Product Regulation and Metrology Bill [HL]
Wednesday 4th September 2024
(4 months, 2 weeks ago)
Lords ChamberRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text
Product Regulation and Metrology Bill [HL]
Tuesday 8th October 2024
(3 months, 1 week ago)
Lords ChamberRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Leong (Lab)
My Lords, it is a pleasure to open this debate. Safety and effective regulation lie at the heart of this legislation. Whether you place an online order for a new toaster or your business is investing in a new piece of machinery, you should have confidence that what you are buying is safe. At least 300,000 UK businesses, with an estimated market turnover of £490 billion, are affected by existing regulations, which are a critical element of the UK’s business and consumer landscape. As we embrace the opportunities of the digital age and exciting new technological advances, it is clear that the products we buy and the way we buy them are changing. It is only right that the rules and regulations that keep people safe and enable businesses to trade effectively are updated too.
This Bill will underpin the UK’s position at the forefront of international trade and enable the recognition of EU product requirements where it is in the UK’s interests to do so. It supports consumers, businesses and economic growth. However, we have to be honest with ourselves in saying that current outdated product and metrology regulations hinder more than help these ambitions. That is why it is now essential to update our framework and future-proof it to meet the challenges ahead.
Historically, the majority of the UK’s product regulation and metrology framework was managed through EU law. From EU exit until the present, the UK Government simply did not have the powers to regulate these areas effectively or efficiently, which is why we are bringing forward legislation now, so we can respond to anticipated changes in the global regulatory landscape next year.
The Bill will preserve the UK’s status as a global leader in product regulation, supporting businesses and protecting consumers. It will ensure that the UK is better placed to address modern-day safety issues, harness economic opportunities and ensure a level playing field between the high street and online marketplaces. It will allow the UK to respond to modern challenges, such as the fire risk associated with such products as e-bikes and lithium-ion batteries. Without these powers, we will not be able effectively to contribute to the regulation of such potentially high-risk products. I take a moment to pay tribute to the family of Sofia Duarte, who have been tirelessly advocating for more legislation to better regulate e-bikes, along with the batteries and chargers associated with them, and generally raise awareness of their risks. Sofia sadly died as a result of an e-bike fire on New Year’s Day 2023. This legislation will allow us to take action to help prevent similar such tragedies.
I would also like to mention the work of the noble Lord, Lord Redesdale, in this space. He introduced a Lithium-ion Battery Safety Bill in September, which generated a highly interesting debate. I look forward to continued engagement with him on both Bills. I also acknowledge and thank the noble Lord, Lord Foster, for his tireless work on lithium-ion batteries over these years. There are already strict legal requirements in place whereby manufacturers must ensure that such products are safe before they are sold. This includes ensuring they provide instructions for safe use, including safe charging. However, this is a complex issue and our understanding is developing over time. We need to tailor any regulatory intervention in the most effective way. This Bill will allow us to ensure that the responsibilities of those involved in the supply of products, such as online marketplaces, are made clear.
Online marketplaces already have some legal responsibility, but the Bill will enable the Government to modernise and clarify the responsibilities of online supply chain actors, and any new duties will be in addition to responsibilities they may already have as distributors under the current framework. Without these powers, it will remain far too easy for unscrupulous suppliers to place unsafe products on the UK market through online marketplaces, which also sees them undercut good British businesses. The legislation will enable improvements to compliance and enforcement, reflecting the challenges of modern digital borders. It enables the Government and our regulators to tackle non-compliance and target interventions by allowing greater sharing of data between regulators and market surveillance authorities.
Finally, the Bill will allow us to update the legal metrology framework, which governs the accuracy of weights and measures for purchased goods, to give consumers and business greater confidence in what they are buying. This will allow for technological progress, including in support of net-zero aims—for example, ensuring that energy smart meters are accurate in their readings.
The Government have worked closely with businesses, representatives and consumer groups, which is why organisations as diverse as Which?, the London Fire Brigade, the Association of Manufacturers of Domestic Appliances, Electrical Safety First and the Chartered Trading Standards Institute are all supportive of this legislation.
The Government are bringing forward this legislation as there are insufficient powers to update the existing body of law, either to keep pace with technical developments or to deal with new risks and hazards. Existing legislation recognises EU law as it stood from our date of recognition. Recognising the product rules of key trading partners such as the EU—should we wish to do so—will help to support trade and consumer choice, but current legislation only allows us to recognise EU rules as they currently stand. The Bill ensures we have the ability to end recognition of EU laws where they do not work for our businesses and consumers.
I would like to give a brief overview of the contents of the Bill. While it is relatively short, it deals with some technical matters. It has14 clauses and a schedule. First, it creates new regulation-making powers to allow the Secretary of State to make regulations for prescribed purposes:
“Reducing or mitigating risks presented by products … ensuring that products operate efficiently or effectively … ensuring that products”
used for
“weighing or measuring operate accurately”,
or, when making provision that
“corresponds, or is similar, to … EU law”,
making regulations to reduce or mitigate
“the environmental impact of products”.
The Bill limits the scope of the products we seek to cover to tangible products that are manufactured or result from another method of production, with specific excluded products listed in the schedule.
However, while the Bill will not regulate AI on its own, we need powers in the Bill to cover it when it is integrated into, or as a component of, a physical product. With the expected increase in the inclusion of AI and machine learning in new products, it is likely that we will need to make amendments to regulations in the future to adapt to technological advances that could pose specific risks to consumers, particularly where AI is a component of a product’s safety.
It includes provision to continue recognising EU product requirements, where this is in the UK’s interest, or to end this recognition. The legislation confers an emergency derogation power to allow for the disapplication or modification of product regulatory requirements in certain emergency situations. This is subject to the affirmative procedure and builds on our experience of needing to bring products to market more quickly during the pandemic.
It creates new regulation-making powers to allow the Secretary of State to make regulations on the quantities in which certain goods may be made available in the UK market: for example, maintaining an average system of quantity control for the sale of packaged goods, including food and drink, and providing legal definitions of units of measurement and measurement standards. The Bill will also confer powers to allow tailored enforcement provision to be made in both product and metrology regulation, including the creation of criminal offences and new civil sanctions, including fines.
The Bill contains a power to amend, repeal or revoke provisions of specific primary legislation that deal with product safety and metrology, namely the Consumer Protection Act 1987, the Consumer Rights Act 2015, the Weights and Measures Act 1985 and the Gun Barrel Proof Acts of 1868 to 1978. This allows us to address the outdated governance requirements placed on the Birmingham Proof House. These were designed during the Napoleonic Wars, when there was a thriving Birmingham gun trade. This trade no longer exists. Again, this is subject to the affirmative parliamentary procedure.
The Bill contains powers to make provisions in future for a charging regime that will allow the relevant authority, such as local trading standards, to recover some of the costs attributable to the operation of enforcing the regulatory regime. Finally, it contains powers to allow the Secretary of State to make provisions in regulations permitting or requiring the sharing of information between relevant bodies, the emergency services and other persons who may be specified. This ensures that we have access to the right information in support of our market-surveillance activities and incident management.
Before finishing, I will touch on two key issues that I am sure will be of interest to noble Lords here today. The first relates to delegated powers. This Bill is what is sometimes called a framework Bill, as the vast majority of its provisions are delegated powers. The Government are fully cognisant of the importance of getting the right balance when it comes to delegated powers and using them as sparingly as possible. For technical policy areas, we believe that it is sensible and proportionate to give powers to Ministers to update and amend legislation, future-proofing the ability to respond quickly and flexibly to new technology and evolving innovation. We have minimised the use of the powers in the Bill as much as possible and we have worked closely with the Attorney-General—who, quite rightly, is a stickler for these kinds of things—to find the best approach. So we look forward to the report of the Delegated Powers and Regulatory Reform Committee, which we will carefully consider.
The second issue relates to devolution. In line with the Sewel convention, the UK Government are seeking the consent of each of the devolved legislatures for provisions that engage the legislative consent Motion process. Product safety is reserved, and, in the main, metrology is also reserved, but the Bill powers are UK-wide and subsequently touch on some elements of devolved competences. We are actively engaged with the devolved Governments on these provisions and will continue to work with them on any concerns they may have. We want to see that the broad support for the policy in this Bill is translated into legislative consent from the devolved Governments. I will update noble Lords as the Bill continues its passage.
I end by saying that this Bill will protect consumers and support businesses by ensuring that the UK is better placed to address modern-day safety issues. It will let us harness opportunities that deliver economic growth and will create a level playing field between the high street and online marketplaces by putting in place appropriate responsibilities throughout the supply chain. The result is that consumers can buy with confidence and businesses can trade effectively and compete fairly. Ultimately, it allows the UK to decide how best to protect consumers and support businesses on our own terms. To echo an often-used phrase, this legislation allows us to “take back control”. But, crucially, it allows us to do so in a way that supports our twin-track approach to trade: seeking a closer, more mature trading partnership with the EU and forging new trading relationships with countries around the world, too. I beg to move.
Lord Sandhurst (Con)
My Lords, this Bill gives the Secretary of State wide powers to make product regulations. The detailed content of these regulations—the what and the how—will affect us all, whether we are manufacturers, importers, retailers or consumers. This Bill provides for yet more criminal offences and gives the power to impose civil sanctions for non-compliance. Yet it contains no detail of how all this will be achieved. What will be the limits on ministerial powers? What oversight will Parliament have in respect to the regulators? These are important questions that are as yet unanswered.
These gaps become more serious when it is appreciated that the previous Government instituted a consultation of all interested parties. That consultation closed a year ago, in October 2023. This Government have yet to publish their response. Why? What is the point of consultation if the Government do not publish a response?
As one who has, on many occasions in the past, answered government consultation papers as an interested party, I know the time and effort that go into responding to such things, often on tight timetables. A year has now passed; the previous Government did not publish a response, but they had not introduced legislation. This Government have now had three months; Ministers have had plenty of time to respond and set out their views before bringing forward this Bill. Sceptic that I am, I none the less believe that the Government would not introduce the Bill if they did not have at least some idea of their direction of travel. Yet we are kept wholly in the dark on important matters: what did the respondents have to say?
The Government have seen fit to introduce this Bill, which lacks particularity on all the issues that really matter to those who will have to live and work with it; that is, business, legislators, consumer groups and environmental groups. We all have different interests in the delivery of this legislation and in its practical impact. We will all have different points of view and things to say, yet we are being asked to legislate completely in the dark as to what the respondents to the consultation said in their submissions, and what it is this Government believe are the right answers to their points—answers have come there none.
This is poor way to begin a new Government’s legislative programme. In discussing this Bill, we should proceed today on the basis that the Government have not yet collated firm conclusions they feel could be put in a published response to that consultation—because, if they had, they would surely have published them. The Government would not be keeping us in the dark on purpose, would they?
So I am afraid that we must proceed, in considering this Bill, on the generous basis that the Government do not yet have their own answers to the responses in the consultation—unless, even worse, which I hope is not the case, they are afraid to let us know what their answers are. Are they proceeding, covertly, to ignore very good points made by respondents in the hope that legislators in Parliament will simply miss the point? Whichever it is, this is a shabby and poor way to proceed on a Bill of great practical importance to industry, consumers and the people of this country. What is the rush? We on these Benches accept the need for reform, but this is ill-informed haste and it is discourteous to us in Parliament.
So my first question is: when will we see the Government’s response to this consultation, which closed 12 months ago? Secondly, does such a response exist, at least in draft? Whatever the basis, why are we being asked to legislate without that information? We need to know what respondents have said and what the Government’s views are. Why is that being kept from us? Is it because they are afraid of the answers? Is it because they have yet to decide their direction of travel: that is, what regulations they propose to introduce and what they will address? Is it because they are afraid that, if they do reveal their plans, everyone will be up in arms? Or is it simply the Government’s view that the man in Whitehall knows best and, we—the consumers, manufacturers and legislators—should not trouble our pretty little heads and just do as we are told?
Have the Government formed a view of the landscape? They say that the regulatory regime needs modernisation: surely they must know where we are headed. This is a Henry VIII Bill par excellence, so now we must be told, in much more detail, what direction the Government think we should be taking on the matters of substance and importance that the Bill addresses.
The lack of a response to the consultation is of particular concern because the Bill grants the Secretary of State such wide-ranging powers without full parliamentary scrutiny. The Opposition would like to seek clarity on a number of areas of the Bill. Where necessary, we will probe these in Committee. I will give some examples. On enforcement, Clauses 3 and 4 grant Ministers the power to designate new relevant authorities to ensure compliance with a new body of regulations and to create new criminal offences by regulation. However, the text of the Bill gives us scant detail on what these new offences will be. Who would bring the prosecutions and gather the evidence? How will these enforcement actions be funded? All these questions are not answered in the Bill.
So, too, Clause 5(3), in the context of metrology—this new word for all of us—includes new requirements for business about units of measure. In practical terms, units of measure and how they are defined will be very important, but there is no clarity on how these rules will be tested and assessed to ensure that they are appropriate, in particular for smaller businesses. It is crucial, as the Government seek to deliver on their stated objective to grow the economy, that regulation does not hinder the growth of small and emerging businesses. Nor, indeed, should we allow a level of regulation that would discourage risk-takers and entrepreneurs from setting businesses up in the first place.
I come back to the issue of consultation. Business and all interested parties, consumers and environmental interest groups must be able to make sensible submissions about regulations before they are laid. Consultation will be critical. So I ask, on this framework Bill, as it has been described—I have described it as a Henry VIII Bill—whether the Government will undertake to publish substantive regulations in draft and consult on them before they are laid. That is really important.
These Benches are also concerned that the lack of clarity in these measures will allow Ministers to align with European Union standards without proper parliamentary scrutiny. It is true that much of our trade is with the EU, but there is a strong case to be made for standards that allow British businesses to trade also around the world. Boosting global trade is vital if we, as the Government intend, are to grow the UK economy. So can the Government confirm that no regulations made under the Bill will prevent or impede United Kingdom businesses from trading globally?
In conclusion, this is a poor way to approach legislation: rushing the Bill without responding to the consultation, without us knowing the Government’s view, is inappropriate and discourteous to the many respondents who have put a great deal of thought into their submissions. This is more worrying in the light of the wide-ranging powers to be granted to Ministers without sufficient clarity on what the Government intend. We need clarity from the Government on their real intentions and I hope that the noble Lord the Minister will engage constructively with these concerns and reassure the House of the Government’s aims as the Bill makes progress.
Lord Foster of Bath (LD)
My Lords, I thank the noble Lord the Minister for his helpful opening remarks and make it absolutely clear that we on these Benches broadly welcome the Bill and very strongly support its aims. However, the Minister did point out that it is a framework Bill and, echoing the remarks of the noble Lord, Lord Sandhurst, we are acutely aware that none of the statutory instruments is before us: the secondary legislation is to follow. As he also pointed out, neither do we have details of the responses to the previous Government’s consultation—so it is somewhat difficult to know whether the Bill will achieve those aims.
In a sense echoing the question asked by the noble Lord, Lord Sandhurst, can the Minister give us a categorial assurance that at least the key draft statutory instruments will be available to your Lordships as soon as possible, and certainly before Third Reading? The devil will be in the detail. We need to be assured that no loopholes remain and that the secondary legislation is robust enough to address the wide-ranging risks associated with product safety and online marketplaces. He will be well aware that we are unable to amend statutory instruments, so we clearly need those assurances before we can give the Bill a Third Reading.
My noble friend Lord Fox will also want to probe how the Bill will relate to the changes to product safety that the EU intends to introduce in December, and how the Bill will take into consideration the United Kingdom Internal Market Act. He and, no doubt, many others will also want to probe the impact of the Bill on the devolved Administrations—an issue the Minister touched on—in respect of common frame- works, the internal market and the Windsor Framework, for example. The Scottish Parliament and the Welsh Assembly have already raised concerns in this regard.
The noble Lord, Lord Sandhurst, rather suggested that there was no rush for the Bill. I will raise address two issues on which I genuinely disagree with him and believe that urgent action is needed: online marketplaces and lithium-ion batteries.
The Minister has made it clear that the Bill is intended to provide a level playing field between online marketplaces and the high street. This is welcome and long overdue. I have raised the concern in your Lordships’ House on several occasions that, for too long, unsafe products, especially electrical products, have been freely available on online marketplaces. A lack of adequate regulation and poor enforcement has created a “Wild West Web” teeming with rogue traders. We even have the ludicrous situation where items recalled by manufacturers, often because of safety concerns, can still be purchased online.
The charity Electrical Safety First has long campaigned on the dangers associated with unsafe electrical products sold on online marketplaces. One of its investigations found that 93% of sampled electrical products were non-compliant or unsafe. That is not an outlier: the British Toy and Hobby Association found that 86% of sampled toys tested from popular online marketplaces were illegal.
It is really welcome that one of the aims of the Bill is to remedy this critical safety loophole. However, as I said earlier, we need assurances from the Government that any secondary legislation will confront and tackle the full scale of this issue.
I am sure the Minister is well aware that a number of organisations such as the British Toy and Hobby Association, the Chartered Trading Standards Institute, Electrical Safety First and Which? have identified three key areas necessary to strengthen the Bill in this regard. There needs, they argue, to be a clear and enforceable duty on online marketplaces, and an extension of liability to the online marketplace for unsafe or defective products sold on their platforms. They argue—and I strongly agree—that the key terms in the Bill must be more clearly defined, and that the definitions of “an online marketplace” and “product” are far too narrowly defined. Thirdly, they argue—again, I strongly agree—that consumer protection should have an underlying primacy in the development of new regulations. I look forward to hearing the Minister’s views on these three points.
The Bill also intends to address another issue in which I have been involved for some time: the safety of lithium-ion batteries, which was addressed so well in my noble friend Lord Redesdale’s Private Member’s Bill. I thank the Minister for his kind remarks about the work I have been doing on this issue. I hope that, very soon, if we can get this Bill through, it can be taken off my to-do list.
I recognise that lithium-ion batteries are increasingly important for the development of our economy: they store more energy than any other type of battery, allowing for longer use. But, if over-heated through incorrect manufacture, misuse, damage or using sub-standard chargers, they can create fierce fires of over 600 degrees centigrade, which are very difficult to extinguish—for example, you cannot use water on them —and release toxic gases.
I have on many occasions provided details of the number of fires caused by such batteries and the damage to property and the tragic loss of life caused by those fires. For instance, the London Fire Brigade attends a fire involving an e-bike or e-scooter once every two days. It is now London’s fastest-growing fire risk. This trend is being repeated right across the country, to the point where many local transport bodies now ban them. It is interesting that Chiltern Railways, for instance, has posters everywhere stating,
“NO e-scooters allowed on trains or stations”,
and then, in big letters,
“Lithium batteries are a fire risk”.
Incorrectly used, they certainly are. Indeed, even the very small lithium-ion batteries, such as those found in vapes, can cause fire and destruction as they enter the waste stream: 84 million disposable vapes are thrown away every single year. Zurich insurers found that the incorrect disposal of vapes led to nearly 250 fires in the last year, an increase of nearly 120% since 2022.
While the majority of lithium-ion batteries are safe, made by reputable retailers already testing their batteries to the relevant safety standards, the lack of third-party safety certification for e-bike and e-scooter batteries, for example, means there is no way of knowing that all the batteries in these products are safe.
The Bill is clear that a product presents a risk if it could, under foreseeable conditions or intended use, endanger health or safety or damage property. Given the statistics, I was very pleased to hear the Minister say in his opening remarks that he believes that lithium-ion batteries should be classified as high risk. That is the first time that has been placed on the record. I hope he will go further and agree with Electrical Safety First, which has argued that there must be third-party safety certification for every battery used in an e-bike or e-scooter before it is placed on the UK market. I hope he agrees that the same should apply to bicycle conversion kits and battery chargers.
There is huge support for that measure from many bodies, including the National Fire Chiefs Council and over 500 local councils right across the country. But there is one omission from the Bill which my noble friend Lord Redesdale’s Bill has sensibly picked up: the disposal of lithium-ion batteries. The safety of products applies to their entire lifetime, from manufacture to disposal. As evidenced by the vape fires in the refuse stream, which I mentioned earlier, action is needed. Can the Minister explain why the safe disposal of lithium-ion batteries has been omitted from the Bill and tell us what can now be done about it?
Finally, I raise the issue of enforcement. Changing regulations to improve safety will have the desired effect only if there is effective enforcement of them. The Minister knows only too well that trading standards officers will play a key role in this, yet in the 10 years to 2020, the number of trading standards officers in local councils declined by between 30% and 50%. Continuing budget cuts, an ageing workforce and, frankly, increased workloads caused by Brexit mean that the situation is getting worse. Can the Minister explain what plans the Government have to halt and then reverse this decline? Without action on improving enforcement, the good intentions of the Bill will not be realised.
As I said at the beginning, we support the Bill, but we are concerned that, without sight of the draft statutory instruments, we have little opportunity to discuss, scrutinise and, crucially, seek to amend the mechanisms by which the Bill will achieve its ends. I hope therefore that, in his response, the Minister will start the debate that we need by giving detailed answers to the questions, including mine, that will be raised today. I look forward to hearing from him about them.
I also look forward to hearing the maiden speech from the noble Baroness, Lady Winterton.
Lord Russell of Liverpool (CB)
My Lords, I echo the comments of the noble Lord, Lord Foster, in thanking the Minister for the way that he introduced the Bill. I welcome the Bill, principally because it gives Parliament an opportunity to mitigate some of the problems—or, if I am being charitable, some of the unforeseen consequences—resulting from our withdrawal from the EU. As I was listening to the noble Lord, Lord Sandhurst, castigating the Government for introducing a skeleton Bill with Henry VIII powers, I ruminated, as a Cross-Bencher, how much the late, much lamented, Lord Judge, would have enjoyed hearing that—pot calling the kettle black comes to mind, or, if Mandy Rice-Davies had been one of Henry VIII’s wives, she probably would have said, “He would say that, wouldn’t he?” I should also mention that, as a member of the Secondary Legislation Scrutiny Committee, I have skin in the game, as they say.
The Bill will guide the future regulation of standards for thousands of products. Consistency of standards across key markets helps give businesses certainty about the quality requirements they must be able to meet to be able to sell their products in target markets. I suggest that one way to provide this certainty might be to consider a formal commitment to dynamic alignment, in the same way that Switzerland, the countries within the European Economic Area and, to a limited extent today, the UK have mechanisms to ensure that regulations with the EU are aligned and continuously updated.
The UK abided by the “CE” European conformity marking system until our exit from the EU. The 2019 EU withdrawal Act created a UK-only system, using the new UK conformity assessment marking “UKCA”, introduced on 1 January 2021, which it required all UK businesses to adopt by 31 December this year—not very far away. The response from businesses has been lukewarm or rather negative. In May this year, after repeatedly extending the UKCA transition deadline, the UK Government acknowledged its impracticality and extended the recognition of many CE goods in GB markets indefinitely; covering 21 regulations across products that are estimated to save UK businesses £640.5 million in net savings from not having to manage two standards regimes.
The powers contained in the Bill allow Ministers to decide whether to recognise or end recognition of EU requirements. In practice, this would have to be decided on a case-by-case basis, either aligning them or ending that requirement, without needing any additional primary legislation. This will help with the smoother management of the somewhat contentious Windsor protocol for Northern Ireland. It also requires Ministers to have regard to the social, environmental and economic input before any decision.
In paragraph 4, in the third bullet point, the Explanatory Notes state that:
“The Bill aims to support economic growth, provide regulatory stability and deliver more protection for consumers by … ensuring that the law can be updated to allow a means of recognising new or updated EU product requirements, with the intention of preventing additional costs for businesses and provide regulatory stability”.
As I read this, it is the Government’s intention that the Bill will allow the UK to align itself to EU standards in circumstances where they judge it sensible to do so. Working with others across the House, I will lay amendments in Committee to probe whether there is a case for the Government to commit formally to a policy of dynamic alignment; to clarify how best to measure and assess the costs or benefits of alignment; and to set out a process of parliamentary scrutiny and accountability when a Minister determines that divergence is in the best interests of the UK. The intention is simple: to place the delivery of consistent regulatory standards beyond the reach of short-term thinking and to ensure the restoration of long-term stability in regulation, to the benefit of British consumers and British businesses.
I finish by wishing the noble Baroness, Lady Winterton, well. We met on the staircase that we share going to our joint offices. I have already wished her well once, and I now do so for a second time.
Baroness Winterton of Doncaster (Lab) (Maiden Speech)
My Lords, it is an honour to make my maiden speech in today’s debate and to follow the detailed, witty and informed contribution of the noble Lord, Lord Russell of Liverpool. First, let me thank noble Lords from all sides of the House for the very warm welcome I have been given since my introduction. I thank also Black Rod, Garter, the clerks, the doorkeepers, the police and staff of the House who made that day so memorable for me, for my family and for my friends.
I am so grateful to my noble and learned friend Lord Falconer of Thoroton and my noble friend Lady Smith of Basildon for being my supporters. We go back a long way, to when I was head of Lord Prescott’s office when he was deputy leader of the Labour Party, and we all three came into Parliament together in 1997. My supporters have always been good friends, always give good advice and, very importantly, are always good fun.
I was rather nervous about the introductory ceremony, but my supporters calmly assured me that nothing could possibly go wrong. In fact, all seemed to pass without incident, but I have more than a suspicion that if I had tripped over my robe, fallen flat on my face and fluffed my words, your Lordships would have smiled benignly and told me afterwards that never had a ceremony of introduction gone so smoothly.
In preparing for today, I looked back at the maiden speech of the late Lord Walker of Doncaster 24 years ago. As a strong trade unionist, he spoke passionately about industrial relations, and I know that he would have been pleased about the current Government’s focus on workplace rights. It was a tremendous honour to follow Harold and to represent the people of Doncaster for 27 years as their Member of Parliament. I hope that I can be as helpful to my successor, the brilliant Sally Jameson, as Harold was to me.
Doncaster was where I grew up and where my father was headmaster at Armthorpe comprehensive and my mother was the head of the nursery at the Park school. Such is the power and influence of teachers that, when I would visit the miners’ social clubs in Armthorpe, even though my father had ceased to be headmaster 30 years before, they would not say, “That’s Rosie Winterton, our MP”, they would say, “You see that lass, that’s Rosie Winterton, Mr Winterton’s daughter.”
My first ministerial appointment was in the Lord Chancellor’s department, headed by my noble and learned friend Lord Irvine of Lairg. My last one was in the Business Department, run by my noble friend Lord Mandelson. Both were Secretaries of State from this House and both were formidable operators. They had a clear idea of what they wanted to do, led their Ministers and officials, and persuaded their colleagues.
In between, I served in a number of departments including Health, Transport, DWP and Local Government. A key lesson for me from my time in government, especially as Minister for Yorkshire and the Humber, is that the key to achieving economic growth and closing regional disparities in wealth and economic development is devolving power and decision-making to regional and local levels. I believe the same principles of devolution will be necessary to get the NHS back on its feet.
I went on to become Opposition Chief Whip. The noble Lord, Lord McLoughlin, was the Government Chief Whip at the time, and I benefited greatly from his guidance and good humour in our usual channels exchanges—I thank him for that. In fact, there are so many ex-Chief Whips in this House that surely there must be an exclusive club of them. If there is, I am waiting anxiously for an invitation to join the ex-Chiefs club, not least because it might be therapeutic for recovering Chief Whips.
After being Chief Whip I served on the Council of Europe, along with my noble friend Lord Foulkes, and was a Deputy Speaker of the other place from 2017 until the general election in July. During that time, I came to appreciate the high regard in which our Parliament—the mother of parliaments—is held in the world, and how important it is for us to be passionate advocates of our democracy. I am deeply disturbed by the lack of voter participation in local and general elections. I hope a focus of this current Parliament will be on how we can bring home to people the impact on their lives of the decisions taken by politicians at national and local level, and impress on them how important it is to use their vote—so crucial in a world where so many are deprived of their democratic rights.
What has become very apparent to me during the time I have spent listening to the debates in this House is the high level of expertise here, and the detailed and rigorous scrutiny of legislation undertaken. It is with some trepidation, therefore, that I admit that I am not the world’s expert on product regulation and metrology, but I am quietly confident that by the end of this debate, having listened to your Lordships, and with the guidance of my good friend the Minister, the noble Lord, Lord Leong, I will be far better acquainted with the finer details of the subject in hand.
What I do know is that this is an important and very necessary Bill that updates the existing body of law. As consumers, the public need to know that the Government will play their part, through legislation, to protect them. Product safety is not something we give enough thought to these days. We take for granted that the things we buy are safe, but as technology develops rapidly and the products we buy are invented and updated with increasing frequency, it is important that we know what we are getting. In a world of ever-increasing online shopping, it is vital that consumers are not hoodwinked by false claims or put in any danger by unsafe products. We certainly need to know, as others have said, that our e-bike, mobile phone or tablet is not going to catch fire, with all the tragic consequences that can follow.
It is the job of government to horizon-scan technological changes and ensure that protections are in place because, as always, it will be the most vulnerable in our society who will become victims if the Government do not act to curb the predators. That is why I welcome the Bill and, in closing, thank your Lordships once again for the warm welcome I have been given.
Baroness Crawley (Lab)
My Lords, it is an absolute delight to follow the maiden speech of my noble friend Lady Winterton of Doncaster, who has just demonstrated what an astute, feisty, gifted and yet totally grounded parliamentarian she is. I have known my noble friend Rosie for many years, for more years than she and I would wish to recall. She has always stood out as a true champion of the people, an authentic voice in British politics.
My noble friend has held many senior offices in government, and she referred to some of them. It is a long list so brace yourselves, my Lords: from the Lord Chancellor’s Department through Minister of State for Health Services, Minister of State for Transport, Minister for Yorkshire and the Humber, Minister of State for Pensions through to Business and Local Government. She was rightly made a dame in the New Year Honours List in 2016, and we all know that there is nothing like a dame. My noble friend Lady Winterton also spent many years as Labour’s Chief Whip in the Commons. She has indeed been there, done that, got the T-shirt. She was a wonderful Deputy Speaker in the Commons, combining being a stickler for the rules with being the epitome of calm and persuasion, especially with the awkward squad—a talent in anybody’s language—and all this while wearing the highest heels on the planet.
My noble friend chose this Second Reading to make her maiden speech because it is about the everyday concerns and safety of people and businesses up and down the country. That is, and always has been, her politics. I look forward to hearing much more from her in this Chamber, as I am sure we all do.
I welcome this landmark framework Bill, as does the Chartered Trading Standards Institute in coalition with the British Toy & Hobby Association, Electrical Safety First and Which?. As Which? has said, this Government are prioritising legislation that addresses a growing gap in consumer protections. The coalition also has concerns about the Bill, which the noble Lord, Lord Foster of Bath, has referred to, and which will no doubt be addressed in the passage of the Bill.
The online marketplace in particular is not protecting consumers today and leaves them open to illegal, unsafe and, indeed, very harmful products, with few repercussions at present for those perpetrating these violations and finding gaps in the law. It is also so damaging to the very many good businesses that trade online in safe and legal products. There has been no real domestic reform to product safety regulation since our exit from the EU. The previous Government extended recognition of EU requirements, which had been due to fall away at the end of this year, but did not prioritise what comes next, either in general terms or in relation to the specific known issues, such as unsafe batteries in e-bikes and scooters, counterfeit electrical goods on online marketplaces, children’s toys, smoke and carbon monoxide alarms—on and on goes the unsafe products list. Although the powers in this Bill will not solve all these issues, they should allow us to make progress in a number of areas.
Some may see this Bill as EU alignment through the backdoor. I disagree. As I see it, the Bill will allow the UK to align with the EU when it makes sense to do so but also give us flexibility not to if, as a country, we want even stronger safety standards. Given the unique position of Northern Ireland in the post-Brexit trading landscape under the Windsor agreement, perhaps my noble friend the Minister could set out how the Bill’s provisions affect Northern Ireland.
I welcome the provisions on information sharing, which are designed to make it easier for public authorities such as trading standards and the emergency services to alert each other on cases they are working on across the country. The Bill’s enforcement aspects are also welcome but must be looked at in the context of very limited local authority resources—I speak as a vice-president of the Chartered Trading Standards Institute.
We have all been lobbied on concerns over the Bill’s metrology regulations, in that they focus on units of measurement and quantities of goods but are limited in scope. For some, the Bill does not grant sufficient authority to test and verify the equipment used for measurements. Perhaps my noble friend could write to me about this, as accuracy is key here.
The coalition of product safety organisations I referred to earlier wants the Bill to safeguard consumers through clear and enforceable duties on online marketplaces, clearly defined definitions of new terms, putting consumer safety on the face of the Bill, and more effective scrutiny processes.
The Regulatory Policy Committee has scrutinised the impact assessment published alongside the Bill and decided that it provides
“sufficient evidence of the problem under consideration and a strong argument for intervention”.
However, it suggests that the Bill’s impact assessment
“could be improved by including further detail of the impacts expected from the related secondary legislation”.
Will my noble friend the Minister comment on that part of the RPC’s opinion?
As I understand it, the Government want the Bill to tackle modern safety issues for consumers, grasp opportunities to deliver much-needed economic growth and offer a much improved level playing field to businesses. I am sure many of us would support those aims, and I wish the Bill well.
Lord Frost (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Crawley, and a particular pleasure to hear the maiden speech of the noble Baroness, Lady Winterton. She has a distinguished career in government and in the service of her party. I am sure we all look forward to hearing her future contributions to your Lordships’ House.
I read the Product Regulation and Metrology Bill with great interest when it was published earlier this summer, and with not a little surprise because it was not foreshadowed in the manifesto of the party opposite. The Minister sought to present the Bill as a technical one, to downplay concerns and to suggest that there is nothing to see here. I agree, of course, that there are technical elements in the Bill, but the technical in this area is often highly political and there is a long history, I am afraid, from those involved in managing the relationship with the EU of obfuscation and lack of clarity about the obligations that are really being undertaken, so it is right that we look under the surface of what the Bill implies.
My basic concern is that the Bill goes further than a purely technical Bill really needs to. It goes further because part of the motivation behind it is indeed to revive a process of alignment of goods with EU single market laws. That is not just my interpretation; it is said in the quite frank briefing prepared for the King’s Speech before the summer break. I will refer to that from time to time. The core of the case for the Bill is that the Government need to be able to regulate new products and continue to give status to the CE marking in the UK. I agree with that in principle, but I do not think that aim requires this Bill in this form. I want to explain why and what my concerns are.
I accept that the Government need a power to regulate in this area. Of course, the Government always have that power. I think the Minister said that the UK simply did not have the powers. With the greatest respect, that is not correct. This Parliament has the powers to do anything it wishes. Of course, it has to do it by primary legislation if there is no other route, and in some areas it will probably be better so done, especially for genuinely new products breaking genuinely new ground. But let us accept that a regulatory power is needed.
The current power to update regulations and recognise the CE marking is the retained EU law Act, which we debated with such pain about a year ago. In fact, that power has been used very recently in the Product Safety and Metrology (Amendment) Regulations 2024, which came into force just a few days ago. Therefore, my first question to the Minister is: can he explain why it is not possible simply to extend the deadlines that do expire for those powers in the retained EU law Act? Why can they simply not be extended, and we proceed as we have done in the last year or so?
I think I know the answer to that: the Government want to do more than that. Specifically, I suspect they want a new set of provisions enabling dynamic alignment with EU law. As the briefing for the King’s Speech said, it will
“enable us to make the sovereign choice to mirror or diverge from updated EU rules”—
that is, to create a power to make sure that our law can automatically follow changes in EU law. Indeed, that is what we find in Clause 2(7):
“Product regulations may provide that a product requirement is to be treated as met if … a requirement of relevant EU law specified in product regulations is met”.
In other words, this is a power to reimport EU law concepts back into our system. It allows UK product standards to be described not in UK law terms but simply by a cross-reference to EU law. When that EU law changes, so ours will change. So my second question to the Minister is: can he confirm or deny that the intention is indeed to make simple cross-references to EU law in that way? Does he agree that such cross-references amount to dynamic alignment with EU law?
Similarly, Clause 1(2) enables the Secretary of State, by regulations, to make provision
“which corresponds, or is similar, to a provision of relevant EU law for the purpose of reducing or mitigating the environmental impact of products”.
Again, it is not clear exactly why this separate provision is needed, but EU rules on traceability are certainly increasingly complex and intrusive.
Lord Falconer of Thoroton (Lab)
Is it the noble Lord’s case that the Government should be prevented in any case from having the same regulations as the EU?
Lord Frost (Con)
I will come on to that. I am trying to get clarity about the purpose of this Bill and why it needs to go further than the powers we already have.
My third question is: can the Minister explain the purpose of the separate provision in Clause 1(2) and the situation it is designed to deal with? I will table amendments to this and other clauses.
Why are any of these provisions necessary beyond simple administrative convenience? The answer is that this Bill is entirely in tune with the lack of clarity that so often surrounded the detail of our relationship with the EU. It is simply the beginning of a path on which, without voters noticing—this is my point: we need clarity—we slip back, closer to single market-like trade arrangements.
Obviously, it is already true that, if a British company wants to export to the EU, its products must comply with EU law. What these provisions would do over time is require producers covered by them to produce in the UK, for the UK, to those EU standards, and make those EU standards the only legal standards on the British market, even when they are not good standards, or are complex or costly. This set-up is a core element of the way the single market works.
Simply mirroring those EU laws does not itself improve trade with the EU. There will still be customs and regulatory paperwork in those circumstances. The only way of eliminating that is to satisfy the EU authorities that our laws are in fact the same as theirs, and I suggest that they are very unlikely to be satisfied without the usual panoply of Commission and court enforcement—subordination once again to the EU authorities. After all, what other way is there for the EU to decide whether our laws genuinely mirror its laws, or to settle any disputes arising?
My further question to the Minister is this. Can he explain how he sees these clauses working in practice? What actual trade frictions does he see being removed as a result of using them? Will he give a commitment that, in conformity with Labour’s policy not to rejoin the single market, the Government will not agree to subordination to EU law or EU-style enforcement?
The Bill also constitutes another step—and this is rather unfortunate—in using the Northern Ireland arrangements to keep this whole country in line with EU rules in certain areas, as we had always feared. Once the previous Government had given up trying to dismantle or override the Northern Ireland protocol and instead agreed to support and enshrine it as the Windsor Framework, something like this Bill became extremely probable. The previous Government were at least discreet in discouraging officials from proposing reforms to goods standards for fear of complicating the Windsor Framework arrangements. The new Government are quite open about it. Their own briefing prepared for the King’s Speech says:
“EU changes to product regulation only apply in Northern Ireland, resulting in divergence within the UK internal market as EU laws are updated. This Bill gives the Government specific powers to make changes to GB legislation to manage divergence and take a UK-wide approach”.
The aim is absolutely explicit. So as we always feared, the Windsor Framework is being used as a tool to inhibit reform and change within GB—not that I think this Government plan to do much of that anyway—and to keep this country in the tractor beam pull of EU laws and rules without having any say in them. Does the Minister agree with his own briefing?
Baroness Ritchie of Downpatrick (Lab)
Would the noble Lord, Lord Frost, not accept that the Windsor Framework was a necessary instrument to ensure that trade could flow easily on the island of Ireland and to prevent a border being recreated there that would have been an encumbrance to trade, society, the economy and business development?
Lord Frost (Con)
The noble Baroness is probably familiar with my view on the subject: I do not agree with that. I think that it would have been much preferable to proceed with the Northern Ireland Protocol Bill that was then proceeded with in 2022, but that is really not to the point now. We have the situation that we have, and the effect of the Windsor Framework, whatever view one takes of it, is to create a massive incentive to push for GB rules to be kept in sync with those of the EU and in Northern Ireland. That is one of the effects that I think this Bill will create.
To finish up, I have a couple of technical questions. The internal market Act has already been raised.
Lord Falconer of Thoroton (Lab)
The noble Lord led me to believe by the way he answered my question that he would tell us whether he took the view that the Bill should positively prevent alignment in any area. Is he willing to answer the question now?
Lord Frost (Con)
I have not finished my remarks yet. Under the internal market Act, goods that are legally on sale in Northern Ireland—those meeting EU standards—may be sold anywhere in the UK already. That is one of the provisions of that Act. One might wonder about the point of this panoply of rules when we already have the internal market Act. It would seem unnecessary, unless perhaps the Government are concerned that the Windsor Framework might require them to bring in elements of Northern Ireland to Great Britain’s border at some point. Again, I wonder whether the Minister could answer that question.
The Government clearly want to go down this road because, whatever they say now, they want to make eventually rejoining the single market and customs union easier. I know from reactions to what I have been saying that many noble Lords regard this direction of travel as a good thing; they doubt this country’s ability to prosper as an independent country with its own rules and laws. I am afraid there is nothing to be done about those who have that opinion. To others who want this country to be a global trader, but without necessarily having our own rules for every single area, I say there is an alternative. It is one more consistent with our global aspirations and membership of the CPTPP, which the Government want to support.
The alternative is to make this country open to the best standards globally—that is my answer to the question that has been raised a couple of times—and to recognise that any goods produced in high-standard, well-regulated economies, such as the US, Canada, Australia, Japan and the EU, would be safe to put on our market. I accept not just the CE standard but similar conformity and standards from other developed economies, and where necessary we can develop our own. This is not just a fantasy; it is what the MHRA is already doing with its new international recognition procedure for medical products. Can the Minister explain why it is not possible to proceed in this way instead?
My speech has been quite long and I will wind up now, but there are important points about the purpose of this Bill that will shape the statutory instruments that will come before us at some point that need to be properly understood. We will put forward amendments in Committee to test the thinking behind some of these provisions and their purpose, and to perhaps reshape some of the more unsatisfactory elements of this Bill. To conclude, I have deep concern about the direction of travel and the direction in which this will take our regulatory framework. I look forward to hearing the Minister’s answers to my questions.
Lord Lansley (Con)
My Lords, this has proven to be a more engaging debate on the subject of product regulation than I had anticipated, principally due to the pleasure of hearing the speech from the noble Baroness, Lady Winterton of Doncaster. We both arrived in the other place in 1997—there were a few of us, and rather more on her Benches. I left before she did, but all through that period it was a very great pleasure to work with the noble Baroness. I look forward to working with her in this place and I much enjoyed her maiden speech.
I am also pleased to follow my noble friend Lord Frost. As I will come on to explain, the purpose of my speech is not necessarily to embrace his argument entirely but rather to embrace his solution. I do not need to ascribe to the Government any ulterior motive about alignment with EU regulation, and I happen not to agree with the noble Lord, Lord Russell, that we should aim for dynamic alignment. Much as I would have wished that we were still members of the European Union and all that flows from that, that is not the point. The point is that we are where we are. From my point of view, the worst outcome is if we become essentially rule-takers rather than rule-makers. The risk is that, through dynamic alignment, that is exactly what would happen; that alignment would contribute to the problem.
I know that a number of noble Lords here today took part in the debate on the Product Safety and Metrology etc. (Amendment) Regulations, just before the Dissolution in July. Quite rightly, concerns were expressed about the loss of capability in the standards-making and regulatory processes in this country as a consequence of the continuing extension of the CE marking on the part of the European Union.
This legislation is necessary. Many in industry welcomed the 21 product sectors having the CE marking extended to them, but they said we were getting closer to the point where there will be a divergence between the CE marking and the UKCA marking. At that point, what do we do? Do we allow two different products to be marketed inside the United Kingdom while arguing to consumers that they are equally safe and effective? I do not think that is a tenable long- term solution, so we must have—as I think my noble friend Lord Frost admitted—more powers, which are in this Bill.
I will not talk on some of the many other interesting subjects that I look forward to our discussing in Committee, but I do want to look at the serious question of how we support and maintain the capability in product regulation, in which the noble Lord, Lord Leong, in his admirable opening to our debate, said we are a world leader. We want to remain a world leader in product regulation, so how are we to do that? Many in industry would say, “Let’s carry on with CE markings for ever and, as they change, just accept them”. I am afraid that is not the solution. I add in parentheses that the Bill’s scope does not extend to medical devices, but the same issues arise in relation to them. Although I endorse the solution in relation to medical devices, we still do not yet get the answer we are looking for; we still run the risk that we recognise other people’s product regulation but do not sustain our own.
Where should we go to? We need to escape from this outcome, and now is the time for us to adopt a much-strengthened policy in relation to our work in international standards. If our regulations and those of the European Union, and indeed the regulations of other countries, are based on international standards, we can reduce regulatory compliance costs and remove technical barriers to trade. Now is the time for this country to lead in an accelerated push for the development and adoption of international standards as the basis of product regulation.
As my noble friend referred to earlier, I think we are to accede to the CPTPP by 15 December. Article 8.5 of that treaty says:
“The Parties recognise the important role that international standards, guides and recommendations can play in supporting greater regulatory alignment, good regulatory practice and reducing unnecessary barriers to trade”.
Article 8.9 says that
“greater alignment of national standards with relevant international standards”
should be pursued,
“except where inappropriate or ineffective”.
It calls for the parties to the CPTPP to
“strengthen their exchange and collaboration … to support greater regulatory alignment”,
which is absolutely right. Very interestingly, in its February 2022 strategy on standardisation, the European Union said:
“Traditionally, the EU has been a strong leader in international standardisation activities but”—
this is interesting—
“needs to take account of a changed geopolitical situation, as other countries start to approach international standardisation more strategically and gain influence”
in its committees. This is a relatively recent acknowledgement by the European Union—in this case, the European Commission—that its policy of making standards in Europe and then handing them to the rest of the world is not going to be sustainable indefinitely; I think it is right about that. Indeed, Mario Draghi, in his recent report on the competitiveness of the European Union, identified the value of international standards in promoting regulatory harmonisation and reducing trade friction. He sought European Union action to lead in framing international standards.
Article 92.1 of the trade and co-operation agreement refers to the use of
“international standards as a basis for the standards”
that each of the parties develop, so we do not need to change the mandate or renegotiate the trade and co-operation agreement; we need to use that agreement. That is where the negotiations with the European Commission should be aimed: at maximising the implementation of the trade and co-operation agreement.
We know that we all use international standards, some to a greater extent than others. We all agree that we should use international standards more in the future, but that fact is not stated anywhere in the Bill. Could it be? Like other noble Lords, I participated in the debates on the Medicines and Medical Devices Act 2021. Section 16(2) of that Act, referring to how to meet product regulation requirements, says that provision
“may … identify relevant requirements by reference to international agreements or standards relating to the marketing or supply of medical devices”.
So where medical devices are concerned, we have statutory backing for a process of recognising international standards as the basis for our own product regulation requirements. I want to see this Bill incorporate the potential for international standards to meet the requirements for product regulation across a broader range of products—not just medical devices, but taking them into the scope of this Bill—and the very wide range of industrial products that are covered. I also hope that in the course of the discussion on the Bill we will give statutory backing to a lead by the United Kingdom to accelerate the development of international standards to be the basis of greater regulatory alignment with our leading trading partners, including our existing agreements both in the CPTPP and the trade and co-operation agreement.
Baroness Brinton (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Lansley, and I am glad he started referring to international products. Given the earlier contribution by the noble Lord, Lord Frost, I am reminded of this House’s scrutiny of the Biocidal Products (Health and Safety) (Amendment) Regulations 2022. The noble Baroness, Lady Stedman-Scott, told the Grand Committee that there was a huge backlog in processing chemical standards given that we lost access to the EU chemical standards database. As a result, the Health and Safety Executive’s chemicals division had to have its budget increased by 39%. On those figures alone, any sensible Government would want to be able to use existing standards—in this case, the EU’s standards—not least because any organisation manufacturing products in the UK that sell in the EU will have to conform to them. I have not had time to check what the HSE chemicals division’s budget is now, but over five years from 2018 to 2022 it increased by 39%.
I was also delighted to hear the maiden speech of the noble Baroness, Lady Winterton. With her wit and experience, she is already being heard very seriously and with some smiles in this House. I wish her well.
As noble Lords have heard, these Benches support the scope of the Bill and the secondary legislation. Others have already explained how necessary it is, but, along with my colleagues, I have some concerns and I will try not to go over the points they have already made. The Government’s delegated powers memorandum says at paragraph 5:
“We judge it essential to be able to respond quickly to an evolving evidence base on product safety and metrology issues”.
I want to focus on those powers being used in a slightly different way and I hope that the Minister can give your Lordships’ House some reassurance that emergency procedures made available to Ministers will not be used on this Bill, as happened on many others over the previous eight years—not least, as we heard from the noble Lord, Lord Russell, on the issue of leaving the EU.
I also saw it at first hand when I was the Lib Dem health and social care spokeswoman from January 2020. The emergence of the pandemic inevitably meant that there was obviously a need to introduce emergency statutory instruments but, to be frank, using the emergency powers completely negated the importance of Parliament being able to scrutinise affirmative SIs before they are introduced. Between January 2020 and March 2022, the Government laid 118 affirmative Covid SIs, of which 66 were introduced by emergency procedures, meaning that they were implemented before either House had any chance to see them, let alone debate them.
The Hansard Society Covid statutory instrument dashboard website is a brilliant resource for this period—perhaps I am extremely sad, but it really is extremely useful. It also noticed that those SIs implemented using the emergency procedure were more likely to have to be amended or revoked, which was perhaps not surprising because of the speed of response needed and the fact that there had been no time to scrutinise them. I hope the Minister will give the House some reassurance that emergency procedures would be used only in true emergency.
I say that because it has become something of a habit inside Whitehall to use them. I had a call from the Paymaster-General in August, informing me that the SI relating to the redress scheme for the infected blood compensation scheme was laid in the middle of August. We do not debate it until the end of this month. We have a debate on the inquiry and the redress scheme generally next week but we have to wait to the end of the month, which is two months after the SI was implemented. I really am keen to hear from the Minister on that.
I turn to one of the examples that was repeatedly raised in the preparation of the Bill and was the subject of my noble friend Lord Redesdale’s Private Member’s Bill—lithium-ion batteries. I pay tribute to my noble friend Lord Foster for his many years’ work in this area. I declare my interests as a vice-chair of the APPG on Fire Safety and Rescue and a vice-president of the LGA. The APPG on Fire Safety and Rescue, the National Fire Chiefs Council and almost everybody involved in manufacturing safety equipment for the fire service want urgent regulation of the use of lithium-ion batteries.
E-bikes and e-scooters present one of the fastest-growing fire risks. In London on average there was a fire every two days last year. There were 143 e-bike fires, three deaths and around 60 injuries. This year, up to the end of August, London Fire Brigade has so far recorded 127 e-bike and e-scooter fires. The real problem is the intensity of the lithium-ion fires, both the heat and the length of the flame. It is not even a flame; it is more like a firework. If you have ever seen a video of such a fire, it is never forgotten. Temperatures get up to 1,000 degrees and substantial damage can be done.
We also need regulation for those who use products with lithium-ion batteries that do conform to very strict regulation. I have a travel wheelchair that uses lithium-ion batteries. It complies with IATA regulations but I have been refused permission to go on a plane because the pilot has the final say on whether or not you can take medical devices on board. He said he was not having any lithium batteries on his plane at all and did not care whether they were IATA-certified. Having regulation would enormously help those of us who rely on these things. It cost me €900 to get back from Bucharest that night.
I also think that lithium-ion batteries stand as a proxy for everything that the Bill is trying to achieve. Many of the e-bikes and e-scooters in these fires have had different batteries or converters bought in an online market and added to the machine, so regulation is vital, as is compliance and ensuring that there are enough people to be able to find out where these are. The below-the-radar sales of these batteries, which often look identical to ones which comply with current safety regulations, mean they can be hard to track down.
It also takes us into what I think is a grey area of the Bill and I have not heard anybody else talk about this: at what point do the product regulations apply to individuals as opposed to businesses or people working in businesses? The Bill sets out those people covered by the regulations in Clause 2(3) and, helpfully, paragraphs (a) to (g) explain those with particular responsibilities and roles, but Clause 2(3)(h) refers to
“any other person carrying out activities in relation to a product”.
Does this include individuals who may have bought an e-bike online as an individual, changed the battery to one bought elsewhere online and then after a couple of years decided to sell it on through eBay, which has a mixture of professional sellers and individuals?
I am trying to find the boundaries here because if the answer is that individuals are included, communications to the public about their new responsibilities when they buy and sell will become vital. But if the answer is no, how will the Bill prevent what is happening at the moment, which is individuals buying and adjusting products from a global marketplace, often untraceable, where the UK has no ability to scrutinise or take action? How would this be enforced? If it is helpful, I do not necessarily need an answer now but would appreciate a letter from the Minister before we go into Committee.
I am very interested in who will be the statutory consultees and wonder whether we might have access to lists—again, before we move on to Committee—because there are some professional associations that might be very obvious to include if you are in the fire industry but not necessarily obvious to the Department for Business.
I turn briefly to the creation of criminal offences through affirmative statutory instruments, which has already been referred to. I want to pick up on the earlier comments from the noble Lord, Lord Lansley, about medical devices, which are specifically disapplied in the Bill because of the Medicines and Medical Devices Act. Can the Minister explain why this Bill has a maximum imprisonment of up to two years, whereas the Medicines and Medical Devices Act, which covers at least as sensitive and dangerous issues, has provision for conviction and jail sentences of up to 51 weeks only? Why have those different figures been used?
It was good to hear the Minister say that the Attorney-General had been involved. Is there a formal consultation with the Ministry of Justice once these regulations are drafted? I remain concerned that our court system is really congested at the moment and if there were, for example, a particularly large, concerted campaign to bring people to justice, that might involve breaking gangs, frankly, even 30 or 40 extra people in prison over a short period would put real pressure on our prisons. What can the Minister say on that?
Finally, we need this Bill but we must have access to affirmative instruments in plenty of time to be able to scrutinise them.
The Earl of Lindsay (Con)
My Lords, after a first-class maiden speech and with her impressive CV, I warmly welcome the noble Baroness, Lady Winterton of Doncaster, to this House. Equally, I welcome the Bill, but before I say why, I should declare two interests: first, as the chair of the United Kingdom Accreditation Service, UKAS, which is the Government-appointed body for the accreditation of organisations providing testing, inspection, certification and similar evaluation services; and, secondly, as the president of the Chartered Trading Standards Institute, the CTSI, a role in which I was preceded by the noble Baroness, Lady Crawley.
The provisions set out in the Bill will help to ensure that the UK’s product safety and metrology regulatory framework is fit for purpose. I therefore agreed with my noble friend Lord Lansley when he said that this legislation is necessary. As the Minister set out, the majority of the United Kingdom’s product safety and metrology framework derives from the European Union, transposed into UK law using powers in the European Communities Act 1972. The repeal of the European Communities Act means that we need new powers to update this body of law and, furthermore, it is timely that we do this. The world is changing, consumer products are changing, and the marketplaces through which consumers access those products are also changing.
The Bill recognises that, as technology continues to develop, new powers will be needed to update our regulations so that they can address both current and future threats and hazards. It recognises that both products and marketplaces are evolving and they will continue to evolve in tandem with new technologies. The United Kingdom needs to be able to keep pace with these technological advances and to be in a position to respond with agility to new product risks and opportunities as they arise.
The increased risk from more complex and often digitally or AI-enabled products may mean that they require additional testing and independent inspection or certification to monitor and assess regulatory compliance. With my UKAS experience, I welcome the fact that the Bill will enable that. UKAS is already a long and well-established part of the product regulation regime. We work closely with the Government to provide trust and assurance that all higher-risk products requiring third-party conformity assessment are subject to assessments that have been conducted by independent, impartial and fully competent organisations, as demonstrated by their conformity with UKAS’s robust and rigorous requirements as the UK’s national accreditation body.
We are likely to see more higher-risk products in the future, as has been evidenced by some of today’s speakers, and the regulatory powers within the Bill—which include the power to place requirements on UKAS and all involved with conformity assessment—will help to mitigate that risk. Importantly, as part of this future- proofing of the regulatory framework, the Bill intends that new and emerging supply-chain business models will also be identified, ensuring that the responsibilities of those involved in the supply of products, such as online marketplaces, are clear. This will enhance compliance and enforcement, and in my CTSI role, I applaud the Bill’s intentions to create both a clearer definition of “online marketplace” and a more level playing field between high-street retailers and online marketplaces.
Also welcome is the focus on entities controlling access to online marketplaces. This aligns with the CTSI’s call for a clearer regulatory framework to cover intermediaries, such as fulfilment service providers, ensuring that they, too, bear responsibility for the compliance and safety of goods where there is no UK-based manufacturer or importer. These expanded definitions are crucial for ensuring that both current and future innovations in online commerce are regulated effectively to protect consumers and legitimate businesses.
I also acknowledge that the coalition of product safety organisations, as mentioned by the noble Baroness, Lady Crawley, of which the CTSI is a member, wants to see the Bill strengthened to properly safeguard consumer safety, with a clear and enforceable duty placed on online marketplaces. This was also mentioned by the noble Lord, Lord Foster of Bath. This would provide confidence for consumers, businesses, and the online marketplaces themselves, together with the extension of liability to online marketplaces for defective products, particularly those sold by third-party sellers. The coalition similarly sees the need for greater clarity regarding the specific obligations placed on fulfilment houses and clearer definitions of key terms to ensure that all existing and future online marketplaces and products cannot take advantage of gaps to avoid responsibility. Of course, these more detailed points will be explored in Committee and on Report.
Also deserving of special scrutiny in Committee and on Report are the nature and extent of the delegated powers being proposed in the Bill, as focused on by my noble friend Lord Sandhurst. As a member of the Delegated Powers and Regulatory Reform Committee of this House, I am aware that the committee will be considering the Bill tomorrow and reporting to the House shortly thereafter, but for the moment I welcome the Bill. It aims to preserve the UK’s status as a global leader in product regulation, supporting both businesses and consumers. It seeks to ensure that the UK can maintain high product standards and be better equipped to address modern-day safety concerns with agility, while also taking advantage of opportunities for economic growth. It strives to create a level playing field between high street retailers and online marketplaces—at long last—and it will update enforcement requirements and the legal metrology framework.
Finally, I welcome that the Bill gives the UK the choice to mirror or diverge from updated EU rules, so that we can maintain high product safety while supporting businesses and economic growth. I also support the specific power to make changes to legislation to manage divergence and take a UK-wide approach where it is in the UK’s interests to do so.
Baroness Bennett of Manor Castle (GP)
My Lords, I am going to start with history. I used to live on Leather Lane in central London between the City and Westminster, where, despite Victorian urban expansion, a dairy farm continued to operate in the middle of the city. That was no historical accident. With the adulteration of milk rampant, with filthy water and much worse, the only way consumers could be sure that milk would not kill them or their children was if they actually saw it come out of the cow.
A few years ago I was privileged to visit the Rochdale Pioneers Museum in the home of the first successful consumer co-operative in the UK: the Rochdale Society of Equitable Pioneers, founded in 1844. Its aim was to ensure not just affordable products but safe and genuine products, without sawdust in the flour or arsenic in the sugar. But not everyone had a co-operative nearby. It was eventually conceded back in the 19th century that it was the responsibility of the state to protect consumers.
Amid a huge ideological debate about the freedom of traders to sell whatever they liked, the Sale of Food and Drugs Act 1875 was passed. However, it took time to take effect. In 1877 a quarter of all the milk examined by the local government board was seriously adulterated. However, the law worked. By 1894 adulterated milk accounted for less than 10% of all samples. Campaigning worked to get the law and the law worked for the good of the people. Lives were saved. I welcome the noble Baroness, Lady Winterton of Doncaster, noting in her wonderful maiden speech that such protections are particularly important for the most vulnerable in society.
Today, in 2024, however, we are seriously failing to provide protections. The noble Lord, Lord Foster of Bath, the noble Baroness, Lady Brinton, and others referred to the fact that it has been clear for some time that there is a huge problem with lithium-ion batteries and chargers. We have seen this problem, yet there has been no action. I would like to ask the Minister specifically about what timeframe the Government see for taking action on this. Do we have to wait for the Bill to go through the many months it will undoubtedly take? I do not know if that is necessary. Could something not be done sooner? As the noble Earl, Lord Lindsay, said in bringing his particular expertise to this debate, in the current age we need a kind of agility in reacting to changing products, circumstances and methods of sale, but we are utterly failing.
Last weekend, I was listening to the London Review of Books podcast. James Butler, who closely followed and reported on the evidence to the Grenfell Tower inquiry, was speaking angrily, and rightly, about the decades of regulatory failure that led to the deaths of 72 people. When you read in Hansard the debates about the 1875 Act, we had people then making the same kind of arguments that are made today: about the need to protect business from extra costs; about the need to allow business to make profits; about the need to allow freedom of trade, even of substandard products. But what could be more central to the role of government than keeping people safe?
It is demonstrably clear that exercising the rhetoric of cutting so-called red tape has killed and continues to kill. Anyone using that language really should take a good hard look at themselves. Taking the US approach of waiting until a product kills and injures, then setting the injured consumer or their relatives against the enormous weight of multinational companies—or in pursuit of some fly-by-night trader who cannot possibly be located—in the hope of financial recompense through the slow lottery of the courts, years or decades later, when of course that will not restore their life or their health, is indefensible and ineffective. It is fit only for a society that does not care for its people.
Product regulation is not just a matter of life and death. It is also about keeping a basic quality of life and well-being, not just for the purchasers of products but for general society and our disastrously battered environment on this planet, where the boundaries for novel entities have already been exceeded, in addition to the now acutely obvious climate emergency and nature crisis. Product regulation is crucial in the quality of our everyday lives and health, in both obvious and more subtle ways. How much energy your TV or computer uses, how much noise your neighbour’s strimmer makes or how much pollution you breathe in as you walk down the pavement affect all of us, every minute of every day. With public health in the UK in such a terrible state, this is even more crucial.
Since Brexit, Europe has demonstrably continued to advance in health, well-being and the safety of its products—even if, as the European green parties regularly point out, still far too slowly—while the UK has been sliding further and further behind. I want to particularly note three briefings that I received before this debate from the Green Alliance, Friends of the Earth and the Institute for European Environmental Policy. Those organisations are, as those names suggest, particularly focused on environmental health. What we need to adopt, of course, is a one-health approach acknowledging that environmental health, animal health and human health are all intimately interrelated. In that context I have to note, as I acknowledge the Minister did in his introduction, that this is an environmental Bill. It therefore contains significant devolved elements which cover areas under the control of the Scottish Parliament and the Senedd. The noble Lord, Lord Wigley, has been listening closely to our debate and I expect that in later stages of the Bill we may well be working on these issues together.
However, it is probably already clear from my comments that the Bill is welcome from the Green Party perspective, if severely insufficient in its current form and approach. I foresee many a debate about “may” or “must” being in its clauses. Surely, the Labour Party will not be reversing the kinds of positions it took in debating such matters when they were on the Opposition Benches. I hope we are not going to see the kind of 180 degree U-turn that we saw from the noble Lord, Lord Sandhurst, much as I am glad to see that the Conservative Party is now concerned about Henry VIII clauses.
I want to focus briefly on a couple of areas. Chemical regulation is a huge area of concern, with the science fast exposing how disastrously we have poisoned this planet. I am looking forward to a commitment from the Minister, either today or down the track, to either a new chemicals strategy or a new chemicals agency. I note that the Royal Society of Chemistry has been calling for this.
I also want to take a brief look at the advances being made in Europe, particularly the EU’s eco-design for sustainable products regulation, which entered into force on 18 July this year. This is part of a wider circular economy plan, an approach I hope to see the Government taking forward. It is focused not on a particular problem or product; it is a framework law that aims to drive forward improvements across a whole range of products and product categories by encouraging products that use less energy—so saving consumers money—last longer, can be easily repaired or recycled, contain more recycled content and have parts that can easily be disassembled and put to further use. It ensures that each product should have a digital product passport, so that producers have to collect and record the sustainability of their products. This means we can look at how to best use these products in the future. Do the Government plan to take a similar approach?
I am perhaps surprised that this debate has not focused more on another issue. Chemical substances in toys are an obvious area of grave concern to the health of our current and future generations. We need particularly to protect children from exposure to harmful endocrine-disrupting chemicals. I note that public awareness of PFAS and “forever chemicals” is growing fast; the Government are going to find themselves coming under considerable pressure in these areas very soon. At the moment, the Bill’s powers appear primarily to cover products that come under the Department for Business and Trade and the Office for Product Safety and Standards. Are the Government prepared to consider—I would be delighted to discuss this with the Minister—whether the Bill can be extended to cover the EU REACH restrictions and bans on other consumer products not falling into those categories? An obvious example here is formaldehyde in furniture, an area of growing health concern.
I have two final points to make. One is about Clause 11, which lists the regulations to be considered under the affirmative procedure but misses an opportunity to deal with something that, again, the now Government frequently lamented from these Benches: the impossibility in your Lordships’ House of dealing with statutory instruments with regulations that are patently inadequate but which we have no effective opportunity to stop. There is a chance to create further oversight in Clause 11, including perhaps a potential option for the House of Lords to disapprove draft instruments, sending them back for extra homework where significant concerns are raised. This, of course, is crucial, given that in the Bill’s current form there are essentially no real commitments.
Finally, I want to pick up one point made by the noble Lord, Lord Foster of Bath. I declare my position as a vice-president of the Local Government Association. The noble Lord rightly highlighted how our trading standards enforcement has been absolutely sliced away by austerity. Your Lordships’ House can do wonders with this Bill, but without enforcement—if the Bill is not enforced—that is pointless. I hope that the Government will address the issue of austerity’s impact on local government, particularly trading standards, as a matter of urgency.
Lord Bourne of Aberystwyth (Con)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Bennett of Manor Castle. I declare my interests as set out in the register.
This has been a very interesting debate, not least because of the wonderful maiden contribution of the noble Baroness, Lady Winterton of Doncaster. It was a speech of great elegance and humour. I congratulate her and look forward to her future contributions.
I thank the Minister, the noble Lord, Lord Leong, for setting out the objectives and purposes of the legislation with commendable clarity. The Government set out their intention to update product safety legislation in the King’s Speech in July 2024. It is important to note, however, that the scope of the legislation is broader than just product safety. It encompasses, for example, environmental legislation, which will have consequences in relation to devolved competencies. I will come to these.
I understand that one of the aims of the legislation is to keep pace with advances such as AI. This is a very sensible move. Dealing with areas such as this will help business and so promote growth. To that extent, it is laudable. Along with other noble Lords, I welcome this legislation. Its general thrust is right, although I have specific concerns that I will come to.
Another aim of the legislation is to clarify the role of online marketplaces in relation to product safety. Their great growth makes this, again, a sensible and welcome development.
The legislation we are considering is, of course, framework legislation. Substantive content will arise only when the Secretary of State exercises the relevant powers. It can scarcely be otherwise. Detailed product safety and other such regulation should not be contained in primary legislation. It is true that, under the legislation, the Secretary of State will be able to make regulations to correspond with relevant EU legislation—or indeed to not correspond if this is the decided and desired course of action. That too seems commendable and sensible. To proceed in that way will help preserve regulatory stability across the UK and the EU.
I hope that this objective—or at least the option to be exercised in many cases—of the alignment of regulations between the UK and the EU will receive a wider welcome in your Lordships’ House, particularly when there is a danger of the deviation from safety laws within the UK. There may be occasions when alignment with the EU is not the correct approach, but that can be debated. It seems entirely reasonable that, as the EU updates its regulations, the UK needs powers to do the same and to follow or diverge, as the case arises.
The impact assessment of the Bill sets out the dangers of not acting. These include business costs, complexity, uncertainty and confusion. Consumer safety risks, businesses choosing not to supply the GB market and, as I have noted, UK internal market divergence are also possibilities and would not be desirable.
I welcome the general thrust of the legislation. There are certain points which I wish to explore and probe a bit further, if I may. The first relates to specific consumer safety issues which have been referred to by the noble Lord, Lord Foster of Bath, and just now by the noble Baroness, Lady Bennett. I agree that it would be good to hear a timescale for dealing with the issues of consumer safety in relation to e-scooters and lithium-ion batteries. These are matters of great urgency which need action. The briefing that we received from the London Fire Brigade and others was very helpful in this regard.
I would also welcome comments from the Minister about the approach of the Government in relation to online marketplaces. Is it the intention to deal with this globally—to have consumer safety applying across both online marketplaces and the traditional retail market—or are we going to see two separate approaches to the issues? Will he indicate the Government’s thinking on this? With the great growth of online marketplaces, through institutions such as Temu and so on, action is needed. Once again, the briefings that noble Lords received from Which? magazine, Electrical Safety First and others have been very helpful in this regard.
I have a major concern relating to devolution. The Bill centralises decision-making in the hands of the Westminster Government. I appreciate that the UK Government are seeking legislative consent Motions from the devolved nations. It would be good to hear from the Minister the likely timescale for these legislative consent Motions to come forward. However, the matter does not stop there. This framework legislation represents not just product safety—which I appreciate is a reserved matter and therefore certainly within our competence—but matters such as environmental law, which is very much a devolved matter where the Scottish Parliament, the Welsh Parliament, the Senedd, and indeed Northern Ireland will rightly have a role.
Under the legislation, it is not clear what that role is to be or, indeed, if there is to be a role: it is not set out. Is consent from the devolved bodies to be required, as should be the case? There is no mention even of consultation. So I would appreciate it if the Minister could clear up a matter that will certainly be important going forward. The legislation is much wider than the narrow title of the Bill suggests. Indeed, there is considerable power within the scope of the Bill in relation to the marketing and use of products to ensure their efficiency and effectiveness, not just to mitigate safety risks.
With these important caveats, I welcome the general thrust of this legislation, but I would appreciate it if the Minister could clarify these matters.
Lord Lucas (Con)
My Lords, I have a great deal of sympathy with the points made from the Front Bench by my noble friend Lord Sandhurst. I do not like a Henry VIII Bill in this form. I was glad that we killed the Schools Bill in the last Parliament. I very much hope that we, on this side of the House, will be able to collaborate to make sure that either we are shown the draft regulations before we get to Committee or that we send the Bill to the other place with a suitably large number of amendments, so that if, when the regulations finally emerge, we find that they pong, we can ping them back.
This Bill sets out to protect consumers from dubious and dangerous goods. I join with the noble Lord, Lord Foster of Bath, in welcoming the Bill from that point of view. In Committee, I want to explore how it could be extended to make sure that VAT is paid on those goods. That is both to pick up the £1 billion or £2 billion a year that we are failing to collect at the moment, and because that kind of attention and positive cash flow would really help reinforce the consumer safety purposes of this Bill.
In what follows, I will rely extensively on Richard Allen’s 20 years of battling to get HMRC to collect the VAT due on imports into this country—a battle that has yet to crowned with full success, though there have been some useful victories. Online retail is just mail order. It is the same business as Pryce Pryce-Jones invented in 1861 and the regulations for dealing with it really date in concept from that era. They have not been updated to address current practices. This has led to a series of past and current abuses.
The abuse of de minimis import tax exemptions is now a global concern. Companies like Shein and Temu have legitimately exploited these outdated exemptions and flooded Asia, Europe and America with low-value goods, assisted by generous Chinese export tax rebates and subsidised international postage rates, overseen by a secretive Universal Postal Union treaty. It appears to me that the business models of those two companies and others are entirely based on the tax that does not get paid. I suspect that, if we collected tax properly, those companies would not exist.
In April 2017, the National Audit Office published its report Investigation into Overseas Sellers Failing to Charge VAT on Online Sales. This highlighted abuse by Chinese retailers who ship goods into UK warehouses with misdeclared import values and then sell them on Amazon and eBay, while not accounting for VAT on the sales. HMRC’s response was ineffective. As can easily be seen by placing test purchases, those ignoring the UK’s obligation to register for VAT can sell goods to UK customers at a distance and send them to the UK in the certain knowledge that, if they are below £135 in declared—not necessarily actual—value, no VAT assessment will be made at the border and the goods will be delivered to the UK customer promptly. That effectively means that these goods can be sold VAT free, which hugely undercuts any legitimate UK business trying to compete. All the business that could be being done in the UK, with the VAT and employment taxes that would result, shifts to these large overseas enterprises.
Large shipments of goods have been sent to the UK individually packaged as consignments of less than £135 in value. Under the new bulk import reduced dataset systems, entire container loads of goods can be declared on a spreadsheet. Undervaluation is hard to detect, and bulk shipments of low-value consignments will not attract VAT or duty if each package is addressed to an individual in the UK and valued at less than £135. Large consignments of goods are thus split into hundreds of smaller consignments and addressed to fake individuals or one of the many hundreds of thousands of mysterious Chinese companies that have been set up at Companies House. Once the goods have cleared customs, these bulk consignments are broken down and the goods are sent to warehouses, from where they are sold on eBay, Amazon or elsewhere. Once the goods are in a distribution warehouse, it is virtually impossible for the customs authorities to determine who is the beneficial owner.
I will outline some simple solutions to these problems. First, make online marketplaces collect VAT on all sales, whether the sellers are established in the UK or not. In the case of those using online marketplaces, as opposed to selling direct, this would greatly simplify collection for the seller and tax authorities and remove the need to determine where the seller is established. As the noble Lord, Lord Foster of Bath, correctly pointed out, in any event, under the Bill, we need to look at how business is conducted in online marketplaces to make sure that the products reaching our consumers are safe. It is not much extra to make sure that the tax has been paid in the correct way. As I said, this would generate a large flow of income that would put a broad smile on the Treasury’s face and make it happy to finance the enforcement effort that, as others have said, will be needed to make the Bill succeed.
Secondly, make any non-resident seller who applies for a UK company or VAT number appoint a VAT representative in the UK who is responsible for paying import tax debts should the seller abscond. Clause 2(2)(k) addresses exactly that for product quality questions: it asks for a UK representative who we can go after if something is wrong with the product, so that it gets put right. In Committee, I will certainly look to make sure that this representative is a person of substance who, faced with substantial fines for exploding batteries— I am glad to see that the noble Baroness, Lady Brinton, is seated on a wheelchair with what looks like lead acid ones—can pay the substantial damages involved. These representatives need to be real people.
Thirdly, make customs brokers responsible for the correct value declaration of goods that they import for their clients, for the safety of those goods and for the payment of any VAT and duty. These two things run together: if you are in the business of importing goods, you will, under the Bill, have to take responsibility for their safety. We can run the VAT in alongside that.
Fourthly, legislate so that all imported goods held in UK warehouses are clearly marked with the name of the beneficial owner. We are asking for products to be properly marked in the Bill. Who is the beneficial owner? Who is the representative whom we can go after if the products are defective or if the VAT has not been paid? We need that sort of information to be clearly specified.
Fifthly, abolish the subsidy enjoyed by Chinese sellers, enabled by the Universal Postal Union treaty. I suspect that will be outside the scope of the Bill, however much I may smile at the Public Bill Office.
Lastly, increase the cost of unrealistically cheap imports, whether through increased duty, enforced partnership with a UK company, the extension of duty to more classes of goods or the application of fixed fees for clearance. Other countries faced with the same challenges have adopted measures like these. VAT has recently been imposed on all low-value imports by South Africa, and a similar measure is being considered in America. In India, Shein has been forced into partnership with an Indian company, ensuring that value is added, to the benefit of the Indian economy.
If we do this for the sake of tax, we will make it easier to ensure safety too. To come back to what the noble Lord, Lord Foster of Bath, said, we will have a way of affording enforcement. In any event, part of the Bill should be an ability to charge for the certification work we do on product safety. This should not happen entirely at the cost of us and our Government; we ought to be able to put a charge on the products. Again, that would ride nicely alongside VAT.
Lord Redesdale (LD)
My Lords, I thank the Minister for his extremely kind words, especially about the Private Member’s Bill I have taken forward on lithium-ion safety. In this regard, I thank my noble friend Lord Foster for his years of work. Indeed, if he had been successful in the ballot and I had not, I think it would have been his Bill, which would have been fitting. On that basis, I recognise the work of Electrical Safety First, which has briefed many noble Lords, and its work on lithium-ion batteries.
Before I started, I was going to raise an issue with the noble Lord, Lord Frost—he is not in his place, but I can have a go at him anyway. I find it utterly incredible that, although we have moved to a Labour Government from the Conservative Government, there still seems to be this argument that convergence is a bad idea. In the area of standards, convergence is the best idea—it does not matter whether it is European or more international. The idea that convergence on standards is not excellent seems deranged. That is my personal view, obviously, from the Back Benches.
The great thing about a Private Member’s Bill is that, whether it becomes law or not, you get the areas of grievance talked about and hopefully prompt the Government into action. The Government have moved extremely fast in this area by bringing forward this Bill of their own. Also, the amount of discussion about lithium-ion does give the impression that this is one of the central tenets of the Bill, although it is of course going to be a great deal wider than that.
I focused on lithium-ion, but it is a very safe technology. The noble Lord, Lord Lucas, suggested that the noble Baroness, Lady Brinton, is sitting on lead acid batteries. I think her wheelchair would weigh about two tonnes if she were. She is actually sitting on lithium-ion batteries, which are extremely safe. However, there are of course situations in which they can be extremely dangerous—and not just the lithium-ion batteries in our e-bikes and their chargers, but any lithium-ion battery that we have in our homes.
Zurich and the British Metal Recycling Association have said that about 1,200 fires per year are caused by lithium-ion batteries in the waste stream—that is, waste trucks and disposal sites—because those batteries, while safe in people’s homes, tend to catch fire when they are crushed and put in water. While the Bill covers many of the areas covered in my Private Member’s Bill, it does not look at disposal. I say to the Minister that I am happy to shelve my Bill if I can talk to his officials about whether disposal could be added to this Bill.
There is a simple way to stop vast numbers of such fires, which are extremely dangerous, especially to the firefighters: to ensure that the people who sell such products online have a duty to make sure that the deliveries are equipped to take back batteries. Then, the massive numbers of batteries sitting around in people’s drawers would be safely taken back, rather than thrown into a truck in water and crushed, which is extremely unsafe and environmentally unsuitable. If we could encourage online marketplaces to take back batteries, as supermarkets do already, I could then shelve my Private Member’s Bill.
There is a second issue, of course: transport regulations. You can deliver as many batteries as you like, and that is not seen as hazardous, but if you take the same batteries away after they have been used, even a couple of days later, that is seen as hazardous waste. That also needs to be addressed.
The Minister is obviously going to have vast numbers of organisations, and his officials, looking at including as many areas as possible in the Bill. It is a Henry VIII Bill, but I can see why it needs to be so, because there are many areas it will have to look at. I have the opportunity now, in this House, to put forward one of the issues I would like to be covered: the scourge of bike theft, which had not occurred to me until I read in the Economist this week a particularly good article about bike thefts in the UK. Some 200,000 bikes were stolen last year, and that does not even include bikes stolen during burglaries. It is such a low priority that it seems to be almost impossible for the police to catch anybody who steals a bike. There is a solution. The article goes on to talk about work being done on Merseyside to stop people on bikes and find out whether they are stolen. An easy way to find out whether a bike is stolen is to look at its security marking. That would have a real impact on the number of bikes stolen, but also on the number of crimes committed by people on stolen bikes—snatching mobile phones and the like.
A simple solution in this Bill would be to make sure that any online platform has to include in the information given the security marking numbers of a bike. That would be an eminently suitable provision to include in the Bill. I would go further and say that retailers should be encouraged to provide bikes with markings in the first place. The article went on to say that the police have developed an app so that when bikes are recovered—you can do so on the online store—they can be returned to their owners, which is apparently so uncommon that it causes a great deal of surprise.
When I was a student in Newcastle, there was a shop on the Westgate Road called the Westgate Road Bazaar, which was fantastic because you knew you could get anything there and it was almost certainly stolen. Indeed, I know one young man who was done for his crime of passion: taking car alarms. In the days when you had to fit car alarms, he would steal them and sell them back to the garages, to be sold on. I digress, and although that is a humorous aside, the fact that bikes can be sold so easily on online platforms makes a mockery of the law, in a way, and is fuelling a massive trade in theft.
Therefore, I very much hope that I can talk to the Minister’s officials about the two points I have raised: the disposal of batteries, which could solve a lot of the problems caused by lithium-ion battery fires; and whether bikes could be included, because it would have a massive impact on crime in this country.
Baroness Lawlor (Con)
My Lords, I thank the Minister for his analysis. It is a pleasure to congratulate him on his appointment and welcome him to the Government Front Bench. I have greatly enjoyed working with him on other enabling Bills, such as the CPTPP Bill, and find myself in agreement with him on many issues. I also welcome the noble Baroness, Lady Winterton of Doncaster, and congratulate her on her winning maiden speech and her extremely impressive parliamentary career. I look forward to her future contributions to this House.
This Bill can be read in two ways. First, it can be read as an enabling Bill, to enable regulation on product safety and consumer protection to be updated, to keep pace with new products hitting the marketplace and new platforms for the market, especially online retail. The Bill, as we have heard, will update product regulation to keep pace with market developments and new marketplaces, and provide, as we have also heard, a means of recognising new or updated EU product requirements, with the intention of preventing additional costs for business. Noble Lords across the Chamber have commented on this, and we have heard many examples of the scary risks from e-bikes, the safety mechanisms that do not work and the calls on the London Fire Brigade. This is all very illuminating and, where necessary, I would totally support the updating of safety and product regulation.
Secondly, in addition to the first way of reading the Bill, it can be seen, as other noble Lords have pointed out, as a Bill to rationalise the UK’s product regulation across the UK’s internal market and to keep it up to date with EU product regulation, which Northern Ireland has been obliged to accept. The King’s Speech guidance illuminates the second reading of this measure, although I am afraid that the Bill is less than forthright about it. I hope the Minister will forgive me if I have questions about that. Page 38 of the guidance says:
“As most product safety legislation falls within scope of the Windsor Framework, EU changes to product regulation only apply in Northern Ireland, resulting in divergence within the UK internal market as EU laws are updated. This Bill gives the Government specific powers to make changes to GB legislation to manage divergence and take a UK-wide approach, where it is in our interests to do so”.
The House of Lords Library briefing, for which I am most grateful, highlights this provision as follows:
“The Government has stated the Bill would give it specific powers to make changes to … GB … legislation to manage divergence within the UK internal market. … Under the bill’s provisions, the government would be able to amend GB legislation in order to … take a UK-wide approach”,
et cetera.
In the impact assessment for the Bill, section 4 explains that the Government’s preferred option to change the law on product framework will ensure the framework is
“agile in its response to emerging threats, new technologies and changes in EU law … This option will ensure that the Government can fully implement a framework for recognising existing EU requirements for a range of products”
and ensure powers
“to enable the Government to manage divergence pragmatically”.
This suggests that the Government will be empowered, in order to manage divergence, to introduce and impose EU goods and product law as they decide. It implies that the EU goods laws now imposed on Northern Ireland could or will be extended to the whole of the UK. Can the Minister clarify whether this is correct and what precisely the Government intend in order to take a UK-wide approach to the internal market, and under which powers particularly conferred in the Bill?
Are the Government planning to end the dual system either at one stroke or in a piecemeal way? This is a dual system in which we have an EU system for Northern Ireland products and UK arrangements which may diverge from inherited EU regulation. Will that be by imposing EU product laws on the whole UK manufacturing sector in order to promote the integrity of the internal market?
I now turn to specific questions on Clauses 1 and 2. Clause 1(2) gives the Secretary of State powers to make regulations for
“marketing or use of products in the United Kingdom, which corresponds, or is similar, to a provision of relevant EU law for the purpose of reducing or mitigating the environmental impact of”
goods. The Henderson Chambers barristers, Prashant Popat KC and Noel Dilworth, in an analysis published on the web, for which I am grateful, say that Clause 1(2)
“empowers the Secretary of State to harmonise UK law with EU law in order to reduce or mitigate the environmental impact of products”.
Can the Minister confirm that he agrees with this analysis and that the UK Government can now decree that our producers must follow such EU legislation as they—the Government—decide, for the purpose, of course, of reducing or mitigating the environmental impact of products?
If so, can the Minister point me to specific pieces of EU legislation, which, to date, fall in this category—since, of course, 2018—that is, any existing EU regulations, and which UK goods and producers will be affected by and subject to it?
I am sorry for the list of questions, but I hope the Minister will bear with me. Is it supposed to be a dynamic alignment, as other noble Lords have suggested, so allowing the continued keeping up with EU laws on product safety? If so, what is the certainty that producers can have as to whether the rules will change, even when some product is already on the assembly line? Who will judge whether a product falls within the law—in fact, EU law—and who will operate the law?
I now move on to the powers given for product requirements in Clause 2, to require conditions to be met for products in the UK. I refer to Clause 2(7), which allows that
“product regulations may provide that a product requirement is to be treated as met if … a requirement of relevant EU law specified in product regulations is met, or … such a requirement is met and conditions specified in the regulations are also met”,
provided due regard has been taken of
“the social, environmental and economic impact of making the provision”.
Does this mean that, in addition to the assimilated or inherited EU law, the Government intend to allow or impose a replacement of UK product law with EU product regulation, and in practice, the shadowing of the EU’s level playing field laws and EU economic law for goods in a dynamic alignment?
If my reading is correct—I would like some confirmation on this—it suggests that the Government intend, under cover of the Bill, to bring in the Chequers agreement piecemeal by the backdoor, which was rejected by the House of Commons three times. Would the Minister agree with that analysis in general?
To conclude, I urge the Government to embark on their new term of office, for which I wish them very well, by being open and transparent with the people of this country, to rethink the Bill to allow only for standard updating procedure for product regulation and metrology where absolutely necessary, and to drop the enabling powers in the Bill which allow them to impose EU law and regulation alignment by the backdoor.
I conclude by proposing, as other noble Lords on this side have already outlined, that the UK recognises the best international standards, wherever they come from, and that it plays its part in helping to shape these standards for product regulation, as it has done so successfully in so many other areas. I note here international financial services regulation in particular. Indeed, I echo the noble Lord, Lord Lansley, in saying that the UK is well-placed to chart its own course and to reflect the best international standards, without looking over its shoulder to enact EU regulation. Much of it, I fear, is unequal to keeping pace with the best—and the worst—new products as they hit the market and the best international standards.
Viscount Trenchard (Con)
My Lords, it is a great pleasure to follow my noble friend Lady Lawlor, with whose speech I find myself in full agreement. I thank the noble Lord, Lord Leong, for introducing the Bill today and congratulate him on his appointment. I much enjoyed the interesting and entertaining maiden speech by the noble Baroness, Lady Winterton of Doncaster. Your Lordships’ House will gain much from her well-informed contributions.
I was initially rather confused about the Bill’s Title and kept trying to read “metrology” as “meteorology”. As I now understand it, the Bill’s Explanatory Notes claim two distinct purposes: to ensure that the product safety and metrology regime established after we left the EU is better able to adapt to AI and better reflects the shift in what consumers buy and how they buy it. Your Lordships’ House last debated this subject when it approved the product safety and metrology regulations in May. The effect of those was to extend indefinitely the grace period given for businesses to conform to the new UKCA markings in place of the EU markings, and to permit the use of UKCA markings in cases where products have conformed with EU assessment procedures.
This Bill is completely different from the regulations that were debated at that time. It is sure to have a large impact across the UK consumer market. Products in scope of the Bill are used by every person in the country, covering nearly all manufactured products. The Government’s own estimates suggest that there are 220,000 UK businesses currently affected by product safety legislation, with an estimated market turnover of just under £280 billion. The “Policy background” section of the Explanatory Notes states:
“The Bill is intended to enable the UK to maintain high product standards … by allowing the UK Parliament the power to update relevant laws”.
I cannot see how the Bill achieves that. It is easy to see that it gives very considerable powers to the Secretary of State to do that, but that is not the same thing.
Nevertheless, I welcome the fact that the Bill addresses the growing problem of unsafe products being marketed online. Noble Lords will have noted the briefings produced by Which? and the London Fire Brigade, and good points are made in both. In particular, the dangers of fires from lithium-ion batteries in consumer products, in e-bikes and, although outside the scope of this Bill, in grid-scale projects such as the controversial Sunnica solar farm at Newmarket need to be properly regulated. I support the London Fire Brigade’s wish for the word “safety” to be included in Clause 1(1)(b). I strongly agree with my noble friend Lord Lucas in asking that the draft regulations be made available to your Lordships as soon as possible.
I am as concerned about what is excluded from the Bill as about what is included. Can the Minister explain why the Bill excludes food and SPS-related products? I can understand why it excludes aircraft, military equipment, and medicines and medical devices, but the exclusion of such a wide range of products would appear to tie the Secretary of State’s hand. How could the Government negotiate the SPS changes necessary to enter into trade agreements? Can the Minister tell the House how this would affect the USTR’s negotiating mandate for a trade agreement with the UK?
The Government have set out clearly their intention to negotiate a veterinary and SPS agreement with the EU. Can the Minister explain whether the reason that food products are specifically excluded from the Bill is that the type of agreement that the Government intend to strike with Brussels is one that requires dynamic alignment with EU regulation? As the Minister knows, there are only two types of agreement that the EU will countenance, given that returning to the customs union or the single market have both been ruled out repeatedly since the Government took office. Those two types of agreement are exemplified by the agreements that the EU has with Switzerland and New Zealand. Of these two types, does the Minister agree that our only option is a New Zealand-style agreement, providing for mutual recognition of different regulatory regimes and equivalence of outcomes? Could we not negotiate a similar agreement to that applied to medicines and medical devices, where our regulator, the MHRA, unilaterally recognises approvals given by the EU, the US, the Japanese and certain other counterparts?
Does the Minister acknowledge that to enter into dynamic alignment with the EU on SPS and food products would provide very limited benefits in return for a considerable surrender of authority and sovereignty over our SPS regime? We would not be able to do anything differently from the EU, even where it is in our national interests to do so. However, food importers would still have to deal with the extensive bureaucratic form-filling.
Can the Minister also explain how the Bill will affect existing trade agreements, since after the passage of the Bill the Government will no longer be able to control the UK’s rules? Furthermore, if the EU changes its rules in a more restrictive direction, would the law of unintended consequences apply, in that the Secretary of State would have no powers to follow suit and make similar changes to the UK’s rules?
The Minister will be aware that the UK’s accession to the CPTPP will become effective before the end of the year. My noble friends Lord Frost and Lord Lansley already referred to that. The CPTPP agreement contains good chapters on SPS and on regulatory coherence. Regulatory practice should be based on sound science. This agreement assumes that all partners to the agreement can exercise sovereign powers over their own regimes. Article 2 of Chapter 24 states that the parties affirm the importance of
“each Party’s sovereign right to identify its regulatory priorities and establish and implement regulatory measures to address these priorities”.
If, under the Government’s plans, we are to lose authority over our own rules, does the Minister not agree that we would be open to sanctions brought against us by other CPTPP members and would be required to negotiate under the partnership’s dispute settlement process? Surely we would be at risk of losing the benefits that we would enjoy as a partner to the agreement.
Is this not also a problem for products that are covered by the Bill? Clause 2(7) seems to indicate that a product requirement will be “treated as met” if it conforms to EU law, whether or not the EU law may have diverged from its previous alignment with UK law. My noble friend Lady Lawlor also referred to this.
I hope the Minister will agree that it is essential that the Secretary of State must retain sovereign powers over all UK rules. That would enable him to be able to choose whether a particular EU rule is or is not in the UK’s interests. If the Secretary of State does not have that power, would it not have profoundly damaging effects on the UK’s trade policy? Would it not also damage the UK’s capacity to improve its regulatory system in the SPS area through taking advantage of technological advances in areas such as gene editing?
Clause 11 explains which powers can be exercised by the Secretary of State under regulations subject to the affirmative procedure and which shall be subject to the negative procedure. It seems fair enough that authority to enter premises should be made subject to the affirmative procedure. Authority to seize products is not subject to the affirmative procedure, but it is hard to understand how products can be seized without entry to premises where the products are held.
I look forward to working with other noble Lords in seeking to improve the Bill in its future stages and to hearing the Minister’s winding-up speech.
Lord Browne of Ladyton (Lab)
My Lords, I am grateful both for the chance to contribute to today’s consideration of this important legislation and for the opportunity to follow so many well-informed and forensic contributions. As we have heard enumerated extremely well already, this Bill is broad in scope and application—as it needs to be to achieve its objectives. Against that background, and conscious that I am the 17th speaker today, I do not intend to detain your Lordships’ House for longer than it will take for me to focus on one or two specific elements of the Bill.
Before I do that, I commend and thank my noble friend the Minister for his excellent introductory speech to legislation that is complex and difficult to understand. He has taken to the Front Bench of your Lordships’ House as a duck does to water, and I commend him for that too. As other noble Lords have, I also commend, thank and congratulate my noble friend Lady Winterton of Doncaster, who made her maiden speech today. She made what I thought was a speech that can be made only by someone who has a flawless political touch.
For half of my noble friend’s 27 years in Parliament, in the House of Commons representing Doncaster, our careers as parliamentary politicians followed a similar path. We were both elected in 1997 and we were both given ministerial responsibilities in 2001, after our first term on the Back Benches. My noble friend went on to have—I think I have got this right—six additional jobs. In my case it was five, and that took us to 2010. At that point, our careers diverged; I retired from the House of Commons and was introduced to your Lordships’ House. My noble friend went on to hold, entirely appropriately for a parliamentary democracy, senior positions in the Government for a period of time and then senior parliamentary positions. I retired because I had this conviction that three terms in the House of Commons was the appropriate time to spend there and one should then move on. She is, in that respect, the living contradiction of my judgment.
In anticipation of having this opportunity to speak about her, I made some inquiries and did some research in the media that covers the Doncaster area, of which there is quite a lot. I can tell you that, whatever she says about why this is the case, it seems very clear that, in Doncaster, she is deeply respected, greatly admired and loved for who she is—there is no question of that. I can say, from the time we were together in the House of Commons, that she was deeply respected, she was universally admired across the House and she was loved. From the reaction of your Lordships to this one speech from my noble friend, it is clear that she is deeply respected and deeply admired—the love will come.
This Bill makes no mention of the UK single market act. In that sense, it is somewhat like “Hamlet” without the Prince. These two pieces of legislation may turn out to sit awkwardly together on the statute book, both purportedly governing UK internal trade. But, to introduce my first point, I draw your Lordships’ attention to the fact that this Bill does seem to be adopting an approach slightly distinct from that of the UK SMA in respect of the devolved Governments. I do not plan to explore that topic in any great depth today as I am sure this will be examined very thoroughly in Committee; if my former colleagues in the Law Society of Scotland have anything to do with it, they will guarantee that is the case. But I have a couple of questions to ask the Minister.
First, I understand from the Explanatory Notes that a legislative consent Motion is being sought from the Scottish Parliament. Given that the Notes further make clear that this process will apply only to Clauses 1 to 4 and 8 to 11 of the Bill, I ask my noble friend whether the Government plan to detail the discussions they have had with the devolved Administrations in respect of the legislative consent process. If they do not have such intentions, I urge them to get them because, from the point of view of our joint politics, it would be much easier to deal with these matters in the Scottish context if that is done.
Secondly, Clauses 1 to 4 and 8 to 11 empower the Secretary of State to make regulations in areas of devolved competence, but there is no requirement for him to consult with, or obtain consent from, Scottish Ministers before such regulations apply to Scotland. To forestall any possibility of this fact becoming yet another matter of unnecessary controversy during the implementation process, can my noble friend outline the circumstances in which regulations would be made without such consent being sought and granted—and, if it is not possible for him to do that today, will he write about it?
On the question of alignment, in the reaction to those elements of the Bill which concern the EU regulations, there are those who seem to believe that they can glimpse what TS Eliot described as
“the skull beneath the skin”—
that, behind what they regard as a designedly prosaic Bill, the Bill seeks to smuggle measures on to the statute book that would all but reverse Brexit, establish us as little more than a satrap of the European Union and condemn us, unthinkingly, to eight new European regulations as they emerge from the infernal bowels of the European Commission.
In that spirit, the Daily Express greeted this Bill with the typically understated headline “The Great Brexit Betrayal”, while another somewhat fevered headline suggested that this measure reduces Britain to nothing more than an “EU district”. Perhaps they are overstating things a little. This Bill offers nothing so apocalyptic, even for those who would regard greater EU alignment as inherently undesirable. Clause 2(7), for instance, would give the Secretary of State the power to declare UK product regulations met where these fulfil the requirements of the relevant EU law—this has already been referred to by others. This is caveated a little by the succeeding Clause 2(8), which makes it clear that this is subject to prior regard being given to the social, environmental and economic impact of EU alignment.
I know that Clause 2(7) has been particularly controversial, but there are a few points to make. First, this is an enabling power. It does not oblige the Secretary of State to accept EU regulations but gives him or her, an elected British Minister accountable to a sovereign Parliament, the ability so to do where it is believed that this would be in the UK’s national interest. Secondly, as the background briefing notes to the King’s Speech make clear, harmonisation is to be pursued only when
“it is in our interests to do so”.
This legislation also gives the Government the power to end recognition of EU product regulations where it is in
“the interests of UK businesses and consumers”
to do so.
The notion that regulation is inherently undesirable is flawed, to say the least. I will take the specific example of the chemical sector, where the enactment of the powers in this Bill could make a substantial beneficial difference. The last Government decided to leave REACH, the EU’s registration, evaluation, authorisation and restriction of chemicals regulation, to set up a parallel body. Since then, we have not adopted a single restriction on a harmful substance, compared with 10 new protections offered by EU regulation, including on harmful micro- plastics deliberately added to products. While REACH has regulated PFAs in the EU, not a single river or water body in England is in good chemical health.
As well as damaging wildlife and water bodies, these PFAs—so-called “forever chemicals”—have been found in high concentration in our drinking water, in pollution hotspots across the UK and even in our blood. Since we left REACH, the EU has initiated 23 risk assessments related to harmful substances while we have initiated just three. It may be that this is a function of a more vibrant, freebooting approach, or that we have superior data or a more effective methodology, but I fear it may just be that our duplicate body has simply proven less effective—which, in turn, imperils the safety of people in this country.
I have lost track of the number of Conservative Ministers I have seen in my 27 years in Parliament announcing their determination to kindle a bonfire of regulations, to take an axe to red tape or some similarly strenuous deregulatory measure. But the powers in this Bill that offer the chance for greater regulatory alignment will make trade with the EU easier across a variety of sectors, without any need for duplicate regulations. Indeed, Make UK, the manufacturers association, describes the Bill as “removing the uncertainty” created by the EU retained law Act, and giving Governments
“the ability to assess and implement EU product regulatory requirements into GB law for specific markets and categories”.
If I properly understood the noble Lord, Lord Redesdale, I agree with him when I say that few things damage trade law more than uncertainty and asymmetry. It is therefore unclear, at least to me, how the British Government being empowered either to adopt or end EU regulations according to a calculus of self-interest represents an irreversible slide into geopolitical irrelevance.
In case your Lordships have not got it, I welcome the legislation before the House today. I look forward to participating in the later stages of its passage and offer the Government my support in ensuring that it reaches the statute book.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to take part in this important debate on the Bill. I welcome the noble Lord, Lord Leong, to his place on the Front Bench and congratulate him on his appointment to the Government. I am sure he will do an excellent job. I also welcome the noble Baroness, Lady Winterton of Doncaster. We were sparring partners in the other place and I am sure she will make a very strong contribution in this House.
The Bill appears beguilingly straightforward, benign and innocuous, but it contains some clauses that cause me a deal of concern and alarm, both for what is written in the Bill and—as my noble friend Lord Trenchard said—what is not written but omitted. I will concentrate my remarks on product regulation.
Naturally, we all support the imperative of responding to new product risks and opportunities, updating the law in respect of new and emerging business models in the supply chain, enhancing powers for market surveillance, working towards better product safety, including for products sold online, and addressing product recalls and traceability. The previous Government were committed to replacing and updating EU-derived regulations that were part of UK law, aiming to create a more coherent and effective product safety regime.
There is a consensus on the Government’s focus on innovation as a driver for the delivery of economic growth. That includes the safe development and supply of new technologies. As we know, a new modernised product safety regulatory framework has been needed for some time, as the Office for Product Safety and Standards pointed out in its 2018 report. New legislation was, of course, inevitable and probably advisable following the OPSS’s product safety review of March 2021, with the focus on updating the General Product Safety Regulations 2005. The previous Government legislated in secondary legislation that came into effect this month.
However, as noble Lords might expect, I have some reservations, particularly on Clauses 1(2) and 2(7), which contain powers to align UK laws with any EU environmental rules and a general power to provide that the EU standards shall apply respectively.
The language in Clause 2(7) is oddly technocratic but, at the same time, vague. It has significant ramifications in terms of a policy shift towards aligning with EU standards over time—dynamic alignment. Other noble Lords, such as my noble friends Lady Lawlor and Lord Frost, mentioned this. The Bill also does not fully elucidate the details of what types of products are covered by its provisions—it references “nearly all manufactured products”—so will the Minister clarify this for the House? Will alignment with the EU regulatory regime include the EU’s 2023 safety regulations, due to come into force in the EU in December 2024, and the revised EU product liability directive, in the next few years? What steps will Ministers take to both consult with business and allow Parliament appropriate scrutiny and oversight of ministerial decisions? If the latter is not the case, will the Minister tell us whether the Government will bring forward primary legislation on product liability in the near future?
As Which? has rightly stated, this is an enabling Bill, a Henry VIII Bill, which allocates vast powers. The devil will of course be in the detail of the secondary legislation. I had a wry smile when I heard the noble Lord, Lord Russell of Liverpool, reproaching my noble friend Lord Sandhurst for referencing the Henry VIII powers in the Bill. We were tripping over legal experts on the Cross Benches during the Retained EU Law (Revocation and Reform) Bill, who pontificated and opined on that Bill’s traducing of parliamentary sovereignty by its Henry VIII powers. But I fear that the noble Lord is alone today and that his Cross-Bench noble friends who share his views are not present. The strange thing is that we now have a Labour Government, which might account for that.
The briefing paper from Which? rightly points out the lack of detail in the Bill on the duties and obligations of those supplying products in online marketplaces, for instance. I therefore invite the Minister seriously to consider the proposals outlined by Which? in the helpful briefing paper: an explicit set of provisions to detail key duties on online marketplaces and a commitment to publish, in good time before the duties come into force, any draft secondary legislation on how these duties will work in practice, and to consult key stakeholders on the design of those regulations.
Which? also made the very important point that a new parliamentary committee should be dedicated to scrutiny and to reviewing any proposed changes to product and metrology regulations, especially where the UK is opting to diverge from existing rules. I do not have a problem with defending the divergence of rules if it is in the long-term interest of UK businesses, looking outwards to global regulatory regimes—if it is defensible, of course.
Which? also proposes a commitment to ensure that, in the future, consumer and industry groups are given consultation rights over any significant rule changes that impact specific products and markets, in good time and before draft secondary legislation is published. I hope the Minister will address that in his speech.
As has been mentioned, in fairness, the Bill also contains provisions that allow the UK to end recognition of EU product regulations. I concede that, but the Minister might explain how such a decision might be triggered, what scrutiny Parliament will be able to exercise on that policy and what evidential basis will be required.
On the specific content of Clause 2(8), can the Minister explain the likely scenarios that would cause him or her to make reference to
“the social, environmental and economic impact”
of the Bill’s provisions and the rationale for this subsection, given that the Bill already complies with human rights provisions and environmental legislation? Dare I say that Clause 2(8) might just invite more litigation and judicial review? On that basis, it is perhaps unwise to place it in the Bill.
The Bill is opaque in many respects. It is a concern that the impact assessment prays in aid the enabling nature of the powers in this primary legislation and is therefore silent on the likely monetary costs of the Bill to business. Page 11 of the impact assessment specifically states:
“Impacts have therefore not been monetised and are discussed qualitatively”.
While the rationale for the Bill appears clear and unambiguous—that, at present, the UK lacks the power to end recognition or to recognise new and updated EU regulations in Great Britain—I am unconvinced of the corollary argument that, ipso facto, the UK will fall behind the EU and other jurisdictions and markets in its innovation, technological advances and competitiveness. I have great respect for the noble Lord, Lord Foster, but I think it is important to take our time with the considered scrutiny of the Bill, because the devil will be in the detail—notwithstanding what he said about specific product issues, which are of course very important.
At the risk of being labelled deranged by the noble Lord, Lord Redesdale, I refer noble Lords back to recent history and the ill-fated Chequers White Paper of 12 July 2018, the most consequential part of which considered the future economic partnership between post-Brexit UK and the European Union. These proposals were thrice rejected in the other place, and indeed by the EU in September 2018. The May Government proposed a common rulebook—I am sure we all remember that—for all goods, including agri-food, and a treaty commitment to harmonisation to provide frictionless trade. In addition, the PM promised binding commitments on state aid and competition, and non-regression clauses on level playing field issues, and the UK was de facto to remain in the customs union, which was then labelled the combined customs territory. Amazingly, senior civil servants briefed the EU that Chequers would give the UK no competitive advantage in business and commerce in the future, which seemed an odd position for the UK Government to take. There was no mandate, electorally or in Parliament, for what was effectively dynamic alignment —without a vote or a voice, as my noble friend Lord Lansley said. I say in passing that I agreed with the vast bulk of my noble friend’s very well-articulated remarks.
Finally, the Bill potentially undermines His Majesty’s Government’s manifesto commitment to remain outside the single market, opens up disputes over the reach of the European Court of Justice in its interpretation of legacy EU law, and traps entrepreneurs and innovators in the UK into a legal and regulatory framework that is inimical to British competitiveness, global ambitions and economic growth and prosperity. Let the Minister be assured that a number of us noble Lords will watch the progress of the Bill hawk-like and will fully hold him and his Government to account.
Lord Fox (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Jackson of Peterborough— I think it was in Peterborough that I got caught in a ring road and went round and round without ever getting anywhere. It is also a pleasure to wind up this debate, but it was more of a pleasure to hear the excellent maiden speech by the noble Baroness, Lady Winterton of Doncaster. While other colleagues were describing her huge and lengthy parliamentary CV, they failed to observe her last two jobs. The most recent was that of Deputy Speaker, and before that she was buried in the shady depths of the Whips’ Office. Neither of those afforded much opportunity for her to stand up on the green Benches and make speeches. It is good to have her back making speeches, and I am sure she will contribute fully to the work of your Lordships’ House.
Brexit is the present that keeps on giving. I naively hoped that the post-Brexit replumbing of the statute book was done, but no. As the Minister explained, the Bill is another piece of work that we need to do as a result of the Brexit process and, while we have managed thus far, it provides a welcome—from these Benches—and much-needed legislative mechanism to introduce changes to regulations. On these Benches, as I think noble Lords have understood, we will work positively with the Minister. I welcome him to his new role, and we thank him and his team for the engagement that they have already given us and that I am sure we will get in future.
Overall, we will be looking for ways to ensure that the Bill advocates for strong consumer safety and well-being. Consumer safety should be built into the Bill and should ensure that all future secondary legislation must be designed to maintain a high level of consumer protection and well-being and to require that products be safe. Future regulation should also cover product recall and other areas, such as disposal. In these regards, there is tremendous scope to strengthen the Bill.
There is more joy in heaven over a sinner who repents. While it might not be heaven on the Liberal Democrat Benches, there is some ironic joy when we hear the voices of some on the Conservative Benches complaining about Henry VIII legislation. During a debate on one of the many Bills, I warned them to be careful what they wished for; what they wished for is what they are now getting. As the Minister explained, this is a framework Bill so there is no subterfuge, but it is one with few or no guard-rails. As we go through, I think that will be important. I look forward to hearing what the Delegated Powers and Regulatory Reform Committee has to say about this, because I suspect we may have to think through some areas around it.
Your Lordships’ House is familiar with, and a number of noble Lords have mentioned, the time-honoured complaint that secondary legislation is unamendable when it comes before us. In the absence of any details in the Bill, it is for this reason that colleagues are starting to raise issues, and many of these issues will come forward. They are anxious to pursue how the regulations will work on really important issues. An important subset has been the issue of lithium-ion batteries. It is not the only priority but is clearly one for some Members of your Lordships’ House.
I believe, as others have said, that the best way for the Minister to draw the sting of this debate is to show us what the proposed regulations will be. I think there will be a number of other areas, particularly around markets, where that strategy will be the best way to satisfy your Lordships’ House. Also, publishing the details of the consultation—which, in our meeting with him, the Minister told us would be coming forward—is very important and will draw some of the sting from the Conservative Front-Bench speech. More generally, there should be a commitment to publish that draft legislation and to give your Lordships an opportunity, once the Bill has passed, maybe in Committee or otherwise, to review that.
A real issue, raised by the noble Lord opposite and by my noble friend, is chemicals regulation. Chemicals regulation is one of the biggest bugbears facing British manufacturing, and one of the biggest hazards facing British consumers across the country. There is a roadblock thanks to the way in which REACH was to be ported across to this country with a new system—I will not bore the Minister on this issue; I have bored Parliament on several occasions on it. It is still a botch—the idea that data could be ported across from EU REACH into the British system was always wrong and there were warnings from the outset. That is why we have the stasis going on now. I would like the Minister to confirm that REACH is within the scope of the Bill, and if it is not we will table amendments to bring it into scope.
Liberal Democrats also believe that we should make future regulations that have regard to the sustainability of products, including the right to repair, reuse and safe disposal, which was mentioned by my noble friend—building in circular economy principles into future regulation. We will table amendments to enshrine that as part of the guardrails that I have talked about.
Next, the accompanying notes and ministerial communications have lauded how the Bill will respond to new and emerging business models. This is important and, as noble Lords heard from my noble friend Lord Foster and others, we will be probing the regulation of online marketplaces. Current product safety laws were developed before the evolution of online marketplaces. The Office for Product Safety and Standards thinks that the responsibilities on these online marketplaces are currently insufficient, and that the rules are unclear. We agree with that and will be seeking that clarity. We will seek an enforceable duty on online marketplaces to provide confidence for consumers. In addition, we will propose the extension of liability to online market- places for defective products, particularly those sold by third-party sellers. This needs to be supported by clearer definitions of the key terms, as some of my colleagues, including the noble Baroness, Lady Brinton, I think, mentioned.
The crucial issue of enforcement was also raised by my noble friend and it is clear that without an obligation to deliver resources to enforce them, these new regulations are essentially worthless. There can be no level playing field for bricks-and-mortar shops if these new rules are not properly enforced on the digital players in the economy.
Moving on, can the Minister please explain, as a number of your Lordships have asked, how this regulation will mesh with the United Kingdom Internal Market Act and with the Windsor Framework? The noble Lord, Lord Browne, and others pointed out that although product regulation is a reserved issue, the effects of the product being regulated are often not reserved. So can the Minister explain how the Bill will proceed, and how it will proceed if it does not receive legislative consent from one or other of the devolved authorities? Meanwhile, we have cross-border issues in the island of Ireland. This has been mentioned around the scope of the Windsor Framework. In some cases it has been mentioned as a menace, in some cases I think the Bill has the opportunity to solve some of those problems, and it will be good to know the Minister’s and the Government’s philosophy on that.
Part of the post-Brexit issue in dealing with the internal market was to create the common framework process. Nobody has talked about those common frame- works for a very long time. I would like the Minister to update your Lordships’ House, probably by letter, on where those common frameworks are, because this is an ideal topic for one of those frameworks, probably the environmental framework, to deal with. At the moment it is not clear to me whether those are completely moribund or whether there is a channel there to deal with it. If there is not, I think we will have to table something in Committee that has a way of bringing together the nations of the United Kingdom so that they can contribute to the process of the regulation that is going forward, rather than have it done to them all the time. That speaks to the spirit that the noble Lord, Lord Browne, was talking about just now.
I would like to use what remains of this speech to clarify two points. First, what is a product? This is not the start of a philosophical discussion. I was struck by one of the conversations I had with the Bill team—for which I was grateful—that the Bill is aimed at tangible products, such as an alarm clock, a vacuum cleaner, or a car, if it is in the scope of these regulations. Historically, the operationality of such things was self-contained. It had all the features that it had, and they were not mutable. That is no longer the case. Almost every product can be internet-enabled and can have its software updated, remotely, overnight, without me even knowing. So the properties of that product, which might have been legal, decent, honest and truthful at bedtime, can be positively dangerous by the morning unless the process of the software operating system updating is also part of the regulatory process. The Bill does not in any sense capture the spirit of that. We will certainly probe that in Committee.
My final point is distinctly Brexity—noble Lords would not expect otherwise. Interestingly, and unusually, the noble Lord, Lord Frost, and I have a shared interest, in that both of us would like some clarity around how the Bill will be used, though we definitely come at it from opposite angles. He and other noble Lords raised the spectre of Clause 2. I will not quote Clause 2(7) again, but a number of my colleagues have said that this is starting to look like a change of tone by the Government. Although some noble Lords on the Conservative Benches might consider this to be a sinister plot, those of us on these Benches would consider it cause for hope, and a sign that some sense is beginning to emerge from the chaos that this Government have been left by their predecessor. Can the Minister tell us whether this is cause for hope? Should I be hopeful? When will hope come riding through the corridors of Parliament?
What most manufacturers want to know is how adhering to future UK regulation will affect their ability to export to probably one of their biggest markets. They do not want two different standards, and the failure of UKCA is a good example of why having two regulatory structures does not work. The previous Government recognised that and kept kicking it into the long grass, while pretending it still existed.
There is a real and present issue—I think it was the noble Lord, Lord Jackson, who raised it at the last—in that the EU General Product Safety Regulations are coming down the line. This is a new instrument in the EU product safety legal framework which replaces the current general product safety directive and the food imitations product directive, and it comes into effect on 13 December 2024. This Bill will not be in place to deal with it, and there is a good deal of uncertainty and ignorance among our manufacturers about the very existence of the directive.
I know that the DBT has started to do some workshops, but there is a tremendous amount of work that needs to be done to explain to people exporting to the EU at the moment that they will have new regulations. These apply to non-food products and to all sales channels within the EU and exports to the EU; the aim is to ensure safety on their grounds. There will be new responsibilities for UK exporters, and these changes will be particularly impactful on SMEs and on businesses using online sales channels. It really is important that the DBT gives us a gap analysis as to what these new regulations bring that current UK regulations do not bring. Separate to this Bill but within the spirit of it, that would be an important communication for us to have. There are a number of issues around this directive, relating to producer responsibility, precautionary principles, internal risk analysis, product safety and traceability information, to name but a few. I know that Make UK is extremely concerned about the lack of activity around telling UK businesses what is going on.
On a more general basis, it would make a lot of sense for the UK Government to develop and create a monitoring capability so that divergence at EU level is communicated to British businesses. That would be to take the view that this Bill does not bring dynamic alignment and that there will always be changes going on. There is no sense that any alignment can be dynamic; it can be created, in that Governments can make alignment case by case, but there is no automation in this Bill. As far as international standards go, I do not think there is anything in this Bill that stops what the noble Earl, Lord Lindsay, wanted to do.
This Bill has a very anodyne title—it perhaps wins the prize for one of the more boring titles. Some have concluded that it is a wolf in sheep’s clothing. I hope that, with the help of your Lordships during Committee, we can make sure that it is a sensible approach to helping UK consumers get the safety and well-being they require from products, and that UK manufacturers have a fair wind behind them to trade with the EU and help to deliver the growth that everybody in this House craves.
Lord Johnson of Lainston (Con)
My Lords, it is a great privilege to follow the noble Lord, Lord Fox. He was highly eloquent—although I feel he got slightly stuck on the Peterborough ring road towards the end of his speech when talking about Europe.
There were phenomenal contributions from across the House, including, obviously, from my noble friend Lord Sandhurst. I also pay tribute to the noble Baroness, Lady Winterton, who gave a phenomenal maiden speech, but I was confused as it was filled with compassion, humility and personability. I do not see those as qualities at all relevant to being Chief Whip from my recollection, so I assume she filled her other roles with excellence. I welcome her to this House and look forward to working with her over the coming years.
The Bill is a very important evolution of our product safety processes. It continues much of the work undertaken by the previous Government to ensure that consumers can be safe in the knowledge that what they buy conforms to high standards and that shops on our high street do not have to compete unfairly with online providers through a derogation of standards. I congratulate the Minister, the noble Lord, Lord Leong, for continuing the excellent work, if I may say so, of previous Ministers in the DBT. To follow on from that, the metrology part of this Bill has its roots in a sensible need, quite rightly, to update the legislation to ensure that we can have control over our measurements and standards following our departure from the European Union.
However, as we heard from a number of noble Lords, we have some significant concerns about how these measures will be implemented, as well as the risks contained within the Bill, which could easily lead to less protection for consumers, less choice and higher costs to businesses, and have the exact opposite effect from our desire to have greater freedoms to be an independent trading nation.
I have a few points. This has been a fascinating debate on what could have appeared to be a Bill with a rather anodyne title. I will add to the list of questions, some of which are overlapping and some of which follow on from the excellent speech given by my noble friend. I have not received very clear responses back on questions following the last few debates I have spoken in, so I would be grateful if we can get those, because these are technical points. We want to create good legislation and I think the whole House is agreed that this is an important Bill, but we have to do it correctly.
It is relevant that we are having a philosophical debate. I think the noble Lord, Lord Fox, mentioned the principles around the philosophy of this legislation. It is important; we are changing significantly the principle of responsibility and where it lies for online marketplaces. That is complicated. At the same time, we do not want to distort the new gig economy. Millions of people trade online. I should declare an interest that my sons spend a great deal of their time trading football shirts on various websites. We have to be very careful to ensure that we are not affecting or limiting the prospective future of the online economy because we are concerned about product standards in some respects. Having said that, we have to ensure that the responsibility is properly delineated and that there is a high degree of product safety. I would like to hear the Minister’s thoughts on the philosophy relating to some of the more intellectual concepts around the changes to where responsibility lies, and for him to give us some security that this is about product responsibility rather than necessarily trying to overregulate people’s activities when it comes to online marketplaces.
I would also like some clarity, if the Government can provide more to this House, on the costs of enforcement and how they will ensure that the fees levied will be incidental, or indeed affordable. I have a fear that we will see a whole raft of new regulators. It is clearly important that we have enforcement, but this has to be paid for. This could create an entire new web of regulatory activity, which can often be misguided and expensive.
I am very concerned, as I think are many Members of this House, both noble friends and noble Lords, about the range of criminal offences that will be created, with different tariffs. For some reason we love locking people up in this country and then seemingly releasing them soon after. It would probably be sensible to outline here and now what the real constraints are in this area. I do not think it is good enough, as we have repeated many times in this debate, simply to have that be defined at a later date.
I would like to see the consultation outcomes on product safety. My noble friend Lord Sandhurst mentioned this. It seems absolutely bizarre that we have not seen the outcomes of the consultation that was done a year ago. I am very aware that there was an election, but that should not have stopped officials doing the work to understand the responses. It is impossible for us to legitimately say that we can have a proper debate in this House if we have not seen the feedback from the consultation around product safety and how we need to go forward. I believe, from an informal discussion we had earlier this week, that there is a commitment to produce at least a summary of the findings before Committee, so I call on the Government to do that.
I also press the Government further for more work on battery safety. A number of noble Peers with great expertise have contributed to that part of the debate. It is essential that we deal with this urgently. In response to the noble Lord, Lord Foster, I would not like to confuse some of the comments about battery safety—not that he was confused in any way—with the importance of having proper legislation on consumer safety in general in this Bill.
I want to follow up on the points, well made, by the noble Baroness, Lady Lawlor, about the effect of this legislation on the Windsor Framework. Other noble Lords have raised this issue too, and it is very relevant; we are dealing with complex, sensitive webs of legislative activity and it is essential that we really consider what the impact will be. It is not good enough to say—I fear that I predict this response from the Minister—that there will not be an effect. There clearly will be, because this is a complicated issue. It is very important that we have an open debate about that.
The noble Lord, Lord Browne, and other noble Lords rightly raised the issue of the devolved nations. Have they consented? Where are we in the process of gaining legislative consent? How will this affect the internal market of the United Kingdom? Again, this is not straightforward. It is simply not good enough to say that we hope to get it at a later date, or that if we come back in a few months’ time, it will all be fine.
Then, there is disquiet about how these measures may be used—when they are eventually defined—to align our standards ever further with those of the EU. This is especially relevant in areas such as environmental protection. We know well that, in many instances, blindly following the EU will have negative impacts on our economy. Can the Minister please respond to these important questions? I am concerned that this has somehow been negated in the discussions we have had. It is very important to get the philosophical elements of this correct. An element of openness and transparency will be welcome; it will solve problems in the future if we have an open discussion now.
It is true that this is relatively technical legislation designed to play catch-up with a new modern digital economy. Unfortunately, however, the phrasing is very broad and the powers are ill-defined. Trying to ensure that the Government can evolve their regulatory frameworks as technology evolves is fair, but, at the same time, we need more detail. There is also a growing body of opinion that these plans do not go far enough in genuinely ensuring that consumers are protected, and that trust can be properly vested in the online marketplace industry.
Giving such broad powers to a Government who, by their own admission, do not have a clue as to what tomorrow holds is extremely dangerous and goes against the principles of good lawmaking. It is crucial that we have a proper debate now to ensure that we understand what we are doing and have thought clearly enough about how these marketplaces will operate and how consumer product safety can be properly engaged.
I am also extremely concerned that, if we rush this and simply use secondary legislation to bring in criminal offences, fines, costs and other regulatory structures, we will end up with a clunky, heavy-handed set of regulations that do not protect the consumer. They will end up checking boxes and denigrating out business base, reducing consumer choice.
Finally, it is clear that this House, and, indeed, the nation at large, need to be properly reassured that this Bill is not a simple attempt to realign us with every aspect of EU regulation, but that we have thought clearly about the ramifications of how the world has changed and how properly to police that to ensure consumer safety in a growing economy. I very much look forward to a far higher level of detail as we enter Committee, and I look forward to Minister’s response.
Lord Leong (Lab)
My Lords, I would first like to thank all noble Lords for their very kind remarks; they are much appreciated. I also thank noble Lords for taking part in today’s debate, and for the contributions from all sides of the House. Today’s debate has been not only informative and wide-ranging but also illustrated the depth of expertise and experience present in your Lordships’ House.
I was particularly pleased to hear the maiden speech of my noble friend Lady Winterton. She brings much experience and wisdom, having served with distinction as Deputy Speaker in the other place and as a Minister in multiple government departments between 2001 and 2010. Freed as she now is from the necessary neutrality of a formal role, we welcome her warmly to the government Benches, where I suspect that, like her former boss, Lord Prescott, she will pull no punches. I look forward to hearing from her many more times in the future.
As we have heard, product safety failures can have devastating consequences. We are determined that our regulatory framework is agile and flexible in its response both to new threats and to complex supply chains. For innovation to flourish and potential for growth to be realised, it is essential that consumers can have confidence in the safety of the products they buy and in the businesses that they buy from.
I will try my very best to address as many of the issues and questions raised today as possible within my timeframe of 20 minutes. If I do not have the time, I will get my office to go through Hansard and provide written answers to noble Lords and have a copy placed in the Library. Finally, let me assure all noble Lords that I want to work constructively and proactively in the passage of this Bill, and I will have many more conversations and share information with noble Lords through Peers drop-in sessions—my office is always open, so feel free to contact me and my private office.
The noble Lords, Lord Frost, Lord Browne and Lord Jackson, and the noble Baroness, Lady Lawlor, raised concerns that this Bill is tantamount to the UK rejoining the EU through the backdoor. Let me be extremely clear: this Bill is not rejoining the EU by the backdoor. This Bill gives us the flexibility to ensure that product regulation, now and in the future, is tailored to the needs of the UK. There will be some instances where we will want to take a similar approach to the EU, and there will be others where it makes sense for the UK to diverge. Those decisions will be based on the best interests of the UK’s businesses and consumers, and any secondary legislation will be subject to the usual parliamentary scrutiny. As I said in my opening speech, we are taking back control, seeking closer, more mature trading partnerships with the EU and forging new trading relationships with the global world out there.
The noble Lords, Lord Foster, Lord Browne of Ladyton, Lord Bourne, Lord Fox and Lord Johnson, and the noble Baroness, Lady Bennett, raised questions about devolution. The vast majority of product safety and metrology legislation is reserved, with some specific exceptions. We expect the overwhelming majority of secondary legislation brought forward under the main powers in Clauses 1 and 5 to be reserved. Given the technical nature of product regulation and metrology, it is possible—as many noble Lords have mentioned—that some elements of secondary legislation may touch on devolved aspects, such as regulating the environmental impact of certain products, as we consider safety impacts alongside.
Following meetings with my counterparts, I welcome their broad support for the policy intentions behind the Bill. However, we recognise that the devolved Governments have raised some concerns about the drafting and breadth of delegated power in the Bill. As outlined in our manifesto, this Government are committed to reset the UK Government’s relationship with the devolved Governments in Scotland, Wales and Northern Ireland. I have had positive meetings with my counterparts in the Welsh Government and Northern Ireland Executive and will be meeting with the Scottish Government this week. My department is engaging with all devolved Governments in an open and collaborative spirit, and we hope that we will gain legislative consent Motions from the devolved legislatures. I will keep the House informed of those discussions.
On the specific case of Northern Ireland, which has been raised by several noble Lords, in order to ensure dual access to both the UK internal market and the EU single market, Northern Ireland applies certain EU product regulations and metrology rules under the Windsor Framework. The Bill provides the Minister with the ability to make a sovereign choice and effectively manage upcoming regulatory divergence between the UK and EU, and therefore to ensure continuity across the UK internal market, where it is in our domestic interest to do so. As such, we expect that the Bill will have a positive impact on trade between Northern Ireland and the rest of the UK.
The noble Lords, Lord Foster, Lord Fox and Lord Johnson, raised the importance of ensuring that the enforcement authorities have adequate resources to fulfil their function. With this Bill we intend to improve enforcement capability, leading to more efficient and effective use of time through a better suite of notices and better data-sharing opportunities. The Office for Product Safety and Standards will continue to provide a range of support to enforcement authorities. This will include support on technical queries, access to product testing and an ongoing programme of training and continuous professional development. The Office for Product Safety and Standards will also produce guidelines for the application of any new powers so that enforcement authorities are equipped to use them efficiently.
The noble Lord, Lord Lansley, and several other noble Lords raised an important issue relating to international standards. The Bill will enable us to continue to amend product regulations as well as allow the designation of international standards for products in scope. In line with WTO obligations, the UK recognises the benefits and supports the use of international standards, as well as regional standards, to break down trade barriers with our trading partners. The British Standards Institution regularly reviews UK standards, replacing domestic standards with appropriate international ones. This is also something that the UK pursues in its international agreements.
The noble Lords, Lord Sandhurst, Lord Foster, Lord Lucas, Lord Jackson and Lord Fox, and the noble Viscount, Lord Trenchard, asked whether any draft regulations under the Bill would be produced. The Government are working through policy positions on a range of issues following the election, including addressing the sale of unsafe products via online marketplaces. Additionally, we are reviewing changes the EU is proposing to its registration regulations and considering the applications. Throughout, our response will depend on the outcome of our call for evidence and policy discussions with stakeholders.
The noble Lord, Lord Sandhurst, asked about the poor way we are approaching legislation. The review he referred to was issued by the previous Government. It was clear then that to make fundamental changes to product regulation requires primary legislation because the powers were not available to us, hence bidding for this Bill to ensure that we secure the powers to act in good time to address emerging risks.
The noble Lords, Lord Foster and Lord Sandhurst, asked about online marketplaces. It was right for us to bring forward this Bill to give us the powers we need to address sales of unsafe products by online marketplaces —an area on which the product safety review consulted. Consumer groups such as Which? have also been calling for us to take action. This Bill will allow us to take action now.
The noble Lords, Lord Sandhurst, Lord Foster and Lord Johnson, asked why we have not published a response to the product review consultation. We have bid for the necessary powers to make changes to our regulations and have introduced this Bill, which will deliver enabling powers to allow us to implement a lot of the policy proposals emanating from the product safety review to which the noble Lord, Lord Sandhurst, referred. That review received 126 responses covering regulatory changes. Action on online marketplace enforcement was supported by all respondents. The powers in the Bill are available powers and we have continued conversations with a wide range of stakeholders on the detail.
Lord Sandhurst (Con)
I appreciate that, but we have not actually got any detail at all, or even a summary, of what the responses are. We really do require that; it is normal.
Lord Leong (Lab)
I thank the noble Lord, Lord Sandhurst. I will ask my officials and come back to the noble Lord on that request.
The noble Lord, Lord Foster, asked about lithium-ion batteries. I am pleased to advise that, while we have been in this debate, Minister Madders, my colleague in the other place, is in Paris at the OECD global awareness campaign, which this year focuses on lithium-ion batteries. The UK and the Office for Product Safety and Standards have been leading on this campaign. The noble Lords, Lord Redesdale and Lord Fox, raised additional points about disposal. Ministers are referring proposals to consult on reforms to UK battery regulations before setting out next steps.
The noble Lord, Lord Russell of Liverpool, asked why the UK wished to be able to continue recognising the CE marking. This Bill will allow the Government to choose to recognise updates to EU product regulation to provide continued regulatory stability and avoid extra costs for business where this is in our interests. It will also allow us to end recognition of EU requirements where it is in the interest of business and consumers. We presently recognise current EU regulations for a range of products. Legislation passed in May 2024 to continue CE recognition for 21 product regulations is estimated to save UK businesses £640 million over a 10-year period, largely from avoiding duplicate compliance and labelling costs. Provisions in the Bill allowing us to continue or end recognition of EU requirements will enable us to provide the certainty that businesses need to plan for the future and innovate, supporting economic growth. The UK and EU share information on trade, including changes to the trade and co-operation agreement.
The noble Lord, Lord Foster, and several other noble Lords asked about the disposal of lithium-ion batteries. The Government are committed to cracking down on waste as we move towards a circular economy, where we keep the resources we use for longer and reduce waste. The existing product responsibility scheme for batteries and waste electronics makes producers responsible for the cost of end-of-life treatment. Under existing UK legislation it is already mandatory for all batteries placed on the market in the UK to be clearly marked with the crossed-out wheelie bin.
The noble Baroness, Lady Crawley, asked why there have been no changes to legislation on product safety since our exit from the EU. I can reaffirm that this is real, hence bringing forward powers in this Bill to allow us to make changes before divergence happens and we fall further behind.
The noble Lord, Lord Frost, asked why we cannot use existing powers. The new Bill powers are required to enable the Government to modernise and future-proof product regulation, ensuring that it is tailored to the needs of the UK. The powers in the retained EU law Act 2023 are limited, in that they can be used only to revoke and replace assimilated law and have other inbuilt restrictions—for example, secondary legislation that is made under REUL must be deregulatory. This means that we would not be able to use the powers to increase safety requirements to respond to new and emerging threats through further amendments and legislation which was not assimilated law before.
The noble Lord, Lord Frost, also asked whether the Bill will make the UK a rule-taker or a rule-maker. We are definitely not a rule-taker. We are a rule-maker, and the Bill will provide powers to give the UK greater flexibility in setting and updating its own product-related rules, as well as enabling the UK to choose whether to recognise relevant EU products requirements. Any further changes made using these powers will be subject to appropriate parliamentary scrutiny. The noble Lord asked whether the Bill protects internal markets. The Bill will give us flexibility to ensure product regulation and metrology now and in the future. It is tailored to the needs of the UK as a whole. It will enable us to make changes to product regulation and metrology legislation that will benefit businesses and consumers.
The noble Lord, Lord Frost, also asked about the Windsor Framework. In updating its regulation, the EU will be seeking to deal with many of the same challenges that the Bill will address: for example, online marketplaces and batteries. The Bill will enable a choice to be made as to whether it is in the interests of UK businesses and consumers for UK regulations to take the same or a similar approach, or indeed a different one.
The noble Baroness, Lady Brinton, asked whether the Government will commit to a policy of alignment with EU chemical protections. This Government are committed to protecting human health and the environment from the risks posed by chemicals. We are currently considering the best approach to chemicals regulation in the UK separately to this Bill and will set out our priorities and next steps in due course. The noble Baroness also asked how the Bill will help the Government respond to emergencies.
Lord Fox (LD)
Am I to understand that, if there is to be separate consideration for chemicals regulation, it will not be in this Session because it was not in the King’s Speech? So all those businesses that are currently struggling with where we are now have at least a year, and probably 18 months, to wait before any sense of a Bill—never mind that Bill becoming law.
Lord Leong (Lab)
I am coming back to that in the later part of my winding speech.
National emergencies such as Covid-19 highlight the importance of ensuring that our product regulation framework allows for flexibility in times of national emergency. This enabling Bill will allow the Government, in response to an emergency, to temporarily disapply and modify product regulation while maintaining high safety standards, thereby providing a faster process by which critical products are able to reach the market in order to sustain an adequate supply of such products.
Baroness Brinton (LD)
I apologise, but that was not my question. My question was: will the Government make sure that, if emergency powers are used, both Houses of Parliament are kept informed prior to that happening?
Lord Leong (Lab)
I will get back to the noble Baroness in writing. I see the time flashing, so I might have to write to other noble Lords in response to their questions. Let me conclude.
I would like to thank everyone across this House for their contributions in today’s debate. I specifically thank my counterparts on the Opposition Benches, the noble Lords, Lord Johnson of Lainston and Lord Fox. This is not the first time that we have sat across from each other in such debates, albeit in different spots. I look back fondly on our debates during the passage of the CPTPP Act last year. I hope and expect that debates on this Bill will be as good-natured and as enlightening as those were.
I should like to stress my willingness to meet noble Lords to discuss further the detail of the Bill. I take the firm view that dialogue is essential to building public and parliamentary support.
To sum up, this Bill allows us to keep pace with new technologies, gives us the tools to stop dodgy suppliers placing dangerous goods on the market and allows us to make sovereign choices as to how we diverge or align with the EU and other trading partners. It gives enforcement bodies the tools they need to tackle modern problems facing the transit of goods coming across our borders, be they land, maritime or digital. Finally, it will allow us to update the legal and technological framework that underpins economy and trade. This Government will never compromise on safety. The Bill is essential to strengthening the rules and regulations needed to protect consumers, businesses and the public.
Product Regulation and Metrology Bill [HL]
Wednesday 20th November 2024
(2 months ago)
Grand CommitteeRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 18-I(b) Amendment for Grand Committee (Supplementary to the Marshalled List) - (20 Nov 2024)
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to remove the broad powers granted to the Secretary of State under product regulations, when defining and regulating risks and determining what constitutes efficient or effective product operation.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 1 and 80 in my name, and to Amendment 133 in the name of the noble Lord, Lord Fox. As noble Lords will know, I was not present at Second Reading, having only just assumed this position. I hope that the Committee will indulge me if I range a little more freely than I would normally in my remarks on the amendments.
Amendment 1 is necessary because Clause 1 provides such broad powers for the Secretary of State on product regulations. The Delegated Powers and Regulatory Reform Committee regarded this clause and other clauses in the Bill as “skeleton legislation”. I thank the Minister for his letter dated 24 October detailing the Government’s position in answer to the committee’s original report, which was published on 15 October. But I note that the committee maintained its original position after an evidence session with Ministers on 16 October, which concluded that Clauses 1, 2, 3, 5, 6 and 9
“are inappropriate and should be removed from the Bill”.
His Majesty’s Official Opposition agree with the committee, and we reserve the right to return to this at later stages of the Bill. For now, I have tabled a series of amendments designed to elicit more information.
The committee rightly pointed out that Clause 1 confers considerable discretion to legislate in critical areas, such as product marketing, efficiency and accuracy, via statutory instruments. This amendment aims to address those concerns by ensuring that any regulatory powers in this space are appropriately balanced and subject to full legislative scrutiny. Clause 1 grants wide- ranging powers to the Secretary of State to make regulations through statutory instruments, SIs, a process with limited parliamentary oversight. Such discretion risks undermining democratic accountability, as SIs are not subject to the same level of scrutiny as primary legislation. Again, I think it is worth quoting the committee:
“skeleton legislation should only be used in the most exceptional circumstances and where no other approach would be reasonable to adopt”.
The report goes on to state that the Government are, in effect,
“asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers”.
On these Benches we argue that it is all so insubstantial, that the Bill could lead to regulations that significantly impact businesses and consumers without thorough debate or consultation. It is so insubstantial that it does not give businesses the certainty and predictability they need to thrive. It is so insubstantial that granting considerable discretionary powers could lead to frequent unpredictable changes in regulations, creating compliance challenges on a ministerial whim.
Removing this clause would promote stability and confidence, particularly for small and medium-sized enterprises, which may otherwise struggle to adapt to rapidly changing environments. Clause 1(1)(b) on
“ensuring that products operate efficiently or effectively”
is surely something that can best be left to market forces. Consumers are going to purchase products that work better than others, and this will incentivise producers to provide products that work well. Why is this the business of the state?
On Amendment 80, we see that there are similar issues. The Delegated Powers and Regulatory Reform Committee stated that Clause 5 is another example of skeleton legislation. Clause 5(2) confers sweeping powers to the Secretary of State to dictate the quantities in which goods may be marketed and the units of measurement used. We will return to this theme in later amendments. Granting such broad discretion risks bypassing parliamentary scrutiny and undermining democratic accountability. Decisions affecting trade, business practices and consumer choice should be subject to thorough debate, not delegated to ministerial regulations. The power to use metrology regulations to replace and repeal primary legislation merits a full explanation and compelling justification, but the memorandum fails to provide this—something that the Government admitted in the sixth report of the Delegated Powers and Regulatory Reform Committee on 30 October.
I thank the noble Lord, Lord Fox, for his Amendment 133, which requires that regulation must be referred to a Joint Committee of both Houses for review. The amendment aims to address a serious flaw in the Government’s approach to regulatory changes under this Bill. Specifically, it would ensure that regulations are subject to proper scrutiny by Parliament through a Joint Committee of both Houses, with further safeguards in place if significant departures from existing law are proposed.
By bypassing established mechanisms for scrutiny and relying heavily on statutory instruments, the Government exhibit a clear lack of respect for the legislative process and, indeed, the opinions of their own Attorney-General. As the Constitution Committee noted in its demolition of the Bill in its report on 18 October:
“We endorse the view of the Attorney General expressed at his recent Bingham Lecture on the rule of law: ‘[E]xcessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation, upsets the proper balance between Parliament and the executive. This not only strikes at … rule of law values … but also at the cardinal principles of accessibility and legal certainty. In my view, the new Government offers an opportunity for a reset in the way that Government thinks about these issues. This means, in particular, a much sharper focus on whether taking delegated powers is justified in a given case, and more careful consideration of appropriate safeguards’”.
This amendment would restore Parliament’s rightful role in scrutinising significant legislative changes—“proper balance”, in the Attorney-General’s words—reaffirming its sovereignty and its duty to represent the interests of the people. In short, I agree with the Attorney-General. The fact that two committees have slated the Bill suggests that it is not justified, so we support this amendment. We think Clauses 1, 2, 3, 5, 6 and 9 should be junked. Does the Minister agree with his own Attorney-General? I beg to move.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
If this amendment is agreed, I shall not be able to call Amendments 2 or 3 by reason of pre-emption.
Lord Anderson of Ipswich (CB)
My Lords, I support Amendment 133, to which the noble Lord, Lord Sharpe, has just spoken and to which I put my name. This evening’s inaugural Lord Judge memorial lecture in legal history will address the early modern practice of legislating by proclamation without Parliament. According to the advance publicity for the lecture, Professor Sir John Baker will say that this practice
“may be compared with those resulting from our ‘elective dictatorship’, Parliament having become an instrument whereby a modern Government can exercise more absolute power than that formerly attributed to the King’s prerogative”—
a point often made by the noble and learned Lord, Lord Judge, himself. The truth of those words is demonstrated by this Bill, about which the Constitution Committee remarked—with our customary understatement —that
“several powers in the Bill are widely drawn and could facilitate the making of law that goes beyond the updating of existing rules to involve the making of new policy”.
When the EU makes new policy, as it did with the general product safety regulation, which will come into force next month, the process is properly and appropriately democratic. A road map and a public consultation in 2020 were followed by a Commission proposal in 2021, the usual substantive reports by parliamentary committees, a provisional agreement between the Council and the Parliament, approval by COREPER and IMCO and, eventually, adoption of the GPSR by both Parliament and Council in 2023. The process was more extensive, but so is the end product. The GPSR contains a detailed list of factors to be taken into account when assessing the safety of products. It sets out the obligations of manufacturers, authorised representatives, importers, distributors and—a difficult one—online marketplaces. It outlines a traceability system and makes provision for market surveillance, reporting and recalls. Detailed powers, of course, are delegated to the Commission, but the guiding principles were decided on by the legislature at an appropriate level of detail for a legislature.
My point is not that we should or should not follow the substance of what the EU has done. It is that where such wide-ranging matters of policy are engaged, it is not appropriate for Parliament to abdicate its power to the Government as entirely as this Bill proposes to do. Matters that in Europe are decided upon by the Council and the Parliament are here reserved to unamendable and, in practice, unblockable statutory instruments under this Government as they were under the last.
The noble Lord, Lord Sharpe, like the Constitution Committee, quoted the Attorney-General’s recent Bingham Lecture, in which he criticised excessive reliance on skeleton legislation and expressed the view that,
“the new Government offers an opportunity for a reset”.
I believe that the Attorney-General has talked the talk with complete sincerity about this issue, but his words do not sit happily with this Bill. The practical question is how are we going to walk the walk? A comprehensive solution would be to adopt the Hansard Society’s proposals for a new system of delegated legislation, a concordat agreed between Parliament and government to reset the boundary between primary and delegated legislation, and a new Act of Parliament to ensure that Parliament can calibrate the level of scrutiny to the content of a statutory instrument.
Limiting ourselves to this Bill, two other solutions are possible, short of the wholesale omission of clauses that was recommended by both the Delegated Powers Committee and the Constitution Committee. The first would be to copy the amendments to what is now Section 14 of the retained EU law Act 2023, tabled in the names of the noble Lords, Lord McLaughlin and Lord Hamilton of Epsom, the noble and learned Lord, Lord Hope, and myself. These would have provided for a sifting committee of both Houses, or of the House of Commons, to identify proposed regulations that are particularly deserving of parliamentary attention, and for regulations falling into that category to be amendable by agreement of both Houses under a power modelled on Section 21 of the Civil Contingencies Act 2004. Those amendments were passed by large majorities in your Lordships’ House in May and June last year, with the support of Her Majesty’s Opposition, and drew support from all parties in the Commons before eventually falling at ping-pong.
The second solution, proposed by the noble Lord, Lord Fox, in his Amendment 133, is, by comparison, gentle indeed, and if the noble Lord were a fast bowler, he might describe it as a loosener. No power of amendment is claimed for Parliament. A joint sifting committee would simply have the authority to refer a statutory instrument to a process requiring parliamentary approval if the regulations made a substantive change to the law, or if they had not been consulted upon. A substitute for European levels of democratic engagement I am afraid it is not but a pragmatic improvement to the Bill it is, and I look forward to seeing whether the Minister sees merit in it or whether, as I fear, this is an issue to which we will have to return with renewed energy on Report.
Baroness Crawley (Lab)
My Lords it is a pleasure to follow the noble Lord, Lord Anderson of Ipswich. I have an amendment in this group, Amendment 126, which I shall speak to. It is in my name and those of the noble Earl, Lord Lindsay, who cannot be in his place today, and the noble Lord, Lord Foster of Bath, reflecting its cross-party support. It requires the Secretary of State to conduct,
“appropriate consultation on draft regulations made under this Act”.
Like other amendments in this group, it is all about more effective scrutiny processes for this Bill. As it stands, this enabling Bill allocates significant powers to the Secretary of State—too many, according to the Delegated Powers and Regulatory Reform Committee and the Constitution Committee.
As this is the first time I am speaking in Committee on the Bill, I say that I support it and the need for it to improve the safety of UK consumers, as do most consumer-facing organisations in this country. However, the Bill, to put it mildly, has received a pounding from the Delegated Powers Committee and the Constitution Committee. I quote paragraph 36 of the Delegated Powers and Regulatory Reform Committee report. It states:
“We consider that … the Government have failed to provide a convincing justification for the inclusion of skeleton clauses in the Bill that give Ministers such wide powers to re-write in regulations the substance of the regulatory regime for products”.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to have the opportunity to speak in Committee. I begin by apologising on behalf of my noble friend Lady Lawlor, who is detained on a train. I am somewhat at a disadvantage in reading her notes but, naturally, I support the sentiments contained in what would have been her speech. I also begin by putting on record my thanks to the noble Lord, Lord Leong, for being prepared to debate and discuss these issues since Second Reading, his willingness to correspond with noble Lords on key issues, for holding a meeting with his officials, which was much appreciated, and substantially corresponding with my noble friend Lord Frost.
I am going to take the easy part first, which is to speak to my Amendment 33. I think it is apposite to look at the broader context of the Bill, bearing in mind the admonition that we should not repeat Second Reading remarks. All the amendments that I, my noble friend on the Front Bench and other noble Lords are moving today are in the context of the Bill, which is an extremely wide-ranging Bill that gives significant sweeping powers to Ministers. For instance, the UK in a Changing Europe document published just last week, its UK-EU Regulatory Divergence Tracker, makes the very pertinent point that the Bill
“is a very significant legislative change, with the government giving itself a broad power to proactively align with EU regulations … The exact range of regulations in scope is ambiguous, but it is evidently broad, with the bill’s explanatory notes referencing product safety, as well as emerging sectors like online marketplaces”.
With that in mind, and the skeleton nature of the legislation, as deprecated by my noble friend Lord Sharpe, we need to see my amendment in that context. Clause 2(3)(h) is the most egregious example of the potential issue at the heart of the Bill, which is that even existing provision in primary legislation may be replaced by provision in regulations. Many parts of the Bill, particularly in Clauses 1 and 2, are unfettered by any requirement for consultation, for criteria to be met or for meaningful preconditions to be satisfied. Indeed, the Bill clearly cuts across the guidance for departments that the Delegated Powers and Regulatory Reform Committee provided in its report of 15 October. My noble friend referred earlier to skeleton legislation, as well as the excoriating reports of the DPRRC and the Constitution Committee.
I remind noble Lords that this subsection relates to categories of
“persons on whom product regulations may impose product requirements”—
with all the caveats that we must accept that secondary legislation cannot, by convention, be amended. That leads us to a broader problem with the Bill in many clauses, particularly this one, which is that we have a double whammy. In the use of ministerial fiat, there is in effect no proper scrutiny in our Parliament and no proper oversight, because statutory instruments are very unlikely to be amended. Therefore, given that we have no fora in which to look at the details of the regulatory regime and the statutory instruments that will arise from the Bill—we no longer have a European Scrutiny Committee in the other place and we do not have a similar body in this House; we have a European Affairs Committee, which has a much wider remit—not only will we not be able to exercise that proper scrutiny but, having left the European Union, should we decide to shadow or dynamically align with regulations we will have no input on their effect but will effectively be cutting and pasting them into our domestic legislation.
In effect, we will have no mechanisms for scrutiny should we agree these clauses. We do not know the methodology by which a value judgment is made on the efficacy of any of these regulations on alignment. We have no measurement of criteria and no way to monitor or review the regulations at present, because there is no effective consultation process at the front end. For those reasons, I urge the Minister to look carefully at my amendment. It is not far reaching; it would specifically removes paragraph (h).
With that in mind, and for reasons of time, I am not particularly predisposed to go into detail on my noble friend Lady Lawlor’s amendments, other than to say that her Amendment 8 seems extremely sensible. Given the nature of the Bill and the wide-ranging powers that Ministers are seeking to exercise, potentially across vast swathes of our economy, a de facto sunset clause, after a modest period, would test the effects of a government intervention in terms of its environmental and economic impact, and particularly—regarding what I said earlier—its political and constitutional impact. It is an eminently sensible and straightforward amendment, and I would be surprised if such a measure were arbitrarily repudiated by the Minister and the Government.
Lord Jackson of Peterborough (Con)
I thank noble Lords for their forbearance as I was rudely interrupted by democracy.
I was somewhat remiss earlier for not also congratulating my noble friend on his position as Front-Bench spokesman for our party, so I welcome him, and I hope he will forgive me for that.
As I was saying, I believe that the amendment tabled by my noble friend Lady Lawlor should receive the support of all sides of the Committee because it seeks to ensure that there is proper, informed parliamentary scrutiny and approval in respect of Clause 1, which is a very wide-ranging clause; other noble Lords will no doubt wish to enunciate those issues later on. As the clock is against us, I will just finish by observing that I wholly support Amendment 128 in this group, tabled by my noble friend Lord Frost, which I have signed, and Amendments 80 and 81 on metrology and pints, tabled by my noble friend Lord Sharpe.
I will just finish briefly on Amendments 40 and 41 tabled by my noble friend Lady Lawlor. Again, these go to the heart of the necessity to see the Bill, and particularly Clauses 1 and 2, within the broader context of a quite seismic shift of government policy. Indeed, the think tank UK in a Changing Europe, in its press release last week launching the latest quarter 3 regulatory divergence tracker, makes the quite bold claim, which I think is correct, that this Government are seeking a much closer relationship with the European Union by increased convergence and reducing any capacity for divergence, either deliberately or as a sin of omission. Whether you think that is right or not, that issue has to be looked at in detail by the legislature—both the other place and your Lordships’ House. On that basis, I support my noble friend Lady Lawlor’s amendment, which would insert “constitutional” into the Bill, because of the wider governance and constitutional issues arising from a Bill that some have described as Chequers 2.0 in legislative form—I know that some of my noble friends might not agree with that.
Finally, Amendment 41 would enable a review of the impact and effects of Clause 2 and the powers therein to be laid before Parliament, focusing specifically on how the decisions made by Ministers and the regulations laid have impacted business and commerce in this country and trade across the world, particularly with the European Union.
On that basis, I ask the Minister to look kindly on supporting those amendments. None of them is radical and none of them seeks to undermine the integral nature of what the Bill is hoping to achieve, but they are sensible additions that will hopefully improve the Bill in the course of its passage through this House and the other place.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I welcome this landmark Bill, and I welcome my noble friend the Minister and the noble Lord, Lord Sharpe, to their Front-Bench positions. I firmly believe that the Bill protects consumer rights. However, I declare an interest as a member of the Secondary Legislation Scrutiny Committee, which scrutinises statutory instruments. In that respect, I refer to the amendment in the names of my noble friend Lady Crawley, the noble Earl, Lord Lindsay, and the noble Lord, Lord Foster of Bath, which would require the Secretary of State to conduct appropriate consultation on draft regulations under the Act.
It is vital that we set out as we mean to go on. One criticism that our committee had of many of the statutory instruments is the lack of proper consultation, as well as inadequate memorandums and impact assessments. This amendment in the name of my noble friend Lady Crawley is timely, and I urge my noble friends on the Front Bench to accept it. More effective scrutiny processes are required in legislation to ensure that the policy decisions made with the powers set out in the Bill can be effectively scrutinised as products and marketplaces evolve, particularly those that will evolve online. It is important that consumers are totally protected.
The noble Lord, Lord Jackson, referred to relationships with the EU. I hope that the Government are successful in resetting that relationship and that there is a closer relationship with the EU, because it is important not only for trade but for society and economic growth—and it is good for wider relations in this part of our global world.
Lord Frost (Con)
I shall speak briefly to my Amendment 128. I begin, like others, by congratulating my noble friend Lord Sharpe on his role.
My amendment is only a small one, and it is overwhelmed by the pretty savage surgery proposed in other amendments tabled by other noble Lords—a surgery that is well merited, on the basis of what we have seen so far. I shall save my substantive remarks on my main concerns about the Bill until the fourth group, where most of my amendments lie. I share the concerns about constitutional and democratic process expressed by other noble Lords so far. I would probably not go so far as the noble Lord, Lord Anderson, in advocating a very complex, process-heavy and corporatist EU-type process for the Bill, because I believe that speed and simplicity in legislation are also advantageous —but certainly, if any of the Bill survives, we need some sort of serious scrutiny-sifting process to make it work.
My Amendment 128 is just one tiny part of this. It would ensure that, if Clause 2 survived at all, the powers under Clause 2(7) would be exercised—if they were exercised—under the affirmative procedure. That, however, is really a minor part, when we look at some of the other proposals on the table. Nevertheless, I hope that the Minister will reflect, and I look forward to hearing his thoughts.
Lord Goodman of Wycombe (Con)
My Lords, I congratulate my noble friend Lord Sharpe on his appointment. I support his Amendment 1 and apologise for not having had the opportunity to be present at Second Reading, but I am a member of the Delegated Powers Committee and thought that I would make a few points that arise from our report.
I join my noble friend Lord Jackson in thanking the Minister warmly for the courtesy that he has shown us and the time that he has spared us over the past few weeks. When the Minister came to the Select Committee, I got the short—or long—straw and was given the questions to ask about European alignment or divergence, so I went back over the Second Reading debate. I have no intention of repeating the arguments there but, essentially, I saw that my noble friends Lord Jackson of Peterborough, Lady Lawlor and Lord Frost all suggested that the Government had a policy of alignment, while it was suggested by some on the Government Benches and Cross Benches that it would be better to have a policy of alignment rather than one of divergence.
I note in passing that UK in a Changing Europe has now produced a report which suggests that the Government are moving towards some form of alignment. If I heard the noble Lord, Lord Livermore, correctly in the Chamber during Oral Questions, that seemed to be the general flavour of his answers. My concern is not to get into the policy issue. It is simply to make the point that the Minister may be correct that the Government have no intention of having a policy of either alignment or divergence, but will simply take each regulatory decision as it comes. Even so, Ministers and policy can change.
What we have run across here is, as my noble friend Lord Jackson said, a gap in scrutiny that has arisen since we left the European Union and now that Bill Cash’s committee in the Commons, which used to examine European legislation, is no longer present. I say this in no spirit of party-political animus. After all, my party has been in government for a period since Brexit and has not corrected the position, but the Government now in office have a chance to correct it.
It might be worth quoting, as I close, what the committee said in conclusion about the powers that the Government propose to take under the Bill. It said boldly:
“In our view, the delegation to Ministers of law-making powers in this Bill involves legislative power shifting to an unacceptable extent from the democratically appointed legislature to the Executive”.
We need some form of being able to scrutinise the decisions that a whole series of regulations may make, as well as to debate and decide whether they represent a policy of alignment or divergence, and to probe the matter. The solutions may lie in the ideas floated by the noble Lord, Lord Anderson, a few moments ago or elsewhere, but there clearly is a gap. The committee has been concerned about similar gaps in legislation ever since it produced its Democracy Denied? report in 2021.
The Earl of Lytton (CB)
My Lords, I too was unable to be at Second Reading, so this is my first occasion to make comment. I preface my further remarks by thanking the noble Lord, Lord Leong, for his courtesy and for arranging what I can describe only as a very impressive array of his officials and Bill team members—much better than I think I really deserve.
I have spent nearly 50 years in practice as a chartered surveyor and a lot of that time has been involved in construction. I will not dwell on things that will come up later, on Amendment 46 in my name, but construction is one of the areas where there is an absolute fog of commercial relationships over products, their use and their assembly, which it seems important to raise at this juncture. It is a fog of commercial relationships, collateral warranties, responsibilities, product substitution, legislation and oversight of one sort or another—or a lack of it, as the case may be. Of course, the whole question of building safety has been very much in the news recently.
Turning to the report of the Select Committee on this Bill, I am taken by the comments of the noble Baroness, Lady Crawley, because she gets to the nub of the issue about consumer safety. Who are we doing this for? That must ultimately be the focus. Looking at the mural at the far end of the Room and noting Moses handing down the tablets, I get a sort of 10 commandments moment here, but I am not going to bore the Committee with 10 of them because I have only eight.
First, items should be of merchantable quality. There has to be a duty of care, especially to end users: those whom one can expect to have to use them in real life. Those who put them together may be a stage on the way but they are not the end user. Secondly, they have to be fit for the purpose stated, including their durability. Thirdly, they have to be correctly and comprehensively described, without descriptions that mislead or confuse. Fourthly, they have to be adequately and independently tested, and assessed for their purposes as intended—and where have we seen that fall down?
Fifthly, they have to be installed or assembled as recommended for their intended application, and there needs to be a clear audit trail for how that happens. The more complicated and risk-sensitive the outcome is—I suspect that in the case of buildings and construction, particularly residential buildings, that is a very high risk if you get it wrong—then it has to be assessed accordingly. Sixthly, there has to be adequacy of oversight. That is fundamental. Seventhly, there has to be effective enforcement, with clear responsibilities and duties and a means of making sure that that can be checked and regularly revisited. Finally, there have to be consequences for infractions and culpable non-observance, in the same way as there were some years ago for health and safety at work. A regime of strict liability with consequences at corporate and director level sharpened up everybody’s act no end and produced a substantial improvement in casualty and death rates, particularly in construction.
That is the analysis that should be involved in dealing with this Bill. If you have a paving Bill, you have to make clear rules. We still have the 10 commandments with us. What is it about “Thou shalt not bear false witness” that is not understood? These things have to be durable, they have to survive changes in political tone and international relationships, and they have to survive scrutiny at the level that the noble Lord, Lord Anderson of Ipswich, will be familiar with; that is, of the courts and of people who are experts in examining these things.
At this stage, it is relevant to talk about these many amendments—I broadly support the thrust of what they are doing—and set them in the context of getting the simple arithmetic right because if we drill down too much into the detail, we will try to second-guess what a Secretary of State may try to do somewhere down the line when the circumstances are different. If we can get those core principles right, this will endure and be of genuine benefit and use for future generations.
Lord Fox (LD)
My Lords, I join the cavalcade of congratulations to the noble Lord, Lord Sharpe, on his new role. We on these Benches look forward to working constructively with him; having witnessed what he did on at least one other Bill when I was opposite him, there is lots of room for us to build on that and work with him.
This is a Grand Committee but I will try to avoid grandstanding. I just want to lay out a modus operandi, if you like, from these Benches for how we shall take this Committee stage. Like the noble Baroness, Lady Crawley, and others, we do not need convincing that this legislation is necessary. That is the starting point. We believe that this is an important Bill but we are disappointed—as I am sure the Committee has already heard and will hear again—about the choice of such skeletal, paving legislation to deliver it.
Like the relevant committees of your Lordships’ House, we believe that the balance leans toward the secondary legislation route far more than it should. I will not use the same socio-religious language that the noble Earl, Lord Lytton, just used; I will use guard- rails rather than commandments. There need to be guard-rails in this legislation. There are other issues around alignment, which will come up mostly in the fourth group of amendments, but the bulk of our discussions will be on guard-rails—that is, what guidance should be in the legislation so that, when secondary legislation comes, it has some sense of purpose around what we are seeking to achieve. That will be our approach.
I shall now speak to Amendments 113 and 133; I thank the noble Lords, Lord Sharpe and Lord Anderson, for their support. I should say that, in a debate on a different Bill, the noble Lord, Lord Anderson, described me as a nuisance. Now, he has described me as a softie. I am not sure that I shall welcome his support in future, but the point is that we are trying to find a middle way. In a sense, I agree with some of what the noble Lords, Lord Frost and Lord Anderson, said: we are somewhere in the middle with the amendment, so perhaps we are finding the right place for it.
As we have heard, the Delegated Powers and Regulatory Reform Committee was very clear about this Bill; I have chosen different quotes from everybody else, thank heavens. The committee said:
“We recognise the need for this Bill to delegate some legislative powers”.
So do we. It continued:
“However … skeleton legislation should only be used in the most exceptional circumstances and where no other approach would be reasonable to adopt. This is because … it ‘signifies an exceptional shift in power from Parliament to the executive and entails the Government, in effect, asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers’”.
That is the guard-rail I was talking about.
We had this debate so many times in the previous Parliament. In a sense, it is disappointing that we are having it again. The DPRRC said that
“the Bill provides for almost all of the substance of product regulation and metrology to be provided for by Ministers in regulations under the new powers, and little or nothing to be settled under the fuller Parliamentary scrutiny given to Bill provisions”.
The DPRRC said that it remained concerned, and we have heard about those concerns, that
“so little of the policy is included in this skeleton Bill and so much is instead left to delegated legislation which will be subject to a much lower level of Parliamentary scrutiny”.
We know that, and have debated it many times. In some cases, some might say that it gets almost no real, meaningful parliamentary scrutiny, as long as statutory instruments cannot be amended. As the committee said:
“Parliament will be unable to amend that delegated legislation and the only options available to both Houses will be to accept it or reject it”.
We know that rejection, essentially, never happens.
We have also heard that the scope of these powers is not constrained by any requirements for consultation, for criteria to be met or for meaningful preconditions to be satisfied. That is why I am proposing Amendment 133, with the noble Lords’ support. I will say a little more about that shortly.
Lord Jackson of Peterborough (Con)
Is the noble Lord aware of the letter dated 28 October from the Minister, Justin Madders, of the other place, to the noble Lord, Lord McLoughlin, the chairman of the DPRRC, on these specific issues? It says:
“We recognise the Committee’s concerns that the powers in the Bill to amend or repeal primary legislation may appear as though we are intending to replace existing primary legislation with secondary legislation and accept that we should have given more provenance to the fact that our intentions are limited and specific and the powers in the Bill are limited accordingly”.
Does the noble Lord not think it unprecedented for a Minister to write about a Bill that is before this House?
Lord Fox (LD)
I am not a student of parliamentary history, so I do not know if it is an unprecedented letter, but that was a helpful intervention, and I thank the noble Lord for that.
Baroness Crawley (Lab)
I believe that the sentence that was just read out was in the report from the Government to the Delegated Powers Committee as well. It is not unprecedented is what I am saying.
Lord Fox (LD)
My Lords, I feel that I am standing in the middle of a perfectly good debate between the noble Baroness and the noble Lord. Perhaps we can reconcile it in some other way.
Lord Fox (LD)
If they find themselves in the same Division Lobby, but that is rather unlikely.
For this reason—the reason that I spoke of some time ago—I am proposing Amendment 113, which seeks to remove Clause 9(4) from the Bill. In the view of the committee and of your Lordships, this is the main offending clause, as it essentially grants Ministers unlimited powers. That is why we are proposing that amendment.
Amendment 133 harks back to an amendment for which many of the Minister’s colleagues and of those on these Benches voted during the passage of the Retained EU Law (Revocation and Reform) Bill, as it is very similar to an amendment that was tabled then. It is relatively self-explanatory, and it was explained even better by the noble Lord, Lord Anderson. I suggest that it imports some sensible consultation into the secondary legislation process without overburdening that process.
That may be the Minister’s response. He may say that this is bureaucratic and a lengthy process, to which I would say, to some extent, “So what?” This legislation does not have to be a breathless process; it is supposed to get it right. Many of your Lordships will have witnessed statutory instruments that come back to correct previous statutory instruments. I know of one case when we got into three or possibly four statutory instruments before we were presented with something that was acceptable. A bit of time, consultation and reflection gives us a chance to make regulation that is better and achieves what is intended.
I do not think this is an overwhelming process; it is about careful, purposeful regulation and proper consultation during that process. To an extent, that goes some way to dealing with some of the issues in the amendments tabled by the noble Baroness, Lady Lawlor—who has now made it from her transport system to her place—in fact in a rather more inclusive way, covering large portions of the Bill.
I will speak briefly to Amendment 132, also in my name, which I do not believe is controversial. Again, it continues the theme of the retained EU law Bill. As memory serves, one of the last things your Lordships did when sending that Bill back in the previous Parliament was to add a reporting requirement, so I suspect that there may not be much argument on either side of this against having a window on what is going on in the regulatory process. Indeed, it should provide a platform for us to have a discussion on a regular basis about the effectiveness and necessity of regulation, which I am sure many noble Lords would welcome.
My noble friend Lord Foster will not speak but has deputed me to speak on his behalf, which is a great honour and responsibility. He also signed Amendment 126 in the name of the noble Baroness, Lady Crawley. Amendment 129 in the name of my noble friend would ensure that an amendment that he will bring to the Committee later would be subject to the affirmative procedure. Like me, I think my noble friend would like to say that we do not think that the affirmative procedure is an adequate scrutiny measure, but it is marginally better than nothing.
Amendment 33 in the name of the noble Lord, Lord Jackson, makes an interesting point. I would like to hear from the Minister about who and what they are seeking to address in Clause 2(3)(h), because it is very broad. What level of specificity should we expect, or is there none?
To close, there are substantive amendments in this group, and I suggest that Amendments 113 and 133 are two that should find their way forward with the Government’s help.
Lord Lucas (Con)
My Lords, we have been here before. When the Schools Bill was in front of us, I was very happily lined up next to Lord Judge in saying that this would not do, and I find myself in the same position today. We have a job to do in the House of Lords; it is the proper scrutiny of legislation. This Bill seeks to avoid that. Either the Bill needs to wait and rewrite itself in rather more detail when the Government know what they want to do, or we need some such provision as has been suggested by the noble Lord, Lord Anderson and others to allow us a proper view of what will actually happen under this legislation. I very much hope that the Government will rethink, in one direction or the other.
Lord Leong (Lab)
My Lords, I join noble Lords in congratulating the noble Lord, Lord Sharpe, on his appointment. I look forward to working with him in the years ahead.
I thank all noble Lords for speaking on this group. Noble Lords across the Committee have raised a number of important issues relating to scrutiny. I reassure them, up front, that this Government take very seriously the importance of scrutiny, in particular facilitating parliamentary consideration of government proposals. However, we believe overall that the Bill strikes the right balance on the need for proper consideration of the important issues and the technical nature of many product regulations.
I start with Amendment 132. The noble Lord, Lord Fox, has proposed the publishing of impact assessments of affirmative regulations laid every six months after the Bill’s implementation. The impact of any new regulations will be fully considered through the development of proportionate impact analysis. The Better Regulation Framework, as most noble Lords know, is the system that the Government use to manage the flow of regulation and understand its impacts. In line with the Better Regulation Framework, for regulations where significant impacts are anticipated —above £10 million per year—full impact assessments will be published. For regulations with lower anticipated impacts, a proportionate de minimis assessment impact analysis will be completed. These assessments will, as a matter of course, consider the impact of regulations on small and medium-sized enterprises. Therefore, the laudable sentiment behind these amendments is already covered.
A number of the amendments relate to the use of the affirmative procedure. There exists a process for scrutinising secondary legislation that will operate under this Bill, including by scrutinising committees. I recognise the Bill’s delegated powers have raised questions, including from the Delegated Powers and Regulatory Reform Committee, which the Parliamentary Under-Secretary of State for Employment Rights, Minister Madders, and I appeared before in October. I remind noble Lords that the DPRRC stated and admitted in that evidence session that it saw the need for powers. The Government take seriously the recommendations of the DPRRC, and I plead mea culpa—we put our hands up that we should have been much clearer and could have done more to explain the reasons for the approach taken in this Bill.
The noble Lord, Lord Sharpe, asked about the Attorney-General’s speech at the Bingham lecture. He is a fine lawyer and is a good friend of mine. I listen to him all the time. But he said in his speech that this Bill does not exceed excessive powers. Product regulation is very technical, and we have ensured the that the Bill allows for appropriate parliamentary scrutiny, enabling this House to play the crucial role of scrutinising legislation. Existing secondary legislation runs to over 2,500 pages and covers everything from consumer products, such as toys and cosmetics to heavy industrial products like pressure equipment. We intend to use the Bill’s delegated powers to make targeted changes, on a case-by-case basis, to update and build on the large and well-established existing framework.
I should like to reassure all noble Lords on the specific point around EU law. The appropriate scrutiny procedure is provided by Clause 11, which applies the draft affirmative procedure to various regulations, including those making provision for a power of entry, creating a criminal offence or amending primary legislation, which will need to be debated and approved by Parliament before being implemented.
I turn to Amendment 133, in the name of the noble Lord, Lord Fox. This proposes a sifting mechanism whereby all regulations are preconsidered by a joint committee of both Houses. While we understand the need for oversight, a bespoke joint committee approach could cause delays. In addition, there is already a parliamentary process for statutory instruments made under specific Acts of constitutional significance where sifting is applied to ensure appropriate scrutiny. We do not consider that such a process is proportionate or necessary under this Bill, where regulations will often relate to routine minor technical changes—for example, a change in chemical content in cosmetics or toys.
I turn to the amendments of the noble Baroness, Lady Lawlor—
Lord Fox (LD)
I think the Minister is trying to have it both ways. On the one hand, this committee is so long-winded that important and breathless regulation could not be made and, on the other hand, the regulations will be so small and insignificant that this committee does not need to observe them. It is either one thing or the other—and if there are emergency regulations, I am sure that we can put in place a process to necessarily short circuit and get that before your Lordships’ House quickly. So, the idea that somehow this would hold up vital regulation that that the country is waiting for overnight is something of an overstatement of the process of regulatory development.
Lord Leong (Lab)
I said earlier that we will look at this on a case-by-case basis. Some regulations will relate to very minor technical changes, so it really would be taking up too much parliamentary time for that, whereas other regulations may need a full scrutiny, and we will have avenues for that.
On the amendments from the noble Baroness, Lady Lawlor, although parliamentary oversight is crucial, requiring the sunsetting and renewal of regulations under Clause 1 would create legislative gaps and undermine regulatory certainty. This is particularly for essential product regulations that protect consumers or for products where their design, production and installation may take over a year. Ensuring consumer safety is a constant, ongoing concern. We also have to ensure that businesses have certainty. Having a sunset clause will not give certainty to businesses.
As I have explained, these are also highly technical regulations, covering matters as detailed as the formulae for measuring outdoor noise, for example, and I am not sure it would be a good use of parliamentary time to re-examine such specific matters on an annual basis.
Similarly, Amendments 40, 41, and 131 from the noble Baroness, Lady Lawlor, ensure that regulations incorporating EU law will be subject to parliamentary debate, with consideration of constitutional impacts. As Members of the House will be aware, a duty to assess the impacts of any new legislation on trade between Northern Ireland and Great Britain already exists, and the responsible Minister must make a statement considering any impacts on trade between Northern Ireland and the UK internal market. To provide additional assurances, it is considered that the powers set out in Clause 5(2) provide a proportionate and appropriate parliamentary scrutiny process, where the regulations will often be highly technical and routine in nature.
Noble Lords, including those on the DPRRC, have questioned the Government’s intentions as regards consultation on changes made under the Bill’s powers. Amendment 126, tabled by my noble friend Lady Crawley, for example, proposes to establish a duty for the Secretary of State to publish regulations in draft form, and consult such persons as the Secretary of State considers appropriate.
I fully appreciate the importance of consultation and industry engagement. My department and the Department for Business and Trade have excellent relationships with industry and consumer groups and will continue to engage regularly with any stakeholders before changes are introduced. Indeed, we currently have two calls for evidence in circulation seeking stakeholder input, one on the introduction across the UK of a common charger for all our mobile phones and other portable electrical and electronic devices, and the other on measuring noise from outdoor equipment.
We have not included a statutory consultation requirement to allow for proportionate engagement with industry and consumer groups depending on the significance of the changes. This ensures agility in responding to emerging risks or market developments to protect UK consumers, as mentioned by the noble Earl, Lord Lytton. But I give a firm commitment to noble Lords that the Secretary of State will engage and consult with relevant stakeholders before legislating.
Amendment 33, in the name of the noble Lord, Lord Jackson, and mentioned by the noble Lord, Lord Fox, refers to supply chains involved in products and the extent we need to regulate them. This can be complex, and it is important that we get it right.
Clause 2(3) sets out examples of the persons on whom product regulations may be imposed. However, this is not always clear. Depending on the nature of the product or its supply chain, product regulations may need to cover a whole variety of other actors involved in a product journey. For example, our regulations on the safety of lifts need to cover the people involved in their installation as well as their manufacture, and regulations on recreational craft cover private importers in addition to the usual supply chain actors.
We also need to ensure that rapidly changing business models cannot be exploited, allowing bad actors to exploit good business by defining themselves out of regulation. For this reason, Clause 2(3) is an inclusive list, not an exhaustive list, of persons on whom regulations can be imposed. Clause 2(3)(h) further clarifies that regulations can apply to anyone carrying out activities in relation to a product.
Lord Fox (LD)
My Lords, I beg your Lordships’ leave, and I apologise to the noble Lord, Lord Jackson, for taking over his amendment here, but the wording of Clause 2(3)(h) is
“any other person carrying out activities”.
All the other items refer to the activity of the sale and marketing of that product. This does not refer to it but any person carrying out activities unspecified. For example, if I were repairing a product, would I be in the scope of the Bill? I could be, but I do not think that that is the purpose of the Bill. There needs to be some modification of that language—I think the noble Lord, Lord Jackson, is shrewd in putting that up—which focuses on the development and marketing of the product. Otherwise, it is any person doing anything to it.
Lord Leong (Lab)
I thank the noble Lord for that point. As I see it, it is the whole manufacturing of the product itself. For example, 3D printers are getting cheaper and cheaper on the market, and anyone can make anything from a 3D printer. So we need a regulation that covers someone who sells the printer, someone who supplies the plastic that goes into the printer and whoever makes that. Unless the noble Lord is mistaken, perhaps I and officials could have a private conversation with him and the noble Lord, Lord Jackson.
Lord Leong (Lab)
To conclude, I hope that I have been able to provide assurances on all these matters and I assure noble Lords that the Government have carefully considered—
Lord Deben (Con)
Before the noble Lord sits down, I am very much in favour of most of the Bill, but this bit is very difficult. I have been around a long time, and I have known Minister after Minister explain that things are too technical for us to have proper parliamentary scrutiny, and I heard it again today. The fact is that there is some real concern, even from those of us who are, in general terms, in favour—I hope it gets as near to parity with the rest of Europe, which is our biggest market—as we want to be sure that Parliament has a say, but I am not sure that the Minister has given us a very good answer. Saying that it is very technical is the oldest story that civil servants have given Ministers since we have had civil servants and Ministers.
Lord Leong (Lab)
I thank the noble Lord for that. If it helps, I have gone through some of our 150-odd existing product safety regulations—not all of them—and their technical nature includes scientific calculation and all kinds of other technical input. Are we saying that we want this in every instance of primary legislation? I think not. If noble Lords think that we should have every technical aspect in all primary legislation, we need to have a different debate entirely, but for this, for technical reasons, we need delegated legislation to ensure that we update the regulations.
Lord Jackson of Peterborough (Con)
I do not want to labour the point, but it is either feast or famine. We are being told by the Government that we cannot legislate everything to the nth degree, so we should just trust them on the secondary legislation—the permissive delegated legislation and statutory instruments. But then, with the paragraph that is the subject of my amendment, we are going to the nth degree of granularity and technical finesse while not actually, as it happens, defining what “activities” mean. Activities could mean looking at a product, by which you would therefore be caught by the regulations.
I gently say to the Minister that the substantive clause is not undermined by the removal of this paragraph, and he should seriously think about that.
Lord Leong (Lab)
I thank the noble Lord for that. I shall take it away and speak to officials about this, but the purpose of the Bill is not to be too prescriptive, so that we cover most of the activities that can be described by various stages of production.
I want to conclude, if I may. I hope that I have been able to provide reassurance on all these matters and have assured noble Lords that the Government have carefully considered the importance of parliamentary scrutiny and sought to strike a careful balance. I therefore respectfully ask that the amendment is withdrawn.
Lord Sharpe of Epsom (Con)
My Lords, I do not really have very much to say. I am partially reassured by what the Minister has tried to say, but we will have to study the contents of this debate, which has been fascinating and wide-ranging. It was remiss of me not to have thanked the Minister earlier for his engagement and that of his team, and I apologise. We reserve the right to come back to this, but I beg leave to withdraw the amendment.
Lord Foster of Bath
Lord Foster of Bath (LD)
My Lords, I begin by thanking the Minister for his willingness to engage with all noble Lords who have shown an interest in this Bill, and I thank his team for the support and help that they have given. I congratulate the noble Lord, Lord Sharpe, on his new role.
We have frequently described this Bill as being skeletal. In the two amendments that I am proposing, Amendments 2 and 27, I am offering some flesh to put on the bones of that skeleton. I am acutely aware that many of the regulations that will arise from the Bill will look at products in isolation, but there are many cases whereby products are intended for use when they are installed within some system or other, and it is usually an electrical system.
Amendment 2 suggests that, when considering the safety of a product, we should take into account, where relevant, its installation. Amendment 27 argues that, when the product is installed into a system, the system as a whole, including the product, should require third-party certification.
Let us take as an example something that is happening up and down the country at the moment—the installation of EV charging points, more often than not in individual homes. They are installed by electricians who, under current regulations, register the circuit and the changes made to the consumer unit, but who do not have to register the EV charging point itself. That means that the certification body is not tracking where those charge points are, not informing local building control and not doing any inspection or assessment of the charge points to ensure that they are compliant with building regulations or safety.
Lord Sandhurst (Con)
My Lords, I begin by saying that, like others, I am grateful to the Minister for the time he gave to meeting me. However, the fact remains that our concerns about the Bill have not been assuaged. There are fundamental flaws, as others have said. We do not disagree with the aims of the Bill in general terms; the problem is that we just do not know what the specific policies are. We do not know what route will be taken to address the issues that may arise. It is simply too vague. There will be no opportunity for consultation on, or challenge to, the policies or regulations: policies will be produced by the Minister and that will be that. We know that policies should be in the Bill.
I thank the noble Lord, Lord Foster, for his thoughtful amendments and his commitment to addressing the significant issues raised by Clauses 1 and 2. These electronic developments, such as lithium-ion batteries and so on, are serious issues; they certainly need to be addressed. However, these amendments relate to Clauses 1 and 2, which have been identified by the Delegated Powers and Regulatory Reform Committee and the Constitution Committee as fit only for complete removal from the Bill, for the reasons set out in their reports. Those committees have strongly criticised these clauses because they lack substance and give excessive discretion to Ministers; as I said at Second Reading, this is a Henry VIII Bill par excellence.
We must therefore now be told—we are still waiting—in much more detail what direction the Government think we should take on the matters of substance and importance that the Bill addresses. Ministers are to be empowered to legislate by statutory instrument on matters that are really important for businesses on the receiving end and for consumers, also on the receiving end—or not, if nothing is done—such as marketing, product regulation and metrology. Here in Parliament, we have been given no clear framework or policy direction.
The Delegated Powers and Regulatory Reform Committee’s detailed report of 15 October, which of course came after Second Reading and after substantive objections had been raised by me and others, stated that the skeleton clauses, which include but are not limited to Clauses 1 and 2,
“contain almost no substance about the marketing and use of products but instead give Ministers very broad powers which confer considerable discretion to legislate in that area by statutory instrument”.
On 16 October, the same committee held an evidence session at which it discussed these concerns with the noble Lord, Lord Leong; Justin Madders MP, the Minister in the other place; Helen Le Mottee, deputy director legal for products, business and better regulation; and Tony Thomas, deputy director for product safety policy. The committee said:
“In the evidence session, the Ministers and their officials provided helpful additional information about … the existing legislation that could be amended by regulations made under the powers that the Bill confers; and … the need for the Bill to confer regulation-making powers that would allow detailed and technical provision to be tailored for different types of products and would give Ministers the flexibility to respond quickly and effectively to rapid technological changes and product safety concerns … That additional information could helpfully have been included in the Delegated Powers Memorandum provided by the Department for Business and Trade”.
The committee recognised the need for the Bill to delegate some legislative powers—I think we all understand that that is necessary. However, the committee stood by and repeated the essence of its 15 October first report, notwithstanding the improvement of approach. It said that
“skeleton legislation should only be used in the most exceptional circumstances”—
and we are not there; this is not Covid. We are not in another emergency situation—
“and where no other approach would be reasonable to adopt”.
That, it explained—and I make no apology for repeating this—
“signifies an exceptional shift in power from Parliament to the executive and entails the Government, in effect, asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers”.
Frankly, I say, if they do it with this Bill, they will do it with all future legislation. There was enough fuss in the last Parliament about what those on this side were doing, and now we are going straight down that route and extending it into the distance. As the committee said, the Government
“needs to explain why the Bill provides for almost all of the substance of product regulation and metrology to be provided for by Ministers in regulations under the new powers, and little or nothing to be settled under the fuller Parliamentary scrutiny given to Bill provisions”.
Without clear boundaries or principles, these powers could allow Ministers to fundamentally alter product regulation, metrology standards and even consumer protections with little notice or prior consultation. They can just do what they like if a Minister fancies it or a civil servant has a bee in his bonnet—I mean nothing personal about the civil servants sitting there. I think your Lordships all understand what I have in mind. People have idées fixes, their opportunity comes along, off they go and Parliament will be able to do absolutely nothing about it. This risks creating legal uncertainty, regulatory overreach and a chilling effect on business, stakeholders and consumers.
Clauses 1 and 2 as they stand must, we say, be either significantly revised or removed entirely, as recommended by both committees of which we have already heard rather a lot. Failing such improvements, we on this side of the House will move for the offending clauses to be removed on Report. The Government should understand that.
Lord Leong (Lab)
My Lords, before I address Amendments 2 and 27 tabled by the noble Lord, Lord Foster, I need to make a clarification. The Attorney-General made a general comment about excessive reliance on delegated legislation; he did not comment on this Bill. We certainly do not believe this Bill contains excessive reliance on delegated legislation.
Lord Foster of Bath (LD)
My Lords, I almost want to say that the Minister doth protest too much. We have been given a whole range of examples that he says illustrate that it might be that they will take installation into account. It seems to me that there is a much simpler solution: to accept my amendment and put it in the Bill, since that is what he almost implies he wants to achieve. Clearly, we will have further deliberations. In the meantime, I beg leave to withdraw my amendment.
Member’s explanatory statement
The Amendment ensures that regulations relating to the marketing of use of products in the UK may have the purpose of ensuring that products are safe.
Lord Fox (LD)
My Lords, Amendment 3 is part of group 3, which focuses on the safety of marketed products; we are focusing now on safety. In a sense, the debate on the previous group of amendments demonstrated why the skeletal nature of the Bill needs flushing out. Alongside the amendments tabled by the noble Lord, Lord Sharpe, and my noble friend Lord Foster, I hope we can investigate a little how we can flesh out the Bill on the subjects of health, safety and the environment.
Both Amendment 3 and Amendment 95, which is also in my name, seek to add some purpose to the Bill so that future regulations will be within the guard-rails we talked about earlier. Amendment 3 would simply insert safety as an objective for achievement for the regulations caused by the Bill. There are two purposes to this amendment: one is to try to ensure that, in future, the products regulated are safe, and the other is to allow the Minister to explain how reducing or mitigating risk works in the context of product safety. It seems to me that there is a glaring difference between the two, and I look forward to the Minister explaining how this legislation came to be written in this way.
Clause 1(4) goes on to define risk with language that implores the concept of safety, which is of course helpful. However, under the terms of Clause 1 as currently drafted, any danger to the health or safety of a person—or a domestic animal; the Minister knows that I am keen to know which animals are domestic and which are not, and why non-domestic animals should be subject to danger when domestic animals are not—needs only to be reduced, because Clause 1(1) comes before Clause 1(4). Surely the objective should be to eliminate risk.
If I was selling a trapeze kit for a seven year-old that was 30 feet from the ground, I could of course say that I had reduced the risk by including a mattress to put underneath it, but is this safe, and has sufficient mitigation been observed? I understand that there is no such thing as absolute safety. However, I contend that, if the purpose of the Bill is, first and foremost, risk reduction or mitigation rather than safety, it is pitching the objective of regulations too low. I hope that is an understandable albeit rather complex explanation as to why I am moving this amendment.
Amendment 95 also focuses on safety. It simply spells out some considerations for future regulations made under the Act—namely, that they
“must have regard for consumer safety and wellbeing, and environmental sustainability”.
How could anybody object to those aspirations? Looking forward, we could leave it there and deal with the second part of this amendment in a different way. We will certainly come back to some of this in other groups but, at this point, I chose to add the specific issue of the disposal of chemicals and lithium-ion products because disposal is an important part of—
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the noble Lord, Lord Fox, was in full flow. He may resume on Amendment 3.
Lord Fox (LD)
My Lords, I was not in full flight; I was merely jogging along the runway.
I have talked to Amendment 3 already. Amendment 95 also focuses on safety, and simply spells out some considerations for future regulations to be made under the Act—namely, that they must have regard for consumer safety and well-being, and environmental sustainability. As I said before, how could anybody disagree with that comforting thought?
Looking forward, we could leave it there and deal with the second part of the amendment in a different way, but I chose to add some specific points around the disposal of chemicals and of lithium-ion products. Given that this is Committee, I want to probe the Minister on how he regards the issue of disposal within the context of the Bill, which is why I included those parts. In a sense, there are two ways of looking at Amendment 95. One is the writing in of an undertaking that consumer safety, well-being and environmental sustainability will be a key part of future regulation. The other is to understand a little more how the Government regard disposal. There will be other times when bits of this are debated, but I am clear in my mind that we must consider the end of life of products that this Bill will eventually regulate. The hardest part of that is what happens to chemicals and batteries.
I hope the Minister will agree, but I fear he may suggest that this should be managed through regulation that we have not yet seen. It would be helpful at least to understand how the Government would go about these things. Regulation is where details lie. I come back to the idea that we need guard-rails to indicate how regulation will be developed and otherwise. That is what we would expect in primary legislation. The principles, in this case for the safety of marketed products, should be set out in primary legislation. I beg to move.
Lord Foster of Bath (LD)
My Lords, I support my noble friend’s amendment and the amendment that is still to be debated by the noble Lord, Lord Sharpe. The amendment that I propose is to strengthen and future-proof the Government’s ability to identify and respond to high-risk products on the UK market. It proposes a clear mechanism to flag high-risk products and then requires them to be subject to additional safety measures. Such products would have to be, for example, conformity assessed by a UK-approved body and marked with subsequent CE and UKCA marking.
The concept of high-risk products with special requirements applying to them is not new. Animals and animal products imported into the UK are classified under the border target operating model as low, medium or high risk. Each of those categories, including the high-risk category, has different requirements before entry to the UK is allowed. As noble Lords will be aware, fireworks, heavy machinery and some types of medical devices are already recognised and labelled as high risk. However, outside these types of products, the situation is less clear and, at present, far too discretionary. It may well be that the Government have plans for a clearer, less discretionary framework approach. But given the skeletal nature of the Bill, as we discussed in the first group of amendments, and given the limitations of consultation on secondary legislation, it seems that Parliament will have little say in what emerges in this area.
My amendment provides an opportunity for Parliament to have a say in clarifying and strengthening arrangements around high-risk products. It goes beyond that because it provides a way forward by making use of the fairly recently developed product safety risk assessment methodology, along with other logical approaches that are clearly listed within the amendment.
I will use the proposed way forward by illustrating it in reference to the area of lithium-ion batteries yet again, particularly in the respect of their use in e-scooters and e-bikes, which I have spoken about on a number of occasions. Many other examples could have been used to make my case.
Last month, a batch of imported e-bike chargers, intended for use with GIN e-bikes, was rejected at the border and destroyed by customs officials. According to the Office for Product Safety & Standards, the products presented
“a high risk of fire and explosion”
because of the poor build quality of the transformer and concerns about the fuse used, and the products did not meet the requirements of the Supply of Machinery (Safety) Regulations 2008 or the Plugs and Sockets etc. (Safety) Regulations 1994 and were therefore rejected and destroyed.
Frankly, however welcome this intervention was—and it certainly was—it does not happen all the time. Just a couple of months earlier, the UK cycling sector, including industry trade bodies, e-bike brands, bike shops and charities, joined forces in an e-bike-positive campaign to boost knowledge of e-bike battery safety, helping the public to safely buy, charge and ride them. The e-bike industry is also developing a new scheme to highlight reputable, high-quality brands that thoroughly safety test their e-cycles and batteries. This suggests to me that the industry itself is currently having to act in the absence of clear regulations in respect of high-risk products in this sector. Recent figures sadly show the loss of life and property caused by e-bike and e-scooter fires, clearly showing that the current arrangements are simply not working.
Indeed, lithium-ion batteries in e-bikes and e-scooters are a textbook example of a high-risk product. Prone to catastrophic failure from poor manufacturing or improper use, they can, as we have heard on many occasions in your Lordships’ House, explode and catch fire, posing significant danger. ITV News has found that, in the past two years, e-bike fires have increased by 204%; Electrical Safety First found that over 180 constituencies have experienced an e-bike or e-scooter fire; the London Fire Brigade warned that e-bike and e-scooter fires are the capital’s fastest-growing fire risk and are responding to an associated incident once every two days; and, sadly, earlier this month, two people lost their lives in an e-bike fire in Coventry.
The charity Electrical Safety First has been campaigning for e-bike and e-scooter batteries and their associated chargers to be classified as high-risk and require third-party certification. Its campaign, which I have been supporting for a number of years, now has the support of around 100 major national stakeholders, from fire brigades to Which?, and over 500 parish and local councils, among many others supporting it. This amendment would meet those demands.
I sought to make the case with reference to lithium-ion batteries, but, of course, we must address all existing and future high-risk product safety issues. The Bill must set down robust precedents for the identification of safety risks coming down the line, given the ever-increasing developments in technology and consumer behaviour. I hope that this amendment achieves this by allowing the Government quickly to identify high-risk products and set subsequent additional safety regulations. Above all, it ensures that we have consistency, rather than the lack of consistency in the current arrangements.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendment of the noble Lord, Lord Foster of Bath, and my noble friend’s amendment but I want to press the Minister briefly, because one of the key rationales for Clause 1 is to improve safety dynamically. I think we would all agree with that. Obviously, mention is made of the toy safety regime in the United Kingdom and in the European Union, as well as lithium batteries, artificial intelligence et cetera.
May I press the Minister on a genuine question? I have not found a rationale for why the only Schedule to the Bill excludes so many products not covered by the Bill’s potential regulations. It excludes:
“Plants, fruit and fungi … Feeding stuff”,
food generally and animal by-products, aircraft, military equipment and “Medicines and medical devices”. Maybe the Minister could say a little about which value judgments and what empirical data have been used to exclude those products from consideration in the Bill, perhaps seen through the prism of safety.
Lord Sandhurst (Con)
My Lords, I will speak to Amendment 10, in the name of my noble friend Lord Sharpe of Epsom, which seeks to delete Clause 1(4). It is worth looking at that subsection. It says:
“For the purposes of this Act, a product presents a risk if, when used for the purpose for which it is intended or under conditions which can reasonably be foreseen, it could … endanger the health or safety of persons”
or of domestic animals—I paraphrase—
“property (including the operability of other products), or … cause, or be susceptible to, electromagnetic disturbance”.
That is a bit beyond my knowledge grade.
I looked at this provision and it really is very broad. Where does it end? We say that the provision must be removed because it provides excessively broad powers to the Secretary of State to address things we simply know nothing about. It comes, of course, under the skeleton legislation; I have already made my points about the problems with that.
The definition of risk here has the potential to be so expansive that nearly any product, except an aircraft or certain other things which my noble friend has just identified, could be construed as presenting a risk under certain circumstances. A motor car can be perfectly safe and wonderfully designed but, if driven too fast or just badly in some other way, it will of course endanger life. That happens every other day. The same applies to a whole raft of mechanical tools and instruments—anything one wants to think about. If misused, they will cause danger.
If we have at some time in the future a Government who feel very strongly about something which, at the moment, none of us object to, they will be able to address that by secondary legislation, which will not be ultra vires—outside the scope of the legislation. It can do almost anything. We can all think of almost anything that we use at home, such as a power drill or a stepladder. If you misuse and fall off that, you break your skull. It could be motor cars or anything. This is absolutely absurd and far too broad.
If the Government want to legislate to say that motor cars must have a speed restriction, or must have brakes which do this or that, they should do that with specific regulation under specific legislation directed at that target, because Parliament has said, “We’ve had far too many accidents of this sort. We’ve got to address it”. That is the normal process we have as society develops, but a clause of this sort is just extraordinary. It really is Brave New World stuff.
Our complaint is simply that the broad scope of this definition could, in future, empower regulators to impose unnecessary restrictions on products where the risks are minimal or purely hypothetical—and certainly not within the scope of the imaginations of those of us in this Room—because somebody comes along, or a Government come along, in five years’ time and decides that they want to deal with it. Rather than having an embarrassing and difficult debate in Parliament, the Minister just has his way. That is not how we proceed in this country. We are a parliamentary democracy under, as we have been told, the rule of law. We would suggest that the Government have already attacked businesses, high-street retailers and farmers. Will these relentless, unidentified attacks on businesses ever stop? This provision, like others, risks creating legal uncertainty and regulatory overreach. We really must put a stop to it.
I say again that Clauses 1 and 2, as they stand, must be significantly revised or removed entirely, or the promise remains that we will move for them to be removed on Report.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, it is a pleasure to respond to this particularly interesting debate. I, too, welcome the noble Lord, Lord Sharpe, to his new position. I must say, the noble Lords, Lord Sharpe and Lord Sandhurst, seem to have undergone a conversion, certainly since the former’s time in the Department for Business. I have not been able yet to count the number of regulations in primary legislation that the noble Lord took through but, given that he was a Home Office Minister and given the Home Office’s—how shall I put it?—productive record in producing legislation in Parliament, I hasten to suggest that it was quite a few.
Clearly, behind that is an important consideration about the shape of the Bill and why we need a regulation-making power. On the other hand, the Government would say to noble Lords that the intention is to use those regulations proportionately on the back of the policy consultation that has just taken place. We see here, in a sense, a tension between those noble Lords who wish to make sure that the legislation covers areas of concern—we have heard about the areas of concern for the noble Lords, Lord Foster and Lord Fox—and those noble Lords who feel that the regulation, or the power given here to Ministers through regulation, goes too wide. Clearly, a balance needs to be drawn.
Lord Fox (LD)
There is no dichotomy. We do think that the powers are too wide but part of what we want to do is channel those powers by making the sort of suggestions to which the Minister just referred.
Lord Hunt of Kings Heath (Lab)
I was hoping to assure the noble Lord that the way the Bill is constructed should give him comfort in relation both to the issues he has raised around safety and to the comments of the noble Lord, Lord Foster. Clearly, we think that consumer safety is very important. It is central to the Bill and a key component of our product regulation.
The Bill as drafted seeks to uphold a high standard of consumer protection and guarantees that the risks associated with products are minimised; Clause 118 provides for this. Although some products have risks that may be reduced through improvements to the design or clear warnings, others may be so dangerous that they should never be allowed to be sold in the first place. Baby self-feeding pillows are an example of this. They were recalled by the Office for Product Safety & Standards in 2022 due to the fact that the risks they presented could not be mitigated.
The noble Lord, Lord Fox, referred to Clause 1(1)(a), which refers to “reducing or mitigating risks”. We believe that that wording puts safety at the heart of the Bill while permitting regulations to acknowledge the wider spectrum of risk. This concept of a wider spectrum of risk covers the point that the noble Lord was trying to make.
That really is the same response as the one to Amendment 10, in the name of the noble Lord, Lord Sharpe, to which the noble Lord, Lord Sandhurst, referred—essentially, how the Bill explains the term “risk”. My noble friend Lord Leong explained how the Bill puts product safety, and reducing the risks associated with it, at its heart. That includes risks to the health and safety of persons, and Clause 10 makes it clear that “health” can refer to the physical or mental health of a person.
I understand what the noble Lord, Lord Sandhurst, was saying. He was concerned about the wide scope of the Bill, particularly Clause 1(4). However, in a sense, we have to capture in the Bill a definition wide enough to allow us to deal with some of the circumstances that noble Lords have raised. The aim is to be comprehensive but also proportionate. The noble Lord said that the Minister could just do this willy-nilly, but the fact is that regulations have to go through Parliament. He knows that in your Lordships’ House, one Member, even on a statutory instrument under the negative procedure, can ensure that a debate takes place. To come back to the words he used, at the very least for Ministers that can be a challenging and extensive process. A regulation will not be produced without full consultation as well. I would therefore argue that this is not an overweening power of the Executive; it is a sensible balance whereby we try to set out a broad enough definition to cover the kind of risks that noble Lords are concerned about. However, because it has to go through a parliamentary process and a consultation process before that, there are sufficient safeguards to ensure that any future Government or Ministers are not overriding in the way that the noble Lord suggested.
Clause 1(4) also ensures that damage to property is also included within the meaning of risk, meaning that regulations made under the Bill can be made for the purposes of mitigating risks to property, including the operability of other products. I can say to the noble Lord, Lord Fox, therefore, that the Bill captures the spectrum of risks that products may present to the health and safety of people and their property.
I also emphasise that not every element of our product safety framework is focused entirely on safety in the traditional sense. Our current regulatory framework covers a wide range of topics. This includes the use of radio spectrum, the ergonomics of protective gear and noise emissions from some outdoor machinery, such as concrete breakers and lawn-mowers. A number of our existing regulations, such as those covering fireworks and pressure equipment, also cover risks to domestic animals. By the way, I point out to the noble Lord, Lord Fox, that that is why domestic animals are mentioned in the clause; it is also for this reason that we cover the interoperability of products and their susceptibility to electromagnetic disturbance, along with the risks to domestic animals, as I said.
Amendment 7, in the name of the noble Lord, Lord Foster, would create in the Bill a category of high-risk products where regulations can apply across the board. He worries that the Bill is too discretionary. I understand where he is coming from.
Lord Foster of Bath (LD)
Just for absolute clarity, I did not say that the Bill was too discretionary; I said that the current arrangements were too discretionary and I want a change from that situation.
Lord Hunt of Kings Heath (Lab)
I am sorry if I misinterpreted what the noble Lord said, but I get his drift. We believe that the operation of our current product regulation framework already recognises the point that he made.
Lord Foster of Bath (LD)
I apologise but I am not quite sure what the Minister’s concern about my amendment therefore is. It specifically suggests that we put into the Bill a power for the Secretary of State to choose to bring forward regulations that will enable the classification of high-risk products in the way that he has just described. They are all included, including the recently developed framework, as possible ways of doing that within the amendment. I genuinely do not understand the Minister’s argument. I am giving an opportunity for clarity—so that in all circumstances there is an opportunity to use that framework.
Lord Hunt of Kings Heath (Lab)
If the noble Lord will let me explain, Clauses 1 and 11 grant powers to make regulations relating to product safety for a range of purposes, general or specific. The Government have set out in their response to the product safety review our intention in the months ahead to begin a process of sector reviews. They will consider whether any changes are needed to our existing regulation of higher-risk products to reflect modern challenges, such as those that the noble Lord has pointed out in two speeches this afternoon. We will also consider whether updates to the GPSR are necessary to ensure that cross-cutting and emerging risks are properly addressed, particularly where products fall outside current sector-specific rules.
Furthermore, in December 2022, the Office for Product Safety & Standards developed a product safety risk assessment methodology for GB regulators to use with non-compliant products. The methodology requires consideration of the tolerability of the risk identified. Where a risk is intolerable, a regulator can act robustly in relation to risks that may have a low possibility of occurring, but where, if they did, the outcome would be disastrous. A noteworthy example is the effort made by the Office for Product Safety & Standards to protect young people from the dangers of ingesting small, powerful magnets.
In Amendment 95 the noble Lord, Lord Fox, makes the sensible point that safe disposal can be a key part of protecting consumers and businesses. Clause 1(5) makes clear that regulations can cover safe disposal of products. We will consider whether particular products need specific regulation in this area on a case-by-case basis.
On the disposal of batteries specifically, the Government are committed to cracking down on waste as we move toward a circular economy. We shall have a discussion on the circular economy—I was going to say “in a few minutes”, but that might be a little hopeful. We are reviewing and propose to consult on reforms to UK batteries regulation before setting out our next steps.
Finally, regarding the question from the noble Lord, Lord Jackson, on the Schedule to the Bill, the things mentioned in the exclusions are covered by separate legislation. It is as simple as that.
Lord Jackson of Peterborough (Con)
I am grateful for the Minister’s indulgence; I have a straightforward question regarding Amendment 7 in the name of the noble Lord, Lord Foster. The Minister has answered it thoroughly but I still do not understand. What else would the Government be doing, in looking at the efficacy of product safety, that is not already in the amendment? Surely the noble Lord’s amendment merely formalises actions with regard to product safety that the Government themselves would do in analysing what they need to do to protect consumers. I cannot understand the Minister’s resistance to at least being a bit more emollient towards what seems to me quite a sensible amendment.
Lord Hunt of Kings Heath (Lab)
My Lords, I think that is surprising support from the noble Lord, Lord Foster. This is an iterative process in Committee, and we are certainly always prepared to look at suggestions put forward. My response is simply that we think the Bill as it stands, and the reviews that will take place, cover the points he raises. The Attorney-General’s advice also suggests that we should not unnecessarily add to legislation, but we will give it some consideration.
Lord Fox (LD)
My Lords, as a fox, I take the subject of wild animals somewhat to heart. To some extent the Minister has covered my concerns, particularly around disposal, which is important, so I beg leave to withdraw Amendment 3.
Lord Frost
Member’s explanatory statement
This amendment removes from the Bill a broadly-drawn power to align with EU environmental regulation.
Lord Frost (Con)
My Lords, in moving Amendment 4, I will also speak to my Amendments 6, 15, 36, 37 and 42. I thank the Minister for the constructive exchanges we have had in the previous two or three weeks, both face to face and in writing.
Lord Frost (Con)
My Lords, I will pick up where I left off. I was about to note that my six amendments in this group have a substantive purpose and, I guess, a probing, clarificatory purpose. I will begin with the substantive. My amendments are separate, but they all stem from the same broad thought, and they are designed to deal with the fact that the powers in the Bill give Ministers the ability to make regulations for products in the UK, or GB, in a range of areas defined by simple reference to existing EU laws; and, beyond that, to provide for those regulations to evolve dynamically —that is, when the EU changes its law, that change feeds through into our regulations.
Personally, I am not and have never been a purist in this area. I do not think it is necessary for GB to have its own defined sets of rules on every single thing, with the UKCA designation that covers everything—unless, of course, we were to drop the current approach to regulation entirely, which was, after all, developed in the last few decades under an EU law framework, and revert to a more traditional, common-law, objectives-based framework. That is possibly a step too far for the time being. Given that, it makes sense to look at other standards and whether they work for us. In practice, that is what happens now, in a limited way. For example, we recognise the CE marking for the EU while sometimes having the UKCA marking or our own rules in parallel, but there are two problems with this.
First, I do not see why that possibility of recognising other standards should be limited to EU law only. Of course, I do not really agree with the thrust of Amendment 17 in this group, which we are about to discuss, which would require alignment with EU law. We may want to use other standards from other territories with less prescriptive regulatory frameworks, and we may want to allow goods with different standards from more than one place to compete on our market to make the country open to the best standards globally. That is the first problem the Bill presents.
Secondly, I do not really think it is right for us in this Parliament to subcontract our lawmaking to another body. It must be clear what the law of this country is at any given moment; it must be properly on our books. It is not good enough to say to the question “What is the law on product X?” that the answer is whatever EU regulation number whatever says it is today. My amendments are designed to deal with these points, and I take them in logical, not numerical, order.
Amendment 4 deletes Clause 1(2). I propose this really to explore why it is necessary, in a Bill specifically on product regulation, to include the ability to import large areas of EU environmental law. I can see that it might be convenient, but the same could be said of lots of other areas too. If there is a more specific and persuasive explanation, I would be interested to hear it from the Minister.
The Deputy Chairman of Committees (Baroness Newlove) (Con)
My Lords, I must inform the Committee that, if Amendment 4 is agreed to, I cannot call Amendment 6 by reason of pre-emption.
Lord Russell of Liverpool (CB)
My Lords, I will speak to Amendments 17 and 127 in my name. I also would like to congratulate the noble Lord, Lord Sharpe, on moving from the calm waters of the Home Office to the much more exciting waters of his new role. I hope he will enjoy the turbulence that will be created, not least perhaps by this group of amendments.
I have tabled this quite deliberately with a cross-party group representing the three principal parties across the House. This is designed, frankly, to try to drain the politics and emotion from this particular issue. The Government have made it quite clear that their primary driver for this Bill is to encourage economic growth and, above all, sustained investment. Having spent 31 years serving all kinds of businesses, including some of the largest companies in the world, as a headhunter, I know that one thing companies hate above all is uncertainty. For the last few years, many of our businesses have lived in a state of more or less continuous uncertainty, which they are not very happy about. That partly reflects our economy not moving as fast as it should and levels of investment which are at the bottom of the league table against our primary competitors.
The recent attempts, since midnight on 31 January 2020, to try to create our own system of regulation have been repeatedly underwhelming. I suspect they have been extremely expensive. I do not know whether the Minister will ever be able to find out quite how much the UKCA exercise has cost. I suspect if he managed to get the noble Lord, Lord Callanan, into a bar and plied him with enough drink—possibly Scotch whisky—he might find out. I suspect it was a considerable and rather embarrassing sum.
That has created a state of uncertainty. This Bill gives us a change to try to calm the situation down. Above all, what I want to do, and what I persuade and implore all noble Lords to do, is to drain the emotional and ideological swamp around some of these issues, and to get away from arguments which, frankly, most businesses have very little time or respect for—however important they may seem to the people for whom it is important—about sovereignty and rule-taking, and all those things. Most businesses are as interested in those issues as the general public is in your Lordships’ House and what goes on here. Most of them have no idea at all and have very little interest. Frankly, that is the same attitude that most businesses have to some of the wrangling that has gone on around these issues. Above all, they want certainty.
To start, I quote the head of trade policy at the British Chambers of Commerce, Mr William Bain, on the Bill:
“We would encourage the Government to bring forward an indication of the policy it intends to follow under the bill in terms of whether it would be the default that there would be alignment with relevant EU measures in scope of this or whether they will look at it on a case-by-case basis. But the BCC in its report and surveys and evidence has the data from our members to say that they think for traded goods, having as much alignment as possible is beneficial for trade with the EU”.
Other bodies, such as the Engineering and Machinery Alliance, said the same. CHEM Trust said the same on chemicals and REACH. I think I can rely on the noble Baroness, Lady Bennett, to weigh in on the environment, and we have already touched on some sensitivities about trade with Northern Ireland and trying not to upset the Windsor agreement and the DUP any more—it seems to be in a state of habitual disarray and alarm, which I do not want to exaggerate.
Secondly, the Government themselves, in their Explanatory Notes on the Bill, say that it is
“ensuring that the law can be updated to allow a means of recognising new or updated EU product requirements”
including CE marking, where appropriate,
“with the intention of preventing additional costs for businesses and provide regulatory stability”.
At this point, I return to the theme of Scotch whisky. I thought it was interesting to find a paper from the Scotch Whisky Association, with which certain noble Lords may be familiar. It says that business certainty and consistency by transposing EU market legislation of relevance to Scotch whisky in the UK is of extreme importance and that:
“A pragmatic, non-disruptive transition will be fundamental”.
We are looking for a Bill that gives the degree of certainty that business is craving and looking for. The result of the recent election in the United States of America is a cause of some alarm for some businesses, with perhaps increased uncertainty. I would not be surprised if the President-elect does not again hold out the prospect of a glittering trade deal between us and the United States. I suspect it might never be forthcoming or, if it is, the price we would pay would certainly benefit America first and us last.
The amendments that we are putting forward are in no way, shape or form driven by ideology; they are driven by business pragmatism. I also point out that the Government recently published an industrial strategy Green Paper, from which I quote:
“This government believes it is our role to provide the certainty that inspires confidence, allowing businesses to plan not just for the next year, but for the next 10 years and beyond”.
In essence, this is what we are trying to encourage the Government to articulate during the passage of this Bill, in such a way that business will not have to read between the lines to understand what the Government understand, as it is straight up there—either in the Bill or in comments made at the Dispatch Box that make the Government’s hopes and intentions very clear.
I gently remind some of those who might perhaps take issue with these amendments that it was the new leader of the Conservative Party, in her previous role as a Cabinet Minister, who effectively blew the whistle more than once on some of the attempts by her party to put in place a variety of measures to try to replace some issues that affect trade and regulation with the UK. She found disfavour with some members of her own party for doing so, but I would be interested to know whether the noble Lords who find fault with these amendments have spoken to the new leader of their party to see what her view of this is.
I will finish by firing some questions at the Minister. They are mainly aimed at the Bill team, because I do not expect an immediate answer, but I would be grateful if the noble Lord could come back to us in writing.
First, what calculations have been made by the Government of the impact of divergence in product standards from the EU going forward on our exports and our imports?
Secondly, what engagement have the Government had with industry on the impact of aligning with the EU on product regulation? I know from a meeting that the noble Lord, Lord Kirkhope, and I had, thanks to the Minister, with him and the Bill team that there has been considerable engagement throughout the past year with all kinds of areas of business. It would be helpful to know how extensive that was and what level of detail it was able to go into.
Lord Kirkhope of Harrogate (Con)
My Lords, I rise with no emotion in my voice—because, as noble Lords will appreciate, to be a Government Whip under Margaret Thatcher and John Major one had to leave emotion aside—to support Amendments 17 and 127, which bear my name. In doing so, I first want to speak to Amendments 6, 9, 15, 36, 37, 39 and 42. Obviously, I am against those amendments because they would fundamentally alter the purpose and practical operation of the Bill. If the aim of these amendments is to damage British businesses and our competitiveness on the world stage, noble Lords promoting them should say so. They should also be open with this Committee. If these amendments are simply a product of opposition to the EU or anything associated with the word “Europe”, they should make that absolutely clear.
This raises a critical question: who benefits from this approach? It is not British businesses. Our industries require clarity, predictability and coherence to thrive in competitive global markets. These amendments risk creating a fragmented system where businesses face the burden of navigating multiple and potentially conflicting regulatory frameworks. The UK has a proud history of robust safety and environmental protections. These amendments focus on what are termed “foreign laws”, without any clear guiding principle, and risk creating uncertainty about the quality and safety of products in the UK market. The outcome would be confusion for manufacturers, exporters and regulators alike. These amendments also prohibit the use of some dynamic alignment, a valuable tool for ensuring that our regulations remain relevant and competitive in an ever-evolving global market.
The European Union remains our largest trading partner. Its product regulations set a widely recognised global benchmark. Dynamic alignment allows us to align with the EU when it is in our interest to do so, ensuring that our businesses can access those markets while reducing additional costs or barriers. Denying this flexibility would leave the UK with an outdated and rigid regulatory framework to the detriment of businesses, workers and consumers alike. This introduces a potential free-for-all of standards with little clarity on how decisions would be made or who would be consulted. It is not the framework we need to build confidence in our regulatory system at home or abroad. These amendments represent a step backwards. They prioritise an abstract notion of flexibility over the real-world needs of businesses, consumers and our economy. They threaten to create a chaotic, fragmented regulatory environment that would disadvantage British industry and weaken our position in global trade.
I support the amendments I referred to that bear my name. I believe they offer a practical and balanced approach to regulating products in the United Kingdom. They would provide clarity for businesses by establishing alignment with EU product standards as the default position while, of course, maintaining the flexibility to diverge where clear benefits can be demonstrated. The EU remains our largest trading partner, as I have said, and its regulatory standards often set the tone for international markets. Aligning with those standards simplifies trade not only within Europe but globally; many third countries recognise those rules, and British businesses benefit from this de facto international benchmark. Diverging from EU standards risks isolating our industries, as I have said, and placing UK businesses at a competitive disadvantage.
The financial case for these amendments is equally clear. Without regulatory alignment, businesses face the double burden of not only having to navigate two distinct sets of standards but it not being bureaucratic. It is expensive: the Government’s impact assessment has shown that duplicating conformity assessments alone could cost businesses up to £1.6 billion over the next decade. There are many small and medium-sized enterprises that we should be particularly concerned about. These costs are insurmountable and may even deter them from exporting altogether. Our amendments would mitigate those risks by creating a framework of consistency and certainty.
I welcome the decision by the previous Government— my Government—to extend the recognition of CE marking indefinitely. This amendment would build on that precedent, turning an ad hoc decision into clear, predictable policy.
It has already been referred to but I draw your Lordships’ attention to the situation in Northern Ireland, where alignment with EU product standards is already a reality under the Windsor Framework. This approach would complement the Windsor Framework, ensuring that businesses operating across Great Britain and Northern Ireland have a consistent regulatory environment; reducing friction and confusion; and avoiding separate rules governing different parts of our country. I am sure noble Lords agree that that is desirable.
Our amendments are pro-business, pro-trade and pro-consumer. They reflect the realities of our interconnected world and would ensure that the UK remains an attractive place to invest, trade and innovate.
Lord Browne of Ladyton (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Kirkhope. Tempted as I am to follow his lead and comment on some of the other amendments in this group—other than the ones I put my name to, that is—I shall resist that temptation. My intention is to speak to Amendment 17 only and, even then, in a restricted way.
Before I do so, I join others in congratulating the noble Lord, Lord Sharpe, on his new appointment. He and I have debated consistently and for a period a number of issues; I will miss those opportunities because it is unlikely that I will be back in this space, in policy terms, in future.
I do not intend to rehearse in any detail the arguments that have already been made. I just want to emphasise why this amendment is squarely consonant with the aims of this Bill and will increase our agility in providing British businesses with a greater degree of certainty. As my noble friend the Minister outlined at Second Reading, the Bill aims to underpin the UK’s position at the forefront of international trade and enable the recognition of EU product requirements where it is in the UK’s interests to do so. It is precisely in that spirit that I added my name to Amendment 17; in the short time I will detain the Committee for, I shall attempt to explain why I believe that this provision will smooth our path to accomplishing these goals. Perhaps most importantly, the Bill in general—and Amendment 17 in particular—aims to move beyond the wrangling consequent upon Brexit and to provide our businesses and industrial sector with the certainty they need and crave.
I have had occasion in other contexts to make the case that regulatory certainty does not diminish our economic strength but is a prerequisite for those businesses on which our economic strength depends. The certainty that Amendment 17 would provide will not inhibit economic animal spirits but will allow businesses to plan and co-ordinate their commercial activity with the same confidence that their competitors in the EU and elsewhere currently enjoy. It is for that reason that the 50,000 businesses represented by the British Chambers of Commerce, and those businesses belonging to the Engineering and Machinery Alliance, support the policy of dynamic alignment, which would be instituted by the adoption of this amendment. We have tried the inverse of this approach and ought to have learned the lessons.
The brave new world of a UK-only system for the regulation of goods and products was widely disregarded by domestic businesses, who overwhelmingly chose to continue to conform with the CE mark because it allowed them access to an exponentially larger market. Indeed, the previous Government’s own regulatory impact assessment in this area showed that some overseas suppliers stated their intention to limit product supply to GB if CE was no longer recognised. Overall, the then Government’s best estimate was that around 18,500 UK manufacturers were involved in affected industries and that the average annual value of all manufactured goods imported into the UK subject to UKCA or CE requirements was £110 billion, with around half of these imports from the EU. In 2019, products that were subject to UK or CE requirements represented around a quarter of all UK-imported goods. As we have heard, the previous Government’s own impact assessments of duplicative conformity and labour time, to which the noble Lord, Lord Kirkwood, drew our attention, estimated total costs of up to £1.6 billion over the next decade. As your Lordships’ Committee is aware, in May 2024, after repeatedly extending the deadline to transition to the UKCA, the UK Government admitted defeat and indefinitely extended the recognition of CE goods in GB markets.
As I said at Second Reading, I have lost track of the number of Conservative Ministers I have seen in my 27 years in Parliament announcing their determination to kindle a bonfire of regulations, to take an axe to red tape, or some similarly strenuous deregulation measure. If that really is their desire, there are few things better calculated than this amendment to obviate the need for business to undertake rigorous conformity assessments and, consequently, smooth the path for frictionless trade. As such, this amendment preserves the intentions of the Bill to update our regulations according to a calculus of national self-interest, giving our businesses regulatory certainty while still allowing us to diverge from EU regulations when it is to our advantage.
At the risk of repeating an element of my remarks from Second Reading, we have seen a parallel scenario emerge in respect of our chemical regulations. The last Government decided to leave REACH, the EU’s body dictating the registration, evaluation, authorisation and restriction of chemicals regulations, to set up a parallel organisation. Since then, we have not adopted a single registered restriction on a harmful substance, compared with 10 new protections offered by EU regulation, including on harmful microplastics deliberately added to products. While REACH has regulated PFAS in the EU, not a single river or water body in England is in good chemical health. Since we left REACH, the EU has initiated 23 risk assessments related to harmful substances, while we have initiated just three. It may be that this is a function of a more vibrant, freebooting approach, or that we have superior data or a more effective methodology, but I fear it may just be that our duplicate body has simply proven less effective, which in turn imperils the safety of people in this country.
Lord Jackson of Peterborough (Con)
My Lords, I rise to support the amendment in my name and primarily that of my noble friend Lord Frost, particularly Amendment 4. It would not be fruitful to relitigate the Brexit wars, and certainly, those of us who have tabled these amendments do not wish to do so. We are looking at this Bill and its proposals. It is notable to remember that it is not the Government who are moving Amendment 17 and its consequent later amendment, but other noble Lords.
I shall just specifically talk about the amendment to Clause 1(2). It is actually quite a loose and opaque concept to talk about tabling an amendment to the Bill which talks about mitigating or reducing the “environmental impact of products”, because there is quite a degree of confusion about that specific phrase. There is also a significant question as to why there is a specific carve-out for this in the Bill. My noble friend Lord Frost raised this issue specifically with the Minister, the noble Lord, Lord Leong, in his letter of 16 October, and asked why it was necessary to have a separate provision to deal with this. My concern about this clause is that there is the prospect, if it remains in the Bill, not only that we may replicate very narrowly drawn product safety regulations as regards the environment, but that, due to mission creep, it can develop a lot of other particular areas. That may be music to the ears of the noble Baroness who represents the Greens, but it may extend to a supply chain’s due diligence, or to vehicle standards, artificial intelligence or deforestation. Those are all very wide areas where there would be a significant impact from what looks like a pretty innocuous clause. Therefore, I would like the Minister to address that particular issue, because it is very important.
To go back to the clause that is referenced in the amendment from my noble friend Lord Kirkhope of Harrogate and the noble Lord, Lord Russell, I am not sure that they have been witnessing the same situation with the regulatory regime and this Labour Government since 4 July. We are already seeing de facto alignment. We are seeing alignment on a common charger for electrical devices, the vote to leave the energy charter treaty and rules on organic pet food. We are seeing delayed divergence on Section 6 of the retained EU law Act, which is about paying due regard to European Court of Justice decisions vis-à-vis the UK courts; recognition of CE-marked construction products; the suspension of mandatory recycling labels; changes and delays to the implementation of the Windsor Framework; delays to the border target operating model; regulation on deforestation-free products delayed; and entry and exit schemes delayed.
The idea that this Government are presiding over a mass large-scale divergence is completely not the case. For a speech that was meant to take the political heat out of the debate, I think it was quite a political speech by the noble Lord, partly relitigating the long battles over Brexit we had. I do not think it is an ignoble aim for us, in laying these amendments in Committee, to make a point about the geopolitical changes in the United States with the election of President-elect Trump and the focus on deregulation and fewer and more flexible regulations. There are economic difficulties in the European Union, particularly in Germany, which has had some significant encumbrances in terms of all manner of economic data. To tie our regulatory regime to just one market—the European Union, where we have no control, no say and no voice—in a Bill in which there are huge numbers of Henry VIII and discretionary powers to be exercised by Ministers that are effectively unamendable is a risk. That is the risk, and it is the risk of this amendment.
The fundamental flaw of this amendment is that it is asymmetrical and unbalanced. My noble friend Lord Kirkhope used the word balanced. I do not think it is balanced; it is incongruous because there is an inherent presumption—a requirement in this amendment —for us to accept dynamic alignment. At least the noble Lord, Lord Browne of Ladyton, was honest that it is dynamic alignment. It is Chequers 2.0. In this amendment, we are being asked to support Chequers enunciated in primary legislation. I believe that is wrong.
The reason I think that there is a flaw and that it is incongruous is that if noble Lords look at Amendment 17, in subsection (3) of the proposed new clause there is a requirement to lay a statement before Parliament within 14 days about why a decision not to replicate EU law under proposed new subsection (2) is necessary. Funnily enough, there is not a similar requirement to lay a statement if it is decided to diverge from European Union regulations. I say to my noble friend and the noble Lord, Lord Russell, that the amendment would have been a lot stronger and a lot more robust to criticism by this side and perhaps even Ministers if that had been in the amendment. It is not, and for that reason it is a regrettable amendment. It seeks to tie us to a shrinking market which, by dollar denomination, will be about 14% of world trade within the next 10 or 12 years. That is not something we can put in the Bill. For that reason, I will not support it.
Lord Russell of Liverpool (CB)
I shall quickly respond to the noble Lord. One of the reasons why I asked the Minister for some detail about the breadth and depth of the consultation his department has had with business was to find out what business really thinks. I would say, in riposte to the noble Lord, that the key thing that should drive decisions on whether we align with the European Union or any other jurisdiction should primarily be what business is telling the Government. Businesses have a far better idea of the economic state, presently and potentially, of the markets they do business with. In fact, they have a much better idea than either Ministers or civil servants. From my point of view of trying to speak on behalf of business, listening to them on what they think should be the priority would seem the sensible thing to do.
Baroness Lawlor (Con)
My Lords, I thank the Minister for his generous allocation of time the other day to discuss some of the issues; I am very grateful for that and to his officials. I apologise for missing the debate on group 1 because of train delays for hours, but I rise now because my Amendment 6 cannot be called if Amendment 4 is agreed. I will speak to Amendment 9, which would disallow regulations that disadvantage the UK under its trade treaties. I will highlight the CPTPP and the UK’s main bilateral trade agreements with Australia and New Zealand. I support Amendments 15 and 37 in the name of my noble friend Lord Frost, and I add my Amendment 39 to prevent dynamic alignment with the EU.
The aim of these amendments is to ensure that the UK can help shape and promote free trade globally to the benefit of free trade under a rules-based agreement at international level. That is inconsistent with locking the UK into the EU’s protectionist arrangements, even on a case-by-case basis, I fear. They are different; they are under code-based legal systems and they are shaped by different legal thinking from that underpinning UK law, which is more pro-entrepreneurial and innovation-open. I do not believe we should saddle UK producers and consumers with the cost of complex EU protectionist law rather than be open to the best and most similar arrangements elsewhere—foreign laws—or our own laws that can benefit our economy.
I shall give an example of what I mean by protectionist and inward-looking EU law and then look at how it affects growth figures and jobs; I disagree with noble Lords who suggest otherwise. One illustration comes from the EU’s digital commerce and AI sector. The damage was annotated in a September 2024 study, Rules Without End: EU’s Reluctance to Let Go of Regulation, by two EU-friendly economists, Guinea and du Roy. They concluded that,
“the EU rulebook added 562 new pages and 511 new articles on Data & Privacy; as well as 271 new pages and 247 new articles on E-commerce and Consumer Protection”,
amounting to nearly 2,500 new restrictions for data and privacy and 1,200 for e-commerce and consumer protection. The cost was highlighted former MEP Luis Garicano, who concluded that this coincided with a 50% drop in the number of new apps coming onto the market. Meanwhile, the report said, a study by the Bank of Spain,
“found that each additional regulatory provision was associated with a 0.7 percent decline in the employment rate of the affected sector”.
Other noble Lords with whom I disagree have tried to draw our attention to employment rates. The Ernst & Young investment monitor for 2024 indicated that the UK had the largest number of jobs created by FDI in 2023. The UK was at 52,000, France was at 40,000 and Germany was at 14,000. Project numbers in the UK were increasing; in France and Germany, they were falling.
The other indicator to which I would like to draw your Lordships’ attention—I hope the Minister will look sympathetically on these amendments—is GDP share. The EU’s declining share of global GDP is mirrored in its recent growth figures. Whereas UK growth in the year ending June 2024 was 0.7%—yes, that is disappointing—the eurozone’s was behind that, despite having three G7 members among its number. In the third quarter—that is, since June—figures for UK growth are up by 0.5% and the eurozone’s by a disappointing 0.2%. For those reasons, there is a strong economic case for not locking us into the EU’s protectionist arrangements. Despite the best will in the world in Brussels to move out of them, the EU seems to get stymied each time by ever greater protection, as these studies suggest.
Baroness Bennett of Manor Castle (GP)
My Lords, with the explicit kind invitation of the noble Lord, Lord Russell, I rise to provide an environmental perspective and broadly support Amendments 17 and 127. Since it is the first time I have spoken in Committee, I welcome the noble Lord, Lord Sharpe, to his new role. Given the range of subjects I cover, we have discussed many things before and we will have new subjects to cover. I also apologise to the Minister: I was aware of the long time that he devoted to consultation; like the noble Baroness, Lady Lawlor, however, transport interfered with my attendance. There is a lot of it around, I am afraid.
I will comment broadly on the amendments introduced by the noble Lord, Lord Frost, and others on this side of the Committee. I am not in favour of all those amendments. I suspect it will not surprise many people to hear that but I suggest respectfully to the noble Lord that he might be picking the wrong battlefield when it comes to tethered bottle tops. I am not sure that being the noble Lord in favour of litter is something that he would like to adopt, given that if you look, for example, at a marine conservation study from 2023, bottle tops were the third most littered item found on beaches. Indeed, the NGO Seas At Risk found it was the third most common plastic item in the seas, causing damage to wildlife. So I suggest a small, practical and sensible measure. If the noble Lord is finding it difficult to manage these new bottle tops, there is a TikToker whose handle is @andreilifehack. He has 8 million followers and a neat little trick of how to manage a tethered bottle top. I should be happy to share that link with the noble Lord.
Like the noble Lord, Lord Russell, I am going to take a moderate, practical approach to this. Picking up the point he made about the advantages to businesses, we particularly look at small and medium enterprises in the UK, which have suffered enormously and lost a huge amount of trade following Brexit. Regulatory confusion and uncertainty does not help them, whereas larger businesses may be able to cope. The certainty that his amendment could help to provide would be useful to those small and medium-sized enterprises.
Picking up on environmental health and, indeed, more broadly, the one-health aspect of this and being pragmatic—the noble Lord, Lord Browne of Ladyton, focused on chemical regulation and as the noble Lord, Lord Fox, has amendments on that later in the Bill, I am not going to get into the detail of that now—harmful chemicals and industrial processes are damaging public health in the UK. We have huge problems. The noble Lord, Lord Browne, referred to the state of our rivers, then there is air pollution and the contamination levels in our food. All these things have big impacts on public as well as environmental health. Again being pragmatic and thinking about the fact that both the two largest parties in your Lordships’ House often reflect on the number of people who are not in employment because of ill health and who are not contributing to the economy as a result, taking steps to improve public health, and environmental health as part of that, is an extremely pragmatic step. As the noble Lord, Lord Browne, said, we are trailing significantly behind the EU in important areas of that.
I said I would be brief, so I will stop there because I have more to say on these areas in the next group.
Lord Fox (LD)
As noble Lords can probably imagine, I have been looking forward to this group for ages, and I thank noble Lords for not disappointing. I put my name to Amendments 17 and 127 in the name of the noble Lord, Lord Russell, and tabled my own Amendment 94. I think the valedictory remarks made by the noble Lord, Lord Browne, about leaving this Bill may have been premature because Amendment 16, which is group 9, explicitly deals with the REACH issue, which I know he is so passionate about. I would like him to join me in probing the REACH elements of this, so I hope he can put off his exit from the Bill.
The Prime Minister, the Chancellor and others have stated that they wish to re-engage with our largest market, which is the EU. Their aim, and our aim on these Benches, is to remove friction to make life easier for British business. Thereby costs will be kept to a minimum, markets will be more accessible and growth, which we all agree is vital for our future, can be more easily achieved. I was delighted today when the Treasury spokesperson, the noble Lord, Lord Livermore, endorsed the role of this Bill in helping the Government make those moves to re-engage with the EU. It was reassuring that he sees the importance of this Bill in that process. That is a very good mark to put on what we are doing.
We heard some excellent speeches from the noble Lords, Lord Russell, Lord Browne and Lord Kirkhope, in favour of the amendment tabled by the noble Lord, Lord Russell. The UK Government are introducing legislation to guide the future regulation of standards for thousands of products when they are sold in the UK market. It should go without saying that creating different standards for UK businesses hoping to sell in both the UK and the EU works counter to this. Consistent standards that apply across both markets will give business the ability and certainty to sell in both those markets.
Never mind the dolphins. The noble Lord, Lord Frost, brought up the issue of tethered bottle tops. As far as I am aware, there is no regulation in this country to require tethered bottle tops. The reason we have them is because business knows how costly it would be to have two forms of a drink being sold in one market here and one market there. Business understands, even if some noble Lords do not, the true cost of having two different regulations. When it can do without them, it does, and the one it chooses is that of the biggest market, which is very rarely in the United Kingdom.
This legislation is an opportunity for the Government, if they move in the right direction, to reduce the red tape and the bureaucracy that the current version of Brexit has created for British business. We should be under no illusion that Brexit has made it much harder for businesses to export into the European Union.
The wording of this amendment does not bind the hands of Government. As noble Lords have observed, there is absolutely the opportunity to diverge and move away from the regulations in the European Union, if that is to the advantage of the United Kingdom. This is a common-sense amendment that provides regulatory certainty for UK businesses by requiring a default of alignment with EU regulations and a process for parliamentary scrutiny, if or when Ministers determine that divergence from such regulation would be in the best interests of the UK. That is what business tells us it wants—and I hope that the questions that the noble Lord, Lord Russell, asked will continue with that. It also seems to be what the public wants. A poll published today in the i newspaper says that when people were asked where was more important to Britain economically, 57% opted for Europe, with 34% opting for the US, for example. There are lots of good reasons for the Government to support these amendments, because they provide a foundation for economic growth by ensuring that businesses can plan and invest with confidence about where the regulatory regime is going and what kind of regulations are going to apply in the United Kingdom.
Before I come very briefly to Amendment 94, unlike the noble Lord, Lord Browne, I could not help but be lured into addressing some of the comments made by the noble Lords seated just behind me. The comments of the noble Lord, Lord Jackson, were very interesting. His comments about the environment and how appropriate it is to take into consideration things such as deforestation were interesting, and I shall be interested to see whether the Opposition Front Bench endorse the comments that he made, or whether they will distance themselves from them—because I think that is quite important.
Lord Jackson of Peterborough (Con)
For someone who is usually very astute, who listens to my views and is very kind in saying that they are interesting, I think that the noble Lord may have got the proverbial wrong end of the stick. I was not making a value judgment on whether it was appropriate to put environmental standards in this Bill. The substantive kernel of my comments was that it was unclear as to what the definition of environmental standards was—it was not saying that they were good or bad for things such as deforestation.
Lord Fox (LD)
I may have misunderstood—I shall certainly look at Hansard afterwards. But it would be useful for the Opposition Front Bench to explain where they sit in that regard.
I always listen to the noble Baroness, Lady Lawlor, carefully, but I was confused on a couple of issues that she used as examples. The first example was a very long discussion of digital regulation in the European Union—but digital regulation is not a part of this Bill. The second example was the CPTPP, which we all know is not designed to have mutually enforced standards—standards are not a part of the CPTPP, so I am not sure how this Bill reflects on that at all. This is probably a conversation that we can have outwith this debate, because I am speaking to the point—the point being that we can have trade deals with all sorts of places, multilateral and bilateral, with or without taking into consideration alignment with the EU. However, we cannot have trade in the EU if we do not have the right regulations. That is the point on which I wanted to end, in that regard.
I turn briefly to Amendment 94, which is simply a probing amendment to understand how the Government will monitor and approach the developing international standards. To some extent we have heard about issues around whether we should adopt those standards, but we should certainly understand them—that is my thing—and we should know what standards are governing the products that are coming into our country and how they relate to our standards. Clearly, we are importing a lot of things from a lot of places that are not in the EU, from around the world, and we really need to understand under what level of governance those international standards are maintaining the sorts of things that we care about within product regulation.
To close, the noble Lord, Lord Russell, has done this Committee a great service in tabling his amendments; I am very pleased to be one of their co-signatories.
Baroness Lawlor (Con)
May I clarify something? I specified that e-commerce was part of this study, in line with other digital arrangements. Many producers sell their goods through e-commerce.
Lord Sharpe of Epsom (Con)
My Lords, before I start, I thank all noble Lords, who have been incredibly generous to me this afternoon and this evening. I am immensely flattered.
I say to the noble Lord, Lord Hunt of Kings Heath, that, having been on the wrong end of a couple of punishment beatings by the Secondary Legislation Scrutiny Committee, I am a changed man. I have seen the light. I am reformed. I urge the Government to follow my lead and reform themselves.
This has been a most interesting debate. I thank all noble Lords for introducing their amendments and points of view with such admirable clarity. I thank in particular my noble friends Lord Frost and Lady Lawlor for their amendments. I have signed Amendments 4, 9, 15 and 42; I will explain why.
These amendments would ensure that we maintain our competitiveness on the global stage without being governed solely by EU standards. Amendment 4 seeks to remove a broadly drawn power that allows the Secretary of State to align UK product regulations with EU environmental laws. The provision, as currently drafted, could potentially lead to extensive regulatory alignment on environmental standards without proper parliamentary scrutiny or oversight. I am sorry to harp on about this but the Delegated Powers and Regulatory Reform Committee has expressed significant concerns about this clause, stating that it grants
“Ministers maximum flexibility to choose the direction that the law will take”.
Specifically, the committee warned that this could allow Ministers to align UK law “completely” with EU regulations, even when that may not be in the best interests of the UK or its regulatory framework. Through an overreliance on EU standards, we risk locking ourselves into a regulatory framework that does not necessarily reflect our national interests; of course, we acknowledge that it also might.
Amendment 6 in the name of my noble friend Lady Lawlor and Amendments 15, 36, 37 and 42 in the name of my noble friend Lord Frost are critical for positioning the UK as a global leader in product regulation and consumer protection. They would allow the UK to benefit from the best practices in product safety and environmental regulation from across the world, including from the US, Canada, Japan and other advanced economies. By allowing broader access to international standards, we would ensure that the UK can adapt to global trends and provide consumers with high-quality products. There should be no reason for the Government to oppose such an amendment—unless they are looking for dynamic alignment with the EU.
Amendment 15 is an excellent amendment that would ensure that the UK’s trade agreements with key partners are not undermined by regulations introduced under Clause 1. Those agreements represent some of the most dynamic and rapidly growing economies in the world; ensuring that we do not disadvantage our position with these treaties is crucial to the future growth and success of our global trade. This amendment is about maintaining and strengthening the UK’s competitiveness on the global stage.
The countries involved in these trade agreements, such as those in the CPTPP, are the fastest-growing economies in the world. In ensuring that regulations do not undermine our standing in these markets, the UK is better positioned to take advantage of these growing economies. If we align rigidly with Europe in this way—this is not an ideological point but a practical one—we risk missing opportunities in these markets, where growth is happening at a much faster pace than in the EU.
My noble friends Lord Jackson and Lady Lawlor hinted at this, and I also looked at some of the figures. To put things into perspective on the US versus the EU, in 1982, US and European Union GDPs were broadly similar. However, fast forward to today and the US’s economy is now roughly 45% larger than the EU’s, both in nominal terms and on a per capita basis. Those figures are from the World Bank. Purchasing power parity in the US is 38% larger than in the EU. The US has outpaced the EU significantly in its economic growth. I am not saying that this is due solely to differing regulatory regimes—of course it is not. These numbers encapsulate many varying factors, but it cannot be denied that regulation plays a major part in economic development. The simple conclusion is not that we should slavishly align with the US, just that we should retain flexibility.
The argument is clear: the EU is not the only partner with which the UK should align. We are seeing stronger growth opportunities in markets such as the US, Japan and Australia, with countries that are part of key trade agreements such as the CPTPP and in other areas. Given that the Government have talked extensively about boosting the UK’s growth prospects post Brexit—arguments with which we wholeheartedly agree—it is difficult to understand why they would not support an amendment that protects the UK’s position in these high-growth markets.
If the UK is to remain competitive, it must have the flexibility—which I do not believe is an abstract notion, as claimed by my noble friend Lord Kirkhope—to engage with the most dynamic global markets, rather than being rigidly shackled solely to the EU. There is no logical reason to oppose this amendment, unless there is an ideological fixation on aligning solely with the EU.
This amendment gives the UK the flexibility to take advantage of the best international practices without being locked into EU-centric frameworks that might not be in our best interests in the long term. I urge the Government to accept Amendment 15 in the name of my noble friend Lord Frost.
I will speak briefly on Amendment 17. I have great respect for the arguments made by all its proponents—my noble friend Lord Kirkhope, the noble Lords, Lord Russell, Lord Browne and Lord Fox, and others. In fact, I agree with their reasons for proposing the amendment, but it is perfectly reasonable to arrive at different conclusions. I agree with the noble Baroness, Lady Ritchie, who is no longer in her place but who, in an earlier debate, said that we should reset our relationship with the EU. Of course we should but, for the reasons that I have outlined, this is the wrong way to do it.
I oppose Amendment 17, which proposes to replicate EU law in relation to relevant product regulations. The notion of mandating such alignment with EU regulations post Brexit is not only inappropriate but, we believe, detrimental to the UK’s ability to independently shape its regulatory future. The amendment, by insisting on replicating EU law as the default position, undermines the very essence of the UK’s independence post Brexit. It will inevitably involve importing aspects of EU law that do not suit this country’s future. The entire purpose of leaving the European Union was to take control of our laws, regulations and trade policies. This amendment would force us to retain EU regulatory alignment, unless Ministers could justify divergence—a process that still places undue reliance on the EU framework. Our focus should be on maximising global competitiveness and exploring new trade opportunities, not tying ourselves to EU standards that might not be in our best interests while also accepting that they might.
Finally, I reassure the noble Lord, Lord Russell, that the new leader of the Opposition is well aware of what we are doing. I urge the Government to accept the amendments that I have signed, as I believe they are pro-business, pro-trade and pro-consumer.
Lord Leong (Lab)
I thank noble Lords and the noble Baroness for their amendments in this group. Products in the scope of the Bill are used by every person in this country, covering nearly all manufactured products. We estimate that at least 300,000 UK businesses, employing several million employees, with an estimated market turnover of £490 billion, must adhere to product safety legislation.
The product safety review call for evidence in 2020 and 2021 received something like 158 responses; 126 responses were received in response to the product safety review consultation in 2023; 53 engagement events were held, reaching about 400 stakeholders; and, throughout last year, my department undertook 46 round tables with more than 300 stakeholders, both domestically and internationally. I want to set the picture so that all noble Lords know that we undertook reviews before the Bill was brought to Parliament.
Many businesses and consumer organisations support the Bill, seeing it as a common-sense approach to ensuring that the existing body of product regulation is fit for purpose in the face of technological and other changes. I emphasise again that the Government have been very clear that the UK will not rejoin the EU single market, customs union or freedom of movement. It is important to reset our relations with our nearest friends and neighbours, but that does not mean a return to the arrangements of the past.
Let us not forget that the bulk of UK product regulation is derived from EU law. This is precisely the reason the legislation explicitly references that jurisdiction and not others. If the UK makes a sovereign decision to mirror EU provisions, the Bill provides the mechanism and flexibility, on a case-by-case basis, to do so. This would avoid primary legislation each time technical changes are needed and would increase the certainty that businesses are crying out for. I hope noble Lords will support this pragmatic approach.
However, it is not our default position that we will mirror EU requirements. The Government will be guided by the needs of businesses and consumers, which may differ. Nothing in the Bill prevents the UK diverging from EU requirements. The Government’s approach, whether to mirror or diverge, will be driven by evidence, subject to industry engagement, as discussed earlier in group 1, and support our mission to drive economic growth and provide consistency and certainty to businesses.
I turn to the amendment by the noble Lord, Lord Russell. The Bill provides powers that will give the UK greater flexibility in setting and updating its own product-related rules. It also enables the UK to choose to recognise relevant EU product requirements where it is in the interest of our businesses and consumers to do so. The Government have strong relationships with stakeholders, including industry, trade associations and consumer groups, and will continue to engage with them before any regulatory changes are brought to this House.
Amendment 4 proposes removing the powers in the Bill that would allow us to update regulations that address the environmental impact of products where similar provision exists in EU law. Amendment 6 proposes broadening these powers to update UK regulations to mirror any international jurisdiction. The noble Lord, Lord Jackson, talked about environmental impact, and I thank the noble Baroness, Lady Bennett, for her contribution which leaves me with very little to say here, except that many products are required to meet multiple product regulations, including those which may address the environmental impact of products.
As I have noted, most UK product legislation is derived from EU law. The powers in Clause 1(2) are intended to be used in limited circumstances where there is a corresponding or similar provision in EU product regulations for the purpose of reducing or mitigating the environmental impact of products. This ensures that the power could be exercised to create regulatory certainty and manage changes to EU rules we recognise.
This power is limited in this way as we do not wish to create powers to regulate on wider environmental objectives. This already exists, for example, under the Environment Act. Clause 1(2) in no way obliges the UK to recognise or to mirror EU provisions. We have been clear that such decisions will be taken on a case-by-case basis and subject to parliamentary scrutiny.
Lord Frost (Con)
My Lords, it has been a very interesting debate, even though it may have had a slightly retro feel to those who lived through it all in 2019 and 2020.
I have a couple of quick points. On Amendment 37, if it is genuinely the Government’s view that this clause is not intended to and does not give the power to create ambulatory references, it seems we agree on substance—but maybe it could be clearer in the Bill.
On my question about the Windsor Framework, I gently suggest that the Minister has not quite answered the point. It is not about mirroring in GB; it is about goods that are able to circulate in Northern Ireland and therefore can circulate in the rest of the UK without further ado. I would appreciate it if that could be clarified further. I will not prolong this debate, even though I suspect we will return to this on Report. I beg leave to withdraw my amendment.
“(2) The Secretary of State may also by regulations make provision, in relation to the marketing or use of products in the United Kingdom, for the purpose of—(a) reducing or mitigating the environmental impact of products;(b) promoting sustainable production and consumption;(c) advancing circular economy principles;(d) meeting or exceeding environmental standards set by relevant EU law or other international best practices.”Member’s explanatory statement
This amendment expressly allows the government to exceed EU environmental standards, and adds circular economy principles to the face of the Bill.
Baroness Bennett of Manor Castle (GP)
My Lords, in moving Amendment 5 I will also speak to Amendments 28, 30, 50, 115 and 125, which are in my name and that of the noble Lord, Lord Fox. I am very aware of the time and the risk of a vote being called, so I am abbreviating this on the understanding that we may be able to have discussions later.
In the interests of time I did not speak on the first group, but the noble Lord, Lord Fox, spoke about this Bill—rather than being a framework Bill or one that is filled with Henry VIII powers—as providing guard-rails. Many will see the amendments in this group as providing a set of environmental guard-rails. The noble Lord, Lord Sandhurst, said that the Bill needed policy direction, and that is essentially what these amendments do.
I take the Minister’s point about there being a level of detail that is not appropriate to include in legislation rather than regulation. I spent this morning with Westminster Forum Projects talking about deposit return schemes and extended producer responsibility. I learned about RAM—recyclability assessment methodology. Those are things that certainly need to be in the regulations, but they need to be the guard-rails here.
These amendments will be classed as environmental amendments, but they are also amendments about things such as the right to repair and tackling utterly unnecessary planned obsolescence, which is deeply costly to consumers. These are also amendments that start to address the cost of living crisis and are real principles for people today. I was going to go through the amendments in considerable detail, but the arguments for right to repair and against planned obsolescence are really obvious so, given the time, I will address just the circular economy elements, which run as a line through these amendments.
It is worth saying that the environmental improvement plan contains a target to reduce residual waste, excluding construction waste, to 437 kilogrammes per capita by 2028, but in 2022 this figure stood at 558.8 kilogrammes. That was only 2.8% down on 2019. In three years, that was all the progress that had been made towards the target of circularity, which is only three years away.
The noble Lord, Lord Frost, who is no longer in his place, was talking about EU rules on deforestation. In 2021, UK consumption was associated with 30,000 hectares of deforestation, with all the climate and nature impacts that we understand. If we look at the climate aspect, the treatment and disposal of waste resources is separately responsible for 5% of all UK greenhouse gas emissions. The cost of that treatment and disposal of waste is borne very often by the public, when actually a few companies are profiting from the production.
I briefly mention, because I promised to do so, that the noble Earl, Lord Lytton, who is unable to be with us for this group, wanted to stress the importance of construction. Although it is excluded from that waste target, there are difficulties because so many problems with, and failures of, design are happening in construction. We all know about the safety impacts but they also have huge environmental impacts—and cost impacts, about which many of us know from working with builders.
In the interests of time, I shall stop there. I beg to move Amendment 5.
Lord Fox (LD)
My Lords, I will speak very briefly on Amendments 30, 115 and 125, which are in my name. As the noble Baroness, Lady Bennett, observed, they are designed to produce guard-rails that significantly strengthen the environmental and sustainability part of the Bill. It seems inconceivable to me that legislation of this kind would not carry these requirements.
Amendment 30, which is the substantive one, would add new subsection (2A) to Clause 2 in order to ensure that future regulations under the Act include provisions that relate to environmental impact assessments, the circular economy and granting consumers the right to repair products. On the latter, despite attempts, the tendency is to continue to find products manufactured with increasingly complex modules that defy cost-effective repair or sensible re-use, which should be an important part of the future economy. This amendment does not dot “i”s or cross “t”s, because that is the role of the actual regulation, but it sets a standard that we should be looking at for the regulation process. That is it; I could go into more detail, but I do not think I have to.
Amendments 115 and 125 are definitions that would help explain what we mean by “circular economy” and “right to repair”. I hope that His Majesty’s Government will find some sympathy with all of this group and find a wording. I am not proud about my words; I am sure that the noble Baroness, Lady Bennett, is the same. Let us find a way of putting these proposals into primary legislation because these are really important issues.
Lord Sharpe of Epsom (Con)
My Lords, I will be brief. I thank the noble Baroness, Lady Bennett, for introducing this group. I assure her and the noble Lord, Lord Fox, that we on these Benches want to see a bright future for our green and pleasant land. That said, we have some concerns about these amendments.
The first relates to the themes that the Committee has been exploring throughout this session. The Bill confers, as we have discussed at length, extensive Henry VIII powers on the Secretary of State. These amendments are broadly drawn and, we feel, have considerable holes in them. Given the wide Henry VIII powers conferred on the Secretary of State, it is not hard to imagine a world where a crazed zealot occupies the position of Secretary of State—it is not hard to think of those, is it?—and decides to apply these provisions in extreme ways without any scrutiny. We really should not lay ourselves open to that. These decisions should be subject to democratic scrutiny. Opinions will be sure to differ on the definitions of some of the phrases in these things. That is not to say they are wrong; it is just that opinions can, and will, differ.
My second point is that we are concerned that the amendments would impose significant costs on businesses. They will stifle competition and harm growth; obviously, this comes at a time when businesses are grappling with significant challenges. Although the proposals appear virtuous on the surface, in practice, they represent an unnecessary and impractical burden on businesses and consumers. That comes at a time when the country needs growth—a point that has obviously been acknowledged by the Government.
These amendments would create additional regulatory burdens, which would hamper industries already struggling with economic headwinds. I also note—I will expand on this theme in later debates—that the market is already supplying many of the solutions sought through these amendments. We believe that, for the many businesses —especially small and medium-sized enterprises—that are already struggling due to various factors, the cost of compliance with these rigid requirements could be devastating. It is not just businesses that will be affected because, of course, those costs will be passed on to consumers. Before any amendments in this group can be considered, surely we must assess the potential unintended consequences for businesses and consumers.
We have a strong record of delivering improvements for our environment but we on these Benches are clear that we should avoid overburdensome regulation on businesses. That said, informing consumer choice is an important component of efficient markets so, notwithstanding our objections, Amendments 28 and 30 in the name of the noble Lord, Lord Fox, have some merit. He is channelling his Orange Book foundations here. Overall, we would not support these amendments, for the reasons that I have outlined.
Lord Hunt of Kings Heath (Lab)
My Lords, it has been an interesting mini debate and I am grateful to the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox, for their amendments. I want to remark on the miraculous conversion to regulatory purity of the noble Lord, Lord Sharpe. I can only refer to Luke, chapter 15, which states that
“joy shall be in heaven over one sinner that repenteth, more than over 90 and nine just persons, which need no repentance”.
I am not a crazed zealot but perhaps in my case, with due acknowledgement to St Augustine, “Oh Lord, make me regulatory pure, but not quite yet.”
We have encapsulated a very interesting debate because I think we all accept the really important point raised by the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox. On the other hand, there are issues about the wording of the amendment and the unintended consequences, alongside the fact that we believe that current legislation allows us to do what both the noble Lord and the noble Baroness would require us to do.
Amendments 30, 115 and 125 are intended to reduce waste. They promote recyclability, repair and reuse of products, and seek to mandate that all product regulations made under the Bill would require an environmental impact assessment and provisions related to the right to repair and the circular economy. Amendment 50 of the noble Baroness, Lady Bennett, seeks to achieve similar by making it a requirement that regulations made under the Bill include provisions to promote circular economy principles. The noble Baroness’s amendment then goes a step further, requiring the Secretary of State to issue guidance on such principles within 12 months, and to review and update that guidance at least once every three years.
Under the duty set out in the Environment Act 2021, Ministers and policymakers must already consider the environmental impact of all new government policies. I certainly empathise with the whole concept of the circular economy, on which both the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox, spoke with such eloquence. The Secretary of State for the Environment, Food and Rural Affairs has set the reduction of waste by moving to a circular economy as one of Defra’s top five priorities. In fact, the Secretary of State has convened a small ministerial group on the circular economy and asked his department to work with experts from industry and academia to develop a circular economy strategy. I will feed this debate and noble Lords’ contributions into the ministerial task force.
I understand the importance of the right to repair. The product regulations made under the Bill will cover many types of products, some of which may be inappropriate to repair. That is really part of the point; for instance, cosmetics is one example—the point that the noble Lord, Lord Sharpe, made. The Ecodesign for Energy-Related Products and Energy Information Regulations 2021 introduced measures including requirements for repairability for the first time in Great Britain. Those regulations contribute towards circular economy objectives by increasing the lifespan, maintenance and waste handling of energy-related products. Our aim is to introduce further right to repair measures when regulating individual products under the ecodesign for energy-related products regulations, where appropriate. That is probably the best way in which to approach it, rather than putting a generic requirement in this piece of legislation.
With regard to Amendments 5 and 28, I reassure noble Lords that the provisions in the Bill do not prevent the UK introducing new environmental regulations. Should we wish to set out broader regulations that exceed or differ from EU rules, we already have powers under other legislation to introduce wider environmental protection rules.
I understand the desire of noble Lords to have something in the Bill in relation to these important issues, but there is a problem of imposing requirements where they cannot reasonably be met or duplicate existing policies. I know that is not the intention, but we think that would be the effect of the amendments before us. We clearly want to avoid conflicting or duplicating regulations. In essence, we agree with the principles put forward by the noble Lord and the noble Baroness. We think we are covered by existing legislation and regulations, but I am grateful to them for bringing them forward.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for his response and noble Lords who have taken part in this time-constrained debate. I take some encouragement from the expressions of at least general support. Like the noble Lord, Lord Fox, I look forward to further discussions with the Minister on this issue. That is part of the reason why I tabled a number of amendments taking different approaches and going into different parts of the Bill because of the different ways of approaching it. We are very open to anything that might put in some kind of guard-rail.
If I may say so, the Minister gave a classic Civil Service response: “But it is covered by other legislation”. I point him to the figures I cited about how little progress has been made on waste reduction towards a target that is only three years away. What we are doing now is clearly not enough, and it is not working.
We are talking about the product regulation Bill, and on the point about right to repair and cosmetics, there are obviously different rules to be applied to different products. That is true of any Bill that covers product regulation.
I wish briefly to pick up the points made the noble Lord, Lord Sharpe, who suggested that these amendments might produce a further burden on consumers. If consumers found that their fridge lasted longer, for the kind of period that fridges used to last, that would be not a burden but a considerable advantage. If they were able to fix their mobile phone instead of having to pay a multinational company a large sum of money for a new one, that would certainly not be a burden on consumers. It would perhaps be a rebalancing of the Government acting in the interests of consumers rather than those of giant multinational producers.
We can see clearly that this is a debate that will continue, but in the meantime, I beg leave to withdraw Amendment 5.
Lord Hunt of Kings Heath (Lab)
My Lords, I say at once that I pay due regard to the Civil Service and the advice I receive, but these are the words of Ministers. There is a judgment here that you do not want to add legislation where you already have it. The point the noble Baroness makes is that the legislation is not being used effectively. The whole point of the Secretary of State for the Environment, Food and Rural Affairs’s task force is to look at the progress we are making and to refocus in relation to the circular economy. I hope the noble Baroness will not think that this is a damp squib of an answer because we take what she says very seriously. Of course, we will be happy to meet her and the noble Lord, Lord Fox, to discuss this important matter further.
Lord Sharpe of Epsom (Con)
My Lords, I reassure the noble Baroness that my fridge is more than 20 years old, and I have a very good mobile-phone repairer.
Baroness Bennett of Manor Castle (GP)
I guess the noble Lord has chosen his products well and been extraordinarily lucky. I am afraid some of my fridges have not lasted anything like so long.
Product Regulation and Metrology Bill [HL]
Monday 25th November 2024
(1 month, 3 weeks ago)
Grand CommitteeRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 18-II Second marshalled list for Grand Committee - (21 Nov 2024)
The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
My Lords, in the unlikely event of a Division, the Committee will be adjourned for 10 minutes. Much more likely is that some Members may have been adversely affected by Storm Bert and may not be able to join us for this session.
Clause 1: Product regulations
Amendment 11
Lord Sharpe of Epsom
“(4A) The Secretary of State must also by regulations make provision aimed at promoting investment, fostering innovation, and encouraging economic growth in relation to the marketing or use of products in the United Kingdom.(4B) Regulations under subsection (4A) must support—(a) the creation of economic incentives for businesses that contribute to economic growth, and(b) the alignment of product regulations with the strategic aim of positioning the United Kingdom as a global leader in innovation”Member’s explanatory statement
This amendment ensures that the regulations in the Bill prioritise economic growth and the United Kingdom’s role in innovation and economic expansion.
Lord Sharpe of Epsom (Con)
My Lords, in moving Amendment 11, I shall speak also to Amendments 104A and 124A in my name.
As highlighted by the Delegated Powers and Regulatory Reform Committee, Clause 1 in its current form should be removed—a theme that we have explored already and to which we will no doubt return. This amendment, however, directly addresses a critical gap in the current Bill by ensuring that regulations do not focus merely on product safety, environmental concerns and operational efficiency but actively promote investment and foster innovation.
The news coming from today’s CBI conference makes sobering reading. The chief executive of the CBI has said that employers have been forced into “damage control mode”. The head of the company that makes McVitie’s digestive biscuits said that
“it’s becoming harder to understand what the case for investment is … to make a difference in the growth rate of the economy”.
Again, the chief exec has said that CFOs are asking, “Can we afford to invest?”
I have no wish to talk down the economy or try to score cheap party-political points, but the fact is that life has got harder for big business recently. No doubt noble Lords opposite will say, “Well, they would say that, wouldn’t they?” But they are also committed to providing an environment that fosters growth and I know them to be sincere in that ambition, so we should all take these comments seriously.
It is not just big business. Last week, analysis by the Altus Group said that the planned reduction in business rates relief would lead to a more than doubling of rates for shops, pubs and restaurants next year. Coupled with rises in national insurance contributions and other operational pressures, SMEs are facing difficult times. But they represent the heartbeat of our economy and some of them will hopefully go on to become big businesses.
In today’s competitive global economy, economic growth cannot be secondary. The Bill should prioritise creating an environment where businesses can thrive, develop new technologies and compete internationally. It is vital that our regulations should be aligned with the strategic aim of positioning the United Kingdom as a global leader in innovation. In the post-Brexit world, the UK’s economic success is intrinsically tied to its ability to lead in innovation, which is why my Amendment 11 is critical. It ensures that product regulation supports the creation of an environment conducive to technological advancement and cutting-edge industrial leadership. It strengthens the Bill by ensuring that it is not about just managing risks or regulating product use but about creating a dynamic, forward-thinking market where businesses have the tools, resources and incentives to innovate and expand. Without these provisions, there is a risk that the UK could fall behind in the global race for innovation and business growth. If we do not explicitly ensure that our regulations align with our growth objectives, we could inadvertently stifle entrepreneurship and technological progress.
So how are we to become a global leader? The answer surely lies in aligning ourselves with the strongest global partners in the world today. If we are to maintain and enhance our position as a leading economy, we must look beyond a single trading bloc, particularly one whose economic influence is shrinking on the global stage—a theme we explored in debate last Wednesday. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP, represents some of the fastest-growing economies in the world. Countries such as Japan, Australia, Canada and New Zealand, as well as emerging markets in Asia, are showing much more significant economic growth potential than others.
To lead the world, the UK must be flexible in its approach to trade and regulation. We need to reduce barriers and align ourselves with the economies that will drive future growth and innovation, rather than being tethered to a bloc that is not growing as fast as others. Amendment 11 in my name will enable us to do just that: focus on fostering global partnerships with the most dynamic economies.
Regarding Amendment 104A, a regulatory sandbox means an environment that allows businesses to explore and experiment with new, innovative products under regulatory supervision. This amendment is important for the development of innovative products affected by the Bill. It is an important step forward in fostering a regulatory environment that encourages creativity and innovation while ensuring safety and compliance. Regulatory sandboxes are an effective and proven model used to support businesses in testing innovative ideas. By introducing the importance of regulatory sandboxes in the Bill, we are not just helping businesses to navigate regulatory hurdles but promoting innovation by giving businesses the space to trial and refine their ideas.
Regulatory sandboxes will create a framework in which businesses can develop and test new products, contributing to the growth of the economy and the success of British businesses in the global marketplace. I urge noble Lords to support this amendment to pave the way for more innovation, more competitive businesses and, ultimately, a stronger economy.
I thank my noble friend Lady Lawlor for bringing forward Amendment 11A. The amendment is a clear and strong signal that we are committed to ensuring that our regulations actively foster economic growth, innovation and the global competitiveness of UK businesses. By encouraging the marketing and use of products in domestic and foreign markets, we are helping to open doors for UK businesses to grow their customer base, create jobs and increase exports. I commend my noble friend for this amendment. I look forward to a positive reception for all these amendments from the Government. I particularly look forward to the positive impact that they will have on businesses across the United Kingdom. I beg to move.
Baroness Lawlor (Con)
My Lords, I shall speak to my Amendment 11A, which would insert a new subsection to the effect that regulations
“must promote growth and effective production, foster innovation and encourage the use and marketing of products in the UK’s domestic and foreign markets”.
I declare an interest in that I have commissioned a number of studies and analyses at Politeia, the think tank where I am research director, which aim to examine and promote UK international trade and the UK economy. I support the aims of safety, containing costs and compliance with safety regulations, but I urge that we think about products having to operate efficiently and effectively. The problem we face is how best to do this consistent with promoting the entrepreneurial and innovative instincts of those bringing new products to the market, who my noble friend Lord Sharpe mentioned, and the growth this allows. I support my noble friend’s amendment to put growth at the heart of this measure.
During the consultation process for a product regulatory framework since 2021, of which this Bill is the outcome, producers and their representatives stressed their priorities for regulation. I am grateful to the Government for their response to this long consultation process. Producers stressed that it should be outcomes-focused and risk-based, should have greater simplicity, proportionality and consistency across legislation and powers and should deal with the serious challenges and opportunities that this country now faces. A further consultation to develop the product safety regime took place in August 2023, with businesspeople and business representatives that are listed in the Government’s helpful response. It found broad agreement on the need for a regulatory approach that promotes a regime ready to respond to hazards but that allows temporary derogation during emergencies for supplying essential products—in other words, it is dynamic—and makes for safer online shopping and promotes digital labelling and an enhanced national regime.
The Minister said at Second Reading and has reiterated to this Committee that the Government have listened to business. Their priorities are summarised in the Government’s consultation document. They are designed to allow for effective operations and to promote growth as a priority, which I and my noble friend Lord Sharpe are urging we need. The rules should be demand-led and reflect the capacity of our businesses to innovate, be entrepreneurial and grow their workforces and their range of products along with the high standards and competitive costs that consumers want.
Nowhere in the Government’s response document do we find businesses wanting a regulatory regime that brings greater rigidity in process rather than being outcomes-led, one that is risk-averse rather than equipped to deal with the real level of risk posed by products or processes, one that treats every product as bearing the same risk or being under a one-size-fits-all rule, or a regime that is disproportionate, untargeted and unduly complex. Yet that scenario, rejected by business, is inherent in the EU legal arrangements that the Government wish to be able to adopt for our businesses under Clause 1(2), to which my amendment is addressed. That can only stymie growth, contrary to the express wishes of the Government. For those reasons, I propose that growth should take priority over the arbitrary exercise of power to introduce the rigidity and complexity of an EU system which is not outcomes-focused or risk-based; nor is it proportionate or known for simplicity.
I will give your Lordships an illustration, for which I owe thanks to Professor David Collins, who holds the chair of international economic and trade law at City, University of London. He draws attention to the unnecessarily burdensome EU REACH regulation—on the registration, evaluation, authorisation and restriction of chemicals. Collins explains that it has extensive requirements for registering very low-risk substances. For example, certain food-grade natural substances that have been used safely for centuries will require expensive registration. Under the EU’s REACH, if a company uses more than one tonne per year of natural fruit extracts or oils, and products such as soaps or cosmetics, it needs full registration, including extensive safety data packages, even when these substances have been safely used in food for ages. This can cost tens of thousands of euros per substance. The relevant EU legislation is Regulation (EC) 1907/2006 REACH, and the key sections on registration requirements are primarily in Title II, Articles 5/24.
The EU’s post-Brexit UK REACH maintains similar core principles but has proposed a more proportionate approach for these well-established natural substances, with simplified registration requirements planned for ingredients with long histories of safe use. Although the overall goal of chemical safety is vital, requiring extensive registration for substances such as olive oil or lemon extract when used in non-food products adds to cost without proportionate safety benefit, and it is not needed. The safety of these materials could be adequately assured through simpler mechanisms. The UK REACH regulation, created through the REACH etc. (Amendment etc.) (EU Exit) Regulations 2019, Statutory Instrument 2019/758, aims to do this and does it very effectively.
Moreover—I refer to my noble friend Lord Sharpe urging that we align the UK economy with the strongest, most dynamic economies in the world—by relying on our own laws it will not only help our businesses but will allow us to do exactly that. My noble friend Lord Sharpe mentioned the CPTPP agreement; as Professor Collins says, it
“does not mandate blanket mutual recognition of conformity assessments for food safety among its members”
but it does
“include provisions that encourage members to accept other members’ conformity assessment results. It also facilitates acceptance of conformity assessment results through mechanisms like technical discussions and explanations of requirements. It also allows for sector-specific mutual recognition arrangements to be negotiated between members”—
which are very important. Professor Collins continues:
“So the CPTPP promotes regulatory cooperation and transparency but preserves each member’s right to maintain their own food safety standards and assessment procedures. Members must ensure their requirements are based on science and international standards where they exist, but aren’t required to automatically accept other members’ assessments. This is similar to what the WTO TBT Agreement does, but it goes further in terms of cooperation”.
Lord Kirkhope of Harrogate (Con)
My Lords, I came here full of hope and expectation this afternoon; indeed, I even indicated to my noble friend Lord Sharpe that, on this occasion, I was here to support his Amendment 11 and Amendment 11A in the name of my noble friend Lady Lawlor, because, as one reads them on the page, they seem to have a lot of merit. However, I regret that, as my noble friends have spoken, they have in their speeches used these amendments to diminish the importance of our major market in Europe and our relationship with the European Union. Noble Lords will be delighted to know that I am not, therefore, going to concentrate any further on those matters but shall instead turn immediately—to my own relief and that of those parties—to Amendments 104A and 124A.
I want to refer in particular to sandboxes, a very interesting area that most members of the public probably do not have a clue about, other than from their visits to coastal regions during the summer holidays. Of course, sandboxes are terribly important in the context of this Bill. My noble friend Lord Sharpe was right to allude to them and to say how important they are; indeed, there are already in place regulations referring to their use, to how IP can be protected, as has been mentioned to me, and so on. However, I want to broaden this issue out a tiny bit. In winding up on this group, can the Minister clarify the way in which sandboxes are protected and how, from the point of view of UK plc, we can make use of them without danger either to the thinking that goes into innovation in them or to the overall position of this country apropos markets, wherever they may be in the world?
I am particularly interested—I know that other noble Lords present this afternoon may well speak on this—in sandbox use in the development of technology and AI. This is an area in which this country has every opportunity to lead the world. Certainly, sandboxes are one way that one can experiment and bring in new ideas without the risk or danger of them being exploited by others, against the interests of this country. I merely say that I support Amendments 104A and 124A, in the principles that they debate, but I would like the Minister to clarify how we can bring together sandboxes, in whichever field they may be deployed, to the benefit of the country.
Lord Lansley (Con)
My Lords, I apologise that I was not able to be with the Committee on its first day, nor will I for much of this afternoon, but I look forward to returning for my amendments on Wednesday. I support my noble friend Lord Sharpe’s amendment.
When we debated the regulation of medical devices in the Medicines and Medical Devices Act 2021, we established that safety and safeguarding public health was its overriding objective. However, we went on to say in what is now Section 15(3) of that Act that in considering whether regulations should be made, and whether they would contribute to the objective of safeguarding public health,
“the Secretary of State must have regard to”—
I commend that language to my noble friend, rather than “must support”, which I think takes it a bit far and creates conflicting duties—
“the safety of medical devices … the availability of medical devices … the likelihood of the United Kingdom being seen as a favourable place in which to … carry out research relating to medical devices … develop medical devices, or … manufacture or supply medical devices”.
I draw attention to the third of those. The structure of the existing legislation on the product requirements for medical devices already incorporates an expectation that we consider economic activity, economic growth and our comparative position in the manufacture or supply of such products. I say to my noble friend that that is an alternative formulation which thoroughly supports, through the precedent of a very closely related area of regulation, the idea that economic activity of that form should be part of the consideration of whether and how regulations should be made.
Lord Leong (Lab)
My Lords, I thank the noble Lord, Lord Sharpe, and the noble Baroness, Lady Lawlor, for their contributions on Amendments 11 and 11A, which specify that regulations made under the Bill should promote investment, foster innovation and encourage economic growth and investment. This Government are committed to attracting investment, as illustrated by the £63 billion pledged at the recent international investment summit. Britain is open for business.
I assure noble Lords that growth is the number one mission of this Government and our new industrial strategy, to be published in the spring, is central to it. The strategy will focus on tackling sector-specific and cross-cutting barriers to growth for our highest-potential growth-driving sectors and places, creating the right conditions for increased investment and high-quality jobs and ensuring a tangible impact in communities right across this country.
I also thank the noble Lord, Lord Sharpe, for his Amendments 104A and 124A, which seek to create regulatory sandboxes where new products could be trialled under regulatory supervision, as indicated by the noble Lord, Lord Kirkhope. I recognise and welcome the intention behind the amendments, which seek to encourage innovation. The Office for Product Safety and Standards within my department already works to provide businesses with guidance and support as they develop and market products. We also support local authorities in their work as primary authorities. This allows businesses to receive assured and tailored advice on meeting environmental health, trading standards or fire safety regulations from a single local authority, then applying this advice nationally. The underpinnings of our product safety regime are based on extensive engagement with businesses. Whether it is on regulatory change, the development of standards or the work of the OPSS as a regulator, the relevant bodies consult extensively across industry.
I am always open to new ideas on how to support businesses to innovate. I understand that in 2022 the Office for Product Safety and Standards supported the Home Office in a regulatory sandbox trialling electronic ID for alcohol sales. However, I am concerned about mandating regulatory sandboxes in the Bill. Product safety is, after all, about avoiding potentially serious risks to people and their property, and anything that would relax regulations in this way, even as a trial, would need careful consideration. It could also commit local responsible authorities to run trials in their areas without sufficient consultation or preparation. This could place an undue burden on local authorities, diverting resources and capacity from their primary responsibilities.
This Government are committed to ensuring that any regulations made under this Bill will support the interests of UK businesses and consumers, providing regulatory certainty and creating the conditions for investment, innovation and economic growth. The Government are always open to debate to ensure that we can support businesses to deliver safe and effective products. I hope I have demonstrated to the noble Lord the extent to which regulators already work closely with businesses to achieve this.
In response to the point from the noble Lord, Lord Sharpe, about SMEs, I was an SME once; we do not want to burden SMEs with additional regulatory or financial cost, if possible. This Government are pro-business and pro-worker and have provided certainty, consistency and confidence—for which investors have been looking for a very long time. Massive tax reliefs are available to investors through the EIS, the SEIS, VCTs and all kinds of grants, including patent grants for any new industries. The Government have shown that we are committed to investment and growth.
I hope that I have been able to reassure noble Lords that the Government are committed to fostering growth through all our policies. This will be set out in more detail in the forthcoming industrial strategy, which we will publish in the spring. I therefore ask the noble Lord to withdraw his amendment.
Lord Sharpe of Epsom (Con)
My Lords, I thank all speakers, in particular my noble friend Lady Lawlor for so eloquently introducing her amendment. I say to my noble friend Lord Kirkhope that my remarks are in no way meant to diminish any of our trading relationships; the point is that these amendments are designed to look after our national interest. It may well be that aligning with the EU is in our national interest, in which case we absolutely should, but if it is not, then we should not, and any reference to relative economic growth is merely factual. I thank my noble friend very much indeed for his supportive remarks on Amendments 104A and 124A.
I also thank my noble friend Lord Lansley for his perspective, which will be very helpful when we come to later stages of the Bill. I also thank the Minister for his remarks, which provided helpful clarity. I take comfort from the fact that he remains open to new ideas. We will consider his remarks carefully but are very pleased to hear his reassurances regarding SMEs. For now, I beg leave to withdraw my amendment.
Baroness Crawley
Member’s explanatory statement
This amendment would broaden the definition of items subject to the new regulatory framework of product regulation to ensure that all digital as well as non-digital products are within scope.
Baroness Crawley (Lab)
My Lords, in moving Amendment 12 in my name and those of the noble Earl, Lord Lindsay, and the noble Lord, Lord Foster of Bath, I also support the amendment from the noble Lord, Lord Fox. I welcome the noble Lord, Lord Sharpe of Epsom, to his new post and thank my noble friend the Minister for his courtesy in organising several meetings for Peers and organisations interested in this Bill; it was remiss of me not to do so earlier.
Lord Foster of Bath (LD)
My Lords, this is an important group of amendments. No doubt, the noble Lord, Lord Sharpe, will shortly set out his amendments but, as I understand them, by deleting bits of the Bill they provide an opportunity for us to have a debate on what is meant by a “product” and by the “use of products”. The other two amendments are in the names of the noble Baroness, Lady Crawley, and my noble friend Lord Fox and have a similar purpose. My noble friend cannot be with us today because he is abroad on parliamentary business in connection with NATO. These amendments will help us to get more clarity on what is covered by a “product” and its use and will help to future-proof the legislation, in the case of Amendment 12 by ensuring that all digital and non-digital products are within scope and in the case of Amendment 13 by ensuring that all operating systems and internet-connected products are within scope.
The noble Baroness, Lady Crawley, very clearly set out the arguments for why this is needed, and I fully support her, but my noble friend Lord Fox’s amendment, which is also a probing amendment, seeks to find out whether the Government’s intention is that operating systems and interconnected products will be covered by the provisions of the Bill. Some may recall that in an earlier grouping I expressed concern about what appears to be the limited way in which the Government consider products as just things. I sought to explain that we cannot always consider a product in isolation as some products are installed as part of a system, and I argued that we should take the whole system into account.
My noble friend’s amendment expresses a similar point. It seeks to ensure that the Bill recognises that the operational characteristics of many products are, effectively, changeable. For instance, household products are increasing controlled by operating systems that can be and are controlled by the vendor remotely. The legislation needs to take this into account in two separate ways. The first, and most simple, is that there should be a clear obligation on the vendor to demonstrate good faith in ensuring its products’ operating systems are up to date and are protected, for example, from external malign attack. Secondly, there needs to be a process whereby material changes in the characteristics of a product continue to meet regulations that they met before the changes.
Many noble Lords will already have heard my noble friend Lord Fox’s particular concern about references to the health and safety of domestic animals in the Bill. He has picked it up on several occasions. He sought to explain his amendment to me in relation to those references. He pointed out that, for example, a remote vacuum cleaner may be programmed to behave in a way that ensures that family pets are not in danger of being harmed by it. He went on to point out that a remote change might disregard this safeguard and so endanger the health and safety of domestic animals. My noble friend argues that without his amendment, or something similar, it would appear that there is no way in which the measures in the Bill could enable the policing of such remote revisions to product properties.
More generally, these amendments in this group seek to probe the Government further on what they believe are covered by “products” and which uses of products are covered by the proposed legislation. I very much look forward to hearing the Minister’s response on those issues and to hearing the noble Lord, Lord Sharpe, explain his amendments more effectively than I have sought to do.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Baroness, Lady Crawley, for her remarks. Obviously, defining “products” is a key consideration in much of what we have to discuss in this Bill. It is a subject to which we will return later today. I thank the noble Lords for introducing their amendments. It was very eloquently done. They certainly deserve consideration and comprehensive answers from the Government.
I will speak to Amendments 18 and 19 standing in my name. The Bill as it stands—and I am afraid this is going to be rather labouring a point that we discussed a lot last week—has been widely criticised for being skeleton legislation with much of the substance being delegated to Ministers through statutory instruments. The Delegated Powers and Regulatory Reform Committee has rightly pointed out that this leaves “almost no substance” or perhaps, as the noble Baroness, Lady Crawley, described it, no clear markers in the Bill, giving Ministers excessive and unaccountable discretion to regulate in important areas, such as product marketing and safety, without sufficient parliamentary scrutiny or oversight.
Clause 2 is a prime example of this, because it grants wide powers to Ministers to make regulations on a wide range of product characteristics—but without any clear or substantive detail. By keeping paragraph (a), the Bill opens the door to the possibility of Ministers creating regulations that lack transparency or specificity. I find the wording concerning and unnecessarily vague. For example, the phrase “other characteristics of products”—or, as the noble Lord, Lord Foster of Bath, described it, “just things”—is far too broad and could allow the Government to regulate anything under this clause, with little or no clear limit or definition.
The lack of clarity here is a significant issue, not least because businesses and producers rely on clear, specific regulations to know what is expected of them and to ensure that they remain compliant. Under this clause, they are left in the dark. What exactly are we talking about when we refer to “other characteristics”? Are we talking about the design of products, marketing methods or even the raw materials that are used in manufacturing? Small businesses and start-ups are especially vulnerable to such unclear regulations, as they may struggle to interpret or comply with such an open-ended provision.
This provision, in effect, gives Ministers the power to define and change the scope of regulations without sufficient clarity or transparency. Ministers could, under this clause, make regulations to cover an incredibly wide range of product characteristics, creating significant uncertainty for the market. We believe that this is an unacceptable level of ministerial discretion. With such a clause, the Government could, in effect, regulate anything and everything related to products. We do not think that we can afford to pass a Bill that leaves businesses and consumers in the dark and subject to the whims of ministerial power. This clause should be completely rewritten or removed. If the Government cannot provide a more specific targeted framework for these regulations, we must consider removing it entirely on Report.
With Amendment 19, there are the same issues. At present, there is no clear definition of what constitutes the “use of products”, nor any explanation as to how the Government intend to regulate it. This lack of clarity presents a significant issue, as it allows Ministers broad and undefined discretion to determine how products should be used and how they are to be regulated. This could easily lead to overreach, and, given how the Government have argued so far in some areas, regulations could be imposed with little or no accountability or scrutiny, leaving businesses uncertain about the future of their operations.
I am very pleased that the Minister has talked repeatedly about giving businesses certainty, particularly in aligning with EU regulations. However, we need more in the Bill to suggest certainty in the areas that I have just described, and I hope that he will be able to provide some reassurance.
Lord Leong (Lab)
My Lords, as technology and regulation continue to develop, we need new powers to address future threats and hazards and to ensure a continued supply of safe, accurate and compliant goods.
I thank my noble friend Lady Crawley and the noble Lord, Lord Fox, for their Amendments 12 and 13, and the noble Lord, Lord Foster, who introduced the latter. I agree that we need a robust product safety framework that can reflect the latest risks and hazards and keep consumers safe and protected. The Government have worked hard to ensure that the powers in the Bill capture the multitude of products that fall within our product safety framework, as well as new products that might be placed on the market and present risks to consumers in future.
For the purposes of the Bill, products are defined as
“tangible items that … result from”
a “method of production”. This definition ensures that we can capture a wide range of manufactured products marketed or used in the UK, from cosmetics to complex machinery. There are a number of instances where our current regulation and product safety work covers software: for example, where certain products are reliant on software, or our work to enforce certain software security requirements under telecommunications legislation. Following my noble friend Lady Crawley’s comments on smart doorbells, I confirm that an app connected to a smart doorbell would be covered by the Bill where it affects the physical safety of the product. The Product Regulation and Metrology Bill would ensure that our general ability to regulate the safety of all products can take account of software, as well as the impact of software on the performance of any particular product.
Let me assure noble Lords that we have carefully considered the scope of products that we seek to cover, and we are future-proofing as much as we can by allowing regulations to also cover intangible components of physical products. This includes things such as software, as I mentioned, where they form part of a tangible product. As such, the Bill will allow us to regulate interconnected products in so far as the safety of the physical product is affected. In this way, we can ensure that we are able to regulate the role of these intangible components in the risk that physical products may present.
Lord Foster of Bath (LD)
I am grateful, because this takes this back in a sense to an earlier group. The Minister has again referred to the issue of installation. Can he say categorically, on the issue of use, whether use will always include installation—or is it that it “may” include installation, as he said? Is it “will” or “may”?
Lord Leong (Lab)
I can give the noble Lord the assurance that it is “will”.
Baroness Crawley (Lab)
My Lords, I thank my noble friend the Minister and the noble Lords, Lord Sharpe and Lord Foster, who have contributed to this short but useful debate.
I will not repeat the valid and important points that have been made, but I ask the Minister to have another look at the Bill’s definition of “product” in the light of our discussion this afternoon. However, I accept his explanation of software regulation going forward: that was an important point he made. For now, I beg leave to withdraw the amendment.
Lord Holmes of Richmond
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in this second day of Committee on the Bill, and a pleasure to speak on this group of amendments. I will move Amendment 14 in my name and speak also to Amendments 54, 75 to 78 and 99 to 101. In doing so, I declare my interests, not least my technology interests, as set out in the register, in particular as an adviser to Socially Recruited, an AI company.
The purpose of these amendments is to bring greater clarity to consumers, citizens and indeed our whole society and economy when it comes to the interaction of AI across so many sectors of our lives, not least in product production, deployment and use. Each amendment has a specific focus. When taken as a suite, they would make a significant difference to citizens’ and consumers’ understanding of where AI has been used in the production of a product or is inherent to the deployment and use of that product—which can only be a positive thing.
Amendment 14 seeks to amend the definition of “production” to highlight where AI has been involved in the production process. As with the previous group of amendments, I could just as easily have drafted an amendment expanding the definition of “product”, because it seems that, with the Bill as drafted, we have a product regulation regime and a production of product regime that do not really fit the economy, society and methods of production we now have across our daily experience.
I will give another example. We have had doorbells and out-of-control vacuum cleaners, potentially. Now let me give you the Minister’s fridge. After a hard day in Committee, the Minister returns home and takes out a lovely piece of soft cheese. Unfortunately, because the AI involved in that fridge has decided, for whatever reason—we know not—to increase the temperature in the fridge to 25 degrees, the Minister becomes very ill as a result of his midnight snack. How does the Bill help the Minister in his travails? The fridge is clearly a product and would be covered, but in no sense can the safety, operation and use of the fridge be of any benefit in the set of circumstances that resulted from AI acting in the way it did. That is what Amendment 14 is all about and I look forward to the Minister’s response on how the Bill could be amended to give better protection, certainty and understanding where AI is involved in the production of products, and indeed in the products themselves.
Similarly, that theme continues through Amendment 54. I believe that, if we are to have greater clarity and consistency, it would be helpful for the Government to undertake a review of all product legislation and regulation, both to see how it would deal with all the issues, opportunities and challenges around artificial intelligence and to assess all that statute and regulatory framework’s ability to look at competency in addressing AI, in terms of how it is operating and having an impact on so many people’s lives because of the products in which it is already embedded, whose use it is part of and which it controls. Oftentimes, it has an impact on people without them even knowing that AI is in the mix. I look forward to the Minister’s response on this potential review.
Amendments 75 to 78 look at labelling. I thank the noble Baroness, Lady Bennett, for signing Amendment 75; similarly, I should have thanked the noble Viscount, Lord Trenchard, for co-signing Amendment 14. If consumers are to have greater understanding of the products they are buying, it would seem helpful for there to be labelling of that product—simple labelling stating that AI was involved in the production of the product and/or is involved in the product. By this, I mean not only a simple label to alert consumers if that is the case but a QR code with far more detail so that all consumers can be aware of the AI elements of a product’s production, particularly in terms of its power usage, water usage and compute usage. Clause 5 of my Artificial Intelligence (Regulation) Bill, to which the Minister in opposition gave full-throated support, covers a number of these issues. I am interested in the Minister’s response to the concept of labelling around product where AI has been involved in the production of a product or is involved in its use.
Amendment 76 goes specifically to the music industry, where artificial intelligence itself has created music products. Again, to my mind, this should be labelled so that consumers know how music has come into being—that is, if it is simply AI-generated with no human involvement.
Amendment 77 offers a statutory option for the Minister to consider amending the Consumer Rights Act 2015, which would give far greater clarity to musicians—indeed, to all creatives across our economy and our society. The current situation is that many creatives find themselves on the wrong end of AI usage of their creative works, with no respect, no consent and no remuneration.
Amendment 78 moves us on and takes us into the areas of likeness and other elements of our personal IP. If AI products take such IP rights, this is not currently covered. I am interested in the Minister’s response as to how we can give our creative community greater clarity, greater comfort and greater support—and, through such labelling and statutory amendment, give far greater legislative cover not just to musicians but to all of our creatives, right across our society and our economy.
Amendments 99 to 101 look at potentially developing new metrology standards for AI data centres and search. Again, they cover these recurrent themes of consumer knowledge, consumer understanding and clarity around what is involved in AI-created products and products with AI in them. It is unlikely that many people who conduct an AI search or query, particularly on the new generative AI models, know the impact of every search in terms of its power usage, its water usage and its compute usage. Similarly, how many of us consider the water usage and compute power of what might seem like a more heritage search—that is, how much is involved in each and every one of those searches? Does the Minister agree that it would be helpful for the Government to undertake a programme of consultation to see whether new metrology standards could be developed? This would be helpful for consumers, businesses and developers in delivering clarity around what is involved in these new product creations.
Baroness Brinton (LD)
I am very grateful for the explanation from the noble Lord, Lord Holmes, of his amendments on AI and digital products, which are particularly appropriate, given the comments from the noble Lord, Lord Lansley, on the first group when we were discussing sandboxes, because of his experience during the passage of the digital medicines Act three or four years ago. A number of noble Lords in this Grand Committee worked on that—I am looking at the noble Lord, Lord Hunt, in particular.
I raise this because one area that concerns me about new products, especially those using AI, is that we do not have the same mechanisms that we have, full of fault though they are, for being able to allow our personal information to be used and to give our consent. I have mentioned before the issue of my dentist. Before you go to see your dentist, you have to go online to fill in a consent form, and at some point mid last year I noticed that there was something about the IT suppliers and it said, “It is assumed you give your consent”—and 10 layers further down they had a completely different set of consents that breached UK GDPR law. Had I not been working on another Bill about digital consent, I would not have looked much further. I have to say that the moment my dental surgery was aware of this, that firm was not just told to change it but was sacked. My problem with AI is that none of that work is visible; it is completely invisible.
My question to the Minister is, in the discussion about sandboxes but also about products that will come under this Bill: will he ensure that our current GDPR laws—and indeed our copyright laws in relation to music—are complied with at all times, so that there would not be any freedom for somebody using AI to develop a product to breach those? I say that in light of the final remark the noble Lord, Lord Holmes, made about consultation. Two sets of Government Ministers have had a very bitter time about patient data and care.data—the noble Lord, Lord Hunt, is smiling at me—when the public were not fully informed about what was going on, and in both cases the proposals had to be abandoned.
Lord Foster of Bath (LD)
My Lords, the first amendment of the noble Lord, Lord Holmes, Amendment 14, seeks to ensure that the production reliance on software and artificial intelligence are included in the scope of the Bill. Clearly, all our remarks are somewhat irrelevant if the Minister gets up and says, “No, they are not”. However, on the assumption that the Minister is going to say, “Yes, they are”, I draw particular attention, if I may, in supporting all the noble Lord’s amendments, to Amendments 75 to 78, on the issue of labelling. This seems to me to be an opportunity for real joined-up government thinking.
The Minister will be well aware that the Communications and Digital Committee, on which I had the opportunity to serve at the time of this, produced a very detailed report on the development of LLMs, large language models, and AI. In so doing, we particularly raised concern about the way in which these large language models were being trained by scraping tons of data from a variety of sources, then creating products over which they were then able to get intellectual property coverage. In so doing, they had scraped a great deal of data.
Amendment 78 in the name of the noble Lord, Lord Holmes, in respect of the labelling and so on, requires the Secretary of State to lay
“regulations to ensure no product or content … uses an individual’s image, likeness or personality rights without that individual’s express consent”.
Had I been drafting the amendment, I would have gone much further, because it seems to me that a large amount of other data is scraped—for instance, novels written by authors without their permission. I could go on; it is well worth looking at the Select Committee report.
Does the Minister accept that this is a real opportunity to have joined-up thinking, when the Government finally decide what their position is in relation to the training of LLMs and people being required to get the permission of all data owners before they can bring their product to market? Does he agree that the labelling of such products, when developed, should include specific reference to them having gained the appropriate permission, paid the appropriate fee or got the appropriate licence to make use of the data that was made use of in the training of those AI products?
Baroness Freeman of Steventon (CB)
My Lords, I shall speak briefly to Amendment 75, which was very eloquently introduced by the noble Lord, Lord Holmes. My academic background is in the research of communication and how people make decisions based on information that they are given. That touches quite a lot on how people assess the reliability and trustworthiness of data.
Amendment 75, on the labelling of AI-based products, includes a proposal about communicating the data used in the training of the AI. I think it is really important that people who have products that provide information on which they might be making decisions, or the product might be acting, are able to know the reliability and trustworthiness of that information. The cues that people use for assessing that reliability are such things as the size of the dataset, how recently that data was gathered and the source of that data—because they want to know if that data, to use the example of the noble Lord, Lord Holmes, is on American cheeses, British cheeses or Italian cheeses, all of which might need a different temperature in your fridge. I urge the Minister to look at this, because the over-trust or the under-trust in the outputs of data make such a difference to how people respond to products. I think this is very important.
Lord Kirkhope of Harrogate (Con)
My Lords, as one of the unfortunate authors of the GDPR, I am very interested to hear the remarks that have been made about possible abuse of the use of data. First, I thank my noble friend Lord Holmes very much for his amendments because, obviously, without proper consideration of the effects in technology and the fast-moving developments of AI, no legislation, particularly the sort of legislation, will really pass muster, so I support his amendments very much.
However, as far as GDPR is concerned, we brought into all of that a term that many of our European Union friends were not going to include at the time: proportional. In relation to how we deal with alleged data abuse, whether or not it is simply a question of small areas of data that have been used for good purposes or otherwise, it is important that we remember at all times that the heavy hand must be looked at carefully and that proportionality must always be remembered as being relevant to the way in which we deal with the use of data.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lord Holmes for his superb introduction to this group. I also thank the noble Baroness, Lady Brinton, for confirming my suspicion of dentists.
I shall speak in general terms because I cannot improve on the eloquence with which my noble friend Lord Holmes put his arguments. To return to the point, these amendments illustrate the limitations of Clauses 1 and 2, I am afraid. These amendments have considerable merit on a stand-alone basis but, in aggregate, they—Amendments 75 to 78 in particular—would in effect seek to define artificial intelligence. This is obviously a fast-moving and rapidly evolving subject; frankly, it deserves a national, never mind parliamentary, debate, as my noble friend Lord Holmes eloquently argued. AI will clearly demand definition and regulation, as the noble Lord, Lord Foster, rightly pointed out. Philosophically, I am not even sure that it qualifies as a product in the traditional sense; frankly, what is in this Bill suggests that we do not really know.
I cannot help thinking that some of the arguments made by the noble Lord, Lord Leong, in our debate on the previous group reinforce this point to some extent. AI can be benign, obviously, but the same application might not be. So, how do we define risk in these terms, even if it regards only the temperature of cheese? I therefore question whether this Bill is the right vehicle for these amendments or whether AI deserves a stand-alone debate and argument. The fact that they are in scope again illustrates, as I said earlier, the inherent weaknesses of Clauses 1 and 2. They are too broad and lack definitions. Ideally, they should be removed; at the very least, they should be extensively rewritten and tightened. I hope that the Government will listen but, if they do not, I will certainly have conversations with my noble friend Lord Holmes about what we shall do next.
Lord Leong (Lab)
My Lords, I thank all noble Lords and noble Baronesses who have spoken. The use of software and AI in physical products covered by our product regulation regime is still in its early days. It is important to take the opportunity of this Bill to ensure that future regulation can keep pace with technological change.
The amendment tabled by the noble Lord, Lord Holmes, would require a review of all product regulations in terms of how AI may impact them and a specific labelling requirement for AI. The Bill gives powers to ensure that product regulation can be updated or new regulations can be passed to cover emerging risks. They include measures such as labelling and verification requirements. However, mandating specific measures in the Bill would limit our ability to determine the most effective ways to protect consumers. A more flexible approach will allow us to adapt as this technology evolves and to ensure that protections remain robust and relevant.
To be clear, this Bill does not seek to regulate digital products or artificial intelligence in and of themselves; it is focused on the regulation of physical products and future-proofs our ability to keep product and metrology regulation up to date with emerging technologies. The Government have a wider programme of work on the regulation of artificial intelligence, where, in most cases, the UK’s expert regulators are responsible for enforcing the rules on AI in their domains; we are working with regulators to ensure that they have the resources and expertise to do this effectively.
Additionally, as set out in the King’s Speech, the Government will bring forward separate legislation to ensure the safe development of AI models by introducing targeted requirements on companies developing the most powerful AI systems. We will undertake a full public consultation to hone these proposals before presenting them to Parliament in due course.
The noble Lord, Lord Holmes, raised the issues of data protection and intellectual property. As we know, UK GDPR and the Data Protection Act 2018 form the legal framework for protecting personal data in the UK; this already covers things such as personal data, photographs and voice recordings.
Lord Holmes of Richmond (Con)
My Lords, I thank everybody who took part in this debate and the Minister for his response. I am convinced that there will be a number of issues to discuss between Committee and Report—certainly to return to when we reach Report—but, for now, I beg leave to withdraw my amendment.
Baroness Brinton
“(c) EU REACH regulation restrictions that are applied to the manufacture, placing on the market, and use of certain chemicals to mitigate unacceptable risks to human health or the environment;”Member’s explanatory statement
The amendment ensures that EU REACH regulations covering certain chemicals are included in the Bill.
Baroness Brinton (LD)
My Lords, REACH regulations cover the safety of chemicals. We simply ask: how can the Bill regulate cosmetics without considering the safety of the chemicals used to manufacture them? I do not buy the idea that Defra is in charge of chemical regulations—in the same way that the DWP is in charge of the chemicals database, other than via its responsibilities in managing the Health and Safety Executive. I will come back to a regulation that the DWP presented to the Grand Committee last year. So, should the Bill ignore chemicals or not? We need an explicit reference in the Bill to cover it. We have talked a lot about AI but the use of chemicals is equally important, particularly in online marketplaces.
I am sure that the selection of EU REACH rather than British REACH will raise certain hackles. I would grab any REACH in a storm, but the EU one is a system that functions, unlike its British cousin, which has proved expensive to business and is failing to react to new challenges.
Over a year ago, I was substituting for my noble friend Lord Fox when the biocidal products regulations 2022 were being discussed in Grand Committee. I think that none of us, including the then Minister, if she were honest, knew very much of what we were talking about. However, it was the most illuminating regulation that I have ever taken part in. We discovered that this was, in essence, a time extension for the use of the EU chemicals database, because Whitehall had not understood that the day we left the EU, we would lose access to the chemicals database. As a result, the Health and Safety Executive had to take on a very large number of staff. Its chemicals sections had increased by 30% to try to rewrite the chemicals database while also consulting with users, whether they were manufacturers importing, exporting or creating in this country. We know that there are systems out there that work but because of our bizarre structures, we tend to have government departments that are not focused on chemicals.
The cosmetics industry imports many of its ingredients from the EU, and often in very small quantities. These would certainly be covered by EU REACH, because these sales represent such a tiny proportion of total production. If there were a substantive difference between EU REACH and British REACH, it is unlikely that the manufacturer would invest in accrediting its products in the UK, causing the UK cosmetic manufacturer either to stop making its product or to move manufacture to the EU—hence my noble friend Lord Fox’s proposal about REACH in this amendment.
Can the Minister confirm whether, under the terms of the Bill as it stands, if a product contains a chemical that was allowed by EU REACH but blocked by British REACH, and yet it conformed to QC standards, it would be legal in Britain? That is what this amendment seeks to clarify. Given the interconnected nature of the UK and EU chemicals industries, it offers a route for aligning the UK chemical regulation with that of the EU. But perhaps the Minister thinks that the current wording of Clause 1(1) means that it could be used to amend and update UK REACH to align with EU REACH. I beg to move.
Lord Browne of Ladyton (Lab)
My Lords, I will speak to both amendments in this group, and I thank the noble Baroness, Lady Brinton, for her introduction of them.
When examining the purport of these amendments and considering whether to include provisions that require us to adopt regulations that correspond with the EU’s REACH provisions, I suggest that the metric by which we should judge that is simple. Would doing so make the people of this country safer? Every other consideration should be secondary to that.
As I said both at Second Reading and in Committee last week—I apologise to those who have heard this before, but it is worth repeating—the past few years have seen a significant divergence between the UK’s approach to chemical regulation and that of the EU. The previous Government decided to leave REACH—the EU’s body responsible for the registration, evaluation, authorisation and restriction of chemicals and their regulations—and to set up a parallel organisation.
Since then, we have not adopted a single registered restriction on a harmful substance, compared with 10 new protections offered by EU regulation, including on harmful microplastics deliberately added to products. While REACH has regulated PFAS in the EU, not a single river or water body in England is in good chemical health. Since we left REACH, the EU has initiated 23 risk assessments related to harmful substances, while we have initiated three.
In considering why that is the case, I point to two contextual factors. This is not a function of the legislative constraints. The Government have the power under the EU withdrawal Act and Schedule 21 to the Environment Act to adopt new restrictions and controls where necessary. However, reviews undertaken by the NAO and the Public Accounts Committee in 2022 pointed to a lack of operational capacity and insufficient data as factors that have hampered the ability of the UK’s chemical regulator properly to do its job. For instance, brominated flame retardants were identified as a risk to health and globally significant exposure rates were identified in this country. Indeed, they were identified as a regulatory priority over two years ago and a review was promised. So far, no review has been published and it is difficult to discern how this apparent priority has been acted upon, if at all.
However, while the EU has added eight flame-retardant chemicals to its list of substances of very high concern, no substances in this category have been added to the parallel UK list. The EU restrictions road map has proposed a ban on brominated flame retardants while no equivalent step has been proposed, let alone planned. This is not because we have data which diverges from that upon which the EU has based its conclusions but because we are working more slowly. I vividly remember the promises of greater regulatory agility and speed which would inevitably result once we were free of the sclerotic influence of the EU. This example is but one of many—including lead in PVC, polycyclic aromatic hydrocarbons in synthetic football pitches and formaldehyde in wood furniture—which suggest that far from being more agile and responsive, our current system of chemical regulation is slower, less efficient and consequently less safe than its predecessor.
In April this year, Hazards magazine published a parallel analysis of the 25 new standards that have been introduced across the EU since our departure in 2020 and the UK’s response. Of the 25 standards, 12 were identical. There were 10 in which the UK’s standard was weaker, sometimes significantly. Only in one case has the UK adopted more protective measures than the European standard. Again, this is suggestive of regulatory incapacity as much as a deliberate exercise of our power independently to regulate.
Fiscal stringency creates significant challenges in remedying this situation, but both these amendments obviate the need for the otherwise necessary significant increase in investment in our chemical regulator. Ensuring that our domestic regulations correspond with those of REACH not only offers greater safety but removes a barrier to trade and promises to ease the burden on our chemical regulator which, as I said earlier, the NAO and Public Accounts Committee suggested has compromised its ability to work with appropriate speed.
At Second Reading, my noble friend the Minister said, in response to a question from the noble Baroness, Lady Brinton, that the Government are currently considering the best approach to chemical regulation in the UK separately to this Bill. In deciding our approach to these amendments, it would be extremely useful if my noble friend who is responding to this debate could at least give us an idea of the direction of travel on this. The noble Lord, Lord Fox, made the point also at Second Reading that the absence of such a Bill from the King’s Speech makes it unlikely that we will see it in this Session. That being so, what plans do the Government have, in the absence of adopting the amendments that are the subject of this discussion, to exercise the powers in Clause 2(7) to ensure that we catch up and keep pace with the EU chemical regulation?
Baroness Lawlor (Con)
My Lords, I will make a very brief intervention because I want to repeat my illustration from the first group about the REACH regulations. I have concerns about including this amendment to Clause 1 at line 13 of page 2 of the Bill as I do not agree that the EU REACH regulations are necessarily better equipped to target sectors and individual products than UK regulations. I will not go through the reasons I gave earlier. The noble Baroness, Lady Brinton, whose introduction I learned a great deal from and am very grateful for, mentioned cosmetics. In my earlier intervention I pointed to the use of olive oil and lemon in some soaps and said that UK REACH regulations recognise that these products can be eaten safely and, indeed, have been used for a long time. Requiring, as EU REACH does, that they go through stringent chemical REACH processes and labelling is a bit over the top and would put expense on our producers. I urge us to think of the wider implications of unsensitive or disproportion regulation where we can.
Lord Sharpe of Epsom (Con)
My Lords, I thank noble Lords who have spoken in this debate. I will speak to Amendment 16 in the name of the noble Lord, Lord Fox, which was introduced by the noble Baroness, Lady Brinton.
Regarding the EU’s REACH scheme, I shall refer to a specific example which relates to my time at the Home Office in the previous Government. It relates to cosmetics, as outlined by the noble Baroness, Lady Brinton, and my noble friend Lady Lawlor. In 2019, the Home Office aligned UK policy with two decisions by the European Chemicals Agency board of appeal which related to the testing on animals for the registration of cosmetics-only substances—specifically homosalate and 2-ethylhexyl salicylate. The marketing of cosmetics tested on animals is banned in the EU under cosmetics products regulation, but the ECHA—the European Chemicals Agency—confirmed that under REACH substances used solely in cosmetics may sometimes be tested on animals, as a last resort, to prove their safety for workers or the environment.
An NGO called Cruelty Free International, quite rightly, in my view, took the Government to court arguing that the UK’s alignment in effect led to the weakening of the long-standing—I think it was a 25-year—ban on animal testing of cosmetics and cosmetic ingredients. The UK court found in the Government’s favour but as the then Minister for Animals in Science, which somewhat surprisingly sits with the Home Office, the Home Secretary and I were firmly of the opinion that this was unjustified, so as of May 2023 we decided that no new licences should be issued to carry out this function. A small number of licences had been issued between 2019 and 2022.
The noble Baroness, Lady Brinton, and the noble Lord, Lord Browne, made persuasive arguments about why it might be in this country’s interest to align with the EU but, equally, it might not be, and this is a very nuanced subject. Failings of the domestic chemicals regulator—real or imagined—are an entirely separate subject. Alignment with, or invention of, our own rules that suit our national and public interest most definitely is in our interest. When I say public interest, in this case 76% of the public are against animal testing according to the RSPCA. So can I ask the Minister to guarantee that this ban on new licences in these cases will be maintained? I am disappointed that the noble Lord, Lord Fox, is not here because I was going to ask him if, in the spirit of nominative determinism, he would withdraw his Amendment 16. However, I say to the noble Baroness, Lady Brinton, that it certainly raised hackles, not necessarily human ones.
On the subject of dynamic alignment, I have two questions for the Minister about an apparent contradiction in our debates last Wednesday. I pored over Hansard, and I found that he said:
“If the UK makes a sovereign decision to mirror EU provisions, the Bill provides the mechanism and flexibility, on a case-by-case basis, to do so. This would avoid primary legislation each time technical changes are needed and would increase the certainty that businesses are crying out for”.—[Official Report, 20/11/24; col. GC 74.]
However, he went on to say:
“The powers in the Bill do not allow regulations to make automatic or ambulatory references to changing EU law. I reassure noble Lords that the Government will return to Parliament to make any changes to references to EU law within our regulations”.—[Official Report, 20/11/24; cols. GC 74-5.]
On careful reading, these statements seem a bit contradictory. So, although I am totally willing to be persuaded otherwise, perhaps the Minister could write to explain to the Committee exactly what is proposed and what was meant. If I am being particularly thick, I would be very happy for him to explain why.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I thank noble Lords who have spoken, particularly the noble Baroness, Lady Brinton, who spoke to the amendment in the name of the noble Lord, Lord Fox.
From listening to the debate, I suggest that the defects identified are not so much in this Bill or other legislative provisions that we have in place but more, as my noble friend suggested, in the energy with which the previous Government used the provisions at hand., I shall first explain why this is covered in existing legislation, and then I will come on to the energy, if you like, with which this Government will approach these important matters. I shall also set out the distinction between the regulation of chemical substances under REACH and other regulations, and the regulation of consumer products that contain chemicals.
The UK has a comprehensive regulatory framework for the use of chemicals. The REACH—registration, evaluation, authorisation and restriction of chemicals—regulation controls the manufacture, import, supply and safe use of chemical substances. The CLP—classification, labelling and packaging—regulation requires companies to classify, label and package their hazardous chemicals before placing them on the market. The REACH model operates in both the UK and the EU, but the systems have been independent since UK REACH entered into force on 31 December 2020, after we left the EU, and the EU REACH regulation was brought into UK law. So the regulation of chemicals must be managed separately under UK REACH and EU REACH.
REACH ensures a high level of protection for human health and the environment from risks imposed by chemicals. This includes minimising harm to workers who may handle chemicals during manufacturing processes, as well as minimising health impacts on our population and environmental damage from chemical substances. Chemical safety is governed by several interacting regimes. For example, certain products regulated by sector-specific regulations, such as cosmetics or toys, may contain chemicals that are also regulated by REACH and CLP. One of the aims when applying these regimes is to avoid putting in place overlapping or conflicting duties, which is the issue that we would have with the amendment in the name of the noble Baroness, Lady Brinton. That amendment risks having overlapping or conflicting duties.
I know that the noble Baroness mentioned Defra, but the Secretary of State for Defra already has powers to amend UK REACH through the Environment Act 2021 and through REACH itself, which sets out a bespoke regime for imposing restrictions and other regulatory controls on chemical substances. The primary statutory purpose of UK REACH is to ensure a high level of protection for human health and the environment from substances that contain chemicals. In some cases, animal studies may be necessary to understand these human health or environmental hazards but, of course, I very much take on board the noble Lord’s point about animal testing, and I know of no plans to change the rules laid down by previous Ministers on that.
The Bill, as we know, relates to consumer products, and the definition of “product” stated in the Bill means that many of the substances regulated under REACH, and the ways they are used, are out of scope of the powers, regardless of these amendments. It should also be noted that the provision in Clause 1(2) is limited to the mitigation of the environmental impact of products. This limitation is reinforced in Amendment 51. As I have already commented, changes to REACH may be prompted by human health and safety, rather than environmental, considerations. The UK REACH work programme, published annually, sets out the work that has been done under UK REACH.
The fact is that the amendment would not provide the Secretary of State with the powers sought by the noble Baroness. We think the powers within UK REACH enable human health and environmental concerns to be considered alongside each other, where necessary. Existing sector regulations, such as those for cosmetics and toys, already include powers for the Secretary of State to regulate the use of chemicals in specific products beyond the overarching restrictions that can be applied under UK REACH. These powers can be, and already have been, used to make provision by regulation in UK law that corresponds, or is similar to, provision in relevant EU law. Such changes to UK regulations have been informed by independent expert scientific advice provided to the Office for Product Safety and Standards by the scientific advisory group on chemical safety for non-food and non-medicinal consumer products.
We have used these powers to make regulatory changes based on advice from that advisory group, following the EU’s introduction of new or amended prohibitions on the chemicals used in cosmetics and toys. My understanding is that, in some circumstances, the Government implemented scientific advice that was different from advice received by the EU. I am sure that the previous Government would have said that this demonstrated regulatory sovereignty to choose what products can be placed on the GB market and also demonstrated our status as a global leader in product regulation, supporting businesses and protecting consumers.
Powers in the Bill, alongside existing sector regulations, will ensure that we are able to regulate the use of chemicals in consumer products, including cosmetics and toys, as well as other consumer products with similar chemical exposure risk, so we will be able to continue to protect consumers from product-related harm. The noble Baroness, Lady Brinton, asked whether chemicals blocked in Britain but permitted in the EU would be available for use in this country. If we decided to ban chemicals that the EU continued to permit, those chemicals would not be permitted to be used for the GB market, because we have sovereignty.
I will confirm the point made by the noble Lord, Lord Sharpe, on animal testing. The ban on using animals to test cosmetic products or ingredients has been in place, as he said, since 1998. We do not wish to revise the ban and do not wish to risk any unintended consequences that might result from bringing REACH within scope of the Bill.
On my noble friend Lord Browne’s point on the pace of reform, at the moment the Government are pursuing a programme of work on a wide range of hazardous substances to gather evidence of risk and exposure pathways. Publishing the work programme 2024-25 late in the financial year has not prevented the continuing development of ongoing streams. Obviously, the UK work programme 2024-25 was prepared under the previous Government. Once approved by Ministers, it will be published on the Health and Safety Executive’s website. But let me say that I understand the essential point that has been raised. My point is that there is nothing wrong with the legislative framework. The point of contention is the vigour with which any Government use their sovereign powers in the way that noble Lords want.
Lord Browne of Ladyton (Lab)
If I have understood my noble friend’s response to this debate, do the Government accept the NAO and Public Accounts Committee’s assessment that UK REACH lacked capacity to do its job? If so, has Defra allocated sufficient funding to bring it up at least to the productivity of EU REACH in the quantity of assessments, recommendations and decisions that it makes? The statistics show that it is not doing anything much in this space.
Lord Hunt of Kings Heath (Lab)
My Lords, the quick answer is that these matters are being considered by Ministers at the moment, but I will feed back to them what noble Lords have raised today.
Lord Hunt of Kings Heath (Lab)
I would be glad to give way to the noble Baroness, but as we will come back to her in any case—
Baroness Brinton (LD)
I have a question. I am very grateful for the Minister’s response, but he has not yet responded to my final question and, following his reply to the noble Lord, Lord Browne, I need to repeat it to check. I said that this was a probing amendment to clarify the interconnected nature of, and differences between, the UK and EU chemicals industries. Under its current wording, Clause 1(1) says:
“The Secretary of State may … make provision, in relation to”.
Could that be used to amend and update UK REACH to align with EU REACH? I ask this in light of the letter that the noble Lord, Lord Leong, wrote to colleagues on 17 October:
“Though the Bill is not intended to cover REACH specifically, chemicals have not been excluded from its scope … We are currently considering the best approach to chemicals regulation in the UK and will set out priorities”.
That is the fundamental bit of this amendment. We can debate EU REACH and UK REACH, but it is about the influence on this Bill.
Lord Hunt of Kings Heath (Lab)
My Lords, the quick response is that we do not envisage it being used in that way because we already have separate legislation to deal with that. I will follow up with a more detailed response, but I do not believe that the provisions would allow that to happen. However, I will double-check and clarify that.
On my noble friend’s point, I have listened to the debate and understand the concerns. I know that Ministers are considering this, and I will ensure that the strong points raised here are put to them as they consider how to take forward this work.
Baroness Brinton (LD)
I am grateful to all noble Lords who have spoken in the short debate on this group. I am particularly grateful to the noble Lord, Lord Browne, for covering the 10 restrictions adopted in the EU but not in the UK, since it left the EU. I was debating whether to raise them or not; I am glad that I left them to him. He pointed out the cost-benefits of using REACH. Manufacturers have made it very clear that they want things as simple as possible and, usually, would prefer one form of REACH—the one to which they are likely to export or from which they will have products coming in. I recognise that other Members of the Committee will disagree with that. I am grateful for the comments of the noble Baroness, Lady Lawlor; lemon and lavender sound like a lovely, simple way of looking at it, but cosmetics are much more complicated. We need to be very careful about that. I look forward to hearing from the Minister but, in the meantime, I beg leave to withdraw the amendment.
Lord Lucas
Member’s explanatory statement
This amendment will enable discussion of what information might usefully be marked on the product, such that the liability for regulations and charges can be clearly established.
Lord Lucas (Con)
My Lords, I rise to move Amendment 20 and speak to the others in this group. Each of these amendments has a role, I hope, in improving or at least elucidating the provisions of the Bill, but they are also put together from the point of view of “Let’s collect the tax”.
This Government have not been shy of hurting people in pursuit of a few hundred million pounds in tax per year. They have threatened the basis of family farms, chucked children out of school in the middle of their exam years and frozen old age pensioners. Why, then, are they leaving a billion pounds a year lying on the floor, uncollected, from scamming Chinese and other—Asian, by and large—traders? It is quite extraordinary. It not only fails to collect the tax but damages the British businesses that would be doing the business if we were not giving a 20% price advantage to the likes of Shein and Temu. Now we see that Amazon has to follow them down this track because it has been so damaged by Shein and Temu that it has to go into the same business. This is economically illiterate and ridiculous.
I am very grateful to the noble Lord, Lord Leong, for arranging a meeting to discuss this. He very kindly invited a Treasury official along. I have had a reply now from the Treasury saying basically, “Don’t ring us, we’ll ring you”. I find this extraordinary, but I do not particularly blame this Government. The last Government was just as bad on it. However, it is extraordinary not to collect tax when the Government are going to such lengths to collect additional tax now.
I will add one more thing: for goodness’ sake, make the marketplaces liable for VAT. Stop trying to make the individual traders liable for VAT. They are here today, gone tomorrow, registering 500 new companies with Companies House, with lots of new VAT numbers. As soon as you put your finger on them, they are gone. Make the marketplaces collect VAT. It would be simpler and easier for them and for us, and much more effective.
Amendment 20 asks that we get a sensible amount of information on the origin, the identity of the local representative, the value and the beneficial ownership of the goods, so that everybody involved can see where the liability for product regulation sits, where the liability for any charges can sit and how things can be enforced. The more difficult you make it to track down who should be collared, the less it will happen. In these regulations, we must make it easier to chase people.
Amendment 24 basically says, “Make sure the representative who is appointed has the financial strength to stand behind what’s going on”. If the Minister cares to browse Amazon when he has the time and looks for, say, a three-terabyte drive—the sort of thing I shall need to pack up my 30 years in this place and carry it away with me—he will find that there are some very reputable products on the market for around a hundred quid. That is astonishing. I remember buying my first serious computer, which had 20 megabytes of hard drive, and thinking that was extraordinary. So—three terabytes for a hundred quid from a good manufacturer.
However, there are also products on the market for fifty quid from weirdly named companies. The game being played there is that the products do not contain three terabytes. They probably contain only 256 megabytes. But it does not show on the outside and by the time that anyone gets around to complaining and putting bad reviews in place, the company has changed; it has gone; it is someone else and there is no one to pursue. With a product such as a hard drive, it takes a while for someone to realise that it has been mis-sold. If you are going to pursue these people properly, you need to know that you can go after them for several months of turnover and succeed, which means that the representatives in the UK have got to be good for the money. Otherwise, you just do not have effective product regulation.
Amendment 25 also relates to “Let’s collect the tax”, since we are creating these structures to look after product quality, which could quite easily be used to help collect tax. Amendment 26 says, “Look, we’ve got a trading standards system that is really short of money, so let’s make it easier for us to extract money from the process we are creating in the Bill and feed it through to trading standards so that we get an effective and efficient system of enforcement”. I beg to move.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Lucas, for his proposed amendments to Clause 2, which, as highlighted by the Delegated Powers and Regulatory Reform Committee, has been recommended for removal due to the broad and vague nature of the powers it grants. The liability for regulations and charges related to products is a matter of extreme importance. Without clear guidelines and transparent information, businesses could face significant uncertainty, which in turn undermines their ability to comply effectively.
The Government’s focus on clarity in other areas will ring hollow if they fail to address the critical need for clarity in liabilities—an issue that the amendments in the name of the noble Lord, Lord Lucas, seek to address directly. Regarding Amendment 20, by ensuring that products are marked with clear and comprehensive information, such as origin, local representation and ownership, we can establish clear responsibility for product compliance. This would not only improve regulatory transparency but foster trust with consumers and businesses alike.
I urge the Government to take this opportunity to acknowledge the importance of clear liability and responsibility frameworks. Although these amendments are to Clause 2, and we continue to discuss its broader issues, nevertheless the noble Lord’s proposed changes are a necessary step towards ensuring both accountability and transparency in product regulations.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lords, Lord Lucas and Lord Sharpe, for their comments in this interesting debate. I am glad that the noble Lord, Lord Lucas, was able to meet my noble friend and officials. I am sure they have taken note of his concerns, although he obviously has some reservations about that. I have also noted the comments of the noble Lord, Lord Sharpe, about the shape of the Bill, which we have already well debated and no doubt will continue to do so.
Despite the noble Lords’ concerns about the Bill, the fact is that we are trying to produce a workable yet robust framework for regulating product safety in what I think we all acknowledge is a rapidly changing and evolving marketplace. We want to ensure that businesses, whether operating through traditional channels or online marketplaces, are held accountable for the safety of the products they distribute. The Bill’s approach is targeted, addressing the need for traceability and enforcement while avoiding excessive regulatory burdens that could stifle innovation and growth. I believe most noble Lords think that is the right balance, although some are somewhat critical of the way in which we have sought to do it in the Bill.
Amendments 20 and 24 in the name of the noble Lord, Lord Lucas, propose to allow regulations to make requirements in relation to the marking of products, including their origin, the identity of the local representative, their value and their beneficial ownership, while also allowing regulations to require authorised representatives to accept liability and demonstrate financial strength. The amendments reflect important concerns, particularly around traceability and accountability, especially in the context of online marketplaces: for example, where a product creates a consumer safety concern, or the circumstances which the noble Lord mentioned in his introductory speech. Our view is that Clause 2(2)(e)(ii) and Clause 2(3) already provide the necessary mechanisms to ensure that authorised representatives and other relevant parties carrying out activities in relation to a product can clearly be identified for product safety purposes.
While I can see where the noble Lord is coming from with the proposed additional requirements, such as marking the product’s value or beneficial ownership, they would create an additional administrative burden for businesses without providing significant additional benefits for consumers or enforcement. The Bill as drafted aims to ensure that sufficient information is available for product safety and enforcement and we are not convinced that the extra information would offer clear advantages in those areas.
Lord Lucas (Con)
My Lords, I am very grateful for the Minister’s comprehensive reply. On Amendment 24, I remain unclear whether the powers in the Bill allow for representatives to have to demonstrate deep pockets. I would be happy to be written to if the Minister cannot reply now. If he could point me in the direction of homework related to Amendment 25, such as the OBR analysis and so on, I would be most grateful.
Lord Lucas
Member’s explanatory statement
This amendment is to ensure that people are aware that they are often buying from China when buying on Amazon/eBay and the product hasn’t undergone any quality checks.
Lord Lucas (Con)
I will also speak to Amendment 22. Amendment 21 is fairly self-explanatory. It asks that people be made aware of where the goods they are buying come from and, therefore, what confidence they can place in their quality. Secondly, it explores whether we might place liability on marketplaces for the quality of the products they allow to be listed there, which is clearly not the case at the moment.
My view is that Amazon makes a great deal of money out of selling what are, essentially, counterfeit products. This is not a satisfactory state of affairs. Amazon is quite well enough off to do a bit of investigation, which does not take long with these products, to make sure that they are what they say they are. This would result in greater stability and higher quality of companies doing business through Amazon. I do not think it would lose Amazon any business, but I am prepared to be shocked to find that the Government disagree with me. For now, I beg to move.
Baroness Brinton (LD)
My Lords, Amendment 45 in this group is in my name. I also support my noble friend Lord Foster’s Amendments 117 and 122.
I come back to an issue debated at some length on the first day of Committee. I am particularly pleased to see the noble Lord, Lord Jackson of Peterborough, in his place because my amendment relates directly to his Amendment 33, which questions whether Clause 2(3)(h) should stand part of the Bill; my amendment also looks at paragraph (h). He spoke about it in the context of parliamentary scrutiny and consultation, but my focus is a different one: I am trying to look at how it will work in practice. During our debate last week, my noble friend Lord Fox said that
“the wording of Clause 2(3)(h) is ‘any other person carrying out activities’. All the other items refer to the activity of the sale and marketing of that product. This does not refer to it but any person carrying out activities unspecified”.—[Official Report, 20/11/24; col. GC 40.]
We are moving from products to people in this debate.
At Second Reading, I asked the Minister who is caught by this very wide, catch-all paragraph. In his letter of 17 October, in which he responded to issues that he did not have time to cover at Second Reading—I thank him for it—he said:
“These supply chain roles may be undertaken by individuals as well as by businesses. The Bill will enable the responsibilities of supply chain actors to be rationalised and modernised, including to reflect the development of new business models that were not anticipated by current legislation, such as online marketplaces”.
I read his reply carefully, but it did not answer my question. That is partly because “actors” could mean anybody; it does not necessarily mean somebody mentioned in one of the clause’s previous paragraphs. I remain concerned about that in the context of Clause 2(3), which identifies the
“persons on whom product regulations may impose product requirements”.
It appears that paragraph (h) can include absolutely anyone involved in selling a relevant product, without limitation. This matters because a private individual selling an item with a lithium-ion battery, for example, on eBay or Vinted may be an actor at the very end of a long supply chain, but that does not mean they are a professional in the business. The wording is important.
Where does the responsibility for satisfactory compliance lie? In our Second Reading debate, there was some discussion about online marketplace platforms having responsibility for ensuring compliance but, frankly, eBay and Vinted cannot check the detail of a regulated item—in the case I gave, a lithium-ion battery in a bicycle—or how it meets the regulations. Also, the individual at the end of the supply chain has no obvious way of finding out whether they are responsible for ensuring that the item they wish to sell meets the regulations. Of course, there is a future actor in all of this: the person who buys it.
Which?, in its very helpful briefing prior to Second Reading, pointed out that the Bill needs strengthening in a number of areas, including clearer definitions of key terms, so that existing and future online marketplaces cannot take advantage of gaps to avoid responsibility. Clause 2(3)(h) is one such area. Will the Minister help by making it clear who is covered? Can he also explain exactly how the online marketplaces can manage the extension of liabilities for defective products sold by individuals, which those online marketplaces have not seen themselves? Alternatively, if individuals selling items are covered by Clause 2(3)(h), how do those individuals become aware of their responsibilities under the Bill for ensuring that the goods they sell meet the requirements and are not defective? Frankly, eBay sending them an email saying, “You are entirely responsible” is not good enough for compliance. If this is not clarified, we have a gaping hole in the Bill.
Baroness Crawley (Lab)
My Lords, I will speak to Amendments 48, 71, 118, 119, 120, 121, 123 and 124 in this group, on the topic of online marketplaces, which are in my name and those of the noble Lord, Lord Foster of Bath, and the noble Earl, Lord Lindsay.
Turning first to Amendment 48, I recall that, in the King’s Speech, the Government made a commitment to ensure that the responsibilities of those involved in the supply of products, such as online marketplaces, are clear. That commitment is to be welcomed, but the clarity and detail will be in the secondary regulations after the Bill is passed and not in the Bill itself. As set out in the explanatory statement, the proposed new clause in the amendment
“provides a non-exclusive list of duties that must be imposed upon online marketplaces by regulations made by the Secretary of State … to be made to Parliament within 3 months of Royal Assent regarding the exercise of the duties conferred by this section”.
These duties include an explicit provision to place a duty on online marketplaces to take the necessary measures to ensure the safety of products offered on their platforms and a commitment to publish any draft secondary legislation on how this duty and related provisions will work in practice in good time before the measures are due to come into force. Finally, there is a duty to consult with key stakeholders on the design of these regulations.
I make it clear to my noble friend the Minister that the duties in this amendment are about the transparent process by which the Government will ensure a safer online marketplace, rather than a long list of possible actions taken to bring this about. The Office for Product Safety and Standards, in its 2021 research, found that 81% of the products it found online failed safety tests. I am sure that the figure would probably be far higher if they were tested today. Which? tells us that around 23.4 million consumers in the UK make monthly transactions on these marketplaces, yet they are unwittingly putting themselves at risk because, at present, they do not have the same protections as they have come to expect when buying from traditional high-street retailers. This evidence should encourage us to reform online marketplace regulations as urgently as possible.
Amendment 71 allows for regulations to provide liability of online marketplaces for defective and unsafe products and to ensure redress for those harmed by these unsafe and defective products, including civil litigation. It is important that the law on product liability can be updated to take account of the responsibilities of online marketplaces and others in the supply chain, and to provide effective redress for consumers who suffer harm from these dangerous products. We know that online marketplaces have become a mainstream method for people to shop, particularly when they are looking for value for money in these difficult economic times. This amendment seeks to ensure that there is redress for those online shoppers if they buy unsafe or faulty goods.
From the briefing sent to us by the London Fire Brigade we know that e-bikes and e-scooters are one of the capital’s fastest-growing fire risks. On average, there was a fire every two days in 2023. Sadly, deaths and injuries have resulted. Many of these fires are caused by incompatible chargers and faulty products that are purchased online. The London Fire Brigade believes, as many of us do, that product innovation has gone far ahead of proper safety standards and that there is inadequate regulation, especially for conversion kits, batteries and chargers. A strengthened version of the Bill would go a long way to answering these safety gaps online.
Lord Jackson of Peterborough (Con)
My Lords, I support the probing Amendment 45 from the noble Baroness, Lady Brinton, as she referenced my earlier Amendment 33. She expressed in a more erudite and articulate way what I should have said last week on Amendment 33. However, I think we have both alighted on the fundamental problem in that subsection, which is that despite its opacity and the fact that it is drawn very widely, it does not achieve what we all hope it will achieve—in other words, to point out the obligations on buyers and sellers. The noble Baroness quite rightly pointed out the lacuna inherent in that.
My very brief question to the Minister is whether it might be possible—this is not a criticism but merely an observation in respect of the drafting—for this subsection to be redrafted before Report so that that confusion that we see now, which could potentially give rise to substantial amounts of litigation, is ameliorated and we could have tighter wording to address some of the issues that the noble Baroness and I have pointed out.
Lord Foster of Bath (LD)
My Lords, so many of our deliberations in our various sittings have been seeking to put some flesh on to the skeleton nature of the Bill before us; I have done that on a number of occasions, as have many other noble Lords. For instance, in our last-but-one grouping, I proposed that we seek to use the Bill to address concerns about data scraping for the development of new AI products. I gently point out to the Minister that he told me that this would be covered by the Data (Use and Access) Bill. I have double-checked Hansard and can tell him that at the end of the debate on that Bill, when this was raised with the noble Baroness, Lady Jones, the Minister responsible, she replied that this issue was not covered by that Bill and that DCMS and DSIT Ministers are jointly working and looking forward to bringing forward proposals in due course. She ended by saying:
“We will announce more details in due course”.—[Official Report, 19/11/24; col. 197.]
So it is not covered, and this is a good opportunity to do it.
As the noble Baroness, Lady Crawley, and other noble Lords who have spoken have pointed out, this is an area, in terms of online marketplaces, where there is an urgent need to put flesh on the bones and to have a clearer understanding of the definition of an online marketplace and of what regulations should apply to them. I have frequently raised in your Lordships’ House my concerns that consumers have far less protection from faulty products bought online than they have when they purchase them on the high street.
It simply cannot be right, as we have seen from all the evidence that we have all received from various organisations, such as the British Toy & Hobby Association, Which? and Electrical Safety First, as well as others, that so many unsafe products are available for sale online. In an earlier contribution, the noble Baroness referred to the fact that 86% of toys sold online do not comply with UK safety requirements. I have referred to the sad fact that many electrical appliances purchased online do not meet appropriate safety requirements and, sadly, have led to loss of life and damage of a great deal of property.
It certainly cannot be right that products that have been withdrawn by a manufacturer, often because of concerns about safety, can still be purchased online, and it certainly cannot be right that consumers have not only less protection but fewer opportunities for redress when purchasing products online compared to what they have when purchasing them on the high street. I support all the amendments addressing those concerns because collectively they would improve consumer protection by ensuring accountability by imposing a clear and enforceable duty on online marketplaces to ensure the safety of products sold on their platforms, especially those coming from third-party sellers overseas. Incidentally, I shall later propose an amendment that would strengthen the extraterritoriality covered by the Bill.
The amendments that we have before us further protect consumers by removing anonymity so that third-party sellers can no longer hide behind platforms to evade product safety regulations and by making it easier for them to seek any form of redress. It establishes direct liability on platforms for unsafe products sold throughout them, which leads to the opportunity for much greater fairness in terms of redress because, at the moment, consumers dealing with faulty high street products expect and receive a full refund or replacement, but when problems arise with online purchases, particularly from overseas sellers, consumers often seem to have no recourse. Amendments in this group deal with that issue. Finally, the amendments would clarify something that is lacking in the Bill at the moment: the issue of accountability. Who is actually accountable in the multinational marketplace structures that we have to deal with now?
Given that these platforms are evolving at an incredibly rapid rate, with people almost daily finding new ways to market their products, we need amendments that ensure that there is no room for manoeuvre to get around the regulations by online marketplaces now and, crucially, in future. We need a clearer definition of what we mean and what is covered by an online marketplace, and I welcome and support the amendments in the group that do just that.
I add one additional point. In Clause 10, the definition of an online marketplace includes,
“any other platform by means of which information is made available over the internet”.
Clause 10 does not define “the internet”, despite quite a point being made of doing so in other legislation. Indeed, other pieces of legislation prefer the phrase “internet service”, not just “internet”. To avoid further ambiguity, I have proposed in Amendments 117 and 122 that the Bill uses “internet service” instead of “internet” and that the definition of “internet service” is exactly as set out in the Online Safety Act 2023.
Given, for instance, that the Tobacco and Vapes Bill has this definition simply copied and pasted into it, I see no reason why this Bill could not do the same. Failing to do so would unhelpfully leave the definition to common law. We should be aiming to ensure that levels of protection and redress are as powerful online as they are on the high street. Amendments in this group will achieve this and will also ensure that we have a future-proofed definition of “online marketplace” and that clear duties and responsibility towards consumer protection are imposed on all relevant bodies. On these Benches, we certainly support them.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords for introducing their amendments in this group. I shall briefly speak in favour of Amendments 48 and 71. I thank the noble Baroness, Lady Crawley, for bringing attention to the critical issue that addresses the responsibilities of online marketplaces and also, if I may, pay tribute to her wider work in this area as well as that of my noble friend Lord Lindsay, who is not in this place but whose exemplary work as president of the Chartered Trading Standards Institute deserves a mention.
This sector has grown exponentially in recent years and plays a dominant role in modern commerce. This amendment, therefore, highlights essential duties for online marketplaces. For example, a 2023 TSB study found that Facebook Marketplace accounted for 73% of purchase fraud cases. If you think about fraud and its growth in terms of the British crime statistics, that is a significant percentage of British crime, not just online crime. Over one-third of adverts on Facebook Marketplace are scams, we are told, so this amendment would help to level the playing field by ensuring that online marketplaces meet the same safety standards as physical retailers. This would foster fair competition and ensure that businesses prioritising consumer safety are not undermined by unscrupulous practices.
It is vital that we ensure online marketplaces, which facilitate the sale of billions of products, do not become conduits for unsafe goods or fraudulent activity, as all noble Lords have rightly highlighted. Without robust regulations, consumer trust and market integrity are at significant risk. We ask noble Lords to take seriously this amendment to uphold consumer protection, market fairness and safety standards, and think that the Government ought to recognise the urgency of addressing these concerns and act decisively.
On Amendment 71, I support it as a necessary step to protect consumers in the rapidly growing online marketplace sector. The extension of liability to online marketplaces and others under Section 2(3) ensures that those who facilitate the sale of unsafe or defective products are held responsible. Such measures are crucial to maintaining consumer confidence, especially as online shopping becomes so dominant.
We think it is essential that the Government protect consumer rights in all the marketplaces, especially online. We urge the Government to listen to those two amendments in particular but, frankly, there is merit in all the amendments we are debating in this group, and I hope to hear some positive news from the Minister.
Lord Leong (Lab)
My Lords, before I respond to this group, I say to the noble Lord, Lord Sharpe, that I will write to him in respect of the points he has raised.
I thank all noble Lords for their contributions to this debate and for Amendments 21, 22, 32, 45, 48, 71 and 117 to 124. These amendments have raised important points on the scope and application of the Bill’s powers, and I hope to provide clarity and reassurance. Around one-third of UK retail sales are now conducted online, but our product safety legislation has not kept pace with changes in shopping habits, in particular the development of online marketplaces and other platforms.
Online platforms may sell goods themselves and/or provide a platform for third-party sellers—in the UK or aboard—including consumers, to sell goods. The most well-known online marketplaces in the UK are probably Amazon, eBay, ASOS and Etsy, and others are widely used. The online marketplace industry in the UK is booming. In 2023, the UK e-commence market was valued at close to £137 billion and is projected to grow to £152 billion this year. I thank the noble Lord, Lord Sharpe, for setting out the landscape of online fraud and scams on online marketplaces; we really need to take note of that.
Baroness Brinton (LD)
I thank the Minister very much for the detail he has gone into in his answer, but there are two types of regulation. The one he has described is the one that you would expect the Government, trading standards and other bodies to take. But, in litigation terms, if somebody bought an electric bike in good faith, who would they sue? Paragraph (h) does not make it clear. This is not purely about the parameters of the products and the Bill; it is about the consequences of having something that is very general. I think platforms will say, “It’s nothing to do with us”, and the individuals will say, “But I’m not part of the chain, as described”. I am genuinely struggling to understand and I wonder whether the Minister can help me.
Lord Leong (Lab)
I thank the noble Baroness for that; I will come to it. We are talking about product liability to some extent; I have a paragraph on it in my brief, if she will bear with me for a moment.
Amendments 32 and 45 highlight some of the different actors in online supply chains that may need to be captured appropriately in these new requirements. The Bill gives powers to introduce requirements on online marketplaces to improve the safety of products sold online. These requirements can be tailored and updated appropriately to reflect the wide range of online marketplace models, and other relevant supply chain actors and their activities, now and in the future. Clause 2(3) is therefore sufficiently broad to enable requirements to be introduced on any persons carrying out activities in relation to a product. This could include, where appropriate, private individuals selling products via online marketplaces, whether in return for payment or free of charge.
I will now focus on Amendments 117 to 124, which seek to broaden the definition of online marketplaces. The definition of online marketplaces in the Bill has been created in a way that is broad enough to capture the full range of online marketplace business models, including social media platforms such as TikTok Shop, which was mentioned earlier. I assure the Committee that all the changes proposed in the amendments are captured within the existing definition. For example—and of relevance to Amendment 123—the expansion of the term “marketing” within the definition of an online marketplace is not required due to the definition of “marketing” within the Bill, meaning the “making available” of products. This in turn is defined as goods
“supplied or advertised for distribution or use on the market, whether in return for payment or free of charge”.
Amendments 117 and 122 in the name of the noble Lord, Lord Foster, seek to change the definition of an online marketplace, replacing “internet” with “internet service”, as defined in the Online Safety Act 2023. The definition we have used in the Bill includes a service on any other platform by means of which information is made available over the internet. We are therefore confident that the issue the noble Lord raises in his amendments is covered by the Bill as drafted.
I also thank the noble Lord, Lord Foster, for his clarification about data and GDPR being captured by the Data (Use and Access) Bill. I shall read Hansard and confirm accordingly. I totally agree with him that all unsafe products should never be allowed to be offered for sale on any online marketplaces, whether original or second-hand. We have to address his point about accountability. Who is accountable to be held responsible for some of these unsafe products?
The Bill also includes a power in Clause 10(2) that allows for the definition to be amended later by regulations, if this were necessary to capture any future models not captured by the current definition. I will come back to the issue of product liability.
Amendment 71, tabled by my noble friend Lady Crawley and spoken to by the noble Baroness, Lady Brinton, would allow the Secretary of State to make provisions to ensure that online marketplaces can be held liable for products purchased via their platforms. The primary route to seek damages for harm caused by defective products is through the Consumer Protection Act 1987. Depending on the specific facts, an online marketplace may have responsibility under this legislation. The Government are currently reviewing this legislation and we will consider the UK’s product liability regime holistically, including the question of how it should apply to online marketplaces. This is not a change that we would seek to make without considering all the evidence, so we do not want to pre-empt this important work by adding to the scope of the Bill.
Product liability also covers products that extend beyond the scope of the Bill, including, for example, food and medical devices. A considered review of this area would be the most appropriate way to ensure that our product liability laws are up to date and fit for the future and to take account of the broad-ranging interests in this body of law. I will keep the Grand Committee updated on the Government’s progress with this review and plans for wider engagement.
I say to the noble Lord, Lord Jackson, and other noble Lords: we have listened to the debate and reflected on all the points made. We are aware of the Grand Committee’s strength of feeling on a number of points, including the scrutiny of secondary legislation. With that, I hope that I have been able to reassure noble Lords that these amendments are therefore not required to achieve their laudable aims. Consequently, I would ask for the amendments in this group not to be pressed.
Baroness Brinton (LD)
Clause 1(5) says that
“‘marketing’ means making available on the market”,
which is a much shorter definition than the one that the Minister just read out at the Dispatch Box. Is he telling me that I am not correct in saying that I market a product on eBay when I put it up on eBay?
Baroness Brinton (LD)
This is very important, because this is partly about liability and partly about the clarity in the Bill about who has responsibility. Whether it is a buyer or, as I think the Minister argued, an individual seller, someone has to tell them that they have to follow the regulations, and they need to know how to do that. When he read out the definition of marketing in his speech, he gave a whole sentence more than is included in the definition in the Bill, which very simply says,
“‘marketing’ means making available on the market”.
It goes on to discuss “related terms”, but they are not relevant to my problem. While he ponders between Committee and Report, can he look at that? More than one of us is likely to come back with amendments on Report on this issue.
Lord Leong (Lab)
I thank the noble Baroness. We are trying not to be too prescriptive because it is constantly changing. I am sorry about this, but the Bill defines “marketing” as
“making available on the market”.
Clause 10, line 8, states,
“a product or goods … supplied or advertised for distribution or use on the market”—
Baroness Brinton (LD)
That is exactly what happens with a private individual. They will advertise an item on eBay. The language the Minister is using is what I would describe as the old-style manufacturing and business model. It does not take into account all the comments that people have made about where online marketing is in the 21st century. Therein lies the problem, and I would be very grateful if the noble Lord would look at that.
Lord Leong (Lab)
I thank the noble Baroness for that as well. Online marketplaces are changing overnight. I have just learned over the weekend of dropshipping. Dropshipping means that if someone orders a product on eBay, the person supplying it is not eBay or whoever claims to be on eBay. It is dropshipped by AliExpress straight to that buyer’s home. How are we going to control that? How are we going to capture that? That is why we cannot be too prescriptive. We need to have the flexibility to address ever-changing marketplaces. That is what this Bill is trying to do. If the noble Baroness is still unclear or unsure about this, perhaps we can have another follow-up meeting so we can discuss this in depth.
Baroness Brinton (LD)
I think a number of noble Lords who have participated in this debate might be interested in a meeting, if that is okay. I shall very briefly respond to the Minister to say that flexibility is fine, until the point at which there is nobody to hold accountable. That is the problem.
Lord Leong (Lab)
The Bill is drafted in this way to address who is going to be accountable. My invitation to all noble Lords to a meeting stands, and I welcome each and every one of them. I hope this amendment can be withdrawn.
Lord Lucas (Con)
My Lords, I am very grateful for the long and detailed reply given by the noble Lord, Lord Leong. I recommend a meeting with him to anybody. He is a most welcoming and courteous Minister, and you get good results out of a meeting with him. If, on rereading what he has said, I have any further questions, I shall attend the meeting. For now, I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath (Lab)
My Lords, this might be a convenient moment to adjourn the Committee.
Product Regulation and Metrology Bill [HL]
Wednesday 27th November 2024
(1 month, 3 weeks ago)
Grand CommitteeRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 18-III Third marshalled list for Grand Committee - (26 Nov 2024)
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bell rings and resume after 10 minutes.
Clause 2: Product requirements
Amendment 23
Member's explanatory statement
This amendment is intended to ensure regulated marketplaces co-operate with emergency services (where appropriate) to protect consumers from unsafe products.
Baroness Finlay of Llandaff (CB)
My Lords, much of this Bill, as we know, is underpinned by secondary legislation, which has yet to be set out. That, of course, includes online marketplaces. To support the development of effective regulation, the Government, I hope, will set out their timetable for developing such secondary legislation as soon as possible. They should also provide clarification on who those referred to in the Bill as the “relevant authorities” are, particularly in relation to online marketplaces, which have to co-operate with others in Clause 2.
The UK’s fire and rescue services provide front-line response when dangerous products are sold in an online marketplace and catch fire or set fire to other properties and cause terrible burns to anyone who happens to be nearby. The London Fire Brigade, to which I am most grateful for the information it has given me, has seen a stark rise in e-bike and e-scooter fires in recent years. It responds to an incident about every 48 hours now. In this year alone, there were 131 fires from January to September. Given the role of the fire and rescue services, it would be helpful to set it out and recognise it in regulations. That is the reason for my Amendment 23, which is the lead amendment in this group, and Amendment 105, which goes with it.
Amendment 23 would ensure that regulated marketplaces co-operate with emergency services where appropriate to protect consumers from unsafe products and allow fire and rescue services to respond to fire safety concerns about known products. Some online marketplaces already co-operate with fire and rescue services. One of those—which I will not name because I do not think it appropriate to provide advertising—is a major online supplier that does include safety advice from the London Fire Brigade, but unfortunately, not all sites do.
The Bill is a welcome step to protect consumers from harmful products. It has very wide scope, but it needs to cover the online marketplaces that facilitate the sale or giving away of products through private individuals from one to another, as well as those sold as new. That includes the likes of some of the trading websites—again, I will not name them because I do not want to advertise them. From investigations by the London Fire Brigade, we know that products sought from second-hand online marketplaces include e-bikes, chargers and batteries, which have the potential to cause great harm. It has seen examples of incidents such as the Sutton railway station fire in March, when fire crews were called to the station during rush hour as commuters were on their way home. A bike owner had bought an e-bike from an online marketplace four months beforehand and had had no issues with the purchase. The station commander has confirmed that the fire was ferocious, happened extremely quickly and would have been devastating if things had worked out differently. He said that he hates to think of the tragic consequences that could have occurred. It was, in a way, just fortunate that it happened where it did and that no one was injured, but it serves to highlight the dangers when products are purchased or given away for free from one individual to another.
I know that Amendment 32 has already been debated, and I apologise to the Committee that I was unable to be here; I was on an aeroplane, because the railway lines were flooded. But I read Hansard, and the comments there are all relevant to the stark rise in e-bike fires in the capital.
Turning to Amendment 105 and Clause 7, the proposals would give the regulator the power to require companies subject to the regulation to provide information on the products being sold. As drafted, this clause would give the regulator only the power to require the provision of information and does not give them a responsibility to share this with bodies that have a statutory duty or responsibility for public safety, including fire and rescue services. The role of the data from the London Fire Brigade has been really important and has shown us the scale of the problem. Ensuring that emergency services have access to all the data will be welcome going forward in monitoring safety and spotting things—perhaps products that we currently cannot even imagine, which may come on to the marketplace and subsequently prove to be unsafe.
The change to Clause 7 in my Amendment 105 would ensure that regulations make provision for sharing information about unsafe products with the emergency services, including fire and rescue services, and that they have the information they need to respond to these emerging risks. They also run prevention campaigns and can provide accurate safety messaging, which can all be supportive of public safety, so that the Bill can meet its overall and much-needed aims. I beg to move.
Lord Foster of Bath (LD)
I rise briefly to support the amendments in the name of the noble Baroness. I also draw the Minister’s attention to the fact that when I moved Amendments 2 and 27 in an earlier group, on the issue of installation, I pointed out that in respect of the potentially very dangerous lithium-ion batteries used in EV charging-point systems, for example, and solar panel array storage batteries, there is currently no requirement on the competent person scheme individual who is installing those systems to notify relevant authorities of the installing of those batteries.
I pointed out at the time that lithium-ion batteries, about which we will no doubt speak a great deal when we come to group 5, can create huge fires at high temperatures and very toxic gases; I also pointed out that, crucially, they cannot be put out by the use of water. That is why it is so important that the relevant authorities, particularly the emergency services, are aware of the current location of such devices. The current arrangements require the individual house owner to make such a notification. My amendment argued that it should be the responsibility of the installer not only to check on the safety of the entire system but to make that notification. For that reason, I am particularly supportive of the noble Baroness’s amendment.
Lord Fox (LD)
My Lords, had I been a little shrewder on the grouping, I would have included in this group Amendment 106, which we will debate in the antepenultimate group of the Bill, as it also addresses Clause 7 and goes after the same objective of information sharing. Whether it is lithium-ion batteries or some other danger, it is important that we learn from the problems that are established and that the right people can get that information, so that learning process can start.
I suggest that, whether it is the process set down by the noble Baroness, Lady Finlay, which we support, or something like my Amendment 106, or something that the drafters sitting behind the Minister can do much better than we can, there needs to be a point in this Bill about a process of information sharing, whether it is set out in detail, as in my amendment, which talks about who or what those bodies are, or whether it is a more general duty, as the noble Baroness, Lady Finlay, has set out. We support these proposals, and I hope that we can have a debate next time. I hope that the Minister will acknowledge the need to understand dangers, learn from them and move to be able to prevent them.
Lord Sharpe of Epsom (Con)
I thank the noble Baroness, Lady Finlay, for her important amendments. I, too, am looking forward to exploring the meaning of “relevant authorities” in the next group. If this is really about product safety, of course we have to have regard to unsafe products, and of course that information ought to be shared with the emergency services, so I have absolutely no problem in supporting all those amendments.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I am grateful to noble Lords who have spoken in this interesting debate. Obviously, the noble Baroness, Lady Finlay, speaks with great experience in this area, on the higher risk of the online second-hand marketplace and the relationship between that, the information and the emergency services, as she so rightly says. I take the point made by the noble Lord, Lord Foster, which we will debate later on. I have also noted Amendment 106 from the noble Lord, Lord Fox, which seeks to ensure that the information-sharing provisions apply to more bodies, including medical examiners and coroners. In fact, he has put an extensive list in that amendment.
On the issue of secondary legislation, I cannot as yet commit to a detailed timetable. Clearly, this Bill is starting in your Lordships’ House, so we do not know when it is going to get through and, I hope, receive Royal Assent. Then work will obviously take place in relation to secondary legislation, but my understanding is that, in the meantime, we are continuing to work with stakeholders to make sure that we can do this as quickly as possible.
We are coming on to the issue of relevant authorities but, as we see it, it is restricted under Clauses 3(2) and 6(2) to those authorities fulfilling a public function, such as local authorities and sectoral regulators. We think that any further specification would limit our ability to ensure that enforcement authorities can be equipped with necessary powers to enforce their areas of responsibility. Relevant authority and inspector functions are outlined in Clauses 3(3), 6(3), 3(4) and 6(4) respectively, but I suspect that we will come back to this in relation to the amendment from the noble Lord, Lord Fox, later on.
The noble Lord, Lord Foster, mentioned lithium batteries. We know that he is making a very important point—we very much acknowledge that. We think that the powers in the Bill will allow us to determine what changes and updates to our regulations may be needed to ensure the best protections for consumers and support for reputable retailers, including those related to installation.
On data sharing, which the noble Baroness, Lady Finlay, has raised, I have worked with the noble Baroness in the past on CO2 safety issues, where again the issue of data being shared is very important. That also relates to death certification, in getting accurate information. I well understand that. The draft provisions already allow regulations to make provision for information sharing and co-operation with emergency services. Existing legislation that seeks to facilitate information exchange does not always cover the type of data needed to help protect consumers from unsafe products. We believe that the Bill aims to improve data exchange on product safety among public authorities, emergency services and consumers. Powers in the Bill will allow for regulations to enable extending data-sharing agreements to include public agencies such as emergency services. Sharing information is clearly an important feature in the work of relevant authorities; their ability to obtain and share information enables them to undertake their activities effectively and efficiently. As Clause 7(5) makes clear, any information-sharing regulations must not contravene existing data protection legislation, which covers personal data.
Baroness Finlay of Llandaff (CB)
I am most grateful to the Minister for having such an open door in discussing these issues. I may be wrong, but I understood from the London Fire Brigade that, although its collection of data is comprehensive, other fire brigades around the country do not feed in in the same way. We also have the issue of devolved responsibilities in the devolved nations. Therefore, there is a need to clarify data sharing. I wonder whether we might need to go over this in order to be clear in regulation that some incidents are notifiable.
In responding, the Minister referred to carbon monoxide, which is a colourless gas that does not smell but that can, at high levels, kill you in three minutes. Carbon monoxide deaths are still occurring in this country because of faulty boilers, gas cookers and so on; they are also caused by faulty vehicles when exhaust fumes leak. I understand that we cannot have regulation that includes notifying absolutely everything, but we need further debate on where to draw the line in terms of what becomes notifiable and what is not. It is about an assessment of risk of harm, perhaps.
Lord Hunt of Kings Heath (Lab)
On carbon monoxide, one of the issues concerns medical certificates and cause of death; there is a big problem because, often, carbon monoxide poisoning is not mentioned. The argument is that there is nothing in this legislation that precludes taking action in the way the noble Baroness wants us to take action. The question is whether the noble Baroness’s amendment is proportionate; we can have a further discussion about that.
Baroness Finlay of Llandaff (CB)
I completely accept that it is about what is and is not included. I recall having learned, on many occasions, the danger of having lists in legislation, because there is always something that has not been included, which becomes a tension. I look forward to further discussion. I am most grateful to others for supporting these amendments and recognising their importance. In the meantime, I beg leave to withdraw Amendment 23.
Lord Lucas
“(l) the withdrawal from sale of products of a type concerning which Trading Standards have raised concerns, until such time as the seller has satisfied Trading Standards that those concerns are unfounded.”
Lord Lucas (Con)
My Lords, the market we have at the moment is such that, if there is, say, an orange teddy bear on the market, it may appear in a hundred or more different guises from ostensibly different sellers. Perhaps it has a different label or name attached, but it is, in essence, the same product. If we insist on trading standards proving that each of these instances is dangerous, we will find ourselves unable to enforce this legislation properly.
Amendment 29 suggests reversing the process so that, when trading standards become aware that, say, an orange teddy bear of a particular description appears to be dangerous, they can stop them being sold and put the onus on the sellers to prove that they are safe. In that way, we can achieve the protection of the public quickly and simply, without overwhelming trading standards. I beg to move.
Baroness Crawley (Lab)
My Lords, I will speak to Amendments 31, 85, 97, 98 and 109, all on enforcement issues. Amendment 31 in my name and Amendment 98 in my name and that of the noble Lord, Lord Foster of Bath, deal with the subject of fulfilment houses. Yes, it sounds like a slightly dodgy building, does it not? Anyway, I have been educated.
Amendment 31 addresses Clause 2. At the end of line 14 of page 3, it would insert
“a person who controls fulfilment houses in the United Kingdom”.
This amendment adds to the list of persons in Clause 2 on whom product regulations may impose product requirements. I thank the Chartered Trading Standards Institute for its advice on this issue.
Fulfilment houses or centres store, pack and ship products for other companies, which are third-party sellers, often from overseas. Without clear rules, these products easily skip safety checks, creating risk for consumers. It is important to aim for compliant products only to enter the market, and these fulfilment houses should play a critical role in ensuring that.
There is presently a lack of clarity regarding the specific obligations of fulfilment houses, as their operations may not fall directly under the role of traditional retailers or manufacturers. This amendment makes it clear that fulfilment houses must meet safety standards, just as regular shops must, and are accountable if they are storing and passing on products for delivery that are unsafe or dangerous.
Amendment 98 aims to close a critical gap in the supply chain and protect consumers from non-compliant goods from third-party sellers. The amendment seeks to define “fulfilment houses” because at present the Bill does not. This is needed as these houses are, as I said, a key loophole for unsafe products entering the UK market. The amendment also outlines how fulfilment houses will have to keep records showing that the products they store meet all necessary product safety requirements. These houses are also to work with enforcement officers if that is needed. Although fulfilment houses already register for tax due diligence, this extension to product safety is a necessary logical next step towards ensuring safe consumer products across the board.
Amendment 85 in my name and that of the noble Lord, Lord Foster of Bath, is on enforcement of metrology regulations. This amendment, advised by trading standards officers, makes it the duty of weights and measures authorities in Great Britain and a similar body in Northern Ireland to ensure that products are accurately measured and to add to the list in Clause 6 on page 6, line 30.
Although the Bill currently includes rules about measurement units and product quantities, it does not, according to weights and measurements officers on the ground, fully cover the checking of equipment used to make these measurements. Accurate measuring equipment is essential for ensuring fair trade, so expanding the regulations to include equipment testing, as our amendment suggests, would help authorities to enforce those rules more effectively. There are also concerns that the Bill may allow people other than trading standards officers to carry out enforcement, even though trading standards officers are already trained and authorised to do this work.
This amendment clarifies who is responsible for enforcement, helping build consumer trust in fair measurements, which affects consumers UK-wide. It will also ensure that local authorities will be responsible for regularly checking products to ensure accurate measurements, investigating complaints and taking action if they find issues. This will mean that all sellers follow the same standards so that consumers can trust the quantities they are buying—whether groceries, petrol or other goods—and that they are measured fairly.
I shall now speak to Amendment 97 in my name and those of the noble Earl, Lord Lindsay, and the noble Lord, Lord Foster of Bath. The explanatory statement says:
“This amendment inserts safeguards to ensure non-regression from existing legal protections, as well as providing for the due consideration of the precautionary principle when scientific evidence about a possible risk may not yet be fully available but there is a need to be cautious given the potentially serious consequences for the safety of individuals”.
In current legislation, Regulation 10(5) of the General Product Safety Regulations 2005, for example, includes the duty that
“An enforcement authority … take due account of the precautionary principle”.
That point was relied on by the organisation Which? in its campaign to persuade the Government in 2019 to take action and require Whirlpool to recall dangerous tumble dryers that were responsible for starting hundreds of fires. When the scientific evidence was not fully available, the precautionary principle kicked in. At that point, scientific evidence is not completely collated but, when there are hundreds of fires, something needs to be done.
The Bill provides the Government with the opportunity to introduce new regulations that will upgrade consumer rights, but we believe there needs to be a more encompassing principle to keep consumers safe and underpin all future regulation with key consumer protections. With this amendment, we are seeking to ensure that the primacy of a high level of consumer protection is built into the Bill.
Lord Foster of Bath (LD)
My Lords, these amendments deal with a range of issues concerning enforcement. As the noble Baroness, Lady Crawley, said, I have signed and fully support the numerous amendments she has tabled, and I do not intend, other than very briefly, to touch on those at all.
I said at Second Reading that improved safety will come about through this legislation only if there is effective enforcement of the various regulations that are going to be laid. As I understand it, the thrust of the amendments of the noble Lord, Lord Sharpe, which he will describe in more detail later on, is that they seek clarification on who is going to be responsible for enforcement and what their responsibilities will be.
My noble friend Lady Brinton, who is unable to be with us today, has an amendment that in part suggests that trading standards officers should be the ones responsible since, frankly, they have the expertise and skills and are best placed to take on the role. Indeed, I am pretty sure—although obviously, we will have to wait until we hear the Minister’s response—that trading standards officers are going to play a crucial role in enforcing the Bill and, much more significantly, the as yet unknown contents of regulations arising from it.
The amendment from the noble Lord, Lord Lucas, which I fully support, assumes that trading standards will be the ones who will have the key responsibility, but my noble friend’s amendments and my own Amendment 64 seek to ensure that whoever does the enforcement also has the necessary resources, including financial, to carry out the work.
When I raised this issue at Second Reading, the Minister talked about improved enforcement capability, which he said would come through the more efficient use of time, better notices, better data-sharing opportunities and the support that will be offered, such as support on technical queries from the OPSS—but not a whiff of a promise of additional funding.
At the very helpful meeting then organised by the Minister, I asked how the new burdens principle fitted into all this, whereby the Government will be expected to fund costs arising from new burdens placed on other bodies. The Minister promised to write to us, and indeed he did. He stated:
“No new burdens are being imposed”
by the Bill. He went on:
“The principal enforcement activities currently undertaken by local authorities and delivered by trading standards are not changing”.
Clearly, that is not the case, if we take into account all the regulations that will flow from this skeleton Bill. In fairness, to some extent the Minister acknowledged that. He said that there is a “potential”—an odd choice of word since we know it will happen—for the regulations to bring new burdens. He promised to continue dialogue with a new burdens team, and he pointed to the cost- recovery powers in Clause 8, clarification of which has rightly been sought by the noble Baroness, Lady Crawley, in her Amendment 109.
However, we should surely be acutely aware of the current position faced by trading standards officers around the country. Frankly, they do an excellent job. Over the last year, 2023-24, trading standards prevented more than £905 million of consumer detriment in England and Wales, equating to £8.39 saved for every £1 spent. But despite that really good value for money, over the last decade, spending on trading standards has been cut by more than 50%. Over the same period, staffing levels in local authorities have fallen by between 30% and 50%. Frankly, many local authorities no longer have sufficient resources to enforce all the consumer protection legislation for which they are responsible. Therefore, without additional resources, they certainly will not have the capability to cope with more, which might—or rather, will—come as a result of this Bill.
Whoever takes on the enforcement responsibility will need additional resources to do the job, and that will not be achieved by things such as better data sharing and support on technical queries by the OPSS. I hope the Minister can give us far more assurances than he has so far that the Government are alert to this issue. I hope that he will provide us with assurances that extra resources will be made available, as proposed by my noble friend’s amendments and my own.
I have a couple of other amendments to touch on briefly. In a sense, my Amendment 70 builds on Amendment 98, which I have signed, in the name of the noble Baroness, Lady Crawley. When buying a product online, the buyer is often aware who the seller is. Amendment 98 would place a duty on the fulfilment houses that store all this stuff before it goes out to the consumer to ensure that appropriate safety legislation has been taken into account. Other amendments suggest that there should be a responsibility on online market- places to ensure that appropriate safety regulations have been met by all the products available on their platform. My Amendment 70 goes a little further and suggests that we should therefore give the consumer the right to bring a claim against the online marketplace, regardless of who the original provider of the product was, if this has not happened and they suffer as a result of the product not having met the appropriate standards.
Finally, Amendments 63 and 87 seek to expand enforcement powers by giving the relevant authority or an inspector the power to require a person to attend an interview to answer questions, a power usually known as an interview notice. In similar legislation, authorities including regulators have that power. In the Data (Use and Access) Bill that is currently before your Lordships’ House, the Government seek to give the Information Commissioner that power to give interview notices. The Government are also seeking to give the Security Industry Authority that power in the Terrorism (Protection of Premises) Bill, and the new independent football regulator, in the Football Governance Bill currently before your Lordships’ House, will be given the same power. Yet it is omitted, bizarrely, from this Bill. That means that, on the one hand, the relevant authority would have the power to enter and search premises and seize items but, on the other hand, it would not have the power to question persons about the related entry, search and seizure of those products. I find that particularly bizarre. I hope that the Minister will acknowledge this point and either accept the amendment or offer his own way forward.
I began by saying that the Bill and the regulations that flow from it will, frankly, be pretty meaningless without proper enforcement, so we need clarity about who will be responsible for that enforcement, we need to be assured of what those responsibilities will be and we need assurances that they will be properly resourced to carry out those responsibilities. On all counts, we are at present unaware of any answers to those questions, so we hope that the Minister will shed some light on this when he winds up.
Baroness Finlay of Llandaff (CB)
My Lords, I found the introduction to these amendments from the noble Lord, Lord Lucas, and the clarification from the noble Baroness, Lady Crawley, very revealing. It is a reminder that you can have a product made somewhere that comes into this country and then gets badged by lots of different people, but it is the same basic product with the same problems. The two examples that come to mind are the tumble dryers, when there was a fault in how they were constructed, and magnetic toys, which eventually got withdrawn. Several children ended up inhaling or swallowing small magnets that were in those toys, which were marketed under lots of different guises—but the basic product that came in included these little magnetic particles.
It has been a really interesting debate, because you can see that there is a point at which the trading standards people have the powers to intervene. I hope that, in responding, the Minister will able to describe to us how the powers are strong enough at the point of entry, rather than the trading standards people having to go after one label, then another and then another. That will be very heavy on workload and will not deal with the problem of an unsafe product being produced elsewhere and brought into the country.
The Earl of Lindsay (Con)
My Lords, I support most of the amendments in this group, but I particularly want to support the amendments in the name of the noble Baroness, Lady Crawley—namely, Amendments 31, 85, 97, 98 and 109. Some of those are also in the name of the noble Lord, Lord Foster of Bath. I declare an interest as president of the Chartered Trading Standards Institute. My predecessor in that role, of course, was the noble Baroness, Lady Crawley, hence our common approach to the issues raised.
In relation to Amendments 31 and 98, dealing with fulfilment houses, those houses play a critical role in the distribution chain, especially for products from overseas retailers. These amendments would ensure that they were accountable for product safety, thereby reducing the risk of non-compliant goods reaching consumers. Amendment 98 also addresses gaps in the supply chain. The fulfilment houses play a critical role in the distribution chain for overseas sellers and the amendment would ensure that they were accountable for product safety, reducing the risk of non-compliant goods reaching consumers, but would also require fulfilment houses to maintain compliance records and facilitate inspections. The amendment would increase traceability and accountability for the products that they handle. Furthermore, Amendment 98 aligns fulfilment houses with current due diligence obligations. While they already register for tax due diligence, this extension to product safety is a logical step towards ensuring safe consumer products across the board.
Lord Stewart of Dirleton (Con)
My Lords, I wish to address the Committee on Amendments 60 to 62 in the name of my noble friend Lord Sharpe; I thank him for his amendments on enforcement regulations in this Bill.
As has already been pointed out, the Bill fails to provide clarity about who will be the relevant authority, how that authority will be appointed and what criteria will be used to determine this. In setting out these points, I merely echo concerns already raised by your Lordships’ Committee. The concern is that a dangerous precedent is created, particularly where such broad powers are granted for enforcing product regulations—including sanctions—and for carrying out investigations.
To illustrate the risks of these broad and as yet undefined powers, we need look only to the Horizon scandal. In that case, as the Committee and indeed the whole House is aware, sub-postmasters were wrongly prosecuted based on flawed evidence and poor decision-making by the responsible authorities—a private prosecutor in England and Wales. The lack of proper scrutiny and oversight in that situation resulted in innocent people facing wrongful charges. Lives were ruined; indeed, lives were lost. The situation was greeted with mounting horror across our House, as it was across the country at large, as details began to emerge.
The Horizon case highlighted the dangers of unchecked power or power in the hands of those lacking the professional cultures to exercise such power responsibly. Our concern is that this could easily be replicated under the Bill if we do not ensure that the powers of the relevant authority are defined carefully and according to strict standards of accountability. We submit that the Government must provide clear criteria for the appointment of a relevant authority and establish rigorous oversight in order to ensure that the powers given under the Bill are used fairly and transparently. The Bill should ensure that those granted authority are highly qualified, possess relevant experience and are subject to ongoing monitoring in order to prevent misuse of power.
These clauses are considered skeleton legislation by the Delegated Powers and Regulatory Reform Committee. The House has collectively expressed its concern as to the dangers of skeleton legislation in other contexts, where vague provisions allow the Executive to bypass parliamentary scrutiny; indeed, the dangers and undesirability of such skeleton legislation were touched on yesterday in a take-note debate on the rule of law. Bypassing Parliament on such a critical matter—especially with the ability to bring solemn criminal charges on indictment, not just at summary level—creates risk and sets a dangerous precedent. We are by no means claiming that the Government are consciously seeking to set up a situation and a system of abuse of power, and we recognise the importance of effective regulation for consumer protection; our concern is that a lack of clarity in the Bill threatens to create an environment ripe for the misuse of power, at a time when our consciousness, and of the country at large, of those risks has never been sharper.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 60, 61, 62, 66, 67, 83, 84, 86, 88 and 89 standing in my name.
Before I get on to that, I thank all noble Lords who have spoken. I have not heard very much that I have disagreed with, and in particular I welcome the specialised and clearly considerable expertise of the noble Baroness, Lady Crawley, and my noble friend Lord Lindsay in this area. I also thank my noble and learned friend Lord Stewart of Dirleton, who brought a valuable legal perspective to my Amendments 60, 61 and 62. If I may say so, the Committee should also thank him, because that has relieved me of the duty of mentioning the delegated powers in the Bill.
To probe, starting with my Amendment 60, what is a relevant authority? My amendments as a group seek clarity. There is far too little of it, and I will explain why. There may be a case for a degree of generalisation on product safety laws, which we have discussed in previous Committee days, but when it comes to the enforcement of the law, as my noble and learned friend has just outlined, the Government should not be this vague. The clause that this amendment seeks to remove grants wide discretion in designating one or more persons as the relevant authority, without defining criteria or scope. Businesses need to know who they are engaging with when it comes to compliance and enforcement. The uncertainty in the Bill creates a challenging situation for businesses, in particular small and medium-sized enterprises, which may lack the resources to navigate unclear or fragmented enforcement mechanisms.
Without clearly defined enforcement roles, companies face potential delays and additional costs due to duplicative enforcement efforts, all of which could hamper innovation, productivity and growth. This clause effectively hands unchecked power to Ministers, allowing them to designate any person or organisation as a relevant authority without sufficient parliamentary scrutiny. But it fails to address critical questions, such as what qualifications or expertise the designated authority will require. How will conflicts of interest be avoided? Will there be oversight mechanisms to ensure that these authorities are held accountable for their enforcement activities?
The Government have repeatedly claimed that one of the goals of the Bill is innovation, and that they wish to be a leader on trade, yet unclear enforcement mechanisms may send the wrong message to trading partners and investors. Inconsistent enforcement practices could harm the perceived reliability of the UK’s regulatory regime, potentially complicating cross-border trade agreements and deterring foreign investment.
The Government’s Explanatory Notes suggest that the relevant authority could include the Secretary of State or
“other bodies exercising public functions”.
But nowhere in the Bill or the Explanatory Notes is there any mention of specialised bodies—including those represented by the noble Baroness, Lady Crawley, and my noble friend Lord Lindsay—which have clear expertise in product enforcement, safety and standards. We think this omission is striking. Will product safety specialists such as trading standards and accredited safety bodies be considered? Will enforcement fall to entities with deep technical knowledge and understanding of the complexities of product regulation?
The Bill uses the phrase
“other bodies exercising public functions”,
a catch-all term that could encompass almost anyone who engages in some form of public work. In practice, this could mean highly skilled and knowledgeable experts, but it could also mean organisations or individuals with no background in product safety. Could a local administrative body or other government-adjacent organisation whose primary function is entirely unrelated end up being designated as a relevant authority? Despite the Government’s claims of promoting clarity and higher standards, the wording here does the exact opposite.
This is not a trivial matter. The enforcement authority will determine how the rules are applied and the standards by which businesses are judged. Without explicit safeguards, this clause risks allowing enforcement to be carried out by ill-equipped individuals or bodies, potentially damaging the entire framework of product safety. I appreciate that I have ranged far and wide here, but unfortunately, the way the Bill is drafted invites all these questions, so I look forward to the Minister’s responses.
Turning to Amendment 61, also in my name, we of course recognise the importance of ensuring compliance with product regulations, but the manner in which these powers are drafted raises serious concerns about vagueness, overreach and potential misuse. This subsection includes functions such as monitoring compliance, investigating suspected non-compliance and even mitigating the effects of non-compliance. While monitoring compliance and addressing breaches are legitimate, the concept of suspected non-compliance is especially problematic. What constitutes suspicion? Will it be based on clearly defined criteria, or could it arise from arbitrary interpretations by an as yet to be defined relevant authority?
Lord Fox (LD)
My Lords, very briefly, and complying with time constraints, I warned your Lordships and the Government when speaking to another group that the skeletal nature of the Bill allows everybody to superimpose all their worst suppositions on it. We have just heard a thorough example of that from the noble Lord, Lord Sharpe.
I am of course here to help. In considering previous Bills, it helped when the Government published their draft code of practice between Committee and Report, so that we could get an inkling of their thinking. Doing so will not change our need to address the skeletal nature of the Bill, but it might allay some of our worst fears about the intention, and guide us in wording the amendments we could table on Report to help tie things down a little more, along the lines of the fears outlined by the noble Lord, Lord Sharpe. Can the Minister say whether a code of practice is planned, and undertake to show us a draft of it between now and Report?
Lord Leong (Lab)
My Lords, I thank all noble Lords for their detailed consideration of the Bill, and especially the noble Lord, Lord Sharpe, for his thorough exposition of his amendments, based on his experience at the Home Office and previously as an enforcement officer. He obviously knows a lot about the various amendments he has tabled.
I hope to clarify the Government’s position and explain the reasons behind the approach we have taken. First, I will address the use of delegated powers in the Bill, noting the concerns of the Committee.
Product regulation must legislate for innumerable kinds of products, ranging from heavy machinery to children’s toys. This is best done through regulation, due to the amount of very technical and scientific detail required. In some cases, sectors can be covered by general requirements. However, often they require specific tailored regulations that recognise their individual requirements. For example, a penalty for failure to properly mark a product “harm suffered” is likely be different when comparing a highly sensitive product in a nuclear energy installation versus a lower-risk product.
To proportionately reflect the dangers of a sector, requirements, enforcement powers, offences and penalties must be tailored. This is how the regulators operate at the moment, with over 2,500 pages of technical product safety regulation on the statute book. Alongside reviewing this existing legislation, we will need to consider on an ongoing basis whether there are emerging products or hazards that would benefit from specific rules.
Product regulation is a regulatory area that we have seen go through significant disruptive change with the growth of e-commerce, and this looks set to continue with AI and 3D printing. The activities conducted by different kinds of businesses have changed as well. The spine of the existing system was codified in primary legislation based on bricks-and-mortar businesses, and that led to uncertainties and gaps in duties, penalties and enforcement powers.
Lord Lansley (Con)
I apologise for interrupting the Minister, but Amendment 60 asks who the relevant authorities are. Paragraph 3 of Schedule 5 to the Consumer Rights Act 2015 tell us in statute, as things stand, who the domestic enforcement authorities are. That is not in subordinate legislation—it is in primary legislation. The Minister appears to be taking a list that is in primary legislation, which is amendable by regulation, and turning it into something that is a power to specify by subordinate legislation. What was wrong with retaining the enforcement authority list in Schedule 5 to the Consumer Rights Act and adding to or subtracting from it as necessary?
Lord Leong (Lab)
I thank the noble Lord for that point. As I said earlier, as it stands the relevant authorities are exercising public functions—that is, the Secretary of State or the Health and Safety Executive, in the examples that I gave earlier. However, because of the evolving and changing nature of the new products on the market, we may need more people with specific technical knowledge. We do not want this Bill to straitjacket us so that, every time we need to appoint somebody, we have to come back with new primary legislation.
Lord Lansley (Con)
But can the Minister tell us why the list in primary legislation under Schedule 5 of that Act, which has been amended from time to time since 2015 by regulation, is not a suitable basis for proceeding in future? What is wrong with using that list?
Lord Leong (Lab)
Personally, I do not see why there is anything wrong with it—but in this Bill itself, I am trying to say that we need the flexibility. I just have to continue.
Further clarification of powers and functions would restrict the ability for enforcement regulations to provide powers needed to enforce new product and metrology regulations. We must enable flexibility so that we do not create gaps in enforcement powers now or in the future. We intend to plug the gap in enforcement by making regulation applicable at the border, so that enforcement can take place before unsafe or non-compliant products are sold.
I understand the good intentions behind these amendments but, equally, I hope that I have resolved the concerns that led to them. The Bill provides simple, flexible powers that will help enforcement authorities to fulfil their roles. I submit that we have balanced parliamentary scrutiny with the necessary flexibility in a way that best serves the rule of law. It is for these reasons that I ask the noble Lord to withdraw his amendment.
Lord Fox (LD)
I asked a specific question about publishing the code of practice in advance. Can I have an answer, please?
Lord Leong (Lab)
I thank the noble Lord for that. We would expect regulators and authorities to carry out enforcement in line with the regulators’ code, which I am happy to share with noble Lords.
Lord Lucas (Con)
My Lords, the debate ranged a long way beyond my amendment, and I shall not attempt to summarise it. I suspect that I shall be listening to many of the arguments again at Report, specifically those from my noble friend Lord Sharpe of Epsom and perhaps the noble Baroness, Lady Crawley, too. In his reply to my amendment, I felt that the Minister rather missed the point, which is that, no, they do not have the powers at the moment. That is why this amendment has been tabled, because they are saying that they do not have the powers. Yes, you can name a product and have it taken off, but if it appears in 100-plus different guises, which all claim to be different but are actually the same, you are stuffed. That is what I am trying to get at. I shall come back to this at Report, after taking further advice.
I am also grateful to the noble Lord for reminding us of how overregulated our nuclear industry has become and that allowing it to continue to be the subject of such a ridiculous free for all—resulting in us paying five times more than it costs the Koreans to build a nuclear power plant—is not something that should be waved away in the breadth of the powers that we have in this Bill. I beg leave to withdraw my amendment.
“(d) the licensing of voluntarily committed standard essential patents which protect technology essential for implementing technical standards;(e) limiting the remedies available when a patent mentioned in paragraph (d) is enforced.”Member's explanatory statement
This amendment seeks to ensure that essential software for regulated products which relies on standard-essential patents (SEPs) is shielded from unfair legal abuse.
Lord Fox (LD)
My Lords, I also support Amendment 35 in the name of the noble Lord, Lord Lansley. As opposed to the last group, which focused on a large number of slightly different issues, these two amendments focus on one area and, given that they are only in the names of the noble Lord and myself, you can be sure that they will be technical in content.
I am sure the Minister has often wondered why his mobile phone can operate on Bluetooth in any country of the world, and why the automated vacuum cleaner that my noble friend Lord Foster so ably described in the last session can pick up wireless instructions no matter where it is working. The answer is that sitting underneath all of those are things called standard essential patents, or SEPs. They are patents that are necessary to the implementation of a collectively-agreed technical standard—5G, wifi, Bluetooth and so on. Standardisation across communications technologies makes it possible for devices to work with one another wherever they are.
Connectivity is increasingly a part of the products that the Bill seeks to regulate, as we have heard. UK industry is at the forefront of developing connected products that aim to address some of the biggest issues that we face, including healthcare and climate change. The Bill is about ensuring product compliance with technical standards. Compliance or conformance with the technical standard can often be premised on the implementation of a particular technology; as I have said, wifi is an example. For a product to use the wifi logo and technology, its technical performance with the chip set has to be tested and certified. Bluetooth and other wireless technologies used for power management in the context of electric vehicle chargers and smart metering are all examples of where the technical standards of operation are underpinned by these SEPs.
I realise that the Bill is not about intellectual property, but it is about regulating the properties of things. Unless the situation of SEPs is fixed, those properties can be in a state of flux. SEPs should be treated differently from other patents, which is why we are introducing them into this debate.
Of necessity, as a result of a dominant market position, the SEP holders have to voluntarily commit to license their technologies on fair, reasonable and non-discriminatory terms. The licensing of SEPs is important in ensuring that UK businesses are able to use the most modern and effective versions of these technical standards. In practice, SEP holders often evade their voluntary commitments to license their patents fairly because of a lack of clarity over what constitutes fair, reasonable and non-discriminatory, caused by weaknesses in the UK’s legal framework. SEP holders can abuse their position as gatekeepers of these technical standards by using the threat of costly court action and injunctions to force potential licensees to accept excessive royalty demands or quit the market. That can effectively prevent smaller companies from entering into, and being able to operate in, a market. In the previous group, the noble Lord, Lord Sharpe, asked whether the Bill was pro-innovation or anti-innovation. Unless we round up this issue on SEPs, I have to say that it is absolutely stifling innovation.
In most cases, SEP holders are well resourced and aggressive, while many licensees, especially SMEs, lack the knowledge and resources to defend their rightful position in court or push back against the mere threat of litigation. Increasingly, there is a third sector of people who buy up the rights to these patents and treat them as a revenue stream, whereby they go after and literally squeeze the people who have to use these SEPs. In essence, it becomes a secondary market for these things, without the necessary protections.
There are two issues. First, the availability of injunctions to the UK’s current SEP framework means that both small and large technical innovators who operate downstream of the primarily foreign SEP holders can be forced to accept excessive SEP licensing fees because they want to use this technology. The second problem is the lack of transparency: they quite simply do not know who holds these patents until they get an injunction through the mail. That is the problem. With the threat of injunctions and lack of transparency, UK manufacturers are frequently faced with a no-win situation. They have to either pay these fees or get out of the market, because they cannot afford to defend them at an injunction. This is in spite of the SEP holders making a voluntary commitment to license the SEPs on fair terms as part of the standard-setting process. So there is a problem.
The situation creates significant cost and uncertainty for some of the most innovative UK firms, it stifles innovation and, importantly, in the context of this Bill, it challenges the efficiency and effectiveness of products that rely on SEPs and are regulated by this legislation. That is why it is appropriate to have this discussion here today. The UK IPO is aware of issues concerning the licensing of such technology but to date has done nothing, or has insufficiently acted, to protect UK businesses that must use these technologies. This amendment is an opportunity for the Minister to commit to legislative action on SEPs to address the critical issues of products being threatened with exclusion from the people who need them, the imposition of unfair royalties and SEP licences being refused to companies that need them. I beg to move.
Lord Lansley (Con)
I am most grateful to the noble Lord, Lord Fox, for explaining so expertly what standard essential patents—SEPs—are and how important they are to the use of legislation in specifying product requirements, which of course are directly linked to the standards that we will go on to talk about. We have previously talked about the importance of standard-setting, but there is no point in setting standards if they cannot be fulfilled, turned into product requirements and brought to the market—that is what we are talking about. In particular, the noble Lord was absolutely right to stress that we should be thinking in this legislation about how we can promote innovation. Addressing this issue is one of the central ways in which we can do that.
Our two amendments serve the same purpose. The only distinction is that I was trying to suggest, in this particular instance, the importance of taking a power and not attempting in the primary legislation at this point to specify precisely how that power should be structured, because it is necessary for there to be a full consultation about the changes that would need to be made—not least, probably, to the Patents Act itself. When we come back on Report, if we go down this path there may be a need to have a power to amend the Patents Act as well.
The point here is that, as the Intellectual Property Office itself said, SEPs will be
“of growing importance to the UK economy”.
This is not a small matter, and it is becoming more important because of connectivity, the internet of things and the multiple range of SEPs associated with many of these standards. The noble Lord, Lord Fox, is absolutely right about the problems that can emerge for companies, particularly SMEs, in understanding the visibility of SEPs and who holds them—and, for that matter, in being absolutely clear about which ones are essential and which are asserted to be so, but which are not in fact essential to the standard.
I shall not delay the Committee now, but I want to focus on the question of why we need a power. First, the Intellectual Property Office is trying to do its best within the powers available to it. In July, Ministers announced the establishment of the resource hub, which gives guidance in relation to SEPs and enables companies to understand the SEP ecosystem. However, that does not change some of the fundamental issues to which the noble Lord, Lord Fox, referred. There are licence holders who are delaying access to their patents, and who are using that as a mechanism to get terms that are not fair, reasonable and non-discriminatory. SMEs are finding it very difficult to know what FRAND terms look like in relation to many of these products.
There is another issue: not only the individual royalties that must be paid in relation to these licences, but the global royalties that need to be available. Although there is case law that can be looked at, it is very difficult for SMEs in particular to understand how that may be applied to them. Of course, there are global royalties being established through large cases, which delay access to this intellectual property for some of those who need to use it; they are therefore unable to know how viable their product may be.
These issues have been addressed in the European Union. At present, there is a regulation agreed between the European Commission’s proposal and the European Parliament, and it is awaiting the conclusions of the Council of Ministers. Let us just focus on that for two seconds. What does it do? It sets out that there needs to be transparency, a mandatory register, and the ability for an official body to undertake a reality check asking, in essence, whether something is actually essential to a standard. It facilitates fair, reasonable and non-discriminatory terms. It also delays for nine months the point at which any licence holder could go to court to secure an injunction for these purposes while there is a requirement for a negotiated process; indeed, it entertains the possibility that, under the regulation, this may relate not only to individual royalties for licences but to the aggregate of those royalties for licences. So there is a legal structure in the European Union for these purposes, in order to overcome what is otherwise, for SMEs in particular, an extremely difficult set of circumstances arising from case law for them to understand and interpret.
This is not a small problem for some SMEs. For example, I have been talking to Tunstall Healthcare, which I know well from its role in providing connectivity, particularly for people who require care at home; it looks after more than 100,000 of them. In order to access licences for 4G and wifi connectivity, it needs to negotiate many licences and to identify where they exist. A company called Bullet was trying to develop and market highly resilient smartphones, but it ceased trading, owing millions of pounds to SEP holders, which contributed to its inability to continue trading. So I think we need to act.
The IPO has said that it will respond to the consultation at the end of 2024—so any minute now. I am told, however, that that will not now happen in 2024. What I really want to hear from the Minister is, first, that this is a suitable Bill and a suitable opportunity to take a power—without specifying all the details of that power—to make provision in relation to SEPs. Secondly, I want to hear that the IPO and Ministers will undertake to respond to the consultation in the early part of next year, putting forward proposals for how the new power is to be used and inviting responses.
Lord Sharpe of Epsom (Con)
My Lords, I will be very brief indeed. I have learned a lot from this brief debate and thank both noble Lords for their expert explanations. As a novice in this subject, I cannot think of a single possible objection, frankly, to either of the amendments from the noble Lord, Lord Fox, and my noble friend Lord Lansley. I hope the Government will welcome these as an example of well-informed common sense and give due consideration to some sort of amendment along these lines. I believe the Government to be sincere in their intention to promote growth and innovation, and it seems to me that both these amendments would, in some form or another, help to deliver that. If the Government do that, we will be supportive.
Lord Leong (Lab)
My Lords, I thank the noble Lords, Lord Fox and Lord Lansley, for their Amendments 34 and 35. When I saw the first amendment, I had to go and check what SEPs means. Now, after speaking to officials, I think I know a little bit and I welcome the opportunity to address the issues raised regarding software products that rely on standard essential patents, or SEPs.
These amendments go far beyond the intended focus of this legislation by expanding the scope of regulatory powers. Due to their complexity, the regulation of SEPs should not be reduced to a short provision in a Bill that was not drafted with the intention of regulating in this sphere. Any policy measures need to achieve a balance between rights holders being able to appropriately protect and enforce their rights, and users’ ability to access such technologies and innovations through fair and appropriate licensing forms.
However, I agree with the noble Lords that this is an important issue. The Intellectual Property Office has already engaged extensively with industry and business to determine whether any change to the framework for SEPs is necessary in order to ensure that businesses can license SEPs effectively and fairly. This engagement has included a call for evidence and views, and a questionnaire has been sent out to small and medium-sized enterprises. In response, the IPO has already launched a SEPs resource hub—an information resource that helps to address the very problem the noble Lords have identified. The IPO is also considering whether to consult formally next year on measures, as indicated by the noble Lord, Lord Lansley, and further to improve transparency in the SEPs ecosystem and enable more efficient dispute resolution. Any such consultation would be subject to ministerial decision, and we are currently working on that. In the meantime, I assure noble Lords that the IPO is continuing informal engagement with industry on both this matter and the SEPs ecosystem more generally. I hope that is reassuring to the Committee.
While I agree that this is an important issue, this Bill is not the right avenue to address the problems that the noble Lords raise. I therefore ask that they withdraw or do not press their amendments.
Lord Fox (LD)
I sort of thank the Minister for his response, but not much, because I think he could have acknowledged that this is a problem, rather than that SEPs exist, because it is a problem. Whether or not the Bill is the solution to it, the Department for Business and Trade should have an interest in solving that problem, but it did not seem that there was much appetite for that. Perhaps the Minister could disabuse me of that by acceding to the suggestion of the noble Lord, Lord Lansley, to have a meaningful round table with the right people for us to further this discussion. If this is not the avenue to deal with it, we need something else, because it is a real and present problem that needs a meaningful solution.
While the efforts of the IPO are clear, the point of the noble Lord, Lord Lansley—I should call him my noble friend in this case—is that the IPO needs more power and something needs to be done. If it is not this, it needs to be something else.
Lord Leong (Lab)
I want to be very clear that the Department for Business and Trade wants to support businesses of all types and sizes, but we have to be fair as well, so as not to burden too many SMEs with regulations and financial costs. This area is being led by the IPO but, at the same time, there is a way that the Department for Business and Trade can engage with the IPO. I am than happy to arrange a meeting between the noble Lords, Lord Fox and Lord Lansley, and officials from the IPO and the Department for Business and Trade.
Lord Fox (LD)
I thank the Minister for that offer, which I am sure we will take him up on. If the Government wish to unburden small and medium-sized businesses, solving this problem would be a slam dunk. With that, I beg leave to withdraw Amendment 34.
Lord Lansley
“(7A) Provision made in reliance on subsection (1) may (among other things) identify product requirements by reference to international agreements or standards relating to the marketing or use of products, including agreements or standards as they have effect from time to time.”Member's explanatory statement
This amendment would enable product requirements to by met by reference to international standards.
Lord Lansley (Con)
My Lords, there was a substantial debate on a previous day and earlier group on whether product requirements should, from time to time, be set by reference to the European Union standards to which they should be aligned dynamically or, as my noble friends Lord Frost, Lady Lawlor and Lord Jackson of Peterborough argued, set by reference to standards in other jurisdictions. “Relevant foreign law” was the term that they used.
I think that we should lift our eyes beyond that debate and say that we want not simply to arrive at a point where we set our standards by reference to those determined in other jurisdictions, but that we should maximise the opportunity for international standards to be the basis on which standards and product requirements are set in all these jurisdictions. I say this not least because in June, before the election, when regulations were going through for the temporary effect to which this Bill gives a permanent basis, there was some legitimate concern about whether the competencies inside our standards-making organisations would be retained in this country if the UK conformity assessment is little used relative to other conformity assessment processes.
I have two amendments in this group by which I want to do two things. First, I want to be clear in the Bill that product requirements may refer directly to international standards. Secondly, I want to promote through a new clause a strategy, which I am asking the Office for Product Safety and Standards to lead, for the United Kingdom to lead in the further establishment of international standards.
I mentioned in some detail at Second Reading how I do not think we are doing this in any way contrary to the thrust of thinking in other jurisdictions. The European Union strategy for standardisation in 2022 pointed directly towards the importance of the greater use of international standards:
“Traditionally, the EU has been a strong leader in international standardisation activities but needs to take account of a changed geopolitical situation, as other countries start to approach international standardisation more strategically”.
So, the European Union is working in that direction. Mario Draghi’s report to the European Commission emphasised the importance of international standards as a means of promoting regulatory harmonisation and reducing trade friction and said that the European Union should lead in framing international standards. We are not alone in this process.
On Monday, my noble friend Lady Lawlor referred to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Article 8.5 states:
“The Parties recognise the important role that international standards, guides, and recommendations can play in supporting greater regulatory alignment, good regulatory practice, and reducing unnecessary barriers to trade”.
I hope that with the Ministers and the Government I am pushing at an open door and that international standards are at the heart of how we want to proceed. I have been given an estimate that something like 80% of standards in some form or to some extent derive from international standards. That would be the case, not least if one includes many that are part of a process in which they are incorporated into existing European Union standards. It is not that this is something we do not presently do; it is something we do at present, but we want to do more and to make it a clear priority.
Why do we need it in this legislation? One expert to whom I talked said that the Secretary of State has the power to designate standards and that it is frequently used in relation to international standards. That is fine, but let us remember what this Bill does. Later on, the Bill contains the power to repeal Section 11 of the Consumer Protection Act. Unless I am missing something, it is Section 11 of the Consumer Protection Act that gives the Secretary of State the power to designate standards in that way, so we do not know how the Government intend to use the powers that the Minister has explained are going to be taken and used flexibly in relation to Section 11. How is that power going to be used in future? If it is to be effectively recreated under this legislation, it is important for this legislation to state that the power should reference international standards wherever appropriate and effective.
I am supported in that view in that, in 2021, Ministers—the noble Lord, Lord Hunt of Kings Heath, was a participant in those Committee and Report debates—took medical devices out of Section 11 of the Consumer Protection Act and put them into the Medicines and Medical Devices Act and created a power to regulate medical devices in the same way as this Bill creates a power to regulate many other products. In the Medicines and Medical Devices Act particular language was used, which is the language that is reproduced for the purposes of this Bill in Amendment 38:
“Provision … may (among other things) identify product requirements by reference to international agreements or standards relating to the marketing or use of products, including agreements or standards as they have effect from time to time”.
I have not invented that language. It is the same as is in the Medicines and Medical Devices Act 2021. If we do not include that language in the Bill, people will wonder why, when making similar new legislation, we did not use the language in relation to other products and standards setting that was used in 2021 in relation to medical devices. I think it is best that we use the same language.
Secondly, for the reasons I have just explained, I do not know whether the power to designate standards by reference to international standards might be diminished in some way by the future repeal of the Consumer Protection Act. I want to make sure that, in so far as new powers are used, they are used to deliver a strategy of using international standards wherever appropriate and effective. I beg to move.
Lord Russell of Liverpool (CB)
My Lords, I will be brief. The noble Lord, Lord Lansley, has made a fairly persuasive case for this. I would hope that to a large extent what he is looking for is already happening fairly systematically as part of good practice in any regulatory authority. Given that it is likely that a large amount of our regulation will probably continue to be broadly in alignment with the EU, it would make a lot of sense for our respective regulatory authorities to be in pretty close contact to make sure that they have, to the extent that it is sensible, the same view and understanding and the same breadth in scanning the different international regulations so that, essentially, they are talking the same language. That would be extremely helpful.
In principle, this is a very good idea. However, it is fine for us, as legislators, to talk theoretically or in detail about statutes and subsections, but the proof is the view business takes of what we are discussing. If business regards this as entirely sensible and something that should be done anyway as a matter of doing regulation well, that is well and good. If it has concerns that this will complicate things further, slow things down and lead to slightly arcane arguments about relative international standards from goodness knows where in the world, I suspect it will not be quite so keen.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lord Lansley for introducing his amendments so incredibly clearly and expertly. It is obvious that international standards are vital for facilitating global trade. Products that adhere to international standards are more easily accepted across borders. They reduce trade barriers, open new markets for UK business and so on. They ensure that UK products can continue to compete internationally and maintain their high reputation for quality and reliability.
Aligning product requirements with international standards ensures that UK consumers also benefit from high levels of safety. This alignment builds consumer trust, as consumers know that the products they are buying meet rigorous global benchmarks. Amendment 43 specifies that this requires consultation. It is vital that consultation takes place with experts. In principle, we absolutely support the spirit and intent of these amendments.
Lord Leong (Lab)
My Lords, I thank the noble Lord, Lord Lansley, for tabling Amendments 38 and 43. I know from when I was on the Opposition Benches that he brings great expertise to this House, debating legislation as varied as the Trade Act 2021, the Procurement Act 2023 and the Bill before us today. His amendments raise important points about the role that international standards can play in domestic product regulation and in ensuring a strategic approach to their delivery and implementation.
Regarding Amendment 38, I reassure the noble Lord that Clause 2(6) enables product regulations to continue to reference international standards to support regulatory compliance, as is the case for medical devices. Provision is already made in current product regulations for the ability to designate a standard adopted by an international standardising body.
We work closely with all departments, including the Medicines and Healthcare products Regulatory Agency, and will continue to work with them to ensure the supply of safe and compliant products. However, each responsible department must individually consider the best approach for its own area.
Before the Secretary of State designates the standard for products regulated under the Bill it is assessed by government. The standard may be designated fully, with restrictions or not at all, depending on how far the standard ensures the relevant product requirements. Therefore Clause 2(6) sufficiently addresses the noble Lord’s concern. There is also no need to specifically reference the ability to designate international standards because that provision is already covered in product safety sector-specific legislation already on the statute book.
Lord Lansley (Con)
Which legislation is the Minister referring to? Is it not Part 2 of the Consumer Protection Act, which is able to be repealed by this legislation?
Lord Leong (Lab)
I have been told by officials that it is a specific product regulation.
Lord Lansley (Con)
Where is the power? Is it in the Consumer Protection Act?
Lord Leong (Lab)
I will write to the noble Lord on that.
On Amendment 43, the Government published a memorandum of understanding with the British Standards Institution on 16 September, of which there are copies here available to noble Lords. This sets out in respect of its activities as the UK’s national standards body its role in supporting government policy and acting in the UK’s national interest in the international standards-setting arena. This includes supporting UK policy to strengthen the global approach to standardisation and maximise UK influence.
Within the international standards system the UK already occupies a strong leadership position through the BSI’s membership of international and non-EU private sector European regional standards organisations. The BSI also manages a significant number of important committees in those organisations. In its role, the BSI systematically adopts international and European standards that representatives of UK stakeholders have influenced and withdraws standards that are no longer relevant. This includes internationally agreed standards designed to support regulatory compliance to UK product legislation.
In Articles 2 and 3 of the memorandum of understanding, the Government and BSI agree on the primacy of international consensus and that the two parties will co-operate with each other on international standards policy, while Article 4 ensures that the BSI provides the necessary standards the Government require for UK regulations. The Government are in the process of finalising a document entitled “The UK Government’s Public Policy Interest in Standardisation”, which is referenced in the MoU with the BSI, that explains why standards are a key factor in support of a number of government policies. It also reinforces the policy of influencing international standards and the importance of maintaining a constructive relationship with the BSI.
Given the close collaboration and the mechanisms in place, I believe that the objectives of Amendment 43 are already being met on the points I have just outlined. I hope that I have been able to provide sufficient reassurance to the noble Lord that what he seeks to achieve is not only already possible through the Bill, but also common practice across a range of sectors. If helpful, I will ask my officials, following Committee, to provide further information on the important role that international standards play in the UK system. With that in mind, I respectfully ask the noble Lord to withdraw his amendment .
Lord Lansley (Con)
I am grateful to the Minister for his response. He has obviously taken some trouble to think about it quite carefully.
First, I do not dispute that current powers enable international standards to occupy a central role in our standards-setting process, and I share the Minister’s admiration of the British Standards Institution as our national standards body in doing that, although I note that many of its experts are now in Amsterdam. Let us leave that on one side as noble Lords know which side I was on in that argument and that it was not the same side as my noble friend Lord Frost.
However, not least with the way the European Union is moving and the commitments we are entering into with the new ratification of the CPTPP, would it not be useful to take language such as where Article 8.9 of the CPTPP says the parties should seek
“greater alignment of national standards with relevant international standards, except where inappropriate or ineffective”?
There is language of that kind to which we are party, which in my view it is suitable to incorporate into legislation where we are setting out new legislation that is intended to say how powers should be used in future. That is the point I make. I am not arguing in any sense in a way that is at odds with the intentions of the Government, but I think they have to look and say, “Well, legislation sometimes must be very clear about how people should think and act in the future”. I hope Ministers might think more about this before Report. However, on the basis of the discussion we have had, I beg leave to withdraw the amendment.
Lord Foster of Bath
“Regulations relating to lithium-ion batteries(1) The Secretary of State must lay before Parliament a statutory instrument containing regulations relating to lithium-ion batteries within six months of the passing of this Act.(2) Before laying the statutory instrument referred to in subsection (1), the Secretary of State must consult with the relevant statutory consultees including the fire services, and with relevant consumer, industry, manufacturing and trade bodies.”Member’s explanatory statement
The amendment seeks to clarify the issues relating to the regulation of lithium-ion batteries, including the increasing numbers of fires, deaths and injuries as a result of lithium-ion batteries.
Lord Foster of Bath (LD)
Amendment 41 was tabled by my noble friend Lady Brinton but, as I have explained, she is unable to be with us today. Her amendment and others in this group, including my own and those of my noble friend Lord Redesdale, seek to address an issue that I have frequently raised in your Lordships’ House: safety issues in connection with lithium-ion batteries. Indeed, I have already done so on a number of occasions in earlier groups, particularly in the previous group, where I used lithium-ion batteries as an example of why we need specific regulations regarding high-risk products.
Whenever I have discussed these issues, I have always recognised the vital importance of lithium-ion batteries. They currently provide a crucial role in our drive towards low carbon or zero carbon. After all, they can store more energy than any other commercially available battery at present. However, they have their dangers.
If incorrectly constructed—an issue that is picked up by Amendment 46 from the noble Earl, Lord Lytton, which I support—or if they are damaged or misused, not least through incorrect charging, there can be a thermal runaway, reaching enormously high temperatures of many hundreds of degrees. These fires give off toxic and dangerous gases and, as I pointed out in an earlier discussion, they cannot be put out by using water.
Amendment 44 recognises that this is a framework Bill and new regulations are going to come at a later stage, but it argues that the particular urgency relating to the dangers, especially of fire and explosion, of unregulated lithium batteries, which are often purchased from abroad, requires urgent action from the Government. It therefore proposes that the Secretary of State must lay regulations relating to lithium-ion batteries within six months of the passing of this Act, and that in the period prior to doing so the Secretary of State will have consulted all the statutory consultees, including the fire service and relevant consumer industry bodies and manufacturing and trade bodies. My Amendment 49 seeks to place a duty on online marketplaces to take all reasonable steps to ensure that products containing lithium-ion batteries sold on their platforms comply with the UK safety standards that will be developed.
Lord Redesdale (LD)
My Lords, I will speak to Amendments 55 and 56 in my name. I start by commending my noble friend on the work he has done, over many years, in dealing with fire safety and issues around lithium-ion batteries; indeed, he had a Private Member’s Bill on lithium-ion batteries, but I beat him to it and got one in myself. From discussions with the Minister, I know that the Government are taking this issue forward, so I will not speak specifically on the dangers of chargers of lithium-ion batteries. However, I will mention my Amendment 56, which is the Minister’s own fault: in his bringing forth of this Bill, I raised this issue, and it has now taken on a life of its own.
I will speak first to my Amendment 55, which is about bikes and stopping their theft. I am sure that the noble Lord, Lord Hunt, will be open to my debate here because we often park our bikes outside the front of this building. I am happy to say that I do not have to lock that bike—not because I believe that people passing through the building are inherently honest; it is more that, if somebody can get past two guys with machine guns, they can have my bike. But I am lucky; not everybody in the capital has that joy, obviously.
To go back to the serious point, an estimated 200,000 bikes are stolen each year in London—and that is just the tip of the iceberg because many bikes are stolen but not reported to the police. It is possible that only stolen bikes that can be claimed on insurance are reported to the police, as I have myself experienced in the past. This is a real issue going forward because the cost is not only to the individual but to the insurance companies, the environment and the way in which we structure a transport strategy. If people have their bikes stolen on a regular basis, they will move away from cycling as an option.
So I have come up with a simple solution. The Minister will ask, “Why should I introduce it in this Bill?” The answer is simple: as I say to people, lobbying is 90% hard work and 10% luck. If you do not have the 10% luck, where you can squeeze something in, you might as well give up. This Bill talks about online regulation; it is difficult to get Bills that deal with online regulation through because of some of the inherent difficulties associated with it.
My concept is that there a simple solution to bike theft, which has been proven in the work of Merseyside Police: making sure that bikes have a security marking. If a bike has a security marking, which can be done cost-effectively and cheaply, and it is put on a register, which does not involve any new bureaucracy, you end up with a situation where it is very difficult for those stealing bikes to sell them on online platforms; this is proven to be the case. I have been talking to the Metropolitan Police lead on bike theft. His view is that thieves will not sell bikes in this way—this is the major way in which people sell bikes—because they would be sitting on stolen goods and could be clearly identified with the stolen object.
The Minister is going to say that, obviously, this should be outside the Bill because it does not talk about safety. However, I would argue that, for those who are buying a stolen bike, the theft of the bike will have probably damaged the bike and that it is not in the interest of whoever stole it to look after its maintenance and repair. Bikes on roads can be extremely dangerous. There are two types of dangerous bikes—those that are poorly maintained and those Lime bikes that people drive around—but that is a separate argument.
This would be a very simple measure to take forward. If the Minister is minded not to put it in this part of the Bill, I very much hope that he will agree to a discussion with the lead police authorities, because this would cut crime. In fact, it would not only cut crime but increase confidence in the police because 90% of bikes stolen in London are never recovered, with their thefts never solved. I hope that the Minister will agree to a meeting to look at whether this measure could be included in the Bill; I would argue that the Bill is so wide in its parameters that this could be added, which would be a way forward. Can he also discuss which other legislation we could add this to?
Amendment 56 came out of the arguments that we were having about lithium-ion batteries. I came up with an interesting solution: I plan to bribe the Government by saying that, if they agree to measures to take this forward or discuss it, I will remove my lithium-ion Private Member’s Bill and so free up a Friday morning. Actually, I am not sure that is bribery; it may be coercion.
This is a very simple look at how to remove lithium-ion batteries from the waste stream. My noble friend has talked about how lithium-ion charging and bikes are a danger but, with the advent of throwaway vapes, even if the batteries are removable, you still have the problem with small lithium-ion batteries ending up in the waste stream because people just throw them away. A large number of fires are taking place, at massive cost to local authorities and insurers, because batteries being thrown away in the waste streams are crushed or get water in them and then cause fire. The best thing would be to remove them from the waste stream in the first place.
I am developing this argument—I will come back to it at a later stage with a more refined amendment—but this amendment would allow online retailers to provide buckets so that people could put batteries in them and take them away. I have talked with all elements of the industry. There is no reason why this should not happen. There is no hazardous waste; it falls under the hazardous waste directive, so Defra could not complain about it. It would be a quick and easy way of recycling batteries, which I know are not meant to be thrown into the waste stream; they have a sign on them saying “Do not bin” but, of course, loads of people do. How many people have a bag of used batteries, lithium-ion or otherwise, in a drawer? My argument is that, if they are dangerous in the waste stream, they are dangerous in people’s homes, so removing them from people’s homes is important.
People might say that you can take them to supermarkets or recycling centres. My argument is that, yes, they must be recycled from supermarkets because there is a duty on the supermarket to provide that facility. The problem is that online retailers often get around this by saying, “We don’t have a premise”. My argument is that that really does not fly any more. Amazon provides its own batteries so it should take them back. I do not think that it can rely on saying, “Take it to someone else’s supermarket”; it has a responsibility to take them back. Of course, the point at which it should take it back is from the delivery: if you cannot go to a shop, because Amazon does not have shops, the only point you have is the delivery driver. Amazon may make the point that it does not own the vehicle but it still has the obligation. In talking to the industry, I have shown it—I could not bring it in here, obviously—a small plastic bucket to be taken along. Not every delivery would end up with people providing batteries; it would be a small amount because, once you got rid of the batteries once a year, you would probably then collect.
I have been talking to people from Duracell about this. They believe that, over a year, you could probably recycle about 1 billion batteries through that method; that is an enormous amount. This would take the lithium-ion or other batteries out of the waste stream and make sure that they could be recycled. It would also allow us to build up the waste streams in this country in order to make the development of recycling facilities here profitable. I do not think that the buyback scheme everyone suggests would work because one Duracell AAA battery is worth 0.0002p in recycling, if I have got the noughts right, so that is not worth while; however, once it is recycled, it has a value in the recycling scheme.
Could I meet the Minister and his officials to discuss whether this regulation could be put forward? Could we get direction from the Government, in our debate on the next amendment, saying that this is something that could be taken forward? Online retailers already have an obligation but it has not been pushed at the moment because people have gone back to the default position of, “We do this in shops”. If that is the case then, after the discussion at the next stage, the Minister could just stand up and say, “This is an obligation”, at which point we could make sure that the buckets went out and that this process started. The whole battery industry is keen on making sure that this happens.
I have put forward these amendments. I very much hope that the Minister can give me some assurance that we can meet.
Lord Fox (LD)
Briefly, I of course support these four amendments from my noble friends, but I will say a few words on Amendment 56. In a previous group, amendments tabled by me and the noble Baroness, Lady Bennett, on the circular economy and disposal, also touched on these issues and it would be worth while looking at those in conjunction with the amendments from my noble friend Lord Redesdale.
To give a bit of advice to my noble friend, the noble Baroness, Lady Finlay, made some interesting points about it being fulfilment centres rather than the actual online marketplace. In some cases, the supplier is foreign but the fulfilment centre is local. Perhaps there is some advice to take from the thoughts of the noble Baroness, Lady Finlay, on that, as they seemed a way of bridging the issue of the supplier being a long way away in a different country, whereas the people dispatching the item are most definitely here. With those provisos, I reiterate my support for all four amendments.
Lord Sharpe of Epsom (Con)
My Lords, I will be very brief. I found that a most interesting explanation of lithium-ion batteries and their various aspects. I confess to not being an expert at all, so it is very clear that I—and, I imagine, the general public—need to be better informed on this. I imagine that regulations will form an essential component of becoming better informed.
It was interesting how the noble Lord, Lord Redesdale, said that he was worried about the scope of the Bill. This Bill will take pretty much anything you like—it is enormous—so I would not have too many concerns about that. I ended up, funnily enough, with a couple of questions, which we can perhaps discuss later. I am curious to know how much of the safety of these batteries is contingent on the way that they are stored, used and maintained. That would be an interesting subject to explore further.
Lord Redesdale (LD)
My Lords, it is worth mentioning because we have raised the issue and it is picked up whenever we discuss the danger. The actual danger of good batteries is extremely low. The problem is in the waste stream when they are hit by water or crushed. That is the issue that local authorities have.
Lord Sharpe of Epsom (Con)
Again, I think that my ignorance probably suggests that the public ought to be slightly better informed about that. Maybe they are; maybe it is solely me being ignorant. I do not know.
The other thing that struck me, while I again say to the noble Lord, Lord Redesdale, that I like his Amendment 56, is that surely we need to be a little bit careful about exploding Amazon trucks if they are this unstable. I will leave that thought with him.
There is, finally, a third subset of safety issues that I thought about when the noble Lord was talking about bikes. It is about those, Lime bikes in particular, that are left lying in the middle of the road unexpectedly as you go round a corner—he said, speaking from personal experience.
All these amendments have considerable merit. I am very interested to follow them and will consider supporting them.
Lord Leong (Lab)
My Lords, I thank the noble Lords who have spoken, in particular the noble Lord, Lord Foster, for speaking on behalf of the noble Baroness, Lady Brinton. The issue of lithium-ion battery safety is rightly getting a lot of attention and I am grateful for the opportunity to discuss it. I also mention the work of the noble Lord, Lord Redesdale, who has tabled a Private Member’s Bill on this same topic and with whom I have had valuable discussions during the passage of this legislation.
The Government have already taken significant steps to protect people from the dangers posed by products containing lithium-ion batteries. The Office for Product Safety and Standards has been working with colleagues across government and industry to identify the root causes of safety issues associated with lithium-ion batteries and to ensure that steps are taken to protect consumers and remove dangerous products from the market. We are also working with UK businesses to ensure that they comply with regulations. In addition, we have collaborated with fire and rescue services to identify products involved in incidents and have taken the appropriate action when unsafe products are identified.
Since 2022, efforts have resulted in 20 separate product recalls and 22 other enforcement actions for unsafe or non-compliant e-bikes or e-scooters. The OPSS has issued 26 withdrawal notices to eight online marketplaces, two manufacturers and 16 separate sellers to halt the sale of two dangerous e-bike battery models manufactured overseas by Unit Pack Power—UPP—that were discovered during fire and rescue investigations.
In terms of regulatory change, we need to ensure that any regulation is effective at stopping harmful products reaching the market. We also need to make sure that good businesses, which are in the majority, are not undercut by these unscrupulous traders.
The Bill is designed to provide powers across a broad range of products, including lithium-ion batteries. It does not highlight particular sectors that are in need of regulation. Noble Lords will appreciate that a very large range of products are covered by the Bill; therefore I would be hesitant to draw out lithium-ion batteries or specific measures in it. That would also limit our flexibility to work with all interested groups to identify the most effective way to tackle this issue. Today it may be lithium-ion batteries, while tomorrow it may be magnesium batteries, sodium batteries, salt or seawater—all of which may pose some safety features. So we need the flexibility to identify those new products on the marketplace.
Indeed, during Second Reading of the Bill in the name of the noble Lord, Lord Redesdale, a number of Peers highlighted that battery technology is changing. That is part of the reason why the Product Regulation and Metrology Bill works in this flexible way, as I stated earlier. It is to ensure that future regulations are able to take account of developing technologies.
We are, none the less, considering what change will make a meaningful difference to lithium-ion battery safety. My department has commissioned extensive research from the Warwick Manufacturing Group to better understand battery safety, including compatibility issues. This research is being finalised and we expect to publish it in due course. This will help us identify the root causes of battery risks and options to better protect consumers.
We want to take action about these unsafe products. We cannot commit to a timescale as we want to take the right action—but we do want to take action. One area where we have been very clear about the need for action is products sold via online marketplaces. I thank the noble Lord, Lord Foster of Bath, for his Amendment 49—and his well-informed advocacy in this area—that would require online marketplaces to take reasonable steps to ensure that products containing lithium-ion batteries sold on their platform are compliant.
In addition to the action I just mentioned, the OPSS wrote to major online marketplaces earlier this year, expressing concerns about the availability of unsafe products online. The OPSS has issued online marketplaces with legal notices that prohibit the supply of unsafe products. However, while much has already been done to keep people safe, our product safety regulations could go further.
As mentioned at Second Reading, we will use the Bill to clarify and modernise the responsibilities of online marketplaces in secondary legislation. These requirements will build on best practice to create a proportionate regulatory framework where online marketplaces take steps to prevent unsafe products from being made available to consumers. This will help prevent unsafe goods, including unsafe lithium-ion batteries, from reaching UK consumers.
The enforcement provisions in Clause 3 enable the introduction of enforcement powers for the purposes of monitoring and investigating, and securing compliance with product regulations. A requirement for the production of safety certificates that the noble Lord, Lord Foster, seeks as part of Amendment 49 could be implemented using the Bill’s powers as drafted. As I said, we are keen to continue working with noble Lords and others to identify the regulatory work that would be most effective.
Specifically on Amendments 55 and 56 on bikes, e-bikes and lithium-ion battery products sold on online marketplaces, we agree that online marketplaces should take steps to provide relevant information to consumers so that they can make well-informed purchasing decisions. This is also important to bridge the gap between the information consumers see before a purchase online, compared to the high street, where they can see the product and packaging.
In general terms, the Bill would enable us to introduce requirements on online marketplaces, including the provision of specific information, for the purpose of reducing or mitigating risks presented by products or ensuring that products operate effectively.
I thank the noble Lord for raising another important issue where consumer information can be beneficial to provide product traceability. As he discussed with me previously, this might help to deter the sale and assist the recovery of stolen bikes. The Home Office works closely with policing and academic leads to examine what more can be done to tackle the disposal market for stolen goods. We will therefore engage with the Home Office on this topic to explore whether product regulations could contribute to crime prevention. I will ask my officials to organise a meeting with the noble Lord and officials from the Home Office and other relevant authorities.
I also thank the noble Lord for his Amendment 56, which seeks to require online marketplaces to put in place a return policy for products containing lithium-ion batteries for the purpose of appropriate battery disposal. The Environment Act 2021 provides powers for the Government to introduce new requirements on online marketplaces with respect to the take-back of lithium-ion batteries and products containing lithium-ion batteries. Under the existing producer responsibility legislation, producers of industrial batteries, which include e-bike and e-scooter batteries, must take back waste products free of charge on request. Ministers are currently reviewing proposals to consult on reforms to UK batteries regulation before setting out next steps on battery disposal.
At this point, I wish to mention that I have spoken to my noble friend Lady Hayman of Ullock, Parliamentary Under-Secretary of State at Defra. It is clear to me that noble Lords will discuss the issue of disposal of lithium-ion batteries.
I hope this assures noble Lords that the Government take the issue of lithium-ion battery safety extremely seriously. We have already taken enforcement action and are keen to work with all interested groups to ensure that further regulatory change is effective. Consequently, I ask the noble Lord, Lord Foster, to withdraw his amendment.
Before I sit down, I wish to say that my private office has sent an invitation to noble Lords who have expressed an interest in visiting the OPSS. I very much hope they will take up that offer.
Lord Foster of Bath (LD)
My Lords, on behalf of my noble friend Lord Redesdale, I thank the Minister for his kind offer to him. I am sure the Minister will understand that I will want to go and put a wet towel over my head and read very carefully what he has just said in response to this group of amendments. However, I say to him that reading a list of successful examples of unsafe products coming into the UK by the OPSS is something I did myself in a previous debate. It does not indicate that we have got it right. The figures on the number of fires from lithium-ion batteries, for instance, are going up dramatically, so something is not quite right.
The problem, which the Minister touched on both in this answer and the answer he gave to a previous group when I raised the issue of high-risk products, is that the current arrangements are somewhat discretionary, and not at all clear so that we know what they are. For animal products, there is a very clear procedure: everything has to be checked for whether it is low risk, medium risk or high risk. Earlier, I proposed that we do exactly the same for all products. I am grateful to the Minister for agreeing to meet me and other people about that.
In the light of that and the discussions we will have, for the time being I beg leave to withdraw my amendment. However, I assure the Minister that we will come back to these issues at a future stage.
The Earl of Lytton
“Construction product safety: regulations and requirements(1) Within twelve months of the passing of this Act, the Secretary of State must, by regulations under section 1, make provision to reduce risks as defined in section 1(4) presented by construction products.(2) For the purposes of this section, construction products include, but are not limited to, any components used in the construction of buildings, such as external cladding.(3) Within twelve months of the passing of this Act, the Secretary of State must also make provision about construction product requirements by regulations under section 2.(4) Regulations under subsection (3) must set out requirements for the production, use, marking, marketing, testing, approval and provision of information (including information about risk) of construction products.”Member's explanatory statement
This amendment intends to probe whether the Secretary of State will use powers under sections 1 and 2 to regulate products used in construction.
The Earl of Lytton (CB)
My Lords, members of the Committee will be aware that there are concerns relating to the suitability and safety of construction products, especially in the light of the Grenfell phase 2 report, and will know my professional interest in this area.
First, I pay tribute to the clerks in the Public Bill Office for their help in drafting this amendment, although its objectives and the rationale behind it are entirely my responsibility. I consider that the amendment speaks for itself in probing the Government’s intentions and resolve in bringing construction products specifically within the Bill’s scope, although they are not excluded, either by the Long Title or by the matters listed in the Schedule. My underlying purpose is to clarify this Bill’s specific focus in the objective regulation of a construction-related product’s inherent characteristics rather the nature of its use, particularly in combination with other products. To put it another way, it is concerned with the regulation, testing, certification and marketing of products for their specific stated use and application—namely, the aims of the Bill.
The British Board of Agrément—the BBA—is one of the main industry certifying bodies for construction products. In virtually all the BBA certificates I have looked at, it is made clear that the approval is for the specific use and application as presented. This is logical because behind every approval is an assessment or test of some kind that will be specific as to the proposed use. However, we know from the Grenfell phase 2 report how things can be misrepresented. Of course, none of this prevents misuse of some sort, or abuse, but it starts to clarify responsibility as applying to those who have true agency in the specification and use of products, especially where fire safety is concerned. I hope this gives the Minister an opportunity to confirm that, so far, I have got this right.
At the meeting with the noble Lord, Lord Leong, and officials, for which I thank him, it was suggested that while the provisions of the Bill cover construction products, in all probability any regulations would be made under a different legislative provision, such as the Building Safety Act 2022—so I looked in that Act for the word “regulation”. I got 650 hits, which sounds a bit like Henry VIII on steroids, I am bound to observe. I alighted on paragraph 10(1) of Schedule 11 to that Act which states:
“For the purposes of this Schedule, “safety-critical products” means construction products which are included in a list contained in construction products regulations”.
It is getting a bit circular, I suspect. Sub-paragraph (2) states:
“A construction product may only be included in a list under sub-paragraph (1) if … in the view of the Secretary of State any failure of the product would risk causing death or serious injury to any person”.
I would be grateful if the Minister could confirm that I am right in believing that this is the relevant regulation-making measure that might be used in the Building Safety Act to implement some of the provisions of this Bill, if they are not implemented directly. If so, it has to be noted that the Building Safety Act relates to critical life-safety risks to persons, first and foremost. The Bill does not use that metric, so I consider that the relationship between this Bill and the BSA, for example, needs further clarification.
It has long been my professional assessment that if a building is robust, occupant safety is likely to be assured as well, but focusing on critical fire risk which interests itself only with occupants’ risks consigning them to significant risks of an emotional and financial nature if the building lacks durability and is effectively considered expendable. In terms of human life, that is absolutely the right approach, and I get that, but in terms of mercantile practice and peace of mind, it is a philosophy with gaps, especially if the general Building Safety Act approach is one of proportionality or tolerable risk—although I question by whose objective standards those might be measured, but that is another question.
So if I am correct, even allowing for the point that a building is not “product” as a term of art, why regulate such an important matter as construction products to be used in a residential block via different standards as compared with, say, those for a fridge-freezer or a washing machine? As set out in Clause 1(4)(c), we are concerned with a product that could “reasonably be foreseen” to cause damage to property. How is that, in the case of buildings under the BSA, a proportionate or tolerable risk to life? In the Government’s view, does the latter include the former? If so, I would be delighted to get confirmation of that; it is something that I tried to get hold of right the way through the then Building Safety Bill’s time before us. If not, how does the BSA afford the implementation of product safety in construction products?
Note if you will that the assemblage of products and processes used as someone’s home represents their place of safety. It is often their largest investment; it is also often incomparably more valuable an entity than most consumer products, both to them and in market terms. So standards and regulation matter very much. I invite the Minister to enlighten the Committee on this apparent legislative inconsistency.
Had this amendment been debated earlier in the evening, I might have been tempted at this point to have a little rant about British Standards being set behind a paywall—as well as the invidious nature of that when they are also embedded in regulation; the regulation is open source but the BS is not—but I will leave that matter in part to one side for the moment. I appreciate that some of the points I have mentioned go beyond what I discussed in the meeting with the Minister so, if he is unable to answer them right now, perhaps he could write to me before the next stage of the Bill. I beg to move.
Lord Fox (LD)
I will briefly respond to the noble Earl. He is right to raise this issue, which is clearly important; we look forward to seeing how the Government respond to it. There are serious issues that need to be addressed somewhere. As has been observed by the noble Lord, Lord Sharpe, and others, the open nature of this Bill offers an opportunity for things like this to be properly discussed and to be, if not solved in this way, perhaps solved in another way.
Lord Hunt of Kings Heath (Lab)
My Lords, it is very good to respond to this debate. I am delighted that the noble Lord, Lord Fox, sees that there is some advantage in the way that we have drafted the Bill.
I thank the noble Earl, Lord Lytton, for raising what is a really important matter. We all recognise that there are failings in the system by which construction products are tested, assured and made available for sale. The noble Earl described his amendment as probing whether the Government are prepared to use the powers in Clauses 1 and 2 to regulate products used in construction. The noble Earl has huge professional expertise. He referred to the BBA and the specific approval given but warned of the risk of misuse; I very much take that point.
The straightforward answer is that we think this issue is very important. We intend to bring forward robust regulatory reforms in order to provide confidence in the construction products regime and to ensure that only safe products are used in buildings and infrastructure. To that end, we also intend to ensure that the testing and assessment of products’ conformity must be undertaken by those who are competent, impartial and effectively held to account. We have committed to working with the sector on system-wide reform, including examining the institutions that play a key role in the construction products regime, so that businesses and, in particular, consumers can have confidence in the products and services they purchase. The proposed new clause to be inserted after Clause 2, through the noble Earl’s Amendment 46, would place a duty on the Secretary of State to use the powers and to make provision for construction products regulations within a year of Royal Assent of the Bill.
I turn now to the Building Safety Act 2022, about which the noble Earl made some interesting points. That Act already includes powers to introduce construction product requirements and regulations. We are exploring how best to use those available powers, including their sufficiency—I take his point on that—as part of considering system-wide reform. He will know that since the Grenfell tragedy in 2017 some action has been taken on construction products, but we know that more needs to be done.
In December 2018, regulations came into force that banned the use of combustible materials in and on the external walls of buildings over 18 metres. The national regulator for construction products was established in 2021 and leads on market surveillance and enforcement of construction product regulation across the UK.
The Government extended the period of recognition of CE marking for construction products in September this year to give the industry sufficient certainty to support supply chains and to allow time to address the inadequacies across the wider construction products regime, but we recognise that this action is piecemeal and does not go far enough. We have confirmed that we will respond to the Grenfell inquiry within six months. We are also committed to bringing forward proposals for system-wide reform of the construction products regulatory regime.
I have listened very carefully to the noble Earl’s analysis of the Building Safety Act and his suggestion that it is not sufficient for our purposes. We are considering this and I will write to him in some detail about the points he has raised. But to be fair to him, I have to say that this Bill does not specifically exclude construction products and that there could be an opportunity to use the Bill powers in the future should we discover that the Building Safety Act 2022 may be insufficient.
I hope that he will accept this as a positive response to the issues he has raised.
The Earl of Lytton (CB)
My Lords, I am very grateful to the Minister for that reply and I am certainly prepared to accept what he says in relation to the Government’s intentions. I will need to consider very carefully what he has said, particularly if he is writing to me—I am grateful for that offer. I will consider things in the light of that.
Without further ado and given the hour, I simply beg leave to withdraw the amendment.
Lord Hope of Craighead
“Product regulations: devolved administrations(1) Product regulations may not be made until the Secretary of State has consulted the devolved administrations as to their impact and effect on the marketing and use of products in the areas within the United Kingdom over which they have legislative competence.(2) The Secretary of State may by Regulations exclude the application of this Act to products to be marketed or used in areas within the United Kingdom over which the devolved administrations have legislative competence to enable effect to be given to an agreement that forms part of a common framework agreement.(3) A “common framework agreement” is a consensus between a Minister of the Crown and one or more devolved administrations as to how devolved or transferred matters previously governed by EU law are to be regulated.”Member's explanatory statement
This amendment ensures that devolved administrations are consulted before regulations are made under this Part of the Bill, and that common framework agreements receive the same protection to enable them to receive effect as they have under section 10 of the UK Internal Market Act 2020.
Lord Hope of Craighead (CB)
My Lords, I am very grateful to the noble Lord, Lord Fox, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for adding their names to this amendment in my name.
The amendment seeks to insert a new clause into the Bill with two objectives. The first is to ensure that the devolved Administrations are consulted before any regulations are made under this part of the Bill
“as to their impact and effect on the marketing and use of products in the areas … over which they have legislative competence”.
The second is to preserve agreements made under the common frameworks from being nullified by these regulations.
The first part requires very little introduction. The Bill extends to England, Wales, Scotland and Northern Ireland, and consumer safety standards, which is what the Bill is all about, are devolved matters in relation to Wales, Scotland and Northern Ireland. That has been acknowledged by the Government as is noted in paragraph 10 of the Explanatory Notes. Legislative consent is being sought, as one would expect, and indeed is still being sought, for the provisions that engage the legislative consent process.
That may be difficult to achieve because, while the Bill makes provision about what is to happen in each of the jurisdictions within the United Kingdom, it does not contain any provisions that require the consent of, or at least consultation with, the devolved Administrations before the wide-ranging powers to make regulations under Clauses 1 and 4 are exercised.
The Deputy Chairman of Committees (Lord Ashton of Hyde) (Non-Afl)
My Lords, I have been informed that we are not going to take the last group, and the Minister is confirming that. If anyone is waiting just for the last group, they should not, and they can go.
Lord Thomas of Cwmgiedd (CB)
My Lords, it is an enormous privilege to have been in a position to add my name to these two amendments and to have listened to the elegant description of the way in which they are meant to work, as explained by my noble and learned friend Lord Hope of Craighead.
I come to them from a slightly different perspective. The new Government have brought into being a desire to make the union work as a union by co-operation between the Governments in London, Edinburgh, Cardiff and Belfast. Looking particularly to Cardiff, one would have hoped that this is an ambition capable of easy realisation. These clauses give one an opportunity to mark that stated aim in very clear terms. It seems to me that if one looks at what the two clauses have brought about, which my noble and learned friend has so elegantly explained, one sees that they touch on areas of devolved competence, without any doubt at all, and there are legislative consent Motions before the respective devolved legislatures.
There are two areas, as my noble and learned friend has explained. One is consultation. I have never understood why across the board in areas such as this consultation is not mandatory. The previous Government were not very good at that; they did not uphold it properly, I regret to say. I hope they will now see a changed way through, and I very much hope this Government will accept the first amendment on consultation. I can see no argument whatever for not accepting that change.
The second area, as my noble and learned friend Lord Hope, explained, is common frameworks. He has explained how it is necessary to make the amendment, but I hope there is also something to the amendment that will breathe life back to common frameworks. It is fairly useful to go back to what was said in the communique issued after the heads of Government meeting in 2017:
“As the UK leaves the European Union, the Government of the United Kingdom and the devolved administrations agree to work together to establish common approaches in some areas that are currently governed by EU law, but that are otherwise within areas of competence of the devolved administrations or legislatures. A framework will set out a common UK, or GB, approach and how it will be operated and governed. This may consist of common goals, minimum or maximum standards, harmonisation, limits on action, or mutual recognition, depending on the policy area and the objectives being pursued. Frameworks may be implemented by legislation, by executive action, by memorandums of understanding, or by other means depending on the context in which the framework is intended to operate”.
Those were lofty ambitions. Regrettably, and it is not the occasion to go into it now, those ambitions were not properly realised. I pay especial tribute to what my noble and learned friend Lord Hope did when the United Kingdom Internal Market Act was promulgated in obtaining the clauses to which he has referred. It was only by his skill, diligence and considerable persistence—I say with respect—that we got these amendments through. Unfortunately, if there is not the spirit of co-operation—I regret that such spirit was not there for a lot of the past two or three years, although it came back towards the end, particularly under Mr Sunak’s Government—we cannot begin to hope for the lofty ambitions of a union where the Governments work together being realised again.
I hope that, because we have referred to common frameworks in this legislation, we will see them coming back. Much has been said about the need for co-operation and working together, but I think these two amendments are important because it is often said that men are judged not merely by words but by deeds—one could put it in a more colloquial phrase. It seems that these two amendments, drafted in the Government’s words, are and ought to be the deeds by which the Government show that they really mean to go ahead and operate on the basis of a union where, in these areas of devolved competence, there is co-operation but within a framework that permits divergence. Therefore, I very much hope that the principle of these amendments will be accepted, because it is so important to the future of the union.
Lord Fox (LD)
My Lords, my noble friend Lord Foster will speak to his Amendment 102 in a few minutes, but it makes sense to follow the noble and learned Lords with my comments on Amendment 47 and the two amendments in my name, Amendments 93 and 96.
It is an enormous pleasure and something of a responsibility to follow two absolutely fantastic speeches on this subject, and I am afraid that my mind did go back to the long nights of the internal market Bill and the tenacity—as the noble and learned Lord, Lord Thomas, set out—of the noble and learned Lord, Lord Hope, in bringing his amendments forward, because a really important thing was eventually done there.
The noble and learned Lord, Lord Hope, referred to the danger of impinging on the devolved authorities. I will give just one practical example and this is not theoretical, because it is already something that the Welsh Government have raised. In their response, the Welsh Government concluded that
“there are relevant provisions in the Bill which, for the purposes of Standing Order 29, are within the legislative competence of the Senedd and therefore a Legislative Consent Memorandum (LCM) is required”.
I do not think that is disputed by the Government.
For example, the power within Clause 1(1)(a) could be used to reduce or mitigate risks presented by products that endanger the health of a person, distinct and separate from any risks to a person’s safety. The use of “health” in Clause 1(4) broadens the scope of how power could be exercised beyond simple product safety, which is a reserved matter, and enables provision to be made for public health purposes, which is an area within the Senedd’s legislative competence. This is just one example.
In their response document, the Welsh Government raise issues covering product regulations, product requirements, emergencies, information sharing, cost recovery, consequential amendment of certain Acts, interpretation, and the Schedule. Happily, the Welsh Government seem okay with Clauses 5 and 6, but the rest of the Bill forms a grey area around competence and responsibility.
Lord Foster of Bath (LD)
My Lords, it is an enormous pleasure to follow my noble friend and the two noble and learned Lords, and I am certain that I will not be anywhere near as eloquent in speaking to Amendment 102 as any of them were. Their amendments all deal with the operation of the Bill in the context of the different Administrations that make up the United Kingdom. My probing amendment—it is just that—aims to seek to understand how the Bill will operate in terms of its applicability and its jurisdiction beyond the borders of the United Kingdom. I thought that it might be helpful to noble Lords if I gave an example not of a product but of the issue that particularly drew me to consider this problem, as I see it.
I am the chairman of Peers for Gambling Reform and I have done a lot of work on the issue of gambling. Some time ago, my attention was drawn to an online image which was very clearly identified as coming from Paddy Power. When I looked at this image, I came to the conclusion that it was in breach of our code of conduct in relation to advertising, set by the so-called CAP. I therefore drew it to the attention of the Advertising Standards Authority and asked it to investigate whether this particular image was in breach of the CAP code. It took very many months and several follow-up letters from me before it eventually came back to me and told me that it was somewhat uncertain as to whether it had the jurisdiction to act in respect of that particular image. In the end, it came to the conclusion that it did not have the ability to act—it was something beyond the territorial powers that it had.
When it comes to this Bill, I have to ask myself the question: if somebody acts outside the United Kingdom, what powers do we have for the appropriate body to be able to investigate the activities of that individual or organisation? Will we be able to call for documents or evidence or require it to come for interviews so that an investigation can take place? I appreciate that in many cases we have a situation where we have an internet provider providing this service, and internet service is at the basis of all this. When I look at the Online Safety Act, I notice that that Act defines the internet service in such a way that it has extraterritorial application. Given that an online marketplace is making use of an internet service, one has to ask whether this Bill has extraterritorial powers. In the case of the Paddy Power image, a solution was found because it turns out that we have reciprocal arrangements with the equivalent ASA body in Ireland and it is now going to look into that case—even though the image used pound signs rather than euros, so it was quite clearly intended for a UK audience.
I have suggested an amendment to ensure that there are extraterritorial powers for the various measures in the Bill. I have no idea whether that is the Government’s intention, but I hope it is because so many of the products come from abroad and so many of the services that enable us to purchase those products are based abroad, even though the firms concerned may well have offices within the United Kingdom. It is a probing amendment and I hope that when the Minister replies to the important issues that have been raised by the three preceding speakers, he will also help me understand more clearly what the Bill has in respect of these issues outside our borders.
Lord Sharpe of Epsom (Con)
My Lords, I thank all four noble Lords for their remarks, which I found absolutely fascinating. I agree with the noble and learned Lord, Lord Thomas, that the noble and learned Lord, Lord Hope of Craighead, deals with parliamentary matters with considerable skill, diligence and persistence. It is always a pleasure to follow the noble and learned Lord. I am very grateful for the reference to the Constitution Committee, a subject I have laboured on at some length. It is important that we continue to return to the fact that the Government need to heed the comments of both the committees that opined on this Bill.
Before I go on, I say that I perhaps take a slightly different view of the previous Government’s interactions with the devolved Administrations than the noble and learned Lord, Lord Thomas, and gently remind him, colloquially, that it takes two to tango. When there is a hard-left Government in Wales and a nationalist Government in Scotland they are perhaps not warmly disposed to being enthusiastic interlocutors with a Conservative and Unionist Government.
The first three amendments in this group have a similar theme, so I shall speak mostly to Amendment 96 in the name of the noble Lord, Lord Fox, which would require the Secretary of State to have regard to Part 1 of the United Kingdom Internal Market Act 2020. We are very proud of our record in helping businesses by reducing barriers for them through that Act, and I pay due tribute to the noble and learned Lord, Lord Hope, for his work on it. The Internal Market Act guarantees that goods, services and qualifications recognised in one part of the UK are automatically recognised across all parts. For businesses, this means certainty, simplicity and reduced administrative burdens, themes that we have explored all evening, and enables them to sell goods and provide services without encountering unnecessary barriers or conflicting regulations. It also allows qualifying Northern Ireland goods to be sold in Great Britain in reliance on the market access principles.
This amendment does not seek to rewrite the principles of the Bill. Rather, it seeks to ensure that its implementation is compatible with the vital provisions of the UK Internal Market Act. The market access principles of mutual recognition and non-discrimination are central to the UK Internal Market Act, as it stops protectionist measures that might favour goods or services originating from one part of the UK over another and safeguards fair competition, fostering a level playing field across all regions.
Our views on prioritising growth and investment and adhering to the provisions of the UK Internal Market Act 2020 are well known; we believe that this measure is necessary to achieve that. I am relatively agnostic as to which of the amendments the Government would wish to look at but some amalgam would clearly be a welcome step forward, so I support the amendments.
Lord Hunt of Kings Heath (Lab)
My Lords, this has been a really interesting group of amendments on which to finish our deliberations tonight. I thank the noble and learned Lords, Lord Hope and Lord Thomas, for their Amendment 47; the noble Lord, Lord Fox, for his Amendments 93 and 96; and the noble Lord, Lord Foster, for his Amendment 102. As noble Lords have suggested, the amendments relate to the application of the Bill’s powers in the United Kingdom, particularly in terms of consultation with the devolved Governments; the United Kingdom Internal Market Act 2020; and the issue of the frameworks, including how they would relate to this legislation.
I can give reassurance about the general approach of the Government to their relationships with the devolved Governments and the way in which we will conduct this. However, I want to reflect on some of the points raised by both noble and learned Lords; I will perhaps come back to them between Committee and Report.
The noble Lord, Lord Sharpe, mentioned the constitution. I am very cognisant: I know that both noble and learned Lords, in our discussions on a number of Bills in the past few years, have wanted to ensure that, in the words of the Constitution Committee, if we are to make the union work, the key words are “respect” and “co-operation”. I fully accept that. We believe that we have, in our first five months, begun to reset the relationship between ourselves and the devolved Governments. We want to work constructively with them. For instance, the noble Lord, Lord Fox, mentioned the input from the Welsh Assembly Government. We are considering it very carefully at the moment; my noble friend has also had some fruitful discussions with Scottish Ministers. That is the way we see ourselves going forward in future.
Many of the regulations made under this Bill will concern technical areas in relation to product regulation and metrology. These matters are largely reserved but some touch on devolved areas. I can confirm, and absolutely make clear, that the UK Government will continue to discuss product regulation and metrology matters with the devolved Governments. I am confident that, through this positive engagement, we will be able to reach a position where legislative consent can be gained. We will keep noble Lords updated on progress, obviously, but they will know that these matters sometimes take time. Equally, this is a Lords starter, so we have time over the next few months to ensure that we work in conjunction with the devolved Governments; we want to do that.
On the Sewel convention and secondary legislation, I was a Whip on the Scotland Bill and I remember the discussions involving Lord Sewel. I take the point made by the noble and learned Lord, but it would certainly not be our intention that, because of the convention, we could simply put through secondary legislation without seeking the input of the devolved Governments, certainly Scotland. We would not take forward regulations without engagement with the devolved Governments.
Lord Foster of Bath (LD)
Does it not therefore draw attention to the vital importance of very effective enforcement taking place at our borders? That requires us to look very carefully at the funding and resources of whatever body, or bodies, will be responsible for that enforcement. Does it not also mean that we need to have much clearer arrangements for the specification of the level of risk of different products that come in, so that that enforcement can be done relatively smoothly and openly to our total satisfaction?
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Lord always poses his questions wishing me to say “yes”. I am sympathetic to the points he raised but I cannot commit, and I cannot go further than what I said this afternoon except to say that this is a very important area and clearly something that we as a Government need to strongly reflect upon.
Having said that, I hope that I have indicated to noble Lords that I understand the important issues raised. I have given an absolute assurance from the Dispatch Box that we want to make our relationships with the devolved Governments as effective as possible. It is true that four can play but we hope that we will be able to deliver this and that we will get consent. Again, I would like to reflect some more on some of the tricky legal issues that both the noble and learned Lords raised.
Lord Hope of Craighead (CB)
My Lords, I am grateful to the Minister for his response to my amendments and for his assurances on the way forward that he sees on these matters.
I would like to make two points. First, I appreciate entirely that consulting on every single regulation would be a very time-consuming process, and I have seen the extent of to-and-fro engagement that goes on behind the scenes with good will between civil servants on both sides of the border. It is obviously a matter that deserves reflection and I absolutely understand why the Minister would like to take more time to look closely at it.
Secondly, as far as common frameworks are concerned, it always struck me in dealing with this subject that it is a great misfortune that the language chosen to identify them was not as readily identifiable as “internal market”. When you talk about the internal market everybody knows at once what it means but when you talk about common frameworks nobody knows what it means.
The Minister has obviously done some homework and has reassured me he understands the point, but the particular point about common frameworks is that it is a living process. It is perfectly true that there is a list of the frameworks—some 32 of them—but the prospect of having new ones is there all the time. One of the examples is that, in Wales, they are considering diverging from elsewhere on single-use plastics. I may be wrong but our products are developing all the time and each part of the UK might have an idea that it suits them to have a particular regime that they would like to discuss and introduce.
I ask the Minister to bear in mind that it is a living process and we have to make provision for the future. That is what my amendment seeks to do. I chose the words that were indeed the Government’s words in the internal market Act, so it is a system that they were prepared to accept. I am quite prepared to discuss this with the Minister further if he would like to and welcome his promise of future engagement before Report.
Lord Hunt of Kings Heath (Lab)
My Lords, of course, I very much welcome that. It is worth just referring to Section 10 of the 2020 Act, which defines a “common framework agreement” as
“a consensus between a Minister of the Crown and one or more devolved administrations”.
I take the noble and learned Lord’s point that “common framework agreement” does not readily come off the tongue but the wording very much sets the tone of the relationship that we want to see developed.
Lord Hope of Craighead (CB)
The Minister is right. Consensus lies at the heart of the common framework system. There will not be agreement across the various Administrations without consensus but, where consensus exists, it is a signal that they should be protected against any misfortune on legislation that is across the entire United Kingdom.
Having said all that and with gratitude to the Minister for what he said, I beg leave to withdraw the amendment.
Product Regulation and Metrology Bill [HL]
Wednesday 11th December 2024
(1 month, 1 week ago)
Grand CommitteeRead Full debate Product Regulation and Metrology Bill [HL] 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 18-IV Fourth marshalled list for Grand Committee - (9 Dec 2024)
Lord Holmes of Richmond
“Review of product regulations and supply chains(1) On the day on which this Act is passed, the Secretary of State must initiate a review of all product regulations and standards as they pertain to supply chains.(2) The review must assess how product regulations align with the principles of traceability, transparency and trust.(3) The review must recommend a new supply chain standard to take into account factors including the supply chain of a product’s—(a) environmental impact;(b) transparency and traceability, in real time, of products, financial, trade and legal documents.”
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in today’s Committee proceedings on the Bill. In doing so, I declare my interests as set out in the register, not least my technology interests; in particular, I have advised and socially recruited for an AI business.
In moving Amendment 52, I shall speak also to Amendments 53 and 79 in my name. These may seem disparate and interestingly grouped together, but they have three things largely in common. There are three of them, I wrote them all and, most importantly, they are all underpinned by the potential of having a golden thread of inclusion and innovation running right though them.
On Amendment 52, I am looking for the Government to consider a metrology standard around supply chains, which are notoriously opaque. If you try to go beyond even one step back in any supply chain, things start to get a bit fuzzy. As a result of the technologies now available to us, however, there is the potential to unite in real time physical goods, legal documentation, financial documentation and all customs documents. More than that, there is the potential to link all the environmental factors, not just of that supply chain but of the goods and services involved in it, right from the point when they were brought into being. This is another example of the extraordinary power of the new technologies and what the data that underpins them can bring in driving economic as well as social benefits, while under- pinning environmental benefits as a consequence. What is the Government’s position on how we could look at developing such a standard for the supply chain, which would be beneficial not just in each specific supply chain—for all those businesses and entities involved—but right across our society and economy?
Amendment 53 looks at large language models—the foundational models that have had so much publicity and focus, not least in the last two years. As with Amendment 52, I suggest the development of a standard around LLMs and consider the achievement of that standard to enable access to the UK market and economy. Again, that would be beneficial to consumer and citizen, and social, economic and, yes, environmental benefits could all flow from it. It is important to consider not only the economic and environmental costs of developing those foundational models but their usage, every time somebody asks one of these models—we all know their names—a query about those costs. All that would be worth considering in the development of a standard. On the specifics of some of the data used in the development and training of those models, we should look at the IP and copyright issues and consider the legislation and whether the LLMs would fall into the category of an article for the purposes of the copyright Act.
I should be interested in the Minister’s view on the specifics within that amendment and the benefit that could be gained from the development and work—even if a standard was not the final output—to be done around these models, and the levels of understanding and public awareness that could flow from such a piece of work.
Amendment 79 suggests the development of a standard: inclusive by design, or IBD. Be one young, old, a disabled person, or somebody from any socio- economic group, geography or city, putting IBD in a product benefits everybody by the very nature of that inclusion. There are two parts to this. First, all new products should be developed and deployed as inclusive by design. That should be self-evident and relatively straightforward to bring about. Secondly, and perhaps as important, largely because it is less discussed, there is what happens when a product has previously been inclusive and accessible but then, as a result of a change, an update or a new product rollout, becomes inaccessible and exclusionary.
It is probably best to draw this out through example. Consider the card readers that we all use to pay for goods. For many years, they were inclusive to me as a blind person and to all members of society, not least through the simplest elements of raised keys and a dot on the “5” key. I would know exactly where that was and I, inclusively and independently, could put my PIN into the card machine. Then we saw the rollout of completely flat-screen card payment machines. They are not inclusive or accessible, and of no use to me and millions of people up and down the country who, prior to that product rollout, could have inclusively, independently and—crucially in this context—secretly made their payments. What option is there now, if presented with a flat screen machine? Should one whisper, sotto voce, “4982”? That is not my PIN number. Even if it were, the paucity of funds in the account renders it worthless for noble Lords to remember. Or should I give my card to a friend or ask the person in the store to make the payment under those terms?
None of that is inclusive, independent, secret or in any sense dignified for a citizen in 21st century Britain. Amendment 79 is all about looking into the development of a standard, inclusive by design. Imagine what we could do right across our society and economy. Think about the debate, discourse and discussion, and the positive input that the development of this standard could have across this country, and then connecting right around the world. Such a positive piece of work could drive benefits, business, economic opportunities and social inclusion. It would be good for citizens, business, innovators, investment and our country.
I look forward to the Minister’s response. I hope it will be seen as a positive piece of work that could easily be picked up and rolled out by the Government. I very much look forward to the debate. I beg to move.
Lord Kirkhope of Harrogate (Con)
My Lords, I always like the opportunity to hear my noble friend Lord Holmes because his amendments mostly very much appeal to me. Today’s Amendment 79, to which he has just spoken so eloquently, certainly appeals to me, and I just wanted to add a few words.
I am responsible, for my sins, for the Parking Act 1989, which I am sure noble Lords will spend a lot of time reviewing and considering. The nature of that Act was for the first time to allow parking to take place in this country in a way that did not exclusively require the use of cash. We were slightly ahead of the game at the time, because I think we had only Barclaycards and not telephone exchanges that you could ring into to park your car. All these things have come about because of that simple Act.
I share the frustrations of my noble friend Lord Holmes when we look at how so many things nowadays are developments of such initiatives but without taking into account the great importance of trying to be as broad as possible in their appeal and use. A good example of that was given by my noble friend. There are many machines—I know he has expressed his frustration before about cash machines—and other products, in the general sense, that cannot be accessed by people with disabilities, or where there is insufficient explanation of how they can be implemented. I very much support his ideas about inclusive by design and see no reason why, in the 21st century, we cannot be more enlightened about this. It seems unnecessary for it to have to be raised in this way regularly in legislation that we pass in Parliament, but here we have a marvellous opportunity for the Government—the Minister is looking very excited about this prospect—to introduce, in a legitimate area of the Bill, something that will really make lives much better for those with disabilities through product development. I very much support Amendment 79.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Kirkhope of Harrogate, and to commend the noble Lord, Lord Holmes, for a very clear introduction to three amendments. The Green group is very happy to support all of them. I apologise to the Committee that was I absent for the last two days of Committee. Once I was stuck in the Chamber and the other day I was unavoidably away, so I apologise for missing some of my own amendments, but I really wanted to speak on these amendments. I will start with Amendment 79. We have just heard a very useful argument for it and I will briefly add to it.
Inclusive by design is talking about going beyond accessibility and beyond saying, “We have this thing. What do we do now to make it accessible?”. This starts from the very beginning and takes us back to the social model of disability. Our society and our products are designed to be non-inclusive. That is what we are doing now and that is wrong in terms of allowing so many people to fully participate in our society. It is also always important to make the argument that it is better for all of us, not just those who may have a disability, now or in the future, if products are made to be easy to access so that you are able to do things. There is wrestling with opening a jar or that terrible rigid plastic packaging on toothbrushes and other things that many people struggle with. If you made those things inclusive by design, they would be better for all of us.
Following the technological arguments already made, I thought back to when I helped an elderly man attempt to access his banking. It was certainly not accessible to him and, as a friend, I knew his password and everything else because I had to. The machine he had to press was about the size of a matchbox; the keys were on it and I struggled to press them. There was two-factor authentication, and I could not understand the text message or work out which numbers in the text message you were supposed to put in, and I have been using technology for many decades. This is so important and could be a real advance.
Lord Fox (LD)
My Lords, I shall be brief and start with Amendment 79. We could join in the chorus of approval and my noble friend Lady Brinton could come up with dozens of examples that justify the noble Lord’s amendment but, in the interests of time, we will not. If noble Lords would like more examples, I am sure my noble friend could provide them. We very much support Amendment 79.
I commend the noble Lord for persuading the Public Bill Office to allow him to table Amendment 53. The spirit is very much met. Given the nature of all the digital Bills, with which he is completely familiar, I suspect this is an argument we will have again and again in those Bills. The spirit is correct.
I want to say a few words on Amendment 52 which are different from the words noble Lords have heard. I sit on the International Agreements Committee and we look at the CPTPP trade deal. Rules of origin are central to all this. The nature of CPTPP is that, for example, a product built in Malaysia can start to move freely within the countries that are signatories to that trade deal. Whether we have the details of the components of that product before it starts moving around our alliance depends on His Majesty’s Government asserting their right to know what is in those products. Whether the Government like it or not, in this Bill, with their signing of the CPTPP, they are going to have to start to interest themselves in a detailed way on what is in the stuff travelling around the CPTPP.
Why is that? One of the biggest exporters of components into Malaysia is China. That brings us back to the whole China question, which I will not repeat here. If, for example, we find that that country is the subject of either embargo or tariff, we will really have to know what is going on in all those products. So it makes a lot of sense, from the very start, for the department to flex its muscles and develop its skills to understand the supply chains of the things coming through people’s doors every day, courtesy of the large online retailers.
When a piece of electrical stuff comes through our door, we have absolutely no idea what is in it, where it was made and its safety for our families. We cannot know that without knowing the supply chain and the rules of origin of what is moving around our country. It is difficult, of course, but it is something in which we will have to increasingly interest ourselves.
Lord Sharpe of Epsom (Con)
My Lords, before I start on these amendments, I thank the noble Lord, Lord Leong, for the generous letters that he sent the Committee after previous sessions, which answered a number of questions. I generally commend the Government on their spirit of co-operation on these matters.
I am sincerely grateful to my noble friend Lord Holmes for introducing this critical amendment and for supplying his PIN. Like my noble friend Lord Kirkhope, it very much appeals to me too, because the principle of being inclusive by design reflects a visionary and much-needed step forward in ensuring that products in the UK are accessible and equitable for all members of society—as my noble friend so eloquently and powerfully set out.
The establishment of an inclusive-by-design standard underscores our collective commitment to creating a society where accessibility and inclusion are the norm and not the exception. Moreover, inclusive design benefits everyone, as the noble Baroness, Lady Bennett, pointed out. Features designed for accessibility, such as voice commands or larger interfaces, often enhance usability for all users. For businesses, I would have thought it an opportunity to innovate and differentiate themselves in a very competitive market. For consumers, it is a guarantee that their needs are being respected. So I have no hesitation at all in supporting Amendment 79.
I am also happy to support Amendments 52 and 53. I will not say much about them except to add that Amendment 52 also addresses pertinent and indeed poignant national security or—perhaps this is a better expression—security of supply concerns. A complete national understanding of supply chains makes unarguably good sense.
In conclusion, I wholeheartedly support Amendment 79 and am very sympathetic to Amendments 52 and 53, and I urge the Government to think seriously about them.
Lord Leong (Lab)
My Lords, I thank all noble Lords who have spoken in this debate, and I specifically thank the noble Lord, Lord Holmes, for his amendments. During the second day in Committee, the noble Lord illustrated his knowledge of and passion for the subject of AI.
I turn first to Amendment 53 on the review of large language models. We have already discussed the intersection or interaction between this Bill and AI in a previous group, and I will briefly restate some of the key points I made in that debate which are relevant here. Evidently, the use of AI in products is still in its infancy. How exactly this technology will develop remains to be seen, but we have drafted the Bill in such a way that it keeps pace with technological change; Clause 2(2)(a) allows regulations to take account of intangible components of a physical product.
However, the Bill does not and will not regulate digital products or artificial intelligence in and of themselves. Instead—I hope this reassures the noble Lord, Lord Holmes—the Government are developing a wider policy around AI, which I am sure will take into consideration proposals for AI safety legislation as announced in the King’s Speech. I recognise that noble Lords keenly anticipate the detail of these proposals, so I assure your Lordships that my noble friend Lady Jones will update the House in due course.
The Office for Product Safety & Standards is considering the use of AI in products and the regulatory challenges for product safety associated with that. We are just at the start of that process but know that it will become more important as technologies develop. I will ensure that the House is kept up to date with progress on this work.
Amendment 52 addresses product traceability and responsibilities within supply chains, including digital supply chains. I agree with noble Lords that it is essential that those responsible for producing or importing products are identifiable. Existing regulations already require relevant supply chain parties to maintain necessary documentation for tracing product origins and, as we consider updates to product requirements, we will also review these traceability provisions to ensure that they are fit for purpose. The noble Lord, Lord Fox, mentioned CPTPP, which in fact comes into force this Sunday when the UK becomes a full member. I suppose we will just have to review the application of this whole supply chain and traceability, and monitor how it goes.
Lord Fox (LD)
I thank the Minister, but perhaps there is another of his letters here—for which I also thank him. The CPTPP is not like the European Union—there is not a secretariat overseeing what is going on. If you think something wrong is going on, it is up to the Government to raise it. It would be useful to know how the department is now going to police or at least find out what it needs to deal with. Otherwise, it is essentially transparent.
Lord Leong (Lab)
I totally agree with the noble Lord. I will ensure that officials in the department look into this and either write to him or have a meeting on this.
Over the coming year, our priority will be continuing to address the sale of unsafe goods on online marketplaces—an area that noble Lords are right to highlight and on which they have demonstrated extensive knowledge and passion in the best traditions of this House. As outlined in the Government’s response to the product safety review consultation, we will also explore digital solutions, including the use of voluntary digital labelling, to streamline business processes and support authorities in monitoring product safety.
However, it should be noted that issues of traceability are much broader than ensuring the safety or proper functioning of products. This would bring in myriad other policy issues, such as the nature of global supply chains and cross-border jurisdictional arrangements. I believe that noble Lords would agree that these issues warrant careful discussion and debate, but they are distinct from the Bill’s purpose of ensuring the safety and functionality of products.
Amendment 79 relates to the creation of a mandatory inclusive-by-design standard. I am pleased to inform the noble Lord that the British Standards Institution has already developed and published a British Standard that provides guidelines for the adoption of an inclusive approach to the design of products. The standard sets out a strategic framework and processes to enable business executives and design practitioners to understand that inclusive design should be a core organisational driver.
I refer back to the example the noble Lord, Lord Holmes, gave of credit card payments. We have come a long way, but I still remember those zapping machines that zapped your credit card and you had to sign the receipt. That obviously creates a lot of situations where fraud can happen. Then we had the PIN, and nowadays contactless. I have been reading some articles before today’s debate, and some of the financial institutions are looking at mobile wallets, whereby an encrypted account number is embedded within the wallet itself. But these are early days, so we have to keep watching this area and see how it develops.
Furthermore, an updated version of the ground-breaking, government-sponsored, fast-track standard on inclusive data use in standards was published by the BSI in August this year and is free to download. This helps standards makers to work with data with inclusion in mind so that the standards produced are representative and include communities that are traditionally excluded, helping to minimise harm and deliver more robust products. Standards are voluntary in nature and the Bill, as with our current product safety regulations, continues to allow the use of standards to remain voluntary, avoiding potential barriers to trade.
I hope that the noble Lord is satisfied with the explanations given today and that the amendment will be withdrawn.
Lord Holmes of Richmond (Con)
I thank all noble Lords who took part in this interesting debate, and the Minister for his response. Clearly, there is still a long way to go when it comes to an inclusive experience, inclusive products and inclusive services—and, thus, a sense of living in communities and cities, and in a country, that are inclusive by design.
I thank the Minister for his response. I would not be averse to a letter; it is always nice to receive one. Christmas cards are also possible at this festive time. I will certainly look carefully at Hansard, but I fancy that we may well return to “inclusive by design” on Report. For the time being, I beg leave to withdraw Amendment 52.
“Clothing safety: regulations and requirements(1) Within three years of the day on which this Act is passed, the Secretary of State must, by regulations under section 1, make provision to reduce risks as defined in section 1(4) presented by clothing.(2) For the purposes of this section, clothing means items of fabric, leather, plastic and similar materials usually worn on the human body.(3) Within three years of the day on which this Act is passed, the Secretary of State must also make provision about clothing product requirements by regulations under section 2. (4) Regulations in accordance with subsection (3) must set out product requirements for the production, use, marking, marketing, testing, approval and provision of information (including information about risk) of clothing.”Member’s explanatory statement
This amendment intends to probe whether the Secretary of State will use powers under sections 1 and 2 to regulate clothing products, given the human and environmental health risks they represent from artificial fibres and chemical constituents.
Baroness Bennett of Manor Castle (GP)
My Lords, in moving Amendment 57, I will also speak to Amendments 58 and 59 in my name.
I feel I must begin by offering credit to the noble Earl, Lord Lytton. I was looking at the Bill and thinking, “How do we address particularly pressing issues of safety and environmental concern around products, addressing particular types of products?” The noble Earl put down an amendment on building products, and my drafting owes a great deal to his amendments, so I feel I should acknowledge that. I note that my amendments mirror each other in many ways, although noble Lords will notice that there is a difference: the clothing safety amendment suggests a three-year period before action is taken, while the single-use plastics amendment suggests two years and the period products amendment suggests one year. That is a reflection of capability, scientific understanding and the importance of having the ability to take action as quickly as possible. Viable timeframes have been carefully selected in each one.
These three amendments fit together very well because all of them address the way in which we are exceeding the planetary boundary for what are known as “novel entities”, as identified by the Stockholm Resilience Centre. These are substances made by humans and previously unknown in the natural world. Generally speaking, the natural world has no capacity to deal with, process or get rid of them. In talking about the natural world, I am also talking about the bodies of human animals—all of us. These products, chemicals, plastics and other substances are accumulating in our environment day by day, week by week, month by month and year by year. They are not going away. It is the people in the most disadvantaged communities and situations who are most exposed to these products and their increasingly understood health effects.
Amendment 57 concerns clothing safety. I suspect that there was probably puzzlement in some quarters when people saw this: “Unsafe clothing?” I have to pay credit to a new independent feature documentary by the fashion designer Jeff Garner, called “Let Them Be Naked”. I went to a London Fashion Week showing of this documentary, which focuses on the use of toxic chemicals in fabrics and the harmful impacts on human and environmental health. Clothing worn next to our skin for long periods exposes us to chemicals that can cause short-term and long-term health effects, including cancer and fertility issues. Repeated testing of clothing such as socks, school uniforms and work uniforms has found harmful quantities of toxic chemicals well above legal limits and standards. It is worth noting that, whether it is school pupils or workers with a uniform, people have no choice in these matters. Of course, this issue affects not just the people wearing this clothing but the people who make it, where the material is dumped, et cetera.
I will briefly bring in some detailed information. Laboratory research commissioned by the Canadian Broadcasting Corporation showed that, out of 38 samples of clothing and accessories, one in five contained high levels of harmful chemicals such as lead, PFAS—known as “forever chemicals”—and phthalates. A North American lab study of stain-resistant school uniforms identified high levels of PFAS—of course, these uniforms are worn by often very small children, so the ratio of the amount of PFAS to body weight is very high. Another chemical of concern is bisphenol A. Research for the Center for Environmental Health found that over 100 popular brands of socks contained up to 31 times California’s legal safety limit for BPA. There is a famous case of Alaska Airlines, which introduced a new uniform. Staff who were forced to wear it reported symptoms of chemical sensitivity, sore throats, coughs, shortness of breath, itchy skin, rashes and hives, itchy eyes, loss of voice and blurred vision.
I will pick up one chemical and cite some interesting British research from just this year, published in the journal Environment International. This was a real break- through piece of research. Previously, it had been said of PFAS, these forever chemicals, “Don’t worry—they don’t cross the skin barrier, so you can be wearing them, but they won’t harm you”. But this research demonstrated that that is simply not true. It is of course already known that PFAS can enter the body through being breathed in or being ingested in food or water, and it is known that, by those routes, it causes a lower immune response to vaccination, impaired liver function and decreased birth weight in babies. In this study from the University of Birmingham, 15 of 17 PFASs tested showed substantial absorption through the skin. Remember that it had been said, “No, no—this does not happen. It’s fine”. But 15 of the 17 tested were being absorbed through the skin and at least 5% of the exposure dose was being absorbed. For PFOA, which is one of the most regulated ones—it is regulated because it is considered dangerous—13.5% was absorbed through the skin. This is on people’s clothing, effectively being injected into their bodies.
There is also the important issue of plastics. It is starting to be understood—but still little understood—that, as the marine conservation organisation Plastic Soup Foundation pointed out recently, 69% of fashion is now synthetic materials. Noble Lords have heard me talking before about how microplastics are being found in human testes, placentas, breast milk and brains. But it is not just the microplastics themselves. At the Future Fabrics Expo in London earlier this year, it was pointed out that nylon in particular is very detrimental to our lungs, especially in terms of repair and growth. It is not the fibre itself that is the primary culprit but the chemicals associated with it. I was looking around this Committee and thinking that I cannot see a lot of artificial fibres, but we are a very privileged group of people; if you looked at a different socioeconomic group, that would not be the case. That is my clothing introduction.
I turn to Amendment 58, which of course is closely related because it is about single-use plastics. We mostly hope that clothing is not a single-use item, but in our environment today there is an enormous amount of single-use plastic that is sometimes used for seconds and then will exist in our environment for hundreds of years.
Here I pay credit to City to Sea, a campaign group that I am sure many noble Lords are aware of. If noble Lords have not seen its briefing, I would be delighted to share it. Some 220 million tonnes of plastic waste were created in 2024. Globally, the average is 28 kilos per person. That is a 10% rise since 2021. Although we have been talking about plastics and having a UN plastics treaty, the amount of plastic being produced and put out into the world is still going up.
As we referred to on the previous group, so many of the products we are talking about have unnecessary single-use plastics wrapped around them. If we are to be serious about making a safe world for people to live in, we need product regulation that drastically slashes this amount of single-use plastic. In the UK alone, households throw away an estimated 90 billion pieces of plastic packaging. That is nearly 70% of our plastic waste. If we are regulating products, we need to think about the packaging as well.
Thinking again about the health impacts, a letter by the Plastic Health Council and signed by a range of doctors, including from the Alder Hey Children’s Hospital, the Royal College of Paediatrics and Child Health, Queen’s University Belfast, Doctors Against Harm, and NHS trusts, calls for action. This was in the UN context, but it also applies to the Bill. The letter recognised that endocrine-disrupting chemicals in plastics can impair sperm quality and fertility, and cause cancers, endometriosis, early puberty, neurological and learning disabilities, abnormalities in sex organs, altered growth and nervous system and immune function, and diverse respiratory, cardiovascular and metabolic diseases. I note that there has been a global decline in sperm counts of more than 60%. Leading scientists have suggested that most couples may have to use assisted reproduction by 2045.
I am aware that noble Lords may feel I am battering them over the head with a whole lot of statistics, but we are talking about people’s lives, health and future. I have talked about things that apply to us all—clothing and single-use plastics—but I turn now to the amendment in which I have suggested that we should see action from the Government within a year on period products. Here, I draw extensively on the work of the Women’s Environmental Network, which has a proposed menstrual health, dignity and sustainability Act containing elements of this and much more besides.
I will start with the biology. The vagina contains a very large number of blood vessels, which means that the skin is very absorbent. What is in period products really matters. Yet, as I learned from Helen Lynn at Wen, there are currently more regulations about what can be in a candle than what can be in a tampon. Earlier this year, lead, arsenic and cadmium were all found in a variety of tampons tested in the UK and internationally. Single-use menstrual products have been shown to contain phthalates, bisphenols and parabens, which I have already talked about in other contexts. Despite their apparently cottony appearance, tampons and pads can be up to 90% plastic, meaning they continually shed microplastics during use and afterwards.
Many of these products contain fragrances, which are of particular concern. These synthetic fragrances are compiled from a cocktail of up to 3,000 different chemicals, none of which, of course, is recorded in the packaging or—to pick up the point from the noble Lord, Lord Holmes, about transparency—available to consumers, even if they go hunting to find what they are. They contain chemicals that are carcinogens, allergens, irritants and endocrine-disrupting chemicals, which I have talked about before. Despite changes in bleaching practices to purify wood pulp, chlorine and dioxin—you really do not want to put dioxin in your body—can still be found in menstrual pads and tampons.
Finally, I come to a fast-developing and crucial issue that is a real illustration of how a lack of regulation lets us go horribly wrong. Because of environmental concerns, we have rightly seen a shift towards reusable menstrual products. Broadly, that is obviously a good thing, but there is a stigma around menstrual products and period blood. These products are often advertised as tackling menstrual odour—which is not a thing; it is an advertising construction—and contain silver or nanosilver. This applies not just to menstrual products; see also socks, T-shirts and other clothing. That causes direct toxicity to the human body and negative impacts on the vaginal microbiome—known as microbiotoxicity —which can lead to bacterial infections and even problems with pregnancies.
Of course, noble Lords have heard me talk many times before about antimicrobial resistance. The silver washes out of these reusable products and down our drains to join the cocktail of other antimicrobial-inducing products swilling around in our drains, where there are microbes that will be influenced by them and develop resistance.
Baroness Brinton (LD)
My Lords, I thank the noble Baroness, Lady Bennett, for tabling these three amendments. I have a question about Amendment 59.
Paragraph 9 of the Schedule says that:
“Medicines and medical devices as defined in the Medicines and Medical Devices Act 2021, other than devices designed for weighing or measuring for medical purposes”
are excluded from the Bill. I say that because the guidance on what is and is not covered by that Act is somewhat contradictory. It says that sanitary towels and tampons are
“not normally considered to be medical devices”,
yet incontinence pads, which are not internalised in the body, are. In America, tampons are deemed medical devices because they are used inside the body.
I appreciate that I am putting the Minister on the spot. I do not expect an answer, but I wonder whether the very good speech by the noble Baroness, Lady Bennett, might point to a problem with the Government’s guidance under that Act that needs to be amended.
Lord Sharpe of Epsom (Con)
My Lords, I was not planning to say very much about this, but I thank the noble Baroness, Lady Bennett. I do not feel remotely battered; I feel significantly better informed, and I am grateful for that.
It struck me that Amendment 57 is somewhat pertinent to the discussion we have just had about supply chains. I wonder, for example, whether the habitual buyers of fast fashion would be quite so enthusiastic if they understood how it was made and the environmental despoilation it entails. Of course, a lot of fast fashion is single use.
I am also intrigued to know—I have just been thinking about this—what makes a non-iron shirt non-iron. I imagine it is some sort of chemical. As a fan of said shirts, I would rather like to know, not least because the noble Baroness’s description of the destination for microplastics made me wince slightly, to be honest.
Of course, a lot of single-use plastic ends up in the ocean. Frankly, as a keen scuba-diver who has found single-use plastics below depths of 30 metres, I think that societies across the world need to address that.
I do not have much to say apart from that, but I will be very interested in the Government’s answers. I would also be keen to pursue these issues later.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, that was a very interesting debate, and I am very grateful to the noble Baroness, Lady Bennett, for her amendments. She spoke tellingly about the impacts the products to which she referred are having on the world, on disadvantaged communities and on human health more generally. She gave a lot of information and I will try to respond to the general principles, but I will also take away her speech and ask my noble friend to write to her with a more considered response, as I would like our officials to have a look at some of the details of the concerns she raised.
Amendment 58 is about single-use plastics. The Government recognise the concerns the noble Baroness raised about plastic products, plastic waste and plastic pollution. We think we already have the right powers and, to an extent, with what comes in this legislation. The question she is really challenging us on, I think, is whether the Government’s action is sufficient. I will try to persuade her that we are very much on this, that we have the legislation and we are pursuing the issues she has raised.
For instance, there are powers under the Environment Act 2021 and the Environmental Protection Act 1990 that allow us to regulate certain matters relating to products, including single-use plastics and plastic packaging, that show evidence of harm to the environment and/or human health. This includes powers for bans on manufacture, product design and labelling requirements, charges and targets. UK REACH also contains powers to address harmful additives that might be added to plastics to ensure the safety of consumer products. We know about, and I pay tribute to, the carrier bag charge. It has been very successful and has had a great impact on the United Kingdom. We have also seen other product bans and restrictions, such as those relating to microbeads, and plastic straws, cotton buds and stirrers.
Additionally, the forthcoming extended producer responsibility for packaging uses the powers in the Environment Act 2021 to make producers responsible for the costs of managing packaging once it becomes waste, and encompasses packaging of all materials, not only plastic. The improved packaging design—and I think the noble Baroness made a very important point about this in the previous debate—will be incentivised through the modulation of the fee the producer must pay based on its environmental sustainability. There is, of course, a risk in focusing just on plastic that we encourage companies to use some other material that might be equally damaging. Therefore, it has to be considered in the round.
Also, the noble Baroness may have seen the Statement made by my colleague Emma Hardy, the Minister for Water and Flooding, in the other place about the final negotiations that we are involved in to develop an international treaty on plastic pollution. The Minister said:
“Plastic pollution is one of the greatest environmental challenges that the planet faces. The world produces 400 million tonnes of plastic waste each year. Scientists predict that there will be a threefold increase in the amount of plastic entering the ocean between 2016 and 2040. A global agreement on plastic pollution is urgently needed”.
She then goes on to say,
“The Government have an ambition to catalyse the transition to a circular economy”—
which we have debated in previous days in Committee—
“and the treaty is one of the key levers available to us to achieve the systems-wide changes needed to make that a reality”.
She went on to say:
“Plastic waste has for too long littered our streets, polluted Britain’s waterways and threatened our wildlife. This Government are committed to cleaning up Britain and cracking down on plastic waste. We will roll out extended producer responsibility to incentivise businesses to cut plastic packaging and the deposit return scheme to incentivise consumers to recycle”.—[Official Report, Commons, 25/11/24; col. 31WS.]
So we are taking this seriously and we think we have the legislation that we require. It is worth noting that, as part of this work, the Defra Secretary of State has convened a small ministerial group on the circular economy and asked his department to work with experts from industry, academia, civil society and the Civil Service to develop a circular economy strategy.
We will come on to the issue of clothing. In the meantime, the Government continue to fund action on clothing through Textiles 2030. This is a voluntary initiative that supports businesses and organisations within the fashion and textiles industry to transition to more sustainable and circular practices. I also assure noble Lords that Defra will keep the House updated with work in this area and we are happy to ensure that the noble Baroness can speak with relevant Ministers to discuss this matter further.
Amendments 57 and 59 seek to ensure that regulations are made to reduce the risk posed by clothing and period products. Again, the noble Baroness made a powerful speech. I must admit, a frisson of fear shook me when she mentioned London Fashion Week because it recalls the time when I was Minister for Sustainability in Defra, quite a long time ago. We were involved in starting developments in sustainable clothing, and I was invited to make a speech on sustainability on the first day of London Fashion Week. I thought it went well until I saw the review in the Daily Telegraph, which ignored my speech but referred to my suit being rather crumpled, which was a trauma I have never recovered from.
I come to the substance of what the noble Baroness said and the legislation. The General Product Safety Regulations do not make specific provisions for reducing the risk to consumers from harmful chemicals among some products, potentially including those that the noble Baroness raised, including period products. Although the legislation requires that the product placed on the market must be safe, it is not tailored to mitigating these risks. What it does is enable the introduction of new regulations to ensure that the Government can continue to reduce and mitigate the risk to health and safety posed by products, which could potentially include those listed in Amendments 57, 58 and 59.
The Bill can ensure that we are able to regulate the use of chemicals in consumer products, as we currently do for cosmetics and toys, as well as in other consumer products with similar chemical exposure risks. I reassure the noble Baroness that we will use the powers to identify product sectors and hazard types that require action, including period products where regulations may need to be strengthened or updated. This will be done on a risk-led basis. It will be evidence led, proportionate and follow appropriate stakeholder engagement. It goes back some time but, as an example, the Nightwear (Safety) Regulations 1985 set flammability and labelling requirements for children’s and adults’ nightwear. They are an example of risk-based regulations where a particular hazard was identified, and that can be done again.
To conclude, the noble Baroness, Lady Bennett, made a powerful speech. I want us to have a look at some of the details. We think we have the legislation. The debate is really about what the Government should do and we are active in this area.
I am afraid that I shall have to duck the interesting question from the noble Baroness, Lady Brinton, and write to her. We will have a look at the details of that.
Baroness Brinton (LD)
The Minister worked on the medical devices Act, as indeed I did. That Act is mentioned here, and I hope we might be able to table an amendment to this Bill to amend that Act because of the inconsistency. Will he look at that before he writes to me?
Lord Hunt of Kings Heath (Lab)
I very much remember the debate because we worked closely on it. We will look into this and get back to the noble Baroness with a detailed explanation of the issues so that everyone is clear.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank everyone for their kind words about my introductory speech. I thank the Minister for his detailed response. I say to the noble Baroness, Lady Brinton, that I also worked on the Medicines and Medical Devices Act. Well done for picking up that cross-reference, because my understanding was that tampons, pads and reusable products were not medical devices under that Act. There is a complication there that we need to address.
Lord Hunt of Kings Heath (Lab)
My Lords, we are still but just over five months in office. Clearly, we have to think very carefully about the actions we are going to take. What I seek to demonstrate to the noble Baroness is that we have the powers and determination. There are a lot of areas that we have to look at, but I think that the Written Statement I read out in relation to plastics shows where we want to go. We want to see real progress in the areas that she has developed.
Baroness Bennett of Manor Castle (GP)
I thank the noble Lord for his intervention. I think he perhaps misunderstood where I was going with that. It was not meant to be a criticism of this Government—I fully take the point of five months in power. What I was criticising or questioning was the legal framework, which allows the Government to act, whereas in these amendments each proposed new subsection (1) says that the Secretary of State “must” regulate. This is proposing a different kind of framework. It is asking the Houses of Parliament whether they are prepared to direct, within a certain timeframe, that the Government have to take action. I am questioning not what the Government are doing but whether we as a society and a Parliament want to say, “There is a real problem; the Government must take action and that is what the legal framework should be”. That is what each of these amendments does.
While I fully acknowledge that the Minister expressed some good intentions, I have to pick the noble Lord up on the reference to the straws, cotton buds and stirrers regulations. I am afraid that, when I was responding to that regulation, I was accused of being rude. I pointed out that, in 100 years’ time in a plastic- choked world, the generation then will not say, “Oh but they banned straws, stirrers and plastic cotton buds back then in the UK”. It is a very tiny scale tackling of a very large issue.
None the less, I appreciate everything that has been said. I will note that the phrase “precautionary principle” did not appear anywhere. I think that is very relevant here. We will continue the discussion. I very much appreciate the Minister’s offer of meetings to talk about these issues. I would be delighted to take that up.
Lord Hunt of Kings Heath (Lab)
My Lords, I apologise for interrupting and delaying the Committee, but I did say that we would use our powers to identify products and sectors that require action and that this work would be evidence-led and proportionate.
Baroness Bennett of Manor Castle (GP)
Proportionate is not precautionary principle. Anyway, I am not going to pick up that. I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to clarify the offences which could be created or expanded under subsection (9), as well as the civil sanctions which might be imposed.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 68 and 90, which are in my name. These amendments address the serious concerns raised by the provisions in Clause 3 and Clause 6, which give the Government sweeping powers to create or widen criminal offences and impose civil sanctions.
I have to revisit some old ground here but, given the gravity of this issue, I feel we have no choice. As was pointed out by the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, these clauses are skeletal legislation, meaning that they lack detail, leaving critical decisions about enforcement and prosecution to be made at a later stage via secondary legislation. We feel that the approach of using skeletal legislation for such crucial issues is problematic. These clauses give broad powers to create and enforce criminal offences without providing clear primary legislative guidance on who will have the authority to impose sanctions. This is particularly concerning because it leaves us very little clarity on which bodies will hold the responsibility to prosecute criminal offences.
The DPRRC and the Constitution Committee have highlighted these concerns, noting the lack of detail in the Bill and its potential to bypass parliamentary oversight. The Government’s decision to leave critical decisions about enforcement powers to be determined later by regulation, rather than in the Bill, undermines the transparency that businesses and consumers need. The Bill as written provides no information about the exact scope of the criminal offences that could be created or widened. This is not just a technical issue. It raises serious questions about the accountability of the bodies that will enforce these sanctions. The Minister may not be happy that these issues continue to be addressed but, until we receive clarity, we have a duty to bring these issues up, as I hope the Committee would agree.
The most concerning aspect of the clause is the provision allowing the creation or widening of criminal offences by regulation. The powers given to the Secretary of State or any other body of a public nature in this regard are overly broad, with little or no clear guidance or justification on what these offences will be. The Bill should, at the very minimum, provide some specification of the type of offences that may be created, rather than leaving this to broad, undefined powers that will most likely lead to overreach. The question has to be asked: why is it necessary to give the Government the power to create new criminal offences by regulation in the first place? Given the gravity of criminal sanctions, the Bill should be more transparent and specific about what offences will be created and who will be responsible for enforcing them—a point that the noble Lord, Lord Fox, made in his reference to the CPTPP, incidentally.
Criminal sanctions carry serious consequences and it is fundamental that Parliament has a say in the creation of such offences, rather than allowing the Government to define them through secondary legislation. We understand that the Government have argued for flexibility in enforcement and that the regulatory framework must be adaptable, but that flexibility should not come at the cost of clarity or proper oversight.
We have heard serious concerns from businesses and industry stakeholders about the skeleton clauses in this Bill. Specifically, there is real uncertainty about which public bodies the Government intend to designate as having the authority to impose criminal sanctions. Again, the question has to be asked: what additional public bodies are the Government planning to empower to prosecute businesses for currently barely defined criminal offences under the Bill?
As my noble friend Lord Lansley pointed out on the previous Committee day, currently enforcement responsibilities for consumer protection laws are set out clearly in Schedule 5 to the Consumer Rights Act 2015, which names very specific enforcement authorities, but the Bill removes that clarity and instead gives the Government the power to designate by secondary legislation which public bodies can impose criminal sanctions. This creates a situation where businesses may have to deal with a wide array of bodies, many of which may not have the expertise or experience needed to understand the complexities of product and metrology regulations.
This broad power to assign enforcement duties to any body that is deemed appropriate opens the door to a wide range of unknown authorities, so the question here is: why are the Government attempting to create this uncertainty? Why not retain the existing list of enforcement bodies in the Consumer Rights Act 2015 and allow changes to be made to that list through normal, well-defined procedures, rather than using secondary legislation to grant powers to an unknown set of authorities? Businesses deserve to know exactly who will be responsible for enforcing the regulations and imposing sanctions. The Bill’s current drafting creates a legal vacuum where there is no certainty about the powers of various public authorities, which could have serious consequences for businesses’ legal security.
The ambiguity surrounding criminal sanctions is deeply troubling for business, especially when these powers can be used by a range of authorities that may not be clearly identified at this stage. It raises serious concerns about due process and the fairness of enforcement actions. If a business is unsure whether it is complying with regulations and there is uncertainty about which body will be enforcing them, the risk of facing criminal sanctions obviously becomes much higher and that creates an environment of fear and uncertainty for business, which is already facing difficult economic conditions.
This situation is further complicated by the fact that secondary legislation will define the details of how these sanctions are imposed, potentially without proper scrutiny by Parliament. Criminal penalties should never be determined by regulation alone; they must be clearly laid out in primary legislation with full parliamentary oversight.
The balance of probabilities standard in civil cases can create significant challenges for businesses as well, especially in the context of the provisions outlined in the Bill regarding enforcement and sanctions. The balance of probabilities standard makes businesses more vulnerable to claims from enforcement authorities or competitors. In the absence of clear regulations and objective criteria, businesses may find it difficult to mount a defence as the mere likelihood of non-compliance could be enough to trigger sanctions. This could result in a climate of fear and uncertainty whereby businesses are hesitant to innovate or engage in new activities, due to the potential for legal action based on speculative or incomplete evidence.
The Government have claimed that this Bill will support economic growth and innovation, yet its skeletal nature and the conversations that we have had with leading industry experts suggest that they are concerned. Moreover, the Bill already includes an emergency clause—we will come on to this in our debate on the next group, I think, and we will address it later—that allows for swift regulatory action if necessary. So there is no reason why criminal sanctions cannot be made clear at the outset. There is simply no need to leave the scope of criminal offences and enforcement powers so broad and undefined.
To clarify, we absolutely recognise the importance of product safety and the need both to protect consumers and for necessary regulations. We oppose the various skeletal clauses in the Bill, as we have made clear over the course of these Committee sessions, because of the lack of clarity and the potentially authoritarian powers given to unnamed, undefined public bodies in some of these regulations. I hope that the Minister will address the many concerns the amendments in this group address and will commit to clarity for business. I beg to move.
Baroness Brinton (LD)
My Lords, my amendments in this group—Amendments 69, 91 and 107—cover a somewhat wider area than those in the name of the noble Lord, Lord Sharpe of Epsom. I shall return to his amendments and the speech he has just made later, to comment on them—but I start by saying that Amendment 92 in the name of the noble Lord, Lord Jackson of Peterborough, is helpful. One of my concerns at Second Reading was how Parliament can be made fully aware by more than just the laying of regulations, when a Minister or another body decides to create or widen the scope of criminal offences, that they must lay an Explanatory Memorandum in the Libraries of both Houses. I look forward to hearing the noble Lord speak later; his amendment is part of a possible solution.
At Second Reading, the Minister said:
“We have minimised the use of the powers in the Bill as much as possible and we have worked closely with the Attorney-General—who, quite rightly, is a stickler for these kinds of things—to find the best approach. So we look forward to the report of the Delegated Powers and Regulatory Reform Committee, which we will carefully consider”.—[Official Report, 8/10/24; cols. 1940-41.]
In my speech later on in that debate, I raised my concerns about a Minister who was not based in the Justice Department being able to create or extend criminal offences by regulation, with no ability to amend and much less detailed debate in both Houses of Parliament.
At Second Reading, we had not seen the second report of the Delegated Powers Committee, because that was published on 15 October—a week afterwards. Its summary about this part of the Bill is blunt. It says:
“We consider that … the Government have failed to provide a convincing justification for the inclusion of skeleton clauses in the Bill”
and suggests that
“the delegations of power in clauses 1, 2, 3 and 9 are inappropriate and should be removed”.
There is some detail about why it thinks that, in particular, there is a problem with the creation of, or the widening of the scope of, criminal offences. I mention this because I absolutely appreciate everything that the noble Lord, Lord Sharpe, has said about the skeletal nature of the Bill earlier on—indeed, my noble friends have also made those comments—but I want to focus on the impact of having new criminal offences on the criminal justice system. I shall come to that in a minute.
My first two amendments tackle the creation of criminal offences—in the first part of the Bill on product regulation and in the second part on metrology. I have also laid Amendment 107, which seeks to ensure that new criminal offences are not created through the clauses on information-sharing regulations. Clause 7(3)(d) talks about
“sanctions for non-compliance … including … creating, or widening the scope of, criminal offences”.
That is exactly one of the points that the Delegated Powers Committee is making: the Bill is so skeletal in nature, it appears that information sharing is a route by which criminal offences could be made. I would be grateful if the Minister could respond to that.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to have the opportunity to contribute to your Lordships’ Committee. I apologise for not having been here throughout all the deliberations on the Bill. I was called away by the excitement of the Football Governance Bill, but I am back to speak to my Amendment 92.
This is pretty straightforward. That the Bill will be unamended is a big assumption, because I sincerely hope that the Government will see fit to bring forward their own amendments or accept opposition amendments on Report—I thank the noble Baroness, Lady Brinton, for her kind words. However, my amendment seeks to fill the gap in appropriate scrutiny and oversight of a very wide-ranging and pervasive Bill, particularly in this respect of potentially creating criminal offences arising from non-compliance.
It is vital that, if new offences are created or if other powers are exercised by Ministers in this clause, it should be subject to some form of rudimentary scrutiny by Parliament. That is why I have tabled this amendment, which says that at least 30 days before making such provisions the Secretary of State must put that rationale into the Library of both Houses in the form of an Explanatory Memorandum.
Let us just remember what this clause on enforcement of product regulations does. It allows, by regulations, the Government to appoint inspectors to
“enter, inspect and search … seize and retain products or evidence of non-compliance … require a person to retain or provide a document or information … dispose of a product or require a person to dispose of a product”.
Those are pretty draconian powers, and they have significant ramifications for civil liberties, the unwarranted interference into the lawful operation of markets, and the potential undermining of due process and norms in the criminal justice system. Most importantly, there is a lack of accountability.
It goes without saying, of course, that I strongly support the amendments from my noble friend Lord Sharpe of Epsom. In fact, I agree with all the amendments in this group, including those from the noble Baroness, Lady Brinton. I do so because—it bears repetition—this is an egregious example of skeleton legislation, as the Delegated Powers and Regulatory Reform Committee found. I also had an opportunity to look at paragraph 12 of the Guidance for Departments on the Role and Requirements of the Committee—the Delegated Powers and Regulatory Reform Committee. I give Ministers half points rather than nil points, because they have actually done half of what the memorandum asks them to do under the heading “Criminal offences”. It says:
“Where a bill creates a criminal offence with provision for the penalty to be set by delegated legislation, the Committee would expect, save in exceptional circumstances, the maximum penalty on conviction to be included on the face of the bill”.
We have seen that, so that is great. But it also says in that same paragraph—and the Government have not met this requirement—that
“where the ingredients of a criminal offence are to be set by delegated legislation, the Committee would expect a compelling justification”.
I am afraid, as with virtually all of the Bill but particularly and specifically on this issue of the creation of criminal offences, that skeleton legislation gives rise to significant risks of the creation of offences, with punishment meted out to businesspeople and others associated with commerce without proper scrutiny and oversight.
For those reasons I strongly support all the amendments in this group, and I look forward to the Minister addressing the particular issue of what are the compelling reasons that necessitate that wording in the Bill and why the Government have chosen to go in that direction. I hope he will think again on Report about perhaps amending the wording in the Bill, as we have argued for today.
Lord Leong (Lab)
My Lords, I thank noble Lords for their amendments in this group related to criminal offences. This is an important area, and I am grateful for the knowledgeable and informed contributions in this debate, demonstrating the significant expertise in this House. My response sets out the general principles relating to criminal offences, but I will try to answer many of the various questions that noble Lords asked.
As I mentioned previously, I am very aware of the concerns that noble Lords have raised on delegated powers and the importance of consultation and scrutiny more generally. In particular, I am grateful for the thoughtful and comprehensive reports of the Delegated Powers and Constitution Committees. I have mentioned this before: noble Lords will be aware that we have provided responses to both committees, and my colleague, Minister Madders, and I gave evidence to the DPRRC. I was very grateful for the opportunity to explain the Government’s approach to these issues.
I begin by stating a central point. The severity of the harm caused by breaches of regulations across different product sectors varies. To proportionately reflect harm, offences and penalties must be tailored to individual sectors and duties.
I hope noble Lords would agree that, with regard to criminal offences, the rule of law is best served by precision. Only by having criminal enforcement provisions alongside product requirements can proportionality be ensured. Take, for example, a penalty for failure to properly mark a product: the harm will be very different for a highly sensitive product within a nuclear energy installation versus a lower-risk product.
As well as creating issues of proportionality, codifying criminal offences and penalties in the Bill would likely lead to enforcement gaps later. Offences would not correspond directly to new duties created for existing supply chain actors or responsibilities placed on new actors who enter the supply chain over time.
Lord Bingham’s principles require that the law be accessible and, so far as is possible, intelligible, clear and predictable. Setting out the details of offences and penalties in the Bill would undermine those principles. It would necessitate drafting speculative penalties to fit duties yet to be created. That would leave ambiguity over to whom offences may apply in future and create statutory maximum penalties that would be disproportionate for some actors.
Lord Bingham’s principles go further to support the approach of tailoring clear, proportionate offences and penalties that correspond to supply chain actors’ duties as they arise over time. If we instead place the detail in primary legislation, we risk undermining those crucial principles by locking in terms that become ambiguous over time as business models and products evolve, and with penalties that can cater to only the most serious version of the offence. Setting the maximum penalty in primary legislation means that the penalty can be calibrated to only the most serious version of the offence, leaving a broad discretion to judges to determine the appropriate sentence for less serious cases. Legal certainty and predictability of applicable penalties are better served by specific, tailored provision being set out in secondary legislation.
Noble Lords have highlighted that the DPRRC, in its report on the Bill, recommended that elements of criminal offences are set out within primary legislation. The Government value the work of the DPRRC and the incredibly important role it plays. We have considered its recommendations carefully within the department. However, the approach taken to setting out criminal offences within regulations is not novel. Other Acts that underpin broad regulatory regimes allow for the creation of criminal offences in regulations, including the Building Safety Act 2022, the Retained EU Law (Revocation and Reform) Act 2023 and the European Union (Withdrawal) Act 2018. I also highlight some examples of existing product regulations that set out criminal offences and penalties, such as the Nagoya Protocol (Compliance) Regulations 2015 or the Simple Pressure Vessels (Safety) Regulations 2016.
Noble Lords may also be interested to note that, to ensure proportionality, the maximum criminal penalties that may be implemented by regulations are set out in the Bill and follow existing precedent, as seen in sector-specific regulations such as the Electrical Equipment (Safety) Regulations 2016. This is a key point. Our approach provides this strong safeguard that enables discretion to set lower and more proportionate penalties in secondary legislation, which will also have parliamentary oversight. We submit that secondary legislation ensures parliamentary oversight but also the flexibility required to ensure that we can implement proportionate criminal offences that comply with the vital principles underpinning the rule of law.
Baroness Brinton (LD)
My Lords, the Minister has been very helpful in explaining about the affirmative process, and he has talked about the Explanatory Memorandum, but he has not responded to my questions about the consultation with the Home Office, the Ministry of Justice and the relevant agencies. If that happens, will it form part of the Explanatory Memorandum? My concern is that this is all still led very much by the Department for Business and Trade and does not take account of the concerns and pressures faced by the Home Office, the justice system and their respective arm’s-length bodies.
Lord Leong (Lab)
I thank the noble Baroness for the question. I will need to come back to her on it because I want to be absolutely clear that I am giving her the correct information, rather than me saying something now on the fly.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords who contributed to this brief discussion. The noble Lord, Lord Leong, praised our expertise. Can I just say that any expertise he thought he might have spotted in my remarks belongs not to me but to my noble friend Lord Sandhurst, who was very helpful. He cannot be here, I am afraid, and I am not a lawyer.
Unfortunately, in spite of the detailed explanation of the Government’s intentions supplied by the noble Lord, Lord Leong—I am very appreciative of it—I am only partially reassured. I still have some concerns, so I will go back to Hansard and study his remarks carefully, particularly those related to Bingham.
In answer to the noble Lord, Lord Leong, on the list of bodies, I have not seen the letter, so I apologise again if I have repeated something that he has already addressed, but it is fair enough that he agrees that the rule of law deserves provision. I totally agree—that is fair enough—but it does not really seem to explain why there should not be a list of specific enforcement authorities, as per Schedule 5 to the Consumer Rights Act 2015. That seems to give too much latitude, but perhaps the letter explains that, in which case I will cheerfully withdraw these remarks.
In relation to the question asked of me by the noble Baroness, Lady Brinton, we considered following her example, obviously, but we also felt that leaving out subsection (9) would in effect render subsections (10) and (11) null and void. But I totally accept that the noble Baroness has a point about how that could be interpreted, so I will go back, have a look at it and consider what we do next. For now, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“(3) The Secretary of State must lay before both Houses of Parliament a comprehensive framework outlining the conditions and procedures for the use of emergency powers under this section.(4) Product regulations providing for emergency disapplication or modification may not be made until this framework has been laid before Parliament and approved by a resolution of both Houses.”Member’s explanatory statement
This amendment requires the Secretary of State to present a framework to Parliament defining the use of emergency powers.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 72 and 73, and I thank my noble friend Lord Trenchard for signing them. Clause 4 is a short clause dealing with emergencies. It allows for product regulations
“to be disapplied, or to apply with modifications, in cases of emergency”.
It also provides:
“The disapplication … may be made subject to conditions”.
That is it. I wonder what happened to the rest of the explanation that a clause of this type surely deserves. Perhaps the parliamentary drafter was using only headlines and forgot to fill in the blanks.
These amendments are designed to introduce some checks and balances. As the clause is currently written, there is no definition of what constitutes an emergency. There is no definition in Clause 10, which deals with interpretation. Who defines an emergency? How long might an emergency last? How will emergency provisions be enforced? The committees that we have talked about so much have been very clear. We have discussed this many times. The Bill is skeletal in nature and introduces a number of Henry VIII powers. I am only surprised that this clause was not added to the list of clauses that they think should be removed from the Bill in its current form.
My Amendment 72 is merely an attempt to seek answers to some of those questions and to apply a minimal level of parliamentary scrutiny. I simply do not think it is right that an undefined individual or body could introduce undefined emergency powers of an unspecified duration without a basic level of scrutiny —frankly, that way despotism lies.
My Amendment 73 expands on this and would introduce an element of ongoing scrutiny. Again, I can see no reason why the Government would disagree with this because, in their response to the Delegated Powers Committee’s report, they said that
“the Department is committed to … engage with stakeholders … including in cases of emergency”.
I have included that exact form of words in my amendment, as well as requirements to justify the continuing need for these powers, to assess their impact and to introduce some time limits. I cannot see any reason at all why the Government would not accept this amendment, given that, in effect, they have already committed to doing pretty much what it says. I beg to move.
Lord Leong (Lab)
My Lords, once again I thank the noble Lord, Lord Sharpe, for his amendment. I begin by reaffirming that this Government take their responsibility to parliamentary scrutiny very seriously. We have listened carefully to the views expressed and we will reflect on them as we move forward. It is always our aim to strike the right balance between thorough oversight and addressing the technical and practical demands of product regulation.
Amendments 72 and 73 seek to ensure that the use of emergency powers is transparent and proportionate. I fully appreciate the intentions behind these amendments, and I reassure the noble Lord, Lord Sharpe, that we believe that the Bill already provides robust mechanisms for oversight.
Clause 4 is intended to be used in rare emergency situations. It is introduced in this Bill following the recent example of the Covid-19 pandemic, when there was a shortage of personal protective equipment. To be clear, this clause is not about quickly implementing regulations on new products; it is about emergency situations where there could be a need to temporarily disapply or modify existing regulations to allow current products to be brought to market much more quickly. Any regulations made under Clause 4 are subject to the draft affirmative legislative procedure, ensuring that both Houses can scrutinise and approve them. We believe this process provides a balanced and proportionate mechanism for oversight and accountability, ensuring thorough scrutiny.
The Government are also committed to developing a clear framework of how the policy will work in practice, and this will be done in consultation with stakeholders. However, we do not believe it will be necessary to formally lay this framework before Parliament, as the oversight arrangements provided by the draft affirmative procedure for any secondary legislation under Clause 4 are believed to be sufficient.
The Office for Product Safety & Standards will take the lead in developing the framework and will publish guidance on the conditions and procedures for using these emergency powers. The guidance will then be made publicly available to Members of this House and relevant committees on the GOV.UK website which, if needed, can be used to supplement any future scrutiny on emergency measures. In addition, Clause 4 is intended to provide a proportionate response to emergencies, and conditions can be applied which will be context specific. Therefore, any disapplication or modification of regulations will be targeted, with safeguards in place to ensure public safety remains paramount.
As the House can appreciate, emergencies can be unpredictable and cannot always be anticipated in advance. Imposing an initial fixed three-month sunset period and review process for extensions risks reducing the Government’s ability to respond effectively to emergencies that may evolve over time. Instead of applying a fixed three-month sunset period to all regulations, we believe that each regulation in response to an emergency should be targeted and tailored to its unique circumstances. This approach ensures that the measures remain both proportionate and effective, addressing the specific challenges of the emergency and the product or situation involved while avoiding unnecessary constraints.
Lord Jackson of Peterborough (Con)
The Minister is making a powerful argument, but he raised the issue of Covid. He is aware, of course, that it is quite possibly the case that you can expedite fast-track legislation in extremis. He will no doubt know that between 1989 and 2009, 15 Northern Ireland Bills that were terrorism and security-related were fast-tracked through both Houses. So, in a fundamentally very serious emergency situation, you can expedite fast-track primary legislation. I offer that as a suggestion to the Minister.
Lord Leong (Lab)
I thank the noble Lord for that, and I am sure the officials will have taken notice as well.
I must also highlight that, in line with the Government’s commitment to transparency and informed decision-making, proportionate impact analysis will accompany future secondary legislation. This will be prepared in accordance with the Better Regulation Framework, ensuring that Parliament has access to evidence-based assessments that support effective scrutiny.
I hope that I have been able to provide reassurance on all these matters and assure the noble Lord, Lord Sharpe, that the Government have carefully considered the importance of parliamentary scrutiny and sought to strike a careful balance in relation to emergencies. I am happy, as always, to meet the noble Lord or, for that matter, any other noble Lords to discuss with them further our approach in this area. On that basis, I ask for the amendment to be withdrawn and for the other amendments in this group not to be moved.
Baroness Brinton (LD)
I am grateful to the noble Lord, Lord Jackson, for his question because it reminded me that when all the primary and secondary legislation on Covid was going through, most of the references to “emergency” were the definition in the Civil Contingencies Act. That Act is not defined in this Bill, and “emergency” is used loosely on its own. I wonder whether there is a bear trap there. If the department means to use “emergency” in the sense of the Civil Contingencies Act, it may be better and more helpful to name it. If not, will the Minister explain why the use of the definitions in the Civil Contingencies Act are inappropriate?
Lord Leong (Lab)
My Lords, I really do not know the answer to that. Obviously I will find out and write to the noble Baroness.
Lord Leong (Lab)
I am told that we were advised by counsel that this word is more flexible to use. I do not know whether that is sufficient but perhaps we can explore that further.
Lord Sharpe of Epsom (Con)
I again thank the noble Lord, Lord Leong, for his detailed explanation. However, the fact is that that explanation and the recent comment about flexibility rather illustrate again, I am afraid, the point about the Bill. Let us go back to the DPRRC report, Democracy Denied. It states:
“Skeleton legislation signifies an exceptional shift in power from Parliament to the executive and entails the Government, in effect, asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by ministers”.
I am afraid that in spite of the noble Lord’s reassurances, that is still very much where we are.
I accept that emergencies are unpredictable. Of course they are, by their very nature: they are rare and emerging situations. But I do not accept the three months argument made by the noble Lord, which strikes me as inconsistent. Surely three months is enough to define and decide on the relative importance, scale or urgency of an emergency. I can see no reason at all why any emergency cannot be defined over the course of 12 weeks, and that would have gone for Covid as much as anything else.
There is some inconsistent logic in the Minister’s replies. I am partially reassured, and obviously some considerable thinking has gone into his replies, which I appreciate, but we will reserve the right to revisit this situation. I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“(2A) The Secretary of State may not use any powers under this Act to remove or disapply the use of the pint as a unit of measurement for alcoholic beverages sold or marketed in the United Kingdom.”Member’s explanatory statement
This amendment ensures that the pint remains an accepted unit of measurement for alcoholic beverages.
Lord Sharpe of Epsom (Con)
My Lords, Clause (5)(1) states the following:
“The Secretary of State may by regulations make provision about the units of measurement that are used to express quantities (whether of goods or other things), including provision about … (a) how units of measurement must or may be calculated or determined … (b) how units of measurement must or may be referred to”.
Subsection (2) goes on to state:
“The Secretary of State may also by regulations make provision about … (a) the quantities in which goods must or may be marketed in the United Kingdom, and (b) the units of measurement that must or may be used to express such quantities”.
Subsection (4) states:
“‘unit of measurement’ means any unit of measurement, including measurement of length, area, volume, capacity, mass, weight, time, temperature or electrical current ... ‘goods’ means tangible items”,
and
“‘quantity’ means quantity expressed by number or a unit of measurement”.
Yet again we have a set of provisions that, while seemingly innocuous, give a relevant Secretary of State incredibly wide powers to do pretty much anything they like about pretty much anything they like.
Both the noble Lords opposite will shortly argue that the Government have no plans to replace the British pint as a standard measure for beer. They are both honourable and sincere, and I believe them, but this careless drafting confers the power on a Secretary of State to do exactly that. It is not difficult to imagine some point in the future when the office of the Secretary of State is held by a metric maniac or, perhaps worse, an interfering busybody who decides that they know what is better for the health of the nation than those who make up the population of the nation. Perhaps that does not entail a metric replacement for our pint, but something even worse—for example, an Aussie schooner. With apologies to the noble Baroness, Lady Bennett, this is an abomination of a vessel that is marginally too large for a sensible sherry, but far too small for a sensible beer.
My Amendment 81 seeks to make sure that this can never happen. It will make the pint safe. It will defend a beleaguered and endangered pub industry from more punishment, and it will guarantee a fundamental tenet of our history. A pint of beer is not a bloodless “tangible item”. It is a tangible institution. It is a link to our history and a part of our heritage. It was formally adopted as a measure for beer in 1824, but was probably used well before then—who knows, maybe even by Anglo-Saxon thanes, when they were on a session in their village hall, drinking what they then called beor and no doubt wondering what to do about the dastardly Vikings. I am reliably informed that they may even have had a word used to describe this community and that is—the spelling is tricky and the pronunciation is trickier—ge beorscipe.
I encourage the Government to accept this amendment on the pint’s formal 200th anniversary. It is straightforward and simple. If they do not, we will return to the subject on Report.
Baroness Bennett of Manor Castle (GP)
My Lords, I will be brief. The main point I wish to make initially is that the next time someone complains about your Lordships’ House not giving enough time to pass important legislation, I will reference this debate. However, given the attack that we have just had on the Australian schooner, I have to point out to the noble Lord, Lord Sharpe, that it evolved organically from the community in 1930s Australia as an unofficial measure. It was a measure of change and of the grass roots making decisions for themselves.
The noble Lord may think that his amendment will save pubs in the UK. I point out to him that, in the first quarter of this year, about 80 pubs closed in England each month. That was a 56% increase on 2023. One of the things that has been suggested might be a saviour of pubs—the noble Lord might choke on his pint at this point—is that we live in a world of change, and sales of low or no alcohol beer have exploded in the past few years. It is very hard to take this amendment seriously.
Despite that, I agree with the noble Lord that there are problems with the Henry VIII nature of the Bill and the way that it allows the Government to do virtually anything. However, picking out one particular small point is not the best way to illustrate that.
Lord Hunt of Kings Heath (Lab)
My Lords, it falls to me to respond to this amendment. Unlike the noble Baroness, I think this is a very serious matter. Of course, the noble Lord, Lord Sharpe, has a track record in this area. I think the final order he laid as a Minister in the Home Office was to extend the licensing hours during the summer’s Euro 2024 tournament for football fans. I cannot believe it, but I think he said it was to
“get properly on the lash”.—[Official Report, 24/05/24; col. 1281.]
The Government are glad that his devotion to the pint continues in Opposition, despite his seeming about-turn on the appropriate use of executive powers. He may like to know that I prepared myself for this debate by sampling pints of beer in a number of hostelries and restaurants over the past few days. I am happy to confirm that I had no difficulty in ordering a pint of bitter—or, indeed, more than one pint of bitter.
The Government rejoice in the use of pints as a measurement. I am less worried about the loss of the pint than I am about the worrying news of a shortage of Guinness. Noble Lords may have seen reports in the media in the past few days that Guinness is being rationed to make sure there is enough available over the Christmas period.
I have made it quite clear that we value the pint; there will be no change. There is no question of using the Bill’s powers to do anything other than preserve the pint. The specific drafting is to allow for changes to legislation on units of measurement, but the reason is primarily to provide powers to fulfil our international obligations and keep pace with updates to the globally used international system of units.
The argument running through the whole debate is that we want flexibility in order to keep up to date with the sorts of situations that the noble Baroness, Lady Bennett, outlined earlier, or with changes happening globally. We are not using this—I do not believe any Government would use this—as a draconian effort to get rid of imperial measurements in the way the noble Lord fears. I hope he will take it from me, as the spokes- person for the Government, that the British pint is safe with us.
Lord Sharpe of Epsom (Con)
My Lords, I am delighted that the noble Lord, Lord Hunt of Kings Heath, rejoices in the pint, as do I. Of course I understand where he is coming from, but there is a serious underlying point, as pointed out by the noble Baroness, Lady Bennett: the Bill is drafted so loosely that it could be interpreted in any number of ways. I make no apology for my previous form of being on the side of the British drinker; I shall continue to maintain that. I have to say that the more I read this Bill, the more pints I need, but that is a separate issue—it is my problem, and I am dealing with it carefully.
I thank the noble Baroness, Lady Bennett, for her contribution. It seems that our brief meeting of minds a few groups ago is already over. I am not quite sure how the schooner evolved but I am not sure it was a community thing. For now, I beg leave to withdraw the amendment.
Baroness Brinton
“(3A) Regulations under this section must have regard for the impact of metrology regulations on small and medium sized enterprises.”Member’s explanatory statement
The amendment ensures that new metrology regulations under the act have regard for impacts on small and medium sized enterprises.
Baroness Brinton (LD)
My Lords, the noble Lord, Lord Fox, is unable to be in his place at this stage of the day because today’s Committee date was confirmed only after he had made an appointment that cannot be changed. On his behalf, I will speak to Amendment 82, which would ensure that new metrology regulations under the Bill have regard for impacts on small and medium-sized enterprises.
It is self-evident that the capacity of small and medium-sized businesses to process and understand regulation is many orders of magnitude different from that of large companies. That is why the Bill should explicitly consider this difference in capacity every single time a new regulation is to be tabled. How will a two-person organisation cope? What is the appropriate level of regulation? This Government say that they are about growth. SMEs are largely the engine of growth, and misplaced overregulation is a key brake on those size of companies. I hope the Minister can answer these questions. In the light of these concerns, this simple amendment calls on regulators to keep this at the front of their minds.
Lord Sharpe of Epsom (Con)
My Lords, I shall speak to Amendments 103, 104 and 104B standing in my name. I want to take a moment to emphasise the current environment in which the Bill is being debated. The timing of this amendment is critical. Consumer confidence in the UK is at a particularly low point, especially during the festive season, when retailers are hoping for a boost in their sales. As we know, this is a critical time of year for retailers. Business confidence has also hit a two-year low. That is significant, as it indicates that the very businesses that we are depending on to drive growth—the engine, in the word of the noble Baroness, Lady Brinton, driving innovation and consumer choice—are also facing significant headwinds.
More troubling is the fact that consumer confidence has dipped sharply. According to a recent survey, consumer confidence in the health of the economy fell in November. The British Retail Consortium’s sentiment monitor showed a concerning dip in consumer confidence, with the index dropping to -19, down two points from October. Consumer confidence is obviously a key driver of spending, and when confidence falls, people tighten their purses, avoid spending and delay purchases. The festive season, which should be a time of consumer optimism, is instead a time of deep uncertainty. This is a problem not just for the retail sector but for the economy as a whole, as it reflects the broader issue of economic pessimism.
At a time when confidence is fragile, we must ensure that we are not inadvertently creating barriers to consumer access, increasing costs or limiting choice. The impact of regulation on consumer choice should not be underestimated. While the intent behind product regulation is to ensure safety, fairness and transparency, we must balance this with the potential burden that such regulations may place on business and, by extension, on consumers. For example, if regulations lead to higher costs for businesses, those costs are often passed down to consumers in the form of higher prices. If businesses face a reduction in profitability, it may lead to a decrease in variety or availability of goods in the market.
Sensible product and metrology regulations are essential to protecting consumers and ensuring fairness in the market. These regulations help create a framework in which businesses can operate with transparency, consumers can have confidence in the safety and reliability of products and the economy can continue to thrive—there is no dispute about all that. However, to illustrate the importance of these regulations, I draw attention to a study from the consumer advocacy group Which? This research found that half of consumers feel that consumer protection regulations enhance their confidence in the safety of goods and services they buy. This confidence is critical in ensuring consumers feel comfortable purchasing products, but it does not just benefit consumers—it also incentivises business. When consumers trust that products are safe, businesses are encouraged to innovate and compete, creating a dynamic, thriving marketplace and, in turn, that increases the production of high-quality goods, stimulates demand and further incentivises businesses to improve products that they already produce. Business and consumer interests are not at odds; in fact, they are complementary. Overly complex regulations or regulations that unintentionally increase the cost of compliance for business could lead to a reduction in the range of products available to consumers. We must avoid creating an environment where smaller businesses cannot afford to comply with the regulations and larger companies dominate the market, reducing choice and competition.
This amendment ensures that the Government will take a careful and considered approach in monitoring the impact of the legislation on consumer choice, and the report will provide important evidence to guide future policymaking and help us to avoid any unintended negative consequences for consumers and businesses alike.
I thank the noble Baroness, Lady Lawlor, for signing my Amendment 104B. The Government have to recognise that SMEs are the backbone of our economy—I know the noble Lords opposite would agree with that. SMEs face unique challenges in comparison to larger corporations, particularly when it comes to compliance with regulations. This amendment seeks to ensure that the impact of these regulations on SMEs is properly assessed, understood and investigated and, if necessary, mitigated.
Innovation is essential to the growth of our economy, and SMEs are often at the forefront of this innovation. Complex or overbearing regulations can stifle creativity and innovation. This amendment seeks to assess whether the regulations in the Bill will help or hinder SMEs in their ability to compete in the marketplace and develop new ideas. The success of any regulatory framework depends on meaningful consultation with those it affects the most, so this amendment ensures that SMEs have a voice in the process. By engaging with representatives from the SME sector, the Government will gain valuable insights into practical challenges that SMEs face and will be able to tailor policies to better support them. I urge noble Lords to support this amendment, which will help guarantee that the regulations in the Bill are not only effective but fair, ensuring that SMEs are not unduly burdened and can continue to thrive, compete and innovate.
On page 3, paragraph 4 of the Government’s Explanatory Notes, it states:
“The Bill aims to support economic growth”.
Hence, I thought it was perfectly appropriate to introduce an amendment that requires the Secretary of State to conduct a review of the impact of this Bill on the economy, and I hope that the Ministers opposite will agree. For small and medium-sized enterprises often most affected by regulatory changes, these reviews can identify disproportionate impacts early and prompt remedial actions to mitigate harm. A structured review process provides empirical data to inform future legislative and regulatory decisions, ensuring that measures remain fit for purpose and aligned with market dynamics.
Baroness Lawlor (Con)
My Lords, I support the amendments in the name of my noble friend Lord Sharpe, to which the noble Viscount, Lord Trenchard, and I have added our names. They would ensure that in the Bill we have a statutory procedure for assessing the impact on the economy in general on consumers and the choices they have to make, and on the producers.
The Bill poses potential costs for producers, which are likely to have an impact on the economy of which they form part. Even though the general scope, as set out in Clause 1, seems sensible and reasonable and appears to reflect consumer protection arrangements which have proven their worth over decades, there is in this very slim Bill less clarity as to what the precise requirement may be, or where precisely liability for transgression lies. It is something of a leap in the dark. Lawyers will be needed to work out who exactly may be covered by the provisions, sanctions and punishments, given that the Bill will touch on many features of production and marketing, and many sorts of person will be involved in the process.
The question really is, if I am an entrepreneur or a small business innovator, do I risk my small pot of savings and those chipped in by my family to get the idea from the drawing board—possibly in the garage—off the ground, into the retail outlet and into use? Sir Hermann Hauser, the technologist and entrepreneur who set up Acorn in Cambridge, did that in the 1970s. He once told me that when you start a business like his—and most start in the garage—they do not have any money, and with what they have, they want reasonable certainty that the law will stay the same, that it will do what it says on the tin, that they can buy the stock they need for the component parts, they can use their judgment within reason about whether a product is safe, and they can take a risk. They have good arrangements for risk assessment, and our law also has pretty good arrangements, as well as for consumer protection. But if—and this is the danger of the Bill—there are open-ended powers, and there is the possibility for a regulation-mad Government to make constant changes, and if, as I have spoken about before, so I will not come back to it, EU law, which is based on the precautionary principle, is mirrored or otherwise imposed, we will be causing greater uncertainty and there will be a greater possibility of costs and of lost stock, because it goes out of date. Such people will also not have time to develop their product properly, bring it to market and make a profit. They may go bankrupt, thanks to a raft of new provisions and new uncertainties.
These three amendments—Amendment 103, on consumer choice and an impact assessment; Amendment 104, on an impact assessment on the whole economy; and Amendment 104B, on an impact assessment on SMEs to be laid before both Houses of Parliament within six months—will help us find out exactly what the impact of these rules are, even if we do not know what they will be when we set out on this road. Successful businesses—small, medium and big—and the consumers who buy their products and services, both in this country and overseas, are the beating heart of our economic life. If businesses are to flourish, the rules need to be clear from the start. Compliance needs to be affordable and the rules must encourage innovation, entrepreneurship and risk-taking.
Most businesses in this country are small—there are 5.51 million of them, as we have heard—with zero to 49 employees. There are only 40,000 businesses that count as medium-sized, with 50 to 250 employees. These small and medium-sized businesses provide most of the employment of people, but the vast majority of them—3.1 million—are sole traders. November’s House of Commons analysis, which is the most up-to-date analysis that I have found, gives the figures, with SMEs accounting for 99% of the business population, providing 60% of UK employment and 48% of business turnover. As the noble Baroness, Lady Brinton, pointed out, they are far less able to bear the costs of the regulatory steamroller that may face us. This is one of the big problems that we hear about all the time from small producers and entrepreneurs: the costs of compliance and of dealing with the uncertainties this brings in. Even the bigger businesses, which provide 40% of the jobs and almost half the turnover, also have to pay—I was told by an NHS trust—almost 18% of their overheads.
Whether or not this Bill directly affects the product market—it does—or the service market, we are a service economy. This is a product regulation Bill, but most services use products. Let us take the hospitality trade: it needs to buy products to ply its trade and make money. Cabbies need to buy cars. Every single service—except financial services, perhaps, which is indirectly affected—will be affected by this Bill. It will have a very big impact on the whole economy. If we price risk-taking and innovation out of the product market, on top of the costs of employment—including through higher tax and higher employees’ NICs—UK small businesses will shrink or close. Jobs will be lost. We shall go the way the French went, with their high- tax protectionist model and a centralised structure in which the small challenger is driven out of the game—and with it, the hope of keeping a competitive economy open to new entrants. That is what has happened in France in the post-war years and is now cast in stone by the EU model, with ever bigger national, transnational or multinational corporations having a monopoly and driving up prices for the consumer while driving choices down.
I fear that this is an alien model to our market economy of competitive small businesses that can have a go without fear or favour under the protection of good law. We cannot afford to lose jobs or businesses and raise prices. Our productivity in GDP per hour is already lower than that of our most similar G7 neighbours, France and Germany. I am sorry that this figure is in dollars, although I am sure that noble Lords are very dollar literate: they earn $92 and $95 respectively per hour, while we earn only $79 per hour. If the Government want higher productivity and higher growth, they need simpler and clearer rule books; I must add that that will not happen by mimicking Brussels’ notorious system, whether it is an imported version or a home-based mirror image of what goes on over there.
Lord Leong (Lab)
My Lords, I thank all noble Lords and noble Baronesses for their contributions in the debate on this grouping of amendments; in particular, I thank the noble Lords, Lord Fox and Lord Sharpe, for their amendments. This Government are committed to supporting businesses as we get the UK economy growing.
I begin with Amendment 82 in the name of the noble Lord, Lord Fox, which was moved by the noble Baroness, Lady Brinton. He specifies that regulations made under Clause 5 of the Bill
“must have regard for the impact of metrology regulations on small and medium sized enterprises”.
The noble Lord has also proposed the publishing of impact assessments of affirmative regulations, to be laid every six months after the Bill’s implementation.
Similarly, Amendments 103 and 104 in the name of the noble Lord, Lord Sharpe, propose publishing a report assessing the Bill’s impact on consumer choice 12 months after the Bill is passed, as well as another report every two years on the economic impacts of the Bill. The noble Lord’s Amendment 104B would further require the Secretary of State to present a report to Parliament detailing the impact of regulations made under the Bill’s powers on SMEs.
I am happy to confirm that the impact of any new regulations will be fully considered through the development of proportionate impact analysis. As I said before, the Better Regulation Framework is the system that government uses to manage the flow of regulation and understand its impacts, including on SMEs and micro-businesses. On 7 December, the Government launched their new Business Growth Service to ensure that it is easier for SMEs to find government advice and support, giving them more time and money.
In line with the Better Regulation Framework, for regulations where significant impacts—above £10 million per year—are anticipated, full impact assessments will be published. For regulations with lower anticipated impacts, a proportionate assessment impact analysis will be completed. These assessments will, as a matter of course, consider the impacts of regulations on SMEs. Furthermore, officials currently routinely engage with SMEs and stakeholders to shape policy, including in the light of emerging technological and industry developments, and to identify and address any disproportionate burdens. The OPSS regularly engages with a small business panel as part of policy development.
I hope that this confirmation provides reassurance to the noble Baroness, Lady Brinton, and the noble Lord, Lord Sharpe, on this important area, and I am grateful to them for raising it today. The Government remain committed to supporting SMEs and recognise the vital role they play in the UK economy. As such, the Bill will allow the Government to update product and metrology regulation to avoid extra cost to business and provide continued regulatory stability. It will also allow the Government to end recognition of EU requirements where this is in the interests of businesses and consumers. The Bill will enable the Government to introduce proportionate product safety requirements that protect consumers and create a fairer playing field for law-abiding businesses.
As some noble Lords will know, before I came to this place I was a serial entrepreneur all my working life. I understand how micro-businesses and SMEs work. SMEs spend most of their time creating and growing the business. They do not want additional costs or regulations impacting their business. Having said that, all that businesses want is a level playing field where they know the rules of the game and what regulations are in place. Imposing additional regulation is not the intention of this Government. We are constantly consulting SMEs to ensure that, whatever regulation is in place, it does not impact SMEs and micro-businesses.
As I said, growth is the Government’s number one priority. On 14 October, we published a Green Paper, Invest 2035, setting out a credible 10-year plan to deliver the certainty and stability that businesses need to invest in the high-growth sectors that will drive our growth mission. This industrial strategy will create a pro-business environment and support high-potential sectors and clusters across the country. By giving the UK the flexibility to adapt its own regulatory framework to keep pace with international regulatory developments and respond to global trends, the Bill supports economic growth and innovation.
This flexibility ensures that the Bill supports economic growth—as I mentioned—reduces unnecessary regulatory burdens and ultimately benefits businesses, including micro-businesses and SMEs. However, introducing a statutory reporting obligation would risk duplicating existing processes, diverting resources and delaying the implementation of timely and effective regulations that provide businesses and consumers with the certainty they need.
I am sure that many noble Lords know that the EU’s general product safety regulation comes into force this Friday 13 December. Under the terms of the Windsor Framework between the UK and the EU, we have to apply it in Northern Ireland, so we will publish on the Government’s website clear guidance to SMEs that want to export to Northern Ireland and the EU. We will prepare a statutory instrument to implement a new enforcement regime in Northern Ireland to allow this GPSR to be enforced. This is a requirement of the Windsor Framework.
I mention this to show that there are regulations that SMEs have to abide by—this is one of them—that will impose a certain amount of burden on SMEs, especially in the run-up to Christmas. Many small businesses will now find it very difficult to export to Northern Ireland and Europe if they do not have a legal representative in the country to verify their goods.
As I have outlined, I believe that the very laudable sentiment behind these amendments is already covered by existing practice, so I ask noble Lords not to press them.
Baroness Brinton (LD)
I am grateful to the speakers in this debate and to the noble Lord, Lord Sharpe, for his Amendments 103, 104 and 104B. They aim, I think, to achieve the same objective as Amendment 82 in the name of the noble Lord, Lord Fox, but in more detail.
I am with the Minister—I thank him for his response —in saying that more paperwork and more regulation is not what we on these Benches wanted to achieve in Amendment 82, which is why it says that any regulations “must have regard for”. I hope that the Minister will take that on board. I want to ask him something; perhaps he might write to me, if he intends to write anyway. He kindly talked about the different types of impact assessment, including whether they would be full or proportionate. We completely understand that those would happen, but will those impact assessments specifically highlight SMEs? In other words, will an untutored eye flicking through see “effect on SMEs” in bold, and then something underneath it? I am seeing nods from the Minister, and I look forward to his letter.
I am glad that the Minister raised the extra burdens on firms either selling into Northern Ireland or the reverse. It is not just about that: over the last few years, we have seen very small businesses having sometimes to double the number of their administrative staff to cope with, for example, things such as music groups touring across Europe. The objective has to be keep that paperwork down as much as possible. Obviously, I will confer with my noble friend Lord Fox, and I look forward to the Minister’s letter. We may return with this later.
Lord Leong (Lab)
Before the noble Baroness withdraws, I can confirm that, when we do the impact assessment, we take SMEs into consideration as well.
Lord Foster of Bath
“(d) coroners, medical examiners or procurators fiscal investigating the causes of deaths in England, Wales, Scotland or Northern Ireland,(e) the Office for National Statistics, National Records of Scotland or the Northern Ireland Statistics and Research Agency,(f) bodies designated to make super-complaints on behalf of consumers pursuant to section 11 of the Enterprise Act 2002 (super-complaints to OFT),(g) NHS England,(h) the Royal College of Emergency Medicine,(i) other bodies specified by the Secretary of State which play a role in representing the public interest in relation to reducing the risks presented by products,(j) persons conducting academic research into the extent, causes or reduction of harm arising from or potentially associated with the use of products, or(k) bodies or persons performing roles comparable to those in paragraphs (a) to (h) in this subsection in the European Union, OECD or individual member states of either of those organisations.”Member’s explanatory statement
The amendment ensures that the information sharing provisions of the Act apply to more bodies responsible for investigating harms and deaths caused by products.
Lord Foster of Bath (LD)
My Lords, I am extremely conscious that I will not excite your Lordships as much as our earlier debate on pints did. Nevertheless, I rise to move Amendment 106 on my noble friend Lord Fox’s behalf, and I will also speak to my Amendment 108. Both relate to issues arising out of Clause 7, which is about information sharing. Clause 7(1) enables the making of product regulations or metrology regulations permitting the sharing of information between persons who are specified later on in Clause 7(2). Those persons who can share information are described in, frankly, incredibly general terms:
“another relevant authority … the emergency services, or … a person specified, or of a description specified, in product regulations or metrology regulations”.
My noble friend’s amendment provides a list of additional persons and bodies that should be specified in relevant subsequent regulations, not least those persons or bodies responsible for investigating harms and deaths caused by products. The list of proposed additions is not, of course, exhaustive. After all, the Bill permits others to be added—but by adding the basic cadre of persons or organisations, we can ensure a healthy flow of information between relevant bodies to help develop future regulations.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the noble Lord, Lord Foster, for introducing these two amendments. Amendment 106 is in the name of the noble Lord, Lord Fox. It is vital to ensure that, as the noble Lord, Lord Foster, explained, a broader range of organisations, such as coroners, NHS bodies, statistical agencies and researchers, can access and share information to investigate and reduce harms caused by products. By involving expert groups and their international counterparts, we would strengthen our ability to identify risks, protect public health and ensure evidence-based action. It is a forward-thinking addition that ensures we leave no stone unturned in safeguarding public welfare.
Amendment 108 is an important and well-balanced safeguard for preserving essential legal protections. It provides clarity and fairness by ensuring that information requirements under the product and metrology regulations are not overly burdensome or unjustly intrusive. The careful limitations on when information can be disclosed and used as evidence reflect a thoughtful approach to balancing the need for enforcement with respect for due process. That contributes to a more trustworthy and transparent regulatory system, where both the public and those under investigation can have confidence in the fairness and integrity of the process. I look forward to hearing the Government’s answers, but these Benches give a guarded welcome to both amendments.
Lord Hunt of Kings Heath (Lab)
My Lords, I thank the noble Lord, Lord Foster, for introducing the amendment from the noble Lord, Lord Fox, which seeks, as he said, to introduce a list of bodies that can be subject to information-sharing obligations. I also thank the noble Lord for his comprehensive and detailed Amendment 108 and his consideration of the Bill.
I take both these amendments very seriously; these are clearly important and interesting points on the limits and scope of information sharing. I assure the noble Lord that I will reflect very carefully on what he said. Over the past few years, your Lordships’ House has debated information sharing and risks to personal information, and the noble Baroness, Lady Brinton, has taken part in those debates. There is a difficult balance to be drawn between the benefits you can get and the risks, and we are trying to test that all the time in order to get the balance right.
The noble Lord argued that we need to include a wider range of organisations in the Bill. He was very careful not to be exclusive, because he anticipated that I would come in with the list defence. I need to look into the Enterprise Act further, if the noble Lord will let me write to him on that issue.
I certainly agree with the sentiment behind the amendments. With this Bill we are clearly trying to ensure that consumers are protected from any harm caused by unsafe or non-compliant products. In a consumer world that is always evolving—it seems to be evolving faster and faster—and where new products are being traded increasingly easily, regulatory authorities need to be able to marshal relevant data and information that may provide crucial evidence of certain product-related issues. Where such issues come within the terms of the Bill, we want to encourage the sharing of appropriate information.
On the other hand, there must be appropriate safeguards about sharing information. The noble Lord mentioned the word “guard-rails”. He was not running two horses; he was reflecting the tension there is and trying to find a way through, for which I applaud him very much. He mentioned the coroner. One of the coroner’s duties is to issue a prevention of future deaths report to related relevant persons, which may well include government bodies. We know that this data sharing can lead to important interventions.
We think that regulations proposed under the Bill will allow public health agencies such as the NHS to share data recorded in the course of their activities that relates to injuries caused by products. I have taken part in previous debates on the importance of this and of the NHS having the information and the registries that enable it to happen. There is a contrast between, say, supermarkets, which, when a product is found to be defective seem able to identify it very easily, and a service such as the NHS, where sometimes, as we have seen in the past, there are real issues around the ability to trace patients and the product. Clearly, this is a vital area in terms of safety. I refer to the report of the noble Baroness, Lady Cumberlege, First Do No Harm, in relation to pelvic mesh, for instance. She clearly identified the need to grip this issue.
It is very important that health bodies do the right thing here, but we think the Bill enables greater sharing of relevant data between public authorities, including emergency service authorities. That will bring more public agencies, including emergency services, within the scope of data-sharing agreements and schemes. We think that regulators need to take a co-ordinated approach to incidents to prevent future harm. However, we are wary of mandating reporting requirements. Going back to the previous debate—I see the noble Baroness there—clearly, more onerous reporting requirements can increase cost and resource burdens for those submitting information, so we need a targeted and efficient approach in this area.
In the normal course of creating such information-sharing obligations, and in relation to the noble Lord’s proposed new subsections (1) to (5), the regulations will state the general power “to share information between ‘x’ and ‘y’ for ‘z’ purpose”, for example. Clause 7(5)—here is the guard-rail—already provides that it will not override the UK general data protection regulations, and Article 9 of the Bill of Rights will apply to prevent a court from compelling information provided to Parliament.
The regulations will also set out any further safeguards that will apply to the information-sharing provisions, tailored to the circumstances envisaged in the regulations. In the context of a discretionary power to share information, for instance, there would be no need to exclude self-incriminating evidence.
Clearly, the UK GDPR provides stringent data-sharing safeguards that require individual consent to share personal data with third parties—as I have already mentioned, that is in Clause 7(5)—but the GDPR allows data sharing where there is a legal basis to do so. The Bill will not contravene that important legislation. We want data to be shared where it will enhance the intentions in the Bill, but we do not want to undermine the necessary protections in the GDPR legislation for information held about individuals.
We hope that we have the balance right, but we will take away the noble Lord’s comments, because this needs careful consideration. It has been very helpful to have this debate and try to tease these issues out.
Lord Foster of Bath (LD)
My Lords, I am enormously grateful that the noble Lord, Lord Sharpe, rather surprised me in seeming more excited by these amendments, in view of my earlier comments about beer, than I had expected. I am grateful for that, but I am particularly grateful for the very thoughtful response of the Minister. I am pleased that he thought I had made important and interesting points and by his promise to reflect on them. Just like the noble Lord, Lord Holmes, it looks like I may be getting a letter or a Christmas card—
Lord Foster of Bath (LD)
I am not sure which it was: the letter or the Christmas card.
Lord Foster of Bath (LD)
Time is not on our side—but it would be very helpful if, in his response, he could look at the issue of the definition of, for example, emergency services, and pick up my point about others. Could he also look very carefully at what he said, when he chose the example of coroners? Because of the work I do in relation to gambling, I am conscious that I very often say in speeches about it that there is well over one gambling-related suicide every day. The latest estimate is that over 400 a year take place. Our difficulty is that, unless we have information from coroners about causes of death, it is very difficult to build up the pattern. That is why coroners were included. Finally, he talked about GDPR, and the Bill itself refers to data protection legislation, as it puts it, but he did not make any specific comments about my concern about Part 9 of the Enterprise Act 2002.
Lord Hunt of Kings Heath (Lab)
I think I did say that we wanted to have a look at that and will come to him on it.
Lord Foster of Bath (LD)
I am grateful for that, and hope that, too, will therefore be included in the letter. With those remarks, particularly to say thank you to the Minister for his very thoughtful response, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member's explanatory statement
This amendment prevents the repeal of provisions made by Parts 2, 4 and 5 of the Consumer Protection Act 1987.
Lord Sharpe of Epsom (Con)
My Lords, I shall speak to Amendments 110, 111 and 112, standing in my name. Clause 9 is a skeleton clause, as has been pointed out by the DPRRC, which recommended its removal—a point that may have been made a few times over the course of this Committee, often by me. In giving this degree of power to repeal existing legislation around consumer protection and metrology regulations by negative procedure, the Government have argued that aspects of the regulatory regime may need to be updated swiftly and frequently. However, they have failed to explain why they should be done with little scrutiny. In their response to the DPRRC, they suggested that it is because existing legislation has proven ineffective at times. The most recent consultation on the Bill suggested that 87% of respondents supported reviewing inspection powers, but it is one thing to review powers and another to have the power to completely repeal existing legislation and replace it with whatever an undefined—that word again—relevant authority feels is necessary.
I am very grateful to my noble friend Lord Lansley for his thoughts on Amendment 110. He is not in his place but I wish him a happy birthday, as I am sure most Members of the Committee do too. I am very grateful for his opinions, some of which I am incorporating in my next remarks. On Amendment 110, he pointed out that the Government are proposing to take the power to repeal Part 2 of the Consumer Protection Act 1987. If they were to do so, we would lose Section 2, which sets out primarily that the Secretary of State may make regulations for the purpose of securing goods that are safe. We would also lose Section 19, which defines “safe”. Section 19(1)(c) includes that “safe” means,
“there is no risk, or no risk apart from one reduced to a minimum, that … the keeping, use or consumption of the goods”
will
“cause the death of, or any personal injury to, any person”,
and that “unsafe” should be “construed accordingly”. The Bill does not make the equivalent provision: “reducing or mitigating risks” in Clause 1 is lesser than “safe” as defined, and the 1987 legislation has a long history of implementation, interpretation and enforcement.
At this late stage of the Bill, the question is: is it His Majesty’s Government’s intention to repeal Sections 2 and 19 of the Consumer Protection Act 1987? If it is not, we can assess the overall legislative framework which will result. If it is, we will need to revisit this issue when looking again at the purpose of the Bill. If His Majesty’s Government say they will decide later and seek to avoid overlap, we should again look at how this Bill and how the Consumer Protection Act 1987 may overlap, and consider whether the continuation of a defined requirement for safe products should be included in the Bill.
The other two amendments follow a very similar vein. I think I have said enough, and I beg to move.
Baroness Lawlor (Con)
My Lords, briefly, I support this. It is important that we do not give the Minister powers to repeal one of the best-known Acts, which many consumers in this country have had experience of. We all know it is a flagship Act, and it has been proven in the decades since 1987.
I strongly support my noble friend’s proposals to remove the concern about giving the Government the power to do away with these protections which are in those sections of the Act. The meaning of “safety” is particularly relevant and needs to be very clear for businesses and consumers alike. Were we to go along this route, heaven knows what a Government could do. It is wrong for this House to allow that to happen; it is constitutionally out of order that such a well-known piece of legislation—which is so important to our economy and those who make our economy—can be done away with using sleight of hand and without any proper scrutiny or discussion.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord and the noble Baroness, but I disagree with her. From the debates we have already had, there is a recognition that what businesses need is certainty and for government to move quickly when it is clear that action needs to be taken to protect the consumer and the other aims of the Bill.
I accept that there has been criticism by your Lordships’ Select Committees and by noble Lords here about the skeletal nature of the Bill, but the point is that we need flexibility to keep pace with fast movement in this consumer area. That is the reason why the Bill is constructed the way it is. I will come on to the Consumer Protection Act, but I hope I can reassure noble Lords on that.
The Government are of course looking very carefully at the reports of both the Delegated Powers Committee and the Constitution Committee and we are reflecting on them. Clearly, as I have said, we are trying to get the right balance between proper parliamentary accountability and the need for flexibility and clarity for all the people affected by the legislation. For instance, in Clause 9 itself, subsection (4) enables us to make minor technical adjustments to ensure coherence across the legislative framework without the need to introduce separate primary legislation for every amendment. I have to say that a general consequential power is typical and required to keep the law functional. If you remove that power, it would mean new primary legislation for adjustments that are primarily procedural or corrective in nature.
Also, the Bill includes safeguards to ensure that the use of the Clause 9 powers is proportionate and justified, with changes to primary legislation subject to the affirmative procedure. Of course, this means debates in both Houses.
As far as the Consumer Protection Act 1987 is concerned, I of course accept the importance of that legislation. As noble Lords will know, Part II of that Act grants powers to the Secretary of State to make regulations to ensure the safety of products, but the powers in Clauses 1 and 2 are intended to replace those powers. So, when product regulations are made under this Bill, it may be appropriate to repeal any or all of Part II of that Act in order to avoid duplication.
Likewise, Part IV of that Act sets out provision for the enforcement of regulations made under Part II. So, because the Bill includes provision in Clause 3 relating to the enforcement of product regulations made under this Bill, it may be appropriate to repeal any or all of Part IV of that Act when new product regulations are made. Included here are the powers for enforcement authorities to investigate and seize goods that have not yet reached the market and the power for customs officers to detain goods.
Part V of the Consumer Protection Act contains miscellaneous and supplemental provisions that may also require amendment when new regulations are introduced. There is no attempt here, nor any desire on the part of the Government, to undermine the Act fundamentally. We simply have to make adjustments in the light of this legislation.
I have listened to the noble Lord and the noble Baroness. As I say, we are considering very carefully the reports of those two Select Committees; clearly, we will reflect on them between now and Report.
Lord Sharpe of Epsom (Con)
I am, obviously, grateful to the Minister for that reassurance because, as he acknowledged, the committees’ reports are incredibly powerful and make some extremely good points.
With regard to the specifics, I thank the Minister. We agree on much. Businesses want certainty but they have certainty under the existing legislation, of course, which is the point of the amendments I have laid. I agree on flexibility as well but, unfortunately, “flexibility” is a word that allows a reasonably flexible definition. That is the point we seek to make here: we need to clarify this in a way that affords businesses a much more rigorously defined definition of “flexibility”.
As the Minister pointed out, businesses crave a degree of certainty, but the existing legislation is perfectly functional and has been for a long time. They have that certainty now, so I think that the Government need to justify why, in our view, they seeking to weaken that certainty.
For now, I beg leave to withdraw my amendment. I very much look forward to hearing what the Government have to say when they have considered the reports and, perhaps, to having further conversations ahead of Report.
Lord Liddle
“7A Products and equipment for use in civil aviation.”Member's explanatory statement
This amendment is intended to probe the Government’s position regarding the use of the powers in the Bill to regulate products used in civil aviation.
Lord Liddle (Lab)
My Lords, it is not my intention to delay the conclusion of this very exhaustive and thorough Committee for very long. I will only take a minute. Some noble Lords will be aware that before the election I covered transport from the Opposition Front Bench. One of the issues that has come up is how the regulation here proposed by the Department for Business and Trade relates to the existing regulatory framework for aircraft, which comes under the Department for Transport.
I am sure that this matter can be sorted out without too much problem through extensive departmental conversations. We are glad that aircraft, which are regulated very strictly and with heavy international content—it is basically an international issue—are excluded by the Schedule. However, it is possible there may be some confusion created unless the definition of aircraft is more broadly defined.
My proposal, which is purely a test—I am not saying that it is perfect by any means—is that the Government take a look at the question of products and equipment for use in civil aviation, which is broader than aircraft themselves, think about this and come back on Report with a view. With that, I move my amendment.
Lord Leong (Lab)
My Lords, I thank my noble friend Lord Liddle for his amendment in this final group in the Committee on this Bill. He raises a very interesting point. I will start by briefly explaining the operation of the Schedule of the Bill. Noble Lords will appreciate that the Bill’s definitions have been drafted to capture the range of products covered by existing regulations. This means that the Bill needs to cover products as diverse as toys, cosmetics, fireworks, lifts and pieces of heavy engineering. The Bill therefore defines a product as
“a tangible item that results from a method of production”.
To place some limitation on this scope, the Schedule lists some exclusions. These refer to certain products that do not require coverage by this Bill because, for example, they are regulated by separate legislation. The Schedule includes an exclusion for aircraft. The noble Lord’s amendment would widen this exclusion to include all products and equipment intended for use in civil aviation.
As my noble friend has said, product regulation is not always as clear-cut as that. Many sectors have products feeding into them that span other sectors. Aviation is an important and complicated field when it comes to safety. It is right that there is an extensive suite of existing legislation, overseen by the Department for Transport, that covers that. It is not the Government’s intention to create any confusing parallel structure of regulation.
However, we need to ensure that, by excluding a wider range of products that can be used in aviation, we do not accidentally exclude dual-use products that might also need to be captured by this Bill. It cannot be the case that a manufacturer or other supplier can evade regulation on the grounds that, as well as supplying consumers, they also supply the aviation industry. My noble friend has raised an important and nuanced issue. Aviation safety is a serious matter. The Government will definitely reflect on this matter, and I am happy to have discussions with my noble friend before Report.
As this is the last group in our consideration of the Bill in Committee, I would like to express my thanks to all noble Lords for their thoughtful and constructive contribution during this stage of the scrutiny of the Bill. I would also like to thank my officials and all the staff here in the House, including the clerks, Hansard and the doorkeepers, for ensuring that the Committee has run as seamlessly as possible.
As I have said many times during today’s debate, the Government have valued the debates we have had, and the issues raised by all noble Lords. We have heard, clearly and loudly, the mood of the Committee on a number of areas. I can assure noble Lords that the Government will carefully reflect on all concerns. I give an undertaking that I will come back to noble Lords on these issues.
I look forward to continuing my constructive conversations with noble Lords as we approach Report to ensure that this important Bill is suitable to deliver the policy objectives that many in the debates have outlined their support of. With that said—and to ensure that noble Lords are not totally surprised—I would like to end on a familiar note and ask that Amendment 134 be withdrawn.
Lord Liddle (Lab)
My Lords, I am happy for Amendment 134 to be withdrawn. I am very grateful for the assurances the Minister has given me that this will be a matter subject to further consideration.