Product Safety and Metrology etc. (Amendment etc.) (UK (NI) Indication) (EU Exit) Regulations 2020
(3 years, 12 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the draft Regulations laid before the House on 13 October be approved.
Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, this SI is one of a series of SIs that amend the previously laid 2019 regulations. Those original regulations, the Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, were drafted in the event that a deal was not agreed and will need to be amended before coming into force at the end of the transition period.
The SI we are debating today is needed to take account of the withdrawal agreement, in particular the requirements of the Northern Ireland protocol. This amending instrument—the sixth in the series—will do a number of things to complete the picture on how goods from the EU and from Northern Ireland will be treated on the market in Great Britain and provide businesses with certainty about these arrangements.
The aim of the original product safety and metrology EU exit regulations 2019 was to bring the existing EU system of essential requirements, standards and conformity assessment into our domestic law. It made some changes that are needed by virtue of the UK leaving the EU—regardless of any deal—while retaining the fundamental elements of the product safety and metrology regulatory regime.
As I am sure noble Lords will recognise, the UK product safety and legal metrology system is among the strongest in the world. Alongside the original EU exit regulation, which left that framework largely unchanged, this amending SI will ensure that we continue to have a robust product safety framework in place to prevent unsafe and non-compliant products, whether that is toys, cosmetics, lifts or machinery, entering the UK market. Specifically, this SI will allow for continued acceptance of CE-marked goods into the market of Great Britain for 12 months, before making the new UKCA mark mandatory from January 2022. It will introduce a number of transitional arrangements to help minimise costs to economic operators and give them time to prepare. It will provide for unfettered access for Northern Ireland to the rest of the United Kingdom, and introduce and implement the UKNI marking for certain goods on the Northern Ireland market.
By making these amendments, this SI will ensure that the UK is able to provide continued robust protection to UK consumers, giving confidence that only safe and compliant products can be placed on the market, maintaining a robust product safety and legal metrology framework from the end of the transition period. There will, of course, be interest in what the new UK regulatory regime will look like going forward. This SI does not set out what that future regime will look like; it sets out the building blocks that will be a matter for future consultation and future legislation. On this matter, I will simply say that the Government are committed to ensuring that consumers are protected from unsafe products and we will look to deliver a future product safety regime that is simple, flexible and fit for the opportunities ahead of us.
What does this SI do? It does a number of things to complete the picture of how goods from the EU and from Northern Ireland will be treated on the market in Great Britain, as follows. It provides greater legal certainty about the date by which companies need to comply with new regulatory requirements for the market in Great Britain, specifying that the new UKCA marking will become mandatory from the start of 2022. It amends domestic legislation to take account of the withdrawal agreement, implementing the Northern Ireland protocol with respect to product safety and legal metrology. On the protocol, this SI provides for unfettered access to the rest of the United Kingdom market for qualifying Northern Ireland goods, subject to product safety and metrology legislation.
This SI will introduce and implement the UKNI marking, which will accompany the CE marking for certain goods when placed on the market in Northern Ireland. This includes the introduction of an appropriate set of sanctions should the UKNI marking be missing or misused, in line with the penalties that apply when other product safety rules are broken. I shall address each of these areas in more detail, starting with the GB regulatory arrangements.
In respect of amending domestic legislation, this SI will ensure that provisions in previous EU exit legislation are updated to reflect the Government’s approach to phasing in new GB regulatory requirements. The previous product safety EU exit SI introduced a domestic regulatory regime, with the UKCA marking replacing EU conformity markings, including the CE marking, alongside a system of UK approved bodies to replace EU notified bodies. That system will come into force at the end of the transition period. This original SI also set out that goods meeting the EU’s requirements, including the CE marking, could still be accepted in Great Britain, in order to give businesses time to prepare. However, the original SI did not put a specific end date on how long the CE and other conformity markings could continue to be accepted. Now that we have greater certainty, due to the withdrawal agreement and the end date for the transition period, this amending SI now introduces a 12-month end point for goods in scope of this instrument.
We now have a clear date for independently approving goods for sale in our market, rather than relying on the EU. We believe that this will give businesses clarity on when they should be ready for the new regime. However, we do appreciate that business will still need time to prepare, so we have also gone further than the original SI by increasing the number of easements for businesses. This includes offering the option to affix the UKCA marking on to products using labels, or on accompanying documentation, rather than on to each individual product. This will be allowed from the end of the transition period for 24 months and will help to reduce costs to businesses for retrospectively changing their marking and labelling mid-production. It will also allow new UK importers of products into Great Britain—those from the EEA and Switzerland—to place their contact details on accompanying documents, again for a period of 24 months from the end of the transition period—which is an increase on the 18 months’ timeframe established in the original SI. This measure will give businesses more time to implement the labelling requirements for the GB regime, again saving them time and money.
This SI will also ensure that all GB authorised representatives must be based in the United Kingdom from the end of the transition period, helping to ensure that any legal entity that has been authorised to act on behalf of the manufacturer can be held accountable here in the UK.
Turning to the issue of unfettered access, the Government committed to legislating by 1 January 2021 to guarantee unfettered access for qualifying Northern Ireland goods to the rest of the United Kingdom market. That commitment is intended to be delivered through both primary and secondary legislation, with the Government having already laid a draft affirmative SI to define qualifying Northern Ireland goods. This SI references that definition in order to implement unfettered access provisions with respect to product safety and legal metrology. The changes made by this SI will be interdependent with other required protocol work—for example, to establish a Northern Ireland-facing product safety and legal metrology system. This SI must be in place to ensure all aspects work coherently from day one.
Finally, I turn to the UKNI marking, which noble Lords will find as an illustration in Schedule 1 to the instrument. This SI makes provisions in respect of two aspects of the UKNI marking: its introduction and the implementation of the product marking requirements in respect of the Northern Ireland protocol. It sets out the design of the marking and implements the approach to sanctions should the marking be missing or misused.
The UKNI marking will be used alongside the CE marking to indicate that a UK-based conformity assessment body has undertaken third-party testing against EU requirements and approved it for placing on the Northern Ireland market. This will also mean that such products cannot be put on the market in the EU. This is a vital part of the operation of the protocol. Not proceeding with this legislation would mean not fully implementing the protocol, causing businesses uncertainty about the UKNI marking and what exactly they must do to comply after the end of the transition period.
In conclusion, this SI will retain a regulatory framework that business is familiar with, alongside delivering important updated elements of the product safety and legal metrology regime in both Great Britain and Northern Ireland to implement the requirements in the withdrawal agreement of the Northern Ireland protocol. I can reassure noble Lords that we have engaged with Northern Ireland colleagues on the changes this SI makes and ensured that they have been kept fully informed of its progress. It ensures that provisions in previous EU exit legislation are updated to reflect this Government’s approach to allowing goods in the scope of this SI to continue to be accepted on to the Great Britain market, having followed EU rules for 12 months after the end of the transition period, and it forms part of the legislation to deliver unfettered access for qualifying Northern Ireland goods to the rest of the UK market.
The safety of individuals, families and communities is a top priority for the Government. As I am sure noble Lords will recognise, it is essential that the UK continue to have a robust product safety framework in place to protect consumers and prevent unsafe and non-compliant products entering the UK market. I therefore commend these regulations to the House.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I thank the Minister for his introduction and the very helpful letter and factsheet he sent us yesterday. However, I must say I found the Explanatory Memorandum to this SI even more interesting—and much more revealing. The obtuse title of the SI hides a lot of important issues, but in the limited time available I will confine myself to a few questions to the Minister.
As he said, we have already agreed four Sis, in 2018 and 2019, on this subject in preparation for a no-deal exit from the EU, which could now come into force on 31 December. As I understand it, we have six SIs to amend those because of the withdrawal agreement: four already laid and two more still to come. We do not know yet if there will be a deal or no deal, so can the Minister explain how we will deal with these SIs if there is a deal, and if there is no deal?
This instrument deals with a wide variety of important matters, as the Minister said, including noise emissions by outdoor equipment, aerosol dispensers, toy safety, lifts, recreational craft—including motorboats—gas appliances, and PPE, yet there was no formal consultation on this. Why not? This instrument also covers the important issue of firework safety and the designation of an approved body for pyrotechnics. Interestingly, maybe astonishingly, it allows for it to be based in any country—the UK, in the EU or in the rest of the world, presumably including China. Can the Minister explain why the present arrangement is not acceptable?
The regulations also provide for unlimited fines for the misuse of what are complicated product safety rules, but the Government say they will be used rarely. How can they make such a prediction?
This is just one of hundreds of such SIs from this and other departments taking up the valuable time of capable officials, which could be better spent elsewhere. And it is all because of the chaos and confusion arising from a bungled and unnecessary exit from the European Union market—a market that was working well.
Lord Dodds of Duncairn (DUP) [V]
My Lords, these measures are, like others we have dealt with in recent weeks, designed to implement the Northern Ireland protocol as well as the other objectives that the Minister set out this afternoon.
Noble Lords will know how many in Northern Ireland feel about the protocol, which was implemented and imposed on the people, businesses and communities here without any consent being forthcoming from Northern Ireland and without even the need for it to be voted on in the Assembly by our elected representatives. In the limited time that I have, I will not go into all the major issues, big and small, that that creates. I seek assurance from the Minister this afternoon that qualifying Northern Ireland goods can be sold in the rest of the United Kingdom without the need for checks and controls, in line with the commitment to unfettered access, that there will be no regulatory discrimination, and that it will be on the basis of the mutual recognition of regulatory standards. Can the Minister assure the House that that will continue to apply in the future, whatever the EU requirements or the requirements set by Her Majesty’s Government for the rest of the UK may be?
I also seek reassurance on the matter highlighted in the Secondary Legislation Scrutiny Committee’s report about conformity assessments carried out in Great Britain. Can we be assured that assessments, registrations, certificates and approvals issued or carried out by the competent authority of the United Kingdom will be valid in Northern Ireland? It would be unacceptable for that not to be the case. It is clearly in line with the provisions of the protocol.
On costs, we are told that over 100,000 businesses need to familiarise themselves with these new requirements. Tens of thousands of retailers, wholesalers and manufacturers are affected. What is the impact of the measures being taken to implement the protocol, and what is the financial impact on businesses and manufacturers in Northern Ireland? Who will bear these costs going forward? Surely the Government must ensure that both the starting and ongoing costs are met by government. There cannot be an extra cost on business.
With time running out before the end of the transition period, Northern Ireland businesses need certainty and confidence. How confident is the Minister that all necessary systems and arrangements will be in place and ready to operate smoothly for Northern Ireland businesses come 1 January 2021?
Lord Moylan (Con)
My Lords, good design and branding have been at the heart of commercial success at least since the Great Exhibition. For example, in 1913, Frank Pick, the legendary managing director of what became the London Underground, commissioned Edward Johnston to produce a typeface for that railway. That typeface is still in use to this day. It is a London icon—clean, simple, modern—and was the exclusive property of TfL until the copyright expired in 2015. It is used on signs, letterheads, the Tube map and everywhere you look.
If noble Lords turn to the sample of the form of the UKNI logo to be imposed on Northern Ireland businesses from the end of this year, they will find that it fails to meet that standard by a long way. To my mind, it is ugly, blockish and typographically illiterate, with its mixture of serif and san-serif letters, designed almost to hamper, rather than promote, the export of Northern Ireland goods and products. My question to my noble friend the Minister is who designed it. Did he have a hand in it himself, or was it produced by a committee? Was public money paid for it and, if so, can we get our money back? Is there anything that can be done, even at this late stage, to improve it?
My second question is more constitutional. Who is making this law? I understand, at a simple level, that this Parliament is clearly making this regulation, because it is in front of us for that purpose. But let us say that, a few months or some time down the road, the democratic leaders in Northern Ireland join together—as I am predicting they might—to say that this logo is not doing the job of marketing and branding, and they would like it changed. To whom would they write? Would it be to the UK Government, so that we could make that decision unfettered? Would they have to write to this strange and unaccountable joint committee that now appears to set many of the rules for the Northern Ireland protocol? Would they be reduced, as leaders in Northern Ireland—the DUP and Sinn Féin—were only a couple of weeks ago, to writing a begging letter to Brussels, in that case to ask if their supermarkets could still be supplied on the customary basis?
Given that Northern Ireland is the only part of Europe that I can think of that is, at the moment, being actively de-democratised, noble Lords would like to know the answers to those questions and have some assurance from my noble friend.
Lord Empey (UUP) [V]
The noble Lord, Lord Moylan, made some interesting points at the end of his contribution. The Minister, during his introduction, referred to the UK being a sovereign independent nation once again. However, how can someone from Northern Ireland feel part of that sovereign independent nation when, for several weeks and months in this House, we have been passing secondary legislation that distinguishes us from the rest of the United Kingdom? We are talking today about marks, and the noble Lord, Lord Moylan, makes valid points, but the fact that they are there illustrates the differences that have been created between different parts of the United Kingdom.
As is common to a number of these SIs, the impact assessment refers to how
“relevant EU legislation will continue to apply to Northern Ireland by virtue of the Protocol.”
It is as if the protocol is some kind of wonderful achievement. As far as I am concerned, it is a dagger pointed at the heart of the union, and the fact that we are having these discussions and making these differences illustrates that.
We are now going to have to pile more work and burdens on to our businesses and manufacturers. We are creating a situation where you can run the CE label with the other label for a year. What happens if, over time, differences in standards emerge? Whose standards will prevail? Will it be the Brussels or the UK standard? What will happen if a product made in Northern Ireland falls foul of the regulations that apply in Great Britain? There are no answers to these questions.
The Government have consistently refused to accept the fact that what they have done with the protocol is to turn Northern Ireland into virtually an overseas territory of the European Union with its own set of discrete pieces of legislation. The regulatory regime is to be left in the hands of Brussels. We are still subject to state aid rules where Great Britain will not be, and we have a huge pile of problems that will arise in the next few weeks whereby every tin of baked beans that comes into Northern Ireland will have to be notified to the authorities in advance and be subject to inspection. How under these circumstances, can the Minister maintain that we are in any sense on an equal footing with our colleagues in the rest of the United Kingdom?
Lord Lilley (Con)
It is a great privilege to follow the noble Lord, Lord Empey, and I follow him in the spirit of the issues he has raised. Can the Minister explain how certification and labelling will affect trade between Great Britain and Northern Ireland? Let us suppose that a supermarket sources foods within Great Britain for distribution throughout the United Kingdom, including to its stores in Northern Ireland. Surely it would be onerous, if not impossible, for the supermarket and its suppliers to have two varieties of goods, one labelled “UK CA” and the other “CE”. Who will enforce the labelling requirement on goods from Great Britain going to Northern Ireland and where will that be enforced? If it is not going to be enforced at the ports of Great Britain and Northern Ireland—and we have had assurances that it will not be—it must be enforced within Northern Ireland, presumably by trading officers, in practice, when goods are brought to their attention either by a retailer or a customer. If that is possible, why cannot Northern Ireland have the same labelling requirements as us and any enforcement on goods that filter over the border to Ireland be enforced within Ireland by its trading officers, having had the goods brought to their attention by their customers and retailers without any border controls? I simply do not understand why we have got ourselves into this invidious position.
Finally, since my time is running out, I ask my noble friend to imagine what would be the situation in the United States if Alaska had to adopt Canadian rules because tribes crossing the border insisted on that, so that any goods moving from the 48 states to Alaska would have to go through a different regulatory process. Likewise, what would happen in France if goods coming from the Hexagon had to have different rules and regulations on labelling from those in Corsica, or in Italy, if goods sold legally on the mainland could not be sold in Sicily? None of them would accept that. Are British Ministers making these points in the Joint Committee and elsewhere to our partners in Europe, and in Congress to Speaker Pelosi?
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I thank the Minister for his explanation of these complex regulations and for the factsheet that we received yesterday. However, I still have certain questions for him. Like the noble Lord, Lord Foulkes, I agree that all of this would not be happening if we did not have to leave the European Union. But, sadly, that is taking place and, although I always will be a remainer, I will have to accept that.
Notwithstanding that, I have certain questions for the Minister. Where does the conformity marking take place for goods manufactured in Britain to be sold in Northern Ireland and vice versa? What compensation arrangements are in place to facilitate the delays that could take place in supplying goods because of the specialised marking indicators required, notwithstanding that there is a year’s grace period?
The Lords Secondary Legislation Scrutiny Committee, as the noble Lord, Lord Dodds of Duncairn, referred to, has pointed out the disagreements between the EU and the UK on whether accredited bodies in the rest of the UK will be able to provide conformity assessments for goods sold in Northern Ireland. The EU says that the UK will not be able to do that, but the UK asserts article 7.3 of the protocol, which indicates that it is allowed to. Will the Minister provide the House with an update on the discussions and negotiations on that matter? Can the Minister further provide an update on the sanctions regime for the misuse of the UK/Northern Ireland conformity marks?
This is going to place a considerable financial burden on Northern Ireland businesses, which are already impacted on by the costs not only of Brexit but of Covid. Will the UK Government provide the Northern Ireland Executive with the funding to deal with the costs of implementing the regulations? It has been suggested that between 10,000 and 17,000 UK manufacturers and up to 135,000 UK wholesalers and retailers will be impacted. That is a massive cost to businesses.
Lastly, has there been any update from the negotiations on the food supplier issues around prohibited and allowed goods? The noble Lord, Lord Moylan, referred to the letter from the First and Deputy First Ministers relating to the issue of goods coming into Northern Ireland. I would appreciate updates from the Minister on these issues.
Baroness McIntosh of Pickering (Con) [V]
I am delighted to follow the noble Baroness, and I would like to build on her arguments. I thank my noble friend for introducing the instrument today and for the fact sheet sent with his letter. He has argued that this instrument is necessary for greater clarity, but I regret that the main thrust of this debate is that that is certainly not the case.
The noble Baroness, Lady Ritchie of Downpatrick, and the noble Lord, Lord Dodds, have highlighted the disagreement that exists between the UK Government and the EU. What is the legal position on this? How will that disagreement be resolved? Does it have to be resolved by 1 January?
The noble Lord, Lord Foulkes, referred to the fact that there has been no formal consultation. Why has a decision been taken on principle not to have one? I am grateful, as I am sure are others, for the note from the Library and for the 32nd report from the Secondary Legislation Scrutiny Committee, which looked at these issues and highlighted them in their report.
The noble Baroness, Lady Ritchie of Downpatrick, noted the numbers of those affected, which are staggering. The estimated cost to businesses over a 10-year period is in the region of £25.7 million for conformity marking, £3.7 million for conformity assessment and £6.6 million for familiarisation, leading to a total over the period of £36 million—a not inconsiderable sum. Can my noble friend explain why the impact assessment was not made available at the time of the scrutiny by the Secondary Legislation Scrutiny Committee? Is it available for us to look at now? I am sure it would be of great interest to the businesses affected.
I further reinforce the point made by the noble Baroness, Lady Ritchie of Downpatrick, about what the impact will be on agrifoods as of 1 January, both under this particular instrument and more broadly. What discussion has there been between the Minister’s department not just with the agrifood industry but with the road haulage owners and operators, who I know are deeply concerned? I understand that my noble friend Lord Agnew has met the English equivalents, but has anyone actually had the courtesy to meet the Northern Ireland road hauliers?
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I am delighted to follow the informative and detailed speeches of the noble Baronesses, Lady McIntosh and Lady Ritchie. I spent some time today seeking to understand the way businesses have to take a step up in the supply chain due to Brexit product safety rules and how the complications for businesses based in Northern Ireland and exporting to Northern Ireland and Ireland play out. I think I have a handle on it now, although it is very hard to be sure. As the noble Baroness, Lady Ritchie of Downpatrick, pointed out, there are hundreds and thousands of businesses around the United Kingdom now seeking to make the same leap and to achieve the same understanding. As the noble Lord, Lord Foulkes, pointed out, they still cannot know, with 34 days still to go, what rules will apply.
To be specific, I was looking at cosmetics and thinking about some small specialist businesses I know that make high-value organic cosmetic products, often sold online and at a small scale—a popular and fast-growing market. The difficulties that these businesses and many others face were acknowledged by the Minister, who noted that the time for compliance in the UK has been extended from earlier plans, but I will ask him about the challenges they will face from 31 January. If they are exporting to the EU—and I assume to Northern Ireland; perhaps the Minister can confirm this—as well as having a registered responsible person in the UK, which is a legal entity that must hold the product information file and whose name and address must be listed on the product packaging, they have to locate an appropriate registered person in the EU and ensure that labels have been updated for products placed on the market in the EU from 1 January. For the cosmetic product notification portal, products will have to be registered in the UK and in the EU—a transfer that has been made by 31 December or started again from scratch.
This stepping up procedure legally means that businesses are more susceptible to investigation by enforcement bodies, and criminal prosecution and liability, in relation to these goods. A risk of civil liability can be passed on through contracts, but criminal liability cannot. From reading up on this, I discovered that enforcement action can lead to customs delays, product seizure, stop notices and enforced product recalls. I think of the lorry queues we recently saw at Dover when the French enforcement procedures were being tested, and I worry.
Mostly in this context I am worried about small businesses. Is the Minister confident that they are ready? Have they received sufficient support? Will they get help with the surely inevitable tangles from 1 January? This applies across the UK, but it is particularly acute in Northern Ireland and for those seeking to sell to Northern Ireland. Looking to the future, as the noble Lord, Lord Moylan, pointed out, regulations will likely diverge further. Will there be support for small businesses, particularly those in and exporting to Northern Ireland, to assist them in navigating through the maze?
Lord Chidgey (LD) [V]
My Lords, I am sorry for this confusion; it is not my doing. I will give my contribution now.
I thank the Minister for his explanatory remarks and his letter concerning product safety when the UK leaves the EU. I note that the statutory instrument before Parliament makes amendments to the product safety regulations 2019, but they have yet to come into force. They will implement the Northern Ireland protocol and the withdrawal agreement, and correct deficiencies caused by the UK’s withdrawal from the EU. All this is in the interests of ensuring that an effective product safety regime continues in the UK, in that it removes unsafe or non-compliant products from the market. This is of course very laudable, providing protection to the public from the unscrupulous and giving certainty to consumers.
To illustrate the point, will the Minister offer some examples of products that are currently deemed safe under the EU CE mark but could be deemed unsafe in future without the corresponding UKCA or UK(NI) mark? In a similar vein, could he provide examples of deficiencies that might need to be corrected in goods and products that might be traded between the UK and the EU, between Northern Ireland and other parts of the UK, or between Northern Ireland and the Republic of Ireland?
The factsheet that accompanied the Minister’s letter makes it clear that the department has not undertaken a public consultation on this instrument for the reasons given. Unfortunately, errors or omissions in the same paragraph obscure its sense. On the subject of insensitivities, the instrument regularly refers to the United Kingdom and Northern Ireland while reducing the description of the Republic of Ireland to the diminutive “Ireland”. The factsheet estimates that more than 100,000 businesses may need to familiarise themselves with these changes; around 85,000 are UK retailers/wholesalers, notified bodies and local authorities. Will the Minister say how those figures were arrived at and what are the estimated costs of their introduction and subsequent policing?
Baroness Bakewell of Hardington Mandeville (LD) [V]
My Lords, I am grateful to the Minister for his helpful letter and factsheet and for his introduction to this SI. It is extremely important that Great Britain and Northern Ireland should be able to operate effectively and safely after 31 December on a wide range of important aspects of life which residents take for granted.
During my time on Somerset County Council, I often went up to the scientific services laboratory on the third floor to look at some of the work being done there. It was very wide-ranging, from seizing unsafe toys to ensuring that weights and measures were accurate. If a consumer is buying 1 kilogram of potatoes they need to be sure that the instrument weighing the kilogram is accurate and is not weighing out 900 grams and calling it 1 kilogram. There are much more serious breaches of this legislation that can have disastrous consequences. I note that the UK does not currently have an approved body for pyrotechnic articles, so approval will be done in other countries. In the past, substandard fireworks have been imported and have had to be withdrawn at short notice due to safety issues. Can the Minister say whether there are plans to have an approved body for pyrotechnics based in this country in future?
The list of bodies in paragraph 2.14 of the Explanatory Memorandum is extensive and extremely varied. At this time of year, our thoughts not unnaturally turn to the safety of the toys and gadgets which appear on the lists of hopeful children. With the lockdown and the closure of the stores where parents and grandparents might normally inspect and buy their children’s presents, many of them are relying on buying online and by mail order. It is essential that the Government ensure that the law protects them through this SI. A package arriving via a van or the mail can often be very disappointing once it is unwrapped and not exactly what was viewed online.
The Government have estimated that more than 100,000 businesses will need to familiarise themselves with the changeover and recognise and use the new marking systems. At paragraph 12.1 the Explanatory Memorandum states:
“The analysis developed to inform this instrument demonstrated that there are limited/negligible additional costs to business associated with the specific provisions made in this instrument.”
Unfortunately, this is inaccurate. The Secondary Legislation Scrutiny Committee investigated this issue and obtained a copy of the assessment from the Government. As the noble Baroness, Lady McIntosh of Pickering, has already said, it found that between 10,000 and 17,000 UK manufacturers and up to 135,000 UK wholesalers and retailers will be impacted, with an estimated cost to business over a 10-year period of £25.7 million for conformity marking, £3.7 million for conformity assessment and £6.6 million for familiarisation—a total of around £36 million. This is a significant amount for a number of businesses. Can the Minister confirm that these costs are accurate?
I turn to the Northern Ireland protocol, which the noble Lords, Lord Empey and Lord Lilley, and the noble Baroness, Lady Ritchie, have spoken about eloquently. It requires that, if a product is for sale in Northern Ireland, it will need to be tested in a UK conformity centre. New regulations introduced new UKNI conformity marking, which allows products to be sold in Northern Ireland when they have been tested by an accredited body in Great Britain.
A product may bear both the UKNI and CE marks if it has been tested in both Great Britain and the EU, allowing the product to be sold in Northern Ireland and the rest of the EU. The Secondary Legislation Scrutiny Committee noted that this could give rise to a disagreement between the UK Government and the EU on whether accredited bodies in the rest of the UK will be able to provide conformity assessment for goods sold in Northern Ireland. The EU stated that they will not; the Government disagree with the EU view—the noble Lord, Lord Empey, referred to this. Can the Minister please provide clarification on this complex issue?
Paragraph 7.19 of the Explanatory Memorandum states:
“In some situations, regulators need to know about the composition of products before they are placed on the market. Businesses placing qualifying NI cosmetic products on the GB market will need to notify regulators about the contents of those products, in the same way that they inform EU regulators.”
Can the Minister say whether the regulators will be checking for plastic microbeads in wash-off cosmetic products?
I note that there was no formal consultation, as the noble Lord, Lord Foulkes of Cumnock, and others have indicated. However, there was a series of informal engagements, with discussion around lead-in times given to allow businesses to adapt to the new regulations. It is extremely important to allow business to adapt. The Minister’s helpful factsheet states that the transitional arrangements allow for the UKCA marking to be used until 31 December 2022 and also allow new importers to set out their details until 2022. I fully support this SI and all its provisions and welcome the extension of the transition period to allow for full compliance by GB and Northern Ireland companies.
Lord Bassam of Brighton (Lab) [V]
My Lords, I join others in thanking the Minister for his explanatory notes, memoranda and letter, trying to bring some clarity to a very complicated situation. I am also grateful to all my colleagues in the House who have spoken because they have all drawn out important issues: my noble friend Lord Foulkes was particularly forceful on consultation. I also understand the feelings of our colleagues in Northern Ireland. I am grateful to the noble Lord, Lord Empey, and the noble Baroness, Lady Ritchie of Downpatrick, for the force of their argument, and to the noble Baronesses, Lady McIntosh and Lady Bennett, for their points, which looked at some of the complexities that small businesses will face. We all found the intervention of the noble Lord, Lord Moylan, extremely entertaining, with his digression on fonts and typefaces.
The Government have said that this instrument has two main purposes: first, to amend earlier product safety and metrology instruments to ensure that the Northern Ireland protocol is implemented; and, secondly, to correct
“deficiencies arising out of the United Kingdom’s withdrawal from the European Union.”
We all remember the related instrument from last year, which was described at the time as a “beast of an SI” in the press. It was 636 pages long and weighed in at 2.5 kilograms. We are grateful that this SI is not as long, though it provides businesses with more of an understanding of what will happen after the transition period ends in just over a month’s time. That the “oven-ready” deal is not yet to be seen makes things more difficult.
In the UK, we need a meaningful regulatory framework for product safety and legal metrology, including the ability to amend our own regulations in the future in the interests of UK businesses and consumers. Therefore, these changes provide some clarity, which is welcome, but it is important to ensure that unsafe and non-compliant products can continue to be removed from the market. That will provide businesses and consumers with reassurance about the safety and accuracy of products.
Following our departure from the EU, the UK will no longer be able to use the CE mark to identify safe products. As has been explained, that has been replaced in the UK by the new conformity assessed marking, the UKCA. These regulations will end the automatic acceptance of products that comply with the EU product safety and metrology legislation at the end of 2021, except in Northern Ireland. How was the period of 12 months decided on, and how will this be communicated effectively to businesses?
In terms of Northern Ireland, the regulations introduce a new UK(NI) indication. The Government have explained that, under the new arrangements, if a business wants to place a product on the NI market it will need to manufacture that product to EU requirements and apply a CE or other relevant conformity marking. If that product requires a third-party conformity assessment under the relevant EU legislation, and if a UK notified body is used to do that, both the UK(NI) indication and the CE marking, or any other relevant conformity marking, will need to be applied. That does not sound simpler to me. How many products does the Minister expect will need a UK(NI) indication and a CE marking? Does he think that this will cause more additional costs for Northern Ireland businesses in comparison to Great Britain businesses?
The Secondary Legislation Scrutiny Committee has been very concerned about the Government’s transparency on the cost to businesses. It said:
“Given the significant number of businesses that will be affected by the changes … We are disappointed that the”
impact
“Assessment was not ready when the instrument was laid before Parliament.”
That has to be of concern. The Government now estimate that between 10,000 and 17,000 UK manufacturers, and up to 135,000 UK wholesalers and retailers, will be impacted by the instrument’s implementation. The noble Baroness, Lady Bakewell, gave some useful figures about the costs of conformity. Without wishing to repeat them, they underline how businesses will be impacted, not least by the familiarisation process. The assessment warns that those costs will be passed on to UK consumers and businesses through increased prices or reduced product availability, and I wonder what specific impact that will have on Northern Ireland businesses.
The big question is: how will the Government support business with these costs? This has been a terrible year for businesses with Covid-19, and we need to make sure that they have all the necessary support to power the recovery next year. Surprise product marking costs will add only extra pressure and burdens. We support these regulations but questions of cost and the way in which the conformity regime will work out need to be answered.
Lord Callanan (Con)
My Lords, I thank all noble Lords for their valuable contributions to this debate on what is a complicated issue, as a number of noble Lords have accepted. I have set out today the importance of this SI for completing the picture on how goods from the EU and from Northern Ireland will be treated on the market in Great Britain. This will provide businesses with certainty about the arrangements in place at the end of the transition period, and easements to give them some more time to prepare. It will do so in the following ways.
It will allow for the continued acceptance of CE marked goods in the scope of this SI on the market of Great Britain for 12 months after the transition period, before making the new UKCA mark mandatory from January 2022. It will introduce transitional arrangements to help minimise costs to economic operators arising from any uncertainty and give them time to prepare by clarifying the obligations they are required to comply with at the end of the transition period. It will provide unfettered access for Northern Ireland to the rest of the UK, which means no new regulatory checks or additional approvals for Northern Ireland businesses to place qualifying Northern Ireland goods on the Great Britain market. It will also, by setting out the rules in relation to the UK(NI) marking, provide clarity for businesses wishing to supply products to the Northern Ireland market that use UK-based conformity assessment bodies.
Along with the business easements that this SI introduces, a number of other steps have been taken to help businesses get ready for the end of the transition period. These include the rollout of an ambitious series of events, including sector-specific webinars and business adviser training sessions, giving the most up-to-date information on general readiness actions to be taken. The Office for Product Safety & Standards has also published a suite of sector guides, explaining product by product the changes made and how businesses need to comply.
In supporting this SI, we will ensure that the UK is able to continue to provide robust protection to consumers, ensuring that only safe and compliant products can be placed on the market. Without it, we risk disruption and confusion for businesses and enforcement authorities.
Turning to some of the specific questions that were raised, I can reassure my noble friend Lord Moylan that I was not involved in the design of the UKNI logo—which is probably to everybody’s benefit. However, it is intended to be easy to print and to read, and I can assure my noble friend that we discussed the design extensively with a range of manufacturers to ensure that they can apply it if they need to. It was delivered in close consultation with businesses, which rejected a number of alternative options that were put to them.
I can assure my noble friend Lady McIntosh, the noble Baroness, Lady Bakewell, and the noble Lord, Lord Foulkes, that we have engaged extensively with businesses on these regulations. We held informal discussions with over 4,000 businesses, including manufacturers, trade associations and industry representatives, by means of a series of structured interviews.
A number of noble Lords, including the noble Lords, Lord Dodds and Lord Empey, raised the issue of the Northern Ireland protocol and unfettered access. This instrument deals with unfettered access arrangements for certain manufactured goods such as toys and gas appliances. Together with other statutory instruments, as well as the UK Internal Market Bill, this instrument will guarantee unfettered access for qualifying Northern Ireland goods to the rest of the UK market. Highly regulated goods, including cosmetics, which can pose a more serious risk to consumers and the environment, will be subject to some minor transparency requirements that ensure that the GB regulator has the necessary information to protect UK consumers and the environment.
The noble Baroness, Lady Ritchie, and the noble Lord, Lord Dodds, also raised the issue of whether products tested in Great Britain can be sold in Northern Ireland. The UK Government are clear that, as set out in the text of the protocol, Article 7 allows for assessments, registrations, certificates, approvals and authorisations issued or carried out by the competent authorities in the United Kingdom or by bodies established in the United Kingdom to be valid in Northern Ireland. The EU’s technical notice on industrial goods states that only bodies in Northern Ireland carry out this activity. Let us be clear that we do not agree with this interpretation.
My noble friends Lord Lilley and Lady McIntosh, and the noble Baroness, Lady Bakewell, raised the issue of recognition. Obviously, the final free trade agreement is not yet agreed, but we have proposed a comprehensive mutual recognition agreement with the EU to recognise each other’s conformity assessment test results, which would mean that UK testing houses could test against EU rules and affix the relevant CE mark, although this is still a matter for negotiation. However, as I said, the UK Government are clear that, as set out in the text of the protocol, Article 7 allows for assessments, registrations, certificates, approvals and authorisations issued or carried out by the competent authorities of the UK or by bodies established in the UK to be valid in Northern Ireland.
The noble Lord, Lord Foulkes, showed a worrying interest in the subject of pyrotechnics, which should be extremely alarming for those of us on the Government Front Bench. I can tell him that we have allowed approved bodies on pyrotechnics to be based outside the UK from 1 January 2021 because, as the noble Baroness, Lady Bakewell, pointed out, currently there is no UK-approved body in the UK. It should be noted that any approved body requirements need to be approved by the Secretary of State.
My noble friend Lady McIntosh addressed the impact assessment. I can tell her that the withdrawal agreement Act sets out an impact assessment on the provisions governing the UK’s exit from the EU, including the terms of the Northern Ireland protocol. This SI is the detailed implementation of that policy, which has already been assessed by that impact assessment, so no new burdens need to be assessed.
In response to the question from the noble Baroness, Lady Ritchie, about UKNI indication and misuse penalties, the UK has high levels of product safety to protect the public from potentially dangerous products. When our market surveillance authorities find that a business has misused a product conformity marking, such as the UKNI, our starting position will be to help businesses to understand and comply with the rules, unless it is a particularly serious breach of product safety. There will usually be a period of time for the business to correct the non-compliance before we take any action.
The noble Baronesses, Lady Bennett and Lady McIntosh, raised the subject of business readiness. Further guidance has since been published and more than 3,000 people have attended government webinars to help them to get ready for the end of the transition period, with 86% of those polled saying that they would take action to prepare their business as a direct result of these sessions. A second phase of webinars is running throughout November and December, covering key issues that could affect businesses in multiple sectors, including personal data and regulations on manufactured goods.
Coming back to the impact assessment, we have assessed the changes related to setting out the time limits to end recognition of the CE mark as below the de minimis threshold of £5 million per annum; an impact assessment is therefore not required, according to the Government’s better regulation framework. I say that to the noble Baroness, Lady McIntosh, and the noble Lord, Lord Bassam.
The noble Lord, Lord Empey, raised the subject of unfettered access if standards diverge between Great Britain and Northern Ireland. Under unfettered access qualifying, Northern Ireland goods can be placed on the Great Britain market without the need for further approvals. This means that goods that are valid on the Northern Ireland market will be valid on the market in the rest of the UK. We have been clear that unfettered access will not cover goods travelling directly from Ireland or the rest of the EU being imported into Great Britain. Northern Ireland businesses will need to label goods that are placed on the market in the rest of the UK with their own contact details, in common with UK businesses placing goods from outside the UK on the GB market.
I am running out of time. I have a number of other queries to respond to so I will be happy to write to noble Lords, with my apologies. With those comments, I commend these regulations to the House.