Medical Devices and Blood Safety and Quality (Fees Amendment) Regulations 2023

Debate between Lord Allan of Hallam and Lord Jones

Monday 20th March 2023 Grand Committee

[Lord Jones (Lab)]

My Lords, I thank the Minister for his concern and his introduction on the very important matter of blood. Much detail is given by the department in the papers that we have, particularly in the Explanatory Memorandum. Clearly, a lot of work has gone into producing what we have before us.

Currently, a lengthy inquiry by a learned judge and his board is drawing to a close. It regards how, a generation ago, contaminated blood was given to unsuspecting patients, resulting in great distress—and worse—for not only the patients affected but their families. I think the learned chair will report soon; the Minister might confirm that.

My basic question is: can the Minister say what sort of people are involved in the receipt of these fees? One presumes that they are medical professionals or ancillaries who perhaps deal with the details of making available what is required. Can he give examples of the status, titles and work of those who receive the fees? He might agree that, on the face of it, the fee rise is steep.

Clearly, time has gone by, so I intend my interjection to be very brief, but I think I have raised a pertinent question. I rise in this Committee fairly often because I believe that many important regulations come to us, but debates are thinly attended. In many cases, what we consider in our debates here would be better taken on the Floor of your Lordships’ House. That is an opinion, but what we are debating now is very important, and I look forward to the Minister’s reply.

[Lord Allan of Hallam (LD)]

My Lords, we echo the Minister’s comments in praise of the agency for the valuable work that it does in the United Kingdom. Of course, we also want to make sure that it is effectively funded for that work, but we have a few questions on the instrument before us.

First, if we look through the Explanatory Memorandum, the Minister has already explained the item referred to in Paragraph 7.6, that

“the Office for National Statistics reclassified the MHRA from a Trading Fund to a Market Regulatory Agency”,

and said that this affected the way in which it can use cash reserves. In exchanges with the Minister prior to the Committee we talked about the fact that we do nerdy regulation in here. I am curious to know whether any more detail might be made available in writing or otherwise about the way in which that classification or reclassification can take place and the effect that it has, as clearly it may be relevant to other agencies in this space. Understanding what it means to move from being a trading fund to a market regulatory agency is quite important for our work more generally.

Specifically on the cost increases, paragraph 10.2 tells us that there was “a general acceptance” of the need for increased fees in the responses, noting that people said that there was an understanding of the need for an increase in the fees but that they expected to see corresponding consistency in the service that they were given. Again, I hope that the Minister can come back to that later and talk about the assurances that the industry is looking for with regard to the service. However, if we look in detail at the consultation responses, we see that they were not uniformly positive. If we look at the category 1 increases, which was the simple 10% indexation, it was 61% for and 39% against. However, if we look at category 2, where there are some cost-based increases—they are significant and we will touch on those—it was 56% against to 44% for, so clearly, people were more uncomfortable with that. When we come to the third category of new fees, opinion was just in favour but was more balanced: 55% for and 45% against. Importantly, the consultees were then asked whether they thought there would be some impact of the new fees structure on particular kinds of businesses, and 89% said yes and only 11% said no, so a significant number of the consultees felt that in particular small and medium-sized enterprises might be disproportionately affected. We should not gloss over that. I know that officials are trying to summarise things when they produce an Explanatory Memorandum but if you summarise, sometimes you lose these important nuances where there was a much more mixed picture in the response to the proposals.

Paragraph 12.1 of the Explanatory Memorandum tells us that the anticipated costs that will fall on businesses, charities and voluntary bodies will be £1.9 million per year, which is echoed in paragraph 25 of the impact assessment, where it says that these costs will fall on businesses. Of course, the direct costs do, but those businesses will in turn have to pass those costs on to someone, and in most cases the eventual purchasers will be NHS bodies. Therefore again, at one level, it will fall on the business; I do not think that the businesses will simply absorb that cost, and there will be an impact on the taxpayer which does not necessarily come out. I hope that the Government will look at that and at whether, perhaps by increasing the regulatory costs, perhaps for good reasons, we end up increasing the cost base of the equipment. The noble Baroness, Lady Merron, and I were just in the Chamber talking to a Question about the cost pressures on medical equipment and devices and the need to replace significant amounts of outdated equipment with more modern equipment. In many cases, that more modern equipment will go through this approvals process, which will add on cost, so we need to be mindful of that cost base impact.

That brings me to my last point, which was about the impact of the new costs—again, we should not lose sight of them. We get the detailed figures in the annex to the instrument, which is extremely helpful. However, certainly for medical devices, if we look at the status quo ante and the status quo post the adoption of the regulations—these are my rough calculations and I am sure that the people who advise the Minister will be able to do it in more detail—there are costs potentially of £40,000 or of that order under the current regime for somebody to get a new medical device through the designation process, the audit process, and so on. In many cases, those costs are increasing three or fourfold, so you are talking about somebody potentially having to find £150,000 and numbers north of that now to get a medical device through the process.