Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 20-32)



Mr Steen

  20. Reflecting my earlier comments, and in no way doubting the dedication and good will of your team and yourself, is there any way—and I am only asking this rhetorically, because I do not know if there is an answer—in which your unit can somehow get involved in primary legislation, to say, "Look, this clause is going to need to be repealed in the next X number of years and should not be included in the first place"? Most of your task seems to be in putting right primary legislation.
  (Lord Macdonald of Tradeston) Indeed, and it is seen as a very important aspect of the earlier reforms that I mentioned in terms of delivery and the scrutiny of legislation going through. Again, to generalise, we know that the Civil Service has been very good at the business of creating policy. That has been its expertise, with perhaps less focus on the delivery of that policy. What we are beginning to see now, first under Sir Richard Wilson and now I believe increasingly under Sir Andrew Turnbull, is a demand that the Civil Service in the drafting of legislation begins to look at a policy delivery plan to try and take it through all the stages to ensure that it has the impact that the ministers have intended, and now we have a whole number—and I come from management but I still cannot speak the language very well—of tool kits created by the Civil Service, the various measures that they put forward as filters and guidance for their staff, and you will find much more emphasis now on trying to work out the policy effect in terms of its delivery, in terms of the resources that it will demand, in terms of any perverse effects it might have. There seems to be much more scrutiny going into that area than previously, and perhaps Mr Montague could amplify on that.
  (Mr Montague) I support that. Part of the process that we in RIU follow to achieve that is through the "Good Policy Making" guide, which is available to all departments and which takes departmental policy makers—through the steps needed to produce effective Regulatory Impact Assessments.

Mr Love

  21. You have commented throughout that the regulatory reform procedure has been recognised or it is increasingly recognised that there is considerable additional resource that needs to be put into that in departmental terms for the deregulation process. Can this Committee be reassured that that resource is being delivered in order to bring forward Regulatory Reform Orders? Secondly, you have commented several times on the difficulties in particular in the area of legal expertise. Everybody recognises it is not enough to just go out there and get a couple of extra lawyers; there is a real bottleneck there. What reassurance can you give us that you will be able to get the expertise in order to be able to keep the flow of Regulatory Reform Orders coming?
  (Mr Campbell) The Regulatory Reform Act did not increase the size of Whitehall. It did not increase the number of policy officials, so in some ways there was a fixed cake. So what has happened since is, you see, some people being keen to do it and running into legitimate questions where you are exploring the vires of the Act and the boundary of it. One of the roles of my unit and the Ministers here is to make sure that we do not just do the urgent things, the things that we traditionally did like bills, and to raise the profile and effort going into Regulatory Reform Orders. So the big message that comes from Mr Spellar and Lord Falconer seeing us every week and the management board and the Permanent Secretary giving very strong endorsement is "Yes, this "matters" seriously, and not just saying, "This was a problem that we have had for a while so we won't deal with it." That is not on. There is that sort of lesson. Likewise with the lawyers, discussions about shifting the focus between bills and RROs are going on. There is a clear message from the Chief Lawyer, and that sort of thing.
  (Mr Spellar) Also, we do need to look at this constraint on legal resource and the balance of work between the in-house departmental lawyers and parliamentary counsel. We have been looking at one or two of these orders to look at where the constraints come, and the timescales that are involved as well; in other words, a draft order coming into the Department to parliamentary counsel, how long it takes to come out, and then again, as we move through this process, looking at where the bottlenecks are and looking at whether we need to increase resource at that bottleneck or whether we need to be looking at an alternative route for covering that.

Brian White

  22. What inspection do you have of the quality of the lawyers? Do you review it? Is there an "OFSTED" of the parliamentary draftsmen?
  (Lord Macdonald of Tradeston) What we are seeing is an increase in resource generally for the number of parliamentary counsel that we have, because that has proved to be something of a bottleneck in previous years for primary legislation. So recruitment is going on in that area. But what we have been trying to do to tackle this issue of legal drafting is we have had the Treasury Solicitors put in place arrangements on our behalf between the departmental lawyers and the parliamentary counsel, and what that is set up to ensure is that the departments start legal drafting earlier, and by that we mean preparing the legal instrument at or around the time the consultation document is drawn up. That would help produce better consultation documents as a result. The parliamentary counsel currently check the drafting by departments, and their workload would be easier to manage if they were involved earlier and given better notice. So the departmental lawyer will agree with the Treasury Solicitors when a draft is ready to go to the parliamentary counsel for checking, and that should help drive up the quality too. The other thing is we are piloting a mechanism for agreeing the priorities within government for RROs that currently compete for legal resources based on their complexity, their readiness, their time-criticality, and that will mean that the RRO work in future will be prioritised according to need. We have increased the legal resources available also to the Regulatory Impact Unit. They can now call on a full-time lawyer as part of a senior team inside Treasury Solicitors. This is all part of the bedding in of what is a very ambitious and promising part of the parliamentary process.
  (Mr Spellar) From a departmental point of view that will only be of value if that actually reduces the bottleneck at a particular stage. If it is merely another layer and the bottleneck does not reduce, then there will not be advantage out of that. We will be monitoring these to ensure they are achieving the objective, otherwise we will have to have a further look at that procedure.

  23. Is that at a departmental or Cabinet Office level?
  (Mr Spellar) From our point of view, as we will be tracking through the particular Orders, we will obviously be tracking that through at departmental level, and obviously liaising with our colleagues in Cabinet Office who will be drawing on wider experience.
  (Lord Macdonald of Tradeston) We will be prioritising it at the Regulatory Impact Unit.

Brian Cotter

  24. It was said earlier that this is not seen as fast-track procedure, the new Regulatory Orders, but some issues have come forward on the regulatory impact aspect of it, the gold plating. I would just like to urge that we do look at these aspects. It has been said in the Committee that there is great difficulty in coping with the workload with the reform business we are dealing with. If the impact of the Bills in the first place, as my colleague has rightly said, could really be addressed at the beginning and also the gold plating—and I do not want to trot out something I do not know the truth or otherwise on, but they say that in following certain procedures they produce four pages of regulation (the Working Time Directive, or something such as that), whereas we produce 40—I would urge that the Government could be concentrating on the initial impact assessment and not gold plating, then this would surely help officials available; rather than adding more officials to a procedure where we are trying to reduce the work.
  (Mr Spellar) It is a worthwhile point, but at the same time we also have to look at the different actions of courts in different countries. If some courts are taking a more prescriptive approach and, therefore, insisting that everything has to be written in, that can have an impact obviously on our actions. We therefore have to get that balance right as well. The general thrust of your argument is very much taken on board.

  25. The concerns coming through the Committee—people are saying that some departments are going to be put off using RROs because of the amount of work to take on, but also because of the bureaucracy involved in dealing with all these things—we have got lots of different aspects of trying to get this work done.
  (Lord Macdonald of Tradeston) I agree. As I touched on earlier, we have done a lot of work in trying to improve the way in which we handle European legislation in particular, which is where the main complaints about gold plating come in. There was a pilot quality assurance study that was set up by Lord Falconer when he was in the Cabinet Office, and that was out of the concerns over criticisms expressed by business and others about how the UK handles the European legislation. I chaired a very useful conference in London in October of last year for business and officials from various levels of government. We have also produced a transposition checklist and transposition notes. It looks as though Europe has picked up on a UK agenda there; and through the Mandelkern Report, which we were instrumental in shaping, the word is going out at every level across Europe that they have to have much greater concern for the impact of legislation. At our end we will ensure that nothing is disproportionate to the way we implement.

Mr Steen

  26. Following on that point of Mr Cotter, I was under the impression that gold plating went out in about 1996. I have not heard the phrase used for at least five or six years. Perhaps, as Mr White said, I have not been here, but I have been on the European Select Scrutiny Committee where we have not heard the phrase "gold plating". I was under the impression that we just did not gold plate anymore, and instructions to the departments was to introduce European regulations at the minimum level rather than the maximum level. The second point following on from that is enforcement. It does not matter what you pass in law if you cannot actually enforce it. I am wondering what your instructions are on enforcement of rules and regulations. If you are to enforce the regulations to the minimum, and the regulations are minimal anyway, they do not have the same impact as if you gold plate them and say they must be in force. The last point is the fiche d'impact. I understood, and I do not know whether it is happening because one only gets this information from other countries, before any rule and regulation is passed in Europe they were obliged to do a risk assessment and a cost assessment of small firms, and the fiche d'impact was rather like the impact assessment in this country. I do not know whether it is happening. I also do not know whether this country has done anything to ensure, before any rule or regulation is passed within the Council of Ministers, a fiche d'impact is embarked upon and the decision as to whether to go ahead is affected by the result of that fiche d'impact enquiry?
  (Lord Macdonald of Tradeston) I am sure it is the case that the British Government over many years have tried to reduce the effect of any gold plating of EU legislation. I think it is equally true that there still is a general perception in business and in other quarters, such as the media, that we in Britain are somehow overzealous in that regard. That is why, for instance, in 2001 there was a requirement set up that Government and departments must produce transposition notes setting out how each element of the European Directive has been transposed into domestic law. There will also be a report issued on improving the UK handling of European legislation, where one of the recommendations is that policymakers think about the transposition issues at a very early stage of policy development and negotiation phases of European legislation. We are also considering taking part in a study with other Member States on the transposition of European Directives which will focus on whether different transposition practice used in different countries leads to greater administrative burdens on business. That study would highlight best practice in avoiding over-implementation. I should also say that there is an enforcement concordat which was launched in 1998. It is a non-statutory code but it provides protection for business against overzealous, unreasonable application of regulation by enforcement officers. The code includes a mechanism for complaints about enforcement to be addressed. Initiatives such as that concordat I hope are promoting a business-friendly and more consistent approach to enforcement. The adoption of that concordat by central and local government organisations is voluntary, but 96 per cent of organisations have signed up for it. I do not know whether any of my colleagues can address any detail that I cannot on your questions about the European dimension.
  (Mr Spellar) It is not universal that regulatory impact assessments are undertaken before policy decisions are taken. This is a matter of some concern to us.


  27. You made a suggestion in the document that Government would "keep under review whether this rigorous and protracted scrutiny is appropriate for all proposals". If you do see a problem, how would you view the procedure to change this? Should we not be careful that the problem is not really perceived to be the Government wishing to avoid troublesome parliamentary scrutiny; or would that be an unfair comment to make?
  (Mr Spellar) Unfair on whom?

  28. On the Government!
  (Lord Macdonald of Tradeston) That certainly would not be the way I would represent it, Chairman. If we go back to the comments that I made about the idea of members perhaps being discomforted by any thought they would be whipped into voting against their own recommendations—is that an issue you wish me to pick up on here in this context, because I would just like to say I believe it to be a very remote prospect, and we would obviously do everything to avoid that. We certainly do not have anything in mind. As our memorandum has said, it is our hope that a debate on a motion to disagree with the Committee's report would never happen, as any disagreement should have been sorted out long before we got to that stage. I have repeated the Government's undertaking that we would not proceed with a draft Order in the event of a hostile report. There has been some debate within Government as to whether the adjournment type debate might be of use, where the Government was minded to disagree with a recommendation made in a Committee report; but the firm conclusion was that it would serve no useful purpose and, indeed, would waste scarce parliamentary time to have an intermediate debate before the House was to debate a substantive motion under the Standing Order procedures to disagree with a Committee's report. It is worth noting in this context that the Standing Order procedures are robust, even if they have been untried since 1994. The real value, I suppose, is the deterrent of sorts, and as long as that continues if it encourages early dialogue, while we might appear to agree to disagree, my anticipation is that it would never happen. If it looks remotely possible that these procedures might be triggered then we would want to be in very close and very early contact with the Committee to seek ways round that.

  29. I think that is helpful. You would seek our views at that stage if you saw a problem?
  (Lord Macdonald of Tradeston) Indeed.

Mr Lazarowicz

  30. Just one technical point, the Government in its memorandum makes a comment that, "The Standing Orders do not appear to make provision for what should happen if, as a result of its 2nd stage scrutiny, the Committee were minded to report approving a draft order, but subject to the Department making certain changes or to some other recommendation". I think there was a concern that if the Committee were to report adversely at a 2nd stage procedure to make recommendations as to how objections could be overcome, then the Government's view was that the Department concerned might need to re-start the entire scrutiny process from the beginning. From the Committee's point of view I think we fail to see why that should be a problem, because it is quite possible, for example, for a draft Order to be withdrawn and one re-laid which meets the Committee's objections. Why is it the Government feels it would be necessary to start the entire procedure again in that eventuality?
  (Lord Macdonald of Tradeston) Chairman, I would be very grateful for the Committee's views on this, but I would hope the circumstances simply do not arise. I suppose the Committee might write to the Minister warning of the likelihood that an Order could be withdrawn, revised or re-laid. Our feeling is that there will be a way round this with close consultation between us. I do not know whether Mr Spellar, or any of my other colleagues, have a view on it.
  (Mr Montague) If I could just expand slightly. It is a question that has been put to us by departments which, because it was very hypothetical, we found it hard to answer. The presumption is that we start from the view that these circumstances would not arise, since there would be close communication between departments and the two Committees. I think the worry stems from the fact that large and complex proposals were going to come before the Committee, and that the 1st stage report might conceivably make very substantial recommendations which the Department would wish to accept and implement; but it does so in a way when it tables the draft Order for 2nd stage scrutiny that does not quite hit the spot so far as the Committee is concerned. The question then would be: what options were open to the Committee, and then for the Government? It may be that the Committee would report adversely against the proposal, or want to make substantive recommendations for further change. It was just to what extent would we need to go around the loop again.

  Mr Lazarowicz: I think the point was to ensure it was clear within the Government, that it was only in extreme circumstances it would be envisaged that the entire process needed to be started again. In most cases there are much more simple ways of dealing with any objections. That was the point I wanted to pursue.

Mr Havard

  31. You have really covered my question about this business of conflict resolution, as opposed to potential conflict creation and problems with Members being whipped and so on. The Chairman obviously thought that the remarks you made earlier on were very positive in that regard. I am just concerned myself that those moves are got right; because potentially there is a conflict there if that close co-operation or consultation you have discussed does not actually take place, if you are not going to use the procedures that may have been suggested by the Committee in the past. I think what you have said was probably positive as well; the Chairman probably understood it better than I did, but I think that was an important statement for you to make given the background as to why we need it in the first place.
  (Lord Macdonald of Tradeston) Chairman, in my final remarks I would just like to say how pleased I am to have been here and to have met the Committee for the first time. It is very much in the spirit of what Mr Havard says, that we come here in a very co-operative spirit. We are obviously in pursuit of what was seen as a very benign piece of legislation when it went through Parliament. With the maximum co-operation of Government and members of the Committee then I think we can play a very positive role in advancing the whole legislative process. I am excited by that and have spoken to Lord Dahrendorf in another Place and he has a very high regard for the work that has been done here and, indeed, of the potential of the processes we are all involved in. I would certainly go forward in a very confident spirit with the realities of departmental life being whispered in my right ear by my colleague Mr Spellar, who may have a grittier view of the world.
  (Mr Spellar) I think we look forward to working with the Committee to deal with the problems of success.


  32. Can I just put in the important point about the laying of one item per week. The issue, as far as the Committee is concerned, is if we see in the forward look (or whatever we now call it) identifying what is a problem, it is not so much the laying of a rigid number, or anything like that; what we would be concerned about, and what we hope the Government will accept, is that we cannot have periods when nothing is coming before us and then have periods when a whole number of things are coming forward which involve a lot of work jumping from one item to another—remembering that within that period we can have a large number of items still before us at varying stages, some needing evidence-taking, some needing correspondence with ministers, with other organisations and everything. Are we reasonably happy that it is not necessarily one a week, but that the Government gives us an assurance that it is not suddenly going to put masses that make it impossible for us to cope? That is what we are saying, and that is our concern.
  (Lord Macdonald of Tradeston) Chairman, what I will try to do as relentlessly as possible is accelerate the flow of work but, at the same time, work very hard indeed to try and smooth the flow of that work as well.

  Chairman: If we see some problem in the forward look that is going to be produced, if we let you know as soon as we see a problem hopefully we will resolve that problem in an amicable way to make sure we are able to do the job laid on us by Parliament, and that reform can go forward. Can I thank you and your team for coming before us, and thank my Committee members. Thank you very much.

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