Hampton Report: Regulators feel heat of efficiency drive

Gordon Brown's plans to strip away red tape and make the nation's legion of business watchdogs more effective have stunned leading regulators who were caught by surprise at the reforms, detailed in the Treasury-commissioned Hampton Review, published yesterday alongside the Budget.

Gordon Brown's plans to strip away red tape and make the nation's legion of business watchdogs more effective have stunned leading regulators who were caught by surprise at the reforms, detailed in the Treasury-commissioned Hampton Review, published yesterday alongside the Budget.

Some of the country's most senior regulators, including Sir John Vickers, chairman of the Office of Fair Trading (OFT), have already called emergency meetings to try and answer staff concerns about jobs and the likelihood of needing to relocate as some regulatory bodies are merged and others are closed.

The review, produced by Philip Hampton, chairman of J Sainsbury, recommends that the OFT lose its consumer protection operations which would move to a new Consumer and Trading Standards Agency. This will also include bodies such as the National Weights and Measures Laboratory and be responsible for co-ordinating local trading standards officers.

In an e-mail to staff yesterday, Sir John said: "This prospect is news to all of us - Penny [Boyse, executive director] and I heard only last week - and is bound to create uncertainty and anxiety."

Sir John, however, tried to reassure staff by pointing out that any new agency would take several years to establish.

"The Hampton recommendation clearly involves the possibility of very significant change for the OFT. It would however take some time to take effect, and a reasonable estimate is that, if the current Government is returned after the general election, it would take three years or so to get any new agency up and running."

Sir John's reaction reveals the scale of Mr Hampton's proposals. His recommendations have been accepted by the Government and a new Better Regulation Executive will be formed to implement them.

Mr Hampton said: "I think there could be a steep reduction in the cost to business."

A No 10 commissioned report from the Better Regulation Taskforce, headed by David Arculus, chairman of O2, also published its findings yesterday, saying output could rise £16bn if the burden of red tape was cut by a quarter.

Mr Hampton's report found that business regulation employed 61,000 people in organisations that had collective budgets of £4bn.

The review is calling for the burden of enforcement to fall most on highest-risk businesses and least on those with a good compliance record. Penalties should reflect the economic advantage gained by not complying, Mr Hampton said.

In his Budget speech, Mr Brown said: "Adopting, in full - and legislating for - the Hampton Review recommendations ... for consumer and trading standards a single body will take over the responsibilities of the four inspection bodies we inherited in 1997.

"There will now be five inspection bodies for food safety, the countryside, agriculture, animal health and environmental protection - compared with 22 separate bodies in 1997. Five existing agencies will be merged into the Health and Safety Executive.

"The Insolvency Service Agency will take over the responsibilities of the Department of Trade and Industry's Companies Investigation Branch. In total we will reduce 35 agencies to just nine - a reduction of 26."

The biggest single shake-up recommended by Mr Hampton involves 17 countryside related watchdogs, including the Egg Marketing Inspectorate, the National Bee Unit and the Drinking Water Inspectorate, which will be folded into just three bodies.

The Wine Standards Board will become part of the Food Standards Agency while the new Gangmasters Licensing Authority will become part of the Health and Safety Executive.

Mr Hampton's recommendations were welcomed by business yesterday. Sir Digby Jones, director general of the Confederation of British Industry, said: "I applaud the deregulation measures outlined. This must be at the heart of the UK's battle to be competitive."