Today (November 28), the Chancellor of the Exchequer, Gordon Brown MP, announced progress to date in implementing Hampton, and a series of policies that will build on this, ensuring a risk-based approach to regulation.
Speaking today at the Confederation of British Industry annual conference, Gordon Brown said:
"The risk based approach of the future that Britain is now pioneering is founded on a different view of the world - trust in the responsible company, the educated consumer and the informed employee - adopting a risk basis with only a fraction of forms, a fraction of information requirements and a fraction of inspections needed."
In March 2005, Philip Hampton reported on the scope for promoting more efficient approaches to regulatory inspection and enforcement while continuing to deliver excellent regulatory outcomes. He argued for the creation of a regulatory system, at both a national and local level, in which risk assessment was the basis for all regulators' enforcement programmes.
Full implementation of the Hampton principles will result in fewer forms, fewer inspections, better advice, and better coordination between regulatory bodies. Progress is already being made with more detail set out today in Implementing Hampton: from enforcement to compliance. Today, the Chancellor announced, amongst other measures, that to make immediate progress, the Government will extend to 70 areas the pilots in Bexley and Warwickshire that have already cut retail inspections by a third. He also announced that the Government accepts in full the findings of Lord Davidson's report on goldplating and Professor Macrory's review of regulatory penalties.
Commenting on the policy to implement a consistent and risk based approach at the local level, the Secretary of State for Trade and Industry, Alistair Darling MP, said:
"This decision is good for business and delivers quickly and effectively a key part of the Hampton agenda to reduce burdens on business. "
Background
1. The Chancellor was speaking today at the Confederation of British Industry annual conference in London.
2. Implementing Hampton: from enforcement to compliance also outlines that:
- To encourage the implementation of a consistent risk-based approach at the local level we:
- have brought forward the timetable for establishing the Local Better Regulation Office (LBRO) from 2009 to 2007;
- will give LBRO powers to issue statutory guidance, for example to ensure that a vigorous adoption of the risk-based approach reduces inspections and information requirements;
- will give LBRO powers to tackle inconsistencies in enforcement between different local authorities;
- will legislate to place the principle of home and lead authority on a statutory footing for multi-site businesses so that firms operating in more than one local authority will face a consistent and risk-based approach across their business;
- will consider feedback that businesses provide to government when enforcement decisions are made. The Audit Commission will assess Local Authorities against their ability to adapt to local concerns; and
- will extend the Retail Enforcement Initiative pilot to reduce inspections and the burden of form filling in local authorities to 70 new local authorities.
- to focus local authorities on the top priorities, Government will establish - by the Budget - around five specific high-risk national priorities to enable local authorities to focus on key risk areas of enforcement; and
- to speed up progress at the national level, the National Audit Office will work with regulators and the Better Regulation Executive (BRE) to assess regulators' performance against the Hampton principles.
3. Following a Hampton recommendation, Professor Richard Macrory today publishes his report, Regulatory justice: making sanctions effective. It has been accepted in full by the Government and will create a level playing field for all businesses and ensure that there is no financial incentive from non-compliance. The majority of businesses, which are compliant, will receive a light touch with fewer inspections and forms. Meanwhile rogue businesses, which repeatedly flout the law, will face quick, meaningful and proportionate penalties. Regulators will only get access to the new toolkit of penalties when they have demonstrated to the Cabinet's satisfaction that they are compliant with the Hampton and Macrory principles.
4. The Government also today publishes Lord Davidson's review, Implementation of EU Legislation, and supports its overall findings that inappropriate goldplating of European legislation is not as widespread as sometimes claimed. Nevertheless, the Government will take forward the recommendations to address ten specific areas of over-implementation including MOTs, consumer sales, waste, and the Insurance Mediation Directive. The Government also accepts the systemic recommendations that will make the UK one of the most robust systems for implementing European legislation without imposing unnecessary burdens on business. These reforms will further strengthen the UK competitive position in the global economy.
5. The Legislative and Regulatory Reform Act, which received Royal Assent on 8 November 2006, contains powers to enable the Hampton principles to be established in UK law through a statutory Regulators' Compliance Code. This will legally oblige regulators (both national and local) to have regard to the Hampton principles in deciding their policies and principles, and in setting standards and giving advice. Any business that believes that a regulator is failing to have regard to the Code will be able to seek redress by complaining to the relevant regulator or the Parliamentary Ombudsman. It may also be possible to apply for judicial review of the regulator's actions.
6. Philip Hampton recommended the merger of 31 regulators into seven thematic bodies by 2009. Twelve have already been merged, agreement has been reached to merge a further twelve, and departments are deliberating on another twelve (potentially more mergers in total than originally envisaged). This will reduce the number of overlaps and interfaces that businesses have to face.
7. The Hampton principles are:
- regulators, and the regulatory system as a whole, should use comprehensive risk assessment to concentrate resources on the areas that need them most;
- regulators should be accountable for the efficiency and effectiveness of their activities, while remaining independent in the decisions they take;
- no inspection should take place without a reason;
- businesses should not have to give unnecessary information, nor give the same piece of information twice;
- the few businesses that persistently break regulations should be identified quickly;
- regulators should provide authoritative, accessible advice easily and cheaply; and
- regulators should recognise that a key element of their activity will be to allow, or even encourage, economic progress and only to intervene when there is a clear case for protection.
8. Links to today's publications are:
