Vol. 567 No. 1
1 Mr. Kenny asked the Taoiseach if he will report on the outcome of the most recent meeting of the interdepartmental group responsible for the implementation of the recommendations of the OECD report on regulatory reform; and if he will make a statement on the matter. [11098/03]
2 Mr. J. Higgins asked the Taoiseach if he will report on the recent work of the interdepartmental group responsible for the implementation of the recommendations of the OECD report on regulatory reform. [13024/03]
3 Mr. Rabbitte asked the Taoiseach the progress made to date with regard to the work of the interdepartmental group on the implementation of the recommendations of the OECD report on regulatory reform; and if he will make a statement on the matter. [13491/03]
4 Mr. Sargent asked the Taoiseach if he will report on the recent work of the interdepartmen tal group responsible for implementing recommendations of the OECD report on regulatory reform; and if he will make a statement on the matter. [13610/03]
I propose to take Questions Nos. 1 to 4, inclusive, together.
As I informed the House in my reply of 26 February 2003, the high level group on regulation has made considerable progress since its establishment in May 2001, following publication of the OECD review on regulatory reform in Ireland. The group has met 16 times to date, most recently on 20 March 2003, and reported to Government on its progress in November 2002. The report is available on my Department's "better regulation" website.
The group has focused on two areas in particular. It has begun the process of framing a national policy statement on better regulation through the publication of the public consultation document, Towards Better Regulation. The consultation document was designed to highlight the key issues that are likely to feature in the national policy statement and to promote public debate and awareness in relation to better regulation.
The consultation document sets out the key questions that we need to address in considering why we regulate, what we need to regulate and new approaches to governance in a global economy. It is important to emphasise that this process is not about resolving micro-level regulatory issues or specific market problems. Rather, it is about giving us a set of core principles to guide future regulation and policy-making.
The consultation process was widely publicised in the media, through Government websites, seminars and presentations. Approximately 4,000 copies of the consultation document were distributed and 89 submissions were received from a wide variety of interested parties. A full list of submissions is available on my Department's "better regulation" website.
To inform the subsequent formulation of the national policy statement, these submissions have been studied and analysed. Earlier this year, my Department published a booklet containing two papers, the first summarising the submissions received and the second offering an independent analysis and commentary on the submissions by an independent economist. More than 1,000 copies of the booklet have been sent to interested parties and copies have been placed in the Oireachtas Library.
A drafting group composed of senior officials from key Departments held its first meeting at the end of January to commence preparation of a draft national policy statement. While a specific date for publication has not been set, it is anticipated that the draft text of the policy statement will be submitted to the Government in early summer with a view to publication some weeks later.
The second priority of the high level group has been the development of a system of regulatory impact analysis, RIA, as recommended by the OECD in its report. Regulatory impact analysis is a policy tool designed to identify and quantify, where possible, the impact of new and existing regulations. A working group of officials has been developing a model that would be suitable for the Irish policy making context. The group has recommended a particular approach and I understand the next steps will be to pilot the model in a small number of volunteer Departments, prepare detailed guidance material and supports and devise and deliver a programme of awareness raising and training to inform civil servants and other interested parties about regulatory impact analysis.
The publication of a White Paper on regulation in 2003 and the introduction of regulatory impact analysis across Departments are two of the commitments on regulatory reform contained in the new social partnership agreement, Sustaining Progress. Overall, significant progress has been made in the area of better regulation since the establishment of the high level group on regulation and I look forward to continued progress in the coming years.
Two years after the publication of the OECD report on deregulation, the response has been an abject failure. The deficiencies identified there have not been tackled. The opening of the energy sector has been too slow and the fees charged by professions are still too high as recognised in the recent report of the Competition Authority. Last week saw us slip out of the top ten in world competitiveness. This must be of serious concern to Government. Is the Taoiseach not concerned at the serious escalation in construction costs for major sites in the country? Many international firms locating here are very concerned at the huge scale of cost increases. Manufacturing facilities could be provided in other countries such as the United States or in central Europe at much less cost. Should the Competition Authority look into the fact that vastly inflated costs seem to apply in a number of cases here and is that not a major factor in driving us out of the top ten in terms of competition and competitiveness?
I will clarify what this is about. It relates to the work of my Department in the implementation of a major national level report by the OECD two years back, in which the Government asked the OECD to involve itself. There are two questions: the White Paper, which I have outlined; and the regulatory impact analysis. The issues on which my Department is working are not the sectoral issues which were in that report. We have now moved on, following the report last year, which was on a cross-departmental basis, and each individual Department is dealing with the issues involved.
My Department's involvement, through the support of the high level group on regulation, has centred on preparing a better national policy, the consultation document Towards Better Regulation and developing models for regulatory impact analysis. The process is endeavouring to ensure that there should be a model of tests to see, when new legislation is brought in, if regulation is required, if existing regulation should be updated, if we would be better off not regulating and whether regulation would be implementable, if legislation is introduced. A series of measures and the kind of models in which we would involve ourselves were set out in the document last year.
The group has looked at best practice everywhere. The OECD told the group it should have a regulatory impact analysis but it did not say what its model should be or how it should be done. The group has been working on preparing the White Paper, as I have outlined in my reply, and putting together the regulatory impact analysis, which it will have this summer.
The objective behind the document is not to resolve particular regulatory issues in specific areas. As Deputy Kenny said, the OECD report contained questions about looking at pharmacies, professional services studies and other areas. Work has gone on in all of those areas under different Ministries. If the Deputy wishes I can say a few general words about those but I am not directly handling them. They are being dealt with in the relevant Departments. That is what this process is about.
The Government received a fairly severe reprimand from the European Union for failing to fully implement a Single Market programme. How does the Taoiseach intend to implement a strategy that will prevent investment moving from Ireland to more competitive countries and has he a strategy in place to deal with that?
I am surprised that the former backbench critic of the Government and chairman of the select committee dealing with corporate affairs is not here because his brief in dealing with the problems of Irish business is directly related to the matter of competitiveness. Can the Taoiseach give an assurance that that committee will not be used to deflect his own responsibility for maintaining the competitiveness of the economy, in view of the uncertainty that faces us in the future?
I can assure the Deputy that competitiveness is a key issue. We must try to deal with the key issues that make up the competitiveness agenda so that we continue to be competitive. I will be dealing with this issue when I answer the next question on social partnership. We have been looking at all the issues – costs, benefits, economic and social inputs, consultation and compliance costs and all the issues that make up competitiveness. It is a key issue and we must do everything we can to make ourselves as competitive as possible and to remain so. We must even improve because we have lost competitiveness, as I have said a number of times recently. It is part of Sustaining Progress and the talks on the social partnership process tried to deal with our loss of competitiveness and with regaining it, in so far as we possibly can.
Deputy Kenny also raised the question of what will happen in more competitive countries where wages and salaries are considerably lower and which have attractions for inward investment. They are all important but they are not based on these questions.
Does the Taoiseach agree that the OECD report on regulatory reform, on which the interdepartmental group is basing its work, is one long argument for the privatisation of key public services once one strips away the formulae? It argues for such services finding their way from public ownership into private hands and into the ownership of multinational corporations in particular in the case of Ireland. Does the Taoiseach agree the example of the ESB bears this out fully? There was no argument we could see for a substantial increase in fees or costs to the ordinary consumer but that was awarded to fatten up the ESB for privatisation in the not too distant future. A similar approach to gas, transport and other areas is dictated by the driving mania to privatise public services which comes all the way from the top of the European Commission.
The Taoiseach spoke recently in Killarney about the professions and the difficulties faced by ordinary working people, for example, in buying good legal advice on the same basis as a millionaire or a wealthy company. What does the Taoiseach see coming out of the group's work which will tackle the inordinate fees charged by barristers? Those fees make the law unavailable to ordinary people. The Taoiseach was saying in general that we need more competition but how does he square that vague formulation with his strong strictures to ordinary workers to stay within the national pay agreement for wage increases which are below the rate of inflation?
The Deputy asked two questions. Regarding the first question, the consultation document, "Towards Better Regulation", which was based on regulatory reform and on the work done by the committee up to last Christmas, is not the same as deregulation. It is not about deregulating industries or moving on to privatisation. Admittedly, some parts of the OECD report put the case for the State disengaging from public sector companies and the European Union has put forward a similar case. That is true in those cases but it is not true of this particular report. The arguments put forward in some cases regarding consumers and investors was that the broader public interest may be better served by introducing new regulations. That is what the OECD report was saying. In other cases the public interest may be better served by removing regulations but the discussion of legislation and regulations is not based on trying to sell off assets.
The Government makes no initial assumptions about either the existing quality or quantity of regulations or the need to deregulate. The goal set out in "Towards Better Regulation" will not be achieved by simply seeking to minimise the volume of regulations. We want to see if it is right to regulate or legislate and to see if doing so is better for the public, trade unions, industry or whoever. The model the OECD said we should devise, which has been devised in other countries and is now being used in the EU, is one where all legislation and regulations are examined. It is not a matter of just looking at State assets.
Regarding the professional services study, the Competition Authority has finished its overall report on the study and has issued two consultation documents. Eight professions were studied in that report, including engineers, architects, dentists, veterinary surgeons, optometrists, doctors, solicitors and barristers. The relevant professional bodies and regulatory authorities, where they exist, also responded by way of completed questionnaires and had discussions with the authority. The consultants commissioned by the authority analysed these discussions and met all the bodies concerned. They conducted surveys of consumers and users of the professional ser vices involved. I think people will admit they completed a very large body of work and they published the overall report in March.
A number of recommendations in that report will be implemented by the relevant Departments and bodies. The consultants considered each body in detail. They did a lot of this work as they put together their overall report. They will now set out detailed recommendations on each of the professions. This month they will produce the document on the engineering profession and in practically every month for the rest of this year they will produce a detailed document on each of the other professions. Recommendations will be made and it will then be up to the Government and the agencies to implement them. The recommendations are, by and large, an extension of what is in the report and I do not think there will be any surprises. They spell out in more detail what is included in the 20 March report.
My memory is that the high level group was established in about April 2001 and it was to make a final report to Government within a year. What is the position now? Is the Taoiseach saying that two years later the final report will manifest itself in the form of a White Paper and, if so, when will we see it?
The Deputy is right in that the consultants started their work on the broad report in April 2001 and they finished it and published their detailed report last year. They have gone on to cover two further aspects of the report, which I outlined. One is a document, Towards Better Regulation – it is not a White Paper for ongoing discussion although it is called a White Paper. Perhaps I should not use that term as it may cause confusion. That is practically finished – it will certainly be finished this summer.
The group will also put forward proposals on developing a system of regulatory impact analysis, which is taking considerable time. The group has looked at how this system works in other countries and, how it can be operated simply so as not to make it a complicated exercise. With the regulatory impact analysis, all Departments and agencies involved in legislation or regulation will go through a series of tests and fulfil criteria before putting forward legislation. The reasons for this are fairly obvious. The OECD analysis showed that bad regulation is a block to competitiveness and flexibility.
One has more paperwork to reduce paperwork.
If one has a simple system that entails going through the paperwork, it is workable and implementable.
Trash.
One has a simple system so one does not go through the enormous exercise of leg islating or regulating only to find it cannot be implemented. There will be a set of less than ten simple criteria whereby anyone regulating will go through these tests which will, I hope, make legislation and regulation more simple, meaningful and useful. Both those exercises will be finished this summer.
Do I understand that an interim report is all that has been published and that what the Taoiseach refers to as a White Paper will be the property of the high-level group and not that of any Minister and that it will not be promoted by any Minister?
In light of the perceptive question raised by Deputy Kenny, will the Taoiseach outline the role of the new committee? Is it to second guess the high-level group or is it to assuage a troublesome and knowledgeable backbencher? Can the Taoiseach tell us anything about the structure of the high-level group? Is it examining whether we could have one office of regulation rather than a plethora of empire building projects for different sectors?
In terms of economic theory, what is the difference between energy and gas on the one hand and transport and telecoms on the other? Why can they not be considered under the aegis of one office? Is that kind of thing being examined by the high-level group and is it likely to make specific proposals to Government in that regard? It seems that we are developing an alternative Civil Service. In case that is not enough, it is hardly possible to meet a consultant in the western world who is not working for some of them or on a retainer. Somebody needs to get a grip on the matter soon. Maybe I should put all my eggs in the basket of Deputy Ned O'Keeffe. Maybe he will get a grip on the matter but it seems to go on and on.
The Deputy should ask a question.
Will a report emerge during the Taoiseach's term of office?
The Deputy has raised two questions, the first of which concerns what the committee has done. It is very obvious. Nobody has looked too much at the work it has done and perhaps we should recirculate it. In fairness to the committee, it has issued the report, which relates to the first report of the OECD, and then it made an economic assessment of the submissions. It published 4,000 of these and got submissions from many bodies. I think 89 of the major interests in the country put forward major submissions on which an economic analysis was given. There were various systems such as pharmacies and other professions which were moved out to Departments. That part of the work is over. Then it moved on to Towards Better Regulation and putting the regulatory impact analysis together.
On the Deputy's second question, the committee is examining the question of regulators, who regulates the regulators and whether we should have myriad regulators built up around every public utility. The committee will report on that and make recommendations. It is now clear that the structures and basis of regulators are not what people thought it would be a decade ago. This is happening in other countries as well. It is an unsatisfactory system which the committee is examining and it will report on it. I am aware of some of the discussions that it had at a recent meeting but I would only be speculating if I were to say what it will ultimately decide. I am getting minutes of its meeting. The committee is looking at this issue and it will bring forward proposals.
What about the role of the committee?
The chairman of that committee will be looking at competitiveness issues and not regulatory impact analysis.
