House of COMMONS
MINUTES OF EVIDENCE
REGULATORY REFORM COMMITTEE
BARONESS SHRITI VADERA, SIR WILLIAM SARGENT and MR JITINDER KOHLI
USE OF THE TRANSCRIPT
Taken before the Regulatory Reform Committee
Andrew Miller, in the Chair
Mr Quentin Davies
Dr Doug Naysmith
Mr Mark Prisk
Memoranda submitted by the Better Regulation Executive
Examination of Witnesses
Baroness Vadera, a Member of
the House of Lords, Parliamentary Under Secretary of State for Business,
Q255 Chairman: Can I welcome you here for the session of evidence, Minister; it is a pleasure to have you here; and Mr Kohli again, and of course for the first time Sir William Sargent - congratulations on your knighthood.
Sir William Sargent: Thank you.
you know, we are coming towards the end of our evidence gathering session and
it is appropriate that we should use this opportunity to probe the Minister
directly on a number of issues that have cropped up during our inquiry. Can I first of all simply ask you, Minister,
Baroness Vadera: The
the Panel for Regulatory Accountability have a role in supporting
Baroness Vadera: My experience of the
Chairman: We will come back to that relationship with the departments later.
Q258 Dr Naysmith: Good morning, Minister. Does the government still believe that replacing the Better Regulation Committee with the Risk and Regulation Advisory Council was the right thing to do?
Baroness Vadera: Yes, I think it does. The
Q259 Dr Naysmith: So who now provides the high-level strategic thinking one stepped removed from actual administration? Who provides the strategic feed-in to your programme?
Baroness Vadera: The people who have always
provided it, which is the government because whatever you might say about it -
and we very much valued the work of the
Naysmith: When we had the
Baroness Vadera: I would be very happy to talk
Naysmith: We also heard something similar when we were
Baroness Vadera: Actal obviously is not the think-tank; Actal is just the monitoring function for a narrow piece of work, which is the admin burdens verification.
Q262 Gordon Banks: In evidence that we have taken the IoD has suggested that a real focus in Civil Service career paths should be on the experience within the effective use of regulation and the usage of legislative solutions. So do you think that the Civil Service training promotion sufficiently acknowledge the value of experience in promoting Better Regulation, as well as the more traditional area of working on Bills, et cetera? So how focused is that?
Baroness Vadera: I am just smiling because I have had this discussion with the IoD and Miles Templeman for a long time - we have actually been bouncing ideas off each other because we have come to the collective conclusion that one of the things that we need to deal with is culture and change of culture across Whitehall, so Miles and I have had so many discussions around the subject. I think that it is fair to say that I think there has been a radical change in the culture, but I think that we have a long way to go still. Some of that is around training but I think some of it is also around the incentivisation - that people feel a sense of ownership of the Better Regulation Agenda that they did not before, and they feel that they will be awarded for that in a way that perhaps they did not have before because there was a sense before that to get around the system you only needed to be doing a big Bill. But now it is slightly different; it is about looking at the overall competitiveness and improving both business and public sector and the third sector functioning more effectively. But I do think that we have a long way to go and I think that some of it is still around the incentivisation issues. But there are training courses; William, do you want to go through all the training courses?
Sir William Sargent: To give you an example, about
35 of the courses like the Ministry of School of Governance have better
regulations, elements within that, which is something that people go through,
right through to top management programmes and right through from the basic day
to day policy making type courses through to the ones which are intended for
the leadership of the Civil Service going forward. We ourselves as the
Q263 Mr Davies: May I just ask a very brief supplementary on that? The matter of incentivisation, what you are describing is more training people, giving them information about the importance of better regulation. Incentivisation would be something different; it would be giving individuals a personal interest and making it clear that promotion is dependent upon progress in this area, for example. Then there is the issue of institutional incentivisation: that is to say, whether the actual department has an interest. For example, you might say in so far as they can make bureaucratic savings by deregulating or better regulating they could keep a portion of that as an allocation of their own budget. Have you thought about going along these roads of individual incentivisation and institutional incentivisation because obviously they are much more powerful than simply giving people training courses?
Baroness Vadera: I think that they are much more powerful. I would obviously encourage you to encourage Sir Gus O'Donnell to think about how he incentivises the Civil Service, but we have talked about this incentivisation before and he has certainly taken some of that on board, and I think that we could do more of it. Institutional incentivisation, obviously the Treasury has historically also looked at, for example, efficiency savings that come from the public sector, because the public sector regulation brings in quite an important element of competitiveness, and how the savings are shared, and people are incentivised to certainly deliver on that. I think that regulatory budgets will create a different incentive structure as well.
Chairman: Which is precisely where we are going to go.
Q264 Gordon Banks: Just to sum up what you have just said there, that the basis of that change has occurred it will take a long time for that change to become embedded and entrenched to the level that we would all wish it to be, would that be right?
Baroness Vadera: I think you can never really get to where you want to be because it is always a work in progress, and I think we should be encouraging, in particular, the senior Civil Service to be looking at this further.
Banks: Doug mentioned Actal in the
Baroness Vadera: I think that we have actually
a different system and we have a very open system, so all of the impact
assessments which have now been reformed again, which William is just pointing
out to me, it is all available on one page and it is very easy to look at and
see and they are all published. So
actually they are open for scrutiny in a wider way. They are open to scrutiny from business and
they are obviously open to scrutiny from this Committee, which would be a
welcome and valuable thing; and also the
Wilson: There seems to be a perception that the
Baroness Vadera: No, I would not accept that
view, although I can see how somebody from the regulator might think that. The reason I do not accept that view is
because if you look at the way in which government makes decisions, policy
decisions are made - not in the Environmental Agency but made by Defra on that
particular issue - collectively within government, so that we all have to sign
off obviously it is made in a collective way with people representing different
views and coming to a collective decision. The job of the
Wilson: That probably could happen, as you say, in
government, but why is there still a perception that the
Baroness Vadera: There might be that perception. I would not claim that the
Q268 Chairman: Before we move on, can we take one step back to the proposed regulatory budgets. How do you see these budgets working and who is going to monitor compliance?
Baroness Vadera: We have obviously not made a final decision, so I can give you some views we are going to consult and I would not want to pre-empt anything that comes out of the consultation process. We are trying to see if we can emulate - and again it is a world first, nobody has quite done it before so I cannot quote any immediate precedents - something as close as possible to, say, the Comprehensive Spending Review where there is a budget that is allocated and that people have a responsibility to live within it, and if they overstep the mark then we have to look at what sanction is available. It is more difficult to do it for regulation than it is to do it for funding because it is, by definition, more finite. So we will have to look and see how we actually monitor and ensure that people stay within the budgets.
Q269 Mr Prisk: Minister, can I turn to the Administrative Burdens Reduction Programme? How committed is the government to this? After all, looking at your own statistics the latest figures show that your own department has only achieved a one per cent reduction and the Treasury has shown a seven per cent increase in the period as shown in your most recent publication. How committed are you to this?
Baroness Vadera: I would say very committed because this really has been our flagship project in terms of delivering results on the ground. I would also say that there has been £800 million so far that has been delivered.
Q270 Mr Prisk: In percentage terms how much is that?
Baroness Vadera: Six.
Q271 Mr Prisk: Out of?
Mr Kohli: Six per cent out of 25.
Baroness Vadera: Because it is quite easy to
get the lower hanging fruit and so on and then need procedural and process
changes or IT changes in particular, it is true that by definition some of that
has back-loaded towards the end of the programme. That is in the nature of the things that you
have to change in order to achieve it.
So I am confident that we will get there. I am actually talking about buy-in, and going
back to earlier questions I think that there is a huge amount of buying-in
Q272 Mr Prisk: I think that enthusiasm is encouraging. Can you tell me, Minister, I think the correction to the original document says that by now, this year, 2008-2009, there should be an 18.9 per cent reduction, can you just confirm that that is where we are at? Has that been achieved?
Baroness Vadera: I cannot actually.
Mr Kohli: The way we do the work - and would welcome suggestions on this - is that at one point in the year we take a snapshot of how much progress each department has made. In autumn last year, December 11 when we published our document, that number was six per cent across government and the table you have in front of you sets out what it was for each department. We will publish an equivalent table on roughly the same date and we have not done the work on that yet.
Q273 Mr Prisk: So you do not know if you are anywhere near 18 yet?
Mr Kohli: Let me just check the numbers, but we will not know whether we are near 18; 18 does not sound to me like the right number, but I will double-check.
Baroness Vadera: I thought it was more
back-loaded than that. But obviously the
Q274 Mr Prisk: You mentioned buy-in and that leads me on to the question in terms of the back-loaded nature of the programme. One of the issues here - and you have said that Whitehall has bought into this, and I understand that that certainly would be your hope - is the question is whether business has, and there is a lot of scepticism that there has been some progress in some departments, but obviously BERR itself has only achieved one per cent there in its first full year. Given that the programme has some difficulties - you say there is some hope that it will be back-loaded - why should business believe that actually you will hit that target? What is the clincher that you can say directly to a small business, "And this is why we will achieve the target we have set ourselves"?
Baroness Vadera: I am a great believer in actually delivery will be in the end the only way to show something. I would say two things. One of them is that for the first time - I have been working on the regulation on and off in government for a number of years - in the last month I have been to two or three meetings with small businesses where actually they have come and said, "Now that you mention it, yes, there is a difference." And it is quite interesting to me that you actually have to mention, "Have you noticed that you can do such and such? - "Oh, yes, I did notice that. Yes, I can do my planning application now within a matter of hours as opposed to days." It is just something about the nature of regulation where people absorb it differently and do not notice so much, and I think there is a communication issue that you are pointing to, which is quite important, quite interesting that we get right. But at the end we just have to deliver; they will notice whether we deliver. But there are already things that they are starting to deliver.
Q275 Mr Prisk: Moving on to some other questions. Data reduction, the target of 30 per cent is one with which we are familiar. By my reckoning of the figures as published, certainly in your own publication, my understanding from this is that there should be roughly £700 million of data reduction savings to date. What is the figure?
Mr Kohli: There are different ways of measuring public sector reductions. What that is saying is that in relation to all measures which help the public sector there are 700 million to date. It is a count of the number of instances where departments require frontline public sector workers to give information to the centre, and that count was conducted in the autumn of last year and came up with the number of about 700. The government is committing itself to reducing that number by 30 per cent by April 10, which is over a much shorter period on the admin burden.
Baroness Vadera: It is the number of times that people go back for information; the 30 per cent applies to that.
Q276 Mr Prisk: Public savings, it says here, very briefly, Chairman, is 921 by this financial year - 921 by now. Are we on course?
Mr Kohli: I think the answer is the same as the one I gave earlier, which is that we do that snapshot check once a year. We are in continued dialogue with the department to see if anything looks off track; so in relation to BERR, to which you referred earlier, because BERR's numbers are low we have been talking to BERR ever since December to make sure that they will reach what they will need to reach in order to deliver those 25 per cent targets.
Q277 Mr Prisk: The Minister who is the Minister for that department would have heard you!
Baroness Vadera: Can I just say that I have had meetings with BERR; I have had meetings with the other side of the department to check, on why where we are where we are, and what we have to do to get there and how much work we have to do.
Q278 Mr Prisk: So you are going to crack the whip, are you, Minister?
Baroness Vadera: I think they probably feel I have done that already!
Sir William Sargent: Can I just clarify, when you are talking about the public sector, those are ---
Baroness Vadera: Yes, those are different things. I am talking about the admin burdens.
Mallaber: Following on from the question of perceptions
of business, how far do the initiatives that have been taken come from
departments or the
Baroness Vadera: I think that you have to start with the burden on business or the third sector or whatever it might be; you have to start from what is their feeling. The simplification plans were very much both people in departments going through and identifying what they thought was not necessary to them in policy terms or what could be reduced in terms of procedures and forms, et cetera, but there was an also an exercise of consultation with businesses during simplification plans which actually tried to identify what businesses felt most strongly about. We also research and work through quite a lot of what are the particular areas of businesses that are concerned about, both in terms of the overall impact, whether it is employment or health and safety, within that what elements are creating the most problems. So we have to do it from both angles. I think the irritant issue is very interesting and I am sure at some point somebody will want to ask me about HMRC so I may as well talk about HMRC. HMRC, for example, very much took the approach of identifying the irritants as well as perceptual issues in a way that was responding to what businesses were telling them, and they have a special group of businesses with whom they consult - because of confidentiality reasons they work with them - and identify those irritants. I think it is important both to look at the overall burden and to look at the irritants because there could be certain sectors in particular who have a very heavy burden, but if you spread the cost across the whole of the economy you would not find that to be significant.
Q280 Judy Mallaber: When you look at the other sectors, the burden on the third sector and also bureaucracy in public services, do you take the same approach in terms of how to identify which sorts of factors to look at?
Baroness Vadera: A lot of the regulations that we look at obviously apply to all sectors; there are employers in all of the sectors, there are health and safety issues in all of the sectors, so they do apply across the piece.
Q281 Judy Mallaber: For example, in the public services there are big issues that come up if you are talking about both irritation and time in terms of public service workers filling in forms in various areas - education, police and so on.
Baroness Vadera: As part of this 30 per cent exercise that we discussed earlier, there is both a 30 per cent exercise in terms of the number of times we ask for data from the public service as well as an exercise on irritants.
Mr Kohli: To give you a specific example, the Department of Health identified 30 key irritants which health providers are concerns about. The top few of those are about different bits of the health service asking frontline health providers for similar pieces of information, and they are committing themselves to addressing those issues. That leads to the publication of the Department of Health's simplification plan in the autumn.
Q282 Mr Prisk: Can I ask both the Minister and Sir William, in terms of how this programme in terms of administrative burdens progresses, what role do you see in how business organisations can play a part in communicating progress or lack of progress? In other words, where do you see them sitting on that?
Baroness Vadera: If we do deliver on a particular area but somehow it is not being felt by businesses then obviously that would defeat the purpose at the end of it. We can find the methodology that gives you a number and a process that gets you to that number, but if the actual result is not being felt on the ground we would still consider ourselves not to have done the job effectively. So we absolutely have to be sure that we are checking that what we are doing is having an impact on business. So we research it, we follow what people are doing, we do samples and surveys and we have discussions with businesses and with business associations very regularly, because if we did not do that we would not be doing our job properly.
Sir William Sargent: To give you some more detail, myself and the Minister meet pretty regularly with the five main business groups in addition to trade associations that are sector specific so we have quite a range of conversations. If we take Common Commencement Dates, which is something I feel is a very positive way of communicating because what you are identifying is how we get the communication in both directions: one, to get ideas into the business community; and, two, for them to give feedback to the business community ---
Baroness Vadera: Can I just interrupt to say
that Common Commencement Dates are William's idea and that was before he joined
Sir William Sargent: Yes, running small businesses, how did I know what was happening and when it was going to happen on certain dates and so forth? So the two dates, 6 April and 1 October, we are a few years into that now. To give you an example, here is what used to be published from the business point of view if you went on to the website and from the Common Commencement Date that just happened and we have it down to something like this for the business community. We then had the issue of how do we get that through to the businesses? For example, the five business groups in the main or the main trade associations can get it electronically to about a million businesses, so we use them as a channel to deliver, to say, "Here is the information, what is new, what is happening, and could you deliver this to your members?"
Q283 Chairman: Just to aid our record of this because Gurneys cannot record the scale ...
Sir William Sargent: Taking an example of a document which was on a Department's website, which was 80 pages of guidance - and that might have been so years ago, even when it was done electronically - and something that has been brought into the new regulations in the April 6 Common Commencement Date is a three and a half page, very simple and easy to digest document.
Q284 Mr Prisk: Which department is that?
Mr Kohli: The situation is that departments individually publish their own guides and what modifications are coming in and if you add it all up it is 80 pages. So Communities and Local Government is at the front of that, but that whole pack is 80 pages for all government departments. But actually it is not just that; if you look at it, if you read it and you try and make some sense of it you somewhat struggle because it is written in very legalistic speak.
Q285 Mr Davies: Can you pass those documents round so that we can look at them?
Mr Kohli: Of course.
Q286 Mr Prisk: I strongly commend the Common Commencement Dates, but just following on, Chairman, on the business communication role, my understanding is that last April there were 81 orders on that particular date but this year it has risen, I understand, in April to 128. I think there were 82 on the day, but around that period 128. Was business disappointed by that?
Sir William Sargent: The feedback I have had from the journalists who talk to businesses are quite pleased about the manner in which they got the information because in the end to find something that relates to you specifically - because, do not forget, quite a lot of things are quire narrow within departments - the fact that you could now get information that you can absorb very easily, I think people are very pleased with that.
Q287 Mr Prisk: Even though the level went up?
Sir William Sargent: I have not had any feedback from the fact that they felt that they could absorb anything more strenuous, because do not forget quite a lot of things would not apply to every single business in the community.
Naysmith: In oral evidence to us both the
Baroness Vadera: I think it is fair to say that we have always had measures in place to look at the flow, including the impact assessments, the fact that we make collective decisions so that we are looking at the collective burden on businesses as well as on the other sectors, and the impact assessments have to show that there is a benefit that is significant. I would say that regulatory budgets are crucial and are central to this because it is actually the one thing that is not just about different bits of a process in the way we make decisions, but an overall cap that actually self-regulates. So I would say that it is the first time that any government has considered a cap, a limit on the flow of regulation and I think that is quite radical. If you have that in one sense within that piece of course we will still continue to need to have impact assessments because we need to ensure that even if it is within the cap it is proportionate and it is the right thing to do, but it does really overarch everything.
Q289 Dr Naysmith: One of the things that the Chamber of Commerce suggested was dividing statutory instruments into the substantive legislation change and those that are just administrative, such as road-closing orders and updating measures, and that sort of thing. What do you think of that idea? It would help the assimilation of what is important and what we are talking about a minute ago.
Baroness Vadera: I think the process of how we communicate that change, which is something that William referred to in terms of the Common Commencement Date, as well as how we communicate actually is important, whether it is through guidance or whether it is through the Common Commencement Dates - the information that William referred to. I think that is the place to actually divide them. Statutory instruments are legislative tools so we cannot start to divide statutory instruments into two different types; we actually have to look at it in terms of a burden on business. It is also true to say that in some sectors the burden will be different from within others.
Q290 Dr Naysmith: Road-closing orders are quite different from introducing some sort of legislation that will go on and on and on for a long time.
Baroness Vadera: It might be, but road closures might be very important to certain types of utilities, so it depends on the sector - some things might still have an impact on certain types of companies.
Q291 Dr Naysmith: Also I cannot resist the opportunity at the moment to raise the role of this Committee in all of this. Over the years this Committee has had the power to get rid of regulatory burdens and to get rid of outdated regulations and things that business finds irritating and annoying, and the government has never put enough work through this Committee, and I just wonder (a) do you know why this is; and (b) what we can do about it to make sure that this Committee is used to its full? The government blames this Committee when it is drawn to its attention that they are not using the Committee and says it is because we are too slow - but we have never been too slow.
Baroness Vadera: I can apologise for that. I do not know why and I do not know the history of it.
Q292 Dr Naysmith: It is probably not directly your responsibility, but you can draw people's attention to it.
Baroness Vadera: What I can say is that I am always, always in the market for ideas of how to do things better as well as what particular burdens to look at; whether we can do something with it; and actually if it came from this Committee it would be incredibly welcome because in one sense it comes then from Parliament and has some buy-in and it would make life a lot easier for us. So actually now that you mention it you might regret it - I might be on your case a lot more!
Q293 Dr Naysmith: There is reported to be a good flow of LROs coming our way but sometimes in the past these have disappeared at the last hurdle, so if you can make sure that they come through.
Baroness Vadera: Absolutely, although LROs are not the only instrument by which we undertook better regulation - they are just ones that apply to a specific type of better regulation outcome. So I think it would be very good if we were able to look at the whole range of the LROs.
Q294 Chairman: The Financial Times quoted a Minister - I think it was John Hutton - as saying that there were 40 or 45 in the pipeline.
Baroness Vadera: It is 38.
Q295 Chairman: I exaggerate slightly. But thus far we have physically only seen one and we have knowledge of another five or so. That is not all that many.
Baroness Vadera: I know that you discussed this previously and we have the list here.
Mr Kohli: We can pass that over to you.
Sir William Sargent: The process is something that is quite recent and at present one to be made, two are before Parliament; six, the consultation process has finished, etcetera. So the pipeline is pretty accurate.
Q296 John Hemming: Perhaps related to this, I was having a problem in my constituency with the police and trying to get them to arrest people for minor crimes and they said, "It takes too long to process the arrest," which is obviously a regulatory burden. I wrote to the Minister and said, "How long does it take to arrest somebody?" and they said "We do not know", which I did not think was a very good answer, to be honest. If you look at these aspects of what are effectively regulatory burdens, even if they are implied by the judicial processes rather than the executive or legislative process, I wonder whether you look at that and try to manage that within regulatory budgets or anything else because obviously it has a massive impact because the people do not arrest people because it takes too long, and that is just not acceptable. So do you look at that in this process at all?
Baroness Vadera: I do not know whether you have managed to prompt Jitinder about this beforehand because he appears to have stops and searches documents!
Mr Kohli: I am pleased you have asked that question
because, as you will know, Sir Ronnie Flanagan did a review of policing
recently and it gives me an opportunity to give you an example of how the
Q297 John Hemming: It is a similar problem with nurses having to fill in 37 pages for each patient and it stops them from feeding the patients.
Mr Kohli: Absolutely.
Baroness Vadera: That is exactly right.
Q298 John Hemming: So you are doing that on a responsive basis rather than initiating it?
Mr Kohli: We are doing both. We are initiating it by saying to departments that they need to find the key irritant and they need to find what they are going to do about it; but equally when an opportunity comes along, as Sir Ronnie Flanagan did on a review of policing, we are quite happy to jump on that bandwagon and push it in the right direction. I can pass that round, if that would be helpful.
Davies: Let us move on, if we may, to the role of the
Baroness Vadera: I am surprised you think it is controversial.
Q300 Mr Davies: It has been contested and I will give you some references if you like.
Baroness Vadera: The idea was to ensure that there was sufficient focus and clarity on the issues around regulatory reform. It therefore became a part of a new department which has regulatory reform in its name. There is now a Secretary of State for Regulatory Reform; there is a junior minister - me, in this instance - focusing on regulatory reform. It is a key part of the agenda for competitiveness of the British economy, both the public and private sectors both of which have efficiencies we need to extract and get our competitiveness up, and it was therefore a part of the department that is structured around competitiveness. It was important for it to be close to and to be able to use and leverage off the relationships of one major stakeholder, which is business, and we believed that it would therefore create this clarity and focus in highlighting what it needs to do by giving it something that is its own department in this. It is business enterprise and regulatory reform.
Davies: I do not know that I personally find it
immensely convincing because what has actually happened is that you have taken
Baroness Vadera: I already gave an answer in
part to the first element is why we are perceived to be captured by business. I do not believe that we are captured by
business; it is a process of making decisions in government that we come to a
decision collectively. I have worked
Davies: So are you aware that Defra has given us
evidence that they think that your move from the Cabinet Office to the Business
Enterprise and Regulatory Reform Department has diminished your influence in
Baroness Vadera: I would not accept that for a single second and if Defra have ---
Q303 Mr Davies: You would not accept it but are you aware of it?
Baroness Vadera: I was aware that you have had some interesting discussions with Defra during the hearings, about which I have read because I read some of the transcripts and some of the material that was provided to me. But I would also say, as I said before we are not always popular with departments and it is not our job to be popular with departments.
Q304 Mr Davies: No, it is certainly not your job necessarily to be popular. As a good minister I am sure you are alive to sentiment in your own department. Would you say that it is a general consensus among the officials who work for you and up to you that the move from the Cabinet Office to the Business Enterprise and Regulatory Reform Department was a good and sensible one?
Baroness Vadera: My sense of it, quite honestly, is that people were a little bit destabilised at the start but they settled down very well, and my sense of the mood - which I think Jitinder and William would be better able to speak to because they represent the people you might be worried about - is that it is very upbeat now because they have seen that we are having an impact.
Q305 Mr Davies: And your assessment is that this move has increased your leverage on the government machine, your ability to influence departments in the right direction so far as regulatory reform is concerned; is that right?
Baroness Vadera: I believe that it has given us a higher profile; I believe that having a Secretary of State has allowed us to focus on this issue at the Cabinet level. I believe that I have been able to use the Secretary of State and other leaders ---
Q306 Mr Davies: Would you give me a direct answer, please, to my question? Do you believe on balance that it has increased your leverage on government?
Baroness Vadera: Yes.
Q307 Mr Davies: Do you agree with that, Mr Kohli?
Mr Kohli: Yes, I do. I do not believe that we would have made regulatory budgets happen in a document other than the Enterprise Strategy. It is looking into a crystal ball and trying to guess, but that would have been significantly harder from within the Cabinet Office than it has been here. But as Shriti said, it has of course been stabilising. Going from one building to another building, all learning brand new systems ---
Q308 Mr Davies: Mr Kohli, we all know about that; the question is whether people think it is a worthwhile exercise, whether the result is worth the effort and the short-term disruption, and you are telling me that you think they do think it was a good idea and worth, therefore, the disruptive costs. You agree with that too, Sir William?
Sir William Sargent: Absolutely, yes.
Davies: Let me move on to something else that does
relate to the EU, and it is the issue of gold plating. Have you in the
Baroness Vadera: Yes.
Q310 Mr Davies: If so, can you give me an answer to it?
Baroness Vadera: We have not done a quantitative study, we have done the Davidson Review, which looked at the practice of what had happened and attempted to drill down into various areas to give us a view. So it was not a comprehensive, quantitative study because nobody has done a comprehensive quantitative study of legislation at all.
Q311 Mr Davies: Why not? You are in a position to do it.
Baroness Vadera: It would be impossible to do because we would be doing it for a long time. The Administrative Burdens target study took us a year or 18 months to do. But when we looked at the methodology of how best to do this we came up with what was eventually done by the Davidson Review. The Davidson Review found that obviously there were instances of gold plating - there clearly are. There are some departments I see from the transcript that you found had a greater prevalence of doing that than others; but, nevertheless, it was not as widespread as you might think - the IoD I understand told you that it was not as widespread as you might think - but there clearly are instances where it is done. We have therefore done two things, one of which is to give clear guidelines of what ought to be done and how things ought to be transcribed. The second is to ensure more rigorously that we do impact assessments for the elements that are additional and extra and that they are justified.
Davies: Those two points are important and I want to
come on to them. But it is also
important for us to have a picture of what the current position is, and we are
talking now in terms of mere vagaries.
You say, "It is not as extensive as you think." You do not know half of what I think; I
actually do not know how extensive it is, I do not have a clear picture
myself. Even you as a minister do not
have a clear picture. We are talking
about more extensive or less extensive
than someone might say or someone might thing and this seems to be a very
unsatisfactory situation which we do not actually know the extent of the
problem, either in absolute terms how many of these directives have been
implemented (a) on a non- minimalist fashion; and we do not have any picture in
terms of qualitative terms what is the actual burden of the additional
regulation which we have taken on board and imposed on our citizens of this
country which will not necessarily have been imposed on other Members of the
Single Market in the course of the same Single Market Programme. Those are two very serious questions and you
are telling me that after all the years of the
Baroness Vadera: No, I am not saying that. What I am saying is I think that it would be disproportionate to try and find a single number that gave you the answer, "Yes, the answer is 12" or 42 or whatever it might be.
Q313 Mr Davies: Do you have an idea in terms of order of magnitude? Is it 100 per cent addition ---
Baroness Vadera: If I may finish answering your first question, you said that you were concerned about the quantitative and I have given you the answer to the quantitative; and you were concerned about the qualitative, and I do not accept the few that we do not have a qualitative sense. We do have a qualitative sense, it is set out in the Davidson Review and I would be very happy to show it to you, and give you a sense of that, which gives you a good qualitative sense of what is actually happening. There are certain departments - you have grilled one of them, I was delighted that you grilled one of them specifically on the issue of gold plating. But in the main we are finding that there is not a problem and there is nothing wrong with having individual regulations if they are found to be proportionately correct, that we ought to be doing them, and if they have been through an impact assessment. So the process that we have in place to ensure that things do not happen when they are not justified are the impact assessments. It cannot be the case that everything is not justified if it is gold plating - it is simply not justified under any circumstances.
Q314 Mr Davies: I gather there are some Members of the Union that take the line - the Italians take the line - that they should just implement these directives in a minimalist fashion. It seems to be to be a rather attractive model.
Baroness Vadera: That is like saying you should never have any regulation; we cannot decide anything ---
Q315 Mr Davies: No, no, that we should never take advantage of the European directive to add domestically conceived additions to it. If there is a case for a domestically conceived regulation in that area it should be justified independently of the directive and from the EU.
Baroness Vadera: It is justified. I am sorry, it is justified independently. It says very clearly in the impact assessment, "Is this an implementation that goes beyond the minimum?" So separately taken out as a line. Would you rather that we set up a completely separate piece of legislation for domestic regulation as opposed to EU regulation? That does not really go with the principles of better regulation and Common Commencement Dates.
Q316 Mr Davies: One last question. You said you had a qualitative and not a quantitative view of the extent of the problem.
Baroness Vadera: Yes.
Q317 Mr Davies: Can you give me an answer quantitatively in terms of orders of magnitude? Do you think that the element of gold plating, as I say, if it is 100 per cent, let us say half of the regulations in these areas are in fact of domestic conception rather than minimal enforcement of the directive? Is it ten per cent, is it 50 per cent? Do you have something in terms of orders of magnitude that you can tell us about your private perception, your intuitive perception based on your experience?
Baroness Vadera: My perception would be that it is significantly lower than 50 per cent, which is the first number that you threw at me; and I would say that it would be above the ten per cent. I would say again that the most important thing is that each element of a legislation has to be justified through the impact assessment, regardless of its origin - the origin is not as relevant as the fact that it is proportionate and justified.
Q318 Mr Prisk: With regard to your plans for regulatory budgets for departments can you give us a yes or a no whether or not European legislation would be included within those proposals?
Baroness Vadera: Yes.
on this section, have you contemplated the
Baroness Vadera: I would take the view that it
does have a physical presence in
Baroness Vadera: It does have a physical
presence in a manner of speaking in
Mr Kohli: I do not think anybody from UKRAP at the
moment who has worked in
Baroness Vadera: It is also important to understand how UKRAP 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 UKRAP in the context of better regulation, so that each of them has to bring the better regulation piece to 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.
Hemming: Everything else is in the
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 they 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.
Hemming: So you are saying that you are entirely for
them to remain outside of the
Baroness Vadera: I am happy for them to remain
outside of the
Agency spoke about initiative overload; the Food Standards Agency said that
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 Regs 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
Baroness Vadera: Perhaps I should ask Resources to answer.
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 new regulations inspectors on the
ground. We have a pretty significant
team, size-wise. You will have noticed
as you went around continental
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?
Sargent: Not at all.
One of the unusual things about
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 high average than you would normally find in a government department.
Wilson: Another question about
perception really. When you discuss
issues with other organisations, primarily it is about business, and Sarah
Veale from the
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
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 attend once a year and have "How are you 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 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
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
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 witnesses. 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.
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
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 trans-dimensional 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 businesslink.gov.uk is not where Altinn is yet but our vision for businesslink.gov.uk 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 businesslink.gov.uk 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.