Meg Hillier: “Inventive” carrier bag decision can’t hide slow progress on cutting red tape
Public Accounts Committee criticises decision to class new carrier bag charges as a deregulatory measure, as officials indicate that many more regulations will soon come under scope of government's Business Impact Target
MPs have questioned whether requiring businesses to charge customers for carrier bags should be counted towards government’s target of reducing the cost of regulation to business by £10bn by 2020.
In a report outlining progress towards this target, known as the Business Impact Target, the Public Accounts Committee note that since 2015 government has achieved less than £1bn of savings, and these savings were almost entirely due to the carrier bag charge, which is included as a saving for retailers because it brings them additional revenue.
PAC chair Meg Hillier said: "The government's inventive way of recording the plastic bag charge cannot conceal what has been a disappointingly slow start to cutting regulatory costs.
"This high-profile piece of new regulation is being counted as a saving while a swathe of other regulations, expected to cost businesses billions of pounds, is omitted from the calculations."
Hillier added: “It is tempting to say 'you couldn't make it up', but clearly you can — and then enshrine it in the implementation of government policy."
The target is overseen by a joint Cabinet Office and business department unit, the Better Regulation Executive (BRE).
Departments are required to produce impact assessments for any new regulatory or deregulatory proposals, which are scrutinised by the Regulatory Policy Committee (RPC).
Michael Gibbons, chairman of the RPC told MPs at an evidence hearing over the summer that although the inclusion of the carrier bag charge was within the rules, it was “not deregulation as we know it”.
The report notes that in the last parliament the charge would not have been counted towards achieving the target, because the it has incremental costs to business which exceed the incremental benefits.
However, it says: “Without the plastic bag charge, the net achievement so far would be a net increase in costs to business rather than a reduction.”
MPs conclude that the BRE should look again at the rules about what counts towards the target, saying: “The BRE should consider whether it is appropriate to include regulations imposed on business as contributing towards the target and, given the limited progress so far, set out by the end of 2016 interim targets for savings to be achieved and what steps it intends to take to achieve the target.”
The report also suggests that a great deal more regulations will soon come under the scope of the target, as the UK leaves the European Union. Currently, regulations originating from the EU are not counted towards the target, since departments had little opportunity to change them.
However at the evidence hearing Martin Donnelly, then the perm sec of the business, innovation and skills department, told MPs that “when we have left the European Union, areas of regulation currently dealt with on an EU level will logically be dealt with on a national level. Then the starting position…is that they would be caught by the Business Impact Target, but the precise details of course will have to be decided by ministers.”
The committee also expressed concerns that departments do not do enough to evaluate the impact of regulatory decisions after implementation. An NAO report published in June found that of the 83 regulatory decisions due for review in 2016, only two reviews have been submitted to the BRE.
Gibbons told the committee he was concerned that the RPC had so far received very few of the post-implementation reviews they were expecting this year, and of those received “none of them are of significance yet”.
He continued: “So the really big, important ones, where real learning could be discovered, we have not seen yet and we don’t know when we are going to.”
The report says departments must urgently set out how they plan to improve their understanding of the impact that existing regulation has on the business community, including the social and environmental impact, and calls on the BRE to set out, by the end of the year, how it will change its rules so that departments can take a proportionate approach to regulatory reform, focusing on areas which will achieve the greatest impact.
Responding to the report’s publication today, Gibbons welcomed the MPs' findings, saying: “We support their call for greater consideration to be given to the wider costs and benefits of regulatory change including social and environmental factors.”
He continued that it is “imperative that all government departments routinely and consistently quantify the impact of their proposed actions on all sectors of society”.
He added: “We are also concerned about the lack of post implementation policy reviews coming to us for scrutiny – I fear that crucial lessons are not being learned and opportunities missed to elicit best practice for future policy-making.
“The RPC looks forward to seeing the large regulatory measures from the last parliament delivered to us for review, as soon as possible.”
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