Supply of Machinery (Safety) (Amendment etc.) and the EU Machinery Regulation (Enforcement etc. in Northern Ireland) Regulations 2026
(3 weeks, 1 day ago)
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Lord Leong
That the draft Regulations laid before the House on 1 June be approved.
Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, this instrument concerns machinery used every day across our economy and in our daily lives. It covers a wide range of products: from cranes and excavators used on construction sites to lawnmowers, leaf blowers and many other workplace and consumer products. The current machinery safety framework is based on legislation introduced in 2006 and 2008, which implemented the then EU machinery directive and was subsequently assimilated into UK law following our departure from the European Union.
As noble Lords will know and appreciate, machinery has evolved markedly over the past two decades. Digital technologies, automation, connected systems and software now play an increasingly important role in machinery design and operation. It is therefore right that our regulatory framework evolves alongside those technological developments to ensure it remains effective, proportionate and fit for purpose. This instrument has two distinct and complementary purposes. First, it introduces the domestic enforcement framework necessary to ensure the effective enforcement of the EU machinery regulation which applies in Northern Ireland from 20 January 2027 under the Windsor Framework. Secondly, it amends domestic legislation to ensure that machinery meeting the updated EU requirements can continue to be placed on the market in Great Britain under the CE marking. In doing so, it provides businesses with continuity and certainty while avoiding unnecessary duplication of conformity assessment procedures.
Turning first to Northern Ireland, these regulations establish a comprehensive enforcement framework to ensure that safe and compliant machinery can continue to be placed on the Northern Ireland market. They designate the existing enforcement authorities, which are the Health and Safety Executive for Northern Ireland and the district councils, and grant them appropriate investigatory and enforcement powers. They also create offences and penalties for serious non-compliance, including fines and, where appropriate, custodial sentences. I can reassure the House that these penalties are fully consistent with the wider product safety framework and proportionate to the seriousness of the offences. The Northern Ireland Department of Justice has confirmed that these provisions will not have a detrimental impact on the criminal justice system.
Importantly, enforcement is intended to be proportionate. In the overwhelming majority of cases, we expect compliance to be achieved through advice, engagement and support for businesses, rather than through criminal sanctions. Criminal penalties are rightly reserved for the most serious instances of non-compliance. The regulations also preserve the important role of UK-approved conformity assessment bodies for machinery placed on the Northern Ireland market by continuing to use the UKNI marking alongside the CE marking where required. It is equally important to emphasise that the UKNI marking is not mandatory in every case: where the relevant conditions are met, machinery bearing the CE marking alone may continue to be placed on the Northern Ireland market.
Turning to Great Britain, the regulations continue the Government’s policy of recognising machinery that complies with the specific requirements of the updated EU machinery regulation. This means manufacturers can continue placing compliant products on the GB market under the CE marking, avoiding costly duplicate conformity assessments while maintaining high standards of product safety. The regulations also ensure that qualifying goods in free circulation in Northern Ireland continue to enjoy unfettered access to the Great Britain market. The updated EU machinery regulation also reflects the considerable technological advances since the previous regime was introduced. It clarifies responsibilities across the supply chain, strengthens the obligations of importers and distributors, facilitates greater use of digital documentation, and mandates third-party conformity assessment for certain categories of higher-risk machinery.
Having carefully considered these changes and following extensive engagement with industry, the Government believe that they are sensible and proportionate and reflect the reality of a modern machinery sector. Indeed, the engagement has been extensive. My officials undertook a call for evidence, held a series of round table discussions with more than 200 stakeholders across the United Kingdom and internationally, and engaged directly with businesses in Northern Ireland, including through dedicated events in Belfast. The message from industry was consistent and clear. Stakeholders supported modernising machinery safety requirements and strongly backed the continued recognition of CE in Great Britain as a means of reducing costs, facilitating trade and maintaining competitiveness. Businesses in Northern Ireland also emphasised the need to maintain a coherent regulatory approach across the United Kingdom and to ensure that goods continue to move smoothly between Northern Ireland and Great Britain. The Government have listened carefully to those views. This instrument reflects that engagement. It supports competitiveness, particularly for small and medium-sized enterprises, while maintaining robust protections for workers and consumers.
Manufacturers already certify their machinery to EU requirements because they operate across multiple international markets. Consequently, officials have not identified any significant adverse impacts arising from these regulations, and we anticipate no material disruption to trade between Great Britain and Northern Ireland as a result of this instrument. The Government will continue to support businesses with clear guidance and practical assistance, including the recently announced £16.6 million UK internal market package for Northern Ireland businesses adapting to regulatory change.
I shall now briefly turn to the amendment tabled by the noble Baroness, Lady Hoey, which raises concerns about both the functioning of the United Kingdom internal market and the Government’s approach to updating machinery regulation. Northern Ireland is, of course, an integral part of our United Kingdom. While the legal framework applicable in Northern Ireland and in Great Britain will temporarily differ in some respects, the practical consequences for most businesses trading across the United Kingdom will be limited. Manufacturers have already designed and certified their products to meet EU requirements because they serve multiple international markets. The continued recognition of compliant machinery in Great Britain and the continued unfettered access enjoyed by qualifying Northern Ireland goods will enable businesses to trade across the United Kingdom with minimal disruption.
The noble Baroness also suggests that these measures merely follow the European Union’s regulatory approach. I respectfully disagree. The Government carefully considered a range of policy options and engaged extensively with manufacturers, trade associations and other stakeholders. We concluded that this approach best supports UK businesses, reduces unnecessary duplication, facilitates trade, maintains our high standards for machinery safety and provides the certainty businesses have consistently asked for. This is therefore a policy choice made in the interests of businesses, workers and consumers throughout the United Kingdom. Ultimately, these regulations aim to modernise an ageing regulatory framework, maintain high standards of product safety, support innovation, reduce unnecessary burdens where possible and provide businesses with the certainty they need to invest and grow. For these reasons, I beg to move that these regulations be approved.
Baroness Hoey
At end insert “but that this House regrets that the draft Regulations place a different legal requirement on the supply of machinery in Northern Ireland in order to comply with the Windsor Framework; risk interrupting the Northern Ireland supply chain from Great Britain; and increase pressure for the same EU requirements to be imposed on Great Britain, thereby undermining regulatory freedoms in Great Britain in order to prevent divergence from the EU.”
Baroness Hoey (Non-Afl)
It is good to see the Minister in his place; he obviously has not had a telephone call today, which we all welcome, I am sure. This statutory instrument covers the regulation of both workplace machinery and consumer products, including excavators, cranes and leaf blowers, and potentially even lawnmowers. It provides an enforcement mechanism for the Government for a law that automatically applies to Northern Ireland because of the dynamic alignment provisions of the Windsor Framework.
This regulation was made on 14 June 2023. That date is important, because it is more than two years after we left the EU, and it was made by a legislature in which no part of the United Kingdom was represented. It was made not out of any regard for the people of Northern Ireland or any other part of the UK. It tells us that we have not really left the EU; we have simply made our subjection to Brussels that much more abject, imposing a trade border dividing our own country.
The regulation does not come into force, as the Minister has said, until 20 January 2027, so the European Union member state economies have had nearly four years to prepare, but Northern Ireland has not. As the Lords Northern Ireland Scrutiny Committee has recognised, dynamic alignment means that businesses do not know all the laws to which they are subject or even when they will be brought in. In addition to introducing an enforcement regime, these regulations amend domestic legislation so that machinery that meets the updated EU requirements can continue to be placed on the market in Great Britain.
This treats Northern Ireland as if it is a self-sufficient economy that needs only the opportunity to sell its goods to the rest of the UK to succeed. There is a determination by the Government to minimise the impact of the Windsor Framework by saying that goods can move unfettered from Northern Ireland to GB, as if that is the only relevant part of being in the UK internal market, when, in truth, as a small and totally independent part of the UK economy, just as, if not more, important is the unfettered movement of goods and, critically, inputs from GB to Northern Ireland. The EU regulation has effect in Northern Ireland in all respects apart from enforcement, without our Government having to do anything, and yet we heard nothing about it until three years after it had been passed.
Normally, the Cabinet Office would produce an Explanatory Memorandum that considered the impact of legislation and gave us some idea of the cost of compliance. However, despite being passed more than three years ago, as I said, I can see no Explanatory Memorandum or government assessment of the cost of complying with EU Regulation 2023/1230.
Let us be clear. We are being asked to pass legislation enforcing a law that we did not make and have never debated. I addressed a Written Parliamentary Question on cost to the noble Baroness, Lady Anderson, but, rather than setting out the cost, the Answer suggested on the basis of highly controversial and contested assumptions that the overall impact would be positive. There was no attempt to set out the cost. One of the supposed benefits set to outweigh cost was dual market access, which, far from making Northern Ireland the Singapore of the West, has not been responsible for generating a single case of inward investment into Northern Ireland. It cannot and will not, because Northern Ireland plc does not enjoy dual market input access, which would be needed to make dual market access a net benefit rather than a net cost to Northern Ireland.
The Explanatory Memorandum suggests that goods made under this legislation in Northern Ireland must meet EU tests, resulting in their obtaining UKNI markings, and that if they also obtain CE markings, they can be sold in Great Britain. The key question, however, is whether the goods governed by these regulations can be made in Great Britain and then sold in Northern Ireland without encountering new border frictions. The critical question that lies behind that first question is: will a company based in Great Britain that sells most of its goods to Great Britain and that probably will not want the hassle of arranging the cost of separate conformity checks and getting the UKNI and the CE marking to access just 3% of the UK market continue to sell products into Northern Ireland?
When these regulations were debated in the other place, the honourable Member for North Antrim asked this question but did not get a clear answer. His follow-up Written Question was answered last week by the honourable Member for East Renfrewshire, who made it very clear that any company based in Northern Ireland that depends on using goods covered by this legislation that are manufactured in Great Britain will no longer be able to buy those goods from 20 January 2027 unless the GB company is prepared to go through the hassle of a separate conformity assessment and then having their goods subject to UKNI markings. This means, undoubtedly, that the supply chains of Northern Ireland will be placed in jeopardy unless businesses can find other suppliers, either in the Republic of Ireland or in the European Union.
I ask the Minister: what will a GB business that currently supplies these goods to Northern Ireland need to do to get its EU conformity checked and secure a UKNI label so that the product can continue to be sold in Northern Ireland from 20 January 2027? It needs to be making those preparations now. We still have not had any answer from any Minister on that issue. What will be the cost to that business of applying for the tests, being tested and then getting the UKNI marking? Again, we have had nothing about cost.
The Minister in the other place was very clear that the Government intend to subject GB to the same EU law as will come into force in Northern Ireland in January 2027, but can the Minister finally explain what happens between 20 January 2027 and whenever the comparable GB legislation comes into effect? That is going to be crucial for Northern Ireland businesses. When, realistically, do the Government imagine that the same legislation will come into effect in GB? Will the relevant products made in GB still need UKNI markings if sold in Northern Ireland, even after GB law aligns with the EU? That is a very important question.
Once again, Northern Ireland is being sacrificed by the Government, who are not prepared to stand up to the European Union and who are dividing our country once again. I beg to move my amendment.
Lord Empey (UUP)
My Lords, the Minister correctly points out that after almost 20 years it is time for regulations to be updated to take account of technological and other developments. Nobody has an argument with that. However, the points that have been made by the noble Baroness, Lady Hoey, illustrate an ongoing problem. We are only at the foothills of this, because with the European reset about to take place, we are going to be confronted with a tidal wave of these SIs that will be going on for a long time.
On a number of occasions, I have argued that we have the potential to review this year our relationships with the TCA system and the European Union. We have had honeyed words from Ministers at the Dispatch Box saying, “Yes, we will do that”. I am not aware of anything currently happening. There is no meaningful attempt from government that I am aware of to seriously address what is not only a constitutional issue but rapidly becoming a serious economic issue.
The noble Baroness has illustrated, as happened in the other place, the issue of components coming into Northern Ireland to be part of a manufactured product which can then be sold on either to the EU, the world or GB. The Minister is very experienced; he knows business. He knows that to have an economy where you are constructing a product which could have hundreds of components—the form that the European Union produces, with each line with a number, down to washers, is overwhelming—the Government must take these issues seriously.
I am not going to get into the minutiae of the SI tonight because this is only an example; over the next few years, we will face literally hundreds of them. I therefore appeal to the Minister that when it is clear who is going to be representing his department at the Cabinet table—I wish it was him, but that is another matter—he asks whether the Government are going to address seriously the negotiating calamity that took place as we left the European Union, which produced the protocol, which produced the Windsor Framework. Nobody seems to be grasping this. It is costing this country an absolute fortune, with the Trader Support Service and all the differences, and the number of civil servants who have to monitor it. We are going round and round in circles, but no one is grabbing the politics or economics of it. We are just like nodding donkeys: if it comes from Brussels, that is what we do.
The Minister will have to accept that that is not good enough. I would like to see a serious negotiation. We can go back to the argument over Brexit and who was for or against it, but it was very clear to me and others like me, when we asked the Government for the plan they would introduce for Northern Ireland, that there was no plan. That is why some of us took the view that it was not the right time to make the move, but the people decided so we have to live with it and get on with it—and we must do so with enthusiasm. Whatever side of the argument we are on, a decision was taken and we have to live with it.
Therefore, instead of trying to subvert that decision, we have to try to implement it. That means that we do not do harm to our own businesses and constitutional position. I therefore ask the Minister to take back to his department the view that “Government plc” needs to reset our arrangements with the EU within the United Kingdom. We are neither fish nor flesh, and our businesses are confronted with at least two regimes; we have a patchwork quilt to try to repair the relationship. It was badly negotiated and it has been badly implemented.
I hope the Minister will take that back so that, when we come to the next one of what will be hundreds of these SIs, we might, I hope, see some light that the Government have got the message. I hope we can talk to our European partners to see whether we can find a solution, rather than having to do these things every so often.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, I support the amendment in the name of the noble Baroness, Lady Hoey. These regulations drive another wedge between Northern Ireland and Great Britain, cementing the gradual disintegration of our union by legislative stealth. Once again, we in Northern Ireland are the sacrificial lambs sent to the slaughter to appease Europe.
In my opinion, this is a debate about fairness; it is about having an equal footing within the internal market between the four constituent parts of the United Kingdom. It is totally unacceptable that Northern Ireland stands on uneven ground. Businesses have already been fettered by the weight of the Windsor Framework bureaucracy, and now our Government want to apply even more red tape—much to their shame.
Companies and consumers based in Northern Ireland who depend on buying in machinery made in Great Britain will be very concerned about what these regulations will mean—certainly from 20 January 2027 onwards until the same legislation applies to Great Britain, although we do not know when that will be. There is no clarity concerning that timeline. Should businesses contact their suppliers in Great Britain now and encourage them to continue supplying the Northern Ireland market, despite the additional costs involved? In other words, are GB manufacturers expected to absorb the cost of having their machinery assessed against EU standards that apply in Northern Ireland, and of obtaining UKNI marking so that Northern Ireland businesses and consumers can continue to buy the products they need at prices comparable to those they have traditionally paid within their home economy?
I trust the Minister can tell us whether he fully understands why these regulations genuinely worry companies and consumers in Northern Ireland? The worst possible outcome is that many businesses in Great Britain will decide that it is no longer worth the hassle to sell to the Northern Ireland market. In the same vein, can the Minister also tell the House which organisation a GB manufacturer will need to approach to have machinery assessed against the relevant EU standard and what the expected cost of that assessment will be? Once compliance with EU standards has been demonstrated, which organisation will be responsible for issuing or facilitating the UKNI marking and what will be the cost of that process?
Unless greater detail is brought forward, I fear—even beyond the constitutional damage—that these regulations will cost businesses financially and practically. Can the Minister clarify what will happen to products that have already been manufactured and are in warehouses in Northern Ireland but do not have UKNI marking? If they are not sold by 20 January 2027, will they have to be scrapped or sent to GB? I am acutely aware that one company has had to scrap 11 perfectly good condenser tumble dryers because they were unable to sell them before the EU ban on selling condenser tumble dryers came in. I would regret it if this was the case for all the machinery to which these regulations pertain if they were produced without a UKNI marking.
In reality, these regulations do nothing to advantage or uplift British citizens. They were designed by foreign representatives in a foreign polity, not by this Parliament. The regulations are not made to be amended. They have been created with the sole purpose of appeasing the European Union. The people of Northern Ireland have had no say over these regulations and it is an insult to democracy that they should be imposed over our heads.
In conclusion, we have started today with a new Prime Minister. He speaks about a reset with Europe. Would it be too much to expect that our Prime Minister would stand up against Europe and defend the unity of the United Kingdom, remove the iniquitous Windsor Framework and permit us to trade freely within the United Kingdom on equal footing with the rest of the UK?
Lord Elliott of Ballinamallard (UUP)
My Lords, I welcome the opportunity to partake in this debate. I thank the Minister for the detail he has provided. I do not necessarily blame just the current Government for this issue because it goes back much further than that. We have to accept that there were very poor negotiations after Brexit that led to the protocol and the Windsor Framework. Who have been the fall people? The Northern Ireland businesses have been the main fall people, which is extremely unfortunate. We need to try to resolve the outworkings of the protocol and Windsor Framework.
That decision has had significant consequences for many businesses so far, and this will be another one. I am sure that most businesses in Northern Ireland never thought that, after Brexit, we would be debating excavators, cranes and leaf blowers—let alone tumble dryers. For goodness’ sake: this is way beyond what any of us expected in Northern Ireland and what we expected to see as a reasonable relationship between the European Union and the United Kingdom.
In Northern Ireland, our businesses have been the fall people for all of this. So, how are we going to resolve it? This is not going to resolve it, because there is no assessment of the financial impact to the people of Northern Ireland and its businesses. Even though this Government have not been to blame for those negotiations, my issue is that I have not seen anything from them either that has tried to resolve the issues. As my colleague, the noble Lord, Lord Empey, has indicated, I would like to see them coming forward with better, more proactive solutions that are going to help this.
I have already mentioned the cost burden on Northern Ireland businesses, which has been highlighted. The Minister indicated the £16.6 million UK internal market package. But will that be sufficient for these costs? Does that include the cost of this particular regulation? Will it include the cost of the regulations that the noble Lord, Lord Empey, has indicated we are going to have lots more of coming forward? We have to talk to the people on the ground—they are the important ones—and those people have found it extremely difficult to find their way through this bureaucratic burden.
I do not know how that is going to be helped and assisted and what the proactive steps are. The Minister indicated that the Government are taking proactive steps to ensure that the industry is supported and complying with the new requirements. What I want to know is: what are these proactive steps? We hear so often that they are taking steps and measures. I would like some detail on that, so the businesses know exactly where they stand and what they need to do—because they do not know. For the next four months, businesses are going to be looking around to see how they can actually comply with the regulations.
The one other issue that I am really keen to find out is: what are the differences in the requirements between Northern Ireland and Great Britain? What are the requirements in that health and safety aspect in Northern Ireland that will be different to GB? I would have assumed that GB probably may even have a higher regulation than the European Union, or at least something similar, in health and safety standards. So, what actually are the additional aspects that are required? Unless those businesses are given that clear guidance and practical assistance, this is just going to be another burden.
This is increasing the internal divergence between GB and Northern Ireland, which is not only a constitutional issue but is hampering businesses and the economy. We are suffering in the economy in Northern Ireland because of it. We have to be honest: a lot of—or at least some of—our trade is with the Republic of Ireland. I do not deny that, but we need a more straightforward process to retain that trade with GB as well, which we cannot ignore, because that is still our biggest market. Let us be able to do that trade with the Republic of Ireland but also with GB as well, because if we stop that GB trade, that will have a significant economic disadvantage for our businesses in Northern Ireland.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I am very grateful to be able to participate in this debate and I support the statutory instrument coming from the Government, which is one of many statutory instruments that we have already addressed in relation to the Windsor Framework. As the noble Lord, Lord Empey, has said, there will be many more coming down the path to greet us in this Chamber which will already have been examined by the Secondary Legislation Scrutiny Committee.
It is important to point out that, as a supporter of the Windsor Framework, I feel that the new incoming Government, working with the Northern Ireland Executive, need to ensure that the ability provided by the Windsor Framework in terms of trade within the UK internal market and access to the EU single market is fully availed of, and that Northern Ireland businesses are enhanced as a result of it. That area needs to be examined with the Northern Ireland Executive.
On this particular statutory instrument, it is worth pointing out that the Government intend to introduce similar measures to those taking effect in Northern Ireland
“as soon as parliamentary time allows”,
which could allow regulatory divergence between GB and Northern Ireland. I hope that the Minister can advise on that.
I would also like to see accelerated progress on the development of the one-stop-shop by the Cabinet Office to support services for business, including the role of AI in the operation of this one-stop-shop and the UK-EU dynamic database of applicable and future regulation to areas that were proposed by our Northern Ireland Scrutiny Committee in our first report, and also by my noble friend Lord Murphy in his review of the operation of the Windsor Framework. I look forward to answers from the Minister in relation to those issues.
Lord Weir of Ballyholme (DUP)
I am not going to deliver a speech, but the noble Baroness and the Minister have spoken about certainty. Does the noble Baroness not agree that certainty would be a lot more enhanced—and I look forward to the Minister’s reply—if we got some form of timescale for whatever is going to be proposed for Great Britain, to bring it back into alignment with Northern Ireland? Also, certainty is massively undermined by the fact that there has not been any level of financial impact assessment on this. We are left with phrases such as “limited impact” and “not particularly practical impact”, but those things are very vague, and we know from previous experience that there was actually a much greater impact than had previously been highlighted.
Baroness Ritchie of Downpatrick (Lab)
I thank the noble Lord for his intervention. I agree that there needs to be absolute certainty in relation to the framework, but I come at this as somebody who supports the Windsor Framework and feels that the Government need to work with the Northern Ireland Executive to ensure that access to both markets is fully captured, and it is ensured that businesses can avail of them.
Baroness Suttie (LD)
My Lords, I thank the Minister for his introduction to these regulations. I also thank the noble Baroness, Lady Hoey, for allowing us to have this important, if short, debate this evening through tabling her regret amendment.
I read the debate on 30 June about these regulations in the House of Commons with interest. I have also listened carefully to the contributions to this short debate this evening. As usual in these debates, the majority of concerns expressed about these regulations are not so much about the content of the regulations themselves but are constitutional and include concerns about trade between Northern Ireland and Great Britain, and the impact on Northern Ireland businesses.
These regulations in themselves are not particularly controversial. As the Minister and the noble Lord, Lord Empey, have said, they update the safety standards of machinery under the EU directive of 2006 and the UK’s subsequent regulations from 2008. In the intervening nearly 20 years, machinery has changed quite significantly, and I am sure that nobody is disputing that the regulations themselves needed to be updated. These regulations are quite technical and, in the House of Commons, the Minister for Business and Trade estimated that they will impact 230 businesses in Northern Ireland and approximately 5,380 businesses in Great Britain.
The concerns expressed this evening by noble Lords are about the fact that Northern Ireland is being treated differently to the rest of the UK as a result of the Windsor Framework. There are also very real concerns, as the noble Lord, Lord Empey, has said, about how to scrutinise these regulations as we align with the European Union on these matters but have lost our democratic voice in the European Parliament and our representation in the Council of Ministers.
I would like to make three points in my remaining time. The first is about the impact that these regulations will have on businesses throughout the UK, in particular on Northern Ireland businesses. I should note that it is welcome that there was extensive consultation with businesses. However, the Minister in the House of Commons acknowledged that there had been a “de minimis assessment” and not a full impact assessment, because the regulations were deemed
“to have a low impact per business from their introduction”.—[Official Report, Commons, Third Delegated Legislation Committee, 30/6/26; col. 12.]
Does the Minister not accept, however, that given there is no real opportunity for Parliament to have a direct say on this secondary legislation, it would be preferable to have a full impact assessment of their implementation?
My second point is about the continued regulatory divergence that stems from these regulations. From these Benches we broadly welcome the upgrading of safety standards, but the measures being introduced to Great Britain, although they extend the recognition of CE marking beyond next January, are not the same as the EU standards being introduced in Northern Ireland. The Minister in the House of Commons indicated that the intention was to introduce measures in Great Britain similar to those being introduced in Northern Ireland, but she did not say when she expected this to happen. Like other noble Lords, I would be grateful if, in his concluding remarks, the Minister could indicate a rough timescale for when he expects this to happen. Does he agree that it would be advisable to minimise the amount of time when the wider UK internal market is working on different and parallel systems?
Thirdly and finally, does the Minister agree that the current policy of a gradual move towards dynamic alignment with the EU on an ad hoc and case-by-case basis results in both economic and political uncertainty for businesses? Clearly, with the arrival of Prime Minister Burnham in No. 10 today—the fifth Prime Minister in four years—the Minister this evening will not be in a position to know for sure what the new Government’s position will be towards the European Union. However, I am sure he will agree that businesses want and need certainty so that they can prepare and plan.
I am sure I will now lose the will of the House with my final comment, but the Liberal Democrat policy of joining the EU single market would provide certainty and clarity. I do not expect the Minister to comment, but I note that joining the single market would also result in removing regulatory divergence between Great Britain and Northern Ireland, which is clearly of great concern to many in Northern Ireland as well as British businesses that trade and do business with Northern Ireland.
Lord Hunt of Wirral (Con)
My Lords, we are grateful to all noble Lords who have spoken in this important debate. I join the noble Baroness, Lady Suttie, in thanking the noble Baroness, Lady Hoey, for giving us this opportunity.
The origins of the Windsor Framework lay in the desire of the previous Government to address the consequences of what was a deeply flawed protocol on Ireland/Northern Ireland, negotiated in October 2019. Within a short time of the protocol coming into force in January 2021, those consequences had become all too apparent. It disrupted trade, damaged businesses and imposed additional costs and inconvenience on customers and consumers. The Windsor Framework was a serious and, in my view, valiant attempt by the Government led by the former Prime Minister, Rishi Sunak, to address those problems. It was motivated by a desire to reduce significantly the checks on goods introduced by the protocol, to protect Northern Ireland’s place within the United Kingdom internal market and to reinforce Northern Ireland’s position as an integral part of the United Kingdom.
Taken together with the January 2024 Command Paper, Safeguarding the Union, the framework ameliorated some of the worst effects of the protocol. It facilitated a freer flow of goods between Great Britain and Northern Ireland and contributed to the restoration of devolved government at Stormont in February 2024. We should not lose sight of the importance of either achievement. However, acknowledging those achievements does not require us to pretend that every underlying problem was resolved. Significant difficulties remain, including regulatory divergence, trade diversion and, as several speakers have pointed out, the imposition on Northern Ireland businesses of laws made outside the United Kingdom’s democratic institutions.
The regulations before us demonstrate precisely why those unresolved issues still matter. As has been explained, they give domestic enforcement effect in Northern Ireland to regulation (EU) 2023/1230. Northern Ireland manufacturers will be legally required to comply with that regulation, while equivalent businesses in Great Britain will not necessarily be subject to the same legal obligations. That raises both an economic and a democratic concern. Northern Ireland businesses may face higher costs when manufacturing goods for sale in their principal market in Great Britain. At the same time, they will be bound by rules that neither this Parliament nor the Northern Ireland Assembly made, can amend or can repeal. They are being made rule-takers, not rule-makers.
The central question for the Minister is therefore whether the requirements being enforced by these regulations will significantly increase the costs of production in Northern Ireland compared with the rest of the United Kingdom. If they do, Northern Ireland goods could become less competitive in the Great Britain market, despite enjoying formal unfettered access to it.
Legal access is not the same as commercial competitiveness. A Northern Ireland manufacturer may retain the right to place a product on the Great Britain market, but that right is of limited value if the cost of conformity assessment, certification, technical documentation, product labelling and continuing compliance makes that product more expensive than an equivalent manufactured in Great Britain. We therefore look forward to the Minister’s explanation. Can he shed some light on this important area? What assessment has been made of the cumulative costs that regulation (EU) 2023/1230 will impose on Northern Ireland manufacturers? How do those costs compare with those faced by equivalent firms in Great Britain? How many affected businesses are small or medium-sized enterprises? Above all, what steps will the Government take if this new regulatory divergence makes Northern Ireland goods less competitive within their own United Kingdom internal market?
As virtually every speaker has set out, this is a magnificent and welcome opportunity for the Government to set out a clear policy in this area and make the Windsor Framework even more relevant today than it was when it was thought through by the Rishi Sunak Government.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions to this short debate. I will address briefly the concerns and questions raised by the noble Baroness, Lady Hoey, and other noble Lords. This is a time-limited debate, so I will answer as many questions as I can and, if necessary, will write to noble Lords.
I recognise, as does the House, that noble Lords have consistently raised concerns about the operation of the Windsor Framework and its application for Northern Ireland. These are legitimate matters for parliamentary scrutiny and debate, which we welcome. However, the question before the House this evening is much narrower and more practical, as was mentioned by the noble Baroness, Lady Suttie: namely, whether businesses, regulators and consumers should have a clear, modern and enforceable machinery safety framework before the new arrangements take effect on 20 January 2027.
In reaching their conclusions, the Government did not merely make assumptions; we asked those who will be directly affected by them. As I said in opening, my officials have conducted a comprehensive programme of engagement, comprising a national call for evidence, 10 round-table meetings attended by over 200 stakeholders from across the United Kingdom and internationally, and targeted engagement with businesses in Belfast and throughout Northern Ireland. We listened to manufacturers, importers, conformity assessment bodies and representative organisations before deciding on this approach. The consistent message that we received was that businesses sought certainty. They wanted a modern regulatory framework that reflected technological developments. They wanted to avoid unnecessary duplication of conformity assessment. They sought ongoing acknowledgement of CE-marked machinery within Great Britain, as it diminishes costs, bolsters competitiveness, and facilitates more straightforward trade for businesses across the United Kingdom and within the European Union.
Numerous enterprises that we interacted with in Northern Ireland informed us that retaining CE recognition within GB would facilitate trade, as manufacturers already certified their products to these standards to access international markets. They regarded certainty and continuity as essential to investment and future growth. The evidence gathered by government shows that businesses are most concerned not with ongoing uncertainty but with having clear regulations, practical trade arrangements and a solid framework that helps them succeed in the UK and on the global stage.
Noble Lords may continue to hold differing views on the Windsor Framework, but this instrument neither creates nor alters those constitutional arrangements. Its purpose is more limited and practical, and ensures that businesses have certainty. It ensures that regulators have the powers necessary to fulfil their statutory responsibilities and it upholds high standards of machinery safety. It supports innovation and competitiveness, and it enables responsible businesses to continue trading with confidence.
Various noble Lords asked about costs. The measures applying in Northern Ireland are out of scope of formal impact assessment. Nevertheless, the Government have engaged directly with businesses in Northern Ireland, and the feedback from these stakeholders has been broadly supportive of the measures. As a result, we do not expect the measures to impose additional costs or burdens on businesses in Northern Ireland relative to those elsewhere in the United Kingdom. We anticipate that most businesses operating in Great Britain will choose to meet the EU requirements. In practical terms, this means that machinery manufacturers across the United Kingdom will be subject to the same requirements. In addition, the Government have set out their intention to introduce similar reforms in Great Britain. For those reasons, we expect the requirements applying in Northern Ireland to create minimal, if any, competitive disadvantage. As I said, we recently announced £16.6 million to support Northern Ireland businesses adapting to regulatory change.
There were questions asked about whether businesses were unprepared. Through extensive stakeholder engagement, businesses are aware of these forthcoming changes. Guidance for businesses is available at GOV.UK, and this guidance will be updated to reflect the changes implemented by this SI.
The noble Baroness, Lady Hoey, asked what businesses in Great Britain need to do. This instrument does not alter the existing Windsor Framework arrangement. Machinery placed on the market in Northern Ireland must comply with the applicable Northern Ireland requirements. Machinery in Great Britain may be placed on the Northern Ireland market with the CE marking where it is either self-assessed to the EU requirements or assessed by an EU-recognised body. Where the UK-approved body carries out the conformity assessment, both the CE and the UKNI markings are required. Manufacturers may therefore continue to place machinery on the Northern Ireland market, regardless of where it is manufactured, provided it meets applicable requirements.
The noble Baroness, Lady Suttie, asked whether we will be introducing similar measures in Great Britain. My officials have already started actively developing further SIs to modernise the machinery requirements in Great Britain. This will ensure that the UK framework remains proportionate and aligned with technological developments. The announcement for implementing these similar measures has already taken place to provide businesses with certainty.
I think the noble Lord, Lord McCrea, asked a question about whether businesses are in favour. I say again that my officials have consulted with industry stakeholders across the UK and internationally in the call for evidence. The majority of businesses in Northern Ireland supported introducing the requirements under the machinery regulation, and many businesses stressed the importance of introducing similar measures in the rest of the UK as soon as possible.
I think a question was also asked about current products. Products that are placed on the market before 20 January 2027 can continue to circulate freely until the end of their lives without further requirements, including UK(NI) marking.
My time is running out, so I will conclude. Ultimately, I respectfully suggest that this House should evaluate these regulations based on the evidence presented before us, the tangible benefits they offer and the certainty they afford to businesses throughout the United Kingdom. For these reasons, I respectfully invite the House to reject the regret amendment and approve these regulations.
Baroness Hoey (Non-Afl)
My Lords, I thank all the noble Lords who have spoken, particularly my colleagues from Northern Ireland. The noble Baroness, Lady Ritchie, tends to come in on all these SIs and support the Windsor Framework, but does not really seem to take a detailed interest in what businesses are thinking about this.
Generally, I hope the Minister has realised that this is a complex and difficult issue and that the Government have not provided the detailed information for businesses that they could have. Businesses have only a few months before they have to implement, and we are still very unclear about the marking situation. The Minister says that UK(NI) marking will not always be necessary, so how are we supposed to know when it is and when it is not? These are the kind of details that small businesses in particular, which depend on their relationship with GB, will find extremely difficult. None of the detailed questions that noble Lords asked has really been answered, so after the Minister has looked through what was said in Hansard, perhaps we will get a more detailed response, because those questions will come up over and over again until we get real answers and businesses have some certainty.
I welcome the response from the noble Baroness from the Liberal Democrats and some of the questions she asked, as I did the Front-Bench spokesman from the Conservatives. Interestingly, the Conservatives in the other place voted against this statutory instrument, and I welcome that. I am feeling hopeful because, every time we have SIs—the noble Lord, Lord Empey, said that we are going to have a lot more—we seem to get more support, but I am on my best behaviour tonight. I said to the Chief Whip that I would not call a Division and that I would stick to my six minutes, as I think I did. I also know that Members are very interested in what is happening—or is not happening—at Downing Street.
With that, I hope that everyone realises that this will not go away. We will be back, time and again, until this House and the Government recognise that, whatever the reasons for signing up to the protocol and the Windsor Framework, they are not working and this is not sustainable. We will keep coming back until the Government recognise that, as both opposition parties and reform parties seem to be beginning to recognise. I therefore withdraw my amendment.