UK Better regulation projects

1. UK Better regulation projects Helen McColm, June 2014

2. Sources of Regulation Flow (New Regulation) Stock (Existing Regulation)

3. UK Better Regulation programme today • 1. Managing domestic regulation • Red Tape challenge to review stock of existing legislation • Focus on Enforcement • ‘One-in, Two-out’ rule for all new legislation • 2. Managing EU regulation • Working with other Member States to call for EU level efforts to reduce regulatory burden • Preventing extra costs when implementing (“gold-plating”)

4. Tackling the stock – the birth of Red Tape Challenge 4 The Prime Minister set a challenge in April 2011: “We need to tackle regulation with vigour both to free businesses to compete and create jobs, and give people greater freedom and personal responsibility... Our starting point is that a regulation should go or its aim achieved in a different, non-government way, unless there is a clear and good justification for government being involved. And even where there is a good case for this, we must sweep away unnecessary bureaucracy and complexity, end gold-plating of EU directives, and challenge overzealous administration and enforcement” http://www.number10.gov.uk/news/letter-from-the-prime-minister-on-cutting-red-tape/ 4

5. How does the Red Tape Challenge work? 5 • A public website which let business and taxpayers have their say about burdensome regulations they face. Intention has been to root out unnecessary, overcomplicated regulation that strangles businesses and economic growth – but keep the regulation that is needed. - Regulations were grouped into themes and all comments were considered. Policy leads were challenge by ministers on whether the legislation was still needed and/or whether its implementation could be improved. • For each theme there was a period of time during which stakeholders could submit their views on regulation http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/ 5

6. The process UNCLASSIFIED

7. Themes of legislation the RTC process has analysed 7 • Retail • Hospitality, Food and Drink • Road Transportation • Health and Safety • Manufacturing • Environment • Equalities • Children’s Services & Independent Schools • Employment Related Law • Rail • Energy • Housing & Construction • Water • Challenger Businesses • Medicines • Maritime • Aviation • Company & Commercial Law • Insolvency • Pensions • Business Services • Civil Society • Marine • Sports & Recreation • Planning Administration • Legal Services • General Aviation • Healthy Living & Social Care • Agriculture 7

8. 8 Headline figures: We have received and analysed almost 30,000 comments and over 1,500 inbox submissions. We have reviewed over 5000 regulations so far and identified over 3,000 to be scrapped or improved. Red Tape Challenge is set to save businesses £850 million per year by the end of this Parliament. Oliver Letwin – Minister for Government Policy 8

9. What was said and what we did about it:Changes to primary legislation 9 2011 - This Act requires retailers to notify the TV Licensing Authority whenever a TV, DVD, video recorder, digital box or PC with TV card is sold within 28 days of every sale and provide full details of the customer. The Act was introduced in 1967. Modern communication methods means that such steps are now redundant and the law should be repealed.” 2013 - Repealed the requirement in primary legislation removing unnecessary burdens and saving retailers around £2.5m per year. 9

10. What was said and what we did about itChanges to the legislative framework: Spring 2012 “Building standards being assessed repeatedly by different people - such as planners, code assessors, building control officers - often looking at the same issues but coming up with different answers” Autumn 2012 – launch a fundamental review of building regulations and voluntary housing standards to rationalise the large number of codes, standards, rules, regulation and guidance that adds unnecessary cost and complexity to the house building process. Estimated saving of around £60 million to house builders.

11. What was said and what we did about itChanges to guidance: 2012 - The legislative framework for the environment (covering 257 regulatory instruments, over 10,000 pages of guidance and 397 data sets) is overly complex and inconsistent and gets in the way of businesses complying effectively with their environmental obligations 2013 – Reviewing environmental guidance and datasets to remove duplication and documents that out of date; and substantially reduce reporting requirements to make it easier for businesses to meet their obligations.

12. What was said and what we did about itChanges to enforcement: 2011 – Overzealous enforcement and misinterpretation of the Health and Safety system wastes time/money and brings the system into disrepute generally. The principle that the Health and Safety measures adopted must be proportional to the risk is too often ignored. 2012 – Removing hundreds of thousands of low-risk businesses from unnecessary health and safety inspections. 2013 – Removing the headache of health and safety inspections for low-risk businesses is a step change. Scrapping unnecessary and unpredictable inspections is a valuable piece of deregulation.

13. What wehave learnt through the process • It is not just about the regulations but also how they are enforced and the guidance and advice that accompanies them. • Some of the structures of government are not designed to promote holistic legislative approaches for businesses or citizens and therefore the cumulative impact of our rules on a sector is not always clear. • To be effective and deliver change you need a strong leadership and a significant counterweight. • Evidence and understanding of practical implementation matters. • Consultation is important but the follow through and deliver is paramount. • We can not do it alone. Half our rules come from Europe so we all need to work together to deliver real change.

14. Crowdsourcing: open policy making • Simple, low cost Web site • Comment box making debates transparent • Set-up and moderation costs are main overheads • Care with security of data • Effective – to a degree • Gets wider views beyond those most commonly received from standard consultation – provides a starting point and facilitates debate • But intelligence received can be mixed – the good with the bad, including campaigns • Not a standalone option • Business workshops, stakeholder meetings, blogs etc • Currently no feedback loop Email option provides more traditional response More considered, e.g. trade bodies have consulted members Sometimes less guarded / more honest than on the Web site 14

15. What’s different from consultation – the “challenge” Our starting point is that a regulation should go or its aim achieved in a different, non-government way, unless there is a clear and good justification Oliver Letwin – Minister for Government Policy • After Spotlight closes, Departmental analysis of proposals and challenge- often using internal ‘Tiger Teams’ or business panels • Department then produces a set of proposals on regulatory reform. • Department then held to account by RTC Ministers through ‘Star Chambers’ to justify their proposals 15

16. Focus on Enforcement (inspections) This is a programme of reviews of the enforcement of legislation, in sectors as varied as food manufacturing, chemicals and childcare The aim is to identify inappropriate or excessive enforcement of regulation, and to identify good practice Evidence is collected from: fieldwork, interviewing businesses and trade associations as well as policy officials and regulators operating in the relevant sector theFocus on Enforcement website, an open forum for businesses and citizens to feed back on their experience Reviews produce reports of findings not recommendations – Departments/ regulators then say what actions they will take

17. Focus on Enforcement Rolling programme of reviews launched May 2012 • Small food manufacturers • Chemicals • Volunteer events • Pubs • Fire safety • Coastal Investments and Projects • Appeals • Childcare • Adult care homes • Pharmaceutical products

18. Examples of outcomes so far… • Published findings and action plans from four of the reviews • Actions include: • Joining up of multi-regulator process through: • A new “marine and Coastal Concordat” to streamline and speed up planning processes around coastal developments • Single site-level account manager at high hazard chemicals operators to reduce burdens from multiple inspections • Actions to address burdens imposed through guidance, and reforms to poorly coordinated / contradictory guidance e.g. on voluntary events • New online tools to help small businesses comply with food hygiene requirements • “Systemic issues” identified (leading to new actions e.g. fees and charges, “growth duty”, etc) • All 56 non-economic regulators now publish annual data on one site

19. Business Focus on Enforcement • New initiative announced in ‘Small Business: Great Ambition’ Dec 2013 • Business Groups invited to bid to run reviews • Present findings to Ministers & Regulators & agree reforms • Developing Business Groups influence & capability • ‘Call for tender’ period currently open

20. A “One-in, One-out” rule was applied in 2011-12 A tougher “One-in, Two-out” rule applies from 2013 £1 of new cost must now be offset by £2 of savings One-in, One-out: Statement of New RegulationPosition at December 2013 - cost to business (number of regulations made) INs: £2.922bn (56) OUTs: £4.115bn (135) Zero net cost (108) Net: -£1,193bn (299) Rules for new laws e.g. “one-in, one-out” The Coalition: our programme for government “We will cut red tape by introducing a ‘one-in, one-out’ rule whereby no new regulation is brought in without other regulation being cut by a greater amount.” HM Government

21. ‘OUT’ Better prioritisation of regulations ‘IN’ Clearance by Ministerial Committee OUTCOME Overall net reduction in regulation One-in, Two-out: Process • Impact Assessments (IAs) show costs and savings for each big regulation • IA figures are independently checked before Ministers take decisions • BRE adds up IA numbers to produce a 6 monthly “account” of cost totals per Ministry • Each Ministry should make OUTs of twice the value of INs

22. OITO : Control • Each Department (Ministry) must ensure that the value of new INs is offset by OUTs of double that amount • Exceptional Cabinet clearance (collective agreement) will need to be sought for new INs that do not meet this condition Total value of ‘OUTs’ £60M Total value of ‘INs’ £30M

23. OITO : Transparency • Government reports publically on performance every six months, as part of the ‘Statement of New Regulation’ (SNR) • SNR also lists the measures expected to come into force over the following six months

24. OITO Benefits : Departments • Public reporting on performance to strengthen accountability • Improved management of regulatory programmes (closer to financial budget management) • better planning, including prioritisation between new regulatory proposals • strong incentives to find OUTs

25. OITO : Departments

26. OITO Benefits : Policy-Makers How will my idea impact on business? ? How can I minimise the costs to business ? Do I have an ‘OUT’ that will offset any ‘IN’ ?

27. The importance of action at EU level Around 50% of all regulation affecting UK business comes from the EU If we are serious about reducing regulatory costs then we need to tackle the overall regulatory burden at EU level

28. EU Transposition • Coalition Government made a commitment to end the ‘gold-plating’ of EU Legislation • ‘Gold-plating’ is when implementation goes beyond the minimum necessary to comply with a Directive by: • Extending the scope or adding in some way to the substantive requirement • Not taking advantage of derogations / flexibilities • Retaining UK’s pre-existing, higher standards • Implementing early

29. Ending “gold plating” • In 2011, the Government introduced Guiding Principles for EU legislation to put a stop to ‘gold plating’ (going beyond minimum requirements). These rules were further strengthened in April 2013. • A review showed that, between July 2011 and December 2012, no proposals assessed under the new principles placed additional burdens on UK business as a result of gold-plating. • Since December 2012, there has only been one instance of gold-plating placing additional burdens on business (implementation of the Consumer Rights Directive). • This was at minimal cost (some £1.35m per annum and a one-off cost of £0.23m) and ensures greater protection for UK consumers.

30. PM’s Business Taskforce • In June 2013, the Prime Minister appointed six business leaders to identify EU rules and regulations (including proposals) that need reform to help British and EU companies grow. • The members of the Taskforce are: • Marc Bolland, Chief Executive Mark & Spencer; • Sir Ian Cheshire, CEO Kingfisher [B&Q and similar EU retailers]; • Glenn Cooper, MD ATG Access [SME manufacturer]; • Louise Makin, CEO BTG [pharma]; • Dale Murray CBE, Entrepreneur and Angel Investor; and • Paul Walsh, formerly of Diageo.

31. Taskforce process • The Taskforce sought contributions from businesses and groups in the UK and the EU (with help from Embassies) • Over 100 businesses and business groups across the EU responded, generating more than 250 ideas for action • The Taskforce were supported by BIS Minister Michael Fallon and a Secretariat from the Better Regulation Executive but the report is that of the Taskforce • The report was launched on Tuesday 15 October and welcomed by HMG after a discussion at Cabinet • The Prime Minister and Taskforce members presented the report to President Barroso and the heads of government of Germany, the Netherlands, Italy, Poland, Finland, Estonia and Sweden, in the margins of the October European Council (OEC)

32. Taskforce recommendations • 30 dossier recommendations that could make a real difference to growth, e.g: • Abolishing written risk assessments for low risk businesses could save €2.7bn • Completing the digital single market could increase EU GDP by 4% by 2020 • COMPETE principles to ensure new legislation is fit for purpose (building on 2012’s Ten Point Plan): • Competitiveness test; • One-in, One-Out • Measure Impacts • Proportionality rules • Exemptions and lighter regimes for SMEs • Target for burden reduction • Evaluate and Enforce

33. Progress on implementation • We have already achieved tenof the 30 dossier recommendations: • non-regulatory approaches on shale gas and traineeships; • a streamlined approach for clinical trials,; • new rules for Environmental Impact Assessments, which should minimise burdens on SMEs; and • a new framework for Non-Financial Reporting, which will only apply to businesses with over 500 employees; • proportionate rules on Country of Origin Labelling for Food; • political agreement on the EU-Canada Free Trade Agreement • withdrawal of soils and access to environmental justice items • Waste proposal to help SMEs

34. Progress and next steps • Our priority for the new European Commission is to seek commitment to COMPETE principles • A range of major EU business organisations, including BusinessEurope, Eurochambres and Eurocommerce, along with the European Parliament, have all issued recent policy statements in support of the proposals contained in the Taskforce’s COMPETE Principles.

35. Previous UK action • Our administrative burden reduction programme ran from 2005-2010 (link) • It achieved a 25% saving • Ministries had their own targets, and were tracked • A central panel confirmed the savings claims • We worked hard to communicate the results

36. Some big admin cost savings • Rule change so companies could email info to shareholders (one firm went from posting 35,000 documents to only 8,000) • Rule change relating to housing licences • Major change to business-consumer law • Tools to make employment law easier e.g. form letters, “calculators” • Guidance on health and safety risk assessment, with sample documents

37. A big compliance cost saving The information helps with labelling food, which helps the hotel – the key aim is avoiding food wastage and saving money • Safer Food, Better Business – Guidance for SMEs • Specifically designed to help SMEs • Several information packs and online tutorials to help small businesses with food hygiene rules. • Businesses encouraged to complete the ‘safe methods’ tutorial in the pack and tailor them to their business • Good feedback and evaluations I think it does go far enough and I don’t really think there is much missing

38. Useful links BRE website: https://www.gov.uk/government/topics/regulation-reform Red Tape Challenge website: www.redtapechallenge.cabinetoffice.gov.uk/ Focus on Enforcement website: http://discuss.bis.gov.uk/focusonenforcement/ One-in, Two-out account – the Statement of New Regulation https://www.gov.uk/government/collections/one-in-two-out-statement-of-new-regulation Guiding Principles on EU legislation https://www.gov.uk/government/publications/guiding-principles-for-eu-legislation PM’s Business Taskforce https://www.gov.uk/government/publications/cut-eu-red-tape-report-from-the-business-taskforce Contact details Helen.McColm@bis.gsi.gov.uk (+44 207 215 0386)