Downing Street Says » Compensation Culture Speech

» Thursday, May 26, 2005

Compensation Culture Speech

The PMOS previewed the Prime Minister’s speech this afternoon on Compensation Culture. The Prime Minister would call for:

"…a sensible debate about risk in public policy making. In my view, we are in danger of having a wholly disproportionate attitude to the risks we should expect to run as a normal part of life. This is putting pressure on policy-making, not just in Government but in regulatory bodies, on local Government, public services, in Europe and across parts of the private sector – to act to eliminate risk in a way that is out of all proportion to the potential damage. The result is a plethora of rules, guidelines, responses to ‘scandals’ of one nature or another that ends up having utterly perverse consequences."

The Prime Minister would go on to say:

"So what to do? First recognise the problem. Some public discussion of it helps engender a more sensible debate. Instead of the ‘ something must be done’ cry that goes up every time there is a problem or a ‘scandal’, we make it clear we will reflect first and regulate only after reflection. Secondly, start to roll back the tide of regulation in specific areas: here, in Europe, in respect of the regulatory bodies themselves. Third, replace the compensation culture with a common sense culture."

And finally he will say that:

"Sometimes we need to pause for a moment and think whether we will not do more damage with a hasty response than was done by the problem itself. We cannot respond to every accident by trying to guarantee ever more tiny margins of safety. We cannot eliminate risk. We have to live with it, manage it."

Put to him that in the Queens speech the government had saidthere was a problem with public perception of compensation, the PMOS said that specific point would in fact be dealt with in the speech.

Put to him that a lot of the regulations that the Prime Minister was referring to were put in place in the last 8 years, the PMOS said that this was an issue the Prime Minister and his colleagues had been talking about for many years. As the Prime Minister would say, it was the nature of bureaucracies to take a safety first attitude. Equally we had to be wary of the full impact of regulation to make sure that it was not having a completely counter-productive affect.

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