Select Committee on Constitution Minutes of Evidence

Examination of Witnesses (657-659)




  657. Good afternoon. Thank you very much for being with us. Could I invite each of you to identify yourselves for the record and then if there are any opening comments you would like to make to the Committee, please feel free to make them.

(Mr Corbett) Thank you, Chairman. On my right is Janet Lewis-Jones, who is one of our part-time Commission members. We thought it would be useful for her to come along, particularly for a Committee which is interested in the decision-making process of a collegiate regulator. On my left is Martin Stanley who is our Chief Executive. He is a Commissioner and he is a full-time officer and Chief Executive of the Commission. My name is Graham Corbett. I am the part-time Chairman of the Commission, a little less part-time than Janet is. I devote about three days a week to the Commission's business. In terms of an introductory comment, I have very little that I would wish to say beyond the submissions we have already made but I would counsel the Committee against being too seduced by the concept that has been put in front of you of the relationship between regulator and regulatee being a marriage. I would not, frankly, wish to embark on a marriage that had built within it the sorts of constraints and I think necessary tensions that apply to a regulated industry.

  658. Thank you very much. That was one of the points that Callum McCarthy made to us last year, that you are going to have some degree of inherent tension in those sorts of processes and the question is how do you manage that tension within the system. Could I begin by picking up on the point you made at the beginning, which I think would be very interesting from the Committee's point of view, and ask you to explain the decision-making process because clearly one of the things we are looking at across the board in terms of regulators is the question of boards and how they operate and the value that the board system brings to the process?
  (Ms Lewis-Jones) This was one of the first things we addressed when we were first appointed, how we would go about our business together. There was no model that we could pick off the shelf and no precedent we could look to about how to conduct our business in a collegiate way. Actually I would say that the process of deciding that was an extremely useful one because it was a good introduction to the manner in which we were going to work together. I have to say that it has been a pleasurable and rewarding way of working. We all come from different backgrounds and we have different levels of understanding in different subjects. One result of that is that we end up having to explain to ourselves extremely carefully at every stage what it is we are doing and ensuring that we all understand it. I think this has led, certainly in my case, to a better informed way of decision-making certainly than I would have arrived at alone and I think possibly my colleagues would have. We also addressed the way in which collegiality contributed to accountability. I think it depersonalises the regulatory process, it gets rid of any notion that there can be regulation by caprice or whim or that there can be personal confrontation between a single regulator and a regulated entity. It provides continuity. I think it helps to ensure consistency. Our appointments are carefully arranged so that there is a staggering of turnover in the Commission and it is quite difficult for any one of us to be unduly dogmatic, whether that is in terms of economic theory or perception of a company or anything of that sort. I think it is a good safeguard of independence, and of course the heart of what you are looking at is the extent to which regulatory independence can also be portrayed as a lack of accountability.

  659. If I can pick up on the point you said about understanding, from your point of view, as you say, one of the benefits of the process is actually the level of understanding of what the role is and so on, but I wonder about the understanding of others, those outside the framework of the regulator. To what extent, with the roles there are in this non-marriage of the different bodies that are involved, do you think there is a clear degree of clarity in terms of the respective responsibilities and the extent to which that is known outside and, if there is a lack of clarity, the problems it creates from your point of view?
  (Mr Corbett) In so far as that question is addressed particularly to our relationship with Postwatch, I think we should deal with that and then I would like to expand it to some of the other third parties with whom we are necessarily in contact. So far as Postwatch is concerned, I think it is well known that relationship between Postcomm and Postwatch has not always been particularly easy. However, I would say that from where I stand, and I think it is a view that is very largely shared by my fellow Commissioners, I am totally in agreement with Lady Gould's approach earlier on that it would be quite inappropriate in my view to ask the economic regulator to have also to play the role of advocate for consumer interests. Clearly, we are obligated under the statute that set us up to carry out our functions in the interests of users of postal services, and we have no difficulty about that, but to assume that we should be the only guardians of how those interests should be preserved I do not think would provide a proper balance, so I like the idea, frankly, of there being a body which is charged with making the views of the consumer available to us in exactly the same way that Royal Mail make their views known and other operators make their views know, unions and others. They are a crucial part of this whole process. They must have their say. Yes, I think we have had some problems and I think to some extent those problems have derived from a lack of sufficient clarity as to exactly where the line should be drawn. There is, as we perceive it, a recurring desire on the part of Postwatch to involve themselves in our regulatory decisions, not as commentators and in a way which is absolutely appropriate, but they actually want to be part of the decision process. That we believe would be unnecessarily time-consuming. It would not lead to regulatory clarity. It would add to the time taken and involve a misuse of the resource which ought to be being devoted on their part to finding out what consumers want. I think that is probably enough about that. So far as the other participants in this whole exercise are concerned, we do spend a great deal of time in making certain that we inform ourselves as to the views of major users, of individual users, of other operators, of the trades unions and, of course, of the Royal Mail. In our submission to you we have set out some of the regular consultation processes in addition to the reports that we issue, a whole programme of regular meetings held up and down the country, to which we regularly ask part-time members of the Commission to come along with us. That is an important part of what we do.

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