Regulatory Framework
Good morning. The first item of business is a debate on motion S4M-01526, in the name of Fergus Ewing, on the regulatory framework. Any members who wish to speak in the debate should press their request-to-speak buttons now.
Ronald Reagan famously said:
“The nine most terrifying words in the English language are, “I’m from the Government and I’m here to help.”
As someone who for 15 years of my working life owned and managed a small business, I must say that that view struck a chord: governments—local or national—took our taxes and ignored our wishes. Of course, the world has changed since Mr Reagan was in the White House, and Governments everywhere are working harder to change that perception, because businesses are the engines for delivery of both economic recovery and growth. Successful businesses create wealth and jobs and improve communities and lives. They increase Government tax take through higher income and corporation taxes, through VAT, through national insurance contributions, and through landfill tax, excise duty and many other rates and levies.
The Scottish Government is already supporting business, jobs and growth where we can. We do so through investments in capital infrastructure—along the lines of the major announcement that Mr Neil made recently—through provision of business advice and through the small business bonus scheme. I welcome the opportunity today to consider better regulation and what more the Government can do in that context to take care of business.
We must recognise, of course, that most of the regulations that impact on businesses in Scotland, including in respect of employment law, tax, company law, competition and health and safety, are reserved to the United Kingdom Government or are transposed from European Union law. The UK Government has been focused since 2010 on hardline deregulation. Its one in, one out policy means that over the lifetime of the Parliament, new UK legislation should be offset by identifying existing regulations that can be removed. Its red tape challenge website drives a rolling review of 21,000 UK regulations, with the presumption that regulations will go unless they are deemed to be essential and it is, as we know, progressing reviews of pensions regulation, company law, health and safety regulation, environment legislation and employment law.
I welcome and share the desire to get rid of regulation that is no longer relevant or necessary, but I am not convinced that deregulation is the answer to every question, nor that the arbitrary one in, one out approach is either logical or correct. The role of Government is to support business and to address obstacles to growth, but not through a desperate drive to deregulate. After all, without regulation, children would still be working up chimneys and workers would still be handling asbestos. We can see by those two simple examples that regulation is required.
I take Fergus Ewing’s point about the cases he has highlighted, but when did he change his mind to not being in favour of the one in, one out approach, given that he stood in 2007 on exactly that commitment?
No. We have never supported an arbitrary process that involves the mathematical approach of one in, one out. The Government has not espoused that approach.
Will the minister give way?
No, I will not. I will carry on for the reason that I have just described.
Without regulation, property rights would not exist and international trade would not be possible, so regulation is required in those contexts, too.
The question is not whether we regulate but how we regulate. In Scotland, our focus has been, and will continue to be, on better regulation. I see little merit in one in, one out protocols or other complicated targets that are disproportionate and ineffective and also create their own bureaucracy.
Will the minister give way?
No. I will move on and perhaps take an intervention from Gavin Brown later, if I feel like it.
As I said, such targets create their own new bureaucracy that allows Governments to deliver on cosmetic targets while making no real difference to the problems that are faced by business. Our approach is predicated on careful and collaborative consideration of whether regulation is necessary, effective or proportionate. A good example of how that works in practice is the process that I led when I was Minister for Community Safety to review fire safety regulations in the bed-and-breakfast sector of our tourism industry. The sector was unhappy with what it saw as being over the top fire safety measures that were based on complex guidance. I chaired a working party and together we simplified the requirements and reduced the average cost of compliance to business by over 90 per cent, from an average of around £20,000 to an amount in the region of £1,000, while maintaining the necessary high safety standards.
I remain committed to that type of collaborative work to tackle the stop-flow culture of regulation. Since 2007, we have enhanced the role of the independent business-led regulatory review group and, with its encouragement, we have made it easier to change any regulation that is inconsistent with the five principles of better regulation; we have introduced business and regulatory impact assessments, with the core objective of ensuring that new legislation is developed with direct input from businesses that are likely to be affected; and we have aligned all Scottish regulators with our overarching purpose of increased and sustainable growth, so that they are beginning to change the way in which they interact with business at large.
We remain committed to five key principles in requiring that regulation be transparent, accountable, proportionate, consistent and targeted only where action is needed and not with an exclusive focus on economic factors. Protection of our built heritage and protection of our natural environment are good for all of us, and regulation of potentially harmful acts sets appropriate standards and supports enforcement, but it must be done in the right way.
Progress has been made in the context of planning, where the adversarial system that we inherited was letting Scotland down. Since 2009, our reforms have delivered a system that debates major issues about future development of areas, and which involves people and communities at the earliest possible stage. We have a national planning framework, a front-loaded development management system and less reliance on planning by appeal: processes do not become unnecessarily protracted.
The Scottish Environment Protection Agency now responds to more than 95 per cent of all planning consultations within agreed deadlines. Decisions are made at appropriate levels of authority and locality. In addition, our investment in e-planning has made it easier for communities, small businesses and major developers to engage effectively with the planning system wherever they are. All that helps appropriate business developments to happen faster.
In looking forward, we are exploring options for better joint working between public sector bodies that have roles in planning. To that end, I have had positive meetings with Scottish Natural Heritage and SEPA, which has published proposals for a new, simpler and stronger model for environmental regulation. Much of our environmental legislation is European-Union driven, but we do have some scope to decide how it is enacted. SEPA wants a system that reduces bureaucracy and duplication, which protects and improves environments and communities, which drives economic and environmental improvements and which rewards good performance while ensuring that tougher action is taken against those who fail to meet acceptable standards. I share that ambition.
I am pleased, too, that Historic Scotland has demonstrated a firm commitment to simplification and to de-layering of process and decision making. Its work with local authorities to clarify roles and responsibilities and to reduce double handling is already bearing fruit. A culture of early engagement and proportionality in all that it does is now firmly embedded in that agency. I know that Historic Scotland is committed to working with all its partners to find more opportunities for better and simpler regulation, while respecting the core need to nurture and protect all that is most significant about Scotland’s heritage.
On procurement, there are now almost 60,000 suppliers registered on the public contracts portal, and small businesses secure three quarters of the contracts that are advertised. We recently published the online supplier journey, which provides simple one-stop help and guidance for business. In the coming year, we will introduce a standard pre-qualification questionnaire to further simplify the process, which I know will be welcomed by many contractors.
We are determined to connect quality public services and positive impacts on the Scottish economy. Improvements have been achieved and, increasingly, officials in local authorities, SEPA, SNH, Historic Scotland and other bodies are minded to act as economic enablers whenever they can.
Will the minister give way?
I am in a good mood this morning, so I will.
I am extremely grateful.
Does the minister believe that if a regulation is likely to, or could, have an impact on the economy, there ought to be a business and regulatory impact assessment?
Generally speaking, a BRIA should be carried out, but we must have regard to whether it would be disproportionate for that to be done. For example, if only 0.1 per cent of premises might be affected—as was the case with the public health levy—it would not be proportionate to carry out such an assessment. However, in the vast majority of cases, we already carry out BRIAs.
The message that I hear from businesses across Scotland, hundreds of which I have visited in the six months since I was appointed Minister for Energy, Enterprise and Tourism, is very clear: we need to go further and faster.
First, I want to acknowledge the work of the regulatory review group, whose annual report was published yesterday. It confirms that we are making progress. The RRG’s review of Scotland’s environmental and rural services initiative, which is a step towards streamlining those services, confirms that 8,012 fewer inspections of farms were carried out in the past three years, there was an 11 per cent reduction in land managers’ paperwork and the sheep-farming industry paid around £400,000 less in fees. Those are solid and significant achievements for a great many small businesses in the rural economy.
In addition, the RRG’s chair, Professor Russel Griggs, is working with the Government on a project to ensure that industry planners and regulators are fully prepared to process carbon capture and storage projects in Scotland; indeed, just yesterday I pushed through regulations on that issue at the Economy, Energy and Tourism Committee. We have published and tested the necessary regulatory framework, and we continue to monitor progress on the matter.
I note the progress that the minister has outlined.
Professor Russel Griggs says that he is disappointed that there has still been no reply to the recommendations and findings that were sent to the Convention of Scottish Local Authorities earlier this year. Is the minister also disappointed at that situation?
I am sure that we wish to engage fully with COSLA on all such matters. Professor Griggs has drawn that to our attention and it will be pursued. I thank Mary Scanlon for raising the point.
We wish to have even better regulation, because it is one of the main ways in which we can help business. The RRG listens to business, and I have been doing the same—my door has been open and there has been heavy traffic through it over the past six months. It is right that that is the case, because I am the servant of business and the public.
I want every business organisation to listen to business, too. All the enterprise agencies, regulators and Government officials are playing significant roles in that regard, and they are doing so willingly—they are happy to and enthusiastic about performing in a team Scotland capacity to secure the objective of better regulation.
I wish to focus on outcomes. I want all of us, whenever possible, to work together across the chamber to make a real difference on better regulation. I invite all MSPs to be part of the team Scotland approach that I have outlined. If any member hears of business problems with specific regulations, I ask them to communicate their concerns to me. Together, we can change regulation for the better.
I move,
That the Parliament agrees that better regulation is an important driver of sustainable economic growth and endorses the Scottish Government’s commitment to better regulation rather than deregulation; welcomes the Scottish Government’s commitment to delivering regulation that is proportionate, consistent, transparent, accountable and targeted only where needed, and supports a regulatory framework in which government, regulators and business work together to identify regulatory barriers to growth and deliver an outcomes-based approach, thereby providing a favourable environment for business to grow and flourish, creating jobs and improving lives.
09:30
I welcome this debate, albeit that it is a little dry. Discussion of the subject is timely and extremely important. Our economy is struggling and we need to ensure that regulation is in keeping with building the Scottish economy and ensuring that that growth is shared. Growth must benefit the wider community, and good regulation can achieve that. Regulation is necessary in many areas. However, we increasingly get complaints about red tape when regulation appears to have become overly bureaucratic and is not in keeping with the Government’s policy aims and objectives.
Although a sustainable procurement bill would create greater transparency in regulation, we need constantly to review existing regulation. When new regulations are drafted, there must be a review of the existing regulations to ensure that the result is as simple and transparent as possible.
I welcome the annual report of the regulatory review group. It mentions the group’s work on the regulation of carbon capture and storage, which is welcome. However, I urge it to examine other areas in which we need simplification or, at the very least, a one-stop shop approach to regulation. We are all keen to develop wave and tidal energy, but the field is strewn with different regulators that have different remits. We have the planning system, Marine Scotland and the Crown Estate to mention but a few, and there are statutory consultees such as SEPA and SNH. The list goes on. They all have important roles to play, but the area can be daunting for developers. Regulation is required, but we need to make the process as accessible and cost effective as possible.
The same is true in relation to onshore renewables. Developers tell me that Scotland is one of the most risky areas in which to develop, because of the regulatory framework. As a counterbalance, we have the renewables resource. However, if expert developers are struggling, what hope do small community groups have of working their way through the regulatory framework? The Parliament is united in the view that communities should benefit from the development of renewables, so it is important that we make that possible and remove the barriers.
One of the biggest concerns that I hear from communities and constituents is about their interaction with the planning process. I note what the minister said in his opening remarks about trying to simplify the process, but the measures do not seem to have made it more accessible. It is a legal process that is made up of national planning policy guidelines, local plans and the like, but decisions are made by politicians either at local government or Scottish Government level, which leads constituents to believe that there is political input to the decisions. There is not; their elected representatives are unable to make meaningful representations on their behalf. What they need is expert planning advice on how to pick apart an application, against the national planning policy guidelines. That would help communities; they do not have the resources to do that, and so become extremely frustrated. Our planning must be fair and above question, but that does not mean that it should not be accessible to all.
The amendment in my name states that we in the Labour Party are calling on the Government to introduce a sustainable procurement bill. It could be argued that that would involve further regulation, but it would be good regulation. It would encourage economic growth by protecting jobs and retaining in our communities the economic benefit that they bring. Such a bill would set the scene for minimum standards and best practice in procurement. Too often, we see contracts going to companies that are not local and which bring in their own workforces under conditions that we would not find acceptable here.
Rhoda Grant will be aware that many procurement contracts are bound by European procurement regulations, which mean that such companies are entitled to bid for contracts.
I think that Mark McDonald misunderstands where I am coming from. I am not suggesting that such companies should not be able to bid, as they can under European law. I am saying that a sustainable procurement bill would set the standards under which they could bid. I think that our colleagues in Wales have done that.
The non-local companies get the contracts but do not have the standards or local procurement values that we expect. The situation will get worse as the global crisis deepens and companies from further and further afield compete for work. A sustainable procurement bill would ensure that there was a level playing field and that companies that exercise good practice are not disadvantaged.
Procurement should be carried out on a scale that allows small and medium-sized enterprises to bid when that is possible. They are more likely to bid in their areas and to employ local people. Companies should demonstrate commitment to apprenticeships, to training, to paying a living wage and to access to employee stakeholder pensions.
There has been much debate in recent days about public sector pensions, which commentators often compare with private sector pensions. The truth is that private sector pensions have fallen back—companies no longer offer pension provision. However, we should not become involved in a race to the bottom because of the economic climate. Pensions lift retired people out of poverty. If people do not make provision for their retirement, taxpayers will have to support them. Our demographic profile will place a greater burden on future generations, so we must ensure that workers are encouraged and enabled to make pension provision. Otherwise, we will create a generation of older people who face poverty at the most vulnerable stage of their lives.
A sustainable procurement bill could also promote environmental sustainability by ensuring that contractors do their bit to meet our environmental goals. It is pointless to set goals if public money is spent on undermining the policy. Currently, contracts do not take account of a supplier’s or contractor’s distance from the organisation with which it is contracting. In catering contracts, reducing food miles should be a crucial part of the contracting process. Large suppliers have been given contracts on the basis that the local supply chain is too small or in places too fragile.
I agree with Rhoda Grant. Does she agree that one way around that situation would be for more companies to enter into consortia arrangements to bid for contracts, rather than bid against each other and lose tenders as a consequence?
I agree that that is worth exploring, but a lot of small companies do not have the resources to join consortia. I have spoken to large companies that have spent many thousands of pounds on bid preparation. To ask smaller companies to do the same would be unviable, because they do not have the financial back-up for that.
A crucial point is that contracts with catering suppliers take no account of the environmental impact of transporting food and other goods over long distances. Local contractors can often supply the same goods at a much lower price. If that consideration were built into tenders, the successful contractor would be bound to buy locally, even if a contract were too large for a local company, which would ensure that the economic benefit remained in the area.
Procurement processes could be used to increase the number of disabled people in our workforce. A minimum percentage that depended on the size of the business would provide people with much-needed employment. I have in a social enterprise in my constituency met people who work with disabled people. The time that is necessary to get individuals job-ready varies depending on the support that they require. However, when they are job-ready, very few jobs are available. Sadly, that is the case even in the public sector. The situation condemns those people to poverty and exclusion when they have a lot to offer.
A sustainable procurement bill would ensure that contractors ring fence jobs for disabled people. Someone with learning difficulties will always have difficulty in competing in an interview process, even when they are perfectly able to carry out the job to a high standard. Ring-fenced jobs would allow such people the opportunity to work.
We must look at best value for the whole public purse and not just for the organisation that carries out the procurement. We need to get out of the silo mentality and to consider knock-on costs to other agencies.
A sustainable procurement bill would have an impact on all the issues that I have mentioned, which are crucial to our economic recovery.
The Conservatives’ amendment talks about business and regulatory impact assessments. The review group has stated that they are the most important tool for ensuring that measures are properly assessed and that their impact is measured before their introduction. It goes on to state:
“We therefore need to ensure that they are being completed thoroughly for all appropriate legislation and regulation.”
I agree with the Conservatives that BRIAs should be carried out for the proposed retail levy and for the reform of empty property rates relief. We live in difficult times, and it is important that new legislation does not create unintended consequences. Impact assessments are therefore even more important now. I welcome the regulatory review group’s annual report; it makes an important contribution to our governance. I also urge the Government to introduce a sustainable procurement bill to improve regulation and to maximise environmental, economic and social benefit.
I move amendment S4M-01526.2, to insert at end:
“, supports regulation that encourages equal opportunities, and calls on the Scottish Government to bring forward its proposed sustainable procurement bill.”
09:40
My colleague, Mary Scanlon, learned yesterday of the dangers of pre-judging a debate or a speech. She had intended to begin her speech by saying how disappointed she had been by the cabinet secretary, John Swinney, but after listening to him, she had to do a 180° turn and say how enthusiastic she was about his speech. This morning, I had intended to begin by paraphrasing the former Prime Minister, Gordon Brown, by saying, “I agree with Fergus”. Having listened to what the minister had to say, however, I will now have to change about three quarters of my speech. I shall outline briefly what I was going to say. First, it is right to praise the regulatory review group, which has done an outstanding job since it started. It has been ably led by Professor Russel Griggs, and he has an excellent team around him that has been drawn from trade unions, business organisations and farmers. It has done a very good job indeed.
Let me also praise the previous Government—the Labour-Liberal Executive—that set up the group in 2004, as well as the current Administration, which reinvigorated the group and took it a step further in 2007. It was ably led at that point by Jim Mather, and it has now been taken forward by Fergus Ewing. He arrives in post with a strong personal track record on regulation—he mentioned fire regulations earlier—and I hope that he will carry on in that vein.
That was what I had intended to spend most of my time on this morning, but I have changed that plan slightly and will now comment on the minister’s speech. He said that the one in, one out approach is illogical. Indeed, in response to a question from Tavish Scott, he said that it is something that his party has never supported. Let me quote from page 21 of the Scottish National Party’s 2007 manifesto; I know that Mr Ewing had a pretty big hand in writing that manifesto, particularly the parts of it that relate to business. It states:
“Finally, we would adopt the Better Regulation Commission’s policy of ‘One in, one out’ meaning each new regulation must replace another.”
Tavish Scott asked Fergus Ewing when he had changed his mind on that, but the answer was not forthcoming.
When the SNP came into government, the regulatory review group took the view that, given the flow of regulation that was coming from the Scottish Parliament and the Scottish Government, it was not hugely enthusiastic about the one in, one out approach for Scotland. So, if the Scottish Government were to follow the RRG’s recommendation, I would say, “Fair enough”. To criticise the UK Government for going ahead with one in, one out and for adopting a degree of deregulation is pretty unfair, however. I would commend to Fergus Ewing the work that is being done by the UK Government and urge him to read the first-year report on one in, one out that it has recently produced. The report outlines the UK Government’s sensible approach, and shows that one in, one out has worked in that context. It might not have worked for the Scottish Government, but that does not mean that it is not a good thing for other Governments to do. Since the UK Government started, there have been savings to business of approximately £3 billion annually, which has been welcomed by businesses throughout the UK.
One such ‘out’ is a measure that permits credit unions to communicate with their members electronically. That is estimated to have reduced the net cost to business by approximately £10.4 million. That calculation has been validated by the Regulatory Policy Committee. Some deregulation works and it does not all have to be about children going up chimneys. Certain examples, including the one that I have just given, can be particularly effective.
I turn to business and regulatory impact assessments. Rhoda Grant quite rightly read out from the regulatory review group’s 2011 annual report its view on how critical BRIAs were. On the page following the quotation that she read out—page 11—the group stated:
“In the light of the formal approach that RRG has received in recent times regarding the issue of Ministerial exemptions to doing BRIAs we will be looking particularly at how these have been used since BRIA started and if appropriate making further recommendations if we identify opportunities to enhance current arrangements and outcomes.”
A number of regulations have been introduced for which impact assessments have not been carried out. If the cost is genuinely disproportionate—if the BRIA will cost more than the regulation will save—an assessment ought not to be done. However, where it is clear that there will be some economic impact, there ought to be a regulatory impact assessment. That is the clear spirit that is coming from the regulatory review group.
The retail levy, to which the minister referred, is predicted to cost business £110 million over the course of the spending review. That is slightly more than the cost of carrying out the impact assessment, so according to the Government’s own guidelines an assessment should have been carried out.
Will the member take an intervention?
I am so pleased that Chic Brodie wants to intervene; I will definitely take his intervention.
I am glad that we agree on something this morning. The Conservatives go on about the special relationship with the United States. Now, apparently, they have a special relationship with large retailers. The cost of the retail levy is £30 million in one year and £110 million over three years. Is Gavin Brown suggesting that we increase the work of the regulatory body on an item of expenditure that represents 0.1 per cent of the budget? Where would that lie in terms of prioritising items of much greater budget expenditure?
I will compensate Mr Brown for that long intervention.
Mr Brodie should quit while he is behind, Presiding Officer. I have a quote from Chic Brodie, in the Economy, Energy and Tourism Committee, when he discussed the retail levy in front of the Confederation of British Industry and the Scottish Retail Consortium. He said:
“I am sure that the Government will lay out the impact assessment. In fact, I do not believe that it would have reached its decision without already having done so.”—[Official Report, Economy, Energy and Tourism Committee, 5 October 2011; c 358.]
Chic Brodie really ought not to have even turned up for the debate today. He probably had to because he was on chamber duty, or water duty or something like that. My goodness, that was a rich intervention.
The cost is £110 million, but there is not just the retail levy: there are the empty property rates relief and a number of other pieces of legislation.
If an impact assessment is appropriate for the Seed Potatoes (Fees) (Scotland) Amendment Regulations 2011, which has an impact of £91,000 on business, it is surely appropriate for other legislation.
I move amendment S4M-01526.1, to insert at end
“; further notes that the Regulatory Review Group’s Annual Report 2011 found that Business and Regulatory Impact Assessments (BRIA) have been used in respect of 80% of primary legislation and 57% of secondary legislation since April 2010, and calls on the Scottish Government to increase the use of BRIAs for legislation and regulation and to explain why it has not carried out a BRIA on either the proposed retail levy or the reform of empty property relief on business rates.”
09:49
I will look at the quite brief history of the regulatory review group and at where it has got to in the past few years. I will go back to July 2008, when Fergus Ewing’s predecessor, Jim Mather—who has already been mentioned and who, I think, is much missed—wrote:
“Increasing sustainable economic growth is the over-riding purpose of the Scottish Government. Within this, making Scotland one of the best places in Europe to do business is one of the key national outcomes. So establishing a Europe-leading approach to the improvement of business regulation is in itself a fundamental government objective. Better regulation covers a ... broad swathe of government activity. It concerns Planning ... SEPA”
and so on, and
“it is relevant to government interaction with business, at Ministerial level, at official level, and through agencies such as Scottish Enterprise and Highland and Island Enterprise.”
In 2008, Professor Russel Griggs, the leader of the group, wrote:
“For many years now business has ‘complained’ that there is ‘too much regulation’. However the challenge has always been that when asked to be specific on the burdens that regulations impose both on individual businesses and the organisations representing them, they have found it difficult to highlight many specifics which they and Government can jointly engage in a conversation to discuss and resolve.
This has led to:
a) Business having a belief that Government is there to ‘fix’ regulation to make it better for them;
b) A belief by Government that regulation is just one of the things that businesses ‘complains’ about like taxation.
This has been exaggerated by many of the initiatives that Government in the UK has put into place”.
He continued:
“What this has led to is that the two sides of this debate have positions and views without any real understanding of the way the other side operates or needs to operate to satisfy their individual aims. In simple terms Business does not understand why or how Government operates and Government does not understand why business complains as it does not realise the full impact that regulation has on them.”
Those words were written in 2008. Members will know that the business and regulatory impact assessments were introduced in April 2010, which is why it is appropriate that we should now review, as the regulatory review group has done, what has happened in the year since then.
Page 2 of the report that the group published this week states that the group’s initial view
“remains unchanged, that the BRIA process overtime will show both business and government that engaging in open and constructive dialogue in the initial processes around policy and legislation development leads to a better understanding of each other’s issue. Over time a natural dialogue should expand out beyond the BRIA process to confirm and seal the partnership approach that is at the heart of the creation of better regulation. We believe that in the first year the BRIA process has already demonstrated that it adds value to both business and government encouraging more detailed discussions between both. Lack of understanding however continues to be one of the key challenges for both business and government in this area and while it has improved greatly still has some way to go before it becomes a natural part of our culture.”
The minister mentioned the work that has been done on Scotland’s environmental and rural services. I draw members’ attention to the four conclusions that the review group has come to, which are set out in that report, beginning on page 4, and which are fundamental to most of the good work that will be done on the issue. The first is:
“Without a Minister driving and directing the process at the outset it is unlikely the project would have happened or developed as positively as it did.”
It is incumbent on ministers to lead the process, precisely because there is evidence that it works.
The second conclusion is:
“The involvement and buy in of the most senior people in each organisation is needed for maximum impact.”
That is not telling us anything that we did not know.
The third, which is also rather obvious, states:
“good communication is critical, making it clear to customers and the wider stakeholder community exactly what the initiative is and the benefits to be delivered.”
The fourth states:
“Changing the culture is important and improving shared and joint working between bodies can be as good an outcome as particular effects on customers.”
I will refer to a couple of impact assessments that I have had a look at. The first relates to permitted development rights. Anybody who has ever tried to modify their home will understand something about that. As I worked my way through it, I found that the principal result of looking at the regulations and changing them has been to make it easier for some people to get planning permission and to free up planning staff’s time for the more important and more difficult cases.
I also had a look at the impact assessment of the Agricultural Holdings (Amendment) Scotland Bill, which is before the Parliament and which is intended to improve tenant farming. Time does not permit me to discuss all the things that I found in there—that is for another day.
Both those assessments indicate the importance of discussion. I suggest that members look at some impact assessments, because they will find that the Government talks to a vast array of organisations when regulation is drafted. That is precisely what the Government needs to do, precisely what the review group is pushing it to do and exactly the way forward.
09:55
I welcome the opportunity to speak in the debate.
I am pleased that the debate seems to have moved on from where it was four or five years ago. Gavin Brown spoke about the one in, one out policy, which seemed to be a priority for most of the parties around the 2007 election. However, things have happened since then that have resulted in a more sensible approach being taken.
It has been deeply frustrating to see people arguing for a reduction in red tape as though it were a burden on business that somehow inhibits growth, when the reality is that effective regulation can play an important part in ensuring that employers and businesses take a longer-term view about what they do in their communities. I echo Gavin Brown’s comments about the report from the regulatory review group. That tripartite approach, with the trade union side, consumers and employers and businesses sitting around the table discussing strategic policy development in the area, is important. We should consider developing it and rolling it out across other Government areas to ensure economic development, especially in the current climate.
I will put some things on the record about where Scotland stands on regulation, including as part of the United Kingdom. We are one of the least regulated economies in the developed world; in fact, the Organisation for Economic Co-operation and Development tells us that the UK is the second or third least-regulated economy in the developed world. However, when we look at some of the other countries that we compete against, particularly in the euro zone, we see that the competitive advantages that countries such as Germany, Denmark, the Netherlands and Finland seem to have over Scotland and the United Kingdom are not down to the fact that those countries are less regulated. The reality is that they have made longer-term decisions about investment in skills and infrastructure, ensuring that taxation matches their long-term investments. That is where we, as a country, want to go, regardless of our constitutional future, which we are debating at present. There are things that the Scottish Parliament can do just now—important levers that we currently have—around the regulation of procurement, which has been spoken about and which can make a big difference to Scotland.
We support the targets for solidarity, cohesion and sustainability in the Scottish Government’s economic strategy. I strongly believe that procurement is an important tool in ensuring that we meet those targets. The support that article 19 can give sheltered workshops is just one example of that. We must ensure that community benefit clauses are not just sitting in a room somewhere gathering dust, but are being taken forward by local government and public bodies more generally so that we are driving up standards and using public funds effectively to support local employment. That needs political will not just at the local government level, but at the Scottish Government level, and all parties and MSPs must ensure that that is happening in their communities.
For example, we could use community benefit clauses to drive up pay standards, especially in relation to the living wage, and to ensure that all public bodies take on apprentices and local people are given opportunities to be employed on big public sector contracts. We should all aim to ensure that, in that way, public sector funding makes a big difference to economic development.
I am happy to take part in the big debate about where we are going in this country. However, there are issues that we need to deal with. For example, as I raised with Jim Mather back in February, I do not agree with some proposals at the UK level on changes to employment legislation. It would be helpful if the minister would respond to that in his closing remarks. I asked Jim Mather whether the Scottish Government had made representations to the UK Government on its proposals, and he was keen to meet me. However, the election came and went and we did not have the opportunity to meet.
I also raised the issue at First Minister’s question time a couple of weeks ago and was not given a clear answer. The only answer I received was that from the First Minister’s perspective it would be helpful if Scotland had all the powers to make decisions about employment legislation. That is all well and good, but it would be useful to know the Scottish Government’s view of changes to employment legislation that will negatively affect Scottish workers. If we want to take a longer-term approach in this country, we must ensure that our workers have the right skills. If we want to be competitive in a global economy we need to ensure that our employment legislation protects workers and skills and plays a key part in driving our economy forward.
10:01
I am pleased to take part in the debate. As a former director of protective services I have some experience in regulatory matters. I declare an interest, in that I am still a vice-president of the UK Trading Standards Institute.
There is good regulation and there is bad regulation. Business often calls for regulation to protect good business against bad business. There are also good regulators and poor regulators. What regulators often lack is common sense. One of the things that I always applied, and which I encouraged my staff to apply, when enforcing various regulations was that it is possible to turn a blind eye. That is how good regulators do their job. Good regulation and good regulators protect consumers and honest businesses. Anti-counterfeiting laws are a good example of protection for honest businesses.
There are problems with the trading standards service in Scotland. Consumer Focus Scotland has responded to the consultation by the Department for Business, Innovation and Skills on the consumer landscape by saying:
“Because many Scottish councils are much smaller than their English counterparts, trading standards services are often tiny, isolated and marginalized, leaving them struggling to deliver a full range of services to the public. As recognised in the UK Government’s consultation paper this creates the potential for a gap in enforcement. However, the Scottish Government has no legislative locus to require councils to collaborate ... We would therefore suggest that an adjustment to legislative powers to give an administrative role here for the Scottish Government would add value for Scotland’s consumers.”
The problems with trading standards are also borne out by the chief executive of the Trading Standards Institute, who commented on the report published last month by the House of Commons Public Accounts Committee, saying:
“The cross-party group of MPs on the Committee had just delivered a devastating analysis and verdict on the state of our UK system for enforcing consumer law. Its references to trading standards ‘enforcement deserts’ where councils do not provide the funds required to maintain an adequate trading standards service provided a clear indictment of such councils.
When linked with the MPs’ criticism of government in failing to establish clear arrangements for who does what and how to protect consumers; the inadequate infrastructure for dealing with cross-border consumer malpractice; crime and enforcement; the lack of sufficient power; expertise and money to enable trading standards and others to tackle major and emerging cases of consumer fraud and detriment; it all reads as a sorry state of affairs.”
I wrote to the minister in October commenting on the BIS proposals to change the consumer landscape by disbanding the Office of Fair Trading and Consumer Focus Scotland and transferring some of those powers to citizens advice bureaux and some to local authorities. That is all very well, but those bodies need the resources to be able to do the work. At the moment, local authorities are not doing what they should be doing already, even before they have more responsibilities put on them.
I support the retention of Consumer Focus Scotland, which does a good job in a number of different areas and receives the majority of its funding from the private sector. I ask the minister to consider killing two birds with one stone, with a unique Scottish solution to the issues raised in the BIS consultation. Rather than abolish Consumer Focus Scotland, I would strengthen it by giving it responsibility for the management of the trading standards service in Scotland and by designating it as the local weights and measures authority for Scotland, rather than leaving that to individual local authorities. That would fit well with some of its current responsibilities in relation to regulation.
Effectively, the proposal would create a Scottish trading standards service, which I envision would have a number of strong regional offices while being able to use economies of scale to deal with specialist areas across Scotland. The problem at the moment is that there are 32 councils enforcing trading standards legislation—there used to be 12, prior to local government reorganisation. The people are spread far too thinly and the range of responsibilities and duties is far too great.
In his reply to me, the minister said that such a change might need devolution of powers. However, Consumer Focus has identified another way, which it has recommended in a briefing. It says that, rather than amending the Scotland Bill or the Scotland Act 1998, the most straightforward way to achieve the proposal would be
“to make an Order in Council under section 63 of the Scotland Act 1998 to provide for the functions that are listed in Schedule 5 Part II Section C7 (consumer protection) to be exercisable by Scottish Ministers concurrently with UK ministers.”
That solution would allow for the delineation of responsibility to be clarified not through the legislation itself but through discussion and agreement between Scottish and UK ministers. It is Consumer Focus’s understanding that any agreement and arrangement so arrived at may be reviewed administratively at agreed times. I ask the minister to seriously consider that course of action, so that we have a fit-for-purpose trading standards service in Scotland.
10:07
I am pleased to be able to contribute to this debate, not least because I have seen at first hand the difficulties that are experienced by local small and medium-sized businesses due to certain regulatory hurdles.
In recent years, there has been a vast improvement in the way that small to medium-sized businesses have dealt with regulatory matters, but there is still a way to go to ensure that regulatory reform makes life easier for everyone, while ensuring compliance through better regulation rather than deregulation.
It is important that we do not hinder businesses as they attempt to grow, and there has never been a more important time to ensure that fewer hurdles are put in the way of firms wishing to grow, expand and flourish.
I recall that, in 2007, during the reform of business gateway provision, the then Minister for Enterprise, Energy and Tourism, Jim Mather, said that, to ease the way for businesses, the system would be de-cluttered, with councils providing a one-stop-shop service to any small firm or company seeking advice—we know that small businesses prefer to receive information from a single, local source, and the plan was to make advice available as and when required.
Although many councils have embraced that idea, some have not quite got there yet. For example, Falkirk Council, which covers my constituency, has not quite managed to provide the one-stop shop that it is required to provide, although it has made some valiant attempts. Although there seemed to be a willingness among officers to provide a one-stop-shop service, we have seen that, as tends to be the case in local government, departments still need to learn to speak to one another. In Falkirk, we tended to get the flags out to celebrate if there seemed to be any cross-departmental co-operation, as it was such a rare occurrence.
I give the example of a case in my constituency that I have just managed to resolve. In Whitecross, in the east of Falkirk, a constituent of mine has a firm that employs 10 people. The firm has to move from its existing premises as the building is being demolished to make way for a major housing and industrial development. My constituent identified suitable premises at the other end of the constituency. However, red tape in the building control and planning departments, coupled with a lack of urgency on the council’s part and, initially, a lack of advice from various council departments—including those responsible for economic development—nearly led to the new premises being lost and the business having to close. Thankfully, the matter has now been resolved, but that is a prime example of how thriving businesses—the business in question is thriving: it has more orders than it can cope with—can be put at risk simply because of red tape that officials seem unable to assist in cutting through.
Overall, however, a great deal of progress has been made on improving the planning process, and I was pleased to hear the minister’s commitment to further simplification of planning. That said, inconsistencies are an issue, even among planning officers in the same local authority. That must be addressed.
The success of a better regulatory framework very much depends on the Government, regulators and businesses working together to ensure that businesses grow and flourish. The regulatory review group’s 2011 annual report concurs with that view. It states:
“Getting everyone together is an approach we fully endorse and encourage.”
Creating a robust relationship between small firms and regulatory services locally must be a high priority if we are to cut red tape for SMEs. It is clear from anecdotal evidence that there are local inconsistencies. There are issues around local authorities’ interpretation and enforcement of regulation. Local flexibility in relation to regulation is to be welcomed, but it can lead to numerous different regulatory standards and procedures being applied in different areas of the country, which can be inefficient and confusing. For example, local flexibility in the interpretation of the new licensing laws resulted in some local authorities being overzealous in their implementation, whereas others were a bit more lax.
With enforcement and cost details left to local authorities to determine, there is a strong argument for creating a body to take responsibility for co-ordinating and monitoring local regulation. That would help councils to improve their trading standards, environmental health and licensing services. I urge the minister to consider that suggestion in the coming months. Small firms could turn to such a body when inspections failed to meet the required standard, for example, and it would allow them to seek advice to improve. The majority of SMEs often welcome and value interaction with regulators such as environmental health officers and trading standards officers, who often take a helpful advisory approach in dealing with local businesses. In the small business community there is no doubt that there is a role for a body whose purpose is to support and represent the views of small firms on red tape in local authorities. Such a body would fit in well. It would work with the Government, regulators and businesses to ensure that businesses grow and expand.
Cognisance must also be given to the fact that regulatory compliance represents higher financial and time costs to small businesses relative to their turnover than to larger businesses, as small businesses do not have specialists on their payroll. However, it has been noted that, with regard to the costs of compliance to small firms in comparison with businesses across the UK, fewer businesses in Scotland have felt an increase in time spent on compliance.
As the Federation of Small Businesses has highlighted, there is a definite need for action with regard to our local authorities. Many Scottish regulations spring from enabling provisions in primary legislation; regulatory schemes are outlined in secondary legislation; and the enforcement and cost details are left to local authorities to determine, which can lead to inconsistencies throughout the country. Local authorities can also create their own regulations, as we have seen in the Falkirk district. Better regulation will help to ensure a reduction in or removal of difficulties that arise from inconsistent and disproportionate approaches to the same regulation by different local enforcement bodies and other failings in regulatory practice, particularly at the local level.
Let us ensure that we make it easier for businesses to grow and thrive, particularly in the current climate, and that we remove regulatory barriers while ensuring that compliance requirements are adhered to. We can thereby create jobs and improve lives.
10:14
I welcome the opportunity to speak about regulation. I have a business background and so have some experience of red tape and compliance, and several weeks ago, I joined the Scottish Parliament business exchange. I am therefore mindful of the business community’s concerns about the regulatory framework in which it must operate.
From dealing with recruitment and selection to health and safety and equal opportunities, businesses must take full account of the rules and regulations that are placed before them. Excessive or uneven regulation can be a headache for small businesses, which is why it is so important that the regulatory review group has a clear and consistent approach to the issue.
Most businesses understand the need for proper regulation in the economy, but they also hope and expect that regulators will be sympathetic to their needs and the demands that they have to contend with on a day-to-day basis. Regulators have to remember that small businesses and independent firms do not have dedicated compliance functions, and the Scottish Government has to ensure that the training on compliance through business gateways is advertised and fully promoted.
Of course, we all represent a much broader constituency than the business community. Each of us, in our own way, has an understanding of the public interest and an understanding that economic growth is not the sole objective of any Government. We have duties to protect the environment, to preserve our heritage, to achieve equality and to defend the rights of workers, consumers and families across Scotland. There is some recognition in the Government’s motion of those tensions—tensions between growth and other gains—but I would argue that good, proper, effective regulation can help rather than hinder economic growth.
There is some recognition of that out there in the Scottish economy and in Scottish society. Overall, the tone of the debate about regulation is much more sedate, dignified and constructive in Scotland than elsewhere in the United Kingdom. When the previous Administration set up the regulatory review group, it tasked the group with the job not of deregulation or reregulation but of better regulation. I am glad that the review group continues to approach the issue in that way.
The Scottish Government’s economic strategy prioritises seven key sectors: the creative industries; energy and renewables; financial services; food and drink; life sciences; tourism; and Scotland’s universities. I know that the regulatory review group is independent of Government, but I suggest to the minister that it might be worth while to ask the group to look into those sectors. A timely and measured assessment of the regulation landscape in the creative industries or life sciences would allow us to address barriers to growth. It would also allow us to consider how those sectors can grow and develop in a fair, balanced and sustainable way.
We can see from its annual report that a large part of the group’s work has involved monitoring the introduction and implementation of business and regulatory impact assessments. Annex 6 of the report shows that the Scottish Government regards those assessments as mandatory unless a ministerial exemption is granted. Will the minister say how many exemptions have been granted and, in each of those cases, why? How does he differentiate between cases in which the exemption is justified and those cases in which it is not?
I turn finally to the issue of procurement. I have spoken at length in other debates about youth unemployment, skills and training, and I believe that, through community benefit clauses, we can use public procurement to regenerate communities and to help young people into work. EU rules on state aid allow the Government to intervene in certain circumstances to help disadvantaged groups, and I regard all the young people in Scotland aged between 16 and 24 who are struggling to find work as being at a disadvantage. Those who have a disability or are part of a minority are often pushed even further from the labour market.
I believe that regulation and procurement can and should drive real change in the Scottish economy. For that reason, I encourage members to support the Labour amendment.
10:18
I begin by declaring a small interest: my father is a director of a small business and my brother is employed as a health and safety adviser.
I reassure Rhoda Grant that I do not necessarily disagree with the thrust of what she was saying on procurement. I was merely pointing out that, with the current EU procurement legislation, we have to be very careful when we draft clauses into procurement tenders. I am not saying that we should not seek to have local employment clauses where possible, because such things do have a benefit. I am aware of the protections afforded for certain organisations by, I think, article 12 of the EU directive, and I believe that local authorities need to do more to look at whether article 12 can be used in the tendering process. However, I emphasise again that there are some barriers.
Will the member give way?
I want to make some progress. I have a lot to get through.
Some barriers could be overcome by consortia arrangements. I have spoken to many people from various industries who have bemoaned the letting of contracts to companies from beyond these shores. When they are asked whether they considered the possibility of consortia arrangements, to ensure the success of local companies, they often say that they were not aware of such an option. Very often their competitive nature precludes their considering such an option. Consortia arrangements are not a panacea, but they are an option that businesses should consider as a means of approaching tendering slightly differently.
We should always be careful about how we characterise certain aspects of regulation, such as health and safety regulation. Nigel Don said that there is often a disparity between what is said about regulation and what happens in reality when we sit people down and ask them to identify regulations that meet the supposed acid test. All too often, the rhetoric about health and safety legislation—and regulation in general—does not match the reality. Too often, decisions that are totally unrelated to health and safety are held up as sticks with which to beat the industry and we hear people talk about “health and safety gone mad.” An infamous example was the supposed regulations that required children playing conkers in England to wear goggles, which no less a person than David Cameron mentioned. That turned out to be nothing to do with health and safety; it was entirely down to an individual headteacher, who had taken a slightly overzealous decision.
The point is that the trivialising of health and safety regulation should be a concern not just for the Health and Safety Executive but for politicians. Members of the Scottish Parliament are all too acutely aware of the importance of strong health and safety regulation, for example in the oil and gas sector, where strong regulation that was brought in following disasters such as the Piper Alpha disaster has strengthened protection for offshore workers. Whenever we hear people decry the work of the HSE, we must repeat the mantra that health and safety saves lives.
Does Mr McDonald agree that the health and safety regulations that operate in the North Sea were introduced after a major disaster and that health and safety features prior to that were not adequate to protect workers who were operating on North Sea platforms?
I agree. It is unfortunate that sometimes it takes a major incident to sharpen minds and focus attention. We ought to do everything that we can do to ensure that regulation is fit for purpose to prevent such incidents from occurring, so that we do not need to learn those lessons.
Mr Brown is keen on the BRIA approach and his researcher has been clocking up the Google miles in recent weeks to find him all kinds of quotations and examples—I see that Mr Brown is indicating that he has been doing the work himself; I apologise to him and to his researcher. The Government has said that it thinks that a BRIA in relation to the public health levy would be disproportionate. Even if Mr Brown does not believe that—and I suspect that he does not—it is difficult to reconcile complaints about the economic impact on supermarkets with what I read in the newspapers about supermarkets slashing prices at the petrol pump. One wonders what economic impact that approach has.
Will the member give way?
No, no—there is more. It is a bit rich of Mr Brown to talk about the impact on businesses, given the “Tory VAT bombshell”—copyright Nick Clegg—which impacts not just on major retailers but on all businesses. Given the significant economic impact, one wonders where the impact assessment of that approach was.
Although the amendment from the Conservative Party mentions empty property relief, Mr Brown made no mention of the issue. Perhaps that is because he realises that the economic impact of empty properties in and of themselves is significant in communities up and down the country, which is why action is needed to try to reinvigorate and regenerate the economies of local communities.
No one is saying that deregulation in and of itself is wrong. However, we should base it on logic, not on arithmetic.
There is a little time in hand if members wish to take interventions.
10:25
I thought that Mark McDonald was very unfair to Gavin Brown when he suggested that Mr Brown does not do his own homework, especially given that I thought that Mark McDonald read his civil service brief very well in his own speech.
I congratulate Professor Russel Griggs and those who sit on his panel on their work. I do not know whether Professor Griggs is here today—he probably has more sense, given where he lives and the weather forecast. Like Mr Ewing, both as a minister and as an MSP, I have enjoyed many useful and varied discussions with Professor Griggs over the years. The work of his panel is extremely useful and important for Government and I hope that, as the minister said, its recommendations will continue to be taken forward.
The minister started by quoting Ronald Reagan, which I thought was only fair, given that they are ideological soul mates. He went on to call regulation a “perception”. I am sure that he did not mean to say it in that context. The reality is, after all, contained in the excellent briefing that the Federation of Small Businesses in Scotland sent, which other members have mentioned, which states:
“62% of FSB members have seen the cost of regulation increase in the last four years.”
I am sure that, given the spirit in which Mr Ewing introduced the debate and given that he said that he was looking for areas that he wishes to address, he will want to address that statistic.
Mr Ewing has had a number of representations from his back benchers calling for new bodies, such as a compliance body, and for a firm hand on local government. It all sounded like a lot more centralised, top-down government to me, so I will be intrigued to see how he responds to all those requests.
I am puzzled by the change of tune from the Government on regulation, particularly because just this morning I found John Swinney’s job description from 2007. Members might remember that he had many responsibilities; indeed, there was not really anything in the Government that he was not responsible for. In 2007, the First Minister gave him responsibility for the economy, the Scottish budget, public service reform, local government, public service delivery, deregulation, cities and communities. Let me repeat that he had responsibility for deregulation. I am not quite sure what happened to that or why Mr Ewing was so disparaging about those who made observations on that earlier, given that his own boss has, or had, that responsibility. Presumably Mr Ewing can clarify in his wind-up speech whether that responsibility is still part of his, or his boss’s, job description. We are all agog waiting to find out.
Will the member take an intervention?
No. I will make some progress.
I want to comment on the entirely predictable attacks on the UK Government from Mr Ewing and his back benchers. No doubt Mr Thompson was going to make exactly such an attack—he does little else in this place. Given what they said, I presume that the Scottish Government is against a strategy to
“remove or simplify existing regulations that unnecessarily impede growth; reduce the overall volume of new regulation by introducing regulation only as a last resort; improve the quality of any remaining new regulation; and move to less onerous and less bureaucratic enforcement regimes where inspections are targeted and risk-based.”
Mr Ewing is shaking his head. Why then did he spend 10 minutes of his speech this morning attacking the UK Government? I thought that one of his back benchers made an eminently sensible series of suggestions about cutting regulation. Mr Ewing might want to sort out exactly what his position is.
The other thing that the minister did not do today was take the opportunity to mention a significant report that was published this morning on public procurement in Scotland by the Royal Incorporation of Architects in Scotland entitled “Building a Better Future?”. I hope that he has read and considered that report, because it makes some quite profound remarks about the manner in which the Scottish Government is now procuring everything from the smallest primary school or small fire station to the very large civil engineering projects that were announced to the press earlier in the week.
I totally accept that those very large projects will be tendered and will therefore ultimately be built by larger international consortia or individual businesses—we have seen that over many years of public procurement in Scotland—but I think that the minister needs to respond properly to the RIAS’s concerns about the disproportionate nature of Government procurement policy. Possibly the most important point here, which he must not be allowed to dodge, is that this is not London or Brussels; it is absolutely the Scottish Government’s own procurement policy and is nothing to do with anyone else at all. The Government’s policy of having five hubcos—five massive corporations that will be in charge of all procurement right across Scotland—means that small businesses, such as electricians, plumbers, architects and small building companies, do not have a prayer of getting much of the work, if any. That is profoundly wrong.
Mr Ewing is shaking his head. I will happily give way if he can tell me how what I say is wrong. He does not seem to want to explain the policy, but he needs to explain how the policy will work. Let me give him two examples. First, the RIAS report says that—this is important as to what he can do as a minister—the Public Contracts (Scotland) Regulations 2006, which were brought in by this Parliament, specifically state, on the issue of proportionality, that
“smaller projects should not be unduly burdened by considerations more appropriate for use in relation to major construction projects.”
Mr Ewing and his Government have in their hand, under existing measures, ways of assisting small business, but they are choosing not to use them. Instead, they are setting up a huge structure that will choke small businesses out of the supply chain.
Secondly, I would have more sympathy with Mr Ewing on the point that he rightly made about bureaucracy if he would deal with this point from the RIAS report. Why is it that, in the hubco concept that the Government is driving forward in Scotland, the standard pre-qualification questionnaire—he can read all this himself in the RIAS report, so he does not need to believe me, which I am sure he will not—runs to 66 pages, with 118 questions for bidders, including 12 on environmental management? I do not know too many three-man architect practices or small building companies that have time to deal with that kind of bureaucracy imposed on them by the Scottish Government.
There is time for a lot more action from the minister on this. If he did that, and sorted out some of the issues that I have raised today, he would have my full support and I look forward to his winding up on that basis.
10:32
In its earlier work, the regulatory reform group concentrated on many of the areas of my concern in the fields of rural affairs, climate change and the environment. I have a natural interest from a constituency point of view in how this works. For example, SEARS—Scotland’s environment and rural services—is a partnership of nine organisations that are beginning to work together to deliver in our area so that there are far fewer visits to farms, crofts and the like. That way of working began across Scotland before the last election and represents a major change in the way in which the necessary regulation of farms and crofts should take place. I am delighted that it has been possible to do that, with the help of the regulatory review group; SEARS, which was set up by the Government, ensures that those nine organisations collaborate and do not send nine people at any time across the calendar to visit a farm.
I am glad that the carbon capture and storage project board has been joined by Professor Griggs, because that is one place where local authorities work together. It was all very well for Mary Scanlon to suggest in her intervention earlier that COSLA has not responded to the regulatory review group but, on the question of piping away CO2, the local authorities that might be affected by such moves have agreed to co-operate on simplifying the planning processes to allow that to happen. That is another win-win situation should we ever get to a stage of being able to take carbon capture and storage forward.
I was very interested to read in the regulatory review group’s report about the end-of-life vehicles exercise that SEPA has effected. That will become very important in my work, because the Rural Affairs, Climate Change and Environment Committee will be looking at the Zero Waste (Scotland) Regulations 2011. Dealing with vehicles at the end of their life in a fashion that will help properly set-up vehicle breakers to carry through their important work has huge environmental implications, as do cowboy operations, which are something that we must try to stop. The beginnings of that work have been shown to be successful. SEPA has become much more customer friendly and its processes have become much more streamlined, which I think many people celebrate.
The question of small businesses and small communities has been raised in a number of ways. I put it to members that local authorities can break down contracts into bite-sized bits that many smaller organisations and businesses, such as architects, could tender for. I believe that it is fundamental that our local authorities take those chances, because I have seen examples in Highland where that sort of thing has not happened, to the detriment of many local farmers.
I think that we are all in agreement on that point. One of the challenges that we have just now is that, to try to achieve greater efficiencies, there is a push to group contracts together, which perhaps excludes employers who have bid for them in the past.
There is no doubt about that. For example, in school transport, local drivers with 40 years’ knowledge are outbid by other people who win big contracts and then subcontract them and drive down the costs by giving the drivers much less money. There are many other examples like that.
The bringing forward of the bill in 2013 at the behest of the Federation of Small Businesses and local authorities will give us the chance to see what the best structure should be.
I want to move on to two things that Professor Griggs said that I think are very interesting, because the EU has been mentioned already. Professor Griggs has pointed out that the EU audit trail issues that affect so many of our people who apply for grants under the Scotland rural development programme are additional regulatory burdens. Moreover, the EU auditors have never been in at the initial stages of creating the legislation. The lesson for us from that is that the audit approach must be built in at the earliest stages. The debate about the bill in 2013 will have a major bearing on that. Secondly, we must use our influence in Europe to ensure that the regulations that are put in place have those audit matters built in.
I move on to something that is also international and also a climate change issue: the way in which legislation regarding shipping and the marine environment is affected. I had a very useful meeting with the British Chamber of Shipping recently and, in a follow-up, it talked about the development of marine management. Adrian Lester said to me in a communication:
“While developed from a common legislative and philosophical base we have noticed distinct differences in the approach of Marine Scotland versus that of Defra and the MMO in the implementation of marine planning, including offshore renewable energy and marine conservation. The holistic view and evidence based approach of Marine Scotland is refreshing and extremely positive.”
The point is that there are ways of reducing regulation by ensuring that the 85 acts that apply in the marine area are dealt with by one body. We have too many side issues, such as the Crown Estate. Marine Scotland sets up a process that is holistic and should be able to take this forward. That is one of the reasons why constitutional change has got to be borne in mind in this debate.
10:39
I, too, welcome the opportunity to take part in the debate and I congratulate the regulatory review group on its work in producing its annual report for 2011. As others have said, the group is chaired by Professor Russel Griggs, who is an eminent constituent of mine. Hearing the wind roaring above, I am not surprised that he may not be in the chamber to hear the debate. As an aside, I note that Professor Griggs was also instrumental in the early days of getting the University of Glasgow to move on to the Crichton site, so we are all very grateful to him down in Dumfries and Galloway for his work on that as well.
Like Fergus Ewing and Rob Gibson, I am aware of the work that SEPA is doing to move to a more risk-based regulatory regime, which has the twin benefits of increasing the efficiency of the organisation—achieving efficiency savings is extremely important at the moment—and minimising unnecessary intervention. In the past, some businesses and land managers have viewed SEPA as an inhibitor of their enterprises and have mentioned the organisation’s name in a slightly derogatory or unhappy manner. If the new approach is successful—I very much hope that it is—the agency should be seen, increasingly, as an enabler rather than an inhibitor of enterprise. As the RRG’s annual report notes, that approach involves enabling compliance through
“early engagement and the provision of front-loaded advice”.
It is a highly refreshing approach.
Too often in the past, regulatory bodies felt constrained in offering advice to clients because they had the job of enforcing regulation. I recall a specific example of that. After the passage of the Regulation of Care (Scotland) Act 2001, I received complaints that the Scottish Commission for the Regulation of Care was less prepared to offer advice and help to care providers than local authorities and health boards had been. I think that it felt constrained in that regard because it was the regulatory authority in that sector. I hope that the work that SEPA has been doing in applying legislation in a proportionate manner and reducing regulatory burdens through dialogue and advice can be transferred to other regulatory bodies, and I will be interested to see how that feeds into the proposed better regulation bill that is to be introduced in the next year or so.
Although I would like the impact of unnecessary regulation and bureaucracy on the providers of goods and services to be reduced, I will resist being drawn into the trap of implying that all regulation is a bad thing. The Labour amendment makes reference to how regulation supports equal opportunities. It also mentions public procurement regulation, which can be used, as Rhoda Grant said, to encourage the use of locally sourced foods or, as John Park said, to promote employment practices such as the payment of a living wage.
Regulation also protects consumers and employees, as has been said. Without it, there would be no minimum wage and no statutory rights to days off or to maternity or paternity leave. I agree with Mark McDonald, who is no longer in the chamber, that a load of baloney is talked about health and safety, the fear of which sometimes results in certain activities—such as going on school trips—not being undertaken. The Health and Safety at Work etc Act 1974 was passed 37 years ago and the fear of prosecution under it is greatly exaggerated. In fact, it is the increasing use of civil litigation in the event that things go wrong that is causing problems for many public sector authorities. That tendency, which seems to have been imported from across the Atlantic, has had extremely unfortunate consequences for many activities that children and young people used to greatly enjoy, which now cannot be accessed.
An early recommendation of the RRG was the introduction of business and regulatory impact assessments, which were implemented in 2010. The RRG has examined progress on the issue. According to its annual report, which was published yesterday, 80 per cent of the primary legislation that has been introduced since April 2010 has undergone a BRIA, but only 57 per cent of the secondary legislation has done so. That is a matter of concern. It needs to be asked why, at times, the Scottish Government seems to refuse to apply a BRIA to policies that directly affect business.
I listened to what Fergus Ewing said in response to Gavin Brown’s intervention. He said that only 0.1 per cent of premises would be affected by the proposed public health levy, but we are talking about retailers that are big employers. If they are affected, that may affect the employment prospects of many people. A negative BRIA should not mean that actions should not be taken if the legislative proposal would have significant advantages in other respects but, at times of economic difficulty, the effects of regulation on economic growth and employment opportunities should at least be assessed and placed in the balance.
Given that the Government has introduced the Alcohol (Minimum Pricing) (Scotland) Bill, I hope that it will undertake a BRIA on the consequences of the introduction of minimum pricing in Scotland alone and, in particular, on the impact on retail businesses that are situated near the English border, such those in my constituency. Irrespective of the merits or otherwise of minimum unit pricing, there is a strong likelihood of a negative impact on retailers in the south of Scotland in particular. Many of my constituents have told me that, if it comes in, they will shop in Carlisle. The town already has cheaper petrol, and if it has cheaper alcohol as well, there will be a considerable incentive for people to go south to shop. That will affect not just supermarkets or alcohol sellers but all small businesses in Dumfries and Galloway. Once people get to Carlisle, they will be inclined to use the other shops there as well, which will have a negative impact on small, independent businesses in Dumfries and Galloway, particularly in the east.
I ask the Government not to run away from business and regulatory impact assessments just because they might provide evidence that is contrary to its policy objectives. It is important to make decisions on the basis of all the information and to understand how it might be possible to mitigate the consequences if the legislation is passed.
I support better and more proportionate regulation, but I also support regulation as long as it fulfils the appropriate conditions and is in the greater public interest. I will therefore support—not surprisingly—the amendment in the name of Rhoda Grant.
10:46
May I first dispense with the rather cheap and puerile jibes in Mr Brown’s response to my intervention? I assure him that the only thing that I carry in the chamber is the burden of listening to poor and weak economic and business arguments from the Tory benches week after week. I turn up to see how bad those arguments are, so Mr Brown’s contribution today justified my attendance. As for his rather weak and selective quotation from the Economy, Energy and Tourism Committee, he should do the chamber justice by repeating the much wider contribution in which my comment was made. My point was made, and it still stands.
I welcome the debate. I used to go round trying to fix companies that were in trouble and the first thing that I always looked at was the people who ran the company and the people who were in it. I looked, secondly, at the processes and, thirdly, at the paperwork. The focus was always on growth and revenue, marketing and reducing costs, particularly paperwork costs. It was with some surprise—although maybe it is not surprising—that I noted that the Tories’ amendment sets about doing the opposite, aping their big brothers at Westminster, who claim that they seek to radically change employment law but, yet again, are adding to the bureaucratic burdens, particularly on small businesses.
Will the member give way?
No, let me carry on for a few minutes. I look forward to Mr Brown’s intervention—I cannot wait. I am full of anticipation, but he should let me proceed for a few minutes.
Some examples of measures in the proposed legislation are a law that introduces fees for individuals who want to bring cases to employment tribunals and a law that will allow consultation on the level of fees. That is a lawyer’s dream and a businessperson’s nightmare.
Regulation should work for business and not against it. Regulation should be designed to support economic growth and business growth and should not stifle or choke them. We need better regulation, be it of pensions, employment, health and safety, the environment, energy, procurement, quality or delivery. As the minister said, it is regulation collaboratively developed that is required.
The member said that our amendment simply apes our big brothers at Westminster. I draw his attention to our amendment in the Business Bulletin. We accept Fergus Ewing’s motion in its entirety, including the point about deregulation in Scotland. All that we are doing is pointing out something from the regulatory review group’s annual report and calling on the Government to have BRIAs for the retail levy and the empty property relief levy. How have we aped Westminster with our amendment?
You probably have not with the amendment, although the aping is quite clear, not just on this issue but on many other things.
Better regulation is needed, for example of pensions, as I mentioned. We need new and properly qualified regulations, led by the reform body and enshrined in the proposed new bill, placing significant powers for the enforcement and interpretation of regulation on local authorities. Before Mr Brown starts jumping up and down again, that is not an additional cost; it is, believe it or not, preventative spend.
The proposed bill must ensure no more gold plating of European business regulations. Can members imagine how much we would save by eliminating and making redundant the whole exercise that goes on in London whereby European laws are amended to suit UK regulatory laws? Of course, an independent Scotland would not incur that cost.
Does Chic Brodie agree with the First Minister’s previous statement that, in the years before the crisis in the banking sector, the banking industry had gold-plated regulation and not the light-touch regulation that we would have in an independent Scotland?
I hear the point that the member makes, although I do not understand it.
If new regulation is introduced, it should be properly specified. A timescale for monitoring and auditing it appropriately should be set, so that inefficiencies—and the regulation, if need be—can be eliminated.
We cannot have a free-for-all on regulation, which would result in inefficiencies, poor quality and reliability standards, tax avoidance and poor customer care. That would not promote employment opportunities or sustainable growth. That is why we need less and better regulation, joined-up regulation, easier regulation and a digitally based communication mechanism that allows people to comprehend rules and regulations.
We need a focal point to provide with ease instructions, whether on human resources issues or form filling, and other support to businesses that need support from appropriate authorities, for example trading standards and the business gateway. A clear statement needs to be made on the likely penalties for malpractice, whether failure to meet regulatory or quality standards or to conform to legislative practices.
Regulation must be reasonable, regular, responsible, relevant and realistic. We must be reasonable by minimising legislation, which must work with and fit all the tangential rules. Rules must be regular by being understood through consistent application. New laws must be responsible: they must be designed so that everyone involved—the Government, businesses and regulators—understands that they are properly qualified and risk assessed, and they must be adapted and made obsolete if they are ineffective. Rules must be relevant: each guideline, law and rule must be revealed to have a clear motivation and to be easily implemented and manageable. Legislation and regulation must be realistic by being focused and measurable.
The better regulation bill should provide a one-off opportunity for critical risk assessment of rules that affect Scottish businesses, in particular small businesses, which do not have experts in HR or employment law. All the bodies that are concerned with public procurement, public contracts Scotland, the construction sector and the retail sector should be consulted on and heavily involved in the new bill.
I support the motion.
10:53
I welcome the debate, which centres on the regulatory framework. It is worth acknowledging that the Scottish Government’s emphasis differs from the UK Government’s approach to business regulations and especially from the UK Government’s somewhat prescriptive highlighting of the importance of deregulation.
The importance of regulation should not be diminished. After all, a somewhat poor and lax UK regulatory framework gave us the financial banking crisis that has caused the systematic problem that has impacted on the global economy, the consequences of which we must all live with. Even now, confidence in the financial system is not especially helped by recent events, such as the demise of the MF Global financial group, whose client moneys are unaccounted for.
The Scottish Government has a better-regulation policy, which of course focuses on sustainable growth. Many business organisations complain to me about business bureaucracy that puts roadblocks in their way. As in most things in life, it is the little things that matter for enterprises such as south Dalziel church studio, in Motherwell—a good, local social enterprise—which cannot publicise itself effectively because of restrictions that the local authority planning department has placed on it.
The regulatory review group’s report this year takes up that issue—I am disappointed that the minister is not in the chamber to hear this point. The report states:
“We will also continue our work with Local Authorities and COSLA although the future of the Regulatory Forum, including the work of the 5 work streams, remains unclear. Local Authorities play a key role in delivering better regulation across a wide area for businesses so have to be engaged and fully committed to the five key principles of better regulation. Consistency is one aspect which is central to that.”
My colleagues David Thompson and Angus MacDonald, also made that point.
Work must be done with other agencies and local authorities to ensure that the regulations introduced by this Parliament are carried out as they were intended to be and not as defined by 32 different local authorities or—as we heard in an earlier example—by head teachers in various schools deciding on what local policy on health and safety should be. Work should be carried out consistently throughout Scotland. When examining the future of the regulatory framework, we must be careful about what we wish for. A consistent approach to regulation is needed, and I know that that is a key principle for the Scottish Government.
In contrast, the UK Government seems to want to get rid of red tape. No one likes red tape, but that emphasis on deregulation can be extremely dangerous. Significantly, the employment regulations announced in the autumn statement involved reviews of tribunal hearings and a shortening of the collective redundancy process. Loosening employment protection legislation is not a guaranteed way of creating jobs. In fact, the evidence suggests that there is little correlation between job protection laws and actual employment levels. With regard to laying firm foundations, it is worth observing that the World Bank put the UK on a high rating for ease of doing business. Some people might say that the perception of an overregulated economy does not quite match the reality.
The Scottish Government still has lessons to learn, and the support offered by the regulatory review group will be invaluable in supporting better regulation. The group’s 2011 annual report states that it has worked with organisations that enabled it to progress matters. It notes in particular the work that it has undertaken with SEPA. We need to address the problems identified by businesses, but that should involve a measured, fact-based approach, rather than opinion dressed as fact.
Regulation clearly has a role in any market economy, and a regulatory framework is also required to ensure that matters are conducted in a transparent manner. As I have said, we need to strike a balance between the interests of business and those of the wider society. The Scottish Government has a good track record of ensuring that the practical priorities of business are given an increased focus. The development of an online, one-stop financial information service will signpost a better investment basis for Scotland’s business sector.
I look forward to the proposed bill on better regulation, and I embrace today’s timely debate. I hope that many of the issues that have arisen will be taken forward to create a regulatory framework that strikes the necessary balance between the vested interests of business and those of the consumer and wider society. I hope that it will not provide an excuse, under the guise of cutting red tape, to dismantle many of the advances that have been made in employment regulations and rights to protect workers in Scotland and the UK. I support the motion in the name of the minister.
10:59
I was going to start my speech by saying that this debate has proved that we can be relatively consensual when we set our minds to it, but in the light of some of the contributions this morning, that might not be the case. However, we know that the prize involves the Government and public services working collectively towards creating a more successful country, with opportunities for all to flourish, while seeking to ensure sound protection for our communities. People who have disagreed with the front-bench spokespersons today need to reflect on that.
In contrast with some of the back-bench contributions, the contributions from members of the front bench were quite consensual, and I congratulate them on that. Anyone who has watched any of the BBC’s “Rip Off Britain” programmes will know how far we need to travel to protect our people. That point was well made by John Park when he referred to the OECD. I did not appreciate just how low down we were in the league table, and we should all take special cognisance of that.
I groaned when the whip’s office phoned me yesterday, pulled my arm up my back and said, “You’re speaking in the debate tomorrow.” I thought, “Regulatory review? Oh no!” However, I am here, having burned the midnight oil last night after a very long day. I congratulate the review group, which has worked so hard. I was really quite fascinated—eventually—as I started to work my way through the report.
The group has been working to apply regulations in a way that addresses social and environmental needs, supports business growth and protects consumers. A considerable proportion of the regulations that apply in Scotland come from the European Union and the UK. I believe that the citizens of Europe have much to be grateful to the European Union for. Environmental regulation is one of the best examples of regulation that has made a huge difference to people in Scotland. Whether in relation to the quality of our bathing beaches, air quality or waste directives, there is much to appreciate in our membership of the EU, and much would not have happened if we had not had that driver.
I agree with John Wilson, who made the important point that the Scottish Government needs to take the regulatory review group very seriously. One of the approaches in the report that attracted my attention was the four nations forum. The forum was established by the regulatory review group two years ago, and the Parliament, and we as parliamentarians, could copy many aspects of its work.
Being part of the UK with our own particular ways of doing things means that it is sound to share best practice between the nations. We should consider how to engage as a Parliament in precisely the collective manner that the regulatory review group has done. That would bring obvious benefits, as it would ensure that we each know what is being done separately, while collaboration would benefit all who are involved in the implementation of regulation.
The regulatory review group recognises that as a particular issue, given that the Conservative-Liberal coalition Government is implementing regulation that is not applicable in Scotland, which the group says is the cause of some confusion in industry. We should hold on to that particular thought and, as parliamentarians, replicate the four nations’ working relationships and initiate communities of interest across the UK.
Dave Thompson raised an important point about Consumer Focus Scotland and I urge the minister to reflect on that. I too have worked with that organisation and we should not just throw it out.
I note that the Government proposes to
“bring forward a Better Regulation Bill in 2012-13, following detailed dialogue with national and local regulators, COSLA and local authorities and the business community”.
I agree with the Government’s aim that
“There is scope to improve further the way regulations are applied in practice across Scotland, by better defining national expectations and standards and the context for local variations.”
I understand that the regulatory review group has been part of the driving force behind that, and I note that the group is keen to see the outcome of the consultation. It is hopeful that that will
“enable key aspects of national legislation to be implemented uniformly across Scotland unlike just now where a wide range of implementers develop their own processes and procedures.”
The group hopes, not unreasonably—as Nigel Don rightly pointed out—that if it is to be responsible for implementation, it should be involved closely in the creation of the legislation. We have heard—as the Tories and Rhoda Grant have said—that one of the most important on-going tools is the business regulatory impact assessment, which ensures that legislation is being correctly assessed and that the impact is measured prior to introduction. Therefore, we need to ensure that the assessments for all appropriate legislation and regulation are completed thoroughly.
The regulatory review group is working with Scottish Government officials on the first formal review of business regulatory impact assessment. I understand that that review is under way, and I note that the project plan and methodology have been discussed with the review group.
I rather think that Mark McDonald mixed up article 12 of the EU directive with article 19, which is specifically tailored to make it legally possible to provide clauses in procurement contracts. As John Park said, we have a tool in our hands to make it possible to enshrine in regulations in Scotland provision in every public procurement contract for disabled people. That would give disabled people the care and attention that they should be given to protect and safeguard their jobs. I know that the Government has done some work on that, because I met the minister on the issue. However, to be truthful with the minister, I feel that his Government is moving slowly on the matter. It could move much more quickly by taking up that particular point.
Will you come to a conclusion, please?
Our amendment addresses that issue, which is why I am happy to support it and will vote for it at decision time. I hope that the minister will take on board those points about sheltered employment and public procurement contracts.
11:06
I welcome today’s debate. Unlike Helen Eadie, I am a willing and keen contributor—there is absolutely no need for strong-arm whips in the SNP. However, I thank her for the image that she provided of the conversation that she obviously had with Mr Park. She mentioned that the debate has been more or less consensual, which is to be welcomed, as that is obviously a good way to proceed. There is disagreement, but there is a lot of agreement as well.
Rhoda Grant mentioned that the debate might be a little dry. I must confess that, when I first saw the title, I probably came to that conclusion, too. However, the nature of the subject matter does not make it any less important. It is important that we have the right regulatory framework for business and that we protect the interests of the people. That is the approach that the Scottish Government has taken. It is about trying to strike the correct balance between creating the climate for economic growth and protecting the interests of the people.
Much nonsense is said on a regular basis about regulation. A great mythology has built up around the issue. I will not go into detail on that, but I thought that Mark McDonald and Nigel Don did a good job of demonstrating the nature of that mythology. It is important that we reflect that in our speeches. While I am talking about my colleague Mark McDonald, I say with respect to Helen Eadie that she picked up Mr McDonald’s point incorrectly. I think that he correctly referred to article 12. If she reads the Official Report, she will find that there is a lot of consensus between her and Mr McDonald on that point. I do not mean that in a critical sense; I just point it out for the record. Never let it be said that Mr McDonald’s knowledge of the various articles of EU legislation is anything other than exemplary.
I referred to the balance between creating the climate for economic growth and protecting people’s interests. There is a tendency to think of those as competing principles, but John Park made a very good point when he set out that many countries arguably have greater regulation than the United Kingdom while definitely having greater economic growth. Therefore, the two principles should not necessarily be viewed as competing. Dave Thompson made the good point that regulations are often in the interests of business, so it would be wrong to say that regulations are automatically contrary to the interests of the business community.
The aim of striking a balance typifies the Scottish Government’s approach to regulation. Indeed, as Margaret McCulloch said, it probably typifies the Scottish approach. That approach has influenced the Scottish Government’s proposed better regulation bill, which will be introduced in due course. I understand that the bill has come about through dialogue with national and local regulators, COSLA, local authorities and the business community. That again emphasises the consensual approach to the issue not just in this chamber, but in the wider community.
On the consensual approach of COSLA and the regulatory review group, COSLA has still not responded to the findings and recommendations that were issued by the regulatory review group earlier this year, as stated in this week’s report.
Mary Scanlon has put that on the record. If she is asking me to speak for COSLA, she is asking the wrong individual, because I am not here to speak for it. Although there has been consensus today, we have heard that there is not quite the same level of consensus among the Conservatives.
The bill is a response to calls from business, demonstrating the consensual approach that is being taken. The FSB has stated the need for a stronger duty to comply with the principles of better regulation and an end to legislation that charges local authorities with designing and implementing 32 separate regulatory regimes to achieve the same policy objective. Dave Thompson made that point very neatly. It is not about doing away with regulation; it is about creating better regulation. That is the purpose of the regulatory review group, which has stated its overall aims as being about
“creating a culture and environment in Scotland where both business and Government (in all its forms) work together to create better regulation for all; and in doing that, make Scotland recognised as the leading country in Europe in terms of better regulation.”
That agenda is shared across the board.
As the minister set out clearly, SNP members do not agree with getting rid of regulation for the sake of it, although that typifies the antipathetic approach to regulation that we have seen from the UK Government. It has justified that approach on the premise that it will promote growth in employment and in the economy as a whole. However, recent announcements from the Office for Budget Responsibility—and, for example, the autumn budget statement, which we debated yesterday—identifying continued slow growth suggest that that approach is not working.
How much longer do I have, Presiding Officer?
About 30 seconds.
Okay. Having mentioned the Tory approach south of the border, I turn quickly to the amendment in the name of Tavish Scott’s ideological soulmate, Gavin Brown. I agree that there is merit in the business and regulatory impact assessment approach, which is a useful one. However, the amendment requests that the Scottish Government explain why that approach has not been taken, citing the specific circumstances. We do not need the amendment now, as that has been achieved: the minister has said clearly that such an approach would be disproportionate and unnecessary. Frankly, the amendment has more to do with Tory antipathy to the measure than the issue of regulation and, on that basis, I will not support it.
I will support the Scottish Government’s motion this evening.
Before we turn to closing speeches, I remind members that, if they participate in debates, they should be present for closing speeches.
11:14
The debate has been mainly constructive, with some excellent speeches. Angus MacDonald made a first-class speech, as did Elaine Murray, Margaret McCulloch, with her background of business experience, and Tavish Scott. We all welcomed a first-class speech from Helen Eadie, who is a convert to regulatory review. I say to Chic Brodie that, when the hole gets 6ft deep, he should stop digging. We welcomed Rob Gibson’s point regarding the reduction in the number of inspections of farms and crofts.
In preparation for the debate, I looked at pages 3 and 4 of last year’s annual report. They highlight the fact that legislation forced the care commission to undertake a specific number of inspections each year. The number of inspections was then reduced. However, after recent experiences at the Elsie Inglis and other care homes, and after the excellent report by the Health and Sport Committee into care inspections, the reduction in the number of inspections each year was reversed after only six months. Reducing inspections is not always appropriate.
I see a significant difference between regulation and inspection. Overregulation—which others have mentioned—and unnecessary regulation can impede business, jobs and economic growth. We would welcome and support a reduction in regulation. However, the inspection of care homes is a different matter; it helps to ensure quality standards and a quality of life for many vulnerable people in Scotland. I would no more wish to see a reduction in the number of inspections of care homes than a reduction in the number of school inspections by Her Majesty’s Inspectorate of Education.
Rhoda Grant spoke about the regulatory review group, and I hope that it will consider more specific cases as well as considering overarching organisations and organisations such as SEPA. I agree with Rob Gibson: SEPA has undoubtedly moved towards having a much more positive partnership approach across Scotland in recent years.
As others have said, all 32 local authorities can have different interpretations of planning issues. Some developers seem to face myriad obstacles over many years before achieving planning permission, while others sail through the process with no glitches. An example that the minister will be familiar with is that of Asda. Asda was unable to set up in Thurso, was unable to set up in Tain, and has taken almost seven years to get permission to build in Inverness, where it is opening next autumn. In addition to its overarching approach, it might be of benefit to the regulatory review group to pursue the experience of one organisation and the bureaucracy and regulation that it has faced.
On page 3 of this week’s report, on the subject of working with local authorities, concerns were raised about local authorities’ interpretation, implementation and enforcement of regulations. The regulatory review group decided to consider a nationally agreed approach. That decision was unanimous. I therefore put on record again, as Professor Griggs said, that it is disappointing that COSLA has not yet responded to the paper, despite its being submitted to COSLA earlier this year.
That reminded me of the historic concordat, which is so historic that I cannot remember the last time that it was mentioned. However, I am sure that the minister will resurrect the historical concordat today.
I note that a bill on better regulation is to be introduced in 2012-13. Alongside the bill, I hope that we will see a new culture in the public sector for better working together. The old silos of the NHS and social work, for example, have not been helpful in the pursuit of an integrated approach in which the patient, client or customer is at the forefront or the centre of the service. It is worrying that the chair of the regulatory review group also said that local authorities play a key role in delivering better regulation across a wide area for business, and so have to be engaged and fully committed to the five key principles of better regulation.
I mentioned the lack of response from COSLA, and it seems clear that a culture of understanding, respect and collaboration will be needed before any legislation on regulations is passed. Without such a culture of commitment, understanding and working together, there will be no improvement.
Another point that I picked up from Professor Griggs is that, unfortunately, bilateralism and not multilateralism is the norm, and that is not the best way to resolve challenges.
How many times since 1999 have we asked the Scottish Executive and now the Scottish Government—and I do not totally blame either—to take the lead in introducing, for example, single information technology systems in the national health service and elsewhere? That is also raised in the report; I hope that it will be listened to. In difficult financial times, such action is not only more efficient, it is more effective and it saves money.
11:20
The debate has largely been constructive. Given that the work of the regulatory review group is focused on technical issues of implementing legislation and monitoring compliance, the debate has, as Mary Scanlon suggested, been quite lively. There has been debate on the clarity of Scottish Government policy, good ideas from across the chamber on improving regulatory practices, and criticism of some areas of the Government’s approach. As always, I will be a voice of conciliation and consensus.
There can be no doubt that real progress has been made as a result of the regulatory review group’s activity since it was established in 2004 by the previous Executive and then continued by the current Government. The group has focused on its requirement to ensure that we are not overburdened with unnecessary regulation, but that we have in place the safeguard of a healthy regulatory framework.
The need for that balance was referred to by a number of members, and well summed up in the FSB’s submission, which stated that we need a regulatory regime that correctly balances protection of the public, employees, and the environment with the necessary conditions for economic growth. Those are key principles and the review group’s work has focused on enhancing their operation in Scottish society.
We have all heard in the past about great ambitions in this area. All parties at various stages have had ambitions for a one-in, one-out approach to regulation. Gavin Brown was right to say that the Scottish National Party had a one-in, one-out policy; we had that policy, too, so in a rare moment of solidarity with the minister, I recognise that it is right that thinking can evolve. I find myself rather more in agreement with the minister’s comments today. A one-in, one-out policy on regulation is easier said than done but we will see how the UK Government proceeds.
Legislation can introduce valuable regulation, such as that which protects the public and provides safety at work for employees. Mr Ewing rightly referred to ensuring that workers are not placed in dangerous situations such as handling asbestos, for example. Families in Scotland are still dealing with the fall-out from that today. Mark McDonald referred to health and safety in the oil and gas industry, which we are both aware of. There are concerns about the HSE’s budget being cut in that area. Regulation is important in a range of areas.
John Park was right to say that deregulation will not be a panacea for our economic ills. At the same time, no one wants unnecessary regulation that hampers businesses and the operation of necessary regulation. It is therefore right that the RRG has worked to create better regulation for all.
This morning’s debate largely reflects the fact that the RRG has sought to achieve consensus on its work among the various agencies with which it has worked successfully, as well as politically. That is evident in the group’s diverse membership, which includes Stephen Boyd of the Scottish Trades Union Congress. Russel Griggs has worked hard and effectively to ensure cross-party backing for the broad approach that the group has taken.
I cannot touch on every theme that has come up in the debate or everything that the report has raised in the time that is available to me, but I will touch on a few things. As parliamentarians, we must be conscious of the impact of the legislation that we pass on Scotland’s regulatory landscape. I am therefore pleased that the group is asking whether the right people are involved when legislation is being initiated, including those who will be responsible for its implementation.
The group asks whether we are framing legislation in a way that will aid regulatory efficiency and whether there is too great a prevalence of enabling legislation. In my opinion, that has been an increasing trend not only under the Scottish National Party Government, but throughout the Parliament’s history. Finally, and most fundamentally, the group asks whether the legislative process is fit for purpose. Therefore, there are important questions for ministers, the whole Parliament and individual agencies.
Agencies are already making progress through working with the group. I am a member for North East Scotland and am very much aware of the importance of the regulatory framework in the farming industry, to which Rob Gibson rightly referred, and land management. It is pleasing to see progress on the issues from SEPA and others that are referred to in the report. It is not only the clients of those agencies who benefit from better regulation; it is clear that the agencies themselves are seeing a material and positive difference in the results of their work through collaboration and changing strategic approaches to the implementation of regulation.
The report highlights the need for national consistency in the implementation of regulation. A number of members have referred to that. That is why such a focus is correctly placed on the work stream on consistency, and why the joint working group’s engagement with COSLA is clearly so important. Variation in the application of regulation not only frustrates individuals and businesses; the confusion that can result impacts on those who are implementing the regulation. The report is therefore right to call for national co-ordination, with a ministerial lead often being important. Of course, that must also be informed by the experience of the local authorities and others who are responsible for implementation. A number of examples are given, but licensing stands out. That is one reason why we have long called for a national licensing forum. I hope that that development and similar developments in other areas will arise, given the importance that the report places on consistency of implementation.
I would like to touch briefly on business and regulatory impact assessments, which members have mentioned and which the report highlights as being of great importance. The report welcomes the increased use of business and regulatory impact assessments, and the group will look at how ministerial exemptions have been used and how the system may be improved. I am sure that we can all agree that those assessments are important. As such, although we have not come to a final view as a group on the proposed new retail levy, we believe that Gavin Brown’s amendment makes reasonable and sensible points that we hope that the Scottish Government will accept.
Will the member give way?
I am sorry, but I cannot do so. I have only a minute left, and Mr McDonald would not take an intervention from us, so there are some false tears from SNP members.
As Rhoda Grant outlined in her speech, our amendment refers to our desire for a procurement bill, which we hope would streamline processes for businesses and bring benefits in other areas, including the promotion of contracts for local businesses, the use of article 19—Mr McDonald should take note that Helen Eadie was right about that, too—and, of course, the promotion of the living wage. Tavish Scott made key and important points on that issue. At the moment, our procurement processes are too often a hurdle and obstruction for local businesses when they should be an opportunity. That is why we agree entirely with Tavish Scott that the Scottish Government needs to take a different approach. We look forward to the procurement bill, which we hope will improve matters, and to the better regulation bill.
In conclusion, it is clear that there is a great deal of work to be done in this important area to get the balance right and not to overburden people with regulation, although we should recognise the great importance that regulation can have not only for a successful Scottish economy, but for the quality of life in our society. On that basis, we join members across the chamber in their variety of ways of expressing congratulations to the regulatory review group on its work.
11:28
For just over two hours, we have heard the wind rattle and roar—outside the chamber, things have been quite lively, too.
The tone in the debate has been largely positive and moderate. I echo the comments that were made in the two speeches that we have just heard. The majority of the speeches that have been made have been useful, positive and informative, and a number of arguments have been made that we should certainly pursue together.
That approach was begun by Rhoda Grant. I have had the opportunity to listen for protracted periods to Rhoda Grant’s contributions in various for a over the years. She is always worth listening to, and today was no exception. She was right to point out that we need to address the challenges, procedures and processes of marine energy—Rob Gibson talked about that as well.
I am pleased to inform Rhoda Grant and the chamber that, at my instigation some weeks ago, a short-life working group was set up to look at precisely those matters. I hope that it will reach its conclusions fairly early in the new year, thanks in part to the good offices of Russel Griggs who, with me, chairs the group. It will work on an issue that could hardly be of more importance to Scotland, given that potentially tens of thousands of jobs will be created in Scotland, not least in the Highlands, as Mary Scanlon well knows, and in Caithness, as Rob Gibson remarked yesterday. Such things are important. As far as the opportunities off our shores are concerned, we want Scotland to be the best place in Europe to do business. I think that we all share that objective.
Rhoda Grant went on to raise a theme of the debate: procurement. She did so in a positive way, and I intend to address the remarks of the members who made largely positive contributions. Her remarks about procurement raise serious issues. As Mark McDonald indicated, we instinctively support many of the aims that she wishes to take forward. It seems to me that the approach that we should take is to work together to pursue the issue in detail—of course, the detail is where the devil exists. Rather than simply demand that a bill be brought forward, it is more important that we work out what the bill should do. I think that that is the correct procedure.
I look forward to working with Rhoda Grant. I undertake that I will pass the Official Report of this debate to Mr Neil—as I speak, officials will rapidly be taking a note to do so—because many members made useful comments that should be followed up and not overlooked.
Gavin Brown pointed out some of the good work that the Westminster Government has done. He gave the example of removing the bar on credit unions using e-mail and electronic communications. That is a good example of the sort of measure that we would all support across the party barriers. It is not really for me to praise the Westminster Government—even though, as members all know, I am a very fair-minded person. To be serious, I am more concerned about doing right in Scotland than spending time on criticising what others may be doing wrong elsewhere. That is the approach that I take.
I wanted to stress that point in coming to a pledge that I make to members. This is an important pledge to indicate how together we can address all the topics in this debate. When I receive from any member of this Parliament, no matter in which party, a detailed critique of a particular regulation or piece of guidance with which the member perceives there is a problem, and when I receive a detailed analysis of the problem, regardless of whether it is the member’s point of view or a matter that has been taken up on behalf of the constituent—which form perhaps the greater number of such representations—I will take it very seriously indeed.
That is the sort of thing that members would expect me to do, and it is the sort of thing that I should do. I am sure that my predecessors in different parties have taken the same approach. The point is that looking at specifics is far more useful than railing against thunder in a general sense. Having a rant about red tape in general does not take us further; in fact, I think that it takes us backwards because, instead of having a focused debate, we have an inchoate debate that is of little, if any, use.
I will respond to some of the specific points. Angus MacDonald made a solid contribution about small business. We are acutely aware of the importance of serving the needs of small businesses. The small business bonus helps 85,000 businesses. It is an excellent policy, and we will maintain it for five years.
One of the first meetings that I had was with Colin Borland of the Federation of Small Businesses, and since then I have met him many times. I will meet the small business consultative group next week or the week after and we will discuss many of the matters that have been raised. I will ask officials to study the Official Report of the debate, because many members mentioned small businesses. Constituency members, in particular, hear stories from small businesses—perhaps hearing one side of the case. One does not have to be a lawyer to know that there are always two sides to a case; every MSP knows that. However, I want to pursue all the general points with the consultative group.
Dave Thompson made informed comments, as we would expect, on consumer protection and the proposed changes. The UK Government has published plans to restructure the consumer landscape, and we are keen to negotiate a transfer of powers and funding—the two are inextricably linked. I think that time is pressing for a concrete exchange of information about the funding; I say that not as a criticism of the London Government but to relay views that I have heard from local authorities, which need to know where they stand if they are to take over responsibilities, so that they can make practical arrangements in that regard. The UK Government has indicated that it is willing to discuss the issues and we will work with all stakeholders to examine all the options and devise a system that delivers the best for Scotland as a whole.
I do not think that Gavin Brown mentioned empty property relief—I apologise if he did—although the issue is mentioned in his amendment. No ministerial decision has been taken on whether a BRIA will be conducted for reform of empty property relief. Of course, in relation to that issue and the public health levy, consultation is going on, as part of the draft budget statement. I do not propose to go into all the arguments about the public health levy, which is not the focus of this debate. I note the points that were made and I could respond and bring in extraneous matters. We are consulting and we are listening carefully, but we think that the proposals that we have put forward are right for Scotland.
I welcome much of what John Park said. In particular, he made the point that workforce representatives must be involved in what is not and never should be a business-only activity. It behoves us to consult workforce representatives. I took that approach when I was Minister for Community Safety, when I had the privilege of addressing the UK Fire Brigades Union conference—my speech seemed to be quite well received. I enjoyed working with the FBU and I miss the relationship that I think I built up with its representatives. It is important that, for example, Stephen Boyd continues to do his good work as part of Russel Griggs’s group, which will inform the process that I am in charge of. Where there is a relevant interest for a workforce representative to be heard and to be involved in looking at a matter, a workforce representative will be so engaged. That is the correct approach and I was pleased that John Park raised the important issue.
Helen Eadie talked about supported employment. She and I have met to discuss the matter, which is extremely important. We are doing more work on what is a difficult area, as we all know, and Westminster is looking at the issue in the context of a review. Much consideration must be given to the matter, which I am sure that the Scottish Parliament will debate at some point—it is correct that we do. I was pleased that Helen Eadie raised the matter.
In general, there was a consensus in the Parliament that the culture of regulatory bodies and the staff who work in them is what is important. I am talking about not just the chief executives, chairmen and top management but the people who are involved in day-to-day engagement with businesses, whether they work in SEPA, SNH, the Food Standards Agency, Historic Scotland or planning departments. Of course, culture is difficult to influence, but perhaps one of the most positive things to emerge from the debate is that there seems to be a consensus on its importance.
I think that Dr Elaine Murray mentioned the issue. Of course, she had ministerial responsibility in respect of SEPA for a considerable time—I hope that that is correct. She made the point, as did Dave Thompson, that we want regulatory bodies to be enablers, not just enforcers. We want a collaborative approach; if a serious problem is identified that might impair or impede economic development, we would like to know about it. We as a Government would like to be involved in the discussion at an early stage, which is logical, rather than hear six months down the road after a decision has been made that a development is not going ahead because a solution has not been brokered, options have not been considered and opportunities for compromises have not been taken.
The minister needs to wind up now please.
I am very pleased with this debate, which has been largely positive. I am very grateful to members of all parties for the largely constructive and positive tone of speeches this morning.