Draft Chemicals (Health and Safety) (Amendment, Consequential and Transitional Provision) Regulations 2026
(1 day, 7 hours ago)
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The Minister for Social Security and Disability (Sir Stephen Timms)
I beg to move,
That the Committee has considered the draft Chemicals (Health and Safety) (Amendment, Consequential and Transitional Provision) Regulations 2026.
I am delighted to serve under your chairmanship, Dr Murrison. I welcome all Members to the Committee. I am very pleased to introduce this instrument, which was laid before the House on 24 February.
The draft regulations are important to keep our post-Brexit chemicals regime robust, proportionate and fit for the long term. They amend three pieces of chemicals legislation that we assimilated from the European Union, putting right things that could not be put right at the point of EU exit due to the limited powers available then under the European Union (Withdrawal) Act 2018. I am satisfied that they are compatible with the European convention on human rights.
The draft regulations maintain high standards of protection for human health and the environment, making sure that the regulatory system works efficiently for businesses, and supporting economic growth. In combination with the commitment of the Health and Safety Executive to aligning with the European Union’s regulatory decisions other than in exceptional circumstances, the draft regulations create a framework for adopting EU chemical hazard classifications more quickly in Great Britain. Chemicals stakeholder groups across the board broadly share the wish to stay as aligned with the European Union as possible, to support trade and to maintain the high standards of protection that we share with our closest trading partners, and this statutory instrument reflects those wishes.
It is very important that this legislation has been laid now, because the powers provided for in the Retained EU Law (Revocation and Reform) Act 2023 expire in June, and no other suitable powers are available. The changes being made here are about keeping on the market things that are currently available. New things that are not currently available will still be subject to existing classification and approval requirements, and will be permitted in Great Britain only if the HSE has undertaken an evaluation of them, as is the case at present. There will be a fast track for classification evaluations, but only if the substance has already been subject to classification by a regime that adopts the United Nations globally harmonised system on the same basis as the UK—which means, at present, only the European Union’s. Substances approved elsewhere will not be eligible for fast-tracked evaluation in the UK.
The measures strike an important balance, giving more certainty and flexibility, with a more proportionate system for chemicals suppliers and the regulator, while protecting the natural environment from the risk of chemical pollution, protecting people who use and work with hazardous chemical substances, and retaining the benefits of important biocidal products, such as those used to provide clean drinking water.
The Health and Safety Executive’s chemicals supply framework is overseen through three regimes. First, there is the Great Britain biocidal products regulation, BPR, which controls the placing on the market and use of biocidal products—disinfectants, insecticides, and so on. Secondly, there is the Great Britain classification, labelling and packaging—CLP—regulation, which provides for the identification and communication of chemical hazards, adopting the UN globally harmonised system of classification and labelling. Thirdly, there is the GB prior informed consent—PIC—regulation, which governs the export and import of some hazardous chemicals.
Those regulations were carried over from EU law under the 2023 Act, which enables sensible amendments to keep those regimes operating effectively. The regulations before the Committee apply to England, Wales and Scotland, whose Ministers earlier this year consented to the making of the regulations. In Northern Ireland, EU chemicals legislation continues to apply under the Windsor framework.
The chemicals supply framework that we inherited from the European Union provided a high level of protection, but there are some structural and operational problems in applying it in a single country. We used, for example, to share access to the testing resources of all European Union countries; now we just have access to our own. Without these regulations, we would very quickly run into serious problems. Up to 173 active substances used in essential biocidal products would very soon lose approval and have to be removed from the market.
Those products include insecticides used to remove disease vectors from aircraft, disinfectants for infection control in hospitals, anti-fouling coatings needed by ships at sea, wood preservatives that protect businesses and homes, and other biocides that are important for public health. There would also be inadequate powers to issue temporary permits for critical products, so that it would no longer be possible for essential products such as aviation fuel preservatives and chemicals used to disinfect public drinking water supplies permitted under those powers to be supplied and used legally.
Businesses would continue to face unnecessary administrative burdens such as notification requirements that no longer serve any purpose, and the ability of the Health and Safety Executive to prioritise more quickly and flexibly chemical hazard assessments relevant to the Great Britain market would remain limited. At the moment, the HSE has by law to consider EU risk assessment committee classification proposals, including those that are irrelevant to this country. Exporters of hazardous chemicals would continue to have to carry out pointless tasks such as obtaining a special reference identification number that customs authorities do not use. I also want to make clear that there would be no corresponding benefits at all to health or to the environment.
Taking them one by one, the BRP extends the expiry date for the up to 173 approved active substances to 31 July 2031, provided that renewal applications are submitted. That will prevent them from lapsing through no fault of the suppliers and will avoid very severe disruption. It also reforms emergency provision so that essential biocidal products such as aviation fuel preservatives and drinking water disinfectants can remain available until an authorisation decision is made, where the need for use is long term. Of course, at some point it may be that a decision will be made that these products should not be available, but we do not want that to happen between now and June, because then they would become non-available.
The regulation clarifies and extends data protection rules to ensure that businesses investing in scientific data can recover costs consistently across all relevant approval routes. On 9 March, the Government announced that the biocides regime would be in scope of a new UK-European Union sanitary and phytosanitary—SPS—agreement as part of the reset negotiations for the relationship between us and the European Union. We do not know the outcome of those negotiations, but the direction of travel, as the Government have made clear, is that the UK will follow a model of dynamic alignment with the European Union for biocide products.
The measures maintain important disease prevention and public health protections while enabling SPS agreement negotiations to conclude and any agreement to be implemented. The changes do not allow the introduction of new biocidal products that have not been evaluated and approved under the rigorous biocides regulatory framework, but rather maintain the availability of existing biocidal active substances and products that are already permitted under the current rules. The changes deliver certainty and continuity, not deregulation.
The regulation on classification, labelling and packaging introduces a streamlined procedure for seeking the consent of devolved Governments to update the mandatory classification and labelling list—the MCL list—by removing duplicative actions. It removes the obligation to automatically consider all initial EU hazard classification proposals—even those for products that nobody is interested in using in the UK—so that the HSE can prioritise what matters for this country and introduce a bespoke GB work plan, setting out the classification priorities for the HSE over a three-year period. The plan will be subject to annual review and agreed following consultation with the devolved Governments.
The regulation will also allow the Health and Safety Executive to respond to changes resulting from later European Union decisions; flexibility that the current regime does not allow. It creates a faster evaluation pathway for adopting EU classification proposals other than in exceptional circumstances. It relocates technical notes to the HSE website so that updates will no longer require legislation, making technical guidance more up-to-date and accessible, and revokes unnecessary notification requirements, eliminating the need for businesses to submit data that is no longer needed.
The changes simplify regulation and introduce greater flexibility to direct limited resources to hazard classification evaluations that are relevant in Britain. They maintain high standards of protection, and do not in any way change the legal requirement for the Health and Safety Executive to evaluate chemicals for mandatory classification on the basis of their being carcinogenic, mutagenic or toxic for reproduction. It will also be possible to legally require the assessment of other types of hazards, such as those in the new EU hazard classes, on a case-by-case basis, until the future legislation is introduced. That allows us to adopt EU measures if we need to and maintain coherent trade between Great Britain and Northern Ireland.
The regulation on the export and import of hazardous chemicals removes the redundant requirement for exports of small quantities of chemicals for use in research, analysis or emergency situations from Great Britain to have special reference identification numbers. It harmonises conditions for granting waivers where importing countries fail to respond to consent requests, removing a barrier to legitimate trade. It makes the Health and Safety Executive, as the designated national authority, responsible for reviewing and updating the GB list, reducing administrative delays and ensuring faster implementation of international obligations. It also aligns our updates more closely with the Rotterdam and Stockholm conventions, giving exporters greater clarity on prohibited substances. All those changes will streamline export procedures and maintain our strong commitment to our international obligations. They will not affect the import of chemicals to this country.
I want to comment on the situation regarding the UK internal market. Under the terms of the Windsor framework, EU chemicals regulations continue to apply in Northern Ireland. Northern Ireland’s place within the UK internal market is important. The more efficient regulatory process and the more timely decision making, which enable alignment with decisions made in the European Union, are expected to have minimal impact on trade between Great Britain and Northern Ireland within the UK internal market. There may be exceptional circumstances in which a different regulatory decision is made in Great Britain, but the potential impact on the supply of chemicals to Northern Ireland will continue to be a consideration in making such decisions.
Regulatory divergence has been a big concern following EU exit. In December 2024, the Northern Ireland Assembly applied to trigger the Stormont brake to ask the UK Government to prevent the application of new measures adopted into EU classification, labelling and packaging legislation. It was decided that the conditions for application of the brake were not met, but my right hon. Friend the Secretary of State for Northern Ireland has committed to addressing the impact of regulatory divergence and to consider how to apply a consistent classification, labelling and packaging regime across the United Kingdom.
The powers in the 2023 Act, to which I have referred a couple of times, have not permitted us to make changes to introduce a consistent regime for classification, labelling and packaging now, in this statutory instrument. However, the HSE has committed to further work, throughout this year and next, on how to make updates to deliver a consistent classification and labelling regime in Great Britain and Northern Ireland, within the UK internal market, using powers in the European Union (Withdrawal) Act 2018.
Mr Peter Bedford (Mid Leicestershire) (Con)
I thank the Minister for such a comprehensive run-through of those regulations and the changes proposed. I can confirm that the Opposition will not oppose the changes today; we believe, fundamentally, that overbearing and unnecessary red tape should be removed wherever possible. It is worth celebrating the fact that a Government rumoured to be exploring a path back into the EU are taking advantage of one of the benefits of being outside the EU to make these changes.
The statutory instrument amends three pieces of retained EU law. Those changes are proportionate and grounded in the recommendations of the Health and Safety Executive. Collectively, they will help ensure a regulatory system that supports the economy while protecting people and the environment. However, I will briefly outline why we support each of the changes.
First, the amendments to the Great Britain biocidal products regulation are simply common sense. Extending the expiry dates of 173 already approved biocidal products ensures continuity for businesses and avoids needless costs to manufacturers. These products are safe, so we completely agree that, to avoid disruption, that is the right thing to do.
Secondly, the changes to the classification, labelling and packaging regulation are a step in the right direction. They reduce the time taken for the HSE to make classification decisions, and streamline the process.
Thirdly, the changes to the prior informed consent regulation are another simplification of rules and remove overbearing requirements for exporting purposes. This is exactly the kind of regulatory reform that businesses want, and one that, we hope, will lead to growth. I hope the Government will carry out this red tape-cutting exercise across broader areas of the economy.
We will not oppose the SI today. We believe in supporting innovation, and reducing burdens on business, to drive economic growth in the future.
Daisy Cooper (St Albans) (LD)
These regulations ensure that potentially harmful chemicals are carefully controlled, and will provide greater certainty for business, so we Liberal Democrats will not seek to divide on them, or to oppose them. However, I do have two short questions for the Minister.
First, the Minister said that this SI applies to 173 active substances, and he was good enough to give some examples of those we would particularly like to keep, such as those that clean our water so we can have access to clean drinking water. To the best of his knowledge, have any of those 173 active substances faced sustained calls to be banned because of claims related to harming either biodiversity or human health?
Secondly, the Minister mentioned, very fleetingly, that the instrument would not affect any imports; I just want to ask whether it might affect any exports. Although I recognise that the regulations apply to legal and controlled biocidal and other products, the Minister will be aware that both the UK and the EU have been criticised for exporting hazardous pesticides and biocide products that are banned in the UK, yet are exported to other countries. Will the Minister say a word or two about the Government’s policy in that area?
Ruth Jones (Newport West and Islwyn) (Lab)
Thank you, Dr Murrison, for enabling me to speak even though I am not a member of the Committee. It seems like a long time ago, but I should declare that I was a shadow Department for Environment, Food and Rural Affairs Minister and part of my portfolio included chemicals, so that is why I am here today to speak about chemicals and possible unintended consequences. I also lived through the painful immediate post-Brexit era.
I thank the Minister for his opening remarks and for outlining so clearly the need for this delegated legislation. I understand that and welcome most of it, but I have concerns about its implementation and possible unintended consequences.
We know that since Brexit, the HSE has had significant policymaking and delegated authority powers. Where that has been exercised, decisions have often been more ad hoc and less protective than the EU’s. Since January 2021, the UK has operated its own chemical regulation system, but UK chemical regs are a casualty of Brexit and we have fallen behind the EU. I welcome the environmental improvement plan, which was introduced by this Labour Government in 2025. It is a sensible shift back towards EU-aligned protection, which is still the best in the world. However, I still have concerns about four specific areas.
First, how will the proposed changes not lead to unnecessary and undesirable divergence from the EU chemicals regulations? That is against the HSE’s explicitly stated policy. Also, how will any changes be reported to Parliament and to the devolved Administrations?
Secondly, we need exact dates for when protective EU hazard classes will be adopted in GB law. Why does this delegated legislation not enact the six new hazard clauses that the EU introduced in 2023? Northern Ireland, as the Minister outlined, already has those new hazard classes applied, so why should not the rest of us have them?
Thirdly, we need to tighten the broad and wide-ranging criteria for diverging from the EU. The HSE talks about “exceptional divergence”, but gives very broad criteria, including economic and industrial considerations. If we are talking about forever chemicals, carcinogenic or harmful biocides, we must ensure environmental and population safety before broad economic or industrial considerations.
We need clarification and transparency to ensure that we do not regress from environmental and public health protections retained in GB law post Brexit. This SI introduces changes that include postponing expiry dates to July 2031 for all biocidal active substance product type combinations. That could mean contaminated products. It could mean the continued free circulation of products in Great Britain that are blocked in the EU due to their potential to cause harm. We in the UK pride ourselves on protecting humans, animals and the environment. We should look to align closer and not diverge further from the highest chemical standards in the world—the EU’s.
I want to ask about the EU-UK reset, which the Minister alluded to. I understand negotiations are ongoing and I am not privy to behind-door conversations, but this realignment is a chance to improve our chemical safety in Great Britain. We should grab the opportunity with both hands. As I said at the beginning of my speech, I understand the need for this delegated legislation, but I press the Minister to ensure that the chemicals industry’s concerns are acknowledged and, more importantly, addressed in terms of the HSE’s remit and accountability.
Sir Stephen Timms
I am grateful for the Committee’s support for this statutory instrument. I will have a go at answering the questions raised. Is there a possibility that any of these 173 substances will be banned at some point? Did I understand that correctly?
Daisy Cooper
I had two separate questions. The first was whether any of the 173 active substances have faced sustained calls to be banned already. I recognise that none are banned, but have any of them faced calls to be banned because of potential damage to biodiversity or human health?
Sir Stephen Timms
I cannot say how many of the 173 have had such calls made in relation to them, but my guess is that some of them probably have because of the nature of the substances. As the hon. Lady says, they all have current approval. The statutory instrument just ensures that they carry on being approved beyond June. However, science is developing our understanding of the impacts of these substances on the environment and our health, and there may be a case to make about some of them. As I said, I do not have the information for the 173, but it would not surprise me if there were significant calls for some of them to be considered for removal. The point is that we do not want that to happen by accident because we did not have the powers to enable them to continue being used.
In terms of the exports that we are addressing in the third of these measures, the UK is a very responsible supplier, and those who supply from the UK are well regulated and behave conscientiously. As I set out earlier, the SI makes sure that if something is ordered to be exported from the UK, and there is no problem with it and there is no response when one has been requested from authorities, the export can continue. That is if there is no response. Clearly, if the response is, “No, this is not approved here”, or something similar, that product would not be supplied. We just want to ensure that what could be an impediment to legitimate trade is not imposed.
I am delighted that my hon. Friend the Member for Newport West and Islwyn (Ruth Jones) has had the opportunity to contribute to the debate, given her a long-standing interest in this area. I did not catch all six of the questions, so perhaps she and I should correspond separately about some of them. She asked why all six new EU classes are not covered here. The question is what will happen at UN level, because our commitment is to align properly with the UN globally harmonised system. There is a question about how the six EU classes will relate to the UN system, and I do not think that we quite know the answer yet. Perhaps I can send my hon. Friend a fuller response on that point.
Ruth Jones
I would very much welcome that opportunity to talk to the Minister outside this Committee. In terms of the UN alignment, that is fine, but what happens when the UN has countries that have lower and weaker chemical regulations than the EU and the UK? What happens with the alignment then? Do we align down or up?
Sir Stephen Timms
No, we are only aligning with the very highest standards worldwide. The question is: what is the framework for that? We are adopting the UN framework, and we think that is the right one. There is still a question about what the EU will do in relation to the UN classification, but I would be very happy to discuss that further with my hon. Friend. It is not the case that, as she was concerned about, we might permit some things because it is a good idea on industrial production grounds, even if it is not a good idea in terms of human health, animal health or the environment. We are maintaining in these regulations—and indeed in future regulations in this area we are determined to maintain—the very highest standards of protection for human health and for the environment. There is no weakening there at all.
On my hon. Friend’s point about whether we should be aligning more closely, as I have indicated, it is our view that our chemicals regulatory arrangements should be aligned with EU arrangements in the future. This instrument is a step in that direction. There will no doubt need to be further debate and discussion once the current negotiations are concluded, but it is interesting to me that across the whole spectrum, from those whose primary focus is on maintaining human health and safety and the environment to those who are concerned about how much we can export from the UK and how much we can manufacture here and sell elsewhere, pretty much everybody agrees that we should be very closely aligned with the EU.
There are, as I said earlier, some areas where, given that we have quite constrained testing resources, we do not want to be required to test every product that is tested in Europe, if it is a product that is of no use or interest in the UK. There will therefore be instances in which our arrangements are not absolutely identical to the EU arrangements, but we want to align for very good commercial and also environmental and health reasons.
The regulations that the Committee is considering are a practical and necessary set of amendments. They prevent disruption to critical biocidal products that safeguard public health; they reduce unnecessary burdens on business while keeping protections in place; they enable the regulator to focus its resources on the hazards that matter to Great Britain; they strengthen the coherence, efficiency and future readiness of the chemicals regulatory system; they maintain the protection to human health, animal health and the environment; and they make the regulatory process more efficient by delivering a proportionate regulatory environment aligned with the country’s needs. I commend them to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Chemicals (Health and Safety) (Amendment, Consequential and Transitional Provision) Regulations 2026.
Draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026
Draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026
(1 day, 7 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That this Committee has considered the draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026.
Lucy Rigby
Both statutory instruments are made under FSMA, the Financial Services and Markets Act 2023. Together, the two instruments will help to deliver a more agile and responsive capital framework for UK banks and investment firms.
Following the EU exit, the UK retained a body of financial services legislation known as assimilated law, which includes the capital requirements regulation, which sets the detailed and often technical capital rules. As hon. Members know, the UK follows the FSMA model of regulation, which involves regulatory standards being set by expert independent regulators that work within a policy framework set by Government and Parliament.
The Government are now applying the FSMA model to the CRR by revoking the CRR, so that the Prudential Regulation Authority can replace requirements in legislation with requirements in PRA rules, resulting in a more user-friendly, single-source book of prudential rules for firms. Where important elements of the CRR need to stay in legislation to provide the policy framework within which the PRA must operate, those elements are restated, using powers provided under FSMA 2023.
The first SI that I will discuss is the Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026, which simply restate important definitions from the CRR that need to stay on the statute book. For example, the definition of what constitutes an investment firm is being restated in legislation, rather than being defined by the PRA rule book. That is necessary for the continuity of existing legislation and to ensure that the Government and Parliament remain in control of which regulatory activities should be regulated. The instrument does not introduce new regulatory requirements, and it does not make any substantive change to the scope or effect of the definitions being restated. Its purpose is simply to maintain legal continuity and to ensure that the prudential framework continues to operate as intended as we complete the move to the FSMA model.
The second SI that I will discuss is the draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026. The UK remains committed to the full and consistent adoption of the Basel reforms, and the PRA intends to implement most of the new Basel 3.1 rules from 1 January 2027. That will help to ensure that the banking system is well capitalised, while giving domestic-focused firms the regulatory certainty that they need to plan for the future and to invest in the real economy, including small businesses and infrastructure projects.
We recognise, however, that the timing of implementation in other major jurisdictions remains unclear, in particular for certain market risk requirements affecting banks that use internal models. That is particularly relevant for the internationally active firms with cross-border trading activity. Implementing those specific requirements in the UK ahead of clarity elsewhere risks unnecessary operational complexity for internationally active firms and potentially misaligned implementation, which is exactly why the Government, in conjunction with the PRA, decided to build in flexibility to the UK’s approach.
For the new internal model market-risk requirements, the element of Basel 3.1 that will most affect the ability of UK banks to compete in international markets, implementation will be delayed until 1 January 2028. The draft instrument gives effect to that approach by disapplying the updated internal market risk rules during the transitional period from 1 January 2027 to 31 December 2027 and, during that period, firms will continue to apply the existing requirements. This limited delay will allow the UK to flex the new internal model requirements for market risk, should that prove necessary, to ensure that the UK remains competitive with other major jurisdictions. The draft regulations also provide the Treasury with the ability to extend the transitional period by making further regulations. Any such extension would be time limited, subject to parliamentary approval and used only if necessary to respond to material international developments.
In summary, the draft regulations bring near to completion the work to deliver a more agile and responsive prudential regime for banks and investment firms, and I commend them to the Committee.
Mark Garnier (Wyre Forest) (Con)
It is a great pleasure to serve under your chairmanship, Mrs Hobhouse. As the Minister has said, the draft regulations are pretty uncontroversial, and the Opposition will certainly not oppose them.
I have a couple of questions on the draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026. The Minister has quite rightly said that they have been introduced in response to delays in other jurisdictions, including the US and the EU. Of course, it is very important that we remain globally competitive and do not cause any self-inflicted harm. However, can the Minister provide some more detail on why other jurisdictions are delaying the implementation of these rules? Is it procedural, or is it because they have some concerns about the rules that they are being asked to implement?
Secondly, the draft regulations allow the Treasury to extend the delay beyond 1 January 2028, which is absolutely fine—we completely understand why that might need to be the case. That will also be subject to the affirmative procedure. However, there are one or two concerns within the industry that this provision might create uncertainty about when the rules will actually be brought in. It would be very helpful if the Minister gave some idea about what internal tests the Treasury will use to decide whether to pursue such an extension. As I said, the Opposition support the intention behind the draft regulations, and we will certainly not be pressing them to a vote.
Steve Darling (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Mrs Hobhouse. The Liberal Democrats broadly welcome the draft regulations, but I wish to build on what the shadow Minister alluded to. The Minister talked about a one-year delay, but is she confident that it will be only one year? Does she believe that it may be pushed on further, hence the flexibility that has been built into the draft regulations? Some reflections from the Minister on that would be extremely welcome.
Lucy Rigby
I am very grateful to the shadow Economic Secretary to the Treasury and the Liberal Democrat spokesperson for their input on the draft regulations. Their questions are very apt and go straight to the nub of this issue.
What is happening in other jurisdictions is really important, and that is why we are seeking to include a degree of flexibility in the draft regulations. As I said in my opening remarks, we are postponing a certain element until 1 January 2028 for internationally active banks, and I set out why doing so is really important. However, there is potential for further flexibility, exactly as I said, subject to what goes on in other jurisdictions.
As I am sure the shadow EST knows, the US recently put out some revised proposals in March. Without getting into all the nitty-gritty detail, the upshot is that the revised US proposals remain broadly aligned with international standards and the UK’s rules. Briefly, I also want to touch on the EU, because that is also very important. Again, there is broad alignment, although there has been some commentary in the press that the EU banking union is thinking about going out to an even longer date—they were talking about 2030. I think I am right in saying that we are yet to have that fully confirmed. If anything, that comes back to the importance of building in flexibility. We, particularly the PRA, need to have a sufficient degree of agility and nimbleness built into what we can do, which is the approach that we are taking. Should international circumstances change, we and the PRA need to remain alert to those positions.
For all the reasons I have set out, which I will not repeat, the draft regulations are designed to ensure that, for our internationally active banks, we do not create an undue, unnecessary and problematic degree of inconsistency between all those very important jurisdictions. As I made clear, the draft regulations allow the Treasury the power to extend the transitional period that we are putting in place, if necessary, which would then be subject to the negative procedure.
Question put and agreed to.
DRAFT CREDIT INSTITUTIONS AND INVESTMENT FIRMS (MISCELLANEOUS DEFINITIONS) (AMENDMENT) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026.—(Lucy Rigby.)
Draft Major Sporting Events (Income Tax Exemption) (Glasgow 2026 Commonwealth Games) Regulations 2026
(1 day, 7 hours ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That the Committee has considered the draft Major Sporting Events (Income Tax Exemption) (Glasgow 2026 Commonwealth Games) Regulations 2026.
It is a pleasure to appear before you today, Sir Alec. The draft regulations provide an income tax exemption for non-UK resident competitors, officials and certain other designated individuals employed by or associated with the participating national teams and international federations, or otherwise involved with the Glasgow 2026 Commonwealth games.
The Government recognise the great benefits that all sport—including sport at the highest level—brings to this country. International tournaments inspire the next generation of athletes, bring together communities and boost the economy. I am sure that members of the Committee will be aware of the Government’s commitment to making the UK an attractive location to host world-class sporting events.
Successive Governments have provided income tax exemptions for hosting major sporting events, such as the 2022 Birmingham Commonwealth games, the 2023 Women’s Finalissima, the 2024 UEFA champions league final and the 2024 world athletics indoor championships. I should point out that tax exemptions of this type are reserved for only the most exceptional events. I am hopeful—indeed, confident—that the Committee will agree that this event meets that criterion.
The exemption covers income directly related to participating in the Glasgow 2026 Commonwealth games as well as income arising in relation to services and duties performed specifically for the event. Being exposed to taxes in two countries is administratively complex and consideration would also have to be given to matters such as withholding taxes, completing self-assessment tax returns and the relevant double taxation treaties.
The income tax exemptions for the Glasgow 2026 Commonwealth games further support the Government’s commitment to make the UK a global destination for world-class sport. I commend the regulations to the Committee.
James Wild (North West Norfolk) (Con)
The Exchequer Secretary played his own part in inspiring the next generation of athletes on social media during the recess.
The regulations provide a time-limited exemption from income tax for certain non-UK residents working on the Glasgow 2026 Commonwealth games. I am looking forward to the games and to our home athletes bringing home many medals. I also recognise the benefits that such sporting events will bring to Glasgow and more widely.
The Opposition have been pushing the Government to recognise the principle that underlies the regulations: the importance of making the UK attractive to globally mobile individuals. Sadly, more broadly, the Government have targeted such individuals through higher taxes. I therefore hope that the regulations represent a change of direction.
I have a few points to raise with the Exchequer Secretary. First, on scope, the regulations apply to “accredited persons”: individuals issued with an accreditation badge by Glasgow 2026 Ltd. Estimates say that that will impact around 9,000 non-UK residents. Will he set out what discussions His Majesty’s Revenue and Customs has had with or what guidance has been issued to Glasgow 2026 Ltd on who should or should not be accredited for those purposes?
Secondly, on timing, the games run from 23 July to 2 August. Why does the exemption run from 16 July to 4 August rather than matching the dates of the games?
Thirdly, on avoidance, because trading and professional profits are covered, there could be an incentive to structure contracts so that income is characterised as games-related and performed in the UK within that exemption window. How has HMRC addressed that risk?
We will not oppose the regulations, but I would appreciate the Exchequer Secretary’s response to my three questions.
John Grady (Glasgow East) (Lab)
It is a pleasure to serve under your chairship, Sir Alec.
Our relationship with the people and countries of the Commonwealth is something to be cherished and developed. The Commonwealth games in my city is an opportunity to do that.
The regulations help enable the Commonwealth games to take place in Glasgow this year, and, as a Glasgow MP, I welcome the Government’s support. My seat has two of the venues: the Sir Chris Hoy Velodrome, and the Tollcross International Swimming Centre. The exemption is essential to enable the games to happen in my constituency.
The Glasgow games in 2014 were a great success for the economic development of our city, and I am sure that the Glasgow 2026 games will be, too. That is because my home, Glasgow, is a city of warmth and hospitality.
As set out in the Commonwealth charter, the core Commonwealth principles include mutual respect and inclusiveness. The games are an opportunity to reaffirm those principles. A good place to start is by expressing our immense gratitude to the people from the Commonwealth who have made their homes here. I also want to thank the sportspeople who have fought against racism. Examples include Craig Brown and Alex McLeish in Scotland, as well as Sunderland’s Gary Bennett and Newcastle’s Shaka Hislop. They have embodied our shared values of mutual respect and inclusiveness.
I thank the Exchequer Secretary for introducing the regulations, which are an important part of the mosaic of activities that are needed to ensure that the Commonwealth games in my brilliant home city will be a success.
Steve Darling (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Sir Alec.
Although my constituency is almost as far as it possible to get from Glasgow, I know that my constituents will enjoy the games. As the Exchequer Secretary said, they should be an inspiration to us all, especially young people, and a celebration of the Commonwealth and the way in which diversity makes it stronger.
However, I come to the main beef. Are the regulations the sole beef in the burger of encouraging people to participate? What other financial inducements have the Government put on the table to ensure the success of the games?
Dan Tomlinson
I thank all Members for their contributions and questions. It is fantastic that the city of my hon. Friend the Member for Glasgow East will host the Commonwealth games again. They were a great success for the country and for countries throughout the Commonwealth last time they were held in that great city. I know that it has had some difficult times lately with the fire at Glasgow Central station. I hope that this summer, we can all enjoy the best that Glasgow has to offer, including the sporting events in Glasgow East.
I thank the shadow Exchequer Secretary for reminding the Committee that he stands up as a thinking man’s Al Carns.
Dan Tomlinson
I spent four weeks deliberating on whether to put out that video and I deeply regret the decision to do so.
As ever, the shadow Exchequer Secretary asked important and pertinent questions. He asked why the dates do not align with those of the games. That is because many athletes will not be here for those precise dates. Those involved with the sporting teams or with the relevant accreditation may come here in the previous days and weeks. The dates have been set in the usual way; it is typical practice.
On the hon. Gentleman’s first question about accreditation, the Department for Culture, Media and Sport will work closely with the Commonwealth games on that, as they have done for previous sporting events, to ensure that the right people are accredited. He also asked whether HMRC will ensure that income is treated and taxed correctly and appropriately. I give the previous Government credit for making progress on closing the tax gap. We are glad to continue with that. The tax gap has fallen this year and is set to fall further over the rest of the Parliament. We will of course keep a weather eye on the activities of those coming here.
The hon. Member for Torbay asked an important question about what else the Government are doing to support the Commonwealth games. Last June, we pledged to spend at least £400 million on grassroots facilities over the next four years to support those who live in close proximity to the games. I hope that those who are considering competing will not just think about whether they have to pay tax in two countries or the double taxation treaties, but will find an inducement in participating and celebrating their skills, training and hard work. Perhaps the joy of a medal will also be an inducement.
Again, I thank Members for their contributions and commend the regulations to the Committee.
Question put and agreed to