Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

Committee stage
Wednesday 11th December 2024 Grand Committee

[Baroness Lawlor (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Sharpe, to which the noble Viscount, Lord Trenchard, and I have added our names. They would ensure that in the Bill we have a statutory procedure for assessing the impact on the economy in general on consumers and the choices they have to make, and on the producers.

The Bill poses potential costs for producers, which are likely to have an impact on the economy of which they form part. Even though the general scope, as set out in Clause 1, seems sensible and reasonable and appears to reflect consumer protection arrangements which have proven their worth over decades, there is in this very slim Bill less clarity as to what the precise requirement may be, or where precisely liability for transgression lies. It is something of a leap in the dark. Lawyers will be needed to work out who exactly may be covered by the provisions, sanctions and punishments, given that the Bill will touch on many features of production and marketing, and many sorts of person will be involved in the process.

The question really is, if I am an entrepreneur or a small business innovator, do I risk my small pot of savings and those chipped in by my family to get the idea from the drawing board—possibly in the garage—off the ground, into the retail outlet and into use? Sir Hermann Hauser, the technologist and entrepreneur who set up Acorn in Cambridge, did that in the 1970s. He once told me that when you start a business like his—and most start in the garage—they do not have any money, and with what they have, they want reasonable certainty that the law will stay the same, that it will do what it says on the tin, that they can buy the stock they need for the component parts, they can use their judgment within reason about whether a product is safe, and they can take a risk. They have good arrangements for risk assessment, and our law also has pretty good arrangements, as well as for consumer protection. But if—and this is the danger of the Bill—there are open-ended powers, and there is the possibility for a regulation-mad Government to make constant changes, and if, as I have spoken about before, so I will not come back to it, EU law, which is based on the precautionary principle, is mirrored or otherwise imposed, we will be causing greater uncertainty and there will be a greater possibility of costs and of lost stock, because it goes out of date. Such people will also not have time to develop their product properly, bring it to market and make a profit. They may go bankrupt, thanks to a raft of new provisions and new uncertainties.

These three amendments—Amendment 103, on consumer choice and an impact assessment; Amendment 104, on an impact assessment on the whole economy; and Amendment 104B, on an impact assessment on SMEs to be laid before both Houses of Parliament within six months—will help us find out exactly what the impact of these rules are, even if we do not know what they will be when we set out on this road. Successful businesses—small, medium and big—and the consumers who buy their products and services, both in this country and overseas, are the beating heart of our economic life. If businesses are to flourish, the rules need to be clear from the start. Compliance needs to be affordable and the rules must encourage innovation, entrepreneurship and risk-taking.

Most businesses in this country are small—there are 5.51 million of them, as we have heard—with zero to 49 employees. There are only 40,000 businesses that count as medium-sized, with 50 to 250 employees. These small and medium-sized businesses provide most of the employment of people, but the vast majority of them—3.1 million—are sole traders. November’s House of Commons analysis, which is the most up-to-date analysis that I have found, gives the figures, with SMEs accounting for 99% of the business population, providing 60% of UK employment and 48% of business turnover. As the noble Baroness, Lady Brinton, pointed out, they are far less able to bear the costs of the regulatory steamroller that may face us. This is one of the big problems that we hear about all the time from small producers and entrepreneurs: the costs of compliance and of dealing with the uncertainties this brings in. Even the bigger businesses, which provide 40% of the jobs and almost half the turnover, also have to pay—I was told by an NHS trust—almost 18% of their overheads.

Whether or not this Bill directly affects the product market—it does—or the service market, we are a service economy. This is a product regulation Bill, but most services use products. Let us take the hospitality trade: it needs to buy products to ply its trade and make money. Cabbies need to buy cars. Every single service—except financial services, perhaps, which is indirectly affected—will be affected by this Bill. It will have a very big impact on the whole economy. If we price risk-taking and innovation out of the product market, on top of the costs of employment—including through higher tax and higher employees’ NICs—UK small businesses will shrink or close. Jobs will be lost. We shall go the way the French went, with their high- tax protectionist model and a centralised structure in which the small challenger is driven out of the game—and with it, the hope of keeping a competitive economy open to new entrants. That is what has happened in France in the post-war years and is now cast in stone by the EU model, with ever bigger national, transnational or multinational corporations having a monopoly and driving up prices for the consumer while driving choices down.

I fear that this is an alien model to our market economy of competitive small businesses that can have a go without fear or favour under the protection of good law. We cannot afford to lose jobs or businesses and raise prices. Our productivity in GDP per hour is already lower than that of our most similar G7 neighbours, France and Germany. I am sorry that this figure is in dollars, although I am sure that noble Lords are very dollar literate: they earn $92 and $95 respectively per hour, while we earn only $79 per hour. If the Government want higher productivity and higher growth, they need simpler and clearer rule books; I must add that that will not happen by mimicking Brussels’ notorious system, whether it is an imported version or a home-based mirror image of what goes on over there.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I shall speak to Amendments 110, 111 and 112, standing in my name. Clause 9 is a skeleton clause, as has been pointed out by the DPRRC, which recommended its removal—a point that may have been made a few times over the course of this Committee, often by me. In giving this degree of power to repeal existing legislation around consumer protection and metrology regulations by negative procedure, the Government have argued that aspects of the regulatory regime may need to be updated swiftly and frequently. However, they have failed to explain why they should be done with little scrutiny. In their response to the DPRRC, they suggested that it is because existing legislation has proven ineffective at times. The most recent consultation on the Bill suggested that 87% of respondents supported reviewing inspection powers, but it is one thing to review powers and another to have the power to completely repeal existing legislation and replace it with whatever an undefined—that word again—relevant authority feels is necessary.

I am very grateful to my noble friend Lord Lansley for his thoughts on Amendment 110. He is not in his place but I wish him a happy birthday, as I am sure most Members of the Committee do too. I am very grateful for his opinions, some of which I am incorporating in my next remarks. On Amendment 110, he pointed out that the Government are proposing to take the power to repeal Part 2 of the Consumer Protection Act 1987. If they were to do so, we would lose Section 2, which sets out primarily that the Secretary of State may make regulations for the purpose of securing goods that are safe. We would also lose Section 19, which defines “safe”. Section 19(1)(c) includes that “safe” means,

“there is no risk, or no risk apart from one reduced to a minimum, that … the keeping, use or consumption of the goods”

will

“cause the death of, or any personal injury to, any person”,

and that “unsafe” should be “construed accordingly”. The Bill does not make the equivalent provision: “reducing or mitigating risks” in Clause 1 is lesser than “safe” as defined, and the 1987 legislation has a long history of implementation, interpretation and enforcement.

At this late stage of the Bill, the question is: is it His Majesty’s Government’s intention to repeal Sections 2 and 19 of the Consumer Protection Act 1987? If it is not, we can assess the overall legislative framework which will result. If it is, we will need to revisit this issue when looking again at the purpose of the Bill. If His Majesty’s Government say they will decide later and seek to avoid overlap, we should again look at how this Bill and how the Consumer Protection Act 1987 may overlap, and consider whether the continuation of a defined requirement for safe products should be included in the Bill.

The other two amendments follow a very similar vein. I think I have said enough, and I beg to move.

[Baroness Lawlor (Con)]

My Lords, briefly, I support this. It is important that we do not give the Minister powers to repeal one of the best-known Acts, which many consumers in this country have had experience of. We all know it is a flagship Act, and it has been proven in the decades since 1987.

I strongly support my noble friend’s proposals to remove the concern about giving the Government the power to do away with these protections which are in those sections of the Act. The meaning of “safety” is particularly relevant and needs to be very clear for businesses and consumers alike. Were we to go along this route, heaven knows what a Government could do. It is wrong for this House to allow that to happen; it is constitutionally out of order that such a well-known piece of legislation—which is so important to our economy and those who make our economy—can be done away with using sleight of hand and without any proper scrutiny or discussion.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord and the noble Baroness, but I disagree with her. From the debates we have already had, there is a recognition that what businesses need is certainty and for government to move quickly when it is clear that action needs to be taken to protect the consumer and the other aims of the Bill.

I accept that there has been criticism by your Lordships’ Select Committees and by noble Lords here about the skeletal nature of the Bill, but the point is that we need flexibility to keep pace with fast movement in this consumer area. That is the reason why the Bill is constructed the way it is. I will come on to the Consumer Protection Act, but I hope I can reassure noble Lords on that.

The Government are of course looking very carefully at the reports of both the Delegated Powers Committee and the Constitution Committee and we are reflecting on them. Clearly, as I have said, we are trying to get the right balance between proper parliamentary accountability and the need for flexibility and clarity for all the people affected by the legislation. For instance, in Clause 9 itself, subsection (4) enables us to make minor technical adjustments to ensure coherence across the legislative framework without the need to introduce separate primary legislation for every amendment. I have to say that a general consequential power is typical and required to keep the law functional. If you remove that power, it would mean new primary legislation for adjustments that are primarily procedural or corrective in nature.

Also, the Bill includes safeguards to ensure that the use of the Clause 9 powers is proportionate and justified, with changes to primary legislation subject to the affirmative procedure. Of course, this means debates in both Houses.

As far as the Consumer Protection Act 1987 is concerned, I of course accept the importance of that legislation. As noble Lords will know, Part II of that Act grants powers to the Secretary of State to make regulations to ensure the safety of products, but the powers in Clauses 1 and 2 are intended to replace those powers. So, when product regulations are made under this Bill, it may be appropriate to repeal any or all of Part II of that Act in order to avoid duplication.

Likewise, Part IV of that Act sets out provision for the enforcement of regulations made under Part II. So, because the Bill includes provision in Clause 3 relating to the enforcement of product regulations made under this Bill, it may be appropriate to repeal any or all of Part IV of that Act when new product regulations are made. Included here are the powers for enforcement authorities to investigate and seize goods that have not yet reached the market and the power for customs officers to detain goods.

Part V of the Consumer Protection Act contains miscellaneous and supplemental provisions that may also require amendment when new regulations are introduced. There is no attempt here, nor any desire on the part of the Government, to undermine the Act fundamentally. We simply have to make adjustments in the light of this legislation.

I have listened to the noble Lord and the noble Baroness. As I say, we are considering very carefully the reports of those two Select Committees; clearly, we will reflect on them between now and Report.