Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019
(5 years, 2 months ago)
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Lord Henley
That the Grand Committee do consider the Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
While we believe, as we have said on many occasions, that a deal with the EU is in our mutual interest, it would be irresponsible at this stage not to make appropriate plans for a no deal situation. This draft instrument ensures that in such a scenario our ecodesign and energy labelling legislation will continue to function effectively. It provides business and the public with the certainty they need.
Before I talk specifically about this instrument, it may be helpful if I speak briefly about the current EU framework for ecodesign and energy labelling. In recent years, the EU has introduced a suite of product-specific regulations through the ecodesign directive and the energy labelling regulations framework. The EU ecodesign regulations are about minimising the costs and environmental impact of products used in both homes and businesses by setting minimum performance requirements. Energy labelling regulations are about empowering consumers to make informed purchasing decisions through energy labels.
Both ecodesign and energy labelling regulations agreed to date will save household consumers around £100 on their annual energy bills in 2020, and, just as importantly, lead to greenhouse gas emissions savings of 8 million tonnes of CO2 in 2020. As well as bolstering our commitment to reduce carbon emissions, the policy also serves a purpose for industry. Setting minimum performance requirements can help to drive innovation and increase the competitiveness of businesses, in line with our industrial strategy.
This brings me on to the instrument being debated today. Using the power in the withdrawal Act, this instrument amends EU retained law to ensure that the ecodesign and energy labelling regime remains operable in the event of a no-deal outcome.
I will turn now to the amendments. The instrument replaces references to the “Union market” with the “UK market”, so that ecodesign and labelling requirements continue to apply to the UK market after exit. This amendment is essential so as to prevent less efficient and more polluting products being placed on the UK market. It also gives the Secretary of State the power, currently held by the Commission, to lay ecodesign and energy labelling product-specific regulations. As set out in the Clean Growth Strategy, this power will be exercised to,
“keep step with equivalent standards wherever possible and appropriate, or even exceed them where it is in the UK’s interest to do so”.
The instrument removes the requirement for suppliers placing products on the UK market to enter product information into the EU product database, a new EU online portal, live since January, where market surveillance authorities—the Office for Product Safety and Standards for the UK—can view information uploaded by suppliers. Instead, the market surveillance authority will be able to request technical product information, as it does now, directly from suppliers.
The next three amendments relate to changes the Government are making to the trading of goods subject to EU-wide product-specific rules. They are not specific to this instrument. One of these changes pertains to the conformity assessment of goods to ensure they meet relevant requirements. After exit, products needing to be assessed by a third party in order to show compliance with UK legal requirements will be assessed by UK “approved bodies”. This replaces the pre-exit requirement to use an EU “notified body”. To minimise disruption, however, businesses will for a time-limited period be able to continue using EU notified bodies when selling their goods to the UK after exit.
After exit, a new UK marking will need to be affixed to products for the UK market to indicate conformity with UK requirements. This will replace the CE marking which indicates conformity with EU requirements. To ensure continuity, most manufacturers will still be able to use the CE marking for the UK market. This is intended to be for a time-limited period.
The last of these changes relates to testing standards used for the verification of compliance of products with legal requirements. The current list of EU “harmonised standards” will be carried across but renamed for the UK as “designated standards”.
Finally, this instrument makes minor changes to ensure market surveillance can carry out its enforcement activities with regards to the labelling of household lamps and electric ovens. These are routine changes not related to exit.
In conclusion, these regulations are an appropriate and necessary use of the powers of the withdrawal Act and will maximise continuity in our ecodesign and energy labelling regulations as we leave the EU. I commend the regulations to the Committee and I beg to move.
Lord Teverson (LD)
My Lords, perhaps I will be more positive about these regulations and make the Minister feel better. I very much welcome the tone of the Explanatory Memorandum and its emphasis on the benefits of energy efficiency, which is clearly one of the least costly and most effective ways to reduce our carbon footprint. In fact, energy efficiency is one of the reasons why although energy prices have gone up, energy bills for households have gone down. This time, the irony is on not the Government but the broader British media because the famous Brussels-regulations-related vacuum cleaner efficiency scandal foisted on British citizens by the tabloids will remain. I welcome those product standards coming across.
My question are quite practical. I think that the Minister went through this, but who will police or register this matter and what will the additional cost of that be? Secondly, and perhaps more importantly, who will hold the register? Is the IT for that complete? How will what is on the European Union register get on to the UK register? That covers a series of intellectual property rights issues. We came across this with the REACH chemicals database: you cannot just copy this information across. How can we have a robust system that works in this regard? Without that, this scheme cannot work.
I understand the Minister’s point about continuing labels for a while but, more importantly, will it be legal to sell all the electric appliances covered by this SI in our home market from the point of our departure? I want to understand whether the preparation in those technical areas is right and things will work. Legislation is great but if it cannot work, even passing these regulations is not a lot of use.
Lord McNicol of West Kilbride (Lab)
My Lords, again, I am standing in for my noble friend Lord Grantchester so I apologise to my team in the Box if I do not get the language quite right. I spent time going through the regulations. The SI is quite a tome. I feel as if it covers more than just one issue and a number of SIs have been merged together.
I start with a point about no deal because large swathes of the SI cover that scenario. I know that it also covers what will be needed if there is a deal, but the parts of the SI covering a no-deal scenario would not be needed if the Government agreed with us and ruled out a no-deal Brexit. That would save so much effort, energy, time and money.
Looking at the specifics, like the noble Lord, Lord Teverson, I have a number of questions flowing from the draft SI. I want to work through those issues, some of which are technical and some of which are a bit wider than that.
The Secondary Legislation Scrutiny Committee declared the draft SI of interest to the House. I am sure that it will be scrutinised further after today. One of the big themes that came through—and one of my concerns—is about the powers that would be moved to the Secretary of State. There are a number of issues around that. The Minister said that these powers are about protecting and preserving the current standards, possibly increasing and building on them, but I do not see that in the language of the draft SI. Part of it says that the Secretary of State will,
“implement the strategy set out on page 44 of the Clean Growth Strategy which is to ‘keep step with equivalent standards [after exit]’”—
but then, “wherever possible and appropriate”. My reading of those words leads me to believe that the Secretary of State may not decide that keeping a level playing field or keeping the standards at a specific level is possible or appropriate, so those standards could dip. A bit of clarification from the Minister would be very helpful.
As has been touched on, the instrument also creates a stand-alone UK regime for third-party product verification, to be established in further detail in later SIs. Can the Minister assure us that these SIs will deal with that under the “made affirmative” procedure rather than the negative one? The text of the instrument is far longer than most, running to more than 80 pages; the five quite distinct schedules and areas contained in it could and should have been separated into separate SIs.
The Government have also chosen not to produce an impact assessment since, as they say, there will be “no imminent change”. Can the Minister clarify what this means? Are we talking about a week, a month or a year? As has been mentioned, there are financial, operational, organisational and oversight issues involved in setting up new bodies.
On page 7, paragraph (7) of proposed new Regulation 2A states:
“Where the Secretary of State removes the reference to a standard from publication, that standard is no longer a designated standard”.
Does this mean that the standard no longer exists in that area? If so, does that raise any implications or concerns?
The noble Lord, Lord Teverson, asked how other bodies would be constituted and what consideration was given to them. I look forward to the Minister’s response to that. On page 11, paragraph (4)(a) of proposed new Regulation 22 says that the Secretary of State must,
“consider the life cycle of the product and all its significant environmental aspects, including its energy efficiency, and the feasibility of their improvement”,
and paragraph (4)(f) says that they must,
“consult on the draft implementing measure”.
I seek clarification from the Minister on which bodies and organisations would be consulted on the draft measures. This would be helpful for the future.
Lord Henley
I am very grateful to the noble Lord for ending on a positive note. I think I can say—I will write to him if I am wrong—that any further SIs will be affirmative. It is important to make a distinction between affirmative and negative orders. The noble Lord will know that, whenever legislation goes through, Governments of whatever political persuasion are often tempted to make some small concessions by offering to turn a negative order into an affirmative one. Oppositions often push for this, thinking that they have achieved some great victory. I have certainly done it in opposition. We then very often burden both Houses with some unnecessary affirmative orders. In the past, I can think of a large number of affirmative paralytic shellfish orders that kept littering the Order Paper. I cannot remember what they were about, but they would probably have been far better left as negative. I can see a Minister at some point making some generous gesture in the course of the Committee on a Bill to suit some Opposition of whatever colour. As far as I know, the orders will be affirmative. If, inappropriately, we try to make them negative, I am sure that the appropriate committees, chaired by the noble Lord, Lord Cunningham, and others, will correct us.
I briefly—but not completely—apologise for the size of the regulations. Rather rashly, I am tempted to say, “You ain’t seen nothing yet”. Speaking more honestly and frankly, very often, it makes life more convenient for the users if we put everything into one instrument. We get a better end product. The noble Lord is exactly correct in saying that this one is 81 pages long. There are a further few pages of the Explanatory Memorandum. To have to repeat this debate five times with five instruments—five into 80—might be a less satisfactory process. So I do not really apologise; I think this is the appropriate way of getting these things done.
I say the same to the noble Lord, Lord Teverson, who at least welcomed the tone of the Explanatory Memorandum. He told us just how much actions of this sort—even with rising electricity costs—could reduce one’s electricity bills.
I suggest another mechanism: to get one’s children out of the house, which happens when they get to a certain age. The noble Lord, Lord McNicol, shakes his head, but I think the noble Lord, Lord Teverson, knows exactly what I am talking about.
Lord Teverson
I agree, in that my wife’s 40 year-old daughter has just left the house to move elsewhere, so that is a very appropriate comment and I look forward to the reduction in my electricity bill.
Lord Henley
I was not thinking of those who had reached the maturity of 40; I was thinking of the somewhat younger ones who, despite their extraordinarily green credentials, take a slightly less purist approach to turning off lights and other procedure.
I shall deal quickly with some of the questions. On the impact assessment, I assure the noble Lord, Lord McNicol, that the instrument’s impact was assessed at below the annual cost of £5 million, which was why a full impact assessment was not required, but a de minimis impact analysis was undertaken to reach this conclusion and, in doing so, the department followed the guidance, so we are happy about that.
On consultation, I assure both noble Lords that we worked very closely with the industry and other organisations, meeting them and keeping them up-to-date via email. Last summer, officials met all the appropriate trade bodies to consult them. Views were sought on the proposal to keep the design of the energy label, remove obligations in relation to the EU product database and retain the legislative functions carried out by the Commission for the Secretary of State. In the main, as far as I know, the trade bodies supported all those proposals and stressed the importance of not imposing new costs on businesses and the UK being able to legislate after exit.
I shall deal with some of the more detailed points. The noble Lord, Lord Teverson, asked about the policing of this. Ecodesign enforcement and control activities are carried out by the Office for Product Safety and Standards. Energy labelling enforcement and control activities are carried out by that office and local authorities’ trading standards departments in Great Britain and by the Department for the Economy in Northern Ireland. The regulations will not result in any change in that policy.
The noble Lord also asked who holds the products register and whether there is one for the UK. There is no UK database, but there is an EU-wide database, which went live on 1 January this year. There have been delays on the public section of that database, but it remains broadly on track and, after exit, we will review whether to introduce a UK database. Again, I can give the assurance that we will consult on that. He also asked whether all appliances under the SI will be covered from the point of exit, and I can assure him that the changes come into force from exit day and there will be no gaps.
The noble Lord, Lord McNicol, was concerned that there could be a reduction in standards, but I can assure him that we continue to support all these policy measures, which cut energy bills and increase energy security. As stated in the Clean Growth Strategy, we will keep step with equivalent standards, but intend to go further where, as I think I said in my opening remarks, we believe that is in the interests of the UK.
I have dealt with the noble Lord’s concerns about consultation, but I just correct myself on the affirmative nature of SIs. Only the SIs that are not identical to EU standards will be affirmative. If they are not identical to EU standards, they will be negative. I think I have it the right way round.
Lord Henley
It is the other way around, but the noble Lord has understood me anyway. He also wanted clarification on “designated standards” in the Explanatory Memorandum. The instrument renames the EU’s harmonised standards—the testing standards that can be used for the verification of products’ compliance with EU requirements—as “designated standards”. Designated standards will give rise to a presumption of conformity with UK legal requirements in the same way that the EU’s harmonised standards do in relation to EU requirements. To ensure continuity and not drive up testing costs, the testing standards in the UK and the EU will remain the same. That is what the UK industry wants. The reference to designated standards will again be published on GOV.UK. I believe that deals with the points that have been raised.