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

2  The Committee's work in 2007-08

23. In recent years select committees have taken account of a set of 'core tasks' that aim to guide their work. The table below outlines how these have fed into work of the Committee in 2007-08. The remainder of the chapter provides some more detailed, though not exhaustive, examples of the Committee's work under each core task. It is important to recognise that most of our inquiries will cover several of the core tasks; the examples simply pick out the relevant part of what is usually a more complex inquiry.

Table: 2007-08 inquiries against the core tasks

Task 1: Scrutiny of policy proposals

24. Policy proposals emerge in several ways. Sometimes, they are clearly put forward for discussion, for example in a departmental or an EU consultation document. Sometimes however, they emerge as refinements of past work. Over the past year, the Committee has engaged with both types of proposal. The Committee is particularly concerned to keep abreast of EU policy. Staff monitor the output of the European Scrutiny Committee and, as we noted above, the Committee visits Brussels each year for an update on what is likely to emerge from the Commission over the coming months.

25. The Committee adopts a similar approach to telecommunications. For the past three years the Committee has held a joint evidence session with the Culture, Media and Sport Committee to scrutinise Ofcom's annual plan. The hearing gives Members the opportunity to question the regulator's Chairman and Chief Executive on its proposals for the year ahead. It is also a chance for Members to maintain a watching brief on communications issues. This year the Committees were particularly interested in Ofcom's work in developing next generation broadband and its plans to allow mobile use on aircraft.

26. In contrast, our work on the RDAs focussed on a particular policy document, the Government's review of sub national economic development and regeneration. As described in paragraph 9 above, the Committee used two evidence sessions to test responses to the Government's consultation, and, at the beginning of the current session, we held a further meeting with the Minister to discuss the Government's revised proposals.

Task 2: To identify and examine areas of emerging policy, or where existing policy is deficient, and make proposals

27. The Government can sometimes need prompting to look at policy afresh, to make policy more coherent or even to formulate new policy. Construction Matters, the Committee's strategic review of the construction industry, revealed that although the Government was doing a great deal, it had not drawn this together into a coherent policy.[7] The inquiry highlighted the Government's importance to the sector as client for construction projects; as regulator of the industry; and as provider of funding in areas such as Research and Development and investment in skills. In principle, Government should have been able to influence the industry through each of these roles. However, its ability to use these levers to full effect was undermined by the fragmentation of responsibilities for construction across Whitehall. The Committee recommended that the Government create a new post of Chief Construction Officer, responsible for co-ordinating policy across Departments, and ensuring consistency. In response, the Secretary of State wrote to the Chairman of the Committee in October 2008, stating:

    BERR intends to further pursue the idea of creating a Chief Construction Officer […] Construction matters was the result of one of the most thorough and comprehensive enquiries conducted by the BERR Select Committee or its predecessor. It has been unanimously endorsed by the construction industry and it is hard to argue with the general thrust of the recommendations or the premise on which they are based.[8]

The Committee welcomes this whole-heartedly.

28. Our inquiry into Energy Prices, Fuel Poverty and Ofgem provides a still more striking example of the Committee's ability to force Government and others to reassess their policy.[9] In January this year Ofgem announced that it had told the Chancellor of the Exchequer that "Britain's competitive market in energy is working"[10] despite price hikes by the 'Big 6' energy companies. We did not believe Ofgem's assessment—a view that was reinforced when we took evidence from the Minister of State for Energy later that month. So on 5 February we announced an inquiry into the energy market. On 21 February Ofgem announced its own probe of the energy supply market. Accordingly, we completed our inquiry in July to feed into Ofgem's work. The regulator reached many of the conclusions of our own Report and its proposed remedies, to a large extent, responded to our recommendations. For example, Ofgem will now look at ways of increasing the transparency of the energy companies' accounts, so that they show the breakdown of profits between the wholesale and retail arms of the business. In politics it is near impossible to determine counterfactuals, but we think it unlikely that Ofgem would have chosen to look into the energy market had it not been for our intervention. At the very least, our work has ensured the regulator was thorough in its investigations. Our Report dominated the news on its publication and received high praise from the Government—the new Minister for State noted "it was an education to read it".[11]

Pub companies

29. Sometimes our work looks at areas where there is little existing policy, and the question is whether policy intervention is needed. Four years ago our predecessor Committee called for a code of practice on the relationship between pub companies and their tenants. It warned that, "[…] if the industry does not show signs of accepting and complying with an adequate voluntary code then the Government should not hesitate to impose a statutory code on it".[12] The recommendation has not just been made, and then forgotten. Amid growing concern over the demise of the British pub, the Committee is looking again to see whether the code of practice is working. The inquiry has generated a great deal of interest within the industry, and the Committee has received nearly a hundred submissions so far.

Trade with India

30. While the House of Commons arranges its time by Session, and reports such as this cover a single session, we do not simply cover a subject and move on. Our Report on Waking up to India: Developments in UK-India economic relations followed up the Trade and Industry Committee's 2006 Report on Trade and Investment Opportunities with India.[13] Witnesses agreed that the earlier report had contributed to increased UK engagement with India. Our inquiry noted developments since 2006, such as the establishment of the UK-India Business Council—an innovation prompted by our 2006 Report.

Task 3: Scrutiny of bills

31. There were four bills dealing with matters within the Committee's remit in the last session—the Energy Bill, the Planning Bill, the Employment Bill and the Regulatory Enforcement and Sanctions Bill. We maintained a watching brief on their progress, although we did not intervene directly as a Committee. However our Chairman, together with the Chairmen of other Committees concerned,[14] was closely involved in discussions about how the House should scrutinise the National Policy Statements brought in by the Planning Bill. Despite a difficult beginning when the Government put forward its proposals without any warning or prior discussion, the Chairmen engaged with the Government to put forward their views about the best mechanism for Committee scrutiny. Details of this work will be found in the Liaison Committee's Fourth Special Report, Planning Bill: Parliamentary Scrutiny of National Policy Statements.[15]

32. We have also engaged with legislation directly. We have already described how our programme has been arranged to enable us to comment swiftly on the RDA aspects of the Local Democracy, Economic Development and Construction Bill, if we think it necessary. We have also looked at the parts of the Bill which will amend the Construction Acts. BERR invited the Committee to consider its draft amendments to the law on retention of payments by construction contactors in summer 2008. Given the demands of the Committee programme and the resources available, we were unable to look at the detailed drafting of the Government's proposals at the time proposed. We were also aware that many bodies outside Parliament would be willing, indeed eager, to examine the clauses for defective drafting. However what we could and did do was to consider the merits of the policy underlying the proposed changes. This pragmatic approach meant that we were able to endorse the Department's policy aims, while leaving others to look at the technical question of whether the clauses proposed would achieve those aims.

33. Our experience as part of the Committees on Arms Export Controls (CAEC) has not been so positive. CAEC was very unhappy with the two weeks given to the Committees to scrutinise the draft Trade in Goods (Categories of Controlled Goods) Order 2008, which was the second tranche of draft legislation implementing the outcome of the Review of Export Controls. It recommended that at least two months be allowed for the third tranche. Sadly, the third tranche arrived in September, with a response deadline in October, again giving the Committee very little time to examine them. Pre-legislative scrutiny, of bills or of secondary legislation, will only work if Committees are given sufficient time to consider the documents put before them. This is particularly important when several committees need to co-ordinate their programme to undertake this task.

Task 4: To examine specific output from the Department

34. We hold regular hearings on documents such as the Departmental Annual Report, but also scrutinise other outputs when appropriate. In October 2008 the Committee published the Government's Response to its summer energy prices Report, and Ofgem published the initial findings of its energy supply probe.[16] In response the Committee launched a short inquiry to examine these two outputs, and to follow-up on other developments in the energy sector since July. We took evidence from Ofgem and the new Department of Energy and Climate Change, and published a short report early in Session 2008-09, which also marked the end of the Committee's work on energy-related matters.

35. In addition to scrutiny of draft legislation, the Committees on Arms Export Controls continued to monitor the quarterly reports from the Government.

Task 5: Scrutiny of expenditure plans and outturns

36. Each year the Committee takes evidence from the Secretary of State on the Departmental Annual Report and Accounts. Because of the length of the Session, it did so twice in 2007-08—firstly from The Rt Hon John Hutton MP and a year later from Lord Mandelson. These hearings give us an opportunity to consider the work of the Department as a whole, and provide valuable background for our other work.

37. In addition, our staff, with the help of the Scrutiny Unit, analyse the Department's Autumn Performance reports and the Estimates and Supplementary Estimates. In the 2008 Spring Supplementary Estimate BERR asked for an additional £400 million to be made available for the Nuclear Decommissioning Authority (NDA). Given the large sums involved, we conducted an extraordinary hearing on the matter, which gave rise to a Report in April 2008. The hearing exposed the extent to which BERR's budget was affected by the sums required for nuclear decommissioning, and the Committee concluded that "the NDA's funding model is unsustainable."[17]

Task 6: Scrutinising Public Service Agreements and targets

38. Given the role of the Public Service Agreements (PSAs) in driving departmental policy, it is inevitable that much of our work is related to them. This is particularly clear from the two examples below.

Creating a higher value-added economy

39. BERR leads on the cross-government PSA to "raise the productivity of the UK economy".[18] Over the year the Committee has conducted a wide-ranging inquiry on the creation of a higher value-added economy. The breadth of the inquiry can be judged from the range of our witnesses. They include the chief executive of Rolls-Royce, Will Hutton of the Work Foundation, former 'dragons' from the BBC's Dragons' Den, and the Technology Strategy Board, among others. Visits to Glasgow, Edinburgh, the West Midlands, Cambridge and the United States have also greatly informed our work. We expect to produce a final report with recommendations early in the Session 2008-09.

Regional development

40. The Committee's inquiry into the RDAs and the subnational review, described in paragraph 9, has been driven by another PSA for which BERR is the cross-government lead—to "improve the economic performance of all English regions and reduce the gap in economic growth rates between regions".[19]

Task 7: Monitoring the work of agencies and other public bodies

41. Like all departmental select committees, we monitor the agencies in the non-departmental public bodies (NDPBs) associated with the Department we scrutinise. BERR is also responsible for Royal Mail Group (and its subsidiary, Post Office Ltd), which is wholly owned by the Government. For many years we have devoted a great deal of time to looking at matters to do with Royal Mail Group, and this year was no exception.

42. Many agencies and NDPBs are examined in the course of work on subject-based inquiries. For example, trade inquiries automatically involve UK Trade and Investment, our energy inquiry looked at Ofgem, and work on the Estimates involved the NDA. However, we also make sure we undertake some systematic scrutiny of agencies and public bodies associated with the Department. In addition to the annual Ofcom hearing, we look at the work of at least one agency a year. This may simply involve an evidence session, as did the Committee's recent hearing with Consumer Focus, the new consumer advocacy organisation created from the merger of Energywatch, Postwatch and the National Consumer Council. It may lead to a report, as did the hearing on Companies House this year. We will continue this practice in the coming session and we have already announced a meeting with the Insolvency Service, scheduled for the end of January.

Task 8: Scrutiny of major appointments

43. There were no relevant appointments in the session, but the Committee arranged a hearing with the Chairman and Chief Executive of Consumer Focus, the new body which replaces the National Consumer Council, as soon as the organisation came into being. Although it is early in the session we have already held a pre-appointment hearing for the Chairman-elect of Ofcom, Dr Colette Bowe, jointly with the Culture, Media and Sport Committee.

Task 9: Implementation of legislation and major policy initiatives

44. The hearing with Consumer Focus allowed us to examine how the redress structures set in place in the Consumers, Estates Agents and Redress Act 2007 will operate in practice. Often, however, we are concerned with the implementation of policy rather than of legislation, and this has been the case in our series of reports on Post Office matters, which looked at the way in which the Network Change Programme was being implemented.

Task 10: Debates in Westminster Hall and the Chamber

45. The Committee secured two Westminster Hall debates during the Session. On 29 November 2007 there was a very well attended debate on restructuring the Post Office network, based on the work of the Trade and Industry Committee in the previous session.[20] The Report on Jobs for the Girls: Two Years On was also the subject of a lively and thorough debate on 16 October 2008. The Committee's report on the Post Office Card Account appeared on the day the Liberal Democrats motion on the Post Office Card Account was debated; although it was not formally tagged, it informed the debate. On 16 December, our Report on Energy Prices, Fuel Poverty and Ofgem was the subject of an Estimates Day debate on the floor of the House.

46. We have also drawn attention to the way in which the ability of the House as a whole to scrutinise BERR's work has been reduced by the composition of its ministerial team. This is not because of any fault of individual ministers, but because half the team is in the Lords. Unless some procedural solution is found, opposition front benches and individual back benchers will find it impossible to question ministers responsible for significant parts of BERR's portfolio directly.[21] It is only fair to add that the Secretary of State has offered to come before us more frequently than usual. Until more satisfactory arrangements are made, we will attempt to draw evidence from Lords' ministers to the House's attention whenever it is relevant.

47. Finally, our expertise on Post Office matters has been recognised by the Government- the Secretary of State has asked us to identify new services which post offices could offer. We thought carefully before accepting this invitation: we think it is very important that the Committee should be completely independent of the Government. Ultimately, and as we had already been considering a similar inquiry ourselves, we agreed to do this as part of a wider inquiry into the future of the post office network. We have now set the terms of reference in the normal way and will report to the House as usual.

7   Ninth Report of Session 2007-08, HC 127 Back

8   Letter from Secretary of State, John Hutton MP, to the Chairman of the Business and Enterprise Committee, Peter Luff MP, 1 October 2008 Back

9   Eleventh Report of Session 2007-08, HC 293 Back

10   Ofgem Press Release, Market is sound-Ofgem assures Chancellor, 16 January 2008 Back

11   First Report of Session 2008-09, Energy policy: future challenges, HC 32, Q 4. See also Official Report, Col. 943, Edward Miliband, 16 October 2008 Back

12   House of Commons Trade and Industry Committee, Second Report of Session 2004-05, Pub Companies, HC 128 Back

13   Trade & Industry Committee, Fifteenth Report of Session 2005-06, HC 1671 Back

14   The Communities and Local Government Committee, the Environment and Rural Affairs Committee and the Transport Committee Back

15   Fourth Special Report of Session 2007-08, HC 1109 Back

16   Ofgem, Energy Supply Probe-Initial Findings Report, 6 October 2008 Back

17   Fourth Report of Session 2007-08, Funding the Nuclear Decommissioning Agency, HC 394, paragraph 37 Back

18   HM Treasury, Comprehensive Spending Review 2007 Back

19   Ibid. Back

20   TradeandIndustryCommittee,ThirdReportofSession2006-07,StampofApproval?RestructuringthePostOfficeNetwork,HC276. Back

21   Fourteenth Report of Session 2007-08, Departmental Annual Report and Scrutiny of the Department of Business, Enterprise and Regulatory Reform, HC 1116 Back

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