Work of the Committee in 2007-08 - Business and Enterprise Committee Contents

1  Introduction

1. The Business and Enterprise Committee scrutinises the work of the Department for Business Enterprise and Regulatory Reform (BERR), which was itself formed as a successor to the Department of Trade and Industry.[1] This Report provides an account of the Committee's activities and achievements during Session 2007-08. Details of our programme can be found in the sessional return annexed to this report. As in previous years, the Committee has also formed one quarter of the Committees on Arms Export Controls (formerly the 'Quadripartite Committee') along with the Defence, Foreign Affairs and International Development Committees.

2. It has been a particularly busy and productive period for the Committee. During the Session we published fourteen reports and held evidence sessions for a further seven inquiries; we met 51 times and took oral evidence at 37 meetings,[2] in addition to an extensive programme of visits within the UK and further afield. We expect to be similarly busy next year, but our remit has been changed by the creation of the Department of Energy and Climate Change on 3 October 2008. This year, scrutiny of energy policy has formed a large part of our work; from January 2009, this will fall to a new departmental select committee. We very much appreciate the fact that we were given until the New Year to complete our work on energy matters. Whatever our feelings about losing responsibility for scrutiny of energy policy, we fully support the departmental changes that have brought about its transfer. We trust that bringing together climate change and security of energy supply into a single department will bring an even higher priority and new coherence to policy in this vital area.

Successes in 2007-08

3. The objectives set for the Department in the 2007 Comprehensive Spending Review give an idea of the scale of the Committee's task. BERR was asked to:

4. Given the breadth of the departmental responsibilities, the Committee has had to be very selective about its priorities. Furthermore, much of the Committee's work inevitably dealt with complex matters, which could not easily be resolved in the short term. Committees simply report their findings and recommendations to the House; although the Government must respond to each recommendation, it is entirely up to the Government to decide what, if any, action to take upon them. We are particularly pleased, therefore, that despite these constraints, our work this year has been remarkably effective both in setting the terms of debate, and in producing real change. While the Committee's intervention may not have been the only factor in producing some of the outcomes below, it is clear that many of the Committee's inquiries have had an immediate impact. This is true of three reports in particular, all of which received significant coverage in the relevant consumer, business and trade press.

  • Energy prices, fuel poverty and Ofgem
    • The Committee's inquiry led to Ofgem's probe into the energy markets.
    • Ofgem's conclusions and remedies responded to concerns identified by the Committee.
    • Many of the Committee's recommendations are already being implemented: for example there will be more transparency about whether energy companies make their profits from retail or production.
  • Construction matters
    • The Committee recommended Government policy should be given coherence by the appointment of a Chief Construction Officer. The Government is now consulting on the creation of the post.
  • Post Office Card Account: Successor arrangements
    • The Government awarded the Post Office Card Account contract to Post Office Ltd three days after the report was published.

Additionally, the Committee has made repeated interventions on some topics, to make sure its work is taken fully into account as public policy is shaped:

  • Post Office Closure Programme; After the Network Change Programme: the future of the post office network
    • The Committee's continuous review of the Network Change Programme led to significant improvements in process and outcomes; for example, the consultation process itself was gradually improved, so that Post Office Ltd gave MPs and Local Authorities greater notice of the proposed changes; future services were improved, so that Outreach services now have to take parcels up to 6 kg—three times the 2 kg first proposed.

Finally, some of our reports are not intended to have immediate effects, but to raise issues which we consider will be important in the longer term, both within the United Kingdom, and, occasionally, further afield.

  • Funding the Nuclear Decommissioning Authority
    • The Committee's urgent scrutiny of an unexpected supplementary estimate resulted in a commitment from the Permanent Secretary to insulate BERR's budget from the NDA and contributed to the publication of a lessons learned review from the Department.
  • Keeping the door wide open: Turkey and EU accession
    • The Committee endorsed the Government's support for Turkish accession to the EU, and called for honesty in accession negotiations.
    • Copies of the Report were sent to ambassadors of EU countries, to ensure they were aware that the UK Government had parliamentary support for its policy.

Working practices

5. Committees do not have direct power to make policy; they seek to influence it. Our ability to influence depends on the effectiveness with which we work, and the strength of our evidence base and analysis.


6. Our Members come from across the House, and are appointed by the House as a whole to work together to scrutinise government. Last session the Committee contained five Members from the Government party, three Members from the Official Opposition, one Liberal Democrat, and one Member from the Scottish National Party.[3] If we are to make a difference, we need to work well together, and to pull together the evidence we need to support our findings. Committee members are nominated in proportion to representation in the House so the Government party has a majority. That is an advantage. It means that a Government cannot simply brush aside a unanimous select committee report as partisan or ill informed—not, that is, if it is at all concerned about the reaction of the people who support it. Our conclusions and recommendations have almost always been unanimous. In the last year, there have only been two divisions in the Committee, and even in those cases, the Committee was agreed on the underlying thrust of its report; the discussion was about the detail of policy.

7. The new Business and Enterprise Committee has 11 members, compared to the 14 of the old Trade and Industry Committee. Even though the Trade and Industry Committee was extremely effective, the reduction in membership has been helpful. Members have more opportunity to explore the themes which interest them in evidence sessions, enabling them to be more fully involved in the Committee's work and to develop a shared understanding of the underlying issues.

8. This year we have tried to combine a programme of strategic long-term inquiries with the ability to be 'fleet of foot'—in other words, to respond quickly to outside events, and produce reports that have immediate impact. The two are not mutually exclusive. The Committee was able to comment speedily on the Post Office Card Account (POCA) because over the years it had developed an expertise on the relevant matters. Our continued scrutiny of the network change programme gave us the in-depth, up-to-date knowledge to respond swiftly when it became clear that there were lengthy delays in awarding the POCA contract.

9. This is only one example of how responsiveness and long-term planning are linked. To give another, the Government's sub-national review (SNR) of economic development and regeneration proposed to change the relationship between local authorities and Regional Development Agencies (RDAs). The consultation on these proposals ended on 25 November. The Local Democracy, Economic Development and Construction Bill implementing some of the changes was introduced into the House of Lords on 4 December. Last session, we took evidence on the SNR and on RDAs from the RDAs, local authorities and business organisations. We have already taken evidence on the Government's final proposals from the Minister. We expect to report on the aspects of the Bill relevant to our Committee before it reaches this House.

10. Nor does being fleet of foot preclude major inquiries: our programme was rearranged to ensure time for an energy inquiry because we felt the Government and the regulator were not responding properly to signs that something was seriously amiss with the way in which the energy markets were working. Such fleetness of foot does pose significant demands on the Committee staff, but their preparedness to respond to the challenge has contributed substantially to the Committee's success in the last year.


11. We are greatly helped by good working relationships with colleagues, other parts of the Parliamentary service, and with BERR itself. For example, in April 2008 we held a joint evidence session with the Culture, Media and Sport Committee on Ofcom's 2008-09 Annual Plan (the third such session the two committees had held in as many years). We worked with our colleagues once again for the pre-appointment hearing for Ofcom's new Chairman in early 2009. As part of our inquiry into the Post Office Network Change programme, we wrote to all Members who had had constituency experience of the programme. Their input was invaluable.

12. Committee staff have regular contact with the National Audit Office (NAO) to ensure that we can use its expertise. The NAO provided briefing for hearings on the Department's annual report and has given us informal briefings in advance of other inquiries. Similarly, the House of Commons Library has regularly helped us, both through formal notes and speedy responses to requests for information.

13. We scrutinise BERR, and point out where we think things could be improved, but our effectiveness at this depends, in part, on the quality of the Department's co-operation with us. In general, the Department has understood our role, and has had a good working relationship with us. We express our thanks to the previous Secretary of State, The Rt Hon John Hutton MP, for his readiness to share information with the Committee and his responsiveness to a number of our reports. We look forward to a similar relationship with the new Secretary of State, Lord Mandelson. Indeed, we have already agreed with him that he will appear before us regularly, since as he is a member of the House of Lords the opportunities for Commons scrutiny are limited (see paragraph 46).

14. Officials from BERR and UK Trade and Investment have given us very helpful briefings, which have informed our work. There has, however, been one slip, when the initial response to our report on Europe Moves East[4] did not properly address the issues we raised. Rather than considering the Report as a whole, the Department did not appear to have read the report in full and seemed to have ignored all but the conclusions and recommendations. We returned the response to the Department, with an explanation of where we considered it fell short of the required standard. To its credit, the Department willingly and speedily provided a revised response which addressed our criticisms.

15. The one exception to this otherwise fruitful relationship has been in the treatment of the Committees on Arms Export Controls. Although these Committees have agreed with the Government that they will scrutinise the Orders implementing changes in Export Control legislation in draft, in many cases, they have not been given adequate time to do this (see paragraph 33 below). We hope the Liaison Committee's intervention will improve this.


16. Our main way of gathering evidence is to call for written evidence, which is almost always published either in hardcopy or on the web,[5] and to take oral evidence in public. This has many advantages: it means that the Committee's conclusions are based on evidence from a very wide range of people and organisations. Moreover, the oral evidence process enables the Committee to hear directly from witnesses, and test the propositions they put forward. There is a permanent record of this evidence, and it is quickly available on the website, and sometimes in broadcast form.

17. However, the Committee is not simply about engaging with "the usual suspects" in and around Westminster in such a formal manner. We need to consult experts, but the issues we address can affect everyone, and we also often need input from members of the public, and from individuals and organisations across the country. Sometimes, it is a matter of undertaking visits to increase the range of people we talk to, and to gain understanding of complex issues, which cannot simply be explored in a formal evidence session. For example, as part of our inquiry into creating a higher value-added economy, the Committee visited Cambridge, Glasgow, Edinburgh and the West Midlands, and talked to individual entrepreneurs, academics, representatives of the RDAs, and business people.

18. Sometimes, we want to have the broadest possible input from the public, and here engagement with the media is invaluable. Wide reporting of our work helps to set the political agenda, as happened with our work on energy prices and the Post Office. Just as importantly, effective engagement with the media helps us reach people outside Parliament, and they in turn influence our work. To give a recent example, the Chairman received a flood of responses when he raised the issue of energy companies and their direct debit procedures. As a result the Chief Executive of Ofgem was asked about it at an evidence session a few days later and he undertook to investigate. Earlier in the year, the Radio Four programme You and Yours helped us raise the profile of our Post Office inquiries; much of our most valuable evidence came from private individuals and community groups who wrote to us as a result.

19. Many individuals and groups contact us about issues which are not necessarily the subject of an inquiry, but concern them greatly. Sometimes this is done formally, as in the 93 petitions on Post Office matters which were referred to us after being presented to the House. Sometimes, concerns are expressed by e-mail or letter, or raised directly with the Chairman or members of the Committee. We cannot take up individual cases, and we do not have the time to look at every interesting subject that is raised. Nonetheless, we are extremely grateful to all those who contact us in this way. It keeps us in touch with the concerns of business and of the public as a whole. Sometimes contacts like this can trigger new inquiries; very often, as in the case of the direct debits cited above, they provoke particular lines of questioning within existing inquiries.


20. Overseas visits are an important part of our work, even though they take a relatively small part of our time. The Committee has maintained its links with the European Commission, both by taking evidence via video-link as part of its inquiry into energy prices and through its annual visit in February 2008. These annual visits allow us to explore important EU policy areas in depth, and inform many of the inquiries we subsequently undertake. We are extremely grateful to all the officials who met the Committee and briefed us so thoroughly.

21. An international perspective is often essential, even when looking at domestic issues, such as how to ensure that British manufacturing and services sectors maintain their competitiveness by truly adding value. In the last session we undertook two visits outside Europe. The first was to Turkey, in connection with our inquiry into the economic consequences for the UK of Turkey joining the European Union. The UK is a committed supporter of Turkey's EU candidature, but there remain significant obstacles to accession—on both sides. Our visit to Istanbul and Ankara enabled us not only to assess the depth and consequences of the UK Government's support for Turkish accession but also to discuss wider trade issues. Our conclusion that "Turkish accession is ultimately politically and economically right for the UK, and for Europe" was based on first hand experience.[6] Similarly, our visit to the USA to look at ways in which the USA supported innovation at federal and at state level will be invaluable in preparing our report on the higher added value economy.

22. As this account shows, the Committee's success depends on many people. Perhaps most importantly, we thank all those who have provided evidence, both written and oral, in the past year, and those who have taken the trouble to write into the Committee on matters which concern them. We have already mentioned the NAO and the Library, who work with our staff, and other House of Commons staff who have assisted us in the past year. Mr Julian Maitland-Walker has acted as our adviser on the Pub Company inquiry. BERR's parliamentary branch makes great efforts to ensure good communication between the Department and the Committee. Many people worked to make our visits successful, both in the United Kingdom and overseas. We are extremely grateful to all of them. Finally, we record our appreciation of the contribution made by Mark Hunter, who left the Committee in April 2008.

1   In March 2008, the Committee's name was shortened to the Business and Enterprise Committee, primarily to avoid confusion with the Regulatory Reform Committee. Back

2   Excluding the three occasions on which the Committees on Arms Export Control took evidence. Back

3   On 19 January 2009 Mr Mike Weir was discharged from the Committee and Lembit Öpik added. Back

4   Eleventh Report of Session 2006-07, Europe Moves East: The impact of the new EU Member States on UK Business, HC 592 Back

5   Unprinted evidence is placed in the House of Commons library and the Public Records Office. Back

6   Seventh Report of Session 2007-08, Keeping the door wide open: Turkey & EU accession, HC 367, paragraph 107 Back

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