Conformity Assessment (Mutual Recognition Agreements) (Amendment) Regulations 2022

Tuesday 13th December 2022 Grand Committee

Considered in Grand Committee

17:40

Moved by

[Lord Callanan]

That the Grand Committee do consider the Conformity Assessment (Mutual Recognition Agreements) (Amendment) Regulations 2022.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I beg to move that the draft Conformity Assessment (Mutual Recognition Agreements) (Amendment) Regulations 2022, which were laid before the House on 21 November 2022, be approved.

Switzerland is the UK’s 10th-largest trading partner, with bilateral trade between our two countries worth £38 billion in 2021. The UK and Switzerland have strong economic and historical ties, and both our countries have been clear about a shared commitment to maintain a strong trade and investment relationship.

In 2019, the UK and the Swiss Confederation agreed a trade agreement bringing together a number of different areas covered by the EU’s various agreements with Switzerland. Included as part of this were provisions to replicate the mutual recognition agreement between the EU and Switzerland for three sectors of UK-Swiss trade: motor vehicles, good laboratory practice and good manufacturing practice for medicinal products. It was possible to reach agreement in these sectors because many of the applicable rules were already aligned internationally. Between them, these three sectors covered 70% of the UK/Swiss trade covered by the old EU/Swiss mutual recognition agreement.

Although this covered a significant amount of trade, the UK and Switzerland committed through a memorandum of understanding to continue to work towards an agreement in the remaining chapters; the UK and the EU also agreed temporary measures to aid continuity of trade in 13 sectors until such an agreement could be reached. On 17 November this year, the UK and Switzerland successfully concluded a mutual recognition agreement in five of these remaining sectors. From hereon in, I will refer to this as the MRA.

The MRA supports trade in goods between the UK and Switzerland by reducing technical barriers to trade but, importantly, it does so in a way that protects the UK’s robust product safety system. The UK’s product safety legislation requires certain products to be assessed to ensure that they meet requirements in legislation. Sometimes this assessment must be done by third parties that are independent of the manufacturer. MRAs can reduce barriers and costs by allowing this assessment to be undertaken by a conformity assessment body—a CAB—based in the UK for export to the relevant country, in this case Switzerland. We make the same arrangements for Swiss businesses so that the agreement procedures carried out by recognised Swiss CABs are accepted for the purposes of our domestic regulations.

The SI that we are debating today implements this MRA to ensure continuity for UK businesses trading conformity-assessed goods with Switzerland. It does this by amending the earlier 2021 regulations made by my department, which implement MRAs with other countries so that they also include the Swiss MRA. I will return to this briefly when discussing the territorial scope and specifics of the regulations.

Let me now address the measures that we are taking to recognise Swiss bodies and appoint UK bodies under this MRA. This SI provides for the Secretary of State to designate CABs as competent to assess that certain goods comply with the regulatory requirements of Switzerland under the MRA as set out in the schedule to the SI. For example, this means that, where a UK- based CAB would like to be recognised by the Swiss authorities as capable to assess goods against the Swiss measuring instruments requirements, it can apply to UKAS—the United Kingdom Accreditation Service —to be accredited as fit to test against those Swiss requirements. The Secretary of State may then designate the body under the Swiss MRA to assess, for example, measuring instruments for export to Switzerland.

As a result, a UK manufacturer that uses the services of that UK CAB can now use the same body to do its accreditation for the Swiss market. It does not need to identify and start contracting with another CAB operating in Switzerland. This should reduce its costs and make it able to place products on the Swiss market more cost effectively, potentially passing savings on to consumers.

17:45

I now move on to consider provisions for goods coming into the UK. Under this MRA, the UK recognises the results of conformity assessment procedures carried out by recognised overseas CABs against our domestic regulations. This SI makes clear that assessments carried out by a recognised body based in Switzerland should be treated as equivalent to those carried out by a UK-approved body when relevant products are sold in Great Britain. These regulations do not change the detail of the requirements for third party assessment, nor do they amend any requirements related to a product’s specification. This means that the UK will maintain its robust product safety protections, while continuing to reduce barriers to trade with Switzerland, adding the benefit of savings to UK consumers.

The Secretary of State will add Swiss bodies that are recognised under the agreement to the UK’s register of CABs, known as the UK Market Conformity Assessment Bodies database. This publicly available resource can be used by businesses and regulators to verify the status of CABs very quickly.

I shall now speak to the territorial scope of these regulations. They extend to the whole of the UK, except that Regulation 5, relating to recognition of conformity assessment by Swiss CABs, extends to Great Britain only. Northern Ireland will continue to recognise the results of conformity assessment procedures done under the mutual recognition agreement between the European Union and Switzerland. This is in accordance with the terms of the Northern Ireland protocol to the withdrawal agreement. Regulations 6 and 7 of the 2021 regulations, to which I referred earlier, deal with the Secretary of State’s power to designate UK-based bodies under these agreements and information sharing respectively. These powers extend to the whole of the UK. This means that CABs across the UK can be designated under the MRA and the Secretary of State will be able to share relevant information as required under the MRA.

In conclusion, we introduce these regulations to give effect to provisions which keep our barriers to trade with Switzerland low. As I said, we do this while preserving our robust protections for product safety as a responsible Government. This SI will provide certainty on the UK’s approach to recognising and designating CABs for certain products under the MRA. I therefore commend these regulations to the House.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for setting out the details of the regulations for us. I note that we have lost our one Back-Bencher, so it is now a two-person show, but there we go.

This instrument makes provision to give effect to a mutual recognition agreement—an MRA—between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation. It amends earlier regulations. An agreement between the UK and the Swiss Confederation came into force on 1 September 2021 and contains the conditions under which each country will accept conformity results from the other. The five areas it covers are: electrical equipment; measuring instruments; radio equipment; transportable pressure equipment; and noise emitting equipment for use outdoors. The MRA for these is a mutual testing arrangement between Switzerland and Great Britain, but is there any expectation that the sectors covered by this MRA will be expanded in the future? The Minister referred to 12 areas and we have five with us. Are the other seven going to be covered by the regulation at some point in the future?

Equally, the MRA sets out how relevant goods can be tested—Switzerland against UK regulations and UK against Swiss regulations. Are there any notable divergences or are they simply technical adjustments between one and the other? The UK has MRAs with several countries agreed as part of arrangements made under the UK’s trade continuity programme. To this extent, the assessment is the same as that performed to assess conformity with requirements in third countries. This may reduce the need to duplicate conformity assessment. This will provide continuity. It will also have the benefit of saving time for manufacturers, with products being able to be placed on the market more quickly than if they were required to undergo a separate test of conformity in the UK as well as in Switzerland before they arrive.

The instrument implements the Swiss MRA in a similar way, by amending Schedule 1 to the 2021 regulations so that it includes all the domestic regulations which the UK may recognise for Swiss CABs to test against under the Swiss MRA. Since 1 January 2021, the UK and Switzerland have granted temporary bilateral access to goods conformity, assessed against each other’s regulations. Switzerland will no longer apply these temporary measures for new conformity assessment procedures carried out by bodies based in the UK after 31 December 2022. Under reciprocal arrangements set out in the Swiss MRA, conformity assessment procedures issued before this date will still be recognised for goods placed on the market in 2023, ensuring continuity of trade between the parties.

When the Swiss MRA enters into force in 2023, conformity assessment bodies will be permitted to issue new approvals for conformity assessment procedures once they are designated under the agreement. The Swiss MRA specifies the products and sectors to which it applies, such as radio equipment. The amended 2021 regulations also set the power of the Secretary of State to designate UK CABs for the purpose of assessing against Swiss requirements. The instrument amends Schedule 2 to the 2021 regulations to include product sectors of the Swiss MRA.

The main direct impact for business associated with this new legislation will be a one-off familiarisation cost, at a central estimate of £2,300. More specifically, as of 11 October this instrument would have familiarisation impacts on only around 300 affected businesses which are involved in the manufacture and sale of the products within the scope of the instrument, and which trade those products with Switzerland but not the EU. The familiarisation costs should presumably be balanced out by the reduced bureaucracy in having to meet a single assessment conformity. Have the Government made any assessment of the value of exports made by the 300 UK businesses to Switzerland that would be required to break even in this regard?

[Lord Callanan (Con)]

I thank the noble Lord, Lord Lennie, for his comments. It is clear that this SI will maintain our robust product safety framework, at the same time as reducing barriers to trade with Switzerland. It will do this by providing for recognition in Great Britain of conformity assessment by Swiss CABs for certain products under the MRA, while Swiss bodies will be recognised in Northern Ireland under their country’s MRA with the EU; and by providing for the Secretary of State to designate UK CABs to assess against the requirements of Switzerland for certain products under an MRA.

In response to the noble Lord’s questions, I will have to get back to him in detail on the points that he raised, and in writing. In the meantime, I hope he will give us forbearance and allow me to do that, while agreeing that technical agreements such as this play an important function in the landscape of new trade agreements that the Government are negotiating with partners around the world. With these agreements, we demonstrate our commitment to free trade through a variety of means to promote growth in the UK.

With my apologies for not having a detailed answer for the noble Lord, I will get back to him. I again commend these regulations to the Committee.

Motion agreed.

Committee adjourned at 5.54 pm.