Having gone from a move, which we thought was correct, from deregulation into better regulation, better regulation is being slightly changed into being all about the business again. We feel the world moved on from that a couple of years ago but there seems to be a slight move backwards. It is not about saying, "Is it about one vision or a number of goals?" but about trying to get some sort of coherence or consistency.

Q77 Chairman: Does it have a firm grip on its own objectives?

Mr Cullum: I think it has. We have been quite impressed with working more closely with them over the last couple of years. Particularly Jitinder Kohli when he joined as Chief Executive has gradually tried to drive some sort of culture change in the organisation, so I think it does have a sense of what it is there for. But, subject to the comments I made earlier, I think some of the political pressures it is getting at the moment are not entirely consistent with what it has done in terms of developing a more sophisticated approach to better regulation.

Mr Brooker: We perhaps hear a different message when we talk to civil servants on a day-to-day basis than we hear from the ministers when they read their speeches in Parliament and in the newspapers. One example I would give on this concerns the Regulatory Enforcement and Sanctions Bill. That was introduced by the Minister and in the second reading speech she mentioned businesses 56 times and consumers just once, but this Bill is about improving the way consumer protection is enforced locally and modernising the sanction and tool kit to offer consumers better protection in the market-place. The rhetoric we want to hear is how do you empower consumers to drive a competitive market whilst minimising burdens on business rather than how can you reduce the burdens on business while maintaining the necessary consumer protections? There is a difference in emphasis there.

Chairman: We are going to move on to where it belongs.

Q78 Judy Mallaber: Both organisations have touched on this in your evidence. Can you expand a bit on your views as to whether the move from the Cabinet Office to BERR was a good, bad, or uncertain move, and, also, where within government do you think the BRE should be placed in order to fulfil the better regulation role most effectively?

Ms Veale: The first thing you need to try to understand, I suppose, is why it was moved out of the Cabinet Office. I still have not really understood why that happened. Really, if you want a body that is going to have that kind of rolling brief across all the other departments, it made much more sense for it to be located quite firmly within the centre. Going to BERR really did reinforce the TUC's worries that the agenda really is being set by business. It is still about de-regulation to an extent, really, if you scratch away, behind the rhetoric. The worry is that, because it has been tucked into a department at the same time as being renamed the Department of Business, Enterprise and Regulatory Reform, you automatically couple the regulatory reform part of the department with the business and enterprise part and they become twins. Even if that were to be a false fear, and in fact they were able to retain their roving brief and it did not make any substantial difference, public perception would be that the role of the Better Regulation Executive is to ensure that business is not (as they keep telling us they are) strangled with red tape. Certainly our dealings with the BRE have been almost entirely on business-focused issues. In a sense, that is understandable because we are the TUC and we are the other side of business, if you like, but, on the other hand, that is all they seem to spend their time doing. I have not really seen a huge amount of evidence so far that they are spending as much time or focusing as much on other aspects of society, of government work, of government policy. They do seem to be obsessed with delivering to the business agenda, and I think that has distorted what they do. Also, as Philip said a little bit earlier, they tend to look at other areas of work through the prism of how it is going to affect business and business comes first and everything else comes afterwards. It is hard to prove that is a direct result of their being located in BERR but I can only say that it cannot conceivably help. I think they are going to have to work extremely hard if they are going to stay in BERR to establish themselves as a reputable better regulation authority that is capable of understanding issues that are outside the context of the concerns of particularly small businesses. The short answer, I suppose, is there are some real worries about it being located in BERR. I have not seen anything yet to make me really confident that it is going to be able to escape from that.

Mr Cullum: I suppose we want to see it being in some sort of cross-cutting department, which has some sort of leverage across the rest of government to try to empower the BRE to influence behaviour right across government. It is not obvious that BERR has that leverage particularly. If you thought the only benefit for moving from a cross-cutting department to a single department was if it was one that was incredibly powerful, so that other bits of government quaked in their boots when that department did something, that is not really a description of what most people would use about BERR. We share Sarah's concern about the self-confessed positioning of BERR as the department for business. As I noticed from reading the transcript of your previous session, our friends at the CBI missed the opportunity to describe BERR as the "Department of Business" and miss out the "ERR" bit of the story, and it does seem in small ways to have had a different effect on the BRE. Looking at it positively, one might argue that the BRE will be a force for good within BERR rather than BERR being a negative force on the BRE, but looking at the BRE website this morning, on the front page it says, "Life's too short to be bogged down by rules and regulations. That is where the Better Regulation Executive comes in. The bottom line: we make a positive difference to you and your business" but that is not the whole better regulation story. After that, it asks for suggestions for how better regulation might work. One of the things we have argued for in the past is that there are plenty of areas where consumers suffer from regulatory burdens that should be swept away. The BRE, in its previous existence, agreed with that, and so the website did change to encompass an area for ideas from citizens, but the framing of that, if it were not so serious, is slightly funny. There are now sections, so that you click on a box as to whether you are private sector or public sector or third sector or something described as "citizen sector" - which I think means people - and then, if you do that it, there are lots of questions which all ask about the impact on "your organisation". As a member of the public, I do not have an organisation: it is just me. The whole framing is subtly rather business-focused and I do not think that is helpful because it does not convey the texture of better regulation which is about both the pros and cons of regulation, about the extent to which burdens, as Sarah might argue, fall sometimes on employees, and we would certainly say they sometimes fall on the consumers.

Ms Veale: One example recently is the Green Paper on the discrimination law reform. We are told that the Better Regulation Executive has muscled in quite heavily because it eels that a lot of the proposals in the Green Paper would be a burden on business, but this particular piece of legislation does not belong to that department and is set out to benefit society in a much wider sense. I am not quite sure why the BRE feels that it has to look at that particular piece of legislation, which it has every right to do, but through the prism of how it is going to impact on employers, because it is much, much wider. That is a recent example of what I fear they see as their mission in the new department.

Q79 Judy Mallaber: You have commented that your connections are primarily about employment of business, understandably, but has either organisation had any direct discussions with departmental officials, ministers or the BRE about this issue and about whether it will have a broader remit than looking at "burdens on business", which you are obviously anxious about?

Ms Veale: In fairness to the BRE, the Chair comes in regularly to speak to the General Secretary of the TUC and a team of us, and we have expressed those concerns and he has gone to great lengths to reassure us. The trouble is that the proof of the pudding will be in the eating and at the moment, because of what they have done, for example, on the discrimination law issue, our concern is that they are talking the talk but they are not walking the walk. In practice, they are defaulting into taking an awful lot more notice of one very vociferous pressure group than they are of all sorts of other interests out there. They are not looking at other factors that come into developing a piece of legislation which are all about better regulation.

Q80 Judy Mallaber: Have you talked to them about consumer protection and that part of their remit?

Mr Brooker: They have shown greater interest in consumer issues recently. We did a join project on regulated information, as Philip mentioned earlier, and that is a good example of the BRE being prepared to open up to working with new organisations. I think that is a sign of maturity and a welcome approach to open up the closed role of regulation. They have worked with us on the information projects and Jitinder Kohli chaired a seminar that we hosted for consumer engagement last year and they did work with the National Audit Office on the Hampton Implementation Review. They are prepared to open up to new ways of thinking. The next big test is going to be the Consumer Law Review and the sorts of proposals have come out of there. That is going to be jointly promoted by the Business Minister and the Consumer Minister, so we will be interested to see how those natural tensions are resolved.

Q81 Judy Mallaber: Is it legitimate for them to "interfere with other departments". I see in the evidence we have had from the Department, it has Public Sector as one of the headings, which I can imagine creating a few tensions with some of the big spending departments. Should that be part of their role? Are you concerned about them engaging in that?

Mr Cullum: The role of the BRE must be to be cross-cutting and to look at all sorts of regulation. I mentioned earlier the extent to which we find regulators operate in silos. In fact one regulator only last week was expounding enthusiastically on why the challenges they face are completely different from the challenges that everybody else faces, and we find that regulators and, indeed, other organisations tell us that all the time, but in fact there are far more similarities than there are differences and there are lessons to be learned. The idea of making the BRE much, much narrower would be a real mistake. Certainly that would be a problem if being a part of BERR resulted in that. The National Consumer Council is a non-departmental public body, our sponsors are BERR, and our interests go way beyond just business. We look at sustainability and public services. There are quite a lot of issues which fall out of the BERR patch. I am not sure they enthusiastically embrace the idea of us doing all that stuff, but we are independent and we get on with it. I guess that is the challenge as to what extent the BERR corporate push will narrow the focus of the BRE rather than allowing them to make independent decisions about where they look at in terms of better regulation.

Q82 Chairman: You have mentioned your own sponsoring department there. Does the fact that you are there not undermine the reality that there is not really an appropriate place, because the Cabinet Office is not seen outside as having the necessary teeth to do the job?

Mr Cullum: That may be true. Certainly we have grappled over the years as to what would be the most appropriate place for the National Consumer Council to be. We operate as a very independent body. Our governance is through an independent board, so the relations with BERR are sometimes quite helpful in having a look into government, but which part we belong to is not really a major influence on what we do. My concern with the BRE would be if they have taken over the regulatory side of BERR's work, which I understand they have, then there is a corporateness which is sort of different. I would agree with the general point that there is never a perfect solution.

Q83 Chairman: So it is what they do rather than where they are?

Mr Cullum: I am not sure this is the ideal place for them but if everybody behaves in the right way, you could make it work.

Q84 Judy Mallaber: If they are the home department for business, employment, consumer protection, you can argue that that is quite a bit swathe of what they should be involved in and any other department would have difficulty because they do not cover those areas. Would that not be the case?

Mr Cullum: I can see the argument for saying that if it were going to be in a department which is an issue-focused department rather than a cross-cutting department then it might be one of the better choices.

Q85 Chairman: Just explain what you mean by "ideas entrepreneurship" in your paper, if you would.

Mr Brooker: I suppose the warning "Too much information can harm" was an example of ideas entrepreneurship. There is a kind of assumption in government that giving consumers more information is a waste of a good thing. That is an assumption we wanted to challenge. We found in our research an information overload; information that is presented in an unhelpful way; and information that is written by company lawyers to protect businesses from liability rather than helping consumers to use a product safely or to exercise their rights in the market-place. This points to the BRE holding the ream across the regulatory estate, taking an issue that affects all of us in all our lives and is relevant not just to BERR but to the Department of Health, the Department of Transport, other government departments, and coming up with a practical tool kit, a Guide for Policymakers, on when and how people should use regulated information, which we hope has the potential to make a real difference to the way in which these sorts of issues are addressed in future.

Q86 Chairman: What incentives do you think would make real change?

Mr Brooker: That is one question that is open for us: Does the BRE have the levers to force through the change agenda across government? We are not in a position to judge whether that is the case or not but that is certainly a pertinent question that we have and which this committee could provide some answers to.

Mr Cullum: When we worked on the information report with them, there were effectively two outputs from it, as Steve has alluded to. One was a classic policy report, of the type that we would publish (setting out our research, analysing the issues) but the other was a Guide to Policymakers which I think was a rather good piece of work, in terms of trying to help people who do regulate think about when information tools are appropriate and how they might work. The bit of the story we are less aware of is what has happened to that and how the BRE plays that into the right bits of helping the departments. From the outside, it is quite hard to tell on that. One of our comments in our written evidence - which I think you may he alluded to - is that there may be scope for the BRE to do a bit more of an annual stock take: How do they proceed, the overall picture in terms of better regulation? And a little bit in terms of their own accountability: What difference have they made to regulatory behaviour?

Q87 Dr Naysmith: Mr Cullum, I was intrigued by the NCC memorandum that referred to "some progress towards greater sophistication about what better regulation means" and to the need for less regulation in some areas, more regulation in others, and better regulations in lots of areas. What would a more sophisticated approach to better regulation look like? I must apologise, first of all, if this has already been mentioned because I did have to pop out.

Mr Cullum: Better regulation is looking at the diverse types and objectives of regulation, taking a hard look at what is working and what is not working and either improving the stuff that is not working or getting rid of it. It is often seen as a very stereotypical debate, in which business is always arguing for better regulation and we are always arguing for more regulation, but it is much more complicated than that. Businesses, certainly individual businesses, will often argue for more regulation if they think it will protect them from competition; we will sometimes argue for less regulation or different regulation if we think that will benefit consumers. We have produced a list of things in the past where we think consumers face an absurd regulatory burden and they should be got rid of. It is trying to understand the nuances of that a bit more and taking a more balanced approach to what are the benefits and are the problems with regulation.

Q88 Dr Naysmith: How would you define better regulation? Could you define it or does it require all these things you have just been talking about?

Mr Cullum: It is something to do with regulatory cultures and how people who are regulating or might regulate think through: When is it appropriate and what is the tool kit? What is the behaviour change that we are trying to achieve, either amongst consumers or amongst businesses? One of the things we observe often with regulators is that, although they may often require other organisations to produce metrics on how they are doing, they quite often do not have very many indicators themselves on how they are doing. When they introduce individual bits of regulation, it is sometimes rather vague about what it is they are really trying to achieve. Yet, if you try to nail what you are trying to do and what change you are trying to bring about, there is an opportunity for people to scrutinise and say: "Did that work?" If there are further changes to the consumer law regime, what is the underpinning of that? What is the ultimate objective? What does success look like? The Financial Services Authority, I think have done that a bit with their Treating Customers Fairly initiative, where they have said, "We've gone for this much more principles-based approach. It is less rules-based but here is our vision if all these comes off. This is what the world would look like." We think that is quite a good thing in terms of being clear about ambition.

Q89 Dr Naysmith: Sarah, the TUC referred in their evidence to the assessment of the impact of regulation by the "crude measure of quantity" rather than by a consideration of how regulation actually works". How would you make it more sophisticated?

Ms Veale: It would certainly be a more difficult exercise to do, but I would get rid of the rather crude indicators that they use, which are tempting obviously for the officials who are trying to do these kind of exercise of more or less weighing things or looking at the sell-by date on them because that is not necessarily going to indicate whether a piece of regulation is fit-for-purpose or necessary. I think you need to do far more at the beginning of the process to work out a system for assessing whether or not you need regulation at all - and that would involve some quite sophisticated conversations with those affected by the regulation, those who had to apply it - and a look at whether there are alternatives, because quite often there are other ways of achieving the same goal without having to put something on the statute book. It is doing all that intelligent research work before you ever get to that stage.

Q90 Dr Naysmith: You really need to know what you are trying to achieve before you set out.

Ms Veale: Precisely. I think there is a lot of common ground between us on this. When it comes to looking at existing stock, the last thing you should do is look at the volume or the sell-by date on it. You have to talk to people who are affected by it but, also, weight the responses you get. Obviously if you talk to a particularly lobby group, they have an end in mind, and they will use evidence quite cleverly to suggest that something is a burden, when, if you look at it from someone else's perspective, it might not be. The BRE needs to get better at talking to the right people and getting different groups in the room at the same time and developing some sort of synthesised thinking about things. Often, in dialogue, something will emerge from the Third Way (if I might put it like that) or some other possibly consensual way of doing something.

Q91 Dr Naysmith: And that does not happen at the moment?

Ms Veale: We have suggested this. Again in fairness to them, they have held consultation sessions on consultation in how they can do things better. I hope they will absorb some of the thoughts that were coming out of that process and the contributions made, but there is quite along way to go with that. I am not saying it is easy. The other thing we are particularly concerned with is the fact that they tend very much to look at the costs - to business usually or to anybody else - without having any sophisticated tools for measuring the benefits. We give in our evidence the example of the national minimum wage, which obviously is a cost in two ways to employers. If you look at the social good, the good to the economy, and now - and they will admit it themselves - the good to employers that has done, that is a very good example of not having knee-jerk reactions and looking rather more adventurously at organisations that you would not straight away think of, who have benefited enormously. Consumers are an obvious example: they do not necessarily have an articulate voice at any particular time (with the greatest of respect) on one issue but do have very strongly held views. It is getting into that and not doing it through the prism of the Daily Mail as well but getting some proper feedback from people on the ground. It would take an awful lot of time and energy to be able to do that. I can see why officials more easily resort to rather cruder indicators.

Mr Cullum: One of the areas we are both agreed has a rather malign influence on the debate is the Chamber of Commerce's burdens' barometer, which is a bizarre way of looking at how to better regulation issues, particularly because it is cumulative. It is a bit like saying it was 15˚ yesterday and it is 15˚ today, so the temperature is 30˚. It is extraordinary and, actually, quite unhelpful in terms of the push across government to change, because if you start with billions of pounds of previous regulation on the stocks, a little bit more is not going to make very much difference. As a cultural force, that way of thinking is really unhelpful. I do think, as Sarah says, there is an opportunity for a more sophisticated debate. We know from talking to colleagues in business organisations, particularly in businesses rather than necessarily their representative organisations, that there is more sophisticated thinking about it but it is just a question of drawing it out.

Q92 Gordon Banks: The questions I have to ask you are really about your experience of working with the BRE and some of these issues have been touched on already, but does the BRE have the right focus? Does it have the right people? Is it well organised? Linking back to the last question: Does it have enough new ideas? How well does it communicate between itself and the two organisations? How could these communications be improved, not just to you but also to the business and individuals that the regulation impacts on? That is an issue that I do not think is done particularly well, the dissemination of information to individuals or to businesses of how different regulations may impact on their walk of life.

Ms Veale: Possibly one legitimate criticism businesses have is in the area of communication. I think things could be done much better in terms of describing how a set of regulations will work and, again, how to manage the regulations. One particularly good example of that is that small businesses got very anxious about the written statement of employment particulars, which is a small EU requirement on businesses: every employee has to be told six simple things; for example, how much they will be paid, when they will be paid. They decided this was an enormously costly burden on them, but it turned out there was nothing burdensome about the requirement; the burden on them financially was that they all went and got employment lawyers to advise them on every single written statement. If the Better Regulation Executive had got its act together on that, they would have said, "You do not need a lawyer. This is how you do it: five facts and that is that." If that had been communicated to the small firms, I think the sting would have been taken out of that particular issue. I am sure there are many, many others where you could say the same thing. Another thing they are not doing terribly well is communicating the views of other organisations to the loudest lobbyists. We are told - and I suspect the NCC is told - what small businesses think, over and over again, and why we cannot have this and why we cannot have that, but small businesses do not have it explained to them in a very convincing way what all the benefits are going to be and how other organisations see it. When I have suggested putting us all into a room, the suggestion is met with,. "Yes, that's a good idea" with a terrified look at the same time. I wonder whether they ought to be a bit more adventurous and let the grown-ups have a chat to each other.

Q93 Gordon Banks: So communication might not be a strong point.

Ms Veale: Precisely. Communication might not be a strong point - exactly that. In fairness - and we see them as an outsider, so I have never sat in there and watched a group of them doing a day's work - I get the impression that they are well-organised, they are well managed. I share Philip's respect for Jitinder who has done and is doing a good job in a fairly difficult situation. My worry is that, although they clearly do have their support in BERR, I am not really sure how much buy-in they have managed to acquire in some of the other government departments. I do not have any proof of this, but you get the impression that civil servants regard interventions by the BRE as being rather a crude necessity, which they do not really think their way through, that if you can just get rid of them, satisfy them that something is going on that will produce better regulation - I am not sure they are allowed in actually or that they have managed to have the level of engagement they need with senor officials elsewhere. That is speculation, I cannot prove that, but you get the impression back from other departments you deal with that their view of the BRE occasionally is that it is a bit of an irritant that is going to have to be dealt with because there is a politician in a fairly senior place who thinks it is all a good idea. I hope that is not the case, because I am a keen supporter of better regulation. Certainly the trade unions have suffered very badly from very old, appalling regulation, which we keep on trying to persuade the BRE needs to be looked at. We are no fans of excessive regulation at all; we want good, fit-for-purpose regulation, also, primarily, to protect employees. It does not do employees any good to have bad regulation in an organisation that is not doing its job properly, because, in the long run, employers will then say, "This is rubbish regulation, I can get around it," and it starts not doing what it should be doing and being avoided. That is the last thing we want.

Mr Cullum: We have had two close-up experiences. One is the information project which we have both alluded to; the other was the Hampton Implementation Review process. I was on the small team which looked at the Financial Services Authority. That was a joint BRE/National Audit Office initiative. From both those things we have been very impressed with the quality of the people, not just at the Jitinder level but throughout the organisation. They were very, very effective and good. The model that they seem to operate, which is to help people for a relatively short period of time and then move on to other things and other government departments, seems like quite an interesting way of getting a bit of diversity of experience and a bit of ----

Q94 Gordon Banks: Filtering in.

Mr Cullum: -- an alumni network of better regulators across government. As to how well they are organised: people like Sarah are not really close enough to the internal machine to know the answer. As to the right focus: Sarah and I were both members of the Better Regulation Commission, me more briefly than her, and are now members of the Risk and Regulation Advisory Council, and, from my brief sight of it, I never thought that the relationship between the BRE and the BRC was the right one. The BRE bent was very much on the weighing, on the simplification plans, admin burdens, with a bizarre definition of what an admin burden was. Some of the things alluded to, under no commonsense view at all would count as an admin burden. There were policy decisions about things, but some of those exercises were a bit odd and the way that they wanted to use the BRC to scrutinise some of it was a bit strange, so I am pleased that they moved away from that. Some of the more sort of "ideas" stuff that we talked about is a good move. On communications, I suppose there are two parts. One is the relationship with departments. I agree that in some departments you hear rather sniffy comments about them from time to time; on the other hand, I think that is consistent with what we know about the people who regulate, which is that they are quite happy to dish it out but they maybe do not enjoy being subject to anybody else's scrutiny. That may just be part and parcel of what they do; on the other hand, it does go back to the point we were making earlier about the leverage and it is really important that it feels like the BRE have some sort of backing at the high level within government so that they can go in and influence so far as possible and be a little bit heavier if necessary. The final thing I would say on communications is not so much just in the BRE's patch - because I do not think it is really their responsibility - but there are issues about the communication of regulation and the extent to which businesses and consumers who are affected by regulation or, indeed, employees are ever told about it. The great example at the moment is the Consumer Protection Regulations which come into effect on 26 May, introducing the duty not to trade unfairly, which is something for which the National Consumer Council has argued for about 20 years. We are huge supporters of this initiative, but, until last week, BERR had not done any press work at all and seemed to have done little or no work with businesses behind the scenes. This is quite a fundamental change and a very new style of regulation where it is much more principles-based rather than swept away with lots of detailed statutes. There are two things. One is that, hopefully, there will be a big success story to tell about a more sophisticated approach and a less burdensome approach to regulation for everybody, but, also, just to make it work, people will need to know that it is there. You need to be able to march into your local shop and say, "You're not allowed to trade unfairly and you are. I know what my rights are" or companies need to be able to prepare for it. If you do not tell them, it is not going to work.

Q95 Gordon Banks: This question is for the NCC. How is the BRE working on your rating regulation regime with you? When will that be published?

Mr Brooker: Jitinder Kohli sits on the advisory panel for the Rating Regulators, along with representatives from the NAO, academics and a couple of our board members. We hope to publish that towards the end of this year. The whole reason for doing this project - which really goes back to what we were talking about earlier - is that the focus of the better regulation debate is too much on the benefits to business of regulation, and of course Parliament set up these regulations to do the job of protecting consumers in the market-place. That is what we want to look at, the seven regulators: the two FSAs, Ofgem, Ofcom, Postcom, Ofwat and the Water Industry Commission in Scotland. We are going to identify the essential DNA, if you like, of a consumer-focused regulator and then measure those seven regulators against those criteria which cover areas such as the legal framework, organisation culture, the way they understand the consumer interest, do they intervene proactively in markets or are they too passive. We hope that will be a tool kit that all regulators can use as a self-diagnostic check but, also, organisations like the NAO or even select committees can use to inform their assessments of whether these regulators are serving consumers well.

Q96 John Hemming: There is of course a retail enforcement pilot, which potentially has the ability to improve protections for consumers. The question is whether it has achieved any of its potential objectives or made life easier for businesses whilst either improving or not losing safeguards for consumers.

Mr Brooker: We welcome what the retail enforcement pilot is trying to do, which is trying to change the culture from one of top-down enforcement to encouraging compliance based on education and advice. We also welcome an approach which tries to join up different inspection regimes, which will hopefully lead to an improved consistency in the way that consumer protection is enforced locally and which can only benefit consumers. We have not seen any evaluations of whether that has really had that effect on the ground. We have heard of some figures around savings to business which are around the 10 million mark - which, in our view, is really quite a low figure if you are talking about quite huge investment in that project. I would say it is too early days to tell whether it has had the effect it was designed to, but we support the

Mr Cullum: We were very surprised that it was a figure that came out. Sarah is still a member and I was a member of the BERR Better Regulation Ministerial Challenge Panel - a longwinded title - looking at better regulation initiatives across BERR and it had a number of presentations from the retail enforcement pilot team. We have met the team a few times and have been very impressed with the leadership of the team. It is certainly a very well intentioned initiative, but I am very surprised that it was only going to save 10 million. It seemed like a drop in the ocean and, I guess, an interesting example of where sometimes the rhetoric around burdens on business is not really justified by the facts in terms of how much it is costing.

Q97 John Hemming: How do you assess estimated costs? It is a very complex process. Is there a TUC angle on this one?

Ms Veale: I was similarly impressed, as a novice in this area, at the challenge power on the presentation, and I think instinctively we ought to go along with that, but it is not an area that I confess to know a huge amount about.

Q98 John Hemming: The NCC did talk about "regulatory silos". Where are these most obviously found? I suppose retail enforcement is a good case.

Mr Cullum: It goes back to the point I made right at the start, when talking about some of the good examples in terms of openness, or principles-based regulation, or how to analyse particular issues which are common to sectors, in that they do not seem to have spread. I am still waiting for the second Regulatory Board to have its board meetings on podcasts, as the Food Standards Agency does. People do not seem to have engaged much with the idea of principles-based regulation, even though Treating Customers Fairly has now been in place for a while in the financial services industry and the Data Protection Regulations are about to be introduced. It is surprising that other regulators are not learning from some of these sorts of tools in some of the areas of consumer engagement. There are some particularly good examples and then there are a lot of rather mediocre examples, and we are surprised that the regulators are not rather admirably searching out what would be the interesting things to do.

Q99 John Hemming: How do you think the major regulators could share best practice more effectively? Do you give any examples of obvious failings because they are not sharing best practice? Should the BRE get involved in that?

Mr Cullum: There is a role for somebody to try to create a forum in which regulators can exchange ideas more. We are aware of the mission of the Joint Regulators Group but our sense is that it does not encompass all regulators by any means and does not have that sort of ideas exchange. If it is, it is clearly not working, because they are not exchanging their ideas.

Q100 John Hemming: You are implying in that that the BRE should set up a forum for them to discuss regulatory practice.

Mr Cullum: There is an opportunity. There is an undoubted need for it and the BRE you would think were a fantastically well-placed organisation to do it. Some of this is about trying almost to apply the pitfalls of better regulation to the process of better regulation and the BRE, in the sense that we would argue that a lot of better regulation is about culture change, that it is not just about compliance and being heavy-handed - what I believe the Financial Services Authority used to refer to as "Nike regulations" when you say to people, "Just do it." How do you get beyond that and achieve culture change? Rather than the BRE just using tools which are sometimes a bit tick-boxy or about quantity rather than quality, trying to reinvent the relationship with regulators, so that it is more discursive, more about ideas exchange, and more about culture change within regulation.

Q101 John Hemming: One of my hobby horses is taxman regulation processes. One of the particular things is that if somebody's annual return for tax credits gets lost in the post and therefore they do not get it in time, they have to pay back all their tax credits, which is an odd regulatory decision. Do you think HMRC should fall within the BRE's remit? Presumably your employees have encounters HMRC quite a few times.

Ms Veale: Indeed they do. I would have thought there was a very strong argument for that. It has a particular role which we are interested in, in enforcement of the national minimum wage, of course. It seems quite strange that it is detached. It is not something we have given a great deal of thought to, but now you have put it to me I would think there was a huge, impelling logic to having it.

Mr Cullum: I am not sure how it works but I know they have their own in-house better regulator arrangements, in that they have Teresa Graham, a former Better Regulation Commission colleague, as an in-house better regulations scrutineer. She is a forthright, intelligent person, who I am sure does a good job in challenging them, but it does seem an odd mission. Certainly from the consumer and citizen side, it is a very obvious area of regulatory burden. For us, a large part of this story is trying to minimise the number of organisations who say, "Our role as a regulator is so different from everybody else's that we are not going to play" because a lot of the themes are common

Q102 Dr Naysmith: I have a couple of questions on the health and safety and employment regulation and its interaction with other regulation. Is the BRE working well with regulators such as the Health and Safety Executive to produce more effective and risk-based regulation in this area?

Ms Veale: I think that has been a success story. It is not finished: there is a lot more to do. People are particularly - and quite rightly - very sensitive about health and safety legislation and regulation, because of the important role it plays in protecting lives, apart from anything else. Certainly that is one of the very positive impressions I have picked up, that there is a lot of work going on together with both the organisations. I think it has been quite a sea change, for the Health and Safety Commission. It is a fairly long-lived and highly respected organisation that had its own culture that went along with it. I think there is a particular feeling with health and safety regulation that you have to be terribly careful before you change anything. From what I have heard from trade union commissioners on the Health and Safety Commission they have taken this issue extremely seriously and are doing it very methodically and doing it in a way that will not frighten the horses because they take quite a scientific evidential approach - which is good. We would not want to rush them. As far as I can gather the BRE is working within that culture.

Q103 Dr Naysmith: They claim they have halved the number of forms that employers need to fill in. Is that your experience?

Ms Veale: Yes - which is very good. Form-filling has its place and I know that it is necessary afterwards if you end up in court, but there must be much easier ways of doing things. It is easier for trade union officers, much easier for safety officers, if the systems they have to comply with are much easier to use and make the most of modern information technology.

Q104 Dr Naysmith: Do you think it has made any difference to compliance, either better compliance or less compliance?

Ms Veale: I do not think that has really been properly measured. We are not hearing anything negative, so from that I suppose you could draw the inference that it is not causing problems. Whether it is making things better, I think we would have to wait a little bit longer to assess properly. I would not say there has been any significant problems with it - which is a good start.

Q105 Dr Naysmith: You have already mentioned the reviews that are taking place in health and safety and employment regulations, particularly in the area of dispute regulation. Do you have any specific suggestions about what improvements are required here?

Ms Veale: I think less of it, really. The TUC has firmly come to the conclusion that you cannot codify relations between employers and employees. It is just not possible to do it. It is about human relationships. The clearest example of why you cannot do that is the dispute resolution regulations. They were highly well intentioned: the idea was to make sure that all employers had procedures before they dismissed and that employees had a grievance procedure they could use, but it very quickly became obvious that if you start trying to write out a script for how people will deal with each other it is never going to work in a lot of situations. People became obsessed with the script and how they did things, rather than the substance of the problem. There were not fewer cases going to tribunal; there were the same number of cases - in fact the number of cases went up - but the cases related to the procedures rather than to the substantive complaint. That is very frustrating for both parties. It is quite clear that those regulations had not worked at all and I would salute the courage of the Government for having admitted that something was not working and listening to the different voices and making all those changes. You do, then, have to have the very difficult task of substituting for that, because, if you have accepted that the intention was good and that there was a need to improve procedures, you then have to work out how you are going to do it without prescriptive statutory regulation. Again, things are developing and developing in a very positive way, and far more use is being made of the ACAS code, which does have legal status, in that it can be used in a tribunal proceeding, but you do not sit there in your place of work making sure that every line of the ACAS code has been complied with, because it is not that kind of instrument. What is happening now is far more of a prompt system, with rewards and penalties for transgressing and doing things well. If you do make a mistake, you are going to get the book thrown at you in a tribunal and you are going to get money added to the amount you are going to have to pay out to the employee; but on the other hand, if you have done things well and there is a minor problem, the tribunal will be given the freedom to take a very, very light touch approach and just give the employer a bit of a telling off - which is quite right. I think that gets things back to how things should be. I would just chuck in one more comment because I cannot resist it: employers, understandably, complain about the volume of employment litigation now on all sorts of issues - and I think that is partly why the new dispute resolution regulations were put in place, because of course in the old days, when I started out, things were regulated voluntarily between unions and employers far more extensively - and I am not here to give lectures on policy, but I would say that if you remove that form of regulation - and I know it had its warts and there were problems with it, but if it disappears completely, as it has done now in some workplaces - something will go in to substitute for it, unless you move to a society that has no employment protection at all, which none of us would want to have. If you are going to have some employment protection, there has to be some means of enforcement; if you are not going to allow that kind of workplace enforcement, I cannot see that there is any alternative to having litigation. Our plea to the BRE on that would be to throw away the political baggage and have a look again at the tool kit and what could be done in terms of making things better at work and getting the parties to do things between themselves.

Q106 Dr Naysmith: How would you make that come about? What would you suggest?

Ms Veale: I would do some pilots. I would create some opportunities where you can test that - hopefully not to destruction - and where you can see whether there is a way of doing things through those means which achieves the same end. You would not be able to suspend protection; you would have to create a situation somehow where you can get to the same place by a different route and to see whether that would deliver the same result. You would have to keep the protection there, because obviously you cannot strip away bits of employment protection.

Q107 Dr Naysmith: Do you know of employers who would be happy to join those pilots?

Ms Veale: I think we could find some good employers who we work well with who would be happy to demonstrate by example how you can do things much better on a collaborative basis. If that were to work, you could then see if you could spread that out into other parts of the economy. These days it would not necessarily be with unions but with some sort of mechanism that replicates that employee voice, employee buy-in. We are all really trying to get to the same place at the same time.

Q108 Chairman: Perhaps employers should throw away their lawyer's phone number and get a book on common sense.

Ms Veale: I entirely agree.

Q109 John Hemming: I would like to come in on that particular point. There was a Middlesbrough case - and you will know better than me - where employees sued the union for settling something that was not their best interest, which destroyed the concept of collective bargaining. I believe that went to the Court of Appeal and was changed in the Court of Appeal. It does raise an interesting point - and I still employ about 130 people, so I am still quite a big employer; although, to be fair, my staff are not unionised: it is a software house and you negotiate with individuals to a great extent - whether it is worthwhile using works councils/trades unions as a mechanism to get a bit of equality of power, basically, between the employer and the employee because it is unequal relationship by default, dependent on complex factors, and whether that is an area to be looked at from a regulatory point of view. There is no question about it, for a lot of the legal processes there is a merit in having no-win, no-fee lawyers around: they are not going to take cases that are absolutely futile, there are issues about costs, but I do think, yes, there is something to be looked at, and I would be interested in expanding on that idea of alternatives to litigation for protecting individuals in the workplace and whether you have got other thoughts around that. You said not necessarily for trades unions.

Ms Veale: Because they are not there. I would love to set up a national trade union system where everyone had a trade union in their workplace. We are not going to get that and they would not be independent.

Q110 John Hemming: You are thinking of works councils.

Ms Veale: Exactly, where you had some sort of representative fora for employee voice and you had a kind of deal, so that, if what is being done is generally going in the right direction and is for the greater good of the greater number, you would never be able to stop individuals having a right but you would have to hedge that about a lot more. With Middlesborough and other cases, the lawyers have worked out that not only can they make money out of suing employers but they can sue the organisations that do deals with them. That will completely undermine any remaining collective bargaining in the private sector, and in the public sector it is having a massively damaging effect.

Q111 John Hemming: Your argument is that there would be some merit in perhaps limiting legal immunity to representative groups who are doing that negotiation, so they are not vulnerable to being got at all the time.

Ms Veale: If that were possible. There are complications with EU law, as we are finding out. The Equal Treatment Directive specifically includes trade unions, so it would be very difficult to get an opt-out, but I am sure there is some way of nuancing it so that you had some sort of time lags built in. That is what we are trying to look at at the moment, so that nobody loses their right but the way in which the right is accessed is ----

Q112 John Hemming: A lot of the time it is the parameters within which you can take litigation. If it is a very broad parameter, then it is not so much of a problem.

Ms Veale: Yes.

Q113 John Hemming: If it is very narrow and precise, the costs of that have a big impact.

Ms Veale: Exactly.

Q114 John Hemming: It is an interesting topic. I am also involved in the management of Birmingham City Council, and the single status pay and grading review. Obviously the difficulty with the trades unions is you cannot negotiate with the trades unions and agree something if they will get sued by their members as a result of them agreeing something - which does not create a very good negotiating environment. What are your views on the Regulatory Enforcement and Sanctions Bill?

Ms Veale: It is not something to which we have paid a huge amount of attention. We had some sympathy with some of the points the local authorities were making about the local better regulation offices, but our main concern was to ensure that the Hampton Review and those aspects of enforcement it instigated were properly interpreted into the law. So far, we are reasonably satisfied with the outcome. We have not been actively lobbying on the Bill, which I think you can take as being a sign of general approbation, but I suspect the NCC know an awful lot ore about this than we do.

Mr Brooker: The NCC is actively lobbying on the Bill. We certainly welcome the aims, which are to improve consistency in the way that consumer protection is enforced locally to modernise the sanctioning tool kit. We are concerned at the way the Bill was presented by the minister - as I touched on earlier. Consumers were very much treated as an afterthought in legislation rather than putting them right at the heart of it. To be fair, the Bill, now it is more or less through the Lords, is in a much better state than it was when it started. The Government have made a couple of concessions; in particular, excluded from the primary authority principle occasions when there is significant risk of serious harm to human health or a financial interest for consumers. But we do have concerns on remaining points; in particular, there is a pre-emptive right for business to appeal a proposed enforcement action, even if the enforcing authority and the primary authority are in agreement with what should happen next, and we think there is scope there for well-heeled businesses to use certain lawyers to delay legitimate enforcement action or even to deter a hard-pressed local authorities from taking action in the first place, so that is an area that we want to remove from the Bill.

Q115 Judy Mallaber: Sarah, you have criticised business and employers for often not distinguishing between policy and administrative costs when they have made complaints. You have suggested that that attitude is also seeping into government decision-making. Can you expand on that and give some examples?

Ms Veale: The classic example, which is in our evidence, is maternity legislation. It has not been changed radically but extended, so that women have a longer period of paid maternity leave. The problem with the business lobbying on that, which I think the BRE did absorb, is that there was, I think, quite a naked attempt to conflate the administrative issues with policy objections. I think that really what the businesses were objecting to was extending the period of paid maternity leave. They said that this made additional administrative burdens and they could not cope, as if it was much more difficult to let a women have nine months' paid leave than to let a woman have six months' paid leave, whereas, in fact, I would have thought the exercise of providing cover, statutory maternity pay and so on would not have been any more difficult between six and nine months. I think it would be much better if there were to be some honest debates about policy - and we are perfectly happy to engage in debates about policy all day and every day - but to pretend that the objections were to do with the costs of running something I think are disingenuous. There is a lot of help given, especially to small firms, in dealing with maternity absences. I really feel the two things were blurred in together. The trouble is, if the voice is loud enough on those sorts of issues and manages to create a storm of upset about administrative burdens, the temptation then for organisations like the BRE is to accept the evidence they are given without looking behind it. If you go and talk to some small business owners, you will find that it comes out in a rather ugly way, as have some of these recent comments made by some quite senior ----

Q116 Judy Mallaber: Alan Sugar.

Ms Veale: Quite. I was not going to name him, because he is getting too much publicity already, but comments have been made that there is no point in employing women of childbearing age because they are only going to cause you loads and loads of problems. That is detestable, in my view. On the other hand, at least this a view put forward about not wanting to employ people who are going to cause a nuisance in the workplace and not seeing employers having a role in contributing towards ensuring that women who have babies can go back to their jobs and all the rest of it. It beggars belief to try to pretend that this is not policy objection and it beggars belief to argue - like the small firms do to try to get it considered respectable - not by saying what Alan Sugar says but by saying, "It is all just too difficult. If you make it easier then it will all be all right and we will not object" but they never say how they would make it easier. You cannot have the objection to the administrative burden and not provide some sort of solution - unless the truth is that you object to the policy and you are not interested in the solution because you just want the Government to stop doing it. I think it is using the burdens argument as a disguised way of arguing for a different policy. I think that is disingenuous and I worry that the BRE make it into that sort of mindset. I would urge it to do its job of dissectring information and sending people out there to talk to one or two real, small businesses, instead of always listening to the voice of representative so-called organisations which, sometimes, I think, are a bit lazy themselves perhaps in collecting real hard evidence and extrapolating from that proper arguments about how you would do things better.

Q117 Judy Mallaber: Is it always clear what the difference is between the administrative cost or burden and the policy? I was at a small business breakfast recently and maternity rights was one of the big things raised by them. When I tried to pin down one of them, the concern they expressed was not knowing when the person was going to return to work: if only they had clarity at the beginning and it was set out at the beginning rather than the employee being able to say, "Not long before she came back," that would ease the burden. Is that a burden or is it a policy issue? Is it always clear or is there sometimes a blurring between the two?

Ms Veale: I think there is probably more of a genuine blurring there, but there is nothing that can be done about that because human nature is human nature, things take their course, and it is practically possible for women to predict precisely when they would like to return to work. I think the Government have done what they can, with gentle measures like the "keeping in touch" phase, which is an excellent initiative whereby the employer can now feel confident that they can talk to the woman whilst she is off and not get into trouble for it, and make sure that they have conversations regularly, so that there is a better ability to plan when the person is coming back. But I think that is an inevitable consequence of a lot of women now working -which has generally been extremely good for the economy. Leading employers would say that through employing women - who are outperforming boys a lot now at universities and schools - they are ensuring that they have absolute access to a pool of talent without which I do not think they would survive, but have to accept biology, which is that women still do have the babies and will need some time off work. Again, I think you get into much more complex arguments about how far employers have to shoulder social burdens, but employers operate in the community and they have to accept that this is what is happening today: you cannot turn the clock back. They just need to ensure that they do ask, and they should ask volubly, for as much help as they can get with managing the situation - that is perfectly legitimate - but stop wrapping up arguments objecting to the fact that women are working - which some of them still do object to - in bogus arguments about how difficult it all is.

Q118 Judy Mallaber: Is there evidence that the confusion between policy and administrative costs or burdens is affecting how government looks at these issues and government policy?

Ms Veale: It is hard to see exactly where that is happening. One good example of it would be the way in which the Working Time Regulations operate. There has been so much fuss made about all the difficulties in giving people their holidays and their rights to time off, that what has happened in fact is that it has done businesses more harm than good because they have now constructed a raft of regulations that are practically impenetrable in order to protect employers from these administrative burdens. In a way they have created more burdens by trying to avoid the burden of doing what the policy objective was. On that, you feel like saying, "The policy is to give people a decent holiday and to make sure they are not working excessive hours for the good of them, the company, and everyone else. The easiest way to go about that is to negotiate it in each workplace." It really is, because then you get something that fits the purpose, fits the requirements of that particular workplace and gives the basic protection, instead of having this great wad of regulation, which is really where the problem is. That is an example of where you have substituted an attempt to compensate for administrative difficulties with good policy objectives that could be sorted out in a completely different way.

Mr Cullum: I suppose part of the problem is that if you wrongly categorise what is an administrative burden from the start and then say you need to cut the number of administrative burdens by 25 per cent, you are making life difficult for yourself if some of them are not real administrative burdens and are going to be impossible on a policy basis to remove. I have not looked at the BERR list of administrative burdens for a while, but when I last looked at it there seemed to be quite a few which were about providing consumers and, indeed, employees, with information. There is an administrative process associated with that, but that is not administrative burden in the sense that that programme was designed to identify. Things like giving consumers a copy of a contract which they have signed, on a policy basis seem highly appropriate. Okay, there is an administrative task associated with it but, in a regulatory sense, the administrative burden would be if you then had to post a copy to John Hutton - because that is the bit which is not about policy, it is about unnecessary intervention which requires you to do something which is separate and pointless. If you create a list which has lots of fake administrative burdens and then say you must cut them, you make it much harder to achieve the quantity requirements which are there. I guess there is a question then: Does it push you to make some of the wrong decisions in order to get your administrative burdens score up?

Q119 Judy Mallaber: Does the BRE distinguish between tasks and burdens?

Ms Veale: I suspect, exactly as Philip says - and you could become quite cynical about this - if you are given an objective to reduce something and make it far less onerous, if the way it has been introduced has added all sorts of reporting requirements that you are not quite sure about but which you tucked in for various reasons, that would make the task in reduction subsequently much easier. I am not quite sure. Am I misunderstanding you, Philip?

Mr Cullum: If I think everybody knows who is involved in this that the administrative burden exercise is flawed, it is trying to do the right thing, which is it is trying to get to some sort of process which will drive culture change by creating a bit of imperative into why they must try to remove some bits of regulation. But I remember speaking to people involved in regulation within government two or three years ago and saying, "There are all sorts of flaws in what is administrative and what is an administrative burden," and being told, "We know this is flawed, but, hey, that is history, the process is going, it is just a question of getting on with it." It could be the time is right for a bit of a review as to how effective that process has been.

Q120 Chairman: That is very helpful. Certainly I think the Committee would welcome any further observations you might like to submit on that particular point because it does help to quantify the scale of the task facing the BRE if some of the so-called burdens should not be included in that list. Perhaps I could thank both the NCC and the TUC for giving evidence today. I would invite you, before we formally close, if you have anything else you think you would like to add, now is your chance.

Mr Cullum: Perhaps I could pick up on something Sarah said which I thought was terribly interesting - it was the slightly throwaway remark about the importance of pilots. Sometimes regulators take what I think of as the Heathrow Terminal 5 approach to introducing things: they just do it en masse and see whether it works, but there are some examples of things being piloted quite effective. In one of the examples which we are very supportive of is the Food Standards Agency scores-on-the-doors approach. It is all about environmental health, information in the windows of restaurants and pubs that serve food, and about inspection. It is a fantastic way of conveying information very clearly to consumers. There was a big debate about the most effective way of presenting the information and the solution was to trial a number of different options, which they have now narrowed down to two they are consulting on with a view to implementing one at the end of the year. That felt like quite an effective approach and yet it is not really something which regulators in general tend to do at the moment. I think the tendency is to desperately seek a solution to something or seize on what they perceive to be the solution and then say, "That's it, we are going to go for it," and there is something about trialling it which should be better. I thought that was a very good point.

Ms Veale: It was not supposed to be a throwaway point. It is a serious point. We are all for pilots: testing things out before you run them out, to use that awful jargon, would be a very good thing.

Dr Naysmith: It could be usefully used by some government departments introducing policies as well.

Chairman: On that point, thank you very much for your time.