Thursday, August 26, 2004

More on gold plating

You would have thought that Stephen O'Brien’s views on gold plating, after having been so comprehensively demolished by the Today programme would have been quietly removed from the Conservative Party web site.

But no, there are still there in all their glory, including the ridiculous claim about the so-called "abattoir directive".

Since the Conservative Party so obviously still stands by Mr O’Brien’s claims, it is also worth reviewing some of the other examples of "gold plating" that he offered on the site - which actually reproduces O'Brien's press release.

Straight out of his own specific area (O’Brien is the DTI shadow minister), he argues that

examples of the UK's "gold-plating" culture include the section of the 2003 Modernisation Directive dealing with directors' communication which the DTI converted from a four page to a 132 page document.
The "Modernisation Directive" is in fact an interesting choice. It does in fact run to seven pages, dealing with the “modernisation and updating of accounting rules. Its full title is: Directive 2003/51/EC of the European Parliament and of the Council of 18.6.2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings.

As can be seen from this title, it is an amending directive, which actually means that to make direct comparisons between the original length and any new regulations seems a little unfair, as the final length will also depend on the length of the original. However, the core directive 91/674/EEC runs only to 44 pages (Word format - the OJ entry is 25 pages), so the growth to 132 pages of the DTI document does seem more than a little excessive.

I tried this with a couple of colleagues, who took the impression that the DTI did seem to have gone "over the top", both of them assuming that the 132 pages referred to the length of the UK regulations.

However, their assumptions were wrong. The 132-page document is not a set of regulations but a consultation document. Entitled "A Consultation Document: Modernisation of accounting directives/IAS infrastructure", it was published in March 2004, with a consultation period ending in July. Thus, no regulations have yet been promulgated.

Looking at the document, it is in fact 133-pages – but that is a minor quibble. But the actual text is only 40 pages, in large print, setting out the terms of the consultation and, interestingly, drawing readers' attention to the fact that the directive does in fact offer genuine options as to implementation, thus setting out the DTI view and setting out the options on offer. It is hard to see how this could have been done in less than 40 pages.

As for the rest, these comprise annexes, in which the document helpfully reproduces the directive in full, a copy of a relevant Council regulation, details of the companies to which they will apply, and copies of the draft UK regulations. There are several, because different rules apply to different sectors, so the DTI has produced separate sets of regulations, the main set being: "The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004". It runs to ten pages, with 23 pages of schedules, setting out the detailed amendments to previous legislation.

It all, it is very hard to see how the regulations could be any shorter and, as to the document as a whole, with the detail, the lucid explanations of a highly technical subject, and the reprinting of the original EU law, the document could be considered as a model of transparency.

That apart, the main issue is that we are talking about a consultation document. Regulations have not yet been produced. Therefore, by no possible stretch of the imagination can O'Brien's example be considered as gold plating. His point is entirely spurious.

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