Draft Trade Act 2021 (Power to Implement International Trade Agreements) (Extension to Expiry) Regulations 2025
(1 day, 8 hours ago)
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The Minister of State, Department for Business and Trade (Chris Bryant)
I beg to move,
That the Committee has considered the draft Trade Act 2021 (Power to Implement International Trade Agreements) (Extension to Expiry) Regulations 2025.
I have never been so kindly called by the Chair in Committee, Mr Stringer, so thank you very much. It is a genuine delight to sit under your chairmanship.
The draft regulations will authorise the enactment of sections 2(10)(b) and 2(11) of the Trade Act 2021 and extend the power under section 2(1) for a further period of five years. The proposed extension is a vital measure to ensure that the UK can remain flexible and proactive in managing its trade relations with important international partners. By extending the power, the Government will be able to pursue their ambitious trade agenda with minimal interruption.
To provide the Committee with a little more background, the Act was introduced by Liz Truss, but that does not mean it is all wrong. When it received Royal Assent back in 2021 under the previous Administration, the legislation granted the UK Government the authority to implement, through domestic law, trade agreements with countries that previously had such arrangements with the EU before Brexit. That is specified in section 2 of the Act. In practice, under the power in section 2(1), the Act enabled Ministers from the UK Government, as well as those from the devolved Administrations in Scotland, Wales and Northern Ireland, to make regulations via secondary legislation, specifically to address non-tariff elements of such agreements.
Rightful concerns about the scope of the power were expressed in Parliament at the time, including by the Labour party, resulting in the previous Government having to introduce several safeguards, including a sunset clause meaning that the power in section 2(1) will lapse at 11 pm on 31 December 2025 unless extended for up to five years by affirmative statutory instrument, which is what this Committee is about. We believe that such an extension is now necessary for our trade programme.
Any agreement that may have aspects implemented by that provision and that falls within the scope of the Constitutional Reform and Governance Act 2010 will still be subject to the usual pre-ratification scrutiny, alongside the Government’s additional commitments to parliamentary transparency and oversight. All the original safeguards that we fought for at the time of the 2021 Act’s passage will remain in place. The draft regulations will have no effect on them.
We will continue to ensure that the power cannot be used to lower UK standards in areas such as the protection of human, animal or plant life, animal welfare, environmental protection, employment and labour rights, data protection, and safeguarding children and vulnerable adults online. Regulations made under section 2(1) of the 2021 Act that affect healthcare services must also uphold the principle of a publicly funded healthcare system. I cannot see a single Member on the Government side who was in the House when the 2021 legislation went through, so I realise I might be telling people ancient history.
Since coming into office, the Labour Government have made considerable progress in negotiating agreements that may require the continued use of section 2(1) beyond its expiry. It is crucial that we retain the ability to implement the outcomes of such negotiations. That is vital not only for businesses operating under new terms, but for maintaining the UK’s reputation as a dependable trading partner.
In practice, the extension could facilitate the implementation of forthcoming agreements with major partners, such as Switzerland, worth some £45 billion in trade, and Türkiye, worth some £28 billion. The agreements, once operational, are expected to deliver substantial economic benefits, open new markets, create jobs and stimulate growth across the UK. Without the power under section 2(1), delivering on our negotiated successes would be significantly more challenging. I am sure no Members of the House want to make that the case.
It is worth noting that the power under section 2(1) has already been used to implement agreements domestically, enabling the passage of statutory instruments on matters ranging from chemicals to roaming charges. The powers may also be needed for the ongoing management of existing arrangements, an example of which is to facilitate changes to the wholesale rates set out in an annexe to the European economic area and European Free Trade Association free trade agreement with the UK.
What I am trying to demonstrate to colleagues, I hope successfully, is the range of circumstances in which the power may be required. Extending section 2(1), therefore, is the most sensible course of action. A five-year extension is necessary to provide comprehensive coverage and to address any unforeseen issues that may arise during the ongoing administration of our trade agreements. Given the reasons that I have outlined and the assurances that I have made, I trust that the Committee will support the measure.
Andrew Griffith (Arundel and South Downs) (Con)
It is a pleasure to serve under your chairmanship, Mr Stringer. His Majesty’s Opposition do not intend to detain the Committee any longer than necessary.
We welcome the Minister of State, whose feet have probably not touched the ground since his appointment, and wish him well in his endeavours to grow the economy by securing trade deals, lift people out of poverty and help to deliver the Government’s objective for growth. We are delighted that, in so doing, he is making the most of the benefits of Brexit—our freedom to determine our own trade deals. That is part of why the draft regulations are so important. Extension for another five years attracted the full support of the diligent House of Lords Legislative Scrutiny Committee—we thank it for its work, which is important in ensuring that this House discharges its job on secondary legislation properly. In this case, we are delighted to support the Government on the measure.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to serve under your chairmanship, Mr Stringer. The Liberal Democrats strongly opposed the Trade Act 2021, as it failed to provide sufficient parliamentary scrutiny of future trade agreements and risked weakening the UK’s high standards on health, food, labour and the environment. Despite that, the Bill passed the House of Commons in July 2020 without amendment, despite cross-party efforts to introduce greater transparency and accountability.
In contrast to the Labour Back Benchers, I was there and I tabled those amendments to require transparent investment courts for investor disputes, to ensure human rights considerations in trade negotiations and to mandate impact assessments of trade agreements. Those, along with other Opposition amendments such as protections for the NHS and food standards, were voted down by the then Government.
The Liberal Democrats further criticised the Bill for lacking clear national priorities or principles to guide future trade negotiations, such as commitments on climate action, animal welfare and international development. We warned that that omission could lead to deals that lower standards or allow foreign influence over public services. Then and now, we believe that the 2021 Act grants excessive power to Ministers, excluding MPs from meaningful involvement, and it provides no guarantee that UK standards, public services or democratic accountability will be protected. We will not vote against this draft SI, but we will continue to call for reforms to ensure transparency, fairness and parliamentary scrutiny in future trade policy.
Chris Bryant
The shadow Secretary of State for Business and Trade, the hon. Member for Arundel and South Downs, argued for the benefits of Brexit—well, I have searched very high and I have searched very, very low for those. The previous Government even had a Minister for the benefits of Brexit, although he lost his seat, of course, at the last general election. I was a remainer and I remain a remainer, and we know that there has been significant damage to our ability to prosper because of what Brexit did to us. When I was at the World Trade Organisation last week, it was striking how many countries pointed to the number of UK businesses that are no longer trading in Europe because of the difficulties relating to Brexit.
I will say two things. First, we are where we are and we intend to exploit the ability that we have by virtue of not being in the European Union to its utmost, so as to secure trade deals wherever we can in the rest of the world. It may be that in some instances we are able to lead the way, such as on the free trade agreement that we have agreed with India, which is a significant success. That will point the way for the EU itself, in some cases, to be able to follow in our wake. It also gives us a seat at the WTO for the first time, which means that we can lead some of the conversations on reform of the WTO at the ministerial conference next March in Cameroon.
We will exploit the opportunity, but secondly, we must also ensure that, wherever possible, we secure the frictionless trade that was promised us by the shadow Minister and his ilk. We will try to secure that with the European Union because, frankly, any business in the UK that manages to find an export opportunity is more likely to be more resilient, succeed and grow into the future, which is precisely what we want for British businesses.
The hon. Member for Richmond Park, the Liberal Democrat spokesperson, sounded very grumpy. I always think, when a Liberal Democrat stands up, that they will be full of cheer and joy, and then they are always grumpy. I sympathise with some of the arguments that she makes about scrutiny, and I want to make sure, as Trade Minister, that we can provide whatever scrutiny is possible without so limiting our freedom of action to secure a deal with another country. It is a very careful balancing act and we need to get it right.
I was the Minister in the Foreign, Commonwealth & Development Office who took forward the clauses in the Constitutional Reform and Governance Act 2010—CRaG. I stand by them. We will provide as many opportunities as we possibly can in relation to all the trade deals that we are going through at the moment for people to scrutinise, question and, if necessary, tell Ministers off. I will now give way for what will probably be another grumpy Liberal Democrat intervention.
Sarah Olney
I will ask this question in the brightest way I possibly can. The Minister referenced CRaG, which was passed in 2010. Does he still think that that is a sufficient level of scrutiny, given that we are now outside the EU and in a different trading environment to the one that we were in when those provisions were made?
Chris Bryant
We would obviously always want to keep that under review. As part of the CRaG process everything gets notified to the several Committees that might have an interest. When I was on the Foreign Affairs Committee, it struck me that it was always at that moment that all the members would put their heads on the table—it was like the moment from “Absolutely Fabulous” when the accountant comes along.
There is a very strong argument that the whole of the House should take these trade issues far more seriously than we have in the past—though that is not me committing to changes in legislation, in case that is what the hon. Lady thought I was doing. She has started smiling again; it turns out I can put a smile on a Liberal Democrat face. However, I take the issue of how we consult extremely seriously. I know she is a trade envoy, and I still need to have a conversation with her about that.
Broadly speaking, everybody has said that they agree with the motion, so I should probably shut up.
Question put and agreed to.
Draft Motor Fuel Price (Open Data) Regulations 2025
(1 day, 8 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move,
That the Committee has considered the draft Motor Fuel Price (Open Data) Regulations 2025.
It is a pleasure to serve under your chairmanship, Ms Lewell, in my first Statutory Instrument Committee as Minister for Energy Consumers. Through these regulations, we will establish the legislative basis for creating a statutory open data scheme called Fuel Finder, which will increase fuel price transparency across all UK petrol filling stations, empowering consumers to compare prices on a near real-time basis.
In recent years, fuel prices have risen and that has had a profound impact on households, businesses and communities across the UK, as I am sure Committee members have witnessed in their constituencies. In my constituency, the Greenock Telegraph has run a very active campaign for years on fuel pricing. Between 2021 and 2022, the price of petrol and diesel rose by more than 60p a litre, driven by global supply and demand shocks stemming from the covid-19 pandemic and the Russian invasion of Ukraine. In 2022, drivers paid an estimated £900 million more at the pumps across major supermarket retailers than in the previous year. By 2023, higher fuel margins across the whole market had cost drivers a further £1.6 billion.
The Competition and Markets Authority found that price rises for fuel and disparities between prices at a local level were driven by major retailers using the volatile backdrop and the lack of transparency to increase their profit margins unfairly and at the expense of consumers across the UK, contributing to the cost of living crisis and the hardship that families up and down the country have felt in recent years. My job as the Minister for Energy Consumers and the job of the Government is to change that picture and to protect households from price hikes, and that is why we are delivering change to protect consumers, to put an end to unfair pricing practices and to increase transparency in the fuel retail market.
In line with the CMA’s recommendations in the road fuel market study, we are rolling out a statutory open data scheme for fuel prices at the end of the year. These regulations will replace the CMA’s current voluntary scheme and mark a decisive step forward in empowering motorists across the UK to compare prices easily and to make informed choices about where they purchase their fuel. Motorists across the UK will have greater visibility on the range of choice available to them, and retailers will be incentivised more than ever to offer more affordable prices in a more competitive market.
The regulations will require all petrol filling stations in the UK to register and report changes to their fuel prices within 30 minutes of a change. The information will be freely available almost in real time. That marks a fundamental step to restoring competition and fairness in a market that has proved that it will not self-correct without Government intervention. By making this information openly available to any third parties that request it, we will enable the market to integrate the data into digital mapping services and vehicle satellite navigation services to help motorists to locate the best prices in their area.
We recognise that the regulations will deliver a change in the operations of the industry, and that is why the scheme has been carefully designed to take into account the operational complexities of a wide range of fuel retailers to ensure that the measures are clear and proportionate. The regulations were designed in consultation with the industry, and our aim is to build an open data scheme that not only serves a purpose for consumers, but supports the retailers that are involved in reporting. We have designed a simple and time-efficient system for retailers to provide price updates using a practical and accessible digital solution that works across all types of retailer. It will be a change for operators at the beginning, but we expect it to become business as usual quickly and to create transparency in the market without placing unnecessary administrative burden on businesses.
It is impossible to predict how fuel prices will respond as they remain incredibly sensitive to wider geopolitical factors, but we estimate that implementing a statutory open data scheme for fuel prices in the UK could result in fuel cost savings for drivers of £10.4 billion across a 10-year period. We have seen the benefits of other fuel price open data schemes in countries such as Australia and Germany, and we have learned from them in designing this scheme. Where consumers have access to real-time data, prices have decreased. Those international examples show that markets respond to open data schemes and that the schemes deliver their promise to bring down prices, which makes me confident that Fuel Finder will not only meet the expectations, but set a new standard for transparency in the UK fuel market.
This instrument represents an important step in bringing forth real change in market transparency, making a progressive step to a more transparent and fair market. The Government are committed to honouring the promise in the 2024 Budget to restore fairness at the pump, ensuring that motorists are no longer disadvantaged by pricing practices. Fuel Finder is not just a technical solution, but a practical one that puts consumers across the UK at the heart of policy design. By shining a light on pricing practices, Fuel Finder will increase competition to help to bring down fuel prices and ensure that no driver is left overpaying at the pump.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship this afternoon, Ms Lewell. His Majesty’s official Opposition recognise the urgent need for transparency in the fuel market, something the former Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), took significant steps towards under the previous Government through the introduction of Pumpwatch—now called Fuel Finder—which received Royal Assent in 2024. That went alongside the work of Howard Cox from FairFuelUK, whose persistence has been instrumental in pushing for progress through 15 years of research into fuel pricing.
The regulations require every fuel station to register with the Government’s appointed data aggregator and report any change in pump prices within 30 minutes. That data must then be made openly available, free of charge, for use by third-party apps, navigation systems and consumer groups. The aim, as the previous Conservative Government set out, is to allow motorists to see in real time who is offering the best price in their area, enabling genuine competition across the fuel market. Fuel Finder is not a bold new idea from the Labour Benches. It is a continuation, albeit a delayed and diluted one, of the Conservative commitment to ensure that motorists can finally see in real time who is charging what and where. This is a rebrand, not a positive policy change.
It was the Conservatives who commissioned the Competition and Markets Authority’s landmark investigation into road fuel pricing, which revealed that retailers were increasing margins at the expense of consumers. The study showed that average supermarket fuel margins had risen by around 6p per litre since 2019 and that a typical family driving a car could save up to £4.50 a tank by driving just a few minutes further to a cheaper station. It exposed a market that was not functioning as it should—one where falling wholesale costs were not being passed on to consumers and where, in some cases, motorists on motorways were paying 20p plus more per litre than they needed to.
There are several areas where the Government fall short, starting with margin transparency. Motorists will see today’s prices, but not how they have changed over time, nor whether any increase reflects market forces or simply wider retailer margins. The CMA’s evidence shows that it is precisely those margins that have driven up prices in recent years. Without addressing margin transparency, the real cause of the problem remains hidden. Across Europe, in Austria, Germany, France, Italy and Spain, Governments publish not only live pump prices, but also historical and margin data, allowing drivers and regulators to see whether retailers are passing on savings or quietly padding profit. By comparison, this Government’s fuel finder offers only partial transparency. It tells motorists where fuel is cheapest today, but not whether the price is fair.
The Opposition also object to the lack of a legal requirement for fuel stations to report when a fuel type is unavailable. Drivers need to know not only the cost of a litre of petrol or diesel, but whether diesel or petrol will actually be available when they get there. Making that optional undermines the very purpose of transparency.
Enforcement is also left vague. The CMA has powers to issue civil penalties and pursue criminal sanctions, but the Government have not set clear thresholds or standards for when those powers will apply. Nor have they addressed the risk that some operators may plead technical failure or poor connectivity as an excuse for not reporting prices promptly. That kind of leniency invites abuse. If the Government truly want transparency, they must ensure that IT issues cannot be used as a standing excuse for non-compliance.
The same potential penalties—up to 1% of global turnover or 5% of daily turnover per day—apply to all data reporting obligations under this legislation. While sanctions for non-compliance in price reporting were anticipated, it is notable that the same provisions extend to non-price data. The Association of Convenience Stores, for example, has raised concerns that this could include reporting on the availability of coffee machines, baby changing facilities and even microwaves. I am sure people do want to know if such things are available, but we believe that level of reporting goes beyond the original policy intent and imposes unnecessary burdens on retailers already facing significant compliance pressures.
Furthermore, there has been no formal engagement with industry ahead of publishing the non-price data requirements. With the obligation to report on 30 additional categories, that introduces unnecessary cost and complexity for retailers, not only during the initial registration window which runs from 18 December to 2 February, but also on an ongoing basis, given the requirement under the regulations to update information within three days. That directly contradicts the Government’s own target of reducing the regulatory burden by 25%, penalising businesses that are already operating in a challenging economy and diverting resources away from delivering value and service to consumers.
Then there is the question of smaller, rural fuel stations like those in constituencies like, to pick one at random, mine of Mid-Buckinghamshire. The regulations are set out to apply universally but there is little evidence the Government have considered the burden on low volume operators, or how those will be supported to comply. Transparency should not come at the cost of driving independent rural stations out of business.
Finally, we must look at timing. The Government intend to launch Fuel Finder by the end of this year, two years after the CMA’s recommendation and a year later than originally planned under the previous Conservative Government. For motorists already struggling with record living costs and high fuel prices under this Government, progress has been far too slow. Every month of delay means that families continue to overpay at the pump and competition remains weaker than it should be.
The Opposition do support the principle of open data for fuel prices. We welcome the continuation of a Conservative policy that sought to bring transparency for drivers, encourage competition and deliver accountability in a sector that too often escapes scrutiny. But we will not let the Government claim credit for a policy that they did not originate, nor overlook that its implementation has been slow, cautious and incomplete. Conservatives began this work and in opposition we will continue to press for its full and timely delivery for fuel, with stronger enforcement, real transparency and genuine competition for every motorist in Britain. I hope that when the Minister concludes this debate he can address some of the shortcomings I have highlighted this afternoon.
Claire Young (Thornbury and Yate) (LD)
It is a pleasure to serve under your chairship, Ms Lewell. The Liberal Democrats support this statutory instrument. We have long called for measures, including the introduction of a fuel finder scheme, to allow drivers to directly compare fuel prices, to protect from rip-off prices and improve competition between petrol stations. Far from it being a burden in rural areas, we think those living in such areas, where there is a greater reliance on cars—like my Thornberry and Yate constituency—will welcome this change. It is disappointing it has taken so long to enact this scheme. Contrary to what the hon. Member for Mid Buckinghamshire (Greg Smith) has just said, I do not think things were moving in a particularly speedy manner under the Conservatives, but it is now nearly two years since that Government first launched their consultation on the design of a fuel finder, back in January 2024. Given the figures quoted by the Minister in his opening statement, it is clear that motorists will have lost a great deal of money in that time. We will, however, support this statutory instrument.
Edward Argar (Melton and Syston) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. As my hon. Friend the Member for Mid Buckinghamshire, the shadow Minister, has set out, we welcome the intent behind the statutory instrument, which has the potential to considerably benefit the consumer. I echo a number of the points made by my hon. Friend. He highlighted the mission creep in what will potentially have to be reported, and a degree of vagueness in the SI and its supporting documents.
Paragraph 238 of the impact assessment states that there are 8,329 PFSs, of which 698—just over 8%—are deemed to be those of minor brands. One can surmise that means they are smaller operations and therefore potentially disproportionately impacted by a one-size-fits-all approach. I have about half a dozen factual questions, if I may. First, what was the rationale for using worldwide turnover as the basis for the fines? Has the Minister made any assessment of whether there are—and there may not be—any operators that have huge overseas operations but only a very small footprint in this country?
My hon. Friend the shadow Minister talked about the potential impact on small rural operators. Paragraph 7.4 of the explanatory memorandum refers to the potential impact of legacy technology, and to how the reporting mechanism will work. It simply says that the impact will be
“mitigated with taking a holistic view…of the scheme.”
What does that mean, in practical terms?
Paragraph 246 of the impact assessment says that the scheme will be launched at the end of this year, from which we are less than two months away. Is it on target to be launched then? If so, where has the procurement process for the aggregator got to? If an aggregator has been appointed, is the Minister able to tell the Committee which company or organisation has received that appointment? Similarly, paragraph 247 of the impact assessment talks about training that will be done in advance of the launch of the scheme. When will that be done and how, given the very tight timescales?
Finally, paragraph 248 of the impact assessment talks about enforcement guidance to come. Where has that guidance got to in the process, and when will it be published?
Martin McCluskey
That was detailed, if nothing else. It is refreshing to hear those on the Conservative Benches back their own policies in opposition. At the moment in my brief, I am more used to hearing Conservative Front Benchers disavow the policies of the previous Government in my Department. The shadow Energy Secretary could learn from this breakout of consensus.
I will begin by responding to the points of the spokesperson for the official Opposition, the hon. Member for Mid Buckinghamshire. If I neglect to answer any of those points, he should please intervene to remind me of anything I did not scribble down quickly enough.
The CMA annual report will address margin transparency and the other issues that he laid out. It would likely be quite difficult to put margin transparency in place in the current scheme until we have Fuel Finder operational, but it will be included in the CMA’s annual report. On the legal requirement around whether or not fuel is available at a particular filling station, that point was raised during the consultation and examined by officials. A thorough analysis was done of how easy, or not, it would be to collect that information. The determination was made that, although the request for inclusion is well intentioned—and I can understand it; it would be useful information—it would be very technically difficult to include it on a real-time basis in the scheme, which could potentially undermine a lot of the other measures that we are trying to ensure as part of the scheme. On enforcement, I would point the hon. Member towards part 6 of the instrument, which gives details on enforcement. I do not share the hon. Member’s concerns.
Concerns were raised about amenities. It is clear, both from what the CMA has already published and from the impact assessment and explanatory memorandum, that a proportionate approach will be taken to any enforcement, on a case-by-case basis. The published guidance has been clear about that, which hopefully reassures those who have raised concerns about the amenities being included. We are, and have been, actively engaging on amenities, but it is also important to note that amenities were consulted on as part of the consultation exercise that was undertaken, so it is not quite right to say that there has been no consultation with industry on this point.
Greg Smith
The Minister has said that there needs to be proportionality, but he supports some of the other amenities being reported on. If it is possible for any fuel retailer to say whether they have a current working coffee machine or microwave, how is it not possible to report on whether they have any petrol or diesel in the tanks?
Martin McCluskey
That is why we are, and will continue to be, in constant engagement with industry on amenities.
Let me address the points made by the right hon. Member for Melton and Syston. The rationale for worldwide turnover is commonly understood, and already used within the industry. That is why that measure was selected. On the concerns around rurality, there will be other mechanisms for people to feed in that do not rely on, for example, an internet connection. People will be able to text the price in real time, and able to use a telephone service—though we do not actually think that there will be an issue with wi-fi, because lots of rural fuel stations will use wi-fi for their payment systems.
VE3 Global was appointed as the successful supplier to become the aggregator of Fuel Finder. VE3 Global specialises in digital transformation, data aggregation and cloud-based solutions, so it has lots of experience in this area. The right hon. Member also asked a final question on guidance. We will publish the guidance and training before the whole programme is rolled out, so that people can have some certainty and assistance. As I said, we understand that this is a change for businesses, and certainly represents a change to business as usual, so we want to make sure that people are properly guided and trained.
I thank hon. Members for their valuable contributions to the debate and the questions they raised. I also thank the Lib Dem spokesperson for her support of the statutory instrument. I conclude by reaffirming our commitment to creating a firm and transparent UK road fuel market. Now more than ever we need to protect households and businesses from pricing practices and deliver change to reverse the sharp spikes in road fuel prices in recent years. I commend the draft regulations to the Committee.
Question put and agreed to.
Draft Product Security and Telecommunications Infrastructure (Security Requirements for Relevant Connectable Products) (Amendment) (No. 2) Regulations 2025
(1 day, 8 hours ago)
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The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Kanishka Narayan)
I beg to move,
That the Committee has considered the draft Product Security and Telecommunications Infrastructure (Security Requirements for Relevant Connectable Products) (Amendment) (No. 2) Regulations 2025.
It is a pleasure to serve with you in the Chair, Dr Murrison, in my first debate on a piece of delegated legislation in the rigorous venue of a Committee Room. The draft regulations will be made under powers provided by the Product Security and Telecommunications Infrastructure Act 2022. The PSTI product security regulatory regime comprises of part 1 of the 2022 Act, together with the Product Security and Telecommunications Infrastructure (Security Requirements for Relevant Connectable Products) Regulations 2023.
That world-leading regulatory regime came into force in April 2024. It better protects consumers, businesses and the wider economy from the harms associated with cyber-attacks on consumer connectable products such as mobiles, smart cameras and smart appliances more broadly. The law requires that products that can connect to a network or internet are made available to customers in the UK only when they meet baseline cyber-security requirements. Those requirements include banning the use of universal default or easily guessable passwords such as “admin123”, reducing one of the most commonly exploited vulnerabilities in connectable products.
Manufacturers must also be transparent about the minimum duration for which they will provide much-needed security updates that patch vulnerabilities. They must publish information on how to report security vulnerabilities directly to them, and provide status updates about reported issues. There are also important duties that importers must comply with, as they play an important role in ensuring that vulnerable products are not imported into this country. The same applies to distributors, as they are often the last line of defence against non-compliant products making their way to customers.
The PSTI Act was the world’s first legislation of its kind, but let me be clear that we are not alone in our commitment to improve the security of connected products. Across the world, countries that share our values are taking action. One such country is Japan, where the Ministry of Economy, Trade and Industry and the Information-technology Promotion Agency launched the Japan cyber-security technical assessment requirements labelling scheme for internet of things products in March 2025. Similarly, the Cyber Security Agency of Singapore launched its cyber-security labelling scheme for consumer smart devices in March 2020.
The Japanese and Singaporean labelling schemes require manufacturers to ensure that their products meet a set of baseline security requirements that are based on European Telecommunications Standards Institute standard EN 303 645 on cyber-security for consumer IOT products—a standard that the UK developed in partnership with over 90 countries and to which we aligned our own security requirements. Products issued with a valid label under either scheme will therefore have an equivalent or greater level of cyber-security than required under the UK’s PSTI regime.
There is no security advantage in duplicating compliance processes for manufacturers that have already met equivalent or higher security standards. Our focus must be on removing undue burdens from businesses, reducing unnecessary costs and opening the door for UK businesses to succeed in markets around the world. Subject to the approval of the House, the draft regulations will establish two alternative routes for manufacturers of consumer connectable products to demonstrate compliance with the UK’s product security regime.
On 23 October, at Singapore international cyber week 2025, the UK’s Department for Science, Innovation and Technology and Singapore’s Cyber Security Agency formally signed a memorandum of understanding on the mutual recognition of consumer internet of things cyber-security regimes. The UK will also shortly be signing an MOU with Japan. Those MOUs represent a significant step forward in our international collaboration on digital security and innovation. They each establish a framework for recognising cyber-security certifications across borders. When both MOUs come into effect, UK businesses will benefit from streamlined access to the Japanese and Singaporean labelling schemes, boosting their product credibility and market appeal in those regions. The draft regulations will enable the UK to uphold its commitments, allow Japanese and Singaporean businesses to trade more easily with our market and reinforce our shared dedication to securing the connected device supply chain.
Regulations 4 and 8 amend the 2023 regulations to provide for deemed compliance with the requirement under section 9 of the 2022 Act that relevant connectable products must be accompanied by a statement of compliance. Under new regulation 4A and schedule 2A to the 2023 regulations, a manufacturer will be deemed to have complied with this requirement where the relevant connectable product carries a valid label under Japan’s JC-STAR STAR-1 labelling scheme, or a label under any level of the Singapore cyber-security labelling scheme. Regulations 5 to 7 amend schedule 2 to the 2023 regulations to provide for deemed compliance with other relevant security requirements set out in schedule 1 to those regulations, where a manufacturer’s product carries either such label. Regulation 3 inserts definitions of Japan’s JC-STAR STAR-1 scheme and the Singapore cyber-security labelling scheme into the 2023 regulations for the purposes of the deeming provisions.
Cyber-security is not just a technical issue; it is a strategic priority. By aligning with like-minded nations and reducing unnecessary barriers to trade, we are strengthening our digital resilience, supporting UK businesses and protecting our consumers. The UK must continue to lead by example, championing the global adoption of cyber-security standards and advancing mutual recognition, which are both a vital part of establishing a trusted global supply chain of connected products.
These new mutual recognition arrangements, which will be implemented in part by the draft regulations, will not only reduce the regulatory burden on businesses, but streamline compliance and support our ambition to make the UK a more attractive and competitive market for secure digital products. The draft regulations will extend and apply to the whole of the United Kingdom and will have practical effect throughout the United Kingdom. I hope the Committee will recognise their importance.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
As always, Dr Murrison, it is a pleasure to serve under your chairmanship. His Majesty’s official Opposition welcome this statutory instrument, which establishes alternative routes to achieve cyber-security compliance for manufacturers of products within the scope of the product security and telecommunications infrastructure regime. It serves to remove non-tariff barriers to trade in digital products and devices with our strategic partners in Asia—Singapore and Japan.
I recently visited Japan with the British-Japanese all-party parliamentary group, supported by the Japan Society, to strengthen UK-Japanese relations. It was a fantastic visit. It is not yet declared in the Register of Members’ Financial Interests, but it will be in due course and Members should refer to my entry if interested.
Regulations such as these build on and complement the strong free-trade foundation established by the last Government through their negotiation of UK accession to the comprehensive and progressive agreement for trans-Pacific partnership trade bloc and other bespoke bilateral trade agreements with Japan. I am glad the Minister welcomed the Product Security and Telecommunications Infrastructure Act 2022. I think he said it was a world-leading piece of legislation. Given that it was put together by the previous Government, I am glad that he has demonstrated today the same wisdom as his predecessor. I very much welcome him to his place.
Several significant cyber-attacks recently have demonstrated the need for Government and industry alike to increase their cyber-resilience without delay. It is becoming increasingly evident that our cyber-security is a vital component of our national security. We are yet to have sight of the Government’s cyber-security and resilience Bill, which we understand will be targeted at supply chains and providers of digital services to our critical industries. We also eagerly await the Government’s national cyber-security strategy, which they have said will be published by the end of this year.
However, what attracts significantly less public attention is the routine and widespread cyber-risk to consumers of internet-connectable devices in their homes and pockets, such as smartphones, wearable health devices and home sound systems. The last Government recognised that risk and the UK’s consumer connectable product security regime was brought into effect in April 2024. The changes were intended to reduce consumer exposure to cyber-threats and raise the baseline of product security.
Diversifying the supply chain and the market for internet-connectable products has benefits for price competition, product choice and consumer confidence. It also reduces over-reliance on exports from individual states in an era of increasing geopolitical tensions. Charles Parton, senior research fellow in international security at the Royal United Services Institute, has highlighted the multifaceted risks of over-reliance on Chinese cellular internet of things modules, or CIMs. Those are hardware components that enable internet of things devices to connect to the internet via cellular networks, and they are essential for devices that need remote connectivity without relying on wi-fi or wired networks. Chinese products already have more than 50% of the international market for those components. While the use of CIMs is widespread, the option of purchasing products from strategic partners with common security concerns and goals is likely to assist in improving consumers’ ability to choose the most secure products.
For the reasons that I have stated, we are supportive of the regulations. Nevertheless, I would be grateful if the Minister could answer a couple of questions. What assessment was undertaken to determine the equivalence of the Japanese and Singaporean regimes? Can the Government quantify, either in value or in volume, the trade that the regulations are expected to deliver in the first year, if not in coming years?
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Dr Murrison. The Liberal Democrats support the statutory instrument, as it will simplify market access for manufacturers, reduce duplication in testing and certification, and facilitate UK exporters’ entry into Japan and Singapore for smart connected consumer products. It demonstrates the important principle that cutting red tape is vital to promoting economic growth and reducing compliance costs for businesses—which is why the Liberal Democrats, alongside many businesses, are also calling for a customs union with the EU. That would similarly break down the bureaucracy holding British businesses back and boost our economy.
We must, however, ensure that safeguards remain. Given the critical importance of maintaining robust cyber-security protections, can the Minister confirm what oversight mechanisms are in place to monitor ongoing alignment with these international schemes, and how these measures will be integrated into the long-awaited cyber-security and resilience Bill, which will be vital in keeping our economy safe?
Martin Wrigley (Newton Abbot) (LD)
It is a pleasure to serve under your chairship, Dr Murrison. I welcome the move to recognise standards mutually between Japan, Singapore and the UK. It is a clear statement that alignment of specifications and standards can help industry to thrive and is essential in this high-tech world.
For many years, I worked in telecoms, where increasing alignment of standards means that we now have a truly global industry with easy global connectivity. Twenty years ago, we saw the folly of having protectionist views and using different standards. In those days, the mobile world was divided, and we could not use mobile phones from the UK in the USA, or vice versa. Clearly, that cannot work in the age of the internet of things, especially considering the increased need for high security standards. Having multiple standards and certifications is wasted effort and cost for everyone concerned. Will the Minister consider further alignment, at scale, of technical standards with the EU, rather than the path we have been following? Although some have equated deviation from agreed standards with commercial advantage, the reality is commercial disaster.
Kanishka Narayan
I thank hon. Members for their contributions. I will address first the questions that were asked.
I thank the hon. Member for Runnymede and Weybridge for his warm welcome. On the question of how assurances were sought about the equivalence of the Japanese and Singaporean standards, the maturity of those standards and the time for which the countries have been implementing them have been particularly material assurances. Japan and Singapore have aligned their security requirements and labelling schemes to the globally accepted ETSI EN 303 645 standard, which happens to be the same standard that underpins the UK’s PSTI regime. Therefore, products that have a valid label issued by Japan or Singapore will meet the security requirements specified in our regime. The Office for Product Safety and Standards, as the regulator of the regime as a whole, is equipped with a comprehensive set of enforcement powers and will continue to keep under review any mutual recognition agreements.
Of course the Government recognise the strategic importance of the European Union as the UK’s largest trading partner, and we will explore opportunities to reduce technical barriers to trade in the security space in that context, too.
On the question of benefits, my understanding is that we have had representations from a number of small and medium-sized businesses, in particular, about how this measure will open up export markets in Japan and Singapore, allow Japanese and Singaporean firms to trade, and ensure that British consumers can benefit. I do not have a number to give, but I hope very much that we will see the benefits of that freer flow of trade in connected devices very soon.
On the cyber-security context, more everyday products than ever before are connected to the internet, ranging from smart TVs to fitness trackers and voice assistants. From April 2024 to March 2025, we surveyed the participation of consumers and found that 96% of folks personally owned and used a smartphone, 76% a smart TV, and 68% a laptop computer. It is now very rare to find a UK household that does not own a connected device in the scope of these regulations; less than 1% of people reported that they did not own a smartphone, laptop, desktop PC, tablet, games console, smart printer or smart TV.
This growing connectivity brings convenience but also new risks. The Government have taken action to ensure that UK consumers and businesses purchasing consumer connectable products are better protected from the risk of cyber-attacks, fraud or even, in the most serious cases, physical danger. The cyber-security regulatory landscape is evolving, with countries around the world, including Japan and Singapore, introducing similar regimes. The UK must remain agile and forward-looking to maintain its leadership in this space. The draft regulations will ensure that the UK remains a global leader in product cyber-security, while strengthening our position as an attractive destination for digital innovation and trade.
By recognising Japanese and Singaporean IOT labelling schemes, we are reducing unnecessary regulatory burdens, supporting UK businesses to expand internationally and enabling Japanese and Singaporean manufacturers to bring compliant products to our market more efficiently. This measure is a practical step forward in delivering the Government’s mission to drive economic growth and build a more resilient digital economy. It also complements our efforts to harmonise security standards across major economies, in partnership with Brunei, the United Arab Emirates, Australia, Germany, Finland, South Korea, Canada, Japan, Singapore and Hungary, via the global cyber-security labelling initiative. With forecasts suggesting that the global IOT market will grow to 24.1 billion devices by 2030, generating more than £1.1 trillion in annual revenue, it is more essential than ever that we enhance the security of connected products on a global scale.
Dr Spencer
The Minister has referred a few times to cyber-security strategy. Can he update us on when we will see the Government’s cyber-security and resilience Bill?
Kanishka Narayan
I am afraid that I cannot commit to a legislative timeline, but we want to move very fast on the Bill and are looking for the right opportunity in Parliament to introduce it.
The draft regulations are a significant step in achieving our goal for cyber-security. I look forward to continuing this work and building on the momentum we have established.
Question put and agreed to.