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HOUSE OF LORDS MINUTES OF EVIDENCE TAKEN BEFORE DELEGATED POWERS AND REGULATORY REFORM COMMITTEE OPERATION OF THE REGULATORY REFORM ACT WEDNESDAY 1 DECEMBER 2004 RUTH KELLY MP, MR PHILIP CLARKE and MR SIMON VIRLEY

Evidence heard in Public

Questions 1 - 35

USE OF THE TRANSCRIPT 1. 2. This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Clerk to the Committee. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

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WEDNESDAY 1 DECEMBER 2004 ________________ Present Brooke of Sutton Mandeville, L. Carnegy of Lour, B. Dahrendorf, L. (Chairman) Desai, L. Harrison, L. Temple-Morris, L. ________________

Witnesses: Ruth Kelly, a Member of the House of Commons, Minister for Regulatory Reform; Mr Philip Clarke, Head of Regulatory Reform Strategy Team, and Mr Simon Virley, Director of the Regulatory Impact Unit, Cabinet Office, examined.

Q1 Chairman: Good morning, Minister, it is a great pleasure to have you here. I have to apologise for the fact that two members of the Committee will be late, conceivably because we normally meet at 10.30, but we will see. It is Baroness Scott and Lord Desai who will, I am sure, join us presently. This is, as you undoubtedly know, the Delegated Powers and Regulatory Reform Committee and in many ways in the almost 15 years of the history of the Committee it is delegated powers which preoccupy the Committee, so I think I can say that this Committee has a special sense of what we are perhaps going to talk about in a minute the appropriateness of delegation - and, in a sense, Regulatory Reform Orders are delegated powers, even if the super-affirmative procedure which applies to them is somewhat unusual. In recent months we have had plenty of occasion to deal with Regulatory Reform Orders and so you will not be surprised if views have been formed. Incidentally, undoubtedly you also know that we are presently dealing with the Civil Registration Regulatory Reform Order which has given us a lot to think about and a lot to discuss and we are likely to report on it

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next week, unless something happens in between. So that is by way of background. I do not know whether you would wish to say anything initially? Ruth Kelly: I should probably introduce the people I am with. First of all, thank you, my Lord Chairman for inviting me today. I am very, very pleased to have the opportunity of talking to you. I am, as you know, relatively new in this position but personally and as a result of a conversation I had with the Prime Minister at my appointment (and subsequently regularly) I am very keen to pursue this agenda. It is very high on my priorities and indeed on his. That is the first thing I want to say. The second thing is to introduce Simon Virley, who is the Director of the Cabinet Office Regulatory Impact Unit, and Philip Clarke, who is Head of the Regulatory Reform Strategy Team in the Cabinet Office, and I hope that they will contribute to our discussion if they have things to say. You may wish them to do that, my Lord Chairman. I would also like to say that I was told on my appointment, and have since noticed, that we have a very constructive working relationship with the Committee, indeed with officials as well, and I would like to thank you for that. I hope very much that that will continue. I am not going to outline all the issues that I identified within the letter that I sent to both Committees. You will know that I have already given evidence in the Commons and I am sure that you have seen that evidence as well. However, I would like to say that I really would like to see the RRO process used to its full capacity. I think there is the potential here to bring really interesting, good legislation into play with good scrutiny by both Houses, both the Lords and Commons, and I also believe very strongly that that was the original intent of the Act. I believe that Parliament has placed great emphasis on the ability and capacity of this Committee and its parallel Committee in the Commons to scrutinise legislation well and effectively, and I am also convinced that the consultation process has a really big role to play in highlighting any issues as well. I think there are good, strong safeguards in the Bill to make sure that the process is used well and appropriately. I have some knowledge of the civil

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registration issue because I was the Minister responsible for it in my previous job so I am also happy, up to a point, to answer any questions on that in due course.

Q2 Chairman: Thank you very much indeed. Even those brief remarks prompt a whole lot of questions and we will get to them one by one. We are of course aware of your meeting with the House of Commons Committee and I am pleased to say that we have a very friendly and close relationship with that Committee so there is no attempt to compete or indeed to repeat everything, but we would like to begin by asking you to give us your view about the review of the Act and how you see it now. It did not take place as foreseen after three years. Mr Alexander gave some reasons why it was unlikely that it could take place after three years six months before that alarm clock rang. Where are we now and how do you see the chances of it? Ruth Kelly: I want to put this in context. It was probably envisaged at the time that by now there would have been some fairly major proposals passed through the system which we could have assessed. I guess that it was originally envisaged that the civil registration and the fire safety measures would have already gone through the whole process and they could have been assessed. One Bill, the Patent Bill, has come through and also some smaller measures, but there is clearly a lot still to happen. During this three-year period I also understand that officials have, in effect, been reviewing the operation of the Act and the RRO process in an informal way rather than a formal way by talking to everybody in other departments who has been responsible for an RRO and have also being talking to officials in other departments who have decided, for whatever reason, not to go down the RRO route when they thought they might have done so at the beginning of the process, to identify why they decided to pursue a different avenue in the end. As a result of that informal review, I was able to write the letter to your Committees outlining areas where we think there are issues that we need to think about further and where we would value your insight and input. However, I also think 4

given that there are a couple of pretty big issues just on the horizon, we would not do full justice to a review without taking into account the impact of the Fire Safety Bill and the civil registration procedure and other potential big issues as well because there may be more fundamental issues about the whole process that come out of an assessment of those as well. I think it is wise to wait a while to be able to take those into account before a formal review is published, but I would not like you to gain the impression in any sense that officials have not been monitoring this extremely closely and, in effect, done the work which has informed the letter which I sent to the Committees.

Q3 Chairman: Would you be prepared to give a date for a formal review? Ruth Kelly: Well, we expect that a full review might begin in the summer of next year once these measures have had a chance to be properly considered by the Committees.

Q4 Chairman: As a sort of preview to the review, are you yourself basically satisfied with this new instrument? Ruth Kelly: As I hinted, I suppose, in my opening remarks, I think there is a case for looking very seriously at some of the barriers and constraints that have been identified during the process, and this is indeed what officials have been gleaning from their conversations and discussions with other government departments, that there were measures that might have gone down the RRO route which for whatever reason did not. Just to mention a couple of the bigger issues - the two-year rule and the fact that a minor amendment to the Act somewhere along the line could mean that an RRO process could not continue despite the fact that a significant amount of work may have been done on it already, and it would have to be delayed for a further two years. Also the fact that that Act does not have the ability to delegate powers, to sub-delegate. Both of those arose as pretty significant issues where there would be a case for us at least to look at in more depth and decide whether we want to open up the 5

process more. In all of this we have to think about what is appropriate, about what the best route is for delivering reform and think about it in terms of the outcomes rather than the specific avenue that is pursued and what is the best of achieving a better outcome, which is better regulatory reform.

Q5 Chairman: The Prime Minister in a recent speech said that he was prepared “to amend the Regulatory Reform Act to make it easier to get rid of redundant regulation”. Did he have something specific in mind? Ruth Kelly: I do not think he did. I think it was just the recognition that we had quite ambitious targets for the RRO proposals initially. I do not think that the number of RROs is the best measure of how effective the programme has been, but in terms of the number of RROs that have been achieved we have not achieved as many as we envisaged at this stage. In terms of some of the issues which have been identified, there is at least a strong case for looking at some of the potential barriers to fuller use of the RRO process. I would say that I think he has a very open mind on these issues and I certainly would want to take into account your views and the views of the Committee before forming a stronger opinion.

Q6 Chairman: I will go round the other Members in a second. One concern which has been expressed to this Committee is that in a sense there are two types of RROs, those which actually relieve burdens while maintaining protection and others, if I may be deliberately vague, which smell like legislation which has not got a start in the normal list of parliamentary bills, and that of course is where this vexing question of appropriateness comes in and how we judge whether regulatory reform is to be an appropriate instrument. Is that impression totally wrong? Ruth Kelly: Well, there is clearly a history here that needs to be taken into account and the fact that the RRO process replaced a clear deregulation initiative was a change and a break, I 6

think, from the past. The Government has a slightly different view of the RRO process which is that it is not just about deregulation; it is about regulatory reform and bringing through the whole process of reforms that are desirable, that can achieve a degree of consensus on what may in fact be large reforms and that has built into it safeguards along the route. It is clearly an avenue, I think, where reforms which are desirable in themselves which meet the appropriateness criteria and the other criteria can be pursued where - I think you are absolutely right - there is not necessarily going to be an alternative route to get them on to the statute book. I do not think that is a bad thing; I think that is actually rather a good thing.

Q7 Chairman: Despite the fact that parliamentary scrutiny of Regulatory Reform Orders is of course very different from that of Bills and it might be argued that it is much less scrutiny certainly by Parliament as a whole? Ruth Kelly: You might argue that but I would not under-estimate the ability of the Committees and the safeguards and the consultation process and so forth to expose the issues which need to be considered. I have quite a strong view that the original intention of the Act was to divest this power to the Committees and to give the Committees the power to scrutinise items of legislation. The Government is committed to taking into account the views of the Committees, so I think that was a conscious decision by Parliament to entrust the Committees to scrutinise quite substantial reforms.

Q8 Lord Temple-Morris: Thank you very much, Minister, for going to the heart of the matter straight away. Indeed, I am going to follow that up by giving my concerns, which I think are shared by the Committee as a whole. The arch dilemma I think we have in considering these matters is the drive from the very top down, on the one hand, to increase the amount of RROs - the question of targets, your expression “ambitious targets”, 60 RROs which cannot be realised, that sort of thing - on the one hand and, on the other hand, the 7

extent of parliamentary scrutiny that can be applied under the system as it stands. If I can very briefly develop that. My Lord Chairman mentioned the quote from the Prime Minister’s speech “… easier to get rid of redundant legislation” - emphasis “redundant” legislation. When you yourself go before the Commons Committee you talk about a desire to get more big bold legislation. Is the RRO system as it stands sufficient for that, bearing in mind again from a departmental background you have talked about the extent of the scrutiny available, but most of the suggestions for improving the procedure are in fact facilitating the procedure, making it simpler and easier for the department to get this legislation through. It all comes down to the sort of legislation you establish and the parliamentary scrutiny of it. It has been seriously suggested to us, for example, that Westminster Hall debates (which you and I both know) are somehow going to be an effective form of scrutiny. That does raise rather a big smile if one thinks that is scrutiny by comparison to the power when primary legislation is going through to scrutinise and to amend. So how do you reconcile all of this because that does go very much again to the heart of the matter? How much do you expect us to trust you, which is more or less what you are saying? Ruth Kelly: There are pretty big issues that we need to discuss here. If, for example, a decision were made or were to be recommended that we consider a power to sub-delegate, that would be a pretty substantial reform and it might well, for example, in that case be worth trying to think about counter-balancing safeguards in terms of additional parliamentary scrutiny, or an affirmative resolution procedure where this is debated. Those are the sort of things where I think there is room for thinking quite carefully about tradeoffs between parliamentary scrutiny and facilitating the passage of Orders through the process. Do I think that the Committees can carry out effective scrutiny? I do and I believe the Committee always pays very close attention to the safeguards and discusses them during the course of passage of an Order. The safeguards state that the burdens must be removed or reduced,

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protections should not be lost, nobody should be prevented from exercising their right to freedom, and new burdens, if imposed, should be proportionate and strike a fair balance and be desirable. These are all very important safeguards which are routinely discussed by the Committee. The mandatory public consultation is also very important. The robust

cost-benefit analysis is a very important part of this. I think that that provides a viable alternative route for some quite large, uncontroversial measures and that is what was initially foreseen by Parliament, that was its intention, and I think we should think about how we can make it easier for that to happen.

Q9 Lord Temple-Morris: I want to ask one more question just following this up. Concentrating on the parliamentary scrutiny side of it, would you be prepared to consider some form of improving the powers of Parliament perhaps in the committees to scrutinise with more vigour, even possibly to the extent of suggesting amendments? Bearing in mind that, to my mind at least having served in both Houses now, this is very much good Upper House business. The Regulatory Powers Committee down the corridor is not exactly the pin-up committee that an elected politician wants to get on whereas here it is slightly different rules that apply. Would you be prepared to consider extending parliamentary powers in some way and also bearing in mind the Upper House’s role? Ruth Kelly: I will certainly look with interest at any proposals that came from this Committee or indeed the one down the corridor on how we might make this process work better. If one of the concerns of the Committee is that there is not sufficient parliamentary scrutiny, then any proposal on that score we would look at with interest as well. Chairman: It is a straight throw to the Committee to have, potentially at least, the last word on whether a Regulatory Reform Order goes forward or not. We normally with our delegated powers responsibility report to the House but when it comes to stopping the progress of a Regulatory Reform Order we have no way of reporting to the House. That is it and I think it 9

is worth thinking about whether that is an appropriate function for a committee. I think that is what Mr Timms had in mind when he suggested to the Commons Committee that there might be a debate, although I do not quite see how in procedural terms that could be done. Sorry, I should not have interrupted. Lord Harrison?

Q10 Lord Harrison: Thank you, Lord Chairman. Good morning, Minister. You mentioned earlier the policy area of fire services and fire safety and I would like to explore a little more the choice of legislative instrument that is pursued because sometimes it can seem to us on the surface where there is primary legislation in a particular policy area that that is then juxtaposed to an RRO, and I wondered what the process was of deciding what areas should be, as it were, relegated to the RROs and what would then be prioritised to come into primary legislation? What is the link between the two and what are the risks of having two different procedures, but also what are the benefits? Also sometimes these are nearly simultaneous in their action, (sometimes one follows another but sometimes they are simultaneous) so do you not see perils because there are these two separate routes? Ultimately, how do you fend off that worry we have that it looks as though the constraint is parliamentary time and parliamentary procedure rather than some logical approach which says this is indeed appropriate to be put into an RRO. Ruth Kelly: I have already talked about the safeguards for use of the RRO procedure and I think that is important, but I think you are also right to draw attention to the potential risks there are in pursuing a twin track approach to legislation. In the fire safety area the twin-track approach was in fact used. What we have to consider, which I think can only be done on a case-by-case basis, is how we achieve the most effective outcome. The Fire Safety RRO proposal was being prepared for scrutiny and was in the process of development when the need for a Fire and Rescue Services Bill was identified and the Fire and Rescue Services Bill, I am sure you will remember, was a particularly controversial Bill which was brought forward 10

for debate. It just could not have been tacked on to the RRO proposal, that is clear, because it was a highly controversial measure, nor could the RRO have been added on to the Bill because it was a very large RRO and the measures being debated before the House were in need of very clear and immediate resolution, and it would have been impossible given the legislative timetable to achieve that on the floor of the House. We live in a different world. You could design things theoretically and it would have been nice to have had the whole thing done together but within the practical constraints of legislative slots in timetables that just would not have been possible, so in a way it is a second-best result but the best we could have hoped for to achieve the outcome that we desired.

Q11 Lord Harrison: If that is the case and you are saying that it is parliamentary constraints that oblige you to take something off the shelf, an RRO procedure, do you recognise that there are then problems when you are trying to look at the totality of the picture by having these two different routes, and what safeguards then are applied to ensure that there is cohesion between the purposes of both the Bill and the RRO so that there is not confusion or a different outcome? Ruth Kelly: The alternative would probably have been to have done the Fire and Rescue Services Bill and then wait for a very long time and done the Fire Safety Bill on the floor of the House There would have been risks in that process as well. No process is without risks. The issue is how do you best achieve a particular outcome. Doing them in parallel probably drew attention to some of the issues that needed to be resolved and also the potential for conflict or harmony between the two, and exposed those for public debate. In a way, having them run in parallel was better than having two, one could argue, primary legislation slots which were separated by very considerable gaps.

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Q12 Lord Desai: I just want to continue on that. When you have a problem - say fire - do you think of it systemically? This is something that I have just thought about. Do you think, “Oh my God, here is a problem,” and some of it can be tackled with legislation and some of it not? I tell you what seems to me to be the problem here is that the Prime Minister is impatient, he wants to reduce red tape or whatever it is. The standard RRO procedure is not a speedy one so you must choose. You will not get time for primary legislation but it is not clear to me, having sat on this Committee, that an RRO is a quick procedure and therefore either the way things are prepared, presented and packaged has to be so thorough so that we do not ask for more consultation or reports from all and sundry, or you have to say it should be primary legislation. So do you think of a systemic problem and then say, “If I chop this up into smaller legislation I might get it through quicker,” or, “I have to do smaller RROs rather than one big RRO.” It has to be a tactical decision. Who decides and do you think about it like that? I am sorry if that is not a very clear question. Ruth Kelly: I think the important thing is what process best fits the outcome that we desire. To take civil registration, which I know is an issue facing the Committee, I believe clearly that that was identified as the sort of proposal that could benefit from the RRO procedure and very clearly envisaged by Parliament at the time of the passage of the Act because it was clearly desirable, it was long overdue, it delivered very substantial regulatory reform which affected people’s lives and therefore it was an imperative to see the reform delivered, it was necessary, and it was not the sort of measure which would become party politically controversial. Indeed, I think that everybody pretty much is in agreement that this reform is desirable. Now if you get a large reform of any type there are bound to be issues which arise in the course of the consultation that somebody will take different views on. I think that is just inevitable as part of a large proposition. The question is can the overall measure achieve an appropriate degree of consensus? If you take civil registration, for example, and you look

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at the issues which caused a degree of difference or where difference was expressed during the consultation, the point at which death records and so forth and the cause of death are released to the general public, the genealogists opted for greater openness and transparency whereas others were more concerned about the privacy aspect of that. However, if you now ask genealogists along with others is this a desirable reform, pretty much everybody is signed up to the fact that this is a desirable reform and that the way the Government has gone about it has been very robust and extensive and most of those concerns have been met and they would agree that the body of legislation is the sort that would benefit from this type of procedure. So I think this is based on the outcome. We want to see this reform happen and the RRO is a particularly good route to follow because it is not as if there is some sort of free legislative slot open if the RRO process is not followed. There would need to be a bid in the primary legislation programme, and given the demands on the legislative programme that may be a very long time in coming. There may be other options that could be pursued but ---

Q13 Lord Desai: Could I ask a supplementary about that. I think originally when this legislation was passed people were worried about things which are party politically controversial, but controversy can arise in other places in a civil society, using a fashionable phrase. What happens in civil registration is not party politically controversial but it is controversial. At that stage only a parliamentary debate can represent those myriad

reservations properly and if it is left to us to judge we have far too much power to say no to you and we do not want to say yes to you either. Ruth Kelly: I think in that example the consultation was exemplary. It could not have been done in a more thorough fashion. There were 3,500 responses to the initial consultation. That is far more than any other measure I have ever come across. Everybody had the opportunity to express a view and the fact the Government reacted to the consultation and amended the measure was in a way that demanded a broad degree of consensus across the whole of the 13

measure. Most people now would say that they want to see these reforms go ahead on the basis that the Government has proposed. There are issues that arose, as there will be in any large measure, which have been pretty much resolved, and therefore it is the sort of measure that you could say while it has generated quite a lot of interest because it affects people’s lives, it is just the sort of measure that probably would not get on to the statute book for quite a long time. There is a pretty strong imperative to see reform and the RRO process is a vehicle for achieving that.

Q14 Lord Harrison: But you could turn that on its head, Minister, because you could say that the measure of concern of civil society that Lord Desai talks about, where you have 3,000 responses as opposed to 200-odd in the case of the Fire Services Bill, is an indication that there is concern. It may not be put in the box of party political concern but it is in the box of concern which the Commons and Lords ought then to scrutinise on behalf of constituents. Ruth Kelly: I think actually that these Committees do that scrutiny and that is what they are for. There are ways - and we could have a debate on that - to enhance the level of scrutiny if that is also required, but the alternative is really probably not having this reform for quite a long time and if people were asked to choose I think I am clear about where the very strong majority of people would come out. I think the ONS has come back and said what would they do if this did not go down the RRO route and they look at different ways of trying to achieve the goal in a much more limited form. I think it would be a huge missed opportunity.

Q15 Baroness Carnegy of Lour: Just on the same point, Minister and sorry to go on about this but I think this is the nub of our problems. The whole RRO system seems to have almost taken on a life of its own and the opportunities it offers to ministers and to Parliament and the way that it has to be done controls rather how it is dealt with. What worries us - it certainly worries me and I think it worries the whole Committee - is what is actually going to happen in 14

the case of the Civil Registration Order to ordinary people? It is not party political, of course it is not, but what is going to happen is that when somebody dies or is born, instead of going in person and writing things down and registering it in that way, you may ring up and there may be a confusion. We have had a big discussion about how names would get muddled up. What would that be like if you had just had a relative die? It has an effect on the public which is nothing to do with party politics at all and unlikely ever to become such, but there is an anxiety on behalf of the public as to the precise change it will mean for them, and it is very great for them and the potential for muddle is very great, it seems to us. I have never been a Member of Parliament but I have been in local government and I would have thought it is terribly important that elected people should hear these anxieties over a period of time and consider whether the procedure is the best it could possibly be. That is what is not happening in the case of an RRO. I am sorry to labour this point but it is the absolute nub of the problem. Ruth Kelly: I am absolutely happy to try and deal with these points. The civil registration proposals have been thought about and worked up since the early 1990s. That is a very long period of time. They have gone through the most extensive consultation that I have ever come across as a Minister and the overwhelming view is that they are worthwhile reforms that we need to see delivered. There has been an issue as to whether you wait for 100 years after the birth of someone for records to be released about cause of death or whether you wait for 75 years or whether you wait for 50 years, with genealogists taking one view on the extreme side and others taking a slightly different view, but the fact of the matter is that the whole process opens up access in a way that has never been there before. Even those arguing for the extreme view of openness realise that this is a huge advance on where we are now. They may have strong opinions about to what degree we go and how far we open this up but actually the nature of the reform is something that people strongly welcome. On the specifics about how

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deliverable this is and whether the specifics of the reform have been worked through and so forth, of course that needs to be considered, which is why there is this process to go through to highlight those concerns. On that particular issue, the person will still be able to go in person and they can do that if they want to. This is precisely the sort of thing that the Committee ought to be scrutinising and making sure has been dealt with and it is precisely the role that I think Parliament envisaged for the Committee to make sure that these issues are properly dealt with in this process.

Q16 Lord Temple-Morris: This is very much, as the Minister well realises, Baroness Carnegy’s point (which follows others we have made) that it is very much at the heart of all this. I think it is quite useful just to concentrate for a few moments on civil registration because the Committee is about to deliberate and decide after you leave the room, so it is more than appropriate. You have talked about the fact that it is a substantial reform. You have talked about its effect on people’s lives and you have talked about how wonderfully desirable it is. You will forgive the comment, there is no dispute about that, but the question is really the scrutiny, the right to amend, bearing in mind the effect it is going to have on people’s lives. With regard to Stephen Timms’s evidence before the Committee and yours and you have made the point repeatedly and understandably - the question of parliamentary time and legislative bids very much come into the picture. This is the very facet that this Committee, in my own respectful judgment, has to watch out for - the desirability of getting something through without the enormous burden for ministers and generally, putting an enormous bit of legislation like this through the House even if you get the time to do it. How would you deal with this point? In an ideal world where we did not talk so much and we got business done and better scrutinised in a shorter time, would you prefer civil registration to go through as primary legislation and, if so, why?

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Ruth Kelly: The question I see is whether this is an appropriate way of delivering reform and I think, yes, the RRO procedure is a completely appropriate way of delivering legislation. During the passage of the Act there was a substantial debate on this point and Parliament suggested that issues touching on constitutional matters or indeed matters of high political controversy would not be appropriate. The hunting ban clearly would not be appropriate for the Committee to consider through an RRO process. For all other issues they laid down a number of safeguards. It strikes me listening to you this morning that your concerns are really with the nature of the safeguards and how Parliament has said this should be done and whether there are solutions or not, which is something we can think about when reviewing the Act if that is something you feel strongly about. I am firmly of the opinion, however, that Parliament thought that civil registration and fire safety were the sorts of measures that should go through this process because they touched on the lives of ordinary people, because for that reason they were desirable because they improved the quality of people’s lives, and because they might not get another chance of getting onto the statute books at least only in a very broken up, disparate, piecemeal way. For that reason we set up these Committees. I think it would be a huge loss if we could not get this sort of reform through the RRO process. I understand that people may take a different view. I am not going to hold back for that reason because I think that is a very important discussion to have, but I think Parliament put their trust and confidence in these Committees to deliver precisely this sort of reform.

Q17 Lord Brooke of Sutton Mandeville: I am going to go back to the questions which our Lord Chairman asked you about - progress on targets. In the Departmental Report of the Cabinet Office in March of this year you said that the Government was on course to meet the RRO target of 60 in 2005. It was reasonably clear from your evidence of 16 November, which is a bare seven and a half months later, that that situation had changed. What were the

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obstacles that caused the target not to be met and, in second terms, when did you discover during that period of seven and a half months that you were not going to meet it? Ruth Kelly: I am fairly new to this though I had already looked at the situation when I came into the job and it became pretty obvious to me that we were not on course to meet that target and that it would be very, very difficult to get there in the timescale envisaged. I would say that in all of this - and I have been stressing this throughout the evidence - that it is the outcome that matters rather than the procedure that is followed, and of the 60 RROs that were envisaged only three of those measures have actually been dropped. The fact is the ones that have not been pursued, and I think there are 28 which have been delivered --Mr Virley: --- 28 laid. Ruth Kelly: --- Of the 28 laid there are only three which have been dropped and two which have been delivered by other means. So the fact is we have achieved our goals in many of those areas or we are on course to achieve our goals but the RRO route has not necessarily been followed in each case, which led to the contents of the letter which I wrote to the Committees.

Q18 Lord Brooke of Sutton Mandeville: Supplementary question: is there a virtue under these circumstances of having targets? Ruth Kelly: I think it maintains a focus. Without a target the questions would not be asked and it is very good always to ask ourselves are we making best use of the RRO process. It is one of a number of targets which are an attempt to measure our progress but it does maintain that degree of focus and I think it is good.

Q19 Lord Brooke of Sutton Mandeville: Further supplementary question: if the Orwellian phrase on the budget council is that “all countries are equal but they have different votes to make up the qualified majority rule”, is there virtue when you set a target of 60 or 75 in 18

assigning a larger value to the ones that are quite literally, to go back to the original discussion in 2001, elephants compared to some of them which are only a couple of lines? That is the first question. I say in support of it that if you are worried about the number of copies you have to send out, which may frighten people off responding to your consultation because the things are so large, a system of assigning some form of quantified coding would also help those who were thinking about responding to know whether they were dealing with something very substantial or something very modest, despite the fact that it appeared to be quite large? Ruth Kelly: I think that is a very interesting point and in a way by the point you have made you draw attention to the inadequacy of numerical targets, in that they only capture something, they certainly do not capture substance. If we delivered civil registration and fire safety and patents and a number of other big measures, that might be a far greater achievement for the Committee than achieving a vast number of very small matters.

Q20 Lord Brooke of Sutton Mandeville: Minister, if we could use your experience at the Treasury in the context of the Civil Registration Bill to illustrate the process that, I take it, takes place in the number of other departments as well. How much time did you give to the Civil Registration Bill and what sort of time did you give to it during the time that you held the responsibility? Ruth Kelly: A lot, as I hope is transparent from the fact that I am willing to talk about it even after having left the job. I had very many meetings with officials about the civil registration procedure, right from the first months of having become a minister. I was walked through the process and how it would operate in practice. I was given gateway reviews by the Office of Government Commerce. I was given monthly updates on how it was proceeding. I was in very regular contact with the policy issues and implementation issues.

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Q21 Lord Brooke of Sutton Mandeville: Did you at any stage during that process have the slightest doubt that the mode you were following was appropriate? Ruth Kelly: No, I did not. Well, yes, let me change that answer completely because an issue became apparent at the end about replacement of managers (?) which was dropped from the RRO procedure so the controversial element of this was entirely removed from it for the time being. What we are now left with is a move to a record-based from a personal-based system and that I would consider to be the uncontroversial part of this.

Q22 Lord Brooke of Sutton Mandeville: When the present Financial Secretary appeared before us I cited a BBC analogy where 500 experts responded to the first consultation on the Charter and the vast majority said that the BBC was “dumbing down”. When the DCMS went out for a national search to the nation as against to the experts, 40 per cent said it was dumbing down, 40 per cent said it was not, and the others had no opinion at all. Is that analogy irrelevant to the process through which you have been going? Ruth Kelly: I think the consultation process was exemplary. It threw up all of the major issues and I think that the registration service and the ONS and ministers have really listened to the issues expressed and have dealt with them. Lord Brooke of Sutton Mandeville: I have two very quick questions but do stop me, my Lord Chairman. Chairman: I am stopping you now. Lord Desai?

Q23 Lord Desai: It has occurred to me that the problem is that when you follow the RRO procedure that there is a very big presumption that the Committees are going to agree. Scrutiny, yes, but basically you think, okay, here we are very well prepared, very sincere, come on, let’s go. I think the legislation as amended would have to have some slightly bigger obstacle than just a committee saying, presumably, yes, because if we wanted to say no we 20

would like a slightly larger consultation amongst our parliamentary colleagues and the presumption that an RRO will always go through will have to be modified. This is a more difficult area having thought about it. Everybody thinks that once you get an RRO we have to agree. What if we do not? Ruth Kelly: That is exactly the sort of thing we ought to think very, very carefully about when it comes to reviewing the Act and how it works. If there are any concrete proposals that come forward we would be very willing to look at them.

Q24 Lord Desai: Let me put it this way: if some mechanism were to be found where the two committees go to their respective Houses on a simple yea or nay vote, saying having thought it about it we approve or we do not approve. Each thing should be before Parliament and it can be taken quickly or opened up to debate. Something like that would have to be added even if it is a one page or one sentence saying agreed or not? Ruth Kelly: It is not quite as black and white as that, I hope. That is if the Committee does make recommendations or proposals where modification is desirable then, as far as I understand it, departments take those recommendations extremely seriously and will modify the proposals on that basis. I hope that in fact there is more to-ing and fro-ing than you suggest.

Q25 Lord Desai: We do not always have things to be able to tell you. What if they are going to amend this and have the following differences and then come back and then the whole thing will be delayed? You give us a package and tell us yes or no. Ruth Kelly: If it could work better we would be very willing to think about that. I hope there is a backwards and forwards process.

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Q26 Chairman: As I said, in the case of legislation we report to the House. We may decide to suggest amendments before the House has debated, but the principle is there that it is for the House to decide and in the case of RROs we in a sense have the ultimate responsibility? Ruth Kelly: You certainly do but there are the two stages of the process and there is a pretty big section at the end if the Committee says no to government departments, and that is a very strong incentive for them to listen to the views of the Committee and to take on board the comments that you make. Chairman: We are nearing the end, but Baroness Carnegy?

Q27 Baroness Carnegy of Lour: Lord Chairman, there is one point we have not touched on - although I think the Minister mentioned it – and it is this question of sub-delegation and how the Government has so far said that an issue which would require sub-delegation is not suitable for an RRO. Could the Minister tell us what she actually thinks about this? It is obviously a major thing for an Order which is not scrutinised by Parliament to give Ministers the power in the future which could only be discussed by Parliament in the limited way that an Order would be discussed. Does the Government think there is a way round this or is it still a major sticking point? Ruth Kelly: I agree it would be quite a major change of the nature of the RRO the process that we would need to think through very carefully, and I would very much welcome your views on that. The only thing I would say is it has been drawn to our attention that this is one reason why the RRO procedure cannot be used because almost by definition if you have got a very large proposal it is quite difficult to try and constrain it in such a way you do not then need a panel to sub-delegate, so the effect of this is to make it difficult for large RROs to go through this route but it would be quite a major change and we might then have to think through the nature of the scrutiny process, and your views on that would be very welcome.

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Q28 Lord Brooke of Sutton Mandeville: There are two quick questions in relation to your evidence at the Commons Committee. In answer to question 23 you were asked by the Chairman whether their Committee could be given a list of cases where problems arose. For example, the statutory instrument problem where things have come up in the two years and thus had actually prevented you from proceeding. My only question is whether in the past fortnight that list has been prepared? Mr Clarke: We are still working on it.

Q29 Lord Brooke of Sutton Mandeville: Okay. The other question relates to a particular phrase you used in answer to Mr Brown’s question ten where his question related to the issue of activity. The first sentence of your reply says: “This is the fact that an RRO can only perform legislation which has the effect of imposing burdens affecting persons in the carrying on of an activity, as far as I understand it.” Is the phrase “perform legislation” a term of art? Ruth Kelly: It should be “reform legislation”.

Q30 Lord Brooke of Sutton Mandeville: I had a suspicion that was the case. Mr Clarke: We have sent a correction. Lord Brooke of Sutton Mandeville: We have the unamended version.

Q31 Lord Harrison: Minister, you did mention about the two-year rule earlier on and I think you have put that into a review. I think many of us would feel that it ought to be reviewed. Have you had any preliminary thoughts about how you deal with the problem of over-frequent amendment to legislation, which was partly the purpose of the two-year rule? Ruth Kelly: I think there is an issue there about making sure that Parliaments do not legislate too frequently and certainly the guidance from my officials in the Regulatory Impact Unit on the RRO process would be very much to try and make sure that does not happen and that all

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of the issues are thought through at the beginning of the proposal, but I think you are right, this is something that we need to consider.

Q32 Chairman: Thank you very much indeed. Is there anything you would wish to add? Ruth Kelly: No, I think we have had a very full and frank discussion and thank you very much for inviting me.

Q33 Chairman: I was very struck by your repeated statement that you are interested in outcomes rather than procedure, which is entirely understandable to me and makes perfect sense, but of course we are a committee which is only concerned with procedure, and so you might argue that we look at it from different angles at times. Ruth Kelly: Absolutely, but maybe one point to leave you with then. It is very important to see this in the context of constraints which we and legislators actually face in real life because the RRO committees were set up in recognition of the fact that there are constraints and sometimes different avenues.

Q34 Chairman: There are constraints but if it is very important Government will find time or not. Ruth Kelly: That is an interesting question. Lord Brooke of Sutton Mandeville: My Lord Chairman, I do not wish to sound either ominous or sinister, but the majority of cases in the Court of Appeal relate to procedure!

Q35 Chairman: Right, thank you very much indeed for giving us your time and a great deal of interesting thoughts, experience and views, which are highly relevant for us. Thank you for coming. Ruth Kelly: Thank you, my Lord.

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