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Industry and Regulators Committee
Corrected oral evidence: Regulators and growth
Tuesday 3 February 2026
10.30 am
Watch the meeting
Members present: Baroness Hayter of Kentish Town (The Chair); Lord Barber of Ainsdale; Lord Best; Baroness Carberry of Muswell Hill; Baroness Drake; Lord Fuller; Baroness Harding of Winscombe; Lord Teverson; Viscount Thurso; Viscount Trenchard; Lord Udny-Lister; Baroness Valentine.
Evidence Session No. 10 Heard in Public Questions 118 - 130
Witnesses
I: John Fingleton CBE, Chair, Fingleton; Dan Corry OBE, Non-Executive Director, Department for Environment, Food and Rural Affairs; Rebecca Shrubsole, Director for Ministerial, Growth and Resilience, Department for Environment, Food and Rural Affairs.
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John Fingleton CBE, Dan Corry OBE and Rebecca Shrubsole.
Q118 The Chair: Welcome to this meeting. This is an evidence session of the Industry and Regulators Committee looking at our work on regulators and growth. This is being broadcast live on the parliamentary website, but our witnesses should know that there will also be a Hansard report. We will give you sight of that in case there are any errors in it. That is not errors that you have made but errors in the transcription so that that can be corrected. I am Dianne Hayter. On behalf of the committee, I welcome you here and thank you for the time that you have offered to help us with our inquiry. If you would like to begin by introducing yourselves, that would be helpful.
John Fingleton: I am John Fingleton.
Dan Corry: I am Dan Corry.
Rebecca Shrubsole: I am Becky Shrubsole. I am from Defra.
The Chair: Thank you. I will begin with the first question, which is particularly for the people who did inquiries. What was the real learning you got out of those inquiries? What was the value to each of you in the work that you did that you might share with the committee? We will start with John Fingleton.
John Fingleton: In this case it was about a very specific sector, the nuclear sector. It covered defence and civil nuclear and the question was: can the regulatory burdens be removed in a way that does not impair safety and other standards? In that sense, it was a reasonably well-defined piece of work or a well-defined question. Part of the value is in having an independent fresh pair of eyes look at that with some expertise. The taskforce had nuclear expertise, planning and environmental expertise and regulatory expertise on it. The transparency around it—we had two rounds of consultation and we probably had at least 50 meetings with stakeholders during that process—surfaces quite a lot of issues and makes sure that people’s views are heard. It also has an investigative element to it.
The Chair: Would you like to add to that?
Dan Corry: Yes. I agree with a lot of what John said there. I do think that there is an advantage in having external reviews. In my time in the previous Labour Government as Special Adviser I saw a lot of them. I was trying to remember some of them: the Leitch review, the Barker review, the Eddington review, Michael Lyons, all sorts of things. They are helpful in having an independent viewpoint—someone who can call it as it is and can also bring all the stakeholders together and hear what they have to say. In my case, talking to the regulators about what they thought was going wrong and right, the developers, the environmental non-governmental organisations (NGOs), all sorts of different groups, I think that they all welcomed a chance to say what they thought was going right and wrong and get it off their chest a bit.
I was very lucky in the sense that I was given a very good team to work with. I am not just saying that to be nice to Becky, but I know from my time as a civil servant and a Special Adviser that sometimes a Secretary of State will announce someone will do a review and the first thing the department has to do is to find some people to staff it. They pick a whole bunch of people who are between jobs and all the rest of it—a natural thing to do—and it is a bit higgledy-piggledy. Luckily, there was a team that was already working on some of these issues and worked with me. That is important. Although, as I said to them right at the beginning, sometimes it is quite difficult for civil servants in these cases because I wanted to be free, and I was free, to criticise the department as well as the regulators. That is not easy if you are a civil servant, to be involved in something that might criticise people who might decide your promotion.
The timing of my review began pretty quickly after this Government had started, and the Secretary of State I think wanted a clean view. He wanted to get a new sense of direction for him and the department at that point, and I think that was a good way of kicking off as well.
The Chair: Rebecca, would you like to add anything? I know you were not doing it in the same way, but is there any comment that you would like to add?
Rebecca Shrubsole: To back up exactly what Dan said, I think that the value is that people feel that they can speak very openly to somebody who is independent in a way that they might not feel quite so open with people who have an interest in the system as it exists at the moment. It is just getting that frank exchange of views.
Q119 The Chair: I would like to ask both of you a second question, partly from what you just said, Dan, about the range you have seen, but John is also very experienced, not just in the review he did. You know what our inquiry is, and I just wonder whether there is one lesson or recommendation that you would like us to be making to the Government about their view on regulation and the growth agenda.
Dan Corry: One of the things that came out of my review, John’s review and some other reviews as well is this problem of not focusing on outcomes in regulation. We start regulation because we want to hit certain outcomes. Then, over time, process takes over. If the regulator has followed the right process, then everything is okay. I spoke to lots of people and they said, “This is all a bit crazy. We can follow all the right processes and the outcome is not one that any of us think was the right outcome”, in my case either for growth or for nature. It is trying to in different ways get that focus back on the outcomes. It is for government to set what those outcomes should be, but there is a slight inevitability in regulation. You just have to watch it very carefully because of how the legislation is interpreted, case law, all sorts of other things. People are looking over their shoulder to make sure they are following the process and slightly lose interest in whether they are hitting the outcome.
The Chair: Thank you. John Fingleton, would you like to add anything?
John Fingleton: I think that this Government and the last Government were somewhat confused about the relationship between regulation and growth. In our report, we avoided going down the path of giving the Office for Nuclear Regulation a growth objective. I do not think that it is terribly helpful for a regulator to, on the one hand, be told to keep people safe and on the other hand to grow the economy because there is a trade-off they are making that is fundamentally political.
In other areas, we are asking regulators to do things to grow the economy, when in actual fact that is giving them decisions that are fundamentally best suited to politicians to make because they involve trade-offs. We see this in other areas, whether it is the Competition and Markets Authority, in energy, water and other regulation, where we have added more and more objectives to regulators. Each one of them sounds very good, but it just gives extra trade-offs to the regulator to make internally. That makes our regulators bigger and more expensive. I think that the fundamental question is what you want a regulator to do.
In our review, we basically said that we wanted the ONR—the Office for Nuclear Regulation—to regulate nuclear safety better. We wanted the Government to put in place a better framework to do that. I saw that as promoting economic growth, because doing the actual one thing that they are there to do really well is what would promote economic growth. By their nature, the planning regulations do not promote economic growth. They promote something else, but it is the way you do them.
One final observation, and it relates to your previous question, is that I do think that sometimes it is right to do a sector-specific study, but sometimes it is appropriate to look across sectors and ask about systemic issues across sectors. Dan’s review did that on the environment. We perhaps do not always have enough of those reviews because it requires maybe more than one government department to agree to a review at the same time.
The Chair: Thank you for getting us into that. Lord Udny-Lister.
Q120 Lord Udny-Lister: Thank you very much. I am going to follow through on this theme. My question is to John and Dan, but please, Rebecca, join in if you want to. You might feel it is a bit unfair for me to ask this question of you. In both cases, the reviews that you did, the Government accepted or largely accepted all your recommendations. My question is: what is to prevent the Government doing it in the first place? Why should they not have made those changes without conducting a review?
Dan Corry: Logically, you are right. Why should they not? My experience of working as a civil servant and an adviser is that departments will rarely do that. They do have internal reviews. In doing my review, I spoke to some previous Secretaries of State who had at times tried to get change and for various reasons had not managed to do it, partly just because they had too much else on, partly at times the steers from elsewhere, like No. 10, were “Do not do it”, and so on. Although the logic is there, I just do not think that in many cases it will happen. It certainly will not happen in the systemic way that John was mentioning.
You get particular reviews of a particular regulator. I am sure that the department has over the years endlessly looked at the Environment Agency, for instance, and whether it could be more efficient and effective and so on. However, if that is all internal,if it is run by the department, as Becky said, people will be less willing to speak to it because they have a relationship with the department—a whole set of reasons. It does not mean that departments should not be trying to always move forward on regulation, review their own regulators, take in the feedback from users and so on, but every now and then you do need a step back and an independent look at it, which is risky for politicians. The reviewer may not say what they want to be said. There are issues about what your terms of reference are, for instance. The only amusing thing in the terms of reference that I was given was that they go around for clearance and so on and you can guess what the Treasury comment was: “Fine, review, as long as it does not cost anything”.
John Fingleton: The nuclear taskforce review is relatively critical of aspects of government policy and legislation. It is much more difficult for a civil servant to stand up and say, “This does not work well” or “The department does not work well in this way”. As Dan said, we found that the problem was systemic, that there were big problems inside industry. For example, most of the companies in the nuclear space are either on cost-plus contracts or otherwise have cost overruns paid by somebody other than the people running the business. In that case, you have quite odd incentives. In many cases, it is the Government who have put those cost-plus contracts in place, and it will then be much more difficult for civil servants to point that out, I think.
I think that there is a benefit in having somebody independent do that. We were doing it and being supported by a team of civil servants from the Department for Energy Security and Net Zero (DESNZ) and the Ministry of Defence (MoD) and the Treasury. We had three departments involved. No. 10 took an interest as well. The taskforce members were probably bolder and pushed further than maybe the civil servants would have always wanted. Often there is that process, I think, of managing a taskforce like ours. There is a delicate balance to be struck there between what the Civil Service thinks is realistic and reasonable and what we as a taskforce thought should be done. It is very difficult to have that debate if you are having it with yourself, which the Civil Service would be.
Q121 Viscount Thurso: Good morning. My question is around growth. To what extent did the people you were reviewing have an understanding of growth and the part that it played in their regulation? John, you have already said some very interesting things on this, so I will come to you second. Can I come to you first, Dan? To what extent did the regulator have a clear understanding of growth where it sat?
Dan Corry: I would say not as much as you might think. They did know that their processes were suboptimal, too slow, confusing and all the rest of it. One interesting thing, and John has mentioned it already, is that it was remarkable how few people, including stakeholders, knew about growth duties and things like that, let alone used them. Most of them said that on the growth duty in its current form, their legal advice always was that you could not make a decision reliant on the growth duty. It would be overturned if it was challenged and so on.
They were certainly aware that this Government’s big mantra is growth, growth, growth, and that that meant something for them. They were trying to do things. They were trying to work together and so on. What they needed, which is in many of the proposals I made, was to have more direction. What could they do to support growth? What did Ministers actually want? John was talking about too many duties and Ministers not being clear which ones they wanted to be prioritised and all that sort of thing and how they should interpret things.
To some degree the regulators focus on the process and they get through, they do not get legally challenged. One interesting thing, and I do not know how much weight to give to this, is that the leaders of the regulators said they were doing their very best not to be risk-averse, to focus on outcomes and so on. I had a few—I call them “Deep Throats”, if you like-. people from the organisations lower down who got in touch with me because it was not too hard to do that. They said, “Whatever the top guys are telling you, it does not feel like that down here. If we take a risk and there is even a threat of judicial review, for instance, then that is not good for our career”. There is a big sub-cultural change.
I am not blaming the regulators. They live within the legal framework, the way it has been interpreted, the resources they have, the urgent things that are happening at the minute. The Environment Agency is obviously focused on why we are getting these big waste tips at the moment. It will be floods next week, or probably this week actually, and so on. It is difficult. It is not high enough up their agendas.
I think as well, though, in the whole environmental world people have got themselves into a zero-sum frame of thinking: you are either for nature or you are for growth. At times at least there are short-run trade-offs, but in the medium term it is not about trade-offs. There are a lot of win-wins. I think that we need to get that mentality into the regulators but also into some of the stakeholders.
Viscount Thurso: Yes, culture is a key part of all this. John, first, I am fascinated by your work because for years I represented the constituency that has Dounreay in it and therefore I had quite a lot of interaction with the Nuclear Decommissioning Authority (NDA), UK Atomic Energy Authority (UKAEA) and so on. You made the very interesting point earlier on that it is a bit of a false dichotomy between safety and growth, particularly in nuclear. In your report, you clearly highlight as one of the things the cultural problem. You have heard the main question, but can I ask you to expand on that?
John Fingleton: Consistent with what Dan said, what I found was that the leadership of the regulators had a decent understanding of this. The challenge is as you cascade down through the organisation. We looked at a number of regulators. For example, the Environment Agency has 17,000 people. If you go in as chief executive and you try to change the culture to a pro-growth culture, that will not happen overnight, particularly in an environment where you are constantly facing judicial review. Therefore, any change you make has to be carefully considered.
One area where I think regulators could have the biggest impact on economic growth is to speed up decisions that they make. This is also true of government departments. We did not look formally at the decision on the small modular reactor (SMR) contracts at Anglesey, the Rolls-Royce contracts, but it is difficult for me to understand, having looked at this for quite a while, why that decision could not have been made in six months instead of two and a half years. Ultimately, the length of time—we gave a clear account of the Horizon project in Anglesey 10, 15 years ago and that dragged on for ever and eventually collapsed under various factors, of which one was delay. One thing I would say that can make the biggest difference across regulators is introducing a sense of pace and some timetables into this, both in government and in regulators.
Viscount Thurso: On that, to what extent is the regulator merely following the Treasury’s handbook on laying contracts, which has about six different gateway reviews in it, and how much is it the way that they do it?
John Fingleton: It is both government departments and the regulators. In fact, one of the points we made in our report was that we said many decisions do need to be made by Ministers; for example, airport expansion or whatever. However, when Ministers are making these decisions, it would be quite good to have a strict time limit and no further consultation. With the decision being approved, Ministers should make the decision on time. I think that we should be introducing gateway rules like that that mean that projects get approved unless they are actively stopped by Ministers or by regulators.
We could have many more default rules such as that that speed things up. This is hugely important in the area of infrastructure in particular, for two reasons. The first is when you look back at any project, usually the biggest portion of the cost that is avoidable is the interest on the capital that has gone into the project. It depends on how it is funded but that is usually the case. The second reason is the supply chain. We have too many big infrastructure projects in this country—nuclear has examples of this—where they are stop, go, stop, go, in various ways. That has enormously expensive repercussions for the supply chain. The fact that we are the most expensive place in the world to build nuclear is not unusual to nuclear. We are the most expensive place in the world to build a mile of road, a mile of rail, a bridge, a tunnel. There is something about how we are doing this. It is not just the regulators. It is central government as well.
In some cases, it is the Treasury and other controls. For example, AWE—the Atomic Weapons Establishment—has, I think, a £2 billion a year capital budget, but it has a control total on the chief executive that I think has been increased from £20 million to £50 million. It is unclear to me why, when you have a board and a chief executive, a government department needs to be checking every individual line of expenditure, which just adds bureaucracy to the system. We recommended that some of those controls be removed.
I sat on the board of UK Research and Innovation (UKRI) and we were given a budget to spend on science and research, but almost everything we did had to go through approval back to the department and back to the Treasury. I see no reason for this. It is employing lots of civil servants doing things that are second guessing what regulators or other bodies are doing that is, I think, providing a false sense of accountability. If you have a board and you put serious people on the board and you have the right governance structures, let them do it and hold them to account for it. Do not have this fine-tuning—fine-tuning is the wrong word—this constant micro-monitoring of everything they do by government departments. You judge them by the outcomes they achieve over a period of time, not by measuring their inputs in this way.
Q122 Lord Best: My question is for Dan and John, so apologies, Rebecca, for this one. Dan, your review had 29 recommendations and, John, yours had 47. Trying to crystallise the key points for government that come from those two reviews, we have already heard that you both agree that clearer strategic steers are necessary from government. We have been hearing that second-guessing the regulators’ boards is not a very productive use of time. If you were to pick out from your long list of recommendations a couple of key ones for government, what would those be?
Dan Corry: Twenty-nine recommendations is quite a lot. Some of them are quite big and some of them are quite small. My view is that to change the culture, which is the key thing, you need to do a lot of little things. I am a great believer in systems, and the way that systems get changed is by interventions in the system that make it work in a different way.
To give a couple of examples that I think the department are getting on with already, and Becky might want to say something about it, one was about the lead regulator. One of the problems that we have and why things go slowly, why it is confusing, why users find it so difficult, is that there are often several regulators involved, for example, in a new development. It is crazy. They are on different timetables. They ask for different data at different times. The timing is unclear and so on. One of the recommendations was that there should be a lead regulator. There was a bit of debate when we were doing it over whether it was enough to just say there should be a lead regulator. Did that do enough or would you in the end need to have some legislation that said the lead regulator could make decisions on behalf of some of the other regulators? Anyway, we did not go there because I tried to avoid too many things that looked like they needed legislation because I know how difficult it is to get legislation through.
However, that lead regulator is being applied—it is being applied on the Lower Thames Crossing at the moment—so that is working. The department will evaluate it. If it works well, it can clearly work on the big projects like that and it makes a lot of sense. I would hope that if it worked there would be an attempt to try to apply that on the smaller projects because it can be even more of a hassle if you are a small developer or something.
The other thing, which again sounds quite trivial but is culturally important, was that Defra should set up an infrastructure board. To some extent, Defra and the regulators wait for a developer or something to come along and then they say no and you have to go away and try something else. My idea was that, particularly if there is a big project somewhere, or a number of projects in an area, Defra would bring the regulators together, the relevant departments, and think, “You are going to have to obey all this legislation. You are going to have to do this. Let us find a way through it. Let us find a timetable. Let us agree what data we need, what surveys are needed”, and so on. One thing that has happened—I know this from talking to Becky—is that, quite interestingly, it has given Defra sight of what the big projects around and forthcoming are, which it did not even have before. It is now on the front foot. Its role is to see how it can make this project work rather than sit there, see what they say and then say no. Those things are very important in cultural change. Becky, have I described them correctly?
Rebecca Shrubsole: Yes, absolutely. The infrastructure board is just that. It is just about trying to get everybody together much earlier in the process who might have an interest in a development and expose what we think the issues are likely to be around the environment so that we can already start thinking about how we would put a solution in place to try to help the development to happen, as opposed to waiting for a problem to come up and then trying to deal with it further down the line. That is the whole idea. Dan’s recommendation is about trying to engage in a positive way with how we make something happen as opposed to just dealing with it as and when it arises.
John Fingleton: We nested our recommendations under five headings because we felt we needed to deal with quite a lot of these issues—each one of them important but there were quite a lot of them. We saw the strategic steer as being incredibly important because we think that we will deliver better outcomes on nuclear only if industry, government departments and regulators all change at the same time. That requires the Prime Minister to give strategic direction.
I also make the point in the foreword to the report that something like getting the cost of nuclear down requires lots of action by five or six different departments. In fact, there are probably about 10 departments that have a role in nuclear. It will not be the top priority of any one of them. It might be near the top for the Department for Energy Security and Net Zero (DESNZ), but it might not be near the top for the Ministry of Justice (MoJ). Part of the strategic steer rationale is that the Prime Minister would get departments to reprioritise this. If it is important for the country as a whole, it needs to be something that the Prime Minister gets departments to reprioritise. That reprioritisation is more difficult to achieve mid-term. You can achieve it when you start as a new Government. I think that there was an effort to do that.
On the decision-making, we suggested a one-stop shop decision-making structure, for a number of reasons. Dan has mentioned the Lower Thames Crossing, but it was used to solve problems at Sellafield. It was called the G6 and it worked well there. Then others tried it in other locations, in Devonport and other places. It did not work so well and the problem was there was not a burning platform, as it were, to really force the regulators to get together and do this. What we suggested was a single commission that brings together the decision-making powers of the Office for Nuclear Regulation (ONR), the Environment Agency and the planning authority, and it operates as a single decision-making body.
A second input from me into that was having observed a lot of other regulators, whether it is Ofwat, Ofgem and so on, I am never clear who has actually made the decisions, whether it is the board, whether it is the chief executive, or whether it is the staff. I am increasingly struck with the idea that when I look at other countries where they have a commission of five people who decide these things, you are clear who makes the decision. We are clear that the Monetary Policy Committee of the Bank of England makes interest rate decisions. I think that in the accountability processes we have introduced for regulators with boards and chief executives we have lost a sense of how decisions get made and accountability for them. It is a live issue with the Competition and Markets Authority (CMA) at the moment, where the Department for Business and Trade has published a consultation. Part of it was thinking that we need a structure where there are a group of five people accountable for the decisions that are made. The decisions get escalated to them because one of the problems is—and Dan alluded to this—that junior people get stuck in ruts on these things and you need the decisions to get escalated.
A lot of thought went into the decision-making process of bringing regulators together. We tried to avoid merging regulators because it is very disruptive. We did suggest merging—and I think it is happening—the Defence Nuclear Safety Regulator (DNSR) with the ONR, but the DNSR is about 30 people. It is severely understaffed. It uses consultants for a lot of its work and a lot of the good technical expertise is in the ONR. There are national security and other complications around that, but we have come up with a solution to those as well. There are derogations from the civil regulatory regime for defence, but they can be worked through. Apart from that, we thought this model was a model of avoiding regulatory mergers, which I think should be done only when you think that there is a big problem to solve, and we did not think it was that type of problem.
Dan Corry: Can I just say a little bit more on the strategic steers, which I certainly pushed very hard on? I think the department will publish them soon. It will be interesting to see what it says. If I look back, I worked on a lot of economic regulation in the previous Labour Government, and we inherited a quite simple system, which was economic regulation, RPI minus X, and so on. Then slowly during the period of that Government environmental duties and social duties got added to the regulators’ duties. Already people were starting to ask how they trade these off—John referred to that earlier—and whether they should be making those trade-offs.
An interesting thing then, having been out of regulation for a decade, coming back into it to do this review, having had Governments who I suppose you would class as wanting to deregulate, was that, in fact, there were tons more duties. It is not a political thing here. There is something that accretes these duties. The net result is, first, it is difficult for regulators and, secondly, it is almost not quite democratic. The regulators often say they should not be making these trade-offs; that is what politicians are there for.
What should happen to ease these problems is these strategic steers. The trouble is, certainly in that last Labour Government, when we did start bringing them in, to some extent they were very waffly, quite honestly. At the end of the day, politicians do not massively want to be explicit about these trade-offs. They rather like the regulator having to make these difficult decisions and so on. But that is just a recipe for confusion and chaos. It will be very interesting to see exactly what the Defra one says and whether other departments start to bring in much stronger guidance—“These are our priorities”—and therefore that helps the regulator in making those trade-offs.
Lord Best: That is very helpful.
Q123 Baroness Harding of Winscombe: Out of an abundance of caution, I should probably declare that John and I are long-standing friends, and I was, once upon a time, a client of Fingleton. That is just to be clear before we kick off.
You both identify the regulators you have been reviewing as being too risk-averse. How can regulators change their approach to managing risk and how should they manage the challenge of clarity of what potential consumer detriment there is when inevitably something does go wrong and the temptation is to swing the pendulum back again?
John Fingleton: We have in the public sector and in regulators in particular this huge problem of asymmetry in reward. If you as a regulator take a risky decision and there is a great upside from it, you get no benefit—maybe some kudos. But if you take a decision and it goes wrong, you will be fired or treated very badly. We are very quick to judge. Consequently, the safest course of action is to minimise the downside risk rather than to focus on the upside benefit. That is a particular problem.
It can be addressed in a number of ways. One is for regulators to set out much more clearly the nature of the risk and the calculus behind the decision ex ante and the things that could go wrong and then say, “I am making this decision in this way”. The second is for more political cover for risky decisions for regulators. As a completely different example, when I was chairing the council of Innovate UK, we had a big programme on drones in extreme environments. Civil aviation rules did not allow drones to be flown out of line of sight, so it was very difficult to experiment with the drone technologies back in 2018 and 2019. That probably held back innovation and the commercialisation of drones in the UK. It is very difficult if you are the Civil Aviation Authority—it was between politicians and the regulators in that example. The law probably needed to be changed to make it easier for the Civil Aviation Authority to do that, but the Civil Aviation Authority could probably have pushed a bit more at the time on it. I actually went to see the Prime Minister about this at the time. Everybody was anxious that if a drone hit an aircraft and brought down an aircraft there would be a terrible calamity. I think that nothing got done about it for four or five years. It has been addressed now, I think.
That is a nice example where risk aversion gets in the way of making these decisions. I wrote a paper three years ago in which I recommended that we set up a regulatory innovation office, and that has now been done by the Government. Lord Willetts chairs it and Patrick Vallance is the Minister overseeing it. It would have been preferable to try to do that on a statutory basis rather than a non-statutory basis, but it is good to start these things on a non-statutory basis. I would encourage you to look at perhaps strengthening those mechanisms such as the Regulatory Innovation Office. Giving regulators objectives to improve innovation I think will not work as well as creating mechanisms whereby Ministers or another body can enable experiments to happen and that is their actual job as opposed to keeping us safe.
Dan Corry: I think that John’s asymmetric point is very well made. Of course, it applies to civil servants and it applies to politicians. Everyone knows that post Grenfell various building regulations came in, which people now realise are a massive barrier to actually getting anything built, but who will be the politician who gets rid of that? You would have to be very brave. There is always that problem, so you are pushing against that.
My feeling is if we focus much more on outcomes and that is what you are trying to do, rather than process, you can get somewhere. It was interesting because in my review I was looking across the whole country, and there were pockets of people who were taking more risks because they were focusing on outcomes. When I tried to dig in, “Why was this happening?”, it was partly because there was someone from one of the regulators who had been there for 20 years. He knew everybody. They all knew him. He obeyed the rules but not when they were stupid and getting in the way of the right outcome. Everyone was happy to go along with that. That is quite interesting. I spoke to the regulators about that and they said, “Those people are like gold dust. It is hard to hold on to them. A lot of our people do two or three years, and they can triple their salary going somewhere else”.
There are things that you can do. I think if you get much more customer-focused and you see the frustration people are having trying to get through your system—that your system is there to make sure you minimise risk yet it is causing complete chaos and confusion for people—that will help as well, a more customer-focused culture.
One of the problems in a lot of this regulation—and I do not think I had a massively great proposal on this, but I hope the work that the Department for Business and Trade (DBT) and others are doing will—is that there is very little looking at value for money, for instance, of regulations. They will say, “We have to obey this because this is our interpretation of the law and this is what case law says”, but the value for money test is not in there.
Regulators, certainly the environmental regulators, were spending an awful lot of time regulating people they did not really need to regulate. I suggested that you have this earned autonomy concept. For instance, if the National Trust wants to put in a new water thing that would be good for the environment and so on, given that its mission is to be good for nature, - you do not have to overdo the amount of regulation you do on it. That frees up time to do it on others. The department is, I think, piloting that. There are things like that that I think can help. I agree with John about needing cover from Ministers because things will go wrong.
The last thing is on innovation. One of the things I proposed—and I basically just borrowed this from what they have done in financial regulation— was regulatory sandpits which was partly so that, in my mind at least, if somebody comes along and says, “We want to do this thing but your regulations make it very difficult”, the regulator in that instance could suspend that regulation for a bit and see what happened and whether it worked. That would teach them things. I wanted that on the one-off projects but also to try to inject an innovation gene into the regulators, because it is not there at the moment.
Baroness Harding of Winscombe: You both have already said that government should provide more political air cover, but you have also both set out very clearly why a lot of politicians will not want to do that. How do we break out of that puzzle? What role, if any, does Parliament have to play in trying to provide that political air cover?
Dan Corry: It is very difficult. As an ex-Treasury person as well, the idea that the Treasury will relax and not interfere—I am doing a bit of work in my think tank world at the minute, thinking about Great British Railways (GBR). One of the big things there is how much the Treasury will let GBR get on with it rather than checking every bit of track or getting the Office of Rail and Road (ORR) to do it. I find it hard to envisage a world where that is not happening. To some extent you have to take some of these things as a given. That issue about how you get politicians to put the responsibility on the regulator in some ways so that when the question is asked, “Why is this happening?”, the answer is, “Do not ask me as the Minister, ask the Environment Agency and its board why this is happening”. That is very difficult in a parliamentary system.
I do not have a magic answer, to be honest, but to some extent if politicians, Parliament, everybody, has realised the system is not working, then maybe everybody can draw back a bit and try to free people up to do things. It is a tricky thing. Select Committees, House of Commons Select Committees are a bunch of politicians sitting around and trying to catch people out—get the Minister, grab them, find some headline. That is natural, I am not blaming them for doing that, but that culture then feeds right back into the way that Ministers behave and the way that regulators behave. How we get out of that I do not know. I have spent a lot of time thinking about that and I do not have any magic answers.
John Fingleton: It would help if evaluations of decisions regulators make are done at least on the basis of the information they had when they made the decision and not on the outturn. That is a problem you see not just with Select Committees but with politicians, who seem incapable of distinguishing between the information that is available now and the information that was available at the time the decision was made, and to evaluate the decision on that basis.
I think more could be done by regulators in setting out when they are making decisions that are risky that “These are the risks, we have thought about these risks and we have considered them”. I will give you an example. When Ofgem introduced price caps for energy, it set out very clearly the risks and benefits of having a prudential-type scheme to protect the companies from going under. It decided at the time that it was not justified, but then it got pilloried five years later, probably around the time of the Ukraine invasion, when a lot of energy companies went bankrupt. You can take two views on that, but the point is that nobody really wanted to go back and look at what Ofgem had published at the time it made that decision, which was a fairly reasoned risk analysis of the pros and cons of doing that. There will always be that tendency to jump on these things, but as a result we find it more difficult to make these riskier decisions.
The Chair: In answer to Dan, we are a Select Committee of politicians but we are not trying to catch you out, you will be pleased to know.
John Fingleton: So far!
Q124 Baroness Drake: Could I take us back to the lead regulator’s role? You both recommended to the Government that they move to a model of lead regulators which manage the relationships and simplify decision-making. My question is in two parts. First, can you give an actual example of where this has worked, including any international example? To give that question more depth, the National Audit Office (NAO) report in January this year on Defra’s progress on regulation said that support for the lead regulator approach was there, but “the pilots are at a very early stage, and key features are not yet determined”. The second part of the question is: what are the features of this lead regulator model that are most key to delivering positive outcomes and which provide pinch points that might militate against positive outcomes?
Dan Corry: It is interesting. When I was thinking about the lead regulator, in many ways I was basing it on the idea of the lead professional in public services and the stories of the family who have about six different arms of government visiting them on different days and it is completely chaotic. There have been different attempts to say there should be a lead professional that manages the interaction with the family and that that improves things. It is the same thing with trying to regulate a development when there will be a lot of things that have to happen and it can be completely chaotic. The regulators do not necessarily talk to each other or even within a regulator they do not talk. Different bits of it do not talk to each other, and they do not think about “How can we help here?” That is the concept.
As to how it works in practice, it is being tried at the Lower Thames Crossing, and I do not know exactly what is happening there. I am sure they will find some issues. Is everybody playing the game? Are they being helpful? Are they agreeing? As I think I said earlier, there is a slight issue about whether in the end you might want to go even further and that just having a lead regulator who is trying to bring the different regulatory bodies together to agree and so on, and to help the developer or whoever it is find their way through, may not be quite enough and you need them to have some power to make decisions or enforce decisions or make people move faster. In a sense, that is the point of this pilot: to see how it works, to evaluate it, to think whether it worked and what more we need to do.
I am interested as well because although I can see on big projects it is crucial and you can see how it can work, ultimately I would like to see the same thing happening for much smaller projects. If it is a big project, the company involved, for instance, will have a whole team of people who are trying to negotiate all this. If it is a small project, they will not have anybody to try to find their way through.
Some of this is about customer focus. For instance, talking to farmers when I was doing the review, of course there was frustration about some of the regulations, but the main thing was about how the whole thing was administered and that they could not understand it. They would try to get in touch with the regulator, but it would be a different person at the regulator who replied every day. They did not have any consistency. They also, by the way, got pretty annoyed that if they did what they were supposed to do, that was great, but the guy down the road was not doing any of this stuff, never got caught and, if he did get caught, hardly had a big fine so what was the point of any of this. There is a big issue about monitoring and enforcement to make all these things work. Becky, you probably know more than I do about what is going on in the pilot.
Rebecca Shrubsole: Yes, I can say a little bit more about the pilots. The Lower Thames Crossing pilot is being led by Natural England, and what we have tried to do with the pilots is to use different regulators as the lead for each of them. We have a second pilot at Falmouth Docks, for which the Marine Management Organisation is the lead regulator, and we have two further pilots in the pipeline that we may or may not announce. Sometimes we do not announce them publicly just because of sensitivity around it, but overall we are aiming for four or more pilots with different regulators taking the lead.
On the Lower Thames Crossing we are already seeing the model making a difference. For example, they have been able to fast-track a development consent order, saving about two weeks on the statutory timetable that you would normally apply. That is showing that those decisions are happening more quickly.
I would say that you need certain conditions for success and that is what it is showing. You really do need to have a dedicated project manager on that particular project. You need to have clear ownership and accountability between the regulators so that they can broker solutions. The idea basically is that single front door for the developer so that it has one person it can speak to who represents the environmental regulators and can triage between them.
We think the model shows potential, but we are planning a formal evaluation so that we can see whether, as Dan said, it is enough to do it without legislative underpinning, whether that gets you so far and no further, or whether we think there is enough benefit in it to roll it out more widely.
Baroness Drake: Is your trial including a shift of decision-making to the lead regulator or just co-ordination?
Rebecca Shrubsole: At the moment it is about co-ordination and that is just because, as you will be aware, the way that our regulations work, certain regulators have to formally make certain decisions. What we are not able to do in the pilot is transfer that entire responsibility on to one regulator. What they are able to do is make sure that from the customer’s perspective they are getting a single point of focus and a single decision-making. If you wanted to completely shift the whole decision for a project, you would need to look at how the duties and the underpinning regulations work. That is why we are trying it out on a pilot to see what the potential is, and we could then follow up with legislation if we thought that it was worthwhile.
John Fingleton: I would distinguish between two scenarios; the first where a group of regulators have the same objective but maybe different jurisdiction. For example, in financial services regulation there is quite a lot of lead regulation done by international central banks where one takes the lead on an issue. When I ran the Office of Fair Trading, we sometimes handed cases over to the US Justice Department, which was in a better place to prosecute them. Then the individuals in one case served prison sentences back in the UK, having been convicted of being an international criminal cartel by the US Government.
An example of that in our report would have been, for example, Natural Resources Wales, the Environment Agency, Natural England and the maritime regulatory organisation. All had a role in Hinkley because of geographical proximity. That co-ordination was basically bringing together organisations with very similar objectives. We proposed a commission because the Environment Agency and the Office for Nuclear Regulation (ONR) and the planning authorities have totally different objectives. That is a much more difficult situation in which to do a lead regulator. What we proposed there was that the commission have the concurrent powers of each regulator: the planning authority, the Environment Agency and the ONR. It could exercise all those powers in parallel with those bodies. We are not taking the powers away from them, but it could make those decisions. Rather than the ONR handing its power of making decisions over to the Environment Agency, which would not really be right, or vice versa, it is a way of bringing the powers together in one place to achieve that co-ordination. Time will tell whether it works but I think it is an experiment worth doing.
The Chair: Lord Teverson would like to come in on the same point.
Lord Teverson: I just want to come back to Rebecca. You mentioned Falmouth harbour. In that conglomeration of regulators, does it include the local planning authority and the Maritime and Coastguard Agency, both of which are non-Defra, one the Department for Transport and obviously the other local government. I am trying to understand what the boundaries are practically on this. We all know that silo management, even in regulators, is difficult but once you get to the interdepartmental level it can get even worse. I am just interested in that practical example.
Rebecca Shrubsole: That is a great question. In our model, that is about regulators within the Defra purview. We would be saying you have a lead regulator from the perspective of the Environment Agency, Natural England, the Marine Management Organisation. We would give our decisions jointly. They would co-ordinate between them. I would expect them to be working very closely with the local planning authority and all the other agencies, but our model is a Defra model as opposed to being a model that extends to all the possible regulatory bodies that might operate on that project, if that makes sense. It is a model that works for the environmental side of what you might need as a developer.
Dan Corry: I think that it is fair to say, if I am getting this right, the infrastructure board does drag other departments in.
Rebecca Shrubsole: Yes. The infrastructure board would look at the project early and that will bring in other government departments—basically everybody with an interest on the project.
Q125 Viscount Trenchard: Good morning. My first question to you all is about whether legislative change is necessary to allow for a more flexible, more outcomes-based, less prescriptive approach to regulation. I have two supplementaries. That is the basic question for all three of you, but my first supplementary for Dan and Rebecca is: we have heard from witnesses that closer alignment to EU regulation—for example, in food standards—may reduce regulators’ ability to be flexible, especially in approving new technologies. My supplementary to John is: the licensing system of the Office for Nuclear Regulation (ONR) may be fit for purpose for gigawatt-scale reactors, but if we have hundreds of small reactors—and I do not just mean 500-megawatt Rolls-Royce reactors, I mean 50-megawatt micro-reactors—across the wire from data centres or outside industrial clusters, is major change not necessary?
Dan Corry: Let me have a go. There was not that much that I proposed that needed legislation, certainly not major legislation. Partly I tried to avoid proposing things that needed major legislation because that meant it would be years away. I do not really, to be honest, know where the Government are on this, but we both mentioned judicial review and that being a constraint, the way it is used at the moment and the rules around it, which are making people not be outcomes-focused because they are looking over their shoulder all the time. I know that the previous Government and this Government have been looking at that and I do not quite know where that is ending up.
There are some things going on where legislation has happened anyway, such as the Planning and Infrastructure Act and things like the nature restoration fund, which gives you a more flexible approach to hitting the environmental requirements. It is interesting. One of the big debates in the environmental world about regulation and flexibility is whether the habitats regulations are too tight or being interpreted in too tight a way and that is reducing the ability for people to be flexible and so on. For instance, they have to focus on a particular species, a particular place, rather than saying that the best thing might be to support that species elsewhere. I am not going to mention the bat tunnel—I just have—but that was an example.
Some people think you need to change the legislation. At the moment I think that the department is working on the guidance about how you should apply the habitats regulations on the basis that the way it is being applied is a bit over the top and there should be more flexibility. There are some things like that, but on the whole I was trying to avoid legislation.
As to your question on the negotiations going on with the EU and alignment, I do not know. I presume yes, to some extent, although I do not think that it takes away flexibility. One of the frustrating things was—and it was hard to get a feel on this—naturally, when I was looking at environmental regulation, I asked all stakeholders, particularly those who operated in other countries in Europe, whether it was better in another country—was there somewhere we should look at as the model?—on the whole, there was not. There was a bit, not surprisingly, which you often get, about the way that we implemented certain EU directives some years ago being a bit stronger and less flexible than other European countries have done, but that was historic. There was not too much there. Becky, do you know more?
The Chair: I will just say we are running out of time, so could we be quite short in answers?
Dan Corry: Yes. The answer is I do not know. Do you know?
Rebecca Shrubsole: I suppose generally in response to the question the department is trying to be quite systematic about reviewing our regulations on an ongoing basis. One of Dan’s recommendations was to have a rolling programme of regulatory reform. That is one of the things that we are trying to take forward. That does not always have to be primary legislation, although the Planning and Infrastructure Act is a great example of some of the more strategic changes that we have made to the system through primary legislation. A lot of it can be done through secondary legislation, and some of the reforms we are making to the environmental permitting system will be doing that.
In terms of the EU, we have inherited a lot of our legislation from the EU. Where we are at the moment is we think that, as Dan said, there is a lot more we can do to make sure that we are interpreting that legislation in a proportionate, consistent way as opposed to necessarily a wholesale review of it. One of the things we are doing is refreshing our guidance.
The Chair: Thank you. Did you want to add anything, John?
John Fingleton: We think some legislation is needed. When you look at comparative costs between the UK and continental European countries we are still way over cost. A lot of that is because of the way we do regulation. It is not fundamentally about the constraints imposed by EU law. It is about the processes we use to implement these things. We are very process-heavy as a country and we could probably comply with EU regulations, or regulations that come from the EU, in a much more effective outcomes-based way if we thought hard about it.
Q126 Baroness Valentine: I need to make two declarations, sorry. I am chair of Heathrow Southern Railway. Fingleton consultancy has done some work on how to do private finance for railway access to Heathrow and my railway is intending to be privately financed.
I bump into a lot of the issues you are talking about. On the lead regulator subject, the Thames Tideway project had a senior reference group, which is a variant of the lead regulator, and it worked extremely well. That is just an observation.
The other thing I need to declare is I am a member of Green Angel Ventures and therefore invest in a lot of green start-up companies, many of which would probably say that Natural England and Defra are not keeping up to date with technology-enabled solutions, which are better and quicker.
Having said all that, my question is: are the right mechanisms or metrics in place to ensure that the Government, Parliament and the public will know if your reviews have had the expected effect?
Dan Corry: It is a very good question. There are two bits to it. One is implementation. Are any of these things happening? Did they happen? The other is what impact they had. On the implementation, it is an advantage that - I am a Non-Executive Director at Defra now so I have a monthly meeting with the team to find out what is going on. That gives some leverage and it also shows that the Secretary of State—a different Secretary of State from the one who commissioned me in the first place—is very keen for this to happen, so that is good.
I have to say, as an ex-civil servant—and this will be true in any organisation—I know that sometimes a Secretary of State will propose a whole lot of things and officials will think, “Do they really mean us to do all of them? If we just go a bit quiet on some of them, they will never remember”. In this case, they will remember because I will remind them. I think that is important. How exactly the department will publicly say how it is all going I do not know. Committees and so on will, I am sure, press it on those things.
In terms of the impact, that is always harder, not least because one is trying to change the whole system. The question for me will be: are they all operating in a more outcomes-focused way? Has user satisfaction got better? Yes, the department is simplifying the guidance and all sorts of things, trying to bring in lead regulators. Something that I have not mentioned yet is that I was very surprised; I thought I would find that environmental regulation was full of drones and satellites and sensors and all sorts of things, digital everywhere. It is not and it should be. That will make a big difference to an awful lot of things we have been talking about, particularly, as I wanted, a lot of data being published so everybody can see what is going on.
I think that you have to do various things like that. The department and the Government have committed to certain outcomes in the revised environmental improvement plan, and they have an outcomes framework. There will be outcomes they can measure. Whether you will be able to say causation—you made all these changes and now it is all going much better— I do not know but it is important that committees like this hold them to account.
John Fingleton: First, we put a date and an owner on each recommendation that we had, and we discussed those with the relevant government departments before we put them in. Secondly, we had asked for an implementation group to be appointed before we reported. That did not happen, but I am still hopeful that an implementation group will be appointed that is independent.
Picking up on the earlier question on independence, I do think that somebody needs to hold the Government to account on this. There are various other organisations running trackers on the recommendations. In the Haddon-Cave review that was done by the Ministry of Defence (MoD) over a decade ago, the implementation group was appointed several months before he reported, and all of the recommendations were implemented. We saw that as a model for implementation.
In terms of how you measure the outcomes, it gives me the opportunity to pick up that I did not properly answer the last question. It is going to be: can we build the Rolls-Royce Small Modular Reactors (SMRs) more quickly and more cheaply than we would have done otherwise, and can we get advanced modular reactors, smaller reactors and maritime reactors up and running in the UK at the same time and at the same scale as other countries are doing? In answer to the previous question, I think the Office for Nuclear Regulation (ONR) is very much aware of the need for that and, in fact, thinking ahead about it. It raised with us the question of maritime regulation and the interaction with the Maritime and Coastguard Agency and how that would all work, because that was another regulatory complication it wanted us to address.
Baroness Valentine: Can I just ask you, Rebecca, how this feels on the receiving end? Are you actually going to deliver what Dan has recommended?
Rebecca Shrubsole: At the moment we have either started or completed about 18 of the 29 recommendations. I would say that that is good progress. There is still more to go. Quite a lot of what we have done has been quite innovative. It has felt quite different—different ways of working, genuinely trying out different approaches. With things like the lead environmental regulator and the earned autonomy work that Dan was talking about, where we put more trust in people, what we want to do is properly evaluate those so that, again, we can be transparent about whether this has actually made a difference and whether the people who have participated have seen the value. Then we can use that to help inform where we are going.
The only other thing I wanted to mention is we have also developed a set of key performance indicators for each of the regulators, which the Secretary of State is holding them to account for delivering. She is having regular performance conversations with them. Again, we would hope to see across their outcomes a lot of improvement based on the recommendations that John and Dan have been making.
Q127 Lord Barber of Ainsdale: To John and Dan, how would you describe the relationship with the regulators, both when you were conducting the reviews and when it came to the responses to your final report and recommendations? Did they see it as an opportunity or, perhaps more defensively, potentially a threat? What was the balance? How did the relationship work?
Dan Corry: I think that it was a bit of both in a way. It was interesting that at least one of the regulators had thought a bit about what was not working, and it saw that it was a great opportunity to try to get some change in the way it wanted. Another of the regulators told me all the problems it had but it had not really thought about the solutions and so on. I think that generally they saw opportunity for change. They could see where the Government were heading, that they were going to put growth much more centre stage and that that meant something for them. It was also an opportunity for them—not surprisingly, perhaps—to talk about the capacity constraints they had, particularly when we talked about things like digital and so on, but also when they talked about the difficulty of recruiting skilled staff and retaining staff and all the rest of it. There were interesting issues about the limits on the Environment Agency, for instance, in being able to flex pay, that it was very much having to follow Civil Service rules, which I did not realise. I did say something about that. It was a bit of a chance to get some stuff off their chest.
I guess they may have been nervous at the time. John has talked about why he did not come forward with any mergers or machinery of government changes, and nor did I. Although I did say if Jon Cunliffe decided to change something about the Environment Agency—which he has and the Government have said they will take a bit of the Environment Agency into the new water regulator—you might want to think again about it. So they were a bit nervous.
Interestingly, one of the other organisations I was not critical of personally but of the role it played was the Office for Environmental Protection. I did feel that the remit it has been given is to check whether people have followed the processes correctly, and we needed to get it to focus more on outcomes. It would probably say that is what it does, but that is not how it felt, certainly, to the regulators.
John Fingleton: I have found it a pleasure to work with the regulators. They were up for change and quite keen on it and raised lots of issues with us. I would give them a nine out of 10 in terms of their willingness to be radical. I think that was because they think nuclear is important and there is a problem, so they were keen that somebody came up with some solutions.
The Chair: Maybe both lots got good reviewers as well. Lord Fuller.
Q128 Lord Fuller: Thank you very much. This is aimed at Rebecca and Dan. As an observation, I have not heard very much mainly spoken in this committee about risk-based approaches to regulation as opposed to the big ones first. I am surprised at that.
My real question is: what observations do you have about conflicts of interest with the regulator? Certainly, in the Environmental Delivery Plans (EDPs) in the Planning and Infrastructure Bill Natural England will simultaneously be the regulator, the designer, the scientific interpreter, the ministerial adviser, the operator, the enforcer and the designer of these schemes. Will that crowd out private sector innovation? To what extent more widely, Natural England aside, are regulators becoming judge, jury and executioner in their own court? Is that a danger? You have spoken about culture and tone being very important, but if no one can touch them, is that leading to bad behaviours—impossible burdens of proof, for example, unmeasurable things, just because they say so? I am sensing there is the drift, and Baroness Valentine alluded—not quite as strongly as what I have just said—to that behavioural problem. They have to get money to sustain themselves—they are trading rather than regulating.
Dan Corry: I can certainly see the theory. All I can say is I was an open house for everyone to moan to me about anything and I did not get that complaint. I got all sorts of complaints but not that one. People were much more concerned about the way that rules were being implemented, the risk aversion, which I think applies when you are a big regulator operating geographically.
That is a real problem in environmental regulation. On the one hand, we want consistency. Sometimes people would say that depending on who the key local person was you would get a different answer, and that was a bit disturbing and difficult. On the other hand, in environmental regulation the right thing to do will be different in a different geographical place because it will have different challenges and so on. You do not want consistency to be so strong that you cannot now have a bit of flex on the fact that in this particular area there is a river here and there is a particular species and here there is not, and so on. The idea that somehow they are unchallengeable, I do not think that was coming through. Maybe it should have; maybe it will in the future.
Lord Fuller: Can you see the drift in that some of these regulators are now trespassing on to operational activities and being traders among themselves? I gave the example of the EDPs. The Health and Safety Executive (HSE), for instance, also charges every time it makes a visit. There is much more focus on income generation to offset the overheads of the organisation and that is a conflict of interest.
Dan Corry: You are talking about cost recovery, really, which is something I did make a recommendation on, that the department should look at cost recovery but slightly that there is not enough cost recovery.
Rebecca Shrubsole: Unless I have misinterpreted it, I do not think the EDP will generate money for Natural England. It will generate money that will be spent on nature recovery by Natural England, if you see what I mean. Its baseline funding will remain coming from the department, but the environmental development plan will be about how we offset the risk of nutrients in this area on a more strategic level. That will be something that a developer can pay into to do some nature work that it would have to pay for in any case, but it will be on a more strategic, wider level than having to do it site by site.
If I am a developer, I can still say, “I do not want to pay into your pot. I want to do the mitigation on this very specific, narrow set of terms”. They don’t have to be part of the EDP, but what the EDP is offering you is a quicker solution to develop nature at a wider level on a wider geography, rather than the site-by-site mitigation, which I think both Dan and John have highlighted as sometimes being a significant difficulty. In some areas that is what is blocking housing developments in particular around nutrients, which is where we will move forward the EDPs first.
The Chair: We are really short of time now. John Fingleton.
John Fingleton: I will skip this one.
The Chair: Thank you. In that case, Baroness Carberry.
Q129 Baroness Carberry of Muswell Hill: Could I briefly take us back to the opening theme, which was about the value of external reviews? You have given us some very valuable insights into how it works. Dan and Rebecca in particular have also talked about the implementation phase. I wonder, Dan, whether you could expand on that a little bit more and say something about the pace of implementation of your recommendations. Rebecca told us that all but two, I think, are being taken forward. It would be interesting to have a sense of the pace but also to know how, Dan, you reflect on those recommendations that are not being taken forward and whether that is a disappointment and whether you feel that that does not do justice to your report, which on the whole was very well received.
Dan Corry: It is an interesting question. Having worked as a civil servant and a Special Adviser, I know that from the outside you think, “Why on earth have they not done them all straight away?” Actually, it is often a bit more difficult than that, sometimes for not very good reasons, like having to get clearance across lots of departments that take ages. Sometimes it is because a Minister’s attention has gone elsewhere and they are dealing with difficult things. In the department there was a change of Secretary of State. I think that Defra is quite used to changes of Secretaries of State. You have a little bit of them getting up to speed and seeing what they think and everything.
I try in the recommendations, and I might be different from some other reviewers, having been involved in that world in the past, the last thing I wanted to do was a review that sounded great, that I would be very proud of, and nothing ever happened. That is a waste of my time, let alone anyone else’s. I was trying to make recommendations—and talking with the team as we were doing them—that there was a very good chance they would get on with pretty quickly and that Ministers would want to get on with. So it is not surprising, I suppose, that they are getting on with it.
I find it a bit difficult to work out. Some of these things you can see, such as trying out the lead regulator. Others—reviewing, as Becky said, some of the guidance—I do not quite know. I think that four or five have been put out. I have no idea at this point whether users have said that is brilliant or they said, “Honestly, all they have done is change the cover” or something. Trying to understand exactly what has happened is difficult. It is also difficult, I think, because there will be some stakeholders—external, some within the department, some in other departments—who do not like some of the proposals. Those are the ones you need to keep an eye on and try to understand what is going on. The Treasury is always very good at slowing things down if it wants to.
It is not a great answer. I do not quite know which are the ones that are not being pursued. I think that they were all accepted so something is happening. Nine were fast-tracked at the time and things are happening on those and I can see that. The others are in the middle somewhere.
The Chair: We have just got time for Lord Teverson. I think that we skipped your question before.
Lord Teverson: Chair, I think we covered flexibility fairly well, to be honest, by my colleague Viscount Trenchard.
Q130 The Chair: In that case, we can finish. I would like to leave you with two questions that you may not have time to answer now. Baroness Drake raised the question of international comparisons. I think that John Fingleton also mentioned that we are not as good as other countries. It would be helpful if you had any information about how we could learn lessons from regulators in other countries that you are familiar with. If you have something readily available, could you send that to us? I think that it would be useful.
My question, which you only have a couple of minutes to answer, I am afraid, is: is all the stuff you have been saying and we have been asking about actually about better regulation and that is it—or are there bits that are specific about improving regulation with a view to growth, which is what our inquiry is looking at? A lot of what you are saying seems to me just about better regulation. I do not know whether you would like to comment or think about it later.
Dan Corry: We may not totally agree on this, but I think that there is something about putting growth in so that regulators are taking account of that when they are making decisions, marginal decisions. This is not that they do not worry about nature or the environment any more but whether on the margin they are thinking about growth. Does that make them think about their processes as well? You could say that it is just good regulation to be much quicker, much more transparent and all the rest of it, but if you are not thinking about growth or at least user satisfaction, then that will not be high enough up your list. I do think that they need to think a bit more about growth. On exactly what the Government should do in terms of saying that, these trade-offs are always being made and I would like growth to be in among those trade-offs and pretty high up.
John Fingleton: Growth is essential to what we are doing in the nuclear review because the cost of nuclear energy in this country is way too high. If we can bring that down, we will bring down the cost of energy for industrial and domestic users and consumers and reduce the cost of living. In fact, it is very difficult to see how we can grow the economy unless we get energy costs down. To the extent that overregulation and bad regulation are keeping those costs high and preventing us from doing things in AI and quantum as well, that is an important issue. Growth is central to it.
I said earlier that it is not the job of the Office for Nuclear Regulation (ONR) to in some sense grow the economy. The job of the ONR is to do nuclear safety so well that the cost is lower and we stay safe. At the moment we are not on that frontier where there is a trade-off. We are well inside it on both environmental and nuclear safety. We can improve nuclear safety standards and reduce cost at the same time. We can improve environmental outcomes and reduce costs at the same time. It requires some imagination.
I have one final observation that links back to a question that I did not address. We are very bad in this country at policy experimentation. One central thing in our report is that the nuclear estate is 6,000 acres, and there is a real opportunity for us to experiment with doing something different. It might be that some of our recommendations, for example, on the habitats directive and other things turn out not to have been as optimistic as we thought, but we would learn from that. At the moment, we seem only to learn inside a very risk-averse frontier. My plea would be that we think about running a series of experiments in different areas of regulation that see whether we can grow the economy better and regulate better at the same time.
The Chair: That is an excellent way to finish our session. I thank you on behalf of the committee not just for the work you did on the reviews and now in implementing them, but for your time and input today. If there are other things that come to mind when you have thought about this afterwards, we have another couple of months, I think, before we write our report so we would be very interested to hear from you any other thoughts. For the moment, thank you all very much.