Draft Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023
Draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023
(6 months ago)
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The Minister of State, Department for Science, Innovation and Technology (Andrew Griffith)
I beg to move,
That the Committee has considered the draft Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023.
The Chair
With this it will be convenient to consider the draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023.
Andrew Griffith
Good morning, Mrs Cummins; it is a pleasure to serve once again under your chairmanship.
Intellectual property underpins our economy: it is the means by which businesses and individuals can commercialise their ideas, turning them into products and artistic impressions. IP drives innovation and investment, which, as set out in the Government’s innovation strategy, is vital to tackling the world’s largest challenges. Industries with an above average use of intellectual property contribute almost a quarter of UK output, 16% of UK employment and over half of goods exports. IP is crucial to support the Government’s long-term vision to cement the UK as a science and technology superpower and a global leader in innovation. Maintaining the current system is crucial to supporting innovation across the economy.
The draft regulations before the Committee use powers contained in the Retained EU Law (Revocation and Reform) Act 2023, or REUL, to amend or restate certain provisions in IP legislation. They make modest and targeted changes to the benefit of our IP framework in line with the aims of that Act. I will take each set of draft regulations in turn.
Subject to the Committee’s approval, the Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023 will amend provisions in four pieces of IP legislation, and I will explain more about these. The Design Right (Semiconductor Topographies) Regulations 1989 provide protection for designs that are semiconductor topographies, implementing international obligations under the World Trade Organisation TRIPS—trade-related aspects of intellectual property rights—agreement. Semiconductor topography design right is an IP right intended to protect the design of specific semiconductor products—for example, printed circuit boards—which can be relatively easy to copy.
In the UK, the law treats the protection of topographies of semiconductor products as a form of unregistered design right and extends protection to persons from certain qualifying countries. WTO members that are not EU member states are included as qualifying countries by being listed in the schedule to the regulations. The proposed amendment does not alter the design right but is simply intended to remove the need for further legislation to update the schedule when new countries join the WTO, to save parliamentary time.
The Artist’s Resale Right Regulations 2006 provide the basis for an artist’s resale right in the UK. ARR is a form of IP protection related to copyright. It gives creators of visual art, such as paintings or sculptures, an unwaivable statutory right to receive a royalty when their works are resold in the secondary market. The proposed amendments directly replace references to euros in ARR royalty calculations with pounds sterling and are intended to reduce regulatory burdens and costs for UK businesses. A transitional provision has been included so that this change will apply from 1 April 2024, which will allow industry time to prepare and adapt to the changes, in line with advice from the collective management organisations that administer ARR payment schedules.
The Copyright Tribunal Rules 2010 set out the rules of procedure for the copyright tribunal, which adjudicates on various commercial copyright licensing disputes, particularly concerning the terms of licensing schemes for copyright material. The amendments proposed by this instrument will mean a respondent or intervener in a copyright tribunal case will be required to provide an address for service in the UK rather than one located in the European economic area.
Lastly, the Collective Management of Copyright (EU Directive) Regulations 2016 set minimum standards for the governance, transparency and behaviour of collective management organisations established in the UK. CMOs operate as companies and are therefore subject to domestic company law. The amendments proposed by this instrument will reduce the regulatory burden on those CMOs, which qualifies small companies by exempting them from the requirement to audit the accounting information provided in annual transparency reports. The regulations also redefine other exemptions so that they apply to CMOs that qualify as a micro entity under the Companies Act 2006. That will include the removal of references to euros.
I now turn briefly to the draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023. It is important to maintain a balanced, consistent and stable IP framework. An essential mechanism that provides this balance in our IP system is called the exhaustion of IP rights. Put simply, IP rights enable their owners to control the first sale of their creation, but our exhaustion of IP rights regime ensures that, once a good is lawfully placed on the market, the rights holder can no longer use their IP rights to control the subsequent distribution or resale of that good.
For example, after someone purchases a book, the copyright owner cannot stop them from selling that book to another person in the same territory. A functioning exhaustion regime is therefore crucial for commerce in our modern economy. The mechanism also underpins the rules on parallel imports, which are the importation of genuine IP-protected physical goods that have already been put on the market in other countries—medicines, for example.
After we left the European Union exhaustion of IP rights regime, the Government created a bespoke, unique, regional exhaustion regime. Under that regime, once a good is lawfully placed on the market in the UK or the European economic area, the relevant IP rights in that good are considered exhausted. The regime was created to provide certainty for businesses and consumers while the Government consulted on what the UK’s future exhaustion regime should be.
Our current exhaustion regime relies on retained EU law, which will no longer exist from 31 December 2023; without replacing that, our exhaustion regime would not operate effectively from the end of this year. That could create uncertainty about the operability of rules for IP-protected goods, which may impact on supply chains and create a chilling effect on commerce and investment in the UK. Our position is that Parliament must act now to ensure that the UK does have a functioning exhaustion regime from the end of this year onwards. These regulations achieve that purpose. Subject to the Committee’s approval, the regulations restate certain retained EU law to ensure the continued operation of that regime, but without making substantial changes to the policy area. That also achieves the aim of the rule by making our exhaustion laws more befitting for the UK statute book and only restate retained EU law that is necessary for the continued operation of the regime.
In terms of the impact of these regulations, consumers and businesses should not see any significant changes to trading practice, because in substance they ensure a continuation of the current regime that has been in place since 2021.
Nigel Mills (Amber Valley) (Con)
Can the Minister tell us how this applies to electronic sales? If I buy a book on a Kindle, it is always very hard for me to pass on to somebody else. Is that a right I do or should have under these regulations?
Secondly, is this regional principle now the Government’s policy? Does the Minister think a Europe-wide territory for exhaustion is the right answer, or are we going to look at this in our trade deals and try to expand that region to, say, the whole of the comprehensive and progressive agreement for trans-Pacific travel partnership as well?
Andrew Griffith
I will address the first, technical point in my winding up. I was about to come to the fact that the Government have consulted but have not listened to industry’s views about what a go-forward exhaustion regime post our departure from the European Union looks like. The regulations that the Committee is asked to approve today effectively maintain a continuation, to provide that certainty. The Government will respond to that consultation, in due course, to directly address the question asked by my hon. Friend the Member for Amber Valley. As part of that, there will be consideration of the relative merits of extending that territory to include new territories such as the CPTPP.
I hope that hon. Members on both sides will reflect on the fact that this is a complex area; it is very much determined by an interlocking web of international rules and treaties, and I think that it is right that the House should proceed cautiously, given the importance of IP protection to the UK’s economy. My hon. Friend makes an important point, and I hope that we can move forward on that, in collaboration with industry and on a cross-party basis, to provide the opportunities that are there for the UK.
In conclusion, this set of regulations seeks to use powers contained in the Retained EU Law (Revocation and Reform) Act 2023 to introduce only targeted changes, at this stage. Those changes will ensure that rights holders, businesses and consumers can continue to have certainty and confidence in the UK’s IP framework.
Matt Rodda (Reading East) (Lab)
Thank you, Mrs Cummins; it is a pleasure to serve under your chairship. I thank the Minister for his speech, and other Members for their contributions.
As we have heard, the first instrument modifies four distinct laws associated with intellectual property through the authority granted in the Retained EU Law (Revocation and Reform) Act 2023. The objective of the instrument is to implement various technical adjustments to align the UK’s IP framework with the objectives of the 2023 Act. The second instrument maintains existing exhaustion rights.
Intellectual property is the key to maintaining leading British industries, so it absolutely is important that we get it right, and I know that many people working in the creative industries and other sectors are looking to us in our discussions today. In the House, it is important that we are clear about what we do. We must give businesses and the public confidence and certainty that we are treating the issue appropriately.
We recognise that artists, creative industries and others make an enormous contribution to our economy and to society, as do scientists, researchers and entrepreneurs. Long-standing legal protections of IP, such as copyright and patent, are important and need to be recognised. More broadly, the intellectual property system exists to balance the interests of creators and the public, ensuring access to work. It is important that we strike the right balance, so I hope that, as we said earlier, we are able to work on a cross-party basis on this. I look forward to the Minister’s answering a couple of specific questions that I have for him.
Having spoken to people in the industries, I would like to ask the Minister to reassure them on a couple of points. The point about collective management organisations is interesting; it appears that the regulations would make them exempt from some requirements that they currently have to comply with. Will the Minister update me on the assessment his Department made that led to this decision? There has been some comment that the exemption may be unnecessary, and there are concerns that some CMOs might not pledge to use this exemption; new CMOs could exist in the future, which may further complicate this matter. Will the Minister write to me on that specific point about CMOs?
Additionally, will the Minister respond to the suggestion that rights holders can insist on transparency reports without legal obligations resting on CMOs to produce them? Some commentators believe that that may be unrealistic. I ask the Minister to write to me about that point as well.
Finally—this is another point about CMOs—the regulations are touted as a key solution to navigate the impact of AI on creatives and rights holders as we move forward to a permitted-but-paid system of AI training or to AI use on protected content. Will the Minister also write to me about that point?
Regulation of all the infrastructure of collective licensing in the UK is critical. We should not be pushing for more transparency without considering it very carefully and, where possible, without placing undue burdens on organisations. I look forward to colleagues’ contributions on these points and, indeed, on the aspect covered by the second statutory instrument.
Andrew Griffith
I thank the hon. Member for Reading East for his comments and for rightly highlighting the importance of intellectual property to the UK economy. I will happily write to him. The Government consulted extensively on the reforms to collective management organisations. This change affects only the smallest CMOs and, as Members would expect, it seeks to get the right balance between protecting rights holders—there is no desire to see a diminution in rights holders’ ability to get the transparency they need and achieve fair recompense—and reducing some of the burdens on the smallest CMOs. The hon. Gentleman knows the seven smallest CMOs affected by this change.
I will write to the hon. Gentleman about the very important issue of AI training. We will again ensure that rights holders are fully affected. He has spent significant time on that important issue, as has the Department, and I will continue to engage on it.
My hon. Friend the Member for Amber Valley asked about the scope of the regulations and whether they extend to digital content. He used the example of the Kindle. That is not dealt with by these regulations, which are about the protection of IP in a physical form. There are separate regulations and copyright laws that deal with that issue. That illustrates the complexity, and it is right that, rather than move too quickly, we take the time to look at the interlocking tapestry.
Ian Lavery (Wansbeck) (Lab)
For the sake of clarity, will the Minister inform the Committee what sort of exhaustion regime the Government intend to introduce? When is that likely to happen?
Andrew Griffith
As I said in my remarks, the Government are consulting on that, and it is right that we take the time. To be transparent, I cannot give the hon. Gentleman a specific time and date. The issue is complex, and officials are working through when that is, but we have consulted and that regime will come. I hope we all agree that it is more important to be right than to be fast in this domain; that is certainly the strong message that we hear from industry.
In the meantime, the regulations, if the Committee supports them today, will provide valuable certainty to industry. The last thing anyone wants is for us to go into the start of next year with uncertainty. These regulations give us the opportunity to take the time. If the hon. Gentleman wants to make representations, I will be happy to entertain them. Hon. Members on both sides of the House engage very strongly with the industry, and I hope that when we reach agreement on what the regime looks like, we can do it on as much of a cross-party basis as possible.
Question put and agreed to.
Draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023
Resolved,
That the Committee has considered the draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023.—(Andrew Griffith.)
Draft Public Service Obligations in Transport Regulations 2023
(6 months ago)
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The Parliamentary Under-Secretary of State for Transport (Anthony Browne)
I beg to move,
That the Committee has considered the draft Public Service Obligations in Transport Regulations 2023.
It is a pleasure to serve under your chairmanship, Sir Robert. I realise that we have two chairmen present, although you are sitting in the Chair today.
The draft regulations relate to arrangements to support the effective and efficient provision of transport services to customers, in particular rail passenger services. They will use the powers provided by the Retained EU Law (Revocation and Reform) Act 2023 to revoke EU regulation 1370/2007 and replace it with these Public Service Obligations in Transport Regulations 2023.
In doing that, we will take advantage of the benefits of Brexit to put in place a regime that is better tailored to the transport sector in Great Britain, supporting the provision of services to customers. The draft regulations will allow us to retain a flexible regime for contracting public transport services separate to the mainstream procurement and subsidy regimes, and to provide greater clarity and certainty to industry by retaining the interpretive effects of relevant European Union case law and underlying principles, when in Great Britain’s interest. In addition, the regulations will streamline the existing regime by removing duplicative and unnecessary provisions.
When the UK was a member of the EU, the 1370/2007 regulation created a bespoke procurement and subsidy regime of public service contracts in the transport sector. That was in recognition of the fact that such contracts are needed in the general interests of the public and cannot always be operated on an entirely commercial basis. The regulation contained some important exemptions from the complex rules on subsidies and procurements. It recognised the special status of public passenger services as “critical national networks”. It also provided contracting authorities with the freedom to let passenger service contracts more efficiently via simpler competitive processes and, where necessary, by direct award. Such flexibility helped to minimise disruption to those important public services.
The intent of the regulation was to encourage competition, so that the default process for the award of a passenger services contract is through competition. The regulation recognises, however, that in certain circumstances it is necessary to award a contract without competition by instead making a direct award to maintain the continuity of essential public services—for example, the emergency measures agreements that were put in place following the pandemic to secure train services.
Discussions with experts from across the transport sector have identified opportunities to remove some of the ambiguities and conflicting provisions in the existing regulation. That will provide greater certainty and clarity to industry and contracting authorities. We are using the opportunity of our post-Brexit flexibilities to revoke and replace regulation 1370/2007 to ensure that a robust and reliable regime for public transport service contracts is maintained independent of the mainstream procurement and subsidy regimes. The draft regulations will also increase efficiency by removing duplicative or unnecessary provisions and by clarifying drafting wherever possible—for example, by defining terms that previously were left undefined in the EU regulation. This statutory instrument will also bring the regime in Great Britain into compliance with the subsidy control chapter of the UK-EU trade and co-operation agreement.
Crucially, the draft instrument will preserve existing powers to make direct awards of rail contracts, which would otherwise sunset on 25 December 2023 due to a sunset clause in regulation 1370/2007. Without this draft instrument, therefore, the Department for Transport and other contracting authorities such as Transport for London would lose important powers on which we rely to award rail franchises. Leaving the EU has given us the opportunity to retain those important powers, and it is in the best interests of the railways and Great Britain that we retain the important flexibilities that they provide.
The private sector has an important role to play to drive innovation and growth, and we remain committed to returning to competition for rail contracts as soon as possible. The draft instrument, however, recognises that in certain circumstances it will be necessary to award a contract by making a direct award.
Lastly, the draft instrument will provide greater clarity and assurance to industry by retaining the interpretive effects of EU case law and underlying principles. Under the Retained EU Law (Revocation and Reform) Act, EU case law will no longer be binding on UK courts after 31 December 2023. Relevant EU case law relating to procurement notices and in-life change of contracts, which was not codified by the regulation, has been relied on for clarity by authorities and contractors. The case law is therefore being codified by this instrument as it provides helpful clarity.
Likewise, EU principles will no longer apply to underpin public service obligation procurements from the year end. The instrument replaces those with principles based on the new mainstream procurement regime for England and Wales, and with principles based on Scottish procurement law for Scotland. Beyond the changes that I have outlined, this instrument largely maintains the status quo. That will provide certainty, clarity and confidence to contracting authorities, operators and passengers alike.
The Government are using the opportunities provided by the Retained EU Law (Revocation and Reform) Act to revoke regulation 1370/2007 and replace it with an instrument that optimises the regime for the railways in Great Britain. Without this instrument, important powers to make direct awards of rail public service obligation contracts would fall away, with the potential to cause disruption to vital public transport services.
The instrument will also create a simpler, more effective regime by removing duplicative or unnecessary provisions. Furthermore, it will provide greater certainty by codifying important case law and ensuring consistency with the mainstream procurement and subsidy regimes, as well as with the subsidy control chapter of the trade and co-operation agreement. I commend the regulations to the Committee.
Simon Lightwood (Wakefield) (Lab/Co-op)
I am pleased to serve under your chairmanship, Sir Robert. I thank the Minister for his explanation of the purpose and content of the legislation. As long as clarity is provided on certain aspects of the instrument, which I will outline in a moment, we will support this legislation, which will remove the European Union sunset clause of 25 December 2023. If it were not removed, limitations would be placed on the ability of the UK Government and devolved transport authorities to make direct awards. Given the fragmentation of our rail network, it allows the Government to retain the ability to make direct awards, at least in the short term.
More than 40,000 rail services were cancelled across Britain in the latest quarter alone, while punctuality is declining across the entire country. The state of our railways is shocking and passengers are desperate for change across the network. That is why in the long term Labour will reform our broken railways by bringing operators back into public ownership when contracts expire, bringing back track and train together and putting passengers at the heart of the system.
The explanatory memorandum for this instrument states:
“The instrument retains an important power in Regulation 1370/2007 which permits the making of direct awards of PSO contracts for passenger transport by rail and contains new provisions to ensure the Government is able to meet obligations under the UKEU Trade and Cooperation Agreement”.
Can the Minister confirm whether the direct award mentioned applies only to the Government being able to make direct awards to the private sector operator, or whether it would also cover the public sector operator, too? Clarity is required on this issue. Also, what does he expect the impact of the instrument will be on the ability of the Government and devolved Administrations to, first, improve public passenger services; secondly, reduce delays and cancellations on the rail network; thirdly, reduce the cost of rail services for passengers; fourthly, hold train operators to account for poor performance; and fifthly, what will the impact of the instrument be for those who work in the rail sector? I await the Government’s response to the points made with great interest.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to see you in the Chair, Sir Robert. I welcome the new Minister to his place. I will not detain the Committee for long. I will not repeat what this measure does, but further to the questions from the Labour Front Bench, can I ask a question on public service obligation routes? As it stands at the moment, PSOs in Scotland have to include London—I should say routes awarded by the UK Government currently have to include London. The Scottish Government have a number of PSO routes in Scotland. A number of local authorities in Scotland have their own public service obligation routes that they support as well.
In the Select Committee on Transport, of which I am a member, we heard from many witnesses that the inflexibility is deeply unhelpful and a barrier to regional connectivity. The Minister at the time almost agreed, and said that the Government would definitely look at that and come back. The Union connectivity review by Sir Peter Hendy also recommended that it be looked at and changed, as it is a barrier to regional connectivity. In the Flightpath to the Future report, the Government acknowledged that and said that they would respond in their final Union connectivity review response. To date we have still not seen that UCR response. Can the Minister tell us when the connectivity review response will actually come out and whether the Government are still minded to look at the rules surrounding PSO routes as they are currently drafted in England?
Anthony Browne
I thank hon. Members for their consideration of the draft regulations and for their helpful and constructive points. I should note that this regulation has gone through and been supported by the devolved Administrations in both Wales and Scotland and, indeed, been approved by the Scottish Parliament and the Welsh Government.
To come first to the points from the SNP shadow Minister, the hon. Member for Paisley and Renfrewshire North, he asked when the response to the Union connectivity review, the Hendy review, would be published. As he knows, I am not the Rail Minister; I am standing in for the Minister of State, Department for Transport, my hon. Friend the Member for Bexhill and Battle (Huw Merriman) for this debate, but I will write to the hon. Gentleman with information about that.
The Labour shadow Minister, the hon. Member for Wakefield, raised quite a few specific points. One was whether the regulations apply to operators. This is not expected to apply to operators; they would be covered by the mainstream procurement regime. He asked a whole series of questions about the impact on public passenger services in terms of cost, improvements to services and holding poor performance to account, and about the impact on workers. As I said in my opening remarks, the point of these regulations is to ensure improved services for passengers and it would be very disruptive not to have the regulations in place. But I am very happy to get the Rail Minister to write to the hon. Gentleman with a more detailed explanation of the different ways this instrument would help with all the points that he raised.
In summary, this instrument will put in place a regime for the award of public service obligation contracts in the rail, light rail, bus and tram sectors that is tailored to the transport sector in Great Britain, while largely enabling contracting authorities and operators to continue operating as they do now, by maintaining the default position of competitively tendering for public service obligation contracts. It will enable the Government to meet their international obligations and will ensure consistency with other domestic legislation. Lastly and crucially, it will retain important flexibilities in the way we award contracts, which would not have been possible had we remained a member of the EU.
I am grateful to hon. Members for considering these regulations today and I hope that they will join me in supporting them.
Question put and agreed to.
Draft Green Gas Support Scheme (Amendment) Regulations 2023
(6 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
I beg to move,
That the Committee has considered the draft Green Gas Support Scheme (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mrs Murray. The draft regulations, which were laid before the House on Monday 16 October, make a set of changes to improve the administration of the green gas levy, which is charged to licensed gas suppliers in Great Britain, and ensure it works in line with policy intent. The regulations will reduce burdens arising from the levy for Ofgem, which administers it, and for gas suppliers. The green gas levy funds the green gas support scheme, which is a Great Britain-wide tariff-based scheme that facilitates ongoing investment in the biomethane industry and enables the development of new production plants for injection into the gas grid.
The amendments made by the regulations are technical and do not alter the aims of the GGSS or GGL; they will not add to the amount raised by the GGL or the rate at which it is charged. We have consulted the Scottish and Welsh Governments on the regulations. The Scottish Government have consented to them, as required under the Energy Act 2008, which provides the underlying primary powers for the regulations. The Welsh Government have also agreed to the changes.
The amount that the green gas levy collects is set according to a formula specified in regulations, and this statutory instrument will change the formula so that it will operate as always and originally intended. Regulations require the Secretary of State to publish a maximum amount that the green gas levy can collect, which is called the maximum levy amount. That is set at the total that the levy is expected to collect in its peak year. The statutory instrument will allow the maximum levy amount to be set by reference to whatever year is expected to be the peak year, members of the Committee will be thrilled to learn. The regulations introduce powers for the Secretary of State to set a de minimis amount for the green gas levy. That amount will apply to selected payment obligations and credit cover requirements. Obligations below the threshold will automatically be disapplied. The instrument makes five further minor changes.
In conclusion, the changes made by this statutory instrument provide the basis for the green gas levy to be collected efficiently and at the intended rate over the lifetime of the green gas support scheme. The instrument will help Ofgem to administer the policy effectively and as intended. It will reduce administrative burdens and ultimately benefit bill payers by reducing levy administration costs. I commend the draft regulations to the Committee.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray; we seem to be meeting rather frequently today, but that is always a pleasure.
The SI concerns the green gas support scheme, which is a scheme that I advocated for a very long time. I was delighted when it came in in 2021, and it has proved very successful in bringing about substantial advances in biomethane production and substantial increases in the amount of biomethane injected into the grid, thereby decarbonising the gas grid to a considerable degree. I hope it continues to be successful. We have to be careful that people who are in favour of sustainable aviation fuel do not seek to pinch that biomethane in the not-too-distant future, but that is perhaps a debate for another day.
As the Minister outlined, the instrument makes some very minor changes that streamline and make more efficient the operation of the scheme. Those are unexceptional changes, which we certainly support. I have two very brief questions—or rather, one brief question and a suggestion—as far as the changes are concerned. I would be grateful if the Minister could respond, and I am sure he will do so very briefly and succinctly when we get to that in a moment.
The first issue is that, as hon. Members will have seen, the interest that accrued in Ofgem’s account from the levy was, from the beginning of the scheme, added to, rather than deducted from, the levy collection target. Of course, that does not make much sense unless it was a mistake when it was first introduced in the framework. This instrument changes that addition to a deduction. My question is, what has happened to what appears to be an over-collection into the levy from gas suppliers, which are levied for the purpose of the support scheme? I am not a great advocate of handing back money that has been collected to make a scheme work, but has the Minister ever received any complaint or concern from the gas industry that it was being over-levied and would like its money back? I would imagine that, otherwise, it would stay in the support scheme and therefore make the MLA more appropriate to enabling the scheme to last longer.
The other point, which the Minister has mentioned, is that the maximum levy amount in the scheme is designed to, among other things, cope with the maximum point at which the levy is likely to be called on. It is a sensible change to make that maximum point rather more flexible on the decision of the Secretary of State. We want the levy to remain sufficiently flexible to finance the green gas support scheme after 2028-29, because we hope it will go on considerably longer than that.
Although the change is positive, it seems to me a little clunky. It is a fixed rate which requires the Secretary of State to take a decision on it. At that distance in the future, it is quite likely that inflation will begin to eat into the MLA seam. It might have been a better idea to index the MLA against inflation over the periods, leaving the Minister to take a decision only in the event that matters proved adverse to the passage of inflation over a period of time, rather than having to take a decision should things need adjusting even within that parameter.
Those are my only two comments on the scheme. I am sure the Minister will be delighted to know that I am going to stop very shortly.
Dr Whitehead
Those two clarifications would be very helpful to understand exactly where the changes to the scheme can best go, and whether we need to do any more work to make sure these amendments to the scheme stick as well as they are clearly intended to.
Graham Stuart
I thank the hon. Gentleman for his questions, and for his enthusiasm. He may be one of a tiny number of people who has quite that level of enthusiasm for these schemes, and I congratulate him on that, because they are important and excellent.
The hon. Gentleman asked whether the money being added rather than deducted was a mistake—yes, it was—and whether that money has been taken. To date, none of it has been taken because of the structure of the system, so there is no money to talk about. If it had been, it would have stayed in the levy and been rolled over, as any spare funds are in any case. It would have just been rolled over to the following year and thus have helped to reduce the levy the following year, so there are no worries on that front.
On the maximum levy amount, it now has the flexibility it requires. The Secretary of State can change the levy rate annually when the levy rate is set.
With no further ado, and with thanks to the Committee for its support for these technical arrangements, I commend this instrument to the House.
Question put and agreed to.
Draft Health Protection (Coronavirus, Testing Requirements and Standards) (England) (Amendment and Transitional Provision) Regulations 2023
(6 months ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
I beg to move,
That the Committee has considered the draft Health Protection (Coronavirus, Testing Requirements and Standards) (England) (Amendment and Transitional Provision) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Paisley. I will begin by setting out the policy context for the regulations, and then explain the effects of the proposed changes. We all remember that during the covid-19 pandemic the Health Protection (Coronavirus, Testing Requirements and Standards) (England) Regulations 2020 focused on enabling providers who met appropriate quality standards to rapidly enter the private covid-19 testing market. At the time, the right balance was struck between protecting public health and growing the market quickly, both of which were necessary public health outcomes. Now that the threat of covid-19 is reduced and there is no longer an urgent need to grow the testing market quickly, the Department has reviewed the 2020 regulations and proposes that all private providers must be now be fully accredited before they provide testing services.
The 2020 regulations introduced a three-stage accredit- ation process for organisations providing covid-19 testing commercially, to speed up entry to the market. Stage 1 required a private provider to make an application to the United Kingdom Accreditation Service for accreditation, and to make a declaration to the Department that it met and would continue to meet certain minimum standards. Stage 2 required an applicant to demonstrate within four weeks of applying for accreditation that it met the requirements published by UKAS. Between January and June 2021, stage 3 required providers to complete their application within four months.
In June 2021, we passed legislation to update stage 3, thereby requiring applicants to achieve a positive recommendation from UKAS within four months of completing stage 2. As long as a provider received that recommendation, it then had a further two months to achieve accreditation. Providers that failed to meet those deadlines, or failed to satisfy UKAS that they met the relevant standards, had to stop supplying tests. At the time, our approach ensured that enough providers were able to enter the market to meet the public’s demand for covid-19 testing, while still putting providers through an appropriate approvals process.
However, we are now more than three years on from the start of the pandemic, the living with covid strategy has been in place for over a year and the World Health Organisation has declared that covid-19 is no longer a public health emergency of international concern. It is, therefore, the right opportunity to review and update covid-19 legislation on private providers to bring in requirements and standards to strengthen consistency, safety and high-quality covid-19 testing services.
The proposed changes will empower consumers to choose a private testing service with confidence, while continuing to improve safety and quality.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I notice that there is no impact assessment associated with the regulations—why is that? Will the changes to the regulations take into account the investigation into Immensa and the errors that resulted in 39,000 covid tests being inaccurately assessed as negative? Will the Minister reassure us that that will be the case, and explain why there was no impact assessment?
Maria Caulfield
Certainly. I will come in a moment to the standards we are changing to meet those concerns.
First, under the new regulations, from 1 January 2024, in order to enter the private covid testing market private providers will have to achieve accreditation against the appropriate ISO standard by a signatory of the international laboratory accreditation co-operation mutual recognition agreement. That should give Members confidence that providers will now have to meet an internationally recognised standard. There will be consistent testing standards across the board that meet the ISO standard and are accredited by a signatory of that mutual recognition agreement. The new requirements will replace the three-stage accreditation process required under the existing regulations, which I just outlined, to make sure that providers meet a certain standard.
Secondly, we are removing the requirement for providers to get sign-off from the Department at the start of the application process, because they will have to be accredited before they can enter the market; thirdly, we are shifting the legal responsibility for clinical services to the clinical organisation, rather than it resting with customer-facing organisations; and finally, we are removing the duplicative provision for the validation of testing and ensuring that the regulations reflect the publication of the updated ISO standard, which is 15189:2022.
The changes in the regulations are forward-looking and do not affect private providers that have applied for accreditation before the instrument comes into force. Those providers will still need to complete the application process but can do so using the current staged accreditation system.
On the point made by the hon. Member for Oldham East and Saddleworth, we are moving to a system in which accreditation will have to be achieved against the new ISO standard, and that will apply across the board and be comparable to other countries. We will move away from the three-stage process that we used during the emergency phase of the pandemic, when we had to balance risks and benefits. The risk at that time related to the need to get as much testing out to the public as possible, but that has now reduced, so it is important to set high standards so that people have confidence in the tests they get done.
The regulations will reduce the bureaucracy involved in applying for accreditation while still delivering the rigorous accreditation requirements that are important for public health. I therefore commend the regulations to the Committee.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Paisley. The Opposition support the regulations because they represent the right balance between the promotion of innovation and public health.
We are clearly not where we were in 2020, when the original covid regulations for testing-service providers were agreed and “lateral flow devices” was not a household term. We no longer live with the constant fear that the NHS could be imminently overwhelmed—at least not by covid-19 patients. That has been a testament to the incredible work of our NHS, civil servants, the academic community and the millions of ordinary Britons who pulled together at a time of national crisis to overcome the pandemic.
That work is why Labour supported the 2020 regulations. We recognised the urgent need to enable new service providers to meet the demand for testing services—which were critical to opening up our economy and taking pressure off the NHS—but also to balance that with the critical importance of public health protections and regulation to build safeguards into the system and give people confidence that services could be trusted to keep them safe.
Of course, covid remains notifiable to the UK Health Security Agency for all laboratories in England that perform a primary diagnostic role, which is critical to the monitoring of national trends, so we support the need for sensible regulation of such an important sector. We promised to work with the Government in the national interest; we did and we still do.
As the Minister outlined, the regulations apply to clinical covid-19 testing services, such as diagnostic laboratories or those that carry out point-of-care testing. The regulations will mean that those services are no longer subject to the additional requirements introduced early in the pandemic, such as the three-stage UKAS accreditation process and the requirements to submit tests for additional validation and to ensure that the testing process is overseen by a clinical director. They also reflect the update to the international standard since last year.
It is important to stress what the regulations will not change. Providers will still be required to seek accreditation against the appropriate ISO standard, and test devices will still need to meet the requirements set out in the Medical Devices Regulations 2002, as they did before the pandemic. This seems to strike the right balance. As the UKHSA has noted, accreditation was not mandatory prior to the pandemic, but NHS England and Public Health England endorsed all medical laboratories being accredited with UKAS. The process for laboratories to achieve accredited status took anywhere between six and 12 months; given the changes we are discussing, how long does the Minister expect the accreditation process to take now?
It is important that we learn lessons from how the regime worked during the pandemic and apply them going forward, so I hope the Minister will not mind if I ask a number of questions. What confidence does she have that new providers will be able to meet the various deadlines to meet the new ISO requirements? How will the regulations be enforced? Has she ensured that UKAS has the resources it needs for enforcement? How many fines have been issued to non-compliant providers since the 2020 regulations came into force? If—God forbid—there was another pandemic tomorrow and we needed similar regulations again, would she do anything differently?
It pays to think about the state of the market now. How many UKHSA-accredited providers were there at the pandemic’s peak, and how many are there now? As some companies wind down their covid-19 testing capacities because of reduced demand, what assessment has the Minister made of how the market is changing and how such diagnostic capabilities could be deployed to meet other ends?
Finally, I want to take the opportunity to ask the Minister about one of the biggest scandals among private providers during the pandemic: Immensa laboratories. I remember writing to the Government about this case. Local public health experts were baffled as to why an NHS Test and Trace contract had been given to the company while high-quality diagnostic services, such as those at the University of Birmingham in my constituency, were being wound down.
Immensa was awarded more than £100 million to carry out covid testing in September 2021, without going through the normal tendering process. It was subsequently found to have been one of 50 firms that had been put into the priority lane for test and trace contracts worth billions. As my hon. Friend the Member for Oldham East and Saddleworth said, it was found that PCR—polymerase chain reaction—test results from Immensa’s Wolverhampton lab had misreported around 40,000 positive results as negative between September and October 2021, leading to significant additional infections at a critical time and an estimated 20 deaths.
I have specific questions on this issue. Neither Immensa Health Clinic Ltd, nor its related company Dante Labs Ltd, was accredited by UKAS at the time of the scandal, despite the regulations that we are amending today. Immensa was a new entrant to the market and was supposed to go through the three-stage process, and it was awarded vast sums of public money to rapidly expand the capacity of NHS Test and Trace in the autumn of 2021. One would expect high standards from a private provider in exchange, but that did not appear to be the case.
An investigation by the UK Health Security Agency found that despite requirements for accreditation being written into Immensa’s contract, the Department of Health and Social Care and NHSTT decided that they would not apply. As such, Immensa was not accredited at the time of the false-negatives scandal, even though the Department’s spokespeople claimed otherwise. Will the Minister clear up what actually happened in this case?
The findings of the UKHSA report risk undermining the rest of the system, if providers can be encouraged to circumvent the correct process and there are no consequences as a result. Why were the Department of Health and Social Care and NHS Test and Trace so determined that special measures should be put in place for this provider? I am not aware of any consequences for any officials or Ministers responsible for the shocking findings of the UKHSA investigation; why not? Given the tens of millions of pounds of public money involved in the scandal and the dire consequences of the mistakes, what efforts have the Government made to get that money back?
To reiterate, the Opposition support the statutory instrument. We agree that now is an apt time to review the exceptional measures that were taken early in the pandemic while ensuring that appropriate regulation remains in place.
Maria Caulfield
Let me respond to the questions from the shadow Minister. Currently, we have enough testing capability. Testing providers that are already accredited by the current system will not have to reapply, and those currently undergoing accreditation will be able to continue as planned. The new regulations are for providers that want to enter the market.
More than 100 providers currently hold accreditation, and 18 of them were reporting results to UKHSA as of September. A significant number of providers is currently accredited, so we do not anticipate a huge number coming through the new system, but we will keep an eye on that. Since January we have had very few applications, if any, which shows that the current capacity reflects the demand.
If covid numbers took off or there was a variant of concern, the balance of risk and benefit that I talked about earlier would have to be re-looked at and we would look at the accreditation process in that light. Assuming that the living with covid policy continues as it is, we are confident that the regulations will be appropriate to meet the demand of those wanting to join the private market testing sector. We will keep that under constant review, along with the resources needed to manage the accreditation process.
The shadow Minister touched on the specific issue of the testing at Immensa laboratories. As she said, the UKHSA, the arm’s length organisation responsible for that, looked at the issue and published a public statement in November last year on the serious incident investigation. It found that
“no singular action or process implemented by NHS Test and Trace could have prevented the errors within the Immensa laboratory arising”.
However, although Immensa was going through the three-stage accreditation process, when problems were identified and it failed to achieve a positive recommendation at stage 3, it was not allowed to continue, and neither of the relevant organisations has rejoined the private testing market. So it was identified at the time and the UKHSA, the organisation that oversees testing, looked into it.
Lessons will be learned from the covid experience, which is why an independent inquiry is ongoing. I reassure the shadow Minister that we will do everything we can to learn lessons from that. This is exactly why we have the regulations in front of us: at that time there was pressure to get as much testing out to the public as possible, and the three-stage accreditation process was introduced to do that. That is not the case now, so we are able to take a much more robust approach to assessing organisations that want to take on testing. I hope that gives the shadow Minister some reassurance and that I have demonstrated why the regulations need to come into force now. I hope I have answered the questions. I commend the regulations to the Committee.
Question put and agreed to.