Bertie Ahern (Dublin Central, Fianna Fail)

The regulatory impact analysis and the whole question of regulations are not the most interesting of topics, but they are hugely important. Deputy Kenny is correct about Europe, in that the system of bureaucracy and legislation in Europe is very different from that in the United States, where it is very simple. In OECD terms, we are considered not to be a very highly regulated country, and we should keep it that way.

Irrespective of whether the figure of €600 million is right, the analysis my Department undertook was based on what happens in other countries. The cost of regulation is considered to be somewhere between 2.5% and 4.5% of GDP. Approximately 15 % of that is considered to be not necessary. Taking that in the Irish context, my Department took those figures of 2.5% and 15% of that, and it worked out as €600 million. That was the calculation. It is crude enough, but the figure is probably as accurate as it would be if it were calculated any other way. In 1999, we were one of the early countries to put ourselves forward to the OECD to get engaged in this area. The White Paper and the various processes that have developed very much follow what is happening in Europe. I hope we are ahead in some areas; perhaps we are not so in others. The whole concept is that we do not do anything any more without checking whether there is another way or a simpler way of doing it, or whether we need to do it at all. Might a measure be just red tape or bureaucracy?

To answer Deputy Kenny's question, there are many things we can do. Much of what I read out in my reply covers the detailed work being done. There are some really good officials in my Department working in this area and interacting with business. It is extraordinary how things have moved forward in recent years. The position used to be that nobody was too interested in the subject. Now, chambers of commerce, small and medium-sized businesses, the Competition Authority, IBEC and other bodies are all very interested in this area, because they see the added value involved. People were recently getting excited about the issue of the companies Acts and regulations for directors, which was an interesting debate.

The issue of the super-regulator or combining the regulators is now being discussed. The enterprise strategy group with its publication last year of "Ahead of the Curve" recommended merging a number of regulators to create a larger, multisectoral regulatory body. A group in my Department considered that recommendation, and it has been tasked with implementing it. The group does not think a super-regulator is the way to go, because it would cover such different areas. It believes that, before we set up any new regulators, we should try to match existing regulators with any new focus taken, rather than simply adding to them. The White Paper recognises the value of having an ongoing assessment of the possibilities of rationalising the current system. It accepts that it would be beneficial to strengthen the ties between the regulators, the Office of the Director of Consumer Affairs and the Competition Authority. The group is not ruling out the whole lot. A super regulator approach would lead to certain cost savings, for example, the availing of shared services and expertise and, according to the group, this would make sense. However, given the disparate nature of the functions carried out by independent regulators, from the licensing of travel agents to the building of new power stations, the synergies could be overstated. Therefore it does not agree with the Enterprise Strategy Group and regards its view as over-simplistic. However, it does not suggest that we should keep adding to them but that we should try to match them.

The debate regarding the number of regulators misses the point. The issue is the quality of decision-making by regulators. Are we getting better outcomes in key regulated areas? If not, why not? Are regulators fulfilling their functions, both in respect of market players and consumers? Have they sufficient powers to carry out their mandates? Can they strengthen those powers of sanction? Can we limit recourse to the courts by parties wishing to frustrate regulatory decisions? This happens a lot in that if somebody is not happy with a decision they want to fight it in court. This seems contradictory to the idea of a regulator listening to everybody and coming up with a decision. One does not get far if such a decision is challenged in court.

All of these issues have been examined and it is my Department's view that we should try to tidy up the system and not put new regulators in place unless absolutely necessary. One must rationalise where possible. A super regulator would result in too much power resting with one organisation. The Better Regulation Group feels that we would be dealing with the issue of an overly powerful super regulator in five or ten years' time, and I tend to agree with this view.

With regard to other questions raised, there are literally mountains of analysis and material. The model that has been piloted in five Departments is almost finished and will be rolled out in other Departments. Discipline is then required to ensure that people, before jumping to the call of an organisation with regard to new legislation, think in terms of the RIA as to whether the legislation or regulation is needed. They must consider the cost and burden for everybody, not just in terms of business and industry. They must decide whether it is necessary to update legislation.

Europe is different to the US in that countries keep filling their Statute Books with complex legislation which costs more and, in many cases, does not solve the problem. This view is held everywhere. I am not saying that legislation does not need to be updated in some instances, but costs are involved and it affects modern business. There is endless data, some of which I have read, which proves this issue.

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