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Scottish Regulators’ Strategic Code of Practice (SG 2015/10)
Under item 3, the committee will take evidence on the Scottish Regulators’ Strategic Code of Practice. I welcome back the minister, who is joined by Sandra Reid, the better regulation policy manager, and Marion McCormack, the head of enterprise sponsorship and better regulation, from the Scottish Government. Minister, would you like to introduce the item?
Thank you, convener. I am pleased to return to the committee to discuss the Scottish Regulators’ Strategic Code of Practice. When I appeared in front of you to speak about the code in December, I gave a commitment to revisit the code in the light of concerns that had been raised by the Delegated Powers and Law Reform Committee—particularly the comments regarding a potential inconsistency between the Parliament’s intentions for the code and the wording of the code itself.
It is critical that the code accurately reflect the intentions of the Regulatory Reform (Scotland) Act 2014 and the Parliament’s expectations, which is why I withdrew the original code. Careful consideration has been given to the comments that were raised, and the wording has been reviewed and revised accordingly. During that process, we also took the opportunity to consider the concerns that the Scottish Council for Development and Industry raised in its letter to the committee in November, and we have made a further reference to innovation in the code. We consulted members of the short-term working group that developed the code on the proposed changes, and they are broadly content. As a result, I consider that the code that is before you more accurately reflects the true intentions of the 2014 act. “”
As I explained in December, the code of practice sets out to encourage and support regulators in applying regulatory principles and building good practice in order to contribute to achieving sustainable economic growth while concurrently delivering other core functions. Many regulators already contribute to sustainable economic growth in their day-to-day activities and continue to make progress, moving towards an enabling, outcomes-based approach to drive further performance improvements and carrying out regulatory activities in a way that helps business. The code builds on the existing good practice, providing greater transparency, clarifying for regulators what is expected of them and clarifying for businesses what they can expect from regulators.
12:00The code enhances and strengthens our better regulation toolkit to deliver better and effective regulation. It provides a clear framework for regulators to ensure that their regulatory functions are transparent, proportionate, accountable, consistent and targeted. Alongside the duty to contribute to achieving sustainable economic growth, it will play an important role in making Scotland a more successful country with an attractive business environment that provides opportunities for all.
Before I move the motion recommending that the committee approve the code of practice, I would be happy to answer any questions that the committee has.
Thank you, minister. Does anyone have any questions that they wish to raise?
Some of the responses to the original consultation on the first draft of the code expressed concern that the definition of sustainable economic growth should be tightened, and some specific suggestions were made as to how that could be done. One aspect of the code that was welcomed was in paragraph 9, which made it clear that the regulators to which the code applies must take the code into account in developing policies or principles but not in the exercise of
“any specified regulatory function in individual cases”.
The new version of the code—I am switching between the two versions—seems to have ignored both of those comments. It has done nothing to improve or tighten up the definition of sustainable economic growth, which has been a long-standing concern, and it has gone in the opposite direction on paragraph 9, which now says:
“(a) in determining any general policy or principles”
and
“(b) in exercising any such regulatory functions.”
That implies a significant change in relation to the question of individual cases. Is that the intention of those changes?
Considerable attention and scrutiny was given to the definition of sustainable economic growth, as Mr Harvie knows. For the record, convener, the introduction and background to the code includes the following definition of sustainable economic growth:
“Sustainable economic growth means building a dynamic and growing economy that will provide prosperity and opportunities for all, while ensuring that future generations can enjoy a better quality of life too.”
The majority of respondents were supportive of the purpose and intent of the code, and adjustments were made to reflect comments that were received during the consultation process.
It is fair to point out that the adjustments that we are considering today were made at the specific behest of the Delegated Powers and Law Reform Committee, which, quite rightly, drew attention to what appeared to be an inadvertent contradiction between the code and the legislation. It would have served no one to have had a code that contained an inherent contradiction of the terms of the act that was passed by Parliament. Therefore, it is right that the code has been amended.
Mr Harvie and I may still disagree on some of the larger policy questions, but we are not here to re-debate the terms of the 2014 act, which is now law; we are here to implement the act and to deliver a code that allows it to be put into practice.
In practice, regulators generally have a very positive approach. The Scottish Environment Protection Agency, for example, has a positive approach to the discharge of its functions that is being recognised increasingly by many businesses that I deal with. It was recognised most recently by the Civil Engineers Contractors Association, which singled out SEPA as a regulator that appears to work with members of the CECA in the discharge of their duties.
There are many examples of regulators that already espouse good practice, but it is entirely right that, in principle and in practice, the legislation should be implemented as Parliament intended. I believe that the amended code—which, as I have said, deals with the Delegated Powers and Law Reform Committee’s specific points—does precisely that.
We certainly disagree on the legislation and the question whether “sustainable economic growth” actually means anything. However, I am not seeking to explore that again; I am just trying to get a specific answer with regard to the change in paragraph 9. The earlier draft clearly and explicitly did not apply the exercise of “regulatory functions” in individual cases, but the new paragraph 9 seems to reverse that. Is that interpretation correct?
The original code did not reflect the meaning and intent that was agreed by Parliament; the new code does. In that respect, I believe that the amended code is correct in the sense that it will apply to the way in which the regulators carry out all their functions. We deliberately went back to the working group to raise the matter afresh with its members, and I understand that they are broadly content with it.
I think that that is about as clear as it is going to get.
Members have no further questions. I simply note that, on the issue that was raised with us by the Scottish Council for Development and Industry about the lack of any reference to innovation, which we discussed when you came before the committee in December, there is now such a reference. I am pleased to see that positive move. I also note that certain stakeholders who commented on the previous version of the draft code and were alerted when the revised code was laid have raised no points in relation to it.
We move to agenda item 4, which is the debate on the motion. I invite Fergus Ewing to move motion S4M-12158.
Motion moved,
That the Economy, Energy and Tourism Committee recommends that the Scottish Regulators’ Strategic Code of Practice be approved.—[Fergus Ewing].
Does any member wish to speak in the debate?
I simply refer to the arguments that were advanced during the consideration of the legislation and in the discussion with the minister a few minutes ago. I will be opposing the motion on the code.
Do you wish to respond, minister?
I repeat that I believe that the amended code reflects the terms of the legislation. If I may say so, this is a very good example of how valuable parliamentary scrutiny can be. Because of the efforts and diligence of Nigel Don and the members of the Delegated Powers and Law Reform Committee, we were able to detect and correct a manifest error in the code. As I have said, it is a good example of parliamentary scrutiny and of the efficacy and diligence of committee members in the Parliament.
That is a great use of vocabulary.
Thank you, minister. The question is, that motion S4M-12158 be agreed to. Are we agreed?
No.
There will be a division.
For
Fraser, Murdo (Mid Scotland and Fife) (Con)
Robertson, Dennis (Aberdeenshire West) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Brodie, Chic (South Scotland) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Lyle, Richard (Central Scotland) (SNP)
Lamont, Johann (Glasgow Pollok) (Lab)
MacDonald, Lewis (North East Scotland) (Lab)
Against
Harvie, Patrick (Glasgow) (Green)
The result of the division is: For 8, Against 1, Abstentions 0.
Motion agreed to.
I thank the minister and his officials for their attendance. We will have a very short suspension to allow them to leave.
12:08 Meeting suspended.