Wednesday, 30 April 2008
Question 3: To ask the Minister for Enterprise, Trade and Employment the way he will implement the 25% reduction in the regulatory burden upon business; the way he will assess the level of regulatory burden; the legislation in the 30th Dáil that has been assessed for regulatory impact on business; and if he will make a statement on the matter. [16948/08]
In March 2008, the Government decided to reduce the administrative burden of domestic regulation on business by 25% by 2012. This target was set in response to the invitation to member states by the European Council to set national targets in line with the European Commission's 25% target reduction in the burden of EU regulations. My Department is responsible for devising the methodology to be used across Government, for co-ordinating the work across Departments and agencies and for reporting to Government on progress. Initially, all Departments will be required to list the information obligations which their regulations impose on business. From that listing, Departments will assess which requirements are the most burdensome and will then measure the cost to business of the most burdensome requirements. At that point the most appropriate approach to achieving the 25% target will be re-examined.
The Government also agreed that, in regard to future regulations, all Departments should measure the administrative cost on business and specifically examine the impact on small business. The approach to identifying and measuring administrative burdens will be kept simple and not overly bureaucratic, while at the same time being robust and applied consistently across Departments. The regulatory impact analysis, RIA, of new legislation is a matter for individual Departments. In the case of my Department, the following RIAs have been undertaken on current legislative proposals: Employment Law Compliance Bill 2007, Safety, Health and Welfare at Work (General Applications) Regulations 2007, European Communities (Ecodesign Requirements for Certain Energy-using Products) Regulations 2007, Control of Exports Bill 2007, the Chemicals Regulation and Enforcement Bill, the general scheme of the companies consolidation and reform Bill; and the EU shareholders' rights directive.
I thank the Minister for his reply. We are glad the Minister has finally set a target because we have repeatedly asked for this over the past six months. As late as February, no target had been set but we welcome the setting of the target in March. The Minister stated previously the employment Bills due before the House would not be assessed but I am glad there has been a change of heart and it is important he has set down the way forward. He has asked for a number of reports and he will then outline a plan. When will he announce a date for the plan? What baseline cost will he use? Will he announce the cost to business, according to his assessment, in order that we will have a figure to work with and we will know in two years what has been achieved? Will the Department direct this plan? Will he outline progress to the House in two or three years?
I ask the question because he may not be in the post. We would like the Minister to outline the mechanism for this quickly. He said he has asked various Departments and agencies to assess and report back to him. Yesterday the Financial Regulator was asked at a joint committee meeting the cost to business of the regulations he oversees and he did not know. He has not even assessed them. However, the Minister appointed a departmental working group to investigate this issue but the Financial Regulator has not even assessed the cost of his regulations. I am concerned that, although the Minister is discussing the issue and has replied to parliamentary questions saying the plan will be announced, nothing is happening. Will he elaborate on this?
I recall telling the Deputy that when we set the target, we must have an idea of the future path in progressing the issue. We are endeavouring to avoid a scenario where we over-bureaucratise the reduction of bureaucracy, which is a danger.
In Germany 110 civil servants are working to allegedly reduce the burden of bureaucracy. In the UK, the process cost is almost £27 million. I am conscious of how other countries have approached burden reduction and not yielded the concrete results we all desire. Ireland is lightly regulated compared with other EU member states. The World Bank ranks Ireland eighth out of 178 countries in ease of doing business while the Heritage Foundation and The Wall Street Journal ranked it third out of 153 countries in terms of economic freedom .
We need to keep this in perspective. However, the 25% target is ambitious in that context. We have circulated Government with a memorandum and we have asked that a structure managed at principal officer level be established in each Department to liaise with my Department which will be the lead Department in co-ordinating this Government wide endeavour to reach this target. To establish an initial list of the information obligations arising from legislative administrative requirements means going back over all the existing legislation. This is a significant task in itself to establish in particular those administrative requirements relating to business. We are using the month of January 2004 as a base line.
The best course of action would be to share with the Deputies the timeline that has been indicated to me to show how the Department intends to proceed. It will be a three to four-year process in terms of the 25%.
We would appreciate the timeframe information. I suggest a common-sense approach to this issue. The leaders of the various different business groups met us this morning and they admit they are under significant pressure. We discussed employment legislation, but in general they are under pressure and they need us to cut as much of the red tape as we can.
Rather than just proposing a cut of 25% in five years' time, I suggest we set an interim target such as a proposal of a cut of 15%. We could immediately cut out the obvious red tape without having to undertake major assessments and talk to the small and medium business sectors. We could then make some progress within the next 12 months on this issue.
The acronym SARS was coined during our deliberations by an official and I think it is excellent. It stands for sudden acute regulatory phenomenon or whatever. This means that there can be very acute and urgent calls from within this House for legislation and we are the worst offenders at times.
When something happens and it is publicised on radio and television we are all here in the House some morning shouting and demanding to know when the Government plans to introduce regulation A, B and C. This House needs to adopt a mindset as does the Civil Service and the public service, that people in the real world have to get on with life and we cannot overburden them. We must decide how we can reduce the unavoidable burdens on such business. I am in agreement with the Deputy in that regard.
We moved quickly on the audit of the exemption threshold. We did not wait for reports but decided to raise it to the European level which took the majority of small and medium businesses out of that burdensome requirement. We cut to the chase. A group within the forum dealing with this issue came up with the idea of taking quick action. While this was happening I invited business groups to suggest good ideas for simplifying the situation quickly in certain areas. I told them I was open to such suggestions and invited them to bring forward proposals.