Examination of Witnesses (Questions 89
MONDAY 14 DECEMBER 2009
Let us begin officially by welcoming the Minister, Ian Lucas MP,
Parliamentary Under-Secretary of State, Department for Business
Innovation and Skills. Thank you very much indeed for, not only
your written evidence, but also for coming and joining us. I should
say that we hope to discuss a draft report the second Monday we
come back in January and we are hoping to publish our conclusions,
with the approval of the Select Committee, some time in February,
early February, I would have thought. We have been focusing on
impact assessments, as opposed to the wider issues of better regulation.
With that brief introduction, could I ask you whether you would
like to make an opening statement or shall we go straight into
Ian Lucas: I think we should just go straight
into the questions, if that is okay with you.
Chairman: Good. Thank you. Lord
Q90 Lord Bradshaw:
Good afternoon. There are new impact assessment guidelines and
I think we are very interested to know about the quality of what
has been done, whether you think that the costs and the benefits
which are included in them are reliable and are the bases for
the figures used transparent? Are we getting something worth having
or is it just a lot of bureaucracy winding round?
Ian Lucas: I think that we are getting something
worth having, but not in all cases. There are impact assessments
that have been made that have been very helpful to us and very
helpful to UK Government departments in particular areas and,
if impact assessments can be made at a European level in respect
of European Directives, then that could be very helpful in preparing
impact assessments for consideration in delegated legislation
within the UK Parliament, so those are very, very valuable, but
I do not think that all of the impact assessments that have been
made at the present time are of sufficiently high quality. It
is a relatively novel process within the European Union, and I
think therefore that is not altogether surprising, but it is a
valuable process. There are examples of it having been done very
well. There is an example in air quality, for example, that has
been very helpful. It will improve. We want to push ahead our
agenda making it improve at a European level to assist us in legislation
Q91 Lord Bradshaw:
In your written evidence you go on to suggest the Commission is
not producing impact assessments on all measures with significant
impacts, but the Impact Assessment Board think that they are producing
these. What are your thoughts generally on whether the impact
assessments are yet addressing the most significant things, and
do you know of any or think there are some things which should
have been impact assessments and have not been?
Ian Lucas: There is one particular impact assessment
that has not been made on VAT electronic invoicing that we think
is a significant proposal which the Commission estimates could
actually bring about savings of 18 billion across the European
Union. We think that is an example of there not having been an
impact assessment done when it ought to have been done. We accept
that there will not always be a compelling case for making an
impact assessment where a relatively trivial amount is involved,
but where there is a very significant impact we do think it is
valuable. We accept that the impact assessments are being made
in most cases, and they are very valuable and I think real progress
is being made by the Commission in this regard, but there are
still individual cases where the assessments have not been made
and I think that is unfortunate. We hope to continue to persuade
the Commission to take this agenda forward and ensure that, in
every significant case, in every proportionate case, the assessments
Q92 Lord Bradshaw:
Can I pick you up on electronic preparation of invoices?
Ian Lucas: Yes, VAT electronic invoicing. The
Commission adopted a proposal to amend its VAT Directive in January
2009. Firstly, the measure did not appear in its annual work programme
and an impact assessment was not actually produced, despite it
having significant impactsas I say, at an estimated saving
of 18 billionand, therefore, we think that was an
example where the position was not as we would have liked it to
Q93 Lord Bradshaw:
The economy is in the actual collection of value added tax.
Ian Lucas: That is right.
When Lord Adonis came to give evidence on infractions of the first
railway package, he very kindly, subsequently, sent us a list
of those countries who are not fully implementing the freight
package. The reason I mention this is that it would be very helpful
if you have in the department a list, say, over the last few years
of absent impact assessments. It would greatly help the Committee
to attach that as an annex to our report.
Ian Lucas: I am sure that we would be very happy
to investigate that and produce a list for the purposes of the
report. I think it would be very valuable too.
Chairman: Thank you very much.
Q95 Lord Whitty:
We have been talking about the Commission producing impact assessments.
Do you also think that the whole range of proposals that come
up in comitology should also be subject to the full impact assessment
Ian Lucas: I think that any significant proposal
that comes forward should be subject to impact assessment, whether
it is through the comitology process or through the Commission's
proposals for regulations and directives. Comitology is, essentially,
delegated legislation which can be carried forward by the Commission,
and it is important, therefore, that anyone who is scrutinising
those proposals should be in a position to assess the impact of
those proposals. I think, in those circumstances, it would be
valuable to have impact assessments made, again, where it is proportionate
and where the impact of the particular proposal is significant.
Q96 Lord Whitty:
They use the same process as the Commission use; they use the
same resources as the Commission for drawing up the assessment.
Ian Lucas: Yes, I think, essentially, it would
be the Commission that would draw up the assessment in that particular
case, as it would be with any other proposals.
Q97 Lord Whitty:
I think we are going on later to proposals which come up through
the European Parliament, for example, which is a completely different
process, but I will delay that one. The other thing I am interested
in is the relationship between the European process and the British
process of which, I think, our first take was there was not much.
We did have an example from the HSE, who showed us that they prepared
their impact assessment for UK regulation by directly extrapolating
the figures from the one that the Commission had done at a European
level, but they also said this was an extremely rare occurrence
with the HSE. I am not really aware that this is a very frequent
occurrence in any part of government, your own department or others.
Is there a relationship between the work done at a European level
and what might be followed through either in transposition or
in British level directives?
Ian Lucas: I sincerely hope there is, because,
obviously, the proposals that are made at a European level directly
impact on the UK in due course, and the earlier that one can engage
with that process, then the more appropriate the legislation through
the form of Directives coming from the EU will be. So I think
early engagement when a draft proposal of whatever kind is made
in the European Union should be facilitated by the UK Government.
We want to be involved in that process because frankly, we take
the rap when that comes through at the end of the day and the
Directive or the proposal is unsatisfactory for UK business, UK
consumers. In my job, the principle of engagement at every stage
of regulation is very important and European regulation is no
exception to that.
Q98 Lord Whitty:
I think the problem that is identified for me anyway, I am not
sure about my colleagues, is that partly because the Brits have
been earlier in the process of drawing up impact assessments (and
there is a certain sniffiness about the European level, some of
which you have reflected yourself) that actually most government
departments want to use their own material and their own ways
of drawing up impact assessments even if there has already been
some work in Brussels.
Ian Lucas: If that is the case, then I do not
think it makes sense. Clearly, the proposals coming forward from
the European Union will have a direct impact on the departments
and, in due course, on businesses, consumers within the UK, and
we cannot have people singing from different song sheets in respect
of the same proposal. The engagement needs to happen between the
European Union and the UK Government to make sure that when the
implementation takes place at UK level we have got a sensible,
overall cohesive proposal that is implemented in legislation within
Could you help us? It is not necessarily a request for written
information, but can you share with us your impression about how
other countries prepare their own impact assessments? I know the
Commission, for instance, produces its own, but are the Brits
almost unique in the thoroughness and the extent of impact assessments
that departments produce for the UK Government?
Ian Lucas: I think there is a different culture
as regards UK impact assessments and I gather there are complaints
about this sometimes. We are very figures driven in that we think
that cost-benefit analysis in numerical terms is very important,
and I think that that creates some disagreements sometimes with
other European countries because they do not think that that numerical
cost-benefit analysis is as valuable as we think it is, and that
is partly a cultural difference, I think, and a difference in
the way that draft legislation is proposed. I suppose, from our
point of view, the creation of impact assessments is a relatively
novel process and it is a discussion that we are still having
with other European countries to try and bring them on board.
We have allies in this regard, but we have some people who do
just not agree with it.