Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted
There is a risk that over time regulatory divergence (both between the UK and the...
Recommendation
There is a risk that over time regulatory divergence (both between the UK and the EU and between the four nations of the UK) may lead to increased administrative burden and regulatory costs for businesses. All three regulators use fee models, in whole or in part, to fund their work. Both FSA and HSE are in the process of reviewing their fees, and recognising that budgetary pressures, as well as the level of work required, may have an impact on what might need to be charged.52 We are concerned that these costs may have a disproportionate impact on smaller businesses. FSA noted that fees tended to be more bearable for bigger abattoirs and that they offered “more of a discount” for smaller businesses.53 HSE fees for chemicals regulation are charged on an application basis, which will be proportionately larger for smaller companies. It also noted that applications for CBD products were of a lower quality than it was used to receiving, because these companies were “not used to working with a regulator”. These applications were taking longer to validate, presumably increasing burdens and costs for both HSE and the company.54 However, it is worth noting that both FSA and HSE have responsibilities for making sure the Northern Ireland protocol works in practice, and while they felt that changes to the protocol might increase their workload, neither considered that it would have a substantive impact on levels of safety or on the costs of regulation.55 46 Q60 47 Q66 48 Q60 49 Qq 60, 67 50 Q60 51 Q60 52 Qq 45–51 are on fees. 53 Q50 54 Q21 55 Q64 14 Regulating after EU Exit International engagement
Government Response Summary
The FSA has put in place a range of monitoring activities across its regulatory regime to keep track of differences in regulation within the UK and has processes to manage divergence with the EU, engaging with industry stakeholders.
Government Response
Accepted
HM Government
Accepted
5. PAC conclusion: Regulatory divergence between the UK and the EU and within the UK internal market risks increasing costs for businesses, but also offers opportunities depending on the approach taken. 5. PAC recommendation: The regulators should put in place robust monitoring to keep track of regulatory divergence and its implications, particularly for small businesses. FSA Response 5.1 The FSA agrees with the Committee’s recommendation. Recommendation implemented 5.2 The FSA has put in place a range of monitoring activities across its regulatory regime to keep track of differences in regulation within the UK. The FSA also has processes in place to manage different aspects of divergence with EU and more generally internationally, for example, horizon scanning and to try and understand potential changes to legislation at an early stage and mechanisms in place for engaging with industry stakeholders 5.3 For changes within the UK, the FSA considers its approaches on a four-nation basis, working closely with Food Standards Scotland, and using robust scientific evidence to develop policy advice and reach consensus where possible. This supports the effective functioning of the UK internal market. The FSA also consults stakeholders including small businesses as part of risk analysis which ensures businesses have opportunity to communicate concerns and impacts with proposed regulatory changes, which informs the advice we provide. Any advice the FSA provides to ministers on divergence or common approaches will meet requirements set out in the common frameworks.