(1 day, 7 hours ago)
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Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to remove the broad powers granted to the Secretary of State under product regulations, when defining and regulating risks and determining what constitutes efficient or effective product operation.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 1 and 80 in my name, and to Amendment 133 in the name of the noble Lord, Lord Fox. As noble Lords will know, I was not present at Second Reading, having only just assumed this position. I hope that the Committee will indulge me if I range a little more freely than I would normally in my remarks on the amendments.
Amendment 1 is necessary because Clause 1 provides such broad powers for the Secretary of State on product regulations. The Delegated Powers and Regulatory Reform Committee regarded this clause and other clauses in the Bill as “skeleton legislation”. I thank the Minister for his letter dated 24 October detailing the Government’s position in answer to the committee’s original report, which was published on 15 October. But I note that the committee maintained its original position after an evidence session with Ministers on 16 October, which concluded that Clauses 1, 2, 3, 5, 6 and 9
“are inappropriate and should be removed from the Bill”.
His Majesty’s Official Opposition agree with the committee, and we reserve the right to return to this at later stages of the Bill. For now, I have tabled a series of amendments designed to elicit more information.
The committee rightly pointed out that Clause 1 confers considerable discretion to legislate in critical areas, such as product marketing, efficiency and accuracy, via statutory instruments. This amendment aims to address those concerns by ensuring that any regulatory powers in this space are appropriately balanced and subject to full legislative scrutiny. Clause 1 grants wide- ranging powers to the Secretary of State to make regulations through statutory instruments, SIs, a process with limited parliamentary oversight. Such discretion risks undermining democratic accountability, as SIs are not subject to the same level of scrutiny as primary legislation. Again, I think it is worth quoting the committee:
“skeleton legislation should only be used in the most exceptional circumstances and where no other approach would be reasonable to adopt”.
The report goes on to state that the Government are, in effect,
“asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers”.
On these Benches we argue that it is all so insubstantial, that the Bill could lead to regulations that significantly impact businesses and consumers without thorough debate or consultation. It is so insubstantial that it does not give businesses the certainty and predictability they need to thrive. It is so insubstantial that granting considerable discretionary powers could lead to frequent unpredictable changes in regulations, creating compliance challenges on a ministerial whim.
Removing this clause would promote stability and confidence, particularly for small and medium-sized enterprises, which may otherwise struggle to adapt to rapidly changing environments. Clause 1(1)(b) on
“ensuring that products operate efficiently or effectively”
is surely something that can best be left to market forces. Consumers are going to purchase products that work better than others, and this will incentivise producers to provide products that work well. Why is this the business of the state?
On Amendment 80, we see that there are similar issues. The Delegated Powers and Regulatory Reform Committee stated that Clause 5 is another example of skeleton legislation. Clause 5(2) confers sweeping powers to the Secretary of State to dictate the quantities in which goods may be marketed and the units of measurement used. We will return to this theme in later amendments. Granting such broad discretion risks bypassing parliamentary scrutiny and undermining democratic accountability. Decisions affecting trade, business practices and consumer choice should be subject to thorough debate, not delegated to ministerial regulations. The power to use metrology regulations to replace and repeal primary legislation merits a full explanation and compelling justification, but the memorandum fails to provide this—something that the Government admitted in the sixth report of the Delegated Powers and Regulatory Reform Committee on 30 October.
I thank the noble Lord, Lord Fox, for his Amendment 133, which requires that regulation must be referred to a Joint Committee of both Houses for review. The amendment aims to address a serious flaw in the Government’s approach to regulatory changes under this Bill. Specifically, it would ensure that regulations are subject to proper scrutiny by Parliament through a Joint Committee of both Houses, with further safeguards in place if significant departures from existing law are proposed.
By bypassing established mechanisms for scrutiny and relying heavily on statutory instruments, the Government exhibit a clear lack of respect for the legislative process and, indeed, the opinions of their own Attorney-General. As the Constitution Committee noted in its demolition of the Bill in its report on 18 October:
“We endorse the view of the Attorney General expressed at his recent Bingham Lecture on the rule of law: ‘[E]xcessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation, upsets the proper balance between Parliament and the executive. This not only strikes at … rule of law values … but also at the cardinal principles of accessibility and legal certainty. In my view, the new Government offers an opportunity for a reset in the way that Government thinks about these issues. This means, in particular, a much sharper focus on whether taking delegated powers is justified in a given case, and more careful consideration of appropriate safeguards’”.
This amendment would restore Parliament’s rightful role in scrutinising significant legislative changes—“proper balance”, in the Attorney-General’s words—reaffirming its sovereignty and its duty to represent the interests of the people. In short, I agree with the Attorney-General. The fact that two committees have slated the Bill suggests that it is not justified, so we support this amendment. We think Clauses 1, 2, 3, 5, 6 and 9 should be junked. Does the Minister agree with his own Attorney-General? I beg to move.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
If this amendment is agreed, I shall not be able to call Amendments 2 or 3 by reason of pre-emption.
Lord Anderson of Ipswich (CB)
My Lords, I support Amendment 133, to which the noble Lord, Lord Sharpe, has just spoken and to which I put my name. This evening’s inaugural Lord Judge memorial lecture in legal history will address the early modern practice of legislating by proclamation without Parliament. According to the advance publicity for the lecture, Professor Sir John Baker will say that this practice
“may be compared with those resulting from our ‘elective dictatorship’, Parliament having become an instrument whereby a modern Government can exercise more absolute power than that formerly attributed to the King’s prerogative”—
a point often made by the noble and learned Lord, Lord Judge, himself. The truth of those words is demonstrated by this Bill, about which the Constitution Committee remarked—with our customary understatement —that
“several powers in the Bill are widely drawn and could facilitate the making of law that goes beyond the updating of existing rules to involve the making of new policy”.
When the EU makes new policy, as it did with the general product safety regulation, which will come into force next month, the process is properly and appropriately democratic. A road map and a public consultation in 2020 were followed by a Commission proposal in 2021, the usual substantive reports by parliamentary committees, a provisional agreement between the Council and the Parliament, approval by COREPER and IMCO and, eventually, adoption of the GPSR by both Parliament and Council in 2023. The process was more extensive, but so is the end product. The GPSR contains a detailed list of factors to be taken into account when assessing the safety of products. It sets out the obligations of manufacturers, authorised representatives, importers, distributors and—a difficult one—online marketplaces. It outlines a traceability system and makes provision for market surveillance, reporting and recalls. Detailed powers, of course, are delegated to the Commission, but the guiding principles were decided on by the legislature at an appropriate level of detail for a legislature.
My point is not that we should or should not follow the substance of what the EU has done. It is that where such wide-ranging matters of policy are engaged, it is not appropriate for Parliament to abdicate its power to the Government as entirely as this Bill proposes to do. Matters that in Europe are decided upon by the Council and the Parliament are here reserved to unamendable and, in practice, unblockable statutory instruments under this Government as they were under the last.
The noble Lord, Lord Sharpe, like the Constitution Committee, quoted the Attorney-General’s recent Bingham Lecture, in which he criticised excessive reliance on skeleton legislation and expressed the view that,
“the new Government offers an opportunity for a reset”.
I believe that the Attorney-General has talked the talk with complete sincerity about this issue, but his words do not sit happily with this Bill. The practical question is how are we going to walk the walk? A comprehensive solution would be to adopt the Hansard Society’s proposals for a new system of delegated legislation, a concordat agreed between Parliament and government to reset the boundary between primary and delegated legislation, and a new Act of Parliament to ensure that Parliament can calibrate the level of scrutiny to the content of a statutory instrument.
Limiting ourselves to this Bill, two other solutions are possible, short of the wholesale omission of clauses that was recommended by both the Delegated Powers Committee and the Constitution Committee. The first would be to copy the amendments to what is now Section 14 of the retained EU law Act 2023, tabled in the names of the noble Lords, Lord McLaughlin and Lord Hamilton of Epsom, the noble and learned Lord, Lord Hope, and myself. These would have provided for a sifting committee of both Houses, or of the House of Commons, to identify proposed regulations that are particularly deserving of parliamentary attention, and for regulations falling into that category to be amendable by agreement of both Houses under a power modelled on Section 21 of the Civil Contingencies Act 2004. Those amendments were passed by large majorities in your Lordships’ House in May and June last year, with the support of Her Majesty’s Opposition, and drew support from all parties in the Commons before eventually falling at ping-pong.
The second solution, proposed by the noble Lord, Lord Fox, in his Amendment 133, is, by comparison, gentle indeed, and if the noble Lord were a fast bowler, he might describe it as a loosener. No power of amendment is claimed for Parliament. A joint sifting committee would simply have the authority to refer a statutory instrument to a process requiring parliamentary approval if the regulations made a substantive change to the law, or if they had not been consulted upon. A substitute for European levels of democratic engagement I am afraid it is not but a pragmatic improvement to the Bill it is, and I look forward to seeing whether the Minister sees merit in it or whether, as I fear, this is an issue to which we will have to return with renewed energy on Report.
Baroness Crawley (Lab)
My Lords it is a pleasure to follow the noble Lord, Lord Anderson of Ipswich. I have an amendment in this group, Amendment 126, which I shall speak to. It is in my name and those of the noble Earl, Lord Lindsay, who cannot be in his place today, and the noble Lord, Lord Foster of Bath, reflecting its cross-party support. It requires the Secretary of State to conduct,
“appropriate consultation on draft regulations made under this Act”.
Like other amendments in this group, it is all about more effective scrutiny processes for this Bill. As it stands, this enabling Bill allocates significant powers to the Secretary of State—too many, according to the Delegated Powers and Regulatory Reform Committee and the Constitution Committee.
As this is the first time I am speaking in Committee on the Bill, I say that I support it and the need for it to improve the safety of UK consumers, as do most consumer-facing organisations in this country. However, the Bill, to put it mildly, has received a pounding from the Delegated Powers Committee and the Constitution Committee. I quote paragraph 36 of the Delegated Powers and Regulatory Reform Committee report. It states:
“We consider that … the Government have failed to provide a convincing justification for the inclusion of skeleton clauses in the Bill that give Ministers such wide powers to re-write in regulations the substance of the regulatory regime for products”.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to have the opportunity to speak in Committee. I begin by apologising on behalf of my noble friend Lady Lawlor, who is detained on a train. I am somewhat at a disadvantage in reading her notes but, naturally, I support the sentiments contained in what would have been her speech. I also begin by putting on record my thanks to the noble Lord, Lord Leong, for being prepared to debate and discuss these issues since Second Reading, his willingness to correspond with noble Lords on key issues, for holding a meeting with his officials, which was much appreciated, and substantially corresponding with my noble friend Lord Frost.
I am going to take the easy part first, which is to speak to my Amendment 33. I think it is apposite to look at the broader context of the Bill, bearing in mind the admonition that we should not repeat Second Reading remarks. All the amendments that I, my noble friend on the Front Bench and other noble Lords are moving today are in the context of the Bill, which is an extremely wide-ranging Bill that gives significant sweeping powers to Ministers. For instance, the UK in a Changing Europe document published just last week, its UK-EU Regulatory Divergence Tracker, makes the very pertinent point that the Bill
“is a very significant legislative change, with the government giving itself a broad power to proactively align with EU regulations … The exact range of regulations in scope is ambiguous, but it is evidently broad, with the bill’s explanatory notes referencing product safety, as well as emerging sectors like online marketplaces”.
With that in mind, and the skeleton nature of the legislation, as deprecated by my noble friend Lord Sharpe, we need to see my amendment in that context. Clause 2(3)(h) is the most egregious example of the potential issue at the heart of the Bill, which is that even existing provision in primary legislation may be replaced by provision in regulations. Many parts of the Bill, particularly in Clauses 1 and 2, are unfettered by any requirement for consultation, for criteria to be met or for meaningful preconditions to be satisfied. Indeed, the Bill clearly cuts across the guidance for departments that the Delegated Powers and Regulatory Reform Committee provided in its report of 15 October. My noble friend referred earlier to skeleton legislation, as well as the excoriating reports of the DPRRC and the Constitution Committee.
I remind noble Lords that this subsection relates to categories of
“persons on whom product regulations may impose product requirements”—
with all the caveats that we must accept that secondary legislation cannot, by convention, be amended. That leads us to a broader problem with the Bill in many clauses, particularly this one, which is that we have a double whammy. In the use of ministerial fiat, there is in effect no proper scrutiny in our Parliament and no proper oversight, because statutory instruments are very unlikely to be amended. Therefore, given that we have no fora in which to look at the details of the regulatory regime and the statutory instruments that will arise from the Bill—we no longer have a European Scrutiny Committee in the other place and we do not have a similar body in this House; we have a European Affairs Committee, which has a much wider remit—not only will we not be able to exercise that proper scrutiny but, having left the European Union, should we decide to shadow or dynamically align with regulations we will have no input on their effect but will effectively be cutting and pasting them into our domestic legislation.
In effect, we will have no mechanisms for scrutiny should we agree these clauses. We do not know the methodology by which a value judgment is made on the efficacy of any of these regulations on alignment. We have no measurement of criteria and no way to monitor or review the regulations at present, because there is no effective consultation process at the front end. For those reasons, I urge the Minister to look carefully at my amendment. It is not far reaching; it would specifically removes paragraph (h).
With that in mind, and for reasons of time, I am not particularly predisposed to go into detail on my noble friend Lady Lawlor’s amendments, other than to say that her Amendment 8 seems extremely sensible. Given the nature of the Bill and the wide-ranging powers that Ministers are seeking to exercise, potentially across vast swathes of our economy, a de facto sunset clause, after a modest period, would test the effects of a government intervention in terms of its environmental and economic impact, and particularly—regarding what I said earlier—its political and constitutional impact. It is an eminently sensible and straightforward amendment, and I would be surprised if such a measure were arbitrarily repudiated by the Minister and the Government.
Lord Jackson of Peterborough (Con)
I thank noble Lords for their forbearance as I was rudely interrupted by democracy.
I was somewhat remiss earlier for not also congratulating my noble friend on his position as Front-Bench spokesman for our party, so I welcome him, and I hope he will forgive me for that.
As I was saying, I believe that the amendment tabled by my noble friend Lady Lawlor should receive the support of all sides of the Committee because it seeks to ensure that there is proper, informed parliamentary scrutiny and approval in respect of Clause 1, which is a very wide-ranging clause; other noble Lords will no doubt wish to enunciate those issues later on. As the clock is against us, I will just finish by observing that I wholly support Amendment 128 in this group, tabled by my noble friend Lord Frost, which I have signed, and Amendments 80 and 81 on metrology and pints, tabled by my noble friend Lord Sharpe.
I will just finish briefly on Amendments 40 and 41 tabled by my noble friend Lady Lawlor. Again, these go to the heart of the necessity to see the Bill, and particularly Clauses 1 and 2, within the broader context of a quite seismic shift of government policy. Indeed, the think tank UK in a Changing Europe, in its press release last week launching the latest quarter 3 regulatory divergence tracker, makes the quite bold claim, which I think is correct, that this Government are seeking a much closer relationship with the European Union by increased convergence and reducing any capacity for divergence, either deliberately or as a sin of omission. Whether you think that is right or not, that issue has to be looked at in detail by the legislature—both the other place and your Lordships’ House. On that basis, I support my noble friend Lady Lawlor’s amendment, which would insert “constitutional” into the Bill, because of the wider governance and constitutional issues arising from a Bill that some have described as Chequers 2.0 in legislative form—I know that some of my noble friends might not agree with that.
Finally, Amendment 41 would enable a review of the impact and effects of Clause 2 and the powers therein to be laid before Parliament, focusing specifically on how the decisions made by Ministers and the regulations laid have impacted business and commerce in this country and trade across the world, particularly with the European Union.
On that basis, I ask the Minister to look kindly on supporting those amendments. None of them is radical and none of them seeks to undermine the integral nature of what the Bill is hoping to achieve, but they are sensible additions that will hopefully improve the Bill in the course of its passage through this House and the other place.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I welcome this landmark Bill, and I welcome my noble friend the Minister and the noble Lord, Lord Sharpe, to their Front-Bench positions. I firmly believe that the Bill protects consumer rights. However, I declare an interest as a member of the Secondary Legislation Scrutiny Committee, which scrutinises statutory instruments. In that respect, I refer to the amendment in the names of my noble friend Lady Crawley, the noble Earl, Lord Lindsay, and the noble Lord, Lord Foster of Bath, which would require the Secretary of State to conduct appropriate consultation on draft regulations under the Act.
It is vital that we set out as we mean to go on. One criticism that our committee had of many of the statutory instruments is the lack of proper consultation, as well as inadequate memorandums and impact assessments. This amendment in the name of my noble friend Lady Crawley is timely, and I urge my noble friends on the Front Bench to accept it. More effective scrutiny processes are required in legislation to ensure that the policy decisions made with the powers set out in the Bill can be effectively scrutinised as products and marketplaces evolve, particularly those that will evolve online. It is important that consumers are totally protected.
The noble Lord, Lord Jackson, referred to relationships with the EU. I hope that the Government are successful in resetting that relationship and that there is a closer relationship with the EU, because it is important not only for trade but for society and economic growth—and it is good for wider relations in this part of our global world.
Lord Frost (Con)
I shall speak briefly to my Amendment 128. I begin, like others, by congratulating my noble friend Lord Sharpe on his role.
My amendment is only a small one, and it is overwhelmed by the pretty savage surgery proposed in other amendments tabled by other noble Lords—a surgery that is well merited, on the basis of what we have seen so far. I shall save my substantive remarks on my main concerns about the Bill until the fourth group, where most of my amendments lie. I share the concerns about constitutional and democratic process expressed by other noble Lords so far. I would probably not go so far as the noble Lord, Lord Anderson, in advocating a very complex, process-heavy and corporatist EU-type process for the Bill, because I believe that speed and simplicity in legislation are also advantageous —but certainly, if any of the Bill survives, we need some sort of serious scrutiny-sifting process to make it work.
My Amendment 128 is just one tiny part of this. It would ensure that, if Clause 2 survived at all, the powers under Clause 2(7) would be exercised—if they were exercised—under the affirmative procedure. That, however, is really a minor part, when we look at some of the other proposals on the table. Nevertheless, I hope that the Minister will reflect, and I look forward to hearing his thoughts.
Lord Goodman of Wycombe (Con)
My Lords, I congratulate my noble friend Lord Sharpe on his appointment. I support his Amendment 1 and apologise for not having had the opportunity to be present at Second Reading, but I am a member of the Delegated Powers Committee and thought that I would make a few points that arise from our report.
I join my noble friend Lord Jackson in thanking the Minister warmly for the courtesy that he has shown us and the time that he has spared us over the past few weeks. When the Minister came to the Select Committee, I got the short—or long—straw and was given the questions to ask about European alignment or divergence, so I went back over the Second Reading debate. I have no intention of repeating the arguments there but, essentially, I saw that my noble friends Lord Jackson of Peterborough, Lady Lawlor and Lord Frost all suggested that the Government had a policy of alignment, while it was suggested by some on the Government Benches and Cross Benches that it would be better to have a policy of alignment rather than one of divergence.
I note in passing that UK in a Changing Europe has now produced a report which suggests that the Government are moving towards some form of alignment. If I heard the noble Lord, Lord Livermore, correctly in the Chamber during Oral Questions, that seemed to be the general flavour of his answers. My concern is not to get into the policy issue. It is simply to make the point that the Minister may be correct that the Government have no intention of having a policy of either alignment or divergence, but will simply take each regulatory decision as it comes. Even so, Ministers and policy can change.
What we have run across here is, as my noble friend Lord Jackson said, a gap in scrutiny that has arisen since we left the European Union and now that Bill Cash’s committee in the Commons, which used to examine European legislation, is no longer present. I say this in no spirit of party-political animus. After all, my party has been in government for a period since Brexit and has not corrected the position, but the Government now in office have a chance to correct it.
It might be worth quoting, as I close, what the committee said in conclusion about the powers that the Government propose to take under the Bill. It said boldly:
“In our view, the delegation to Ministers of law-making powers in this Bill involves legislative power shifting to an unacceptable extent from the democratically appointed legislature to the Executive”.
We need some form of being able to scrutinise the decisions that a whole series of regulations may make, as well as to debate and decide whether they represent a policy of alignment or divergence, and to probe the matter. The solutions may lie in the ideas floated by the noble Lord, Lord Anderson, a few moments ago or elsewhere, but there clearly is a gap. The committee has been concerned about similar gaps in legislation ever since it produced its Democracy Denied? report in 2021.
The Earl of Lytton (CB)
My Lords, I too was unable to be at Second Reading, so this is my first occasion to make comment. I preface my further remarks by thanking the noble Lord, Lord Leong, for his courtesy and for arranging what I can describe only as a very impressive array of his officials and Bill team members—much better than I think I really deserve.
I have spent nearly 50 years in practice as a chartered surveyor and a lot of that time has been involved in construction. I will not dwell on things that will come up later, on Amendment 46 in my name, but construction is one of the areas where there is an absolute fog of commercial relationships over products, their use and their assembly, which it seems important to raise at this juncture. It is a fog of commercial relationships, collateral warranties, responsibilities, product substitution, legislation and oversight of one sort or another—or a lack of it, as the case may be. Of course, the whole question of building safety has been very much in the news recently.
Turning to the report of the Select Committee on this Bill, I am taken by the comments of the noble Baroness, Lady Crawley, because she gets to the nub of the issue about consumer safety. Who are we doing this for? That must ultimately be the focus. Looking at the mural at the far end of the Room and noting Moses handing down the tablets, I get a sort of 10 commandments moment here, but I am not going to bore the Committee with 10 of them because I have only eight.
First, items should be of merchantable quality. There has to be a duty of care, especially to end users: those whom one can expect to have to use them in real life. Those who put them together may be a stage on the way but they are not the end user. Secondly, they have to be fit for the purpose stated, including their durability. Thirdly, they have to be correctly and comprehensively described, without descriptions that mislead or confuse. Fourthly, they have to be adequately and independently tested, and assessed for their purposes as intended—and where have we seen that fall down?
Fifthly, they have to be installed or assembled as recommended for their intended application, and there needs to be a clear audit trail for how that happens. The more complicated and risk-sensitive the outcome is—I suspect that in the case of buildings and construction, particularly residential buildings, that is a very high risk if you get it wrong—then it has to be assessed accordingly. Sixthly, there has to be adequacy of oversight. That is fundamental. Seventhly, there has to be effective enforcement, with clear responsibilities and duties and a means of making sure that that can be checked and regularly revisited. Finally, there have to be consequences for infractions and culpable non-observance, in the same way as there were some years ago for health and safety at work. A regime of strict liability with consequences at corporate and director level sharpened up everybody’s act no end and produced a substantial improvement in casualty and death rates, particularly in construction.
That is the analysis that should be involved in dealing with this Bill. If you have a paving Bill, you have to make clear rules. We still have the 10 commandments with us. What is it about “Thou shalt not bear false witness” that is not understood? These things have to be durable, they have to survive changes in political tone and international relationships, and they have to survive scrutiny at the level that the noble Lord, Lord Anderson of Ipswich, will be familiar with; that is, of the courts and of people who are experts in examining these things.
At this stage, it is relevant to talk about these many amendments—I broadly support the thrust of what they are doing—and set them in the context of getting the simple arithmetic right because if we drill down too much into the detail, we will try to second-guess what a Secretary of State may try to do somewhere down the line when the circumstances are different. If we can get those core principles right, this will endure and be of genuine benefit and use for future generations.
Lord Fox (LD)
My Lords, I join the cavalcade of congratulations to the noble Lord, Lord Sharpe, on his new role. We on these Benches look forward to working constructively with him; having witnessed what he did on at least one other Bill when I was opposite him, there is lots of room for us to build on that and work with him.
This is a Grand Committee but I will try to avoid grandstanding. I just want to lay out a modus operandi, if you like, from these Benches for how we shall take this Committee stage. Like the noble Baroness, Lady Crawley, and others, we do not need convincing that this legislation is necessary. That is the starting point. We believe that this is an important Bill but we are disappointed—as I am sure the Committee has already heard and will hear again—about the choice of such skeletal, paving legislation to deliver it.
Like the relevant committees of your Lordships’ House, we believe that the balance leans toward the secondary legislation route far more than it should. I will not use the same socio-religious language that the noble Earl, Lord Lytton, just used; I will use guard- rails rather than commandments. There need to be guard-rails in this legislation. There are other issues around alignment, which will come up mostly in the fourth group of amendments, but the bulk of our discussions will be on guard-rails—that is, what guidance should be in the legislation so that, when secondary legislation comes, it has some sense of purpose around what we are seeking to achieve. That will be our approach.
I shall now speak to Amendments 113 and 133; I thank the noble Lords, Lord Sharpe and Lord Anderson, for their support. I should say that, in a debate on a different Bill, the noble Lord, Lord Anderson, described me as a nuisance. Now, he has described me as a softie. I am not sure that I shall welcome his support in future, but the point is that we are trying to find a middle way. In a sense, I agree with some of what the noble Lords, Lord Frost and Lord Anderson, said: we are somewhere in the middle with the amendment, so perhaps we are finding the right place for it.
As we have heard, the Delegated Powers and Regulatory Reform Committee was very clear about this Bill; I have chosen different quotes from everybody else, thank heavens. The committee said:
“We recognise the need for this Bill to delegate some legislative powers”.
So do we. It continued:
“However … skeleton legislation should only be used in the most exceptional circumstances and where no other approach would be reasonable to adopt. This is because … it ‘signifies an exceptional shift in power from Parliament to the executive and entails the Government, in effect, asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers’”.
That is the guard-rail I was talking about.
We had this debate so many times in the previous Parliament. In a sense, it is disappointing that we are having it again. The DPRRC said that
“the Bill provides for almost all of the substance of product regulation and metrology to be provided for by Ministers in regulations under the new powers, and little or nothing to be settled under the fuller Parliamentary scrutiny given to Bill provisions”.
The DPRRC said that it remained concerned, and we have heard about those concerns, that
“so little of the policy is included in this skeleton Bill and so much is instead left to delegated legislation which will be subject to a much lower level of Parliamentary scrutiny”.
We know that, and have debated it many times. In some cases, some might say that it gets almost no real, meaningful parliamentary scrutiny, as long as statutory instruments cannot be amended. As the committee said:
“Parliament will be unable to amend that delegated legislation and the only options available to both Houses will be to accept it or reject it”.
We know that rejection, essentially, never happens.
We have also heard that the scope of these powers is not constrained by any requirements for consultation, for criteria to be met or for meaningful preconditions to be satisfied. That is why I am proposing Amendment 133, with the noble Lords’ support. I will say a little more about that shortly.
Lord Jackson of Peterborough (Con)
Is the noble Lord aware of the letter dated 28 October from the Minister, Justin Madders, of the other place, to the noble Lord, Lord McLoughlin, the chairman of the DPRRC, on these specific issues? It says:
“We recognise the Committee’s concerns that the powers in the Bill to amend or repeal primary legislation may appear as though we are intending to replace existing primary legislation with secondary legislation and accept that we should have given more provenance to the fact that our intentions are limited and specific and the powers in the Bill are limited accordingly”.
Does the noble Lord not think it unprecedented for a Minister to write about a Bill that is before this House?
Lord Fox (LD)
I am not a student of parliamentary history, so I do not know if it is an unprecedented letter, but that was a helpful intervention, and I thank the noble Lord for that.
Baroness Crawley (Lab)
I believe that the sentence that was just read out was in the report from the Government to the Delegated Powers Committee as well. It is not unprecedented is what I am saying.
Lord Fox (LD)
My Lords, I feel that I am standing in the middle of a perfectly good debate between the noble Baroness and the noble Lord. Perhaps we can reconcile it in some other way.
Lord Fox (LD)
If they find themselves in the same Division Lobby, but that is rather unlikely.
For this reason—the reason that I spoke of some time ago—I am proposing Amendment 113, which seeks to remove Clause 9(4) from the Bill. In the view of the committee and of your Lordships, this is the main offending clause, as it essentially grants Ministers unlimited powers. That is why we are proposing that amendment.
Amendment 133 harks back to an amendment for which many of the Minister’s colleagues and of those on these Benches voted during the passage of the Retained EU Law (Revocation and Reform) Bill, as it is very similar to an amendment that was tabled then. It is relatively self-explanatory, and it was explained even better by the noble Lord, Lord Anderson. I suggest that it imports some sensible consultation into the secondary legislation process without overburdening that process.
That may be the Minister’s response. He may say that this is bureaucratic and a lengthy process, to which I would say, to some extent, “So what?” This legislation does not have to be a breathless process; it is supposed to get it right. Many of your Lordships will have witnessed statutory instruments that come back to correct previous statutory instruments. I know of one case when we got into three or possibly four statutory instruments before we were presented with something that was acceptable. A bit of time, consultation and reflection gives us a chance to make regulation that is better and achieves what is intended.
I do not think this is an overwhelming process; it is about careful, purposeful regulation and proper consultation during that process. To an extent, that goes some way to dealing with some of the issues in the amendments tabled by the noble Baroness, Lady Lawlor—who has now made it from her transport system to her place—in fact in a rather more inclusive way, covering large portions of the Bill.
I will speak briefly to Amendment 132, also in my name, which I do not believe is controversial. Again, it continues the theme of the retained EU law Bill. As memory serves, one of the last things your Lordships did when sending that Bill back in the previous Parliament was to add a reporting requirement, so I suspect that there may not be much argument on either side of this against having a window on what is going on in the regulatory process. Indeed, it should provide a platform for us to have a discussion on a regular basis about the effectiveness and necessity of regulation, which I am sure many noble Lords would welcome.
My noble friend Lord Foster will not speak but has deputed me to speak on his behalf, which is a great honour and responsibility. He also signed Amendment 126 in the name of the noble Baroness, Lady Crawley. Amendment 129 in the name of my noble friend would ensure that an amendment that he will bring to the Committee later would be subject to the affirmative procedure. Like me, I think my noble friend would like to say that we do not think that the affirmative procedure is an adequate scrutiny measure, but it is marginally better than nothing.
Amendment 33 in the name of the noble Lord, Lord Jackson, makes an interesting point. I would like to hear from the Minister about who and what they are seeking to address in Clause 2(3)(h), because it is very broad. What level of specificity should we expect, or is there none?
To close, there are substantive amendments in this group, and I suggest that Amendments 113 and 133 are two that should find their way forward with the Government’s help.
Lord Lucas (Con)
My Lords, we have been here before. When the Schools Bill was in front of us, I was very happily lined up next to Lord Judge in saying that this would not do, and I find myself in the same position today. We have a job to do in the House of Lords; it is the proper scrutiny of legislation. This Bill seeks to avoid that. Either the Bill needs to wait and rewrite itself in rather more detail when the Government know what they want to do, or we need some such provision as has been suggested by the noble Lord, Lord Anderson and others to allow us a proper view of what will actually happen under this legislation. I very much hope that the Government will rethink, in one direction or the other.
Lord Leong (Lab)
My Lords, I join noble Lords in congratulating the noble Lord, Lord Sharpe, on his appointment. I look forward to working with him in the years ahead.
I thank all noble Lords for speaking on this group. Noble Lords across the Committee have raised a number of important issues relating to scrutiny. I reassure them, up front, that this Government take very seriously the importance of scrutiny, in particular facilitating parliamentary consideration of government proposals. However, we believe overall that the Bill strikes the right balance on the need for proper consideration of the important issues and the technical nature of many product regulations.
I start with Amendment 132. The noble Lord, Lord Fox, has proposed the publishing of impact assessments of affirmative regulations laid every six months after the Bill’s implementation. The impact of any new regulations will be fully considered through the development of proportionate impact analysis. The Better Regulation Framework, as most noble Lords know, is the system that the Government use to manage the flow of regulation and understand its impacts. In line with the Better Regulation Framework, for regulations where significant impacts are anticipated —above £10 million per year—full impact assessments will be published. For regulations with lower anticipated impacts, a proportionate de minimis assessment impact analysis will be completed. These assessments will, as a matter of course, consider the impact of regulations on small and medium-sized enterprises. Therefore, the laudable sentiment behind these amendments is already covered.
A number of the amendments relate to the use of the affirmative procedure. There exists a process for scrutinising secondary legislation that will operate under this Bill, including by scrutinising committees. I recognise the Bill’s delegated powers have raised questions, including from the Delegated Powers and Regulatory Reform Committee, which the Parliamentary Under-Secretary of State for Employment Rights, Minister Madders, and I appeared before in October. I remind noble Lords that the DPRRC stated and admitted in that evidence session that it saw the need for powers. The Government take seriously the recommendations of the DPRRC, and I plead mea culpa—we put our hands up that we should have been much clearer and could have done more to explain the reasons for the approach taken in this Bill.
The noble Lord, Lord Sharpe, asked about the Attorney-General’s speech at the Bingham lecture. He is a fine lawyer and is a good friend of mine. I listen to him all the time. But he said in his speech that this Bill does not exceed excessive powers. Product regulation is very technical, and we have ensured the that the Bill allows for appropriate parliamentary scrutiny, enabling this House to play the crucial role of scrutinising legislation. Existing secondary legislation runs to over 2,500 pages and covers everything from consumer products, such as toys and cosmetics to heavy industrial products like pressure equipment. We intend to use the Bill’s delegated powers to make targeted changes, on a case-by-case basis, to update and build on the large and well-established existing framework.
I should like to reassure all noble Lords on the specific point around EU law. The appropriate scrutiny procedure is provided by Clause 11, which applies the draft affirmative procedure to various regulations, including those making provision for a power of entry, creating a criminal offence or amending primary legislation, which will need to be debated and approved by Parliament before being implemented.
I turn to Amendment 133, in the name of the noble Lord, Lord Fox. This proposes a sifting mechanism whereby all regulations are preconsidered by a joint committee of both Houses. While we understand the need for oversight, a bespoke joint committee approach could cause delays. In addition, there is already a parliamentary process for statutory instruments made under specific Acts of constitutional significance where sifting is applied to ensure appropriate scrutiny. We do not consider that such a process is proportionate or necessary under this Bill, where regulations will often relate to routine minor technical changes—for example, a change in chemical content in cosmetics or toys.
I turn to the amendments of the noble Baroness, Lady Lawlor—
Lord Fox (LD)
I think the Minister is trying to have it both ways. On the one hand, this committee is so long-winded that important and breathless regulation could not be made and, on the other hand, the regulations will be so small and insignificant that this committee does not need to observe them. It is either one thing or the other—and if there are emergency regulations, I am sure that we can put in place a process to necessarily short circuit and get that before your Lordships’ House quickly. So, the idea that somehow this would hold up vital regulation that that the country is waiting for overnight is something of an overstatement of the process of regulatory development.
Lord Leong (Lab)
I said earlier that we will look at this on a case-by-case basis. Some regulations will relate to very minor technical changes, so it really would be taking up too much parliamentary time for that, whereas other regulations may need a full scrutiny, and we will have avenues for that.
On the amendments from the noble Baroness, Lady Lawlor, although parliamentary oversight is crucial, requiring the sunsetting and renewal of regulations under Clause 1 would create legislative gaps and undermine regulatory certainty. This is particularly for essential product regulations that protect consumers or for products where their design, production and installation may take over a year. Ensuring consumer safety is a constant, ongoing concern. We also have to ensure that businesses have certainty. Having a sunset clause will not give certainty to businesses.
As I have explained, these are also highly technical regulations, covering matters as detailed as the formulae for measuring outdoor noise, for example, and I am not sure it would be a good use of parliamentary time to re-examine such specific matters on an annual basis.
Similarly, Amendments 40, 41, and 131 from the noble Baroness, Lady Lawlor, ensure that regulations incorporating EU law will be subject to parliamentary debate, with consideration of constitutional impacts. As Members of the House will be aware, a duty to assess the impacts of any new legislation on trade between Northern Ireland and Great Britain already exists, and the responsible Minister must make a statement considering any impacts on trade between Northern Ireland and the UK internal market. To provide additional assurances, it is considered that the powers set out in Clause 5(2) provide a proportionate and appropriate parliamentary scrutiny process, where the regulations will often be highly technical and routine in nature.
Noble Lords, including those on the DPRRC, have questioned the Government’s intentions as regards consultation on changes made under the Bill’s powers. Amendment 126, tabled by my noble friend Lady Crawley, for example, proposes to establish a duty for the Secretary of State to publish regulations in draft form, and consult such persons as the Secretary of State considers appropriate.
I fully appreciate the importance of consultation and industry engagement. My department and the Department for Business and Trade have excellent relationships with industry and consumer groups and will continue to engage regularly with any stakeholders before changes are introduced. Indeed, we currently have two calls for evidence in circulation seeking stakeholder input, one on the introduction across the UK of a common charger for all our mobile phones and other portable electrical and electronic devices, and the other on measuring noise from outdoor equipment.
We have not included a statutory consultation requirement to allow for proportionate engagement with industry and consumer groups depending on the significance of the changes. This ensures agility in responding to emerging risks or market developments to protect UK consumers, as mentioned by the noble Earl, Lord Lytton. But I give a firm commitment to noble Lords that the Secretary of State will engage and consult with relevant stakeholders before legislating.
Amendment 33, in the name of the noble Lord, Lord Jackson, and mentioned by the noble Lord, Lord Fox, refers to supply chains involved in products and the extent we need to regulate them. This can be complex, and it is important that we get it right.
Clause 2(3) sets out examples of the persons on whom product regulations may be imposed. However, this is not always clear. Depending on the nature of the product or its supply chain, product regulations may need to cover a whole variety of other actors involved in a product journey. For example, our regulations on the safety of lifts need to cover the people involved in their installation as well as their manufacture, and regulations on recreational craft cover private importers in addition to the usual supply chain actors.
We also need to ensure that rapidly changing business models cannot be exploited, allowing bad actors to exploit good business by defining themselves out of regulation. For this reason, Clause 2(3) is an inclusive list, not an exhaustive list, of persons on whom regulations can be imposed. Clause 2(3)(h) further clarifies that regulations can apply to anyone carrying out activities in relation to a product.
Lord Fox (LD)
My Lords, I beg your Lordships’ leave, and I apologise to the noble Lord, Lord Jackson, for taking over his amendment here, but the wording of Clause 2(3)(h) is
“any other person carrying out activities”.
All the other items refer to the activity of the sale and marketing of that product. This does not refer to it but any person carrying out activities unspecified. For example, if I were repairing a product, would I be in the scope of the Bill? I could be, but I do not think that that is the purpose of the Bill. There needs to be some modification of that language—I think the noble Lord, Lord Jackson, is shrewd in putting that up—which focuses on the development and marketing of the product. Otherwise, it is any person doing anything to it.
Lord Leong (Lab)
I thank the noble Lord for that point. As I see it, it is the whole manufacturing of the product itself. For example, 3D printers are getting cheaper and cheaper on the market, and anyone can make anything from a 3D printer. So we need a regulation that covers someone who sells the printer, someone who supplies the plastic that goes into the printer and whoever makes that. Unless the noble Lord is mistaken, perhaps I and officials could have a private conversation with him and the noble Lord, Lord Jackson.
Lord Leong (Lab)
To conclude, I hope that I have been able to provide assurances on all these matters and I assure noble Lords that the Government have carefully considered—
Lord Deben (Con)
Before the noble Lord sits down, I am very much in favour of most of the Bill, but this bit is very difficult. I have been around a long time, and I have known Minister after Minister explain that things are too technical for us to have proper parliamentary scrutiny, and I heard it again today. The fact is that there is some real concern, even from those of us who are, in general terms, in favour—I hope it gets as near to parity with the rest of Europe, which is our biggest market—as we want to be sure that Parliament has a say, but I am not sure that the Minister has given us a very good answer. Saying that it is very technical is the oldest story that civil servants have given Ministers since we have had civil servants and Ministers.
Lord Leong (Lab)
I thank the noble Lord for that. If it helps, I have gone through some of our 150-odd existing product safety regulations—not all of them—and their technical nature includes scientific calculation and all kinds of other technical input. Are we saying that we want this in every instance of primary legislation? I think not. If noble Lords think that we should have every technical aspect in all primary legislation, we need to have a different debate entirely, but for this, for technical reasons, we need delegated legislation to ensure that we update the regulations.
Lord Jackson of Peterborough (Con)
I do not want to labour the point, but it is either feast or famine. We are being told by the Government that we cannot legislate everything to the nth degree, so we should just trust them on the secondary legislation—the permissive delegated legislation and statutory instruments. But then, with the paragraph that is the subject of my amendment, we are going to the nth degree of granularity and technical finesse while not actually, as it happens, defining what “activities” mean. Activities could mean looking at a product, by which you would therefore be caught by the regulations.
I gently say to the Minister that the substantive clause is not undermined by the removal of this paragraph, and he should seriously think about that.
Lord Leong (Lab)
I thank the noble Lord for that. I shall take it away and speak to officials about this, but the purpose of the Bill is not to be too prescriptive, so that we cover most of the activities that can be described by various stages of production.
I want to conclude, if I may. I hope that I have been able to provide reassurance on all these matters and have assured noble Lords that the Government have carefully considered the importance of parliamentary scrutiny and sought to strike a careful balance. I therefore respectfully ask that the amendment is withdrawn.
Lord Sharpe of Epsom (Con)
My Lords, I do not really have very much to say. I am partially reassured by what the Minister has tried to say, but we will have to study the contents of this debate, which has been fascinating and wide-ranging. It was remiss of me not to have thanked the Minister earlier for his engagement and that of his team, and I apologise. We reserve the right to come back to this, but I beg leave to withdraw the amendment.
Lord Foster of Bath
Lord Foster of Bath (LD)
My Lords, I begin by thanking the Minister for his willingness to engage with all noble Lords who have shown an interest in this Bill, and I thank his team for the support and help that they have given. I congratulate the noble Lord, Lord Sharpe, on his new role.
We have frequently described this Bill as being skeletal. In the two amendments that I am proposing, Amendments 2 and 27, I am offering some flesh to put on the bones of that skeleton. I am acutely aware that many of the regulations that will arise from the Bill will look at products in isolation, but there are many cases whereby products are intended for use when they are installed within some system or other, and it is usually an electrical system.
Amendment 2 suggests that, when considering the safety of a product, we should take into account, where relevant, its installation. Amendment 27 argues that, when the product is installed into a system, the system as a whole, including the product, should require third-party certification.
Let us take as an example something that is happening up and down the country at the moment—the installation of EV charging points, more often than not in individual homes. They are installed by electricians who, under current regulations, register the circuit and the changes made to the consumer unit, but who do not have to register the EV charging point itself. That means that the certification body is not tracking where those charge points are, not informing local building control and not doing any inspection or assessment of the charge points to ensure that they are compliant with building regulations or safety.
Lord Sandhurst (Con)
My Lords, I begin by saying that, like others, I am grateful to the Minister for the time he gave to meeting me. However, the fact remains that our concerns about the Bill have not been assuaged. There are fundamental flaws, as others have said. We do not disagree with the aims of the Bill in general terms; the problem is that we just do not know what the specific policies are. We do not know what route will be taken to address the issues that may arise. It is simply too vague. There will be no opportunity for consultation on, or challenge to, the policies or regulations: policies will be produced by the Minister and that will be that. We know that policies should be in the Bill.
I thank the noble Lord, Lord Foster, for his thoughtful amendments and his commitment to addressing the significant issues raised by Clauses 1 and 2. These electronic developments, such as lithium-ion batteries and so on, are serious issues; they certainly need to be addressed. However, these amendments relate to Clauses 1 and 2, which have been identified by the Delegated Powers and Regulatory Reform Committee and the Constitution Committee as fit only for complete removal from the Bill, for the reasons set out in their reports. Those committees have strongly criticised these clauses because they lack substance and give excessive discretion to Ministers; as I said at Second Reading, this is a Henry VIII Bill par excellence.
We must therefore now be told—we are still waiting—in much more detail what direction the Government think we should take on the matters of substance and importance that the Bill addresses. Ministers are to be empowered to legislate by statutory instrument on matters that are really important for businesses on the receiving end and for consumers, also on the receiving end—or not, if nothing is done—such as marketing, product regulation and metrology. Here in Parliament, we have been given no clear framework or policy direction.
The Delegated Powers and Regulatory Reform Committee’s detailed report of 15 October, which of course came after Second Reading and after substantive objections had been raised by me and others, stated that the skeleton clauses, which include but are not limited to Clauses 1 and 2,
“contain almost no substance about the marketing and use of products but instead give Ministers very broad powers which confer considerable discretion to legislate in that area by statutory instrument”.
On 16 October, the same committee held an evidence session at which it discussed these concerns with the noble Lord, Lord Leong; Justin Madders MP, the Minister in the other place; Helen Le Mottee, deputy director legal for products, business and better regulation; and Tony Thomas, deputy director for product safety policy. The committee said:
“In the evidence session, the Ministers and their officials provided helpful additional information about … the existing legislation that could be amended by regulations made under the powers that the Bill confers; and … the need for the Bill to confer regulation-making powers that would allow detailed and technical provision to be tailored for different types of products and would give Ministers the flexibility to respond quickly and effectively to rapid technological changes and product safety concerns … That additional information could helpfully have been included in the Delegated Powers Memorandum provided by the Department for Business and Trade”.
The committee recognised the need for the Bill to delegate some legislative powers—I think we all understand that that is necessary. However, the committee stood by and repeated the essence of its 15 October first report, notwithstanding the improvement of approach. It said that
“skeleton legislation should only be used in the most exceptional circumstances”—
and we are not there; this is not Covid. We are not in another emergency situation—
“and where no other approach would be reasonable to adopt”.
That, it explained—and I make no apology for repeating this—
“signifies an exceptional shift in power from Parliament to the executive and entails the Government, in effect, asking Parliament to pass primary legislation which is so insubstantial that it leaves the real operation of the legislation to be decided by Ministers”.
Frankly, I say, if they do it with this Bill, they will do it with all future legislation. There was enough fuss in the last Parliament about what those on this side were doing, and now we are going straight down that route and extending it into the distance. As the committee said, the Government
“needs to explain why the Bill provides for almost all of the substance of product regulation and metrology to be provided for by Ministers in regulations under the new powers, and little or nothing to be settled under the fuller Parliamentary scrutiny given to Bill provisions”.
Without clear boundaries or principles, these powers could allow Ministers to fundamentally alter product regulation, metrology standards and even consumer protections with little notice or prior consultation. They can just do what they like if a Minister fancies it or a civil servant has a bee in his bonnet—I mean nothing personal about the civil servants sitting there. I think your Lordships all understand what I have in mind. People have idées fixes, their opportunity comes along, off they go and Parliament will be able to do absolutely nothing about it. This risks creating legal uncertainty, regulatory overreach and a chilling effect on business, stakeholders and consumers.
Clauses 1 and 2 as they stand must, we say, be either significantly revised or removed entirely, as recommended by both committees of which we have already heard rather a lot. Failing such improvements, we on this side of the House will move for the offending clauses to be removed on Report. The Government should understand that.
Lord Leong (Lab)
My Lords, before I address Amendments 2 and 27 tabled by the noble Lord, Lord Foster, I need to make a clarification. The Attorney-General made a general comment about excessive reliance on delegated legislation; he did not comment on this Bill. We certainly do not believe this Bill contains excessive reliance on delegated legislation.
Lord Foster of Bath (LD)
My Lords, I almost want to say that the Minister doth protest too much. We have been given a whole range of examples that he says illustrate that it might be that they will take installation into account. It seems to me that there is a much simpler solution: to accept my amendment and put it in the Bill, since that is what he almost implies he wants to achieve. Clearly, we will have further deliberations. In the meantime, I beg leave to withdraw my amendment.
Member’s explanatory statement
The Amendment ensures that regulations relating to the marketing of use of products in the UK may have the purpose of ensuring that products are safe.
Lord Fox (LD)
My Lords, Amendment 3 is part of group 3, which focuses on the safety of marketed products; we are focusing now on safety. In a sense, the debate on the previous group of amendments demonstrated why the skeletal nature of the Bill needs flushing out. Alongside the amendments tabled by the noble Lord, Lord Sharpe, and my noble friend Lord Foster, I hope we can investigate a little how we can flesh out the Bill on the subjects of health, safety and the environment.
Both Amendment 3 and Amendment 95, which is also in my name, seek to add some purpose to the Bill so that future regulations will be within the guard-rails we talked about earlier. Amendment 3 would simply insert safety as an objective for achievement for the regulations caused by the Bill. There are two purposes to this amendment: one is to try to ensure that, in future, the products regulated are safe, and the other is to allow the Minister to explain how reducing or mitigating risk works in the context of product safety. It seems to me that there is a glaring difference between the two, and I look forward to the Minister explaining how this legislation came to be written in this way.
Clause 1(4) goes on to define risk with language that implores the concept of safety, which is of course helpful. However, under the terms of Clause 1 as currently drafted, any danger to the health or safety of a person—or a domestic animal; the Minister knows that I am keen to know which animals are domestic and which are not, and why non-domestic animals should be subject to danger when domestic animals are not—needs only to be reduced, because Clause 1(1) comes before Clause 1(4). Surely the objective should be to eliminate risk.
If I was selling a trapeze kit for a seven year-old that was 30 feet from the ground, I could of course say that I had reduced the risk by including a mattress to put underneath it, but is this safe, and has sufficient mitigation been observed? I understand that there is no such thing as absolute safety. However, I contend that, if the purpose of the Bill is, first and foremost, risk reduction or mitigation rather than safety, it is pitching the objective of regulations too low. I hope that is an understandable albeit rather complex explanation as to why I am moving this amendment.
Amendment 95 also focuses on safety. It simply spells out some considerations for future regulations made under the Act—namely, that they
“must have regard for consumer safety and wellbeing, and environmental sustainability”.
How could anybody object to those aspirations? Looking forward, we could leave it there and deal with the second part of this amendment in a different way. We will certainly come back to some of this in other groups but, at this point, I chose to add the specific issue of the disposal of chemicals and lithium-ion products because disposal is an important part of—
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the noble Lord, Lord Fox, was in full flow. He may resume on Amendment 3.
Lord Fox (LD)
My Lords, I was not in full flight; I was merely jogging along the runway.
I have talked to Amendment 3 already. Amendment 95 also focuses on safety, and simply spells out some considerations for future regulations to be made under the Act—namely, that they must have regard for consumer safety and well-being, and environmental sustainability. As I said before, how could anybody disagree with that comforting thought?
Looking forward, we could leave it there and deal with the second part of the amendment in a different way, but I chose to add some specific points around the disposal of chemicals and of lithium-ion products. Given that this is Committee, I want to probe the Minister on how he regards the issue of disposal within the context of the Bill, which is why I included those parts. In a sense, there are two ways of looking at Amendment 95. One is the writing in of an undertaking that consumer safety, well-being and environmental sustainability will be a key part of future regulation. The other is to understand a little more how the Government regard disposal. There will be other times when bits of this are debated, but I am clear in my mind that we must consider the end of life of products that this Bill will eventually regulate. The hardest part of that is what happens to chemicals and batteries.
I hope the Minister will agree, but I fear he may suggest that this should be managed through regulation that we have not yet seen. It would be helpful at least to understand how the Government would go about these things. Regulation is where details lie. I come back to the idea that we need guard-rails to indicate how regulation will be developed and otherwise. That is what we would expect in primary legislation. The principles, in this case for the safety of marketed products, should be set out in primary legislation. I beg to move.
Lord Foster of Bath (LD)
My Lords, I support my noble friend’s amendment and the amendment that is still to be debated by the noble Lord, Lord Sharpe. The amendment that I propose is to strengthen and future-proof the Government’s ability to identify and respond to high-risk products on the UK market. It proposes a clear mechanism to flag high-risk products and then requires them to be subject to additional safety measures. Such products would have to be, for example, conformity assessed by a UK-approved body and marked with subsequent CE and UKCA marking.
The concept of high-risk products with special requirements applying to them is not new. Animals and animal products imported into the UK are classified under the border target operating model as low, medium or high risk. Each of those categories, including the high-risk category, has different requirements before entry to the UK is allowed. As noble Lords will be aware, fireworks, heavy machinery and some types of medical devices are already recognised and labelled as high risk. However, outside these types of products, the situation is less clear and, at present, far too discretionary. It may well be that the Government have plans for a clearer, less discretionary framework approach. But given the skeletal nature of the Bill, as we discussed in the first group of amendments, and given the limitations of consultation on secondary legislation, it seems that Parliament will have little say in what emerges in this area.
My amendment provides an opportunity for Parliament to have a say in clarifying and strengthening arrangements around high-risk products. It goes beyond that because it provides a way forward by making use of the fairly recently developed product safety risk assessment methodology, along with other logical approaches that are clearly listed within the amendment.
I will use the proposed way forward by illustrating it in reference to the area of lithium-ion batteries yet again, particularly in the respect of their use in e-scooters and e-bikes, which I have spoken about on a number of occasions. Many other examples could have been used to make my case.
Last month, a batch of imported e-bike chargers, intended for use with GIN e-bikes, was rejected at the border and destroyed by customs officials. According to the Office for Product Safety & Standards, the products presented
“a high risk of fire and explosion”
because of the poor build quality of the transformer and concerns about the fuse used, and the products did not meet the requirements of the Supply of Machinery (Safety) Regulations 2008 or the Plugs and Sockets etc. (Safety) Regulations 1994 and were therefore rejected and destroyed.
Frankly, however welcome this intervention was—and it certainly was—it does not happen all the time. Just a couple of months earlier, the UK cycling sector, including industry trade bodies, e-bike brands, bike shops and charities, joined forces in an e-bike-positive campaign to boost knowledge of e-bike battery safety, helping the public to safely buy, charge and ride them. The e-bike industry is also developing a new scheme to highlight reputable, high-quality brands that thoroughly safety test their e-cycles and batteries. This suggests to me that the industry itself is currently having to act in the absence of clear regulations in respect of high-risk products in this sector. Recent figures sadly show the loss of life and property caused by e-bike and e-scooter fires, clearly showing that the current arrangements are simply not working.
Indeed, lithium-ion batteries in e-bikes and e-scooters are a textbook example of a high-risk product. Prone to catastrophic failure from poor manufacturing or improper use, they can, as we have heard on many occasions in your Lordships’ House, explode and catch fire, posing significant danger. ITV News has found that, in the past two years, e-bike fires have increased by 204%; Electrical Safety First found that over 180 constituencies have experienced an e-bike or e-scooter fire; the London Fire Brigade warned that e-bike and e-scooter fires are the capital’s fastest-growing fire risk and are responding to an associated incident once every two days; and, sadly, earlier this month, two people lost their lives in an e-bike fire in Coventry.
The charity Electrical Safety First has been campaigning for e-bike and e-scooter batteries and their associated chargers to be classified as high-risk and require third-party certification. Its campaign, which I have been supporting for a number of years, now has the support of around 100 major national stakeholders, from fire brigades to Which?, and over 500 parish and local councils, among many others supporting it. This amendment would meet those demands.
I sought to make the case with reference to lithium-ion batteries, but, of course, we must address all existing and future high-risk product safety issues. The Bill must set down robust precedents for the identification of safety risks coming down the line, given the ever-increasing developments in technology and consumer behaviour. I hope that this amendment achieves this by allowing the Government quickly to identify high-risk products and set subsequent additional safety regulations. Above all, it ensures that we have consistency, rather than the lack of consistency in the current arrangements.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendment of the noble Lord, Lord Foster of Bath, and my noble friend’s amendment but I want to press the Minister briefly, because one of the key rationales for Clause 1 is to improve safety dynamically. I think we would all agree with that. Obviously, mention is made of the toy safety regime in the United Kingdom and in the European Union, as well as lithium batteries, artificial intelligence et cetera.
May I press the Minister on a genuine question? I have not found a rationale for why the only Schedule to the Bill excludes so many products not covered by the Bill’s potential regulations. It excludes:
“Plants, fruit and fungi … Feeding stuff”,
food generally and animal by-products, aircraft, military equipment and “Medicines and medical devices”. Maybe the Minister could say a little about which value judgments and what empirical data have been used to exclude those products from consideration in the Bill, perhaps seen through the prism of safety.
Lord Sandhurst (Con)
My Lords, I will speak to Amendment 10, in the name of my noble friend Lord Sharpe of Epsom, which seeks to delete Clause 1(4). It is worth looking at that subsection. It says:
“For the purposes of this Act, a product presents a risk if, when used for the purpose for which it is intended or under conditions which can reasonably be foreseen, it could … endanger the health or safety of persons”
or of domestic animals—I paraphrase—
“property (including the operability of other products), or … cause, or be susceptible to, electromagnetic disturbance”.
That is a bit beyond my knowledge grade.
I looked at this provision and it really is very broad. Where does it end? We say that the provision must be removed because it provides excessively broad powers to the Secretary of State to address things we simply know nothing about. It comes, of course, under the skeleton legislation; I have already made my points about the problems with that.
The definition of risk here has the potential to be so expansive that nearly any product, except an aircraft or certain other things which my noble friend has just identified, could be construed as presenting a risk under certain circumstances. A motor car can be perfectly safe and wonderfully designed but, if driven too fast or just badly in some other way, it will of course endanger life. That happens every other day. The same applies to a whole raft of mechanical tools and instruments—anything one wants to think about. If misused, they will cause danger.
If we have at some time in the future a Government who feel very strongly about something which, at the moment, none of us object to, they will be able to address that by secondary legislation, which will not be ultra vires—outside the scope of the legislation. It can do almost anything. We can all think of almost anything that we use at home, such as a power drill or a stepladder. If you misuse and fall off that, you break your skull. It could be motor cars or anything. This is absolutely absurd and far too broad.
If the Government want to legislate to say that motor cars must have a speed restriction, or must have brakes which do this or that, they should do that with specific regulation under specific legislation directed at that target, because Parliament has said, “We’ve had far too many accidents of this sort. We’ve got to address it”. That is the normal process we have as society develops, but a clause of this sort is just extraordinary. It really is Brave New World stuff.
Our complaint is simply that the broad scope of this definition could, in future, empower regulators to impose unnecessary restrictions on products where the risks are minimal or purely hypothetical—and certainly not within the scope of the imaginations of those of us in this Room—because somebody comes along, or a Government come along, in five years’ time and decides that they want to deal with it. Rather than having an embarrassing and difficult debate in Parliament, the Minister just has his way. That is not how we proceed in this country. We are a parliamentary democracy under, as we have been told, the rule of law. We would suggest that the Government have already attacked businesses, high-street retailers and farmers. Will these relentless, unidentified attacks on businesses ever stop? This provision, like others, risks creating legal uncertainty and regulatory overreach. We really must put a stop to it.
I say again that Clauses 1 and 2, as they stand, must be significantly revised or removed entirely, or the promise remains that we will move for them to be removed on Report.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, it is a pleasure to respond to this particularly interesting debate. I, too, welcome the noble Lord, Lord Sharpe, to his new position. I must say, the noble Lords, Lord Sharpe and Lord Sandhurst, seem to have undergone a conversion, certainly since the former’s time in the Department for Business. I have not been able yet to count the number of regulations in primary legislation that the noble Lord took through but, given that he was a Home Office Minister and given the Home Office’s—how shall I put it?—productive record in producing legislation in Parliament, I hasten to suggest that it was quite a few.
Clearly, behind that is an important consideration about the shape of the Bill and why we need a regulation-making power. On the other hand, the Government would say to noble Lords that the intention is to use those regulations proportionately on the back of the policy consultation that has just taken place. We see here, in a sense, a tension between those noble Lords who wish to make sure that the legislation covers areas of concern—we have heard about the areas of concern for the noble Lords, Lord Foster and Lord Fox—and those noble Lords who feel that the regulation, or the power given here to Ministers through regulation, goes too wide. Clearly, a balance needs to be drawn.
Lord Fox (LD)
There is no dichotomy. We do think that the powers are too wide but part of what we want to do is channel those powers by making the sort of suggestions to which the Minister just referred.
Lord Hunt of Kings Heath (Lab)
I was hoping to assure the noble Lord that the way the Bill is constructed should give him comfort in relation both to the issues he has raised around safety and to the comments of the noble Lord, Lord Foster. Clearly, we think that consumer safety is very important. It is central to the Bill and a key component of our product regulation.
The Bill as drafted seeks to uphold a high standard of consumer protection and guarantees that the risks associated with products are minimised; Clause 118 provides for this. Although some products have risks that may be reduced through improvements to the design or clear warnings, others may be so dangerous that they should never be allowed to be sold in the first place. Baby self-feeding pillows are an example of this. They were recalled by the Office for Product Safety & Standards in 2022 due to the fact that the risks they presented could not be mitigated.
The noble Lord, Lord Fox, referred to Clause 1(1)(a), which refers to “reducing or mitigating risks”. We believe that that wording puts safety at the heart of the Bill while permitting regulations to acknowledge the wider spectrum of risk. This concept of a wider spectrum of risk covers the point that the noble Lord was trying to make.
That really is the same response as the one to Amendment 10, in the name of the noble Lord, Lord Sharpe, to which the noble Lord, Lord Sandhurst, referred—essentially, how the Bill explains the term “risk”. My noble friend Lord Leong explained how the Bill puts product safety, and reducing the risks associated with it, at its heart. That includes risks to the health and safety of persons, and Clause 10 makes it clear that “health” can refer to the physical or mental health of a person.
I understand what the noble Lord, Lord Sandhurst, was saying. He was concerned about the wide scope of the Bill, particularly Clause 1(4). However, in a sense, we have to capture in the Bill a definition wide enough to allow us to deal with some of the circumstances that noble Lords have raised. The aim is to be comprehensive but also proportionate. The noble Lord said that the Minister could just do this willy-nilly, but the fact is that regulations have to go through Parliament. He knows that in your Lordships’ House, one Member, even on a statutory instrument under the negative procedure, can ensure that a debate takes place. To come back to the words he used, at the very least for Ministers that can be a challenging and extensive process. A regulation will not be produced without full consultation as well. I would therefore argue that this is not an overweening power of the Executive; it is a sensible balance whereby we try to set out a broad enough definition to cover the kind of risks that noble Lords are concerned about. However, because it has to go through a parliamentary process and a consultation process before that, there are sufficient safeguards to ensure that any future Government or Ministers are not overriding in the way that the noble Lord suggested.
Clause 1(4) also ensures that damage to property is also included within the meaning of risk, meaning that regulations made under the Bill can be made for the purposes of mitigating risks to property, including the operability of other products. I can say to the noble Lord, Lord Fox, therefore, that the Bill captures the spectrum of risks that products may present to the health and safety of people and their property.
I also emphasise that not every element of our product safety framework is focused entirely on safety in the traditional sense. Our current regulatory framework covers a wide range of topics. This includes the use of radio spectrum, the ergonomics of protective gear and noise emissions from some outdoor machinery, such as concrete breakers and lawn-mowers. A number of our existing regulations, such as those covering fireworks and pressure equipment, also cover risks to domestic animals. By the way, I point out to the noble Lord, Lord Fox, that that is why domestic animals are mentioned in the clause; it is also for this reason that we cover the interoperability of products and their susceptibility to electromagnetic disturbance, along with the risks to domestic animals, as I said.
Amendment 7, in the name of the noble Lord, Lord Foster, would create in the Bill a category of high-risk products where regulations can apply across the board. He worries that the Bill is too discretionary. I understand where he is coming from.
Lord Foster of Bath (LD)
Just for absolute clarity, I did not say that the Bill was too discretionary; I said that the current arrangements were too discretionary and I want a change from that situation.
Lord Hunt of Kings Heath (Lab)
I am sorry if I misinterpreted what the noble Lord said, but I get his drift. We believe that the operation of our current product regulation framework already recognises the point that he made.
Lord Foster of Bath (LD)
I apologise but I am not quite sure what the Minister’s concern about my amendment therefore is. It specifically suggests that we put into the Bill a power for the Secretary of State to choose to bring forward regulations that will enable the classification of high-risk products in the way that he has just described. They are all included, including the recently developed framework, as possible ways of doing that within the amendment. I genuinely do not understand the Minister’s argument. I am giving an opportunity for clarity—so that in all circumstances there is an opportunity to use that framework.
Lord Hunt of Kings Heath (Lab)
If the noble Lord will let me explain, Clauses 1 and 11 grant powers to make regulations relating to product safety for a range of purposes, general or specific. The Government have set out in their response to the product safety review our intention in the months ahead to begin a process of sector reviews. They will consider whether any changes are needed to our existing regulation of higher-risk products to reflect modern challenges, such as those that the noble Lord has pointed out in two speeches this afternoon. We will also consider whether updates to the GPSR are necessary to ensure that cross-cutting and emerging risks are properly addressed, particularly where products fall outside current sector-specific rules.
Furthermore, in December 2022, the Office for Product Safety & Standards developed a product safety risk assessment methodology for GB regulators to use with non-compliant products. The methodology requires consideration of the tolerability of the risk identified. Where a risk is intolerable, a regulator can act robustly in relation to risks that may have a low possibility of occurring, but where, if they did, the outcome would be disastrous. A noteworthy example is the effort made by the Office for Product Safety & Standards to protect young people from the dangers of ingesting small, powerful magnets.
In Amendment 95 the noble Lord, Lord Fox, makes the sensible point that safe disposal can be a key part of protecting consumers and businesses. Clause 1(5) makes clear that regulations can cover safe disposal of products. We will consider whether particular products need specific regulation in this area on a case-by-case basis.
On the disposal of batteries specifically, the Government are committed to cracking down on waste as we move toward a circular economy. We shall have a discussion on the circular economy—I was going to say “in a few minutes”, but that might be a little hopeful. We are reviewing and propose to consult on reforms to UK batteries regulation before setting out our next steps.
Finally, regarding the question from the noble Lord, Lord Jackson, on the Schedule to the Bill, the things mentioned in the exclusions are covered by separate legislation. It is as simple as that.
Lord Jackson of Peterborough (Con)
I am grateful for the Minister’s indulgence; I have a straightforward question regarding Amendment 7 in the name of the noble Lord, Lord Foster. The Minister has answered it thoroughly but I still do not understand. What else would the Government be doing, in looking at the efficacy of product safety, that is not already in the amendment? Surely the noble Lord’s amendment merely formalises actions with regard to product safety that the Government themselves would do in analysing what they need to do to protect consumers. I cannot understand the Minister’s resistance to at least being a bit more emollient towards what seems to me quite a sensible amendment.
Lord Hunt of Kings Heath (Lab)
My Lords, I think that is surprising support from the noble Lord, Lord Foster. This is an iterative process in Committee, and we are certainly always prepared to look at suggestions put forward. My response is simply that we think the Bill as it stands, and the reviews that will take place, cover the points he raises. The Attorney-General’s advice also suggests that we should not unnecessarily add to legislation, but we will give it some consideration.
Lord Fox (LD)
My Lords, as a fox, I take the subject of wild animals somewhat to heart. To some extent the Minister has covered my concerns, particularly around disposal, which is important, so I beg leave to withdraw Amendment 3.
Lord Frost
Member’s explanatory statement
This amendment removes from the Bill a broadly-drawn power to align with EU environmental regulation.
Lord Frost (Con)
My Lords, in moving Amendment 4, I will also speak to my Amendments 6, 15, 36, 37 and 42. I thank the Minister for the constructive exchanges we have had in the previous two or three weeks, both face to face and in writing.
Lord Frost (Con)
My Lords, I will pick up where I left off. I was about to note that my six amendments in this group have a substantive purpose and, I guess, a probing, clarificatory purpose. I will begin with the substantive. My amendments are separate, but they all stem from the same broad thought, and they are designed to deal with the fact that the powers in the Bill give Ministers the ability to make regulations for products in the UK, or GB, in a range of areas defined by simple reference to existing EU laws; and, beyond that, to provide for those regulations to evolve dynamically —that is, when the EU changes its law, that change feeds through into our regulations.
Personally, I am not and have never been a purist in this area. I do not think it is necessary for GB to have its own defined sets of rules on every single thing, with the UKCA designation that covers everything—unless, of course, we were to drop the current approach to regulation entirely, which was, after all, developed in the last few decades under an EU law framework, and revert to a more traditional, common-law, objectives-based framework. That is possibly a step too far for the time being. Given that, it makes sense to look at other standards and whether they work for us. In practice, that is what happens now, in a limited way. For example, we recognise the CE marking for the EU while sometimes having the UKCA marking or our own rules in parallel, but there are two problems with this.
First, I do not see why that possibility of recognising other standards should be limited to EU law only. Of course, I do not really agree with the thrust of Amendment 17 in this group, which we are about to discuss, which would require alignment with EU law. We may want to use other standards from other territories with less prescriptive regulatory frameworks, and we may want to allow goods with different standards from more than one place to compete on our market to make the country open to the best standards globally. That is the first problem the Bill presents.
Secondly, I do not really think it is right for us in this Parliament to subcontract our lawmaking to another body. It must be clear what the law of this country is at any given moment; it must be properly on our books. It is not good enough to say to the question “What is the law on product X?” that the answer is whatever EU regulation number whatever says it is today. My amendments are designed to deal with these points, and I take them in logical, not numerical, order.
Amendment 4 deletes Clause 1(2). I propose this really to explore why it is necessary, in a Bill specifically on product regulation, to include the ability to import large areas of EU environmental law. I can see that it might be convenient, but the same could be said of lots of other areas too. If there is a more specific and persuasive explanation, I would be interested to hear it from the Minister.
The Deputy Chairman of Committees (Baroness Newlove) (Con)
My Lords, I must inform the Committee that, if Amendment 4 is agreed to, I cannot call Amendment 6 by reason of pre-emption.
Lord Russell of Liverpool (CB)
My Lords, I will speak to Amendments 17 and 127 in my name. I also would like to congratulate the noble Lord, Lord Sharpe, on moving from the calm waters of the Home Office to the much more exciting waters of his new role. I hope he will enjoy the turbulence that will be created, not least perhaps by this group of amendments.
I have tabled this quite deliberately with a cross-party group representing the three principal parties across the House. This is designed, frankly, to try to drain the politics and emotion from this particular issue. The Government have made it quite clear that their primary driver for this Bill is to encourage economic growth and, above all, sustained investment. Having spent 31 years serving all kinds of businesses, including some of the largest companies in the world, as a headhunter, I know that one thing companies hate above all is uncertainty. For the last few years, many of our businesses have lived in a state of more or less continuous uncertainty, which they are not very happy about. That partly reflects our economy not moving as fast as it should and levels of investment which are at the bottom of the league table against our primary competitors.
The recent attempts, since midnight on 31 January 2020, to try to create our own system of regulation have been repeatedly underwhelming. I suspect they have been extremely expensive. I do not know whether the Minister will ever be able to find out quite how much the UKCA exercise has cost. I suspect if he managed to get the noble Lord, Lord Callanan, into a bar and plied him with enough drink—possibly Scotch whisky—he might find out. I suspect it was a considerable and rather embarrassing sum.
That has created a state of uncertainty. This Bill gives us a change to try to calm the situation down. Above all, what I want to do, and what I persuade and implore all noble Lords to do, is to drain the emotional and ideological swamp around some of these issues, and to get away from arguments which, frankly, most businesses have very little time or respect for—however important they may seem to the people for whom it is important—about sovereignty and rule-taking, and all those things. Most businesses are as interested in those issues as the general public is in your Lordships’ House and what goes on here. Most of them have no idea at all and have very little interest. Frankly, that is the same attitude that most businesses have to some of the wrangling that has gone on around these issues. Above all, they want certainty.
To start, I quote the head of trade policy at the British Chambers of Commerce, Mr William Bain, on the Bill:
“We would encourage the Government to bring forward an indication of the policy it intends to follow under the bill in terms of whether it would be the default that there would be alignment with relevant EU measures in scope of this or whether they will look at it on a case-by-case basis. But the BCC in its report and surveys and evidence has the data from our members to say that they think for traded goods, having as much alignment as possible is beneficial for trade with the EU”.
Other bodies, such as the Engineering and Machinery Alliance, said the same. CHEM Trust said the same on chemicals and REACH. I think I can rely on the noble Baroness, Lady Bennett, to weigh in on the environment, and we have already touched on some sensitivities about trade with Northern Ireland and trying not to upset the Windsor agreement and the DUP any more—it seems to be in a state of habitual disarray and alarm, which I do not want to exaggerate.
Secondly, the Government themselves, in their Explanatory Notes on the Bill, say that it is
“ensuring that the law can be updated to allow a means of recognising new or updated EU product requirements”
including CE marking, where appropriate,
“with the intention of preventing additional costs for businesses and provide regulatory stability”.
At this point, I return to the theme of Scotch whisky. I thought it was interesting to find a paper from the Scotch Whisky Association, with which certain noble Lords may be familiar. It says that business certainty and consistency by transposing EU market legislation of relevance to Scotch whisky in the UK is of extreme importance and that:
“A pragmatic, non-disruptive transition will be fundamental”.
We are looking for a Bill that gives the degree of certainty that business is craving and looking for. The result of the recent election in the United States of America is a cause of some alarm for some businesses, with perhaps increased uncertainty. I would not be surprised if the President-elect does not again hold out the prospect of a glittering trade deal between us and the United States. I suspect it might never be forthcoming or, if it is, the price we would pay would certainly benefit America first and us last.
The amendments that we are putting forward are in no way, shape or form driven by ideology; they are driven by business pragmatism. I also point out that the Government recently published an industrial strategy Green Paper, from which I quote:
“This government believes it is our role to provide the certainty that inspires confidence, allowing businesses to plan not just for the next year, but for the next 10 years and beyond”.
In essence, this is what we are trying to encourage the Government to articulate during the passage of this Bill, in such a way that business will not have to read between the lines to understand what the Government understand, as it is straight up there—either in the Bill or in comments made at the Dispatch Box that make the Government’s hopes and intentions very clear.
I gently remind some of those who might perhaps take issue with these amendments that it was the new leader of the Conservative Party, in her previous role as a Cabinet Minister, who effectively blew the whistle more than once on some of the attempts by her party to put in place a variety of measures to try to replace some issues that affect trade and regulation with the UK. She found disfavour with some members of her own party for doing so, but I would be interested to know whether the noble Lords who find fault with these amendments have spoken to the new leader of their party to see what her view of this is.
I will finish by firing some questions at the Minister. They are mainly aimed at the Bill team, because I do not expect an immediate answer, but I would be grateful if the noble Lord could come back to us in writing.
First, what calculations have been made by the Government of the impact of divergence in product standards from the EU going forward on our exports and our imports?
Secondly, what engagement have the Government had with industry on the impact of aligning with the EU on product regulation? I know from a meeting that the noble Lord, Lord Kirkhope, and I had, thanks to the Minister, with him and the Bill team that there has been considerable engagement throughout the past year with all kinds of areas of business. It would be helpful to know how extensive that was and what level of detail it was able to go into.
Lord Kirkhope of Harrogate (Con)
My Lords, I rise with no emotion in my voice—because, as noble Lords will appreciate, to be a Government Whip under Margaret Thatcher and John Major one had to leave emotion aside—to support Amendments 17 and 127, which bear my name. In doing so, I first want to speak to Amendments 6, 9, 15, 36, 37, 39 and 42. Obviously, I am against those amendments because they would fundamentally alter the purpose and practical operation of the Bill. If the aim of these amendments is to damage British businesses and our competitiveness on the world stage, noble Lords promoting them should say so. They should also be open with this Committee. If these amendments are simply a product of opposition to the EU or anything associated with the word “Europe”, they should make that absolutely clear.
This raises a critical question: who benefits from this approach? It is not British businesses. Our industries require clarity, predictability and coherence to thrive in competitive global markets. These amendments risk creating a fragmented system where businesses face the burden of navigating multiple and potentially conflicting regulatory frameworks. The UK has a proud history of robust safety and environmental protections. These amendments focus on what are termed “foreign laws”, without any clear guiding principle, and risk creating uncertainty about the quality and safety of products in the UK market. The outcome would be confusion for manufacturers, exporters and regulators alike. These amendments also prohibit the use of some dynamic alignment, a valuable tool for ensuring that our regulations remain relevant and competitive in an ever-evolving global market.
The European Union remains our largest trading partner. Its product regulations set a widely recognised global benchmark. Dynamic alignment allows us to align with the EU when it is in our interest to do so, ensuring that our businesses can access those markets while reducing additional costs or barriers. Denying this flexibility would leave the UK with an outdated and rigid regulatory framework to the detriment of businesses, workers and consumers alike. This introduces a potential free-for-all of standards with little clarity on how decisions would be made or who would be consulted. It is not the framework we need to build confidence in our regulatory system at home or abroad. These amendments represent a step backwards. They prioritise an abstract notion of flexibility over the real-world needs of businesses, consumers and our economy. They threaten to create a chaotic, fragmented regulatory environment that would disadvantage British industry and weaken our position in global trade.
I support the amendments I referred to that bear my name. I believe they offer a practical and balanced approach to regulating products in the United Kingdom. They would provide clarity for businesses by establishing alignment with EU product standards as the default position while, of course, maintaining the flexibility to diverge where clear benefits can be demonstrated. The EU remains our largest trading partner, as I have said, and its regulatory standards often set the tone for international markets. Aligning with those standards simplifies trade not only within Europe but globally; many third countries recognise those rules, and British businesses benefit from this de facto international benchmark. Diverging from EU standards risks isolating our industries, as I have said, and placing UK businesses at a competitive disadvantage.
The financial case for these amendments is equally clear. Without regulatory alignment, businesses face the double burden of not only having to navigate two distinct sets of standards but it not being bureaucratic. It is expensive: the Government’s impact assessment has shown that duplicating conformity assessments alone could cost businesses up to £1.6 billion over the next decade. There are many small and medium-sized enterprises that we should be particularly concerned about. These costs are insurmountable and may even deter them from exporting altogether. Our amendments would mitigate those risks by creating a framework of consistency and certainty.
I welcome the decision by the previous Government— my Government—to extend the recognition of CE marking indefinitely. This amendment would build on that precedent, turning an ad hoc decision into clear, predictable policy.
It has already been referred to but I draw your Lordships’ attention to the situation in Northern Ireland, where alignment with EU product standards is already a reality under the Windsor Framework. This approach would complement the Windsor Framework, ensuring that businesses operating across Great Britain and Northern Ireland have a consistent regulatory environment; reducing friction and confusion; and avoiding separate rules governing different parts of our country. I am sure noble Lords agree that that is desirable.
Our amendments are pro-business, pro-trade and pro-consumer. They reflect the realities of our interconnected world and would ensure that the UK remains an attractive place to invest, trade and innovate.
Lord Browne of Ladyton (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Kirkhope. Tempted as I am to follow his lead and comment on some of the other amendments in this group—other than the ones I put my name to, that is—I shall resist that temptation. My intention is to speak to Amendment 17 only and, even then, in a restricted way.
Before I do so, I join others in congratulating the noble Lord, Lord Sharpe, on his new appointment. He and I have debated consistently and for a period a number of issues; I will miss those opportunities because it is unlikely that I will be back in this space, in policy terms, in future.
I do not intend to rehearse in any detail the arguments that have already been made. I just want to emphasise why this amendment is squarely consonant with the aims of this Bill and will increase our agility in providing British businesses with a greater degree of certainty. As my noble friend the Minister outlined at Second Reading, the Bill aims to underpin the UK’s position at the forefront of international trade and enable the recognition of EU product requirements where it is in the UK’s interests to do so. It is precisely in that spirit that I added my name to Amendment 17; in the short time I will detain the Committee for, I shall attempt to explain why I believe that this provision will smooth our path to accomplishing these goals. Perhaps most importantly, the Bill in general—and Amendment 17 in particular—aims to move beyond the wrangling consequent upon Brexit and to provide our businesses and industrial sector with the certainty they need and crave.
I have had occasion in other contexts to make the case that regulatory certainty does not diminish our economic strength but is a prerequisite for those businesses on which our economic strength depends. The certainty that Amendment 17 would provide will not inhibit economic animal spirits but will allow businesses to plan and co-ordinate their commercial activity with the same confidence that their competitors in the EU and elsewhere currently enjoy. It is for that reason that the 50,000 businesses represented by the British Chambers of Commerce, and those businesses belonging to the Engineering and Machinery Alliance, support the policy of dynamic alignment, which would be instituted by the adoption of this amendment. We have tried the inverse of this approach and ought to have learned the lessons.
The brave new world of a UK-only system for the regulation of goods and products was widely disregarded by domestic businesses, who overwhelmingly chose to continue to conform with the CE mark because it allowed them access to an exponentially larger market. Indeed, the previous Government’s own regulatory impact assessment in this area showed that some overseas suppliers stated their intention to limit product supply to GB if CE was no longer recognised. Overall, the then Government’s best estimate was that around 18,500 UK manufacturers were involved in affected industries and that the average annual value of all manufactured goods imported into the UK subject to UKCA or CE requirements was £110 billion, with around half of these imports from the EU. In 2019, products that were subject to UK or CE requirements represented around a quarter of all UK-imported goods. As we have heard, the previous Government’s own impact assessments of duplicative conformity and labour time, to which the noble Lord, Lord Kirkwood, drew our attention, estimated total costs of up to £1.6 billion over the next decade. As your Lordships’ Committee is aware, in May 2024, after repeatedly extending the deadline to transition to the UKCA, the UK Government admitted defeat and indefinitely extended the recognition of CE goods in GB markets.
As I said at Second Reading, I have lost track of the number of Conservative Ministers I have seen in my 27 years in Parliament announcing their determination to kindle a bonfire of regulations, to take an axe to red tape, or some similarly strenuous deregulation measure. If that really is their desire, there are few things better calculated than this amendment to obviate the need for business to undertake rigorous conformity assessments and, consequently, smooth the path for frictionless trade. As such, this amendment preserves the intentions of the Bill to update our regulations according to a calculus of national self-interest, giving our businesses regulatory certainty while still allowing us to diverge from EU regulations when it is to our advantage.
At the risk of repeating an element of my remarks from Second Reading, we have seen a parallel scenario emerge in respect of our chemical regulations. The last Government decided to leave REACH, the EU’s body dictating the registration, evaluation, authorisation and restriction of chemicals regulations, to set up a parallel organisation. Since then, we have not adopted a single registered restriction on a harmful substance, compared with 10 new protections offered by EU regulation, including on harmful microplastics deliberately added to products. While REACH has regulated PFAS in the EU, not a single river or water body in England is in good chemical health. Since we left REACH, the EU has initiated 23 risk assessments related to harmful substances, while we have initiated just three. It may be that this is a function of a more vibrant, freebooting approach, or that we have superior data or a more effective methodology, but I fear it may just be that our duplicate body has simply proven less effective, which in turn imperils the safety of people in this country.
Lord Jackson of Peterborough (Con)
My Lords, I rise to support the amendment in my name and primarily that of my noble friend Lord Frost, particularly Amendment 4. It would not be fruitful to relitigate the Brexit wars, and certainly, those of us who have tabled these amendments do not wish to do so. We are looking at this Bill and its proposals. It is notable to remember that it is not the Government who are moving Amendment 17 and its consequent later amendment, but other noble Lords.
I shall just specifically talk about the amendment to Clause 1(2). It is actually quite a loose and opaque concept to talk about tabling an amendment to the Bill which talks about mitigating or reducing the “environmental impact of products”, because there is quite a degree of confusion about that specific phrase. There is also a significant question as to why there is a specific carve-out for this in the Bill. My noble friend Lord Frost raised this issue specifically with the Minister, the noble Lord, Lord Leong, in his letter of 16 October, and asked why it was necessary to have a separate provision to deal with this. My concern about this clause is that there is the prospect, if it remains in the Bill, not only that we may replicate very narrowly drawn product safety regulations as regards the environment, but that, due to mission creep, it can develop a lot of other particular areas. That may be music to the ears of the noble Baroness who represents the Greens, but it may extend to a supply chain’s due diligence, or to vehicle standards, artificial intelligence or deforestation. Those are all very wide areas where there would be a significant impact from what looks like a pretty innocuous clause. Therefore, I would like the Minister to address that particular issue, because it is very important.
To go back to the clause that is referenced in the amendment from my noble friend Lord Kirkhope of Harrogate and the noble Lord, Lord Russell, I am not sure that they have been witnessing the same situation with the regulatory regime and this Labour Government since 4 July. We are already seeing de facto alignment. We are seeing alignment on a common charger for electrical devices, the vote to leave the energy charter treaty and rules on organic pet food. We are seeing delayed divergence on Section 6 of the retained EU law Act, which is about paying due regard to European Court of Justice decisions vis-à-vis the UK courts; recognition of CE-marked construction products; the suspension of mandatory recycling labels; changes and delays to the implementation of the Windsor Framework; delays to the border target operating model; regulation on deforestation-free products delayed; and entry and exit schemes delayed.
The idea that this Government are presiding over a mass large-scale divergence is completely not the case. For a speech that was meant to take the political heat out of the debate, I think it was quite a political speech by the noble Lord, partly relitigating the long battles over Brexit we had. I do not think it is an ignoble aim for us, in laying these amendments in Committee, to make a point about the geopolitical changes in the United States with the election of President-elect Trump and the focus on deregulation and fewer and more flexible regulations. There are economic difficulties in the European Union, particularly in Germany, which has had some significant encumbrances in terms of all manner of economic data. To tie our regulatory regime to just one market—the European Union, where we have no control, no say and no voice—in a Bill in which there are huge numbers of Henry VIII and discretionary powers to be exercised by Ministers that are effectively unamendable is a risk. That is the risk, and it is the risk of this amendment.
The fundamental flaw of this amendment is that it is asymmetrical and unbalanced. My noble friend Lord Kirkhope used the word balanced. I do not think it is balanced; it is incongruous because there is an inherent presumption—a requirement in this amendment —for us to accept dynamic alignment. At least the noble Lord, Lord Browne of Ladyton, was honest that it is dynamic alignment. It is Chequers 2.0. In this amendment, we are being asked to support Chequers enunciated in primary legislation. I believe that is wrong.
The reason I think that there is a flaw and that it is incongruous is that if noble Lords look at Amendment 17, in subsection (3) of the proposed new clause there is a requirement to lay a statement before Parliament within 14 days about why a decision not to replicate EU law under proposed new subsection (2) is necessary. Funnily enough, there is not a similar requirement to lay a statement if it is decided to diverge from European Union regulations. I say to my noble friend and the noble Lord, Lord Russell, that the amendment would have been a lot stronger and a lot more robust to criticism by this side and perhaps even Ministers if that had been in the amendment. It is not, and for that reason it is a regrettable amendment. It seeks to tie us to a shrinking market which, by dollar denomination, will be about 14% of world trade within the next 10 or 12 years. That is not something we can put in the Bill. For that reason, I will not support it.
Lord Russell of Liverpool (CB)
I shall quickly respond to the noble Lord. One of the reasons why I asked the Minister for some detail about the breadth and depth of the consultation his department has had with business was to find out what business really thinks. I would say, in riposte to the noble Lord, that the key thing that should drive decisions on whether we align with the European Union or any other jurisdiction should primarily be what business is telling the Government. Businesses have a far better idea of the economic state, presently and potentially, of the markets they do business with. In fact, they have a much better idea than either Ministers or civil servants. From my point of view of trying to speak on behalf of business, listening to them on what they think should be the priority would seem the sensible thing to do.
Baroness Lawlor (Con)
My Lords, I thank the Minister for his generous allocation of time the other day to discuss some of the issues; I am very grateful for that and to his officials. I apologise for missing the debate on group 1 because of train delays for hours, but I rise now because my Amendment 6 cannot be called if Amendment 4 is agreed. I will speak to Amendment 9, which would disallow regulations that disadvantage the UK under its trade treaties. I will highlight the CPTPP and the UK’s main bilateral trade agreements with Australia and New Zealand. I support Amendments 15 and 37 in the name of my noble friend Lord Frost, and I add my Amendment 39 to prevent dynamic alignment with the EU.
The aim of these amendments is to ensure that the UK can help shape and promote free trade globally to the benefit of free trade under a rules-based agreement at international level. That is inconsistent with locking the UK into the EU’s protectionist arrangements, even on a case-by-case basis, I fear. They are different; they are under code-based legal systems and they are shaped by different legal thinking from that underpinning UK law, which is more pro-entrepreneurial and innovation-open. I do not believe we should saddle UK producers and consumers with the cost of complex EU protectionist law rather than be open to the best and most similar arrangements elsewhere—foreign laws—or our own laws that can benefit our economy.
I shall give an example of what I mean by protectionist and inward-looking EU law and then look at how it affects growth figures and jobs; I disagree with noble Lords who suggest otherwise. One illustration comes from the EU’s digital commerce and AI sector. The damage was annotated in a September 2024 study, Rules Without End: EU’s Reluctance to Let Go of Regulation, by two EU-friendly economists, Guinea and du Roy. They concluded that,
“the EU rulebook added 562 new pages and 511 new articles on Data & Privacy; as well as 271 new pages and 247 new articles on E-commerce and Consumer Protection”,
amounting to nearly 2,500 new restrictions for data and privacy and 1,200 for e-commerce and consumer protection. The cost was highlighted former MEP Luis Garicano, who concluded that this coincided with a 50% drop in the number of new apps coming onto the market. Meanwhile, the report said, a study by the Bank of Spain,
“found that each additional regulatory provision was associated with a 0.7 percent decline in the employment rate of the affected sector”.
Other noble Lords with whom I disagree have tried to draw our attention to employment rates. The Ernst & Young investment monitor for 2024 indicated that the UK had the largest number of jobs created by FDI in 2023. The UK was at 52,000, France was at 40,000 and Germany was at 14,000. Project numbers in the UK were increasing; in France and Germany, they were falling.
The other indicator to which I would like to draw your Lordships’ attention—I hope the Minister will look sympathetically on these amendments—is GDP share. The EU’s declining share of global GDP is mirrored in its recent growth figures. Whereas UK growth in the year ending June 2024 was 0.7%—yes, that is disappointing—the eurozone’s was behind that, despite having three G7 members among its number. In the third quarter—that is, since June—figures for UK growth are up by 0.5% and the eurozone’s by a disappointing 0.2%. For those reasons, there is a strong economic case for not locking us into the EU’s protectionist arrangements. Despite the best will in the world in Brussels to move out of them, the EU seems to get stymied each time by ever greater protection, as these studies suggest.
Baroness Bennett of Manor Castle (GP)
My Lords, with the explicit kind invitation of the noble Lord, Lord Russell, I rise to provide an environmental perspective and broadly support Amendments 17 and 127. Since it is the first time I have spoken in Committee, I welcome the noble Lord, Lord Sharpe, to his new role. Given the range of subjects I cover, we have discussed many things before and we will have new subjects to cover. I also apologise to the Minister: I was aware of the long time that he devoted to consultation; like the noble Baroness, Lady Lawlor, however, transport interfered with my attendance. There is a lot of it around, I am afraid.
I will comment broadly on the amendments introduced by the noble Lord, Lord Frost, and others on this side of the Committee. I am not in favour of all those amendments. I suspect it will not surprise many people to hear that but I suggest respectfully to the noble Lord that he might be picking the wrong battlefield when it comes to tethered bottle tops. I am not sure that being the noble Lord in favour of litter is something that he would like to adopt, given that if you look, for example, at a marine conservation study from 2023, bottle tops were the third most littered item found on beaches. Indeed, the NGO Seas At Risk found it was the third most common plastic item in the seas, causing damage to wildlife. So I suggest a small, practical and sensible measure. If the noble Lord is finding it difficult to manage these new bottle tops, there is a TikToker whose handle is @andreilifehack. He has 8 million followers and a neat little trick of how to manage a tethered bottle top. I should be happy to share that link with the noble Lord.
Like the noble Lord, Lord Russell, I am going to take a moderate, practical approach to this. Picking up the point he made about the advantages to businesses, we particularly look at small and medium enterprises in the UK, which have suffered enormously and lost a huge amount of trade following Brexit. Regulatory confusion and uncertainty does not help them, whereas larger businesses may be able to cope. The certainty that his amendment could help to provide would be useful to those small and medium-sized enterprises.
Picking up on environmental health and, indeed, more broadly, the one-health aspect of this and being pragmatic—the noble Lord, Lord Browne of Ladyton, focused on chemical regulation and as the noble Lord, Lord Fox, has amendments on that later in the Bill, I am not going to get into the detail of that now—harmful chemicals and industrial processes are damaging public health in the UK. We have huge problems. The noble Lord, Lord Browne, referred to the state of our rivers, then there is air pollution and the contamination levels in our food. All these things have big impacts on public as well as environmental health. Again being pragmatic and thinking about the fact that both the two largest parties in your Lordships’ House often reflect on the number of people who are not in employment because of ill health and who are not contributing to the economy as a result, taking steps to improve public health, and environmental health as part of that, is an extremely pragmatic step. As the noble Lord, Lord Browne, said, we are trailing significantly behind the EU in important areas of that.
I said I would be brief, so I will stop there because I have more to say on these areas in the next group.
Lord Fox (LD)
As noble Lords can probably imagine, I have been looking forward to this group for ages, and I thank noble Lords for not disappointing. I put my name to Amendments 17 and 127 in the name of the noble Lord, Lord Russell, and tabled my own Amendment 94. I think the valedictory remarks made by the noble Lord, Lord Browne, about leaving this Bill may have been premature because Amendment 16, which is group 9, explicitly deals with the REACH issue, which I know he is so passionate about. I would like him to join me in probing the REACH elements of this, so I hope he can put off his exit from the Bill.
The Prime Minister, the Chancellor and others have stated that they wish to re-engage with our largest market, which is the EU. Their aim, and our aim on these Benches, is to remove friction to make life easier for British business. Thereby costs will be kept to a minimum, markets will be more accessible and growth, which we all agree is vital for our future, can be more easily achieved. I was delighted today when the Treasury spokesperson, the noble Lord, Lord Livermore, endorsed the role of this Bill in helping the Government make those moves to re-engage with the EU. It was reassuring that he sees the importance of this Bill in that process. That is a very good mark to put on what we are doing.
We heard some excellent speeches from the noble Lords, Lord Russell, Lord Browne and Lord Kirkhope, in favour of the amendment tabled by the noble Lord, Lord Russell. The UK Government are introducing legislation to guide the future regulation of standards for thousands of products when they are sold in the UK market. It should go without saying that creating different standards for UK businesses hoping to sell in both the UK and the EU works counter to this. Consistent standards that apply across both markets will give business the ability and certainty to sell in both those markets.
Never mind the dolphins. The noble Lord, Lord Frost, brought up the issue of tethered bottle tops. As far as I am aware, there is no regulation in this country to require tethered bottle tops. The reason we have them is because business knows how costly it would be to have two forms of a drink being sold in one market here and one market there. Business understands, even if some noble Lords do not, the true cost of having two different regulations. When it can do without them, it does, and the one it chooses is that of the biggest market, which is very rarely in the United Kingdom.
This legislation is an opportunity for the Government, if they move in the right direction, to reduce the red tape and the bureaucracy that the current version of Brexit has created for British business. We should be under no illusion that Brexit has made it much harder for businesses to export into the European Union.
The wording of this amendment does not bind the hands of Government. As noble Lords have observed, there is absolutely the opportunity to diverge and move away from the regulations in the European Union, if that is to the advantage of the United Kingdom. This is a common-sense amendment that provides regulatory certainty for UK businesses by requiring a default of alignment with EU regulations and a process for parliamentary scrutiny, if or when Ministers determine that divergence from such regulation would be in the best interests of the UK. That is what business tells us it wants—and I hope that the questions that the noble Lord, Lord Russell, asked will continue with that. It also seems to be what the public wants. A poll published today in the i newspaper says that when people were asked where was more important to Britain economically, 57% opted for Europe, with 34% opting for the US, for example. There are lots of good reasons for the Government to support these amendments, because they provide a foundation for economic growth by ensuring that businesses can plan and invest with confidence about where the regulatory regime is going and what kind of regulations are going to apply in the United Kingdom.
Before I come very briefly to Amendment 94, unlike the noble Lord, Lord Browne, I could not help but be lured into addressing some of the comments made by the noble Lords seated just behind me. The comments of the noble Lord, Lord Jackson, were very interesting. His comments about the environment and how appropriate it is to take into consideration things such as deforestation were interesting, and I shall be interested to see whether the Opposition Front Bench endorse the comments that he made, or whether they will distance themselves from them—because I think that is quite important.
Lord Jackson of Peterborough (Con)
For someone who is usually very astute, who listens to my views and is very kind in saying that they are interesting, I think that the noble Lord may have got the proverbial wrong end of the stick. I was not making a value judgment on whether it was appropriate to put environmental standards in this Bill. The substantive kernel of my comments was that it was unclear as to what the definition of environmental standards was—it was not saying that they were good or bad for things such as deforestation.
Lord Fox (LD)
I may have misunderstood—I shall certainly look at Hansard afterwards. But it would be useful for the Opposition Front Bench to explain where they sit in that regard.
I always listen to the noble Baroness, Lady Lawlor, carefully, but I was confused on a couple of issues that she used as examples. The first example was a very long discussion of digital regulation in the European Union—but digital regulation is not a part of this Bill. The second example was the CPTPP, which we all know is not designed to have mutually enforced standards—standards are not a part of the CPTPP, so I am not sure how this Bill reflects on that at all. This is probably a conversation that we can have outwith this debate, because I am speaking to the point—the point being that we can have trade deals with all sorts of places, multilateral and bilateral, with or without taking into consideration alignment with the EU. However, we cannot have trade in the EU if we do not have the right regulations. That is the point on which I wanted to end, in that regard.
I turn briefly to Amendment 94, which is simply a probing amendment to understand how the Government will monitor and approach the developing international standards. To some extent we have heard about issues around whether we should adopt those standards, but we should certainly understand them—that is my thing—and we should know what standards are governing the products that are coming into our country and how they relate to our standards. Clearly, we are importing a lot of things from a lot of places that are not in the EU, from around the world, and we really need to understand under what level of governance those international standards are maintaining the sorts of things that we care about within product regulation.
To close, the noble Lord, Lord Russell, has done this Committee a great service in tabling his amendments; I am very pleased to be one of their co-signatories.
Baroness Lawlor (Con)
May I clarify something? I specified that e-commerce was part of this study, in line with other digital arrangements. Many producers sell their goods through e-commerce.
Lord Sharpe of Epsom (Con)
My Lords, before I start, I thank all noble Lords, who have been incredibly generous to me this afternoon and this evening. I am immensely flattered.
I say to the noble Lord, Lord Hunt of Kings Heath, that, having been on the wrong end of a couple of punishment beatings by the Secondary Legislation Scrutiny Committee, I am a changed man. I have seen the light. I am reformed. I urge the Government to follow my lead and reform themselves.
This has been a most interesting debate. I thank all noble Lords for introducing their amendments and points of view with such admirable clarity. I thank in particular my noble friends Lord Frost and Lady Lawlor for their amendments. I have signed Amendments 4, 9, 15 and 42; I will explain why.
These amendments would ensure that we maintain our competitiveness on the global stage without being governed solely by EU standards. Amendment 4 seeks to remove a broadly drawn power that allows the Secretary of State to align UK product regulations with EU environmental laws. The provision, as currently drafted, could potentially lead to extensive regulatory alignment on environmental standards without proper parliamentary scrutiny or oversight. I am sorry to harp on about this but the Delegated Powers and Regulatory Reform Committee has expressed significant concerns about this clause, stating that it grants
“Ministers maximum flexibility to choose the direction that the law will take”.
Specifically, the committee warned that this could allow Ministers to align UK law “completely” with EU regulations, even when that may not be in the best interests of the UK or its regulatory framework. Through an overreliance on EU standards, we risk locking ourselves into a regulatory framework that does not necessarily reflect our national interests; of course, we acknowledge that it also might.
Amendment 6 in the name of my noble friend Lady Lawlor and Amendments 15, 36, 37 and 42 in the name of my noble friend Lord Frost are critical for positioning the UK as a global leader in product regulation and consumer protection. They would allow the UK to benefit from the best practices in product safety and environmental regulation from across the world, including from the US, Canada, Japan and other advanced economies. By allowing broader access to international standards, we would ensure that the UK can adapt to global trends and provide consumers with high-quality products. There should be no reason for the Government to oppose such an amendment—unless they are looking for dynamic alignment with the EU.
Amendment 15 is an excellent amendment that would ensure that the UK’s trade agreements with key partners are not undermined by regulations introduced under Clause 1. Those agreements represent some of the most dynamic and rapidly growing economies in the world; ensuring that we do not disadvantage our position with these treaties is crucial to the future growth and success of our global trade. This amendment is about maintaining and strengthening the UK’s competitiveness on the global stage.
The countries involved in these trade agreements, such as those in the CPTPP, are the fastest-growing economies in the world. In ensuring that regulations do not undermine our standing in these markets, the UK is better positioned to take advantage of these growing economies. If we align rigidly with Europe in this way—this is not an ideological point but a practical one—we risk missing opportunities in these markets, where growth is happening at a much faster pace than in the EU.
My noble friends Lord Jackson and Lady Lawlor hinted at this, and I also looked at some of the figures. To put things into perspective on the US versus the EU, in 1982, US and European Union GDPs were broadly similar. However, fast forward to today and the US’s economy is now roughly 45% larger than the EU’s, both in nominal terms and on a per capita basis. Those figures are from the World Bank. Purchasing power parity in the US is 38% larger than in the EU. The US has outpaced the EU significantly in its economic growth. I am not saying that this is due solely to differing regulatory regimes—of course it is not. These numbers encapsulate many varying factors, but it cannot be denied that regulation plays a major part in economic development. The simple conclusion is not that we should slavishly align with the US, just that we should retain flexibility.
The argument is clear: the EU is not the only partner with which the UK should align. We are seeing stronger growth opportunities in markets such as the US, Japan and Australia, with countries that are part of key trade agreements such as the CPTPP and in other areas. Given that the Government have talked extensively about boosting the UK’s growth prospects post Brexit—arguments with which we wholeheartedly agree—it is difficult to understand why they would not support an amendment that protects the UK’s position in these high-growth markets.
If the UK is to remain competitive, it must have the flexibility—which I do not believe is an abstract notion, as claimed by my noble friend Lord Kirkhope—to engage with the most dynamic global markets, rather than being rigidly shackled solely to the EU. There is no logical reason to oppose this amendment, unless there is an ideological fixation on aligning solely with the EU.
This amendment gives the UK the flexibility to take advantage of the best international practices without being locked into EU-centric frameworks that might not be in our best interests in the long term. I urge the Government to accept Amendment 15 in the name of my noble friend Lord Frost.
I will speak briefly on Amendment 17. I have great respect for the arguments made by all its proponents—my noble friend Lord Kirkhope, the noble Lords, Lord Russell, Lord Browne and Lord Fox, and others. In fact, I agree with their reasons for proposing the amendment, but it is perfectly reasonable to arrive at different conclusions. I agree with the noble Baroness, Lady Ritchie, who is no longer in her place but who, in an earlier debate, said that we should reset our relationship with the EU. Of course we should but, for the reasons that I have outlined, this is the wrong way to do it.
I oppose Amendment 17, which proposes to replicate EU law in relation to relevant product regulations. The notion of mandating such alignment with EU regulations post Brexit is not only inappropriate but, we believe, detrimental to the UK’s ability to independently shape its regulatory future. The amendment, by insisting on replicating EU law as the default position, undermines the very essence of the UK’s independence post Brexit. It will inevitably involve importing aspects of EU law that do not suit this country’s future. The entire purpose of leaving the European Union was to take control of our laws, regulations and trade policies. This amendment would force us to retain EU regulatory alignment, unless Ministers could justify divergence—a process that still places undue reliance on the EU framework. Our focus should be on maximising global competitiveness and exploring new trade opportunities, not tying ourselves to EU standards that might not be in our best interests while also accepting that they might.
Finally, I reassure the noble Lord, Lord Russell, that the new leader of the Opposition is well aware of what we are doing. I urge the Government to accept the amendments that I have signed, as I believe they are pro-business, pro-trade and pro-consumer.
Lord Leong (Lab)
I thank noble Lords and the noble Baroness for their amendments in this group. Products in the scope of the Bill are used by every person in this country, covering nearly all manufactured products. We estimate that at least 300,000 UK businesses, employing several million employees, with an estimated market turnover of £490 billion, must adhere to product safety legislation.
The product safety review call for evidence in 2020 and 2021 received something like 158 responses; 126 responses were received in response to the product safety review consultation in 2023; 53 engagement events were held, reaching about 400 stakeholders; and, throughout last year, my department undertook 46 round tables with more than 300 stakeholders, both domestically and internationally. I want to set the picture so that all noble Lords know that we undertook reviews before the Bill was brought to Parliament.
Many businesses and consumer organisations support the Bill, seeing it as a common-sense approach to ensuring that the existing body of product regulation is fit for purpose in the face of technological and other changes. I emphasise again that the Government have been very clear that the UK will not rejoin the EU single market, customs union or freedom of movement. It is important to reset our relations with our nearest friends and neighbours, but that does not mean a return to the arrangements of the past.
Let us not forget that the bulk of UK product regulation is derived from EU law. This is precisely the reason the legislation explicitly references that jurisdiction and not others. If the UK makes a sovereign decision to mirror EU provisions, the Bill provides the mechanism and flexibility, on a case-by-case basis, to do so. This would avoid primary legislation each time technical changes are needed and would increase the certainty that businesses are crying out for. I hope noble Lords will support this pragmatic approach.
However, it is not our default position that we will mirror EU requirements. The Government will be guided by the needs of businesses and consumers, which may differ. Nothing in the Bill prevents the UK diverging from EU requirements. The Government’s approach, whether to mirror or diverge, will be driven by evidence, subject to industry engagement, as discussed earlier in group 1, and support our mission to drive economic growth and provide consistency and certainty to businesses.
I turn to the amendment by the noble Lord, Lord Russell. The Bill provides powers that will give the UK greater flexibility in setting and updating its own product-related rules. It also enables the UK to choose to recognise relevant EU product requirements where it is in the interest of our businesses and consumers to do so. The Government have strong relationships with stakeholders, including industry, trade associations and consumer groups, and will continue to engage with them before any regulatory changes are brought to this House.
Amendment 4 proposes removing the powers in the Bill that would allow us to update regulations that address the environmental impact of products where similar provision exists in EU law. Amendment 6 proposes broadening these powers to update UK regulations to mirror any international jurisdiction. The noble Lord, Lord Jackson, talked about environmental impact, and I thank the noble Baroness, Lady Bennett, for her contribution which leaves me with very little to say here, except that many products are required to meet multiple product regulations, including those which may address the environmental impact of products.
As I have noted, most UK product legislation is derived from EU law. The powers in Clause 1(2) are intended to be used in limited circumstances where there is a corresponding or similar provision in EU product regulations for the purpose of reducing or mitigating the environmental impact of products. This ensures that the power could be exercised to create regulatory certainty and manage changes to EU rules we recognise.
This power is limited in this way as we do not wish to create powers to regulate on wider environmental objectives. This already exists, for example, under the Environment Act. Clause 1(2) in no way obliges the UK to recognise or to mirror EU provisions. We have been clear that such decisions will be taken on a case-by-case basis and subject to parliamentary scrutiny.
Lord Frost (Con)
My Lords, it has been a very interesting debate, even though it may have had a slightly retro feel to those who lived through it all in 2019 and 2020.
I have a couple of quick points. On Amendment 37, if it is genuinely the Government’s view that this clause is not intended to and does not give the power to create ambulatory references, it seems we agree on substance—but maybe it could be clearer in the Bill.
On my question about the Windsor Framework, I gently suggest that the Minister has not quite answered the point. It is not about mirroring in GB; it is about goods that are able to circulate in Northern Ireland and therefore can circulate in the rest of the UK without further ado. I would appreciate it if that could be clarified further. I will not prolong this debate, even though I suspect we will return to this on Report. I beg leave to withdraw my amendment.
“(2) The Secretary of State may also by regulations make provision, in relation to the marketing or use of products in the United Kingdom, for the purpose of—(a) reducing or mitigating the environmental impact of products;(b) promoting sustainable production and consumption;(c) advancing circular economy principles;(d) meeting or exceeding environmental standards set by relevant EU law or other international best practices.”Member’s explanatory statement
This amendment expressly allows the government to exceed EU environmental standards, and adds circular economy principles to the face of the Bill.
Baroness Bennett of Manor Castle (GP)
My Lords, in moving Amendment 5 I will also speak to Amendments 28, 30, 50, 115 and 125, which are in my name and that of the noble Lord, Lord Fox. I am very aware of the time and the risk of a vote being called, so I am abbreviating this on the understanding that we may be able to have discussions later.
In the interests of time I did not speak on the first group, but the noble Lord, Lord Fox, spoke about this Bill—rather than being a framework Bill or one that is filled with Henry VIII powers—as providing guard-rails. Many will see the amendments in this group as providing a set of environmental guard-rails. The noble Lord, Lord Sandhurst, said that the Bill needed policy direction, and that is essentially what these amendments do.
I take the Minister’s point about there being a level of detail that is not appropriate to include in legislation rather than regulation. I spent this morning with Westminster Forum Projects talking about deposit return schemes and extended producer responsibility. I learned about RAM—recyclability assessment methodology. Those are things that certainly need to be in the regulations, but they need to be the guard-rails here.
These amendments will be classed as environmental amendments, but they are also amendments about things such as the right to repair and tackling utterly unnecessary planned obsolescence, which is deeply costly to consumers. These are also amendments that start to address the cost of living crisis and are real principles for people today. I was going to go through the amendments in considerable detail, but the arguments for right to repair and against planned obsolescence are really obvious so, given the time, I will address just the circular economy elements, which run as a line through these amendments.
It is worth saying that the environmental improvement plan contains a target to reduce residual waste, excluding construction waste, to 437 kilogrammes per capita by 2028, but in 2022 this figure stood at 558.8 kilogrammes. That was only 2.8% down on 2019. In three years, that was all the progress that had been made towards the target of circularity, which is only three years away.
The noble Lord, Lord Frost, who is no longer in his place, was talking about EU rules on deforestation. In 2021, UK consumption was associated with 30,000 hectares of deforestation, with all the climate and nature impacts that we understand. If we look at the climate aspect, the treatment and disposal of waste resources is separately responsible for 5% of all UK greenhouse gas emissions. The cost of that treatment and disposal of waste is borne very often by the public, when actually a few companies are profiting from the production.
I briefly mention, because I promised to do so, that the noble Earl, Lord Lytton, who is unable to be with us for this group, wanted to stress the importance of construction. Although it is excluded from that waste target, there are difficulties because so many problems with, and failures of, design are happening in construction. We all know about the safety impacts but they also have huge environmental impacts—and cost impacts, about which many of us know from working with builders.
In the interests of time, I shall stop there. I beg to move Amendment 5.
Lord Fox (LD)
My Lords, I will speak very briefly on Amendments 30, 115 and 125, which are in my name. As the noble Baroness, Lady Bennett, observed, they are designed to produce guard-rails that significantly strengthen the environmental and sustainability part of the Bill. It seems inconceivable to me that legislation of this kind would not carry these requirements.
Amendment 30, which is the substantive one, would add new subsection (2A) to Clause 2 in order to ensure that future regulations under the Act include provisions that relate to environmental impact assessments, the circular economy and granting consumers the right to repair products. On the latter, despite attempts, the tendency is to continue to find products manufactured with increasingly complex modules that defy cost-effective repair or sensible re-use, which should be an important part of the future economy. This amendment does not dot “i”s or cross “t”s, because that is the role of the actual regulation, but it sets a standard that we should be looking at for the regulation process. That is it; I could go into more detail, but I do not think I have to.
Amendments 115 and 125 are definitions that would help explain what we mean by “circular economy” and “right to repair”. I hope that His Majesty’s Government will find some sympathy with all of this group and find a wording. I am not proud about my words; I am sure that the noble Baroness, Lady Bennett, is the same. Let us find a way of putting these proposals into primary legislation because these are really important issues.
Lord Sharpe of Epsom (Con)
My Lords, I will be brief. I thank the noble Baroness, Lady Bennett, for introducing this group. I assure her and the noble Lord, Lord Fox, that we on these Benches want to see a bright future for our green and pleasant land. That said, we have some concerns about these amendments.
The first relates to the themes that the Committee has been exploring throughout this session. The Bill confers, as we have discussed at length, extensive Henry VIII powers on the Secretary of State. These amendments are broadly drawn and, we feel, have considerable holes in them. Given the wide Henry VIII powers conferred on the Secretary of State, it is not hard to imagine a world where a crazed zealot occupies the position of Secretary of State—it is not hard to think of those, is it?—and decides to apply these provisions in extreme ways without any scrutiny. We really should not lay ourselves open to that. These decisions should be subject to democratic scrutiny. Opinions will be sure to differ on the definitions of some of the phrases in these things. That is not to say they are wrong; it is just that opinions can, and will, differ.
My second point is that we are concerned that the amendments would impose significant costs on businesses. They will stifle competition and harm growth; obviously, this comes at a time when businesses are grappling with significant challenges. Although the proposals appear virtuous on the surface, in practice, they represent an unnecessary and impractical burden on businesses and consumers. That comes at a time when the country needs growth—a point that has obviously been acknowledged by the Government.
These amendments would create additional regulatory burdens, which would hamper industries already struggling with economic headwinds. I also note—I will expand on this theme in later debates—that the market is already supplying many of the solutions sought through these amendments. We believe that, for the many businesses —especially small and medium-sized enterprises—that are already struggling due to various factors, the cost of compliance with these rigid requirements could be devastating. It is not just businesses that will be affected because, of course, those costs will be passed on to consumers. Before any amendments in this group can be considered, surely we must assess the potential unintended consequences for businesses and consumers.
We have a strong record of delivering improvements for our environment but we on these Benches are clear that we should avoid overburdensome regulation on businesses. That said, informing consumer choice is an important component of efficient markets so, notwithstanding our objections, Amendments 28 and 30 in the name of the noble Lord, Lord Fox, have some merit. He is channelling his Orange Book foundations here. Overall, we would not support these amendments, for the reasons that I have outlined.
Lord Hunt of Kings Heath (Lab)
My Lords, it has been an interesting mini debate and I am grateful to the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox, for their amendments. I want to remark on the miraculous conversion to regulatory purity of the noble Lord, Lord Sharpe. I can only refer to Luke, chapter 15, which states that
“joy shall be in heaven over one sinner that repenteth, more than over 90 and nine just persons, which need no repentance”.
I am not a crazed zealot but perhaps in my case, with due acknowledgement to St Augustine, “Oh Lord, make me regulatory pure, but not quite yet.”
We have encapsulated a very interesting debate because I think we all accept the really important point raised by the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox. On the other hand, there are issues about the wording of the amendment and the unintended consequences, alongside the fact that we believe that current legislation allows us to do what both the noble Lord and the noble Baroness would require us to do.
Amendments 30, 115 and 125 are intended to reduce waste. They promote recyclability, repair and reuse of products, and seek to mandate that all product regulations made under the Bill would require an environmental impact assessment and provisions related to the right to repair and the circular economy. Amendment 50 of the noble Baroness, Lady Bennett, seeks to achieve similar by making it a requirement that regulations made under the Bill include provisions to promote circular economy principles. The noble Baroness’s amendment then goes a step further, requiring the Secretary of State to issue guidance on such principles within 12 months, and to review and update that guidance at least once every three years.
Under the duty set out in the Environment Act 2021, Ministers and policymakers must already consider the environmental impact of all new government policies. I certainly empathise with the whole concept of the circular economy, on which both the noble Baroness, Lady Bennett, and the noble Lord, Lord Fox, spoke with such eloquence. The Secretary of State for the Environment, Food and Rural Affairs has set the reduction of waste by moving to a circular economy as one of Defra’s top five priorities. In fact, the Secretary of State has convened a small ministerial group on the circular economy and asked his department to work with experts from industry and academia to develop a circular economy strategy. I will feed this debate and noble Lords’ contributions into the ministerial task force.
I understand the importance of the right to repair. The product regulations made under the Bill will cover many types of products, some of which may be inappropriate to repair. That is really part of the point; for instance, cosmetics is one example—the point that the noble Lord, Lord Sharpe, made. The Ecodesign for Energy-Related Products and Energy Information Regulations 2021 introduced measures including requirements for repairability for the first time in Great Britain. Those regulations contribute towards circular economy objectives by increasing the lifespan, maintenance and waste handling of energy-related products. Our aim is to introduce further right to repair measures when regulating individual products under the ecodesign for energy-related products regulations, where appropriate. That is probably the best way in which to approach it, rather than putting a generic requirement in this piece of legislation.
With regard to Amendments 5 and 28, I reassure noble Lords that the provisions in the Bill do not prevent the UK introducing new environmental regulations. Should we wish to set out broader regulations that exceed or differ from EU rules, we already have powers under other legislation to introduce wider environmental protection rules.
I understand the desire of noble Lords to have something in the Bill in relation to these important issues, but there is a problem of imposing requirements where they cannot reasonably be met or duplicate existing policies. I know that is not the intention, but we think that would be the effect of the amendments before us. We clearly want to avoid conflicting or duplicating regulations. In essence, we agree with the principles put forward by the noble Lord and the noble Baroness. We think we are covered by existing legislation and regulations, but I am grateful to them for bringing them forward.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for his response and noble Lords who have taken part in this time-constrained debate. I take some encouragement from the expressions of at least general support. Like the noble Lord, Lord Fox, I look forward to further discussions with the Minister on this issue. That is part of the reason why I tabled a number of amendments taking different approaches and going into different parts of the Bill because of the different ways of approaching it. We are very open to anything that might put in some kind of guard-rail.
If I may say so, the Minister gave a classic Civil Service response: “But it is covered by other legislation”. I point him to the figures I cited about how little progress has been made on waste reduction towards a target that is only three years away. What we are doing now is clearly not enough, and it is not working.
We are talking about the product regulation Bill, and on the point about right to repair and cosmetics, there are obviously different rules to be applied to different products. That is true of any Bill that covers product regulation.
I wish briefly to pick up the points made the noble Lord, Lord Sharpe, who suggested that these amendments might produce a further burden on consumers. If consumers found that their fridge lasted longer, for the kind of period that fridges used to last, that would be not a burden but a considerable advantage. If they were able to fix their mobile phone instead of having to pay a multinational company a large sum of money for a new one, that would certainly not be a burden on consumers. It would perhaps be a rebalancing of the Government acting in the interests of consumers rather than those of giant multinational producers.
We can see clearly that this is a debate that will continue, but in the meantime, I beg leave to withdraw Amendment 5.
Lord Hunt of Kings Heath (Lab)
My Lords, I say at once that I pay due regard to the Civil Service and the advice I receive, but these are the words of Ministers. There is a judgment here that you do not want to add legislation where you already have it. The point the noble Baroness makes is that the legislation is not being used effectively. The whole point of the Secretary of State for the Environment, Food and Rural Affairs’s task force is to look at the progress we are making and to refocus in relation to the circular economy. I hope the noble Baroness will not think that this is a damp squib of an answer because we take what she says very seriously. Of course, we will be happy to meet her and the noble Lord, Lord Fox, to discuss this important matter further.
Lord Sharpe of Epsom (Con)
My Lords, I reassure the noble Baroness that my fridge is more than 20 years old, and I have a very good mobile-phone repairer.
Baroness Bennett of Manor Castle (GP)
I guess the noble Lord has chosen his products well and been extraordinarily lucky. I am afraid some of my fridges have not lasted anything like so long.