Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 1: To ask the Taoiseach his plans for the implementation of the recommendations in the report of the review of the operation of regulatory impact analysis; and if he will make a statement on the matter. [33752/08]

Enda Kenny (Mayo, Fine Gael)
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Question 2: To ask the Taoiseach if he will report on the implementation of the recommendation of the OECD report on regulatory reform; and if he will make a statement on the matter. [46586/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 1 and 2 together.

The OECD report, Regulatory Reform in Ireland, was published in 2001. In response to the OECD's report, the Government published the White Paper, Regulating Better, in 2004 which provides the framework for the better regulation agenda. Some of the key areas outlined in the OECD report and the White Paper relate to specific sectoral issues and relevant Ministers are responsible for reporting directly to the House on progressing those recommendations. The better regulation unit in my Department is tasked with the overall promotion of the better regulation agenda across Government.

In the context of this ongoing work, I would like to briefly outline progress in the three particular areas of regulatory impact analysis, modernisation of the Statute Book and improving the economic regulatory environment. Since June 2005, regulatory impact analysis, RIA, must be applied to all proposals for primary legislation, significant statutory instruments, draft EU directives and significant EU regulations. RIA is a tool which is used for the structured exploration of different options to address particular policy issues and for the consideration of the impacts associated with these options.

The report of the independent review of the operation of regulatory impact analysis was published in July 2008 and is available on the better regulation website. The report indicates that, overall, good progress has been made on the implementation of regulatory impact analysis across Departments, with some 74 produced between June 2005 and February 2008. The Government has agreed to implement the recommendations contained in the report which concern the RIA model itself, its use by Departments and its management across Government.

The better regulation unit of my Department is working closely with the interdepartmental RIA network, which it chairs, to implement some of the report's recommendations including the preparation of revised guidelines, training materials and publication of legislation and regulatory impact analyses on departmental websites. Of course, while the RIA network provides a useful focal point for Departments to learn from each other in terms of RIA best practice, a number of the report's recommendations are ultimately for Departments themselves to implement.

Good progress has also been made in the area of modernisation of the Statute Book. The statute law revision project, which is steered by my Department in partnership with the Office of the Attorney General, has already resulted in the repeal of thousands of redundant and obsolete Acts. The current phase focuses on pre-1922 primary legislation. The heads of a new statute law revision Bill were approved by Government on 29 April 2008. It is intended that the Bill, dealing with local and personal Acts up to and including 1850, and private Acts up to and including 1750, will be published by March of this year. Following the Bill's publication and enactment, further elements of the project will be postponed pending the availability of the necessary funding.

The Law Reform Commission is also undertaking a programme of statute law restatement which will make legislation more accessible by providing, in the case of selected Acts, a single text that incorporates all amendments made to date. The commission published a report on statute law restatement last July in which it proposes to complete restatements of up to 40 Acts.

An independent review was initiated last year as part of the efforts to fulfil the commitment in the programme for Government to review the economic regulatory environment. Work on the review has been overseen by an interdepartmental group, chaired by my Department. The independent benchmarking review is being conducted by the Economist Intelligence Unit in a partnership with Compecon Limited. It comprehends the key economic sectors of energy, communications, transport, financial services, and health and safety. Each of the sectors is being examined against a number of individually selected comparator countries in line with the terms of reference of the review. It is expected that the review will be completed shortly.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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The objective behind regulatory impact analysis is to ease the unnecessary burden of red tape on society and especially on small business and entrepreneurship which are being strangled at the moment. Has the report not highlighted that progress to date in addressing bureaucracy has been painfully slow? One simple recommendation from the report was that each Department should have a dedicated RIA page on its website. From a review of Department websites only one has that in place, the Department of Social and Family Affairs. The Department of the Taoiseach website contains a separate link to access that. When will that be delivered by the Department of the Taoiseach and the other Departments?

One of the concerns is with secondary legislation and EU legislation. The Taoiseach will be aware that at the time of the original referendum campaign on the Lisbon treaty one of the single biggest issues that came up was the impact that EU legislation is having on the ground affecting agriculture, small business and the day-to-day lives of people. Will the Taoiseach ensure that RIAs will now be completed on all EU legislation with a bureaucratic impact? Will he ensure that they will all be published and easily accessible on the various websites?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I agree that the purpose is at the time of policy formulation and policy making before decisions are taken to be able to assess the likely impact any proposal would have in terms of its efficacy and how it impacts on business and regulation generally. The report or review indicates that, broadly speaking, this is working well. The use of websites is a matter for each Department. The Deputy may be unhappy as to where it appears on the website of my Department but it is on the website. From our point of view, the overriding co-ordination role of my Department means we must try to ensure there is better uniformity of presentation. I take the point made by the Deputy on that matter and I will take the matter up with Departments. This regulatory impact analysis which we have undertaken in 76 cases is working well.

On the question of secondary legislation, the first issue is the vetting of such legislation by our parliamentary committees, particularly the Joint Committee on European Affairs, should in the first instance point up any difficulties that may occur in terms of parliamentary oversight and line Departments have their own responsibilities in that respect also. Where there is primary or secondary legislation of sufficient importance or impact, a regulatory impact analysis should be considered if it is merited.

Enda Kenny (Mayo, Fine Gael)
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I am sure the Taoiseach is aware of the business environment that has existed for some time. Does the Taoiseach accept we are not as competitive as we should be in the context of business being able to do business, and that the proliferation of red tape is an impediment to doing business efficiently? Has the Government carried out any baseline assessment of the extent of the hindrance caused to small business by red tape, given that this has been dealt with in Britain and other countries where there has been a reduction of 25% in so-called red tape?

Does the Taoiseach accept we are not as competitive as we should be and that red tape is an impediment and can he provide an assessment of the cost of red tape?

Brian Cowen (Laois-Offaly, Fianna Fail)
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There are issues of competitiveness in the economy which are being addressed and which will need to be addressed in the context of the developments in recent days and certainly in the case of the months and years ahead. This has arisen for a whole range of reasons, many of which are not to do with regulatory issues but rather as a result of the depreciation of sterling, other exchange rate issues and also other matters.

On the question of setting up business in this country, international reports have confirmed that Ireland is one of the best locations for setting up business with regard to the mechanics of setting up business and the company law arrangements, the incorporation of companies and the establishment of trading companies. These are all solid indicators. On foot of representations from business representative bodies, successive budgets have provided means for simplifying the interaction with the Revenue Commissioners and ensuring that for the first few years start-up businesses are not required to report profits under certain thresholds. A range of improvements has been introduced to make it easier for small business.

In a list of international comparisons, Ireland is ranked seventh out of 182 countries as a place to do business, the fifth easiest place to establish a business and the third cheapest location for starting a business. A strong system of support exists for start-up enterprises and also a growing international presence. This is confirmed by the international data.

I agree there is room for improvement and I am sure there are areas where the burden of regulation is not proportionate. The Deputy will know about the project for a reduction in certain areas of up to 25% of the regulatory burden and which is being conducted with business representatives and others by the relevant Department and this is ongoing.

I do not think it correct to state that the logistics of setting up in business in Ireland is more burdensome than elsewhere; in fact, all the international data suggests to the contrary.

Enda Kenny (Mayo, Fine Gael)
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I agree that this is one of the easier countries in which to set up business. However, it is the cost of doing the business afterwards that causes the problem. I will give two examples. A person employing eight people in a small industry in, for example, County Offaly, County Laois or wherever else, has to spend a half a day per week dealing with paperwork to do with regulations of one sort or another. In the case of a person who goes from, say, unemployment benefit to unemployment assistance, he or she will be handed at least six, if not eight, application forms at the social welfare office with the same information to be physically transferred on to each when an electronic recording system could deal with it in less time. Will the Government set out a standard cost model that would cut the cost of red tape on businesses? This has been done in many other places before and would be easy to do if the Taoiseach instructed it.

In early 2008 the Economist Intelligence Unit, on behalf of the Government, undertook an independent benchmarking report to address the need for stronger international data and benchmarks in assessing the comparative efficiency and effectiveness of key economic regulators and regulations. It was to take approximately six months and a report was due last September but it was then extended to the end of November. It still has not been completed and the cost to date has been over €300,000. It should be an interesting document in helping business to be more efficient. When does the Taoiseach expect the report to be published?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The independent review of the economic regulatory environment, which is being carried out by the Economist Intelligence Unit, in partnership with Compecon Limited, commenced in May last year and is expected to be completed shortly. It is intended to publish the report following its presentation to the Government. I understand it will be brought to the Government from the middle to end of this month. A statement will be drafted and the report will be made available for consideration both inside and outside the House.

Ireland ranks well in terms of the setting up of businesses and how they operate. One complaint made about the financial system, internationally and perhaps domestically, concerned the light regulatory touch and whether it was of sufficient oversight given the level of innovation taking place. From time to time, the argument changes depending on the general and the specific criteria involved. Ireland ranks fourth across the OECD and second in Europe for the proportion of early stage entrepreneurs which indicates economic activity in Ireland is higher than in other comparative countries. There is a track record of being proactive in supporting enterprise and pragmatic in policy-making.

The IMD Business School ranks Ireland as third in the world in attitudes and values and joint second in openness to foreign ideas. Ireland has moved up two places to 12 in the competitiveness score card and is ranked fourth in the world for business efficiency. Being a highly trade-orientated economy, this international data points out the Government is proactive in this area.

A project is under way to examine reducing red tape for businesses by 25% which will be concluded and implemented in the next couple of years. It is an area we must guard against, particularly in times of recession. Lightening the burden on business while ensuring best international practice and high ethical business standards is a balance we must achieve all the time. The indications are that Ireland is in the higher quartile of countries in encouraging that type of regulatory and economic environment.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Will the Taoiseach make it possible for each Minister to report to the Oireachtas Joint Committee on European Scrutiny on each EU proposal that comes through their Departments? Very often, by the time many of these proposals are brought to the attention of the European scrutiny committee, and ultimately to individual committees, many of them are well down the line with much negotiation having already taken place at official level. We depend on the vigilance of individual Ministers with regard to what goes on in each Department.

If there could be proper scrutiny of proposed directives coming from Europe, it would give us the opportunity to bring in various organisations, such as the Small Firms Association, to hear their views on how this would impact Irish businesses and small businesses in particular. There is a gap between action being taken and being too far advanced by the time a committee of these Houses gets to examine it. When that happens it becomes a waste of time.

I ask the Taoiseach if he could arrange for his Department to consider the matter. Into the future and, I hope, with the passing of the Lisbon treaty, when national parliaments have real import into directives, proper procedures should be put in place to facilitate this. I put it to the Taoiseach that there is currently a big gap in having a real input into proposed European directives.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I broadly agree with Deputy Barrett's comments. The committee system of the Houses should be the forum in which Departments can bring to the attention of the House, either through Question Time, the legislative programme or regular attendance of these committees in respect of these particular areas of responsibility, what European legislation, directives, regulations or decisions are likely over a particular period. This would enable committees to decide if any of the matters are of sufficient potential impact to warrant further discussion, either with the Department or vested interests that would be grateful for any committee bringing to its attention any issues they may not be aware of in sufficient time to have an input.

As a matter of principle we should, in our efforts to bring European matters into the mainstream of our parliamentary debate, have some sort of structured approach in each committee as to how and when Ministers and Ministers of State could come before committees and bring to the attention of the committee those issues which they believe are important.

There is a significant volume of work coming through that channel — much of it mundane, technical and not of any great impact. It would be very hard to maintain the interest of any individual in it, given some of the subject matter involved. I agree this could be relevant to the Joint Committee on European Affairs or the committee dealing with European scrutiny, which was set up in the aftermath of the Nice treaty defeat to try to bring about a more proactive approach. It required Ministers to go before the committee and bring to its attention issues that would arise at subsequent European Council meetings, etc. The Oireachtas would therefore have an opportunity to have an input before rather than after decisions being taken at that level.

The Deputy also makes the very important point that ratification of the Lisbon treaty gives a greater degree of autonomy and power to national parliaments, not only in respect of prior scrutiny of impending legislation but also the ability to send back legislation that fails the subsidiarity principle, if insufficient numbers require the Commission — or whoever originated the legislation — to amend it in accordance with that principle.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Questions to the Taoiseach will end very quickly as the time has not been extended today. I can allow Deputies Burton, Ó Caoláin and Naughten one brief supplementary question each.

Joan Burton (Dublin West, Labour)
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In the context of the Taoiseach's reference to parliamentary committees, the area of most interest to people relates to regulation of banks. There is a perceived absolute failure of the banks to, for example, highlight the shocking failure to find out about the loans advanced to Mr. Seán FitzPatrick, the former managing director and chairman of Anglo Irish Bank.

The Taoiseach spoke about the use of committees but there is a more fundamental question. With regard to the financial system, is the Taoiseach having second thoughts about light-touch regulation — the model proposed by the Government for this country which has resulted in shocking lapses of regulation? Does he propose to examine how the Central Bank and Financial Services Authority of Ireland and the Financial Regulator failed in the context of protecting the banking system and businesses and other customers of the banks and the taxpayers who will pay the price?

Last weekend's newspapers carried reliable stories confirming what the Taoiseach indicated to the Dáil last week, namely, that in respect of the mysterious Quinn affair and the acquisition of shares, the Financial Regulator was aware of the purchase of those shares by means of contract for difference from as early as December 2007 and very definitely from January 2008. However, action was not taken to address these issues. When the Financial Regulator was invited to come before the relevant Oireachtas committee, he decided that although he was not due to retire until this weekend, he would not make an appearance. The committee had no way to force him to come before it.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Government's White Paper on regulatory reform contains a list of actions in respect of the legislative process. One of the key commitments — about which I have asked the Taoiseach on previous occasions — relates to the information flow in respect of promised legislation. This flow includes the publication of the heads of Bills at the earliest opportunity. Since the previous occasion on which I brought this matter to his attention, has the Taoiseach sought to inform himself with regard why almost no heads of Bills have been furnished by any of the Government Departments? Is he conscious of the failure, across the board, to live up to the expectations contained in the White Paper, which were repeatedly presented to the House by his predecessor? What action does the Taoiseach intend to take to improve the flow of information to Opposition Deputies?

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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The Taoiseach stated that the Government's review of regulation will conclude in the next couple of years. I put it to him that this is just not good enough. We need a political commitment to get rid of bureaucracy and red tape now rather than at some future date. Will the Taoiseach prioritise this issue and consider the implications of the audit and VAT exemption thresholds for business?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The VAT exemption threshold has been increased in successive budgets, a development which was welcomed by the business community.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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There has been a piecemeal approach to date.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The approach has to strike a balance between those who are outside the formal economy and those who are not. When there are thresholds in respect of activity and VAT exemption, the position of businesses which are just above those thresholds and which must submit themselves to the regulatory burden must be taken into account. We must not create unfair competition for those who may obtain an exemption but who may well be involved in such a sufficient level of activity that they should be included in the formal economy. We should not accommodate more informal trades and professions which do not give rise to a very high level of activity. A balance between the two must be maintained. We must continue to work on this matter. I referred to a particular project, which is not in isolation from the regulatory impact assessment system we have in place. This is having an effect.

We have built up a financial services industry which has, in the main, retained its good reputation internationally. Obviously, issues that arose recently have had a reputational and detrimental impact on a particular institution. Competitors have since had an opportunity to indicate that this situation is typical when it is, in fact, more likely to be atypical.

We continue to contend with the financial crisis and world capital market values are estimated to have evaporated to the tune of between 33% and 50% in the past 12 months. A regulatory regime that can keep pace with the level of financial innovation we have witnessed, which has caused the global systemic problem that is undermining consumer, investor and business confidence and which has greatly depleted the potential for worldwide economic growth, is required. There is clearly a need, both regionally within the European Union and at a global level, to provide the type of response commensurate to the damage currently having such effects in terms of the worldwide recession which is impacting severely on emerging and developing countries no more than the advanced economies.

One would be remiss not to accept that there are serious lessons to be learned in terms of how business is to be facilitated and the proper functioning of capital markets is encouraged with the trade and investment flows that derive from that, and the benign impact of that on quality of life and standards of living for many people in terms of a functioning trading system. That must be balanced against the need to ensure we do not have a shock of such systemic impact that we have seen recently that puts at nought much of the progress achieved in recent times. That is a balance that must shift to a far greater regulatory oversight than was deemed suitable or appropriate in the past, given the consequences with which we are trying to cope.