Product Regulation and Metrology Bill [HL]

Lord Lansley Excerpts

Report stage
Wednesday 26th February 2025 Lords Chamber

[Lord Deben (Con)]

I apologise to the House for not being able to be present at many of the earlier debates, but I have come specifically to hear the explanation of this amendment, and I have to say that I am not convinced. The purpose of regulation is, of its nature, to do the best for growth and for business, and if it is best for growth and business to have a regulation that aligns us with somebody else then that must be sensible. There is no reason to say that the priority is not to be aligned. Indeed, I rather think the opposite: the priority is probably, in most cases, to be aligned.

To tie the arms of a future Government on the basis that somehow or other we are living not in the world that we now live in but in some mysterious world that people would like to live in seems wholly unacceptable, and I must say that I am sad that the Government have been opposed on this basis. It runs through all these out-of-date amendments, all of which seek to reassess and restate the disastrous policy of leaving the European Union, which we all know to be a huge success—everyone, throughout the country, knows how very good it has been, so let us make it even better by making it even more difficult to try to come to terms with the world in which we now live. I very much hope that the House will not agree to this amendment.

[Lord Lansley (Con)]

My Lords, I did not intend to support my noble friend on the Front Bench, but I am moved to do so by the speech from my other noble friend. I say to my noble friend Lord Deben that there is a later amendment, which we may or may not pursue, the purpose of which is to make it clear that, when making regulations, Ministers should have regard to the likelihood of the United Kingdom being an attractive place in which to manufacture or supply products. I am sure he agrees that is right.

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[Lord Anderson of Ipswich (CB)]

My Lords, I rise not to support the noble Lord, although it is a pleasure to follow him, but to address government Amendments 44 and 61 in this group, which I have signed, together with government Amendment 55, which will be for another day.

The Constitution Committee has already been kindly mentioned by the noble Lords, Lord Sharpe and Lord Hunt. As a member of that committee, I register my appreciation for the fact that the Government have not only listened to the committee’s concerns and to those developed with impressive persistence by the Delegated Powers and Regulatory Reform Committee but have reacted constructively to them. The Henry VIII powers have been greatly reduced in scope and a credible explanation has been given for the small remainder. While the Bill continues to contain uncomfortably wide ministerial powers to make significant policy decisions, the broad duty of consultation in Amendment 61 is a welcome mitigation. The third part of the package—an extension of the affirmative procedure—is another positive step.

It might have been possible to go further, as the Delegated Powers Committee has rightly said. But, for my part, I would not go so far as to support the noble Lord, Lord Hunt, in his—I am tempted to say “wrecking” —Amendment 2. How to avoid the unconstrained use of excessively broad delegated powers is a problem that will not go away. It was raised by this Bill in a particularly acute form. The Government have grappled with it conscientiously and they deserve credit for that.

I have one final thought. It is rather a dry one, I am afraid, but what do you expect from the Cross Benches? I hope that, some day, the relevant committees of this House might have occasion to discuss the constitutional issues around framework Bills and delegated powers with the Government, not only Bill by Bill, as we do at present, but in a more structured and strategic way. Such discussions would give proper weight to the constraints on government but could also draw on the guidance provided by our committees and bodies such as the Hansard Society over many years. Perhaps the Minister will agree, after his generous and productive engagement on this issue, that the goal of a more consistent and principled approach on both sides of the fence might at least be worth pursuing.

[Lord Lansley (Con)]

I shall speak to my Amendment 4 in this group, which, we are advised, would be pre-empted if Amendment 2 were to be passed, by reason of the deletion of the relevant provision in Clause 1(1), to which it would add an additional subsection. It would add to the overarching objective of making regulations, which is to secure safe products:

“In considering whether regulations should be made … the Secretary of State must have regard to the likelihood of the United Kingdom being seen as a favourable place in which to develop, manufacture or supply products”.


Of course, many of the debates that we have on the Bill will relate to the question of alignment, or otherwise. One of the reasons why we are considering this legislation is because there would be significant issues to do with the manufacture, distribution and supply of products in this country were we to diverge significantly from the standards that lie behind the CE marking from the European Union. Rather than continue, as we have done, with reliance on the retained EU law legislation, it is the Government’s intention, through this legislation, to enable us to accept CE marking. That is not necessarily on a dynamic basis—I agree that it is a matter of choice whether we do so—but the Bill’s structure is intended to enable that to happen. Because we seek to do that by reference to the adverse economic consequences that may flow from failing to be able to bring products here, which may drive some economic activity elsewhere, it seems important that Ministers making regulations under this legislation should consider whether, as a result, the UK is an attractive place in which to manufacture, distribute or supply products.

This is not a new concept. The noble Lord, Lord Hunt of Kings Heath, on the Government Front Bench will recall that the Medicines and Medical Devices Act 2021 includes effectively the same provision in relation to medical devices. Medical devices are outside the scope of this Bill but it is relevant to a wide range of other industrial products. I do not understand why it should not be an essential part of the way that Ministers consider making regulations that have such an impact to have regard to the positive benefits that can accrue to business from ensuring that we have the right product regulatory framework for them, so I commend Amendment 4 to the House.

I do not agree with the noble Lord, Lord Anderson, that Amendment 2 is a wrecking amendment. Why not? Because, if the first subsection were to be removed by that amendment, the regulation-making power would be removed from the Bill so the Government would have to think again. However, the noble Lord and the House will note that later in this group is government Amendment 44. The original formulation in the Bill was to have consequential amendments to Parts II, IV and V of the Consumer Protection Act 1987. In response to the suggestion from the Delegated Powers Committee, which was unhappy with the sweeping power to amend that Act, the Government have instead said, “We’re going to omit Parts II and IV now”. Part II is the bit I am interested in; it is the part of the Act that relates to product safety. The Government simply propose to remove Part II of that Act.

I say to the House and to my noble friend on the Front Bench that if Amendment 2 were to be passed the Bill would clearly have no further regulation-making power in it. However, if at the same time the House were to resist government Amendment 44 then there would continue to be powers in the Consumer Protection Act 1987 for the purpose of making regulations for product safety. The House will be reminded that Section 11(1) of the 1987 Act says:

“The Secretary of State may by regulations … make such provision as he considers appropriate for the purpose of securing … that goods to which this section applies are safe”.


More detail follows, including the respective ways in which provisions can be determined.

The Government should tell us either how they are going to legislate using the powers in the 1987 Act or, if they want to get rid of them, how they are going to replace them in detail. They have done neither of those things. I know we are going to come back to talk about legislation on product liability at a later stage. The Consumer Protection Act is nearly 40 years old and we know it needs updating, but the Government are not doing that; they are sweeping it away and not giving us anything like the detail that was in that Act as to how the powers are going to be used. Nearly 40 years’ worth of scrutiny of the Section 11 provisions on product safety will also be swept away, because the language in this Bill is not the same as in that Act.

The House will have to forgive me: I am slightly anticipating the next group and Amendment 3, because if Amendment 2 is passed, Amendment 3 will not be debated; it will have been pre-empted. I want to make it absolutely clear that although I support my noble friend’s criticisms of the way the Bill is constructed, there is a route available to maintain the powers for determining regulations for product safety. That would force the Government to come back and amend the Consumer Protection Act in ways that are more substantive and clearer than what the present Bill offers us.

[Lord Pannick (CB)]

My Lords, I recognise and value the constitutional principle that the noble Lord, Lord Hunt, eloquently draws to our attention. Ministers should not be given broad delegated powers, but constitutional principles are not absolute; they have to recognise practical reality.

In the context of this Bill, the practical reality is that technical regulations of the breadth and complexity that will be produced cannot sensibly be enacted by primary legislation. We are dealing, in Clause 1(1), with regulations that reduce or mitigate risks presented by products; to ensure that products “operate efficiently and effectively”; and that ensure that products designed for weighing or measuring operate effectively. Are we really to debate each and every such regulation in this House, either on the Floor of the House or in Grand Committee? We would have little, if any, time for anything else.

If the regulations raise issues of principle, Parliament retains control. Parliament does not have to accept the regulations; it can vote against them under the normal principles. The noble Lord, Lord Hunt, suggested, quoting someone from one of the committees—I cannot remember which—that this is Government by diktat. I suggest to him, with the greatest of respect, that that is unfair and inappropriate in this context, for the reasons I have given.

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Moved by

[Lord Lansley]

3: Clause 1, page 1, line 4, at end insert—
“(za) securing that products to which this section applies are safe;”Member’s explanatory statement
This amendment would retain the existing requirement in the Consumer Protection Act 1987 that product requirements must include that they are safe.

[Lord Lansley (Con)]

My Lords, having supported Amendment 2—unsuccessfully—I now have the opportunity to move Amendment 3. The noble Lord, Lord Fox, and I both slightly anticipated some of the arguments in the previous group, but we very much look forward to him speaking to his amendments in this group. I will speak to two sets of amendments: Amendments 3 and 12, which are linked, and then Amendment 28, which is to a separate and different purpose.

Amendment 3 would insert into the regulation-making power a requirement that the regulation should have the purpose of

“securing that products to which this section applies are safe”.

Where does this come from? As noble Lords may recall from the previous group, the amendment seeks to reinsert into this legislation the same provision that is in Section 11 of the Consumer Protection Act 1987. As we discovered from the Minister in the previous group, the Government are going to remove Part II of the Consumer Protection Act 1987; they will not simply have a consequential power to amend it but, under this Bill, will remove it.

I am not an expert on product safety legislation, but for nearly 40 years this provision has been in place and has been the basis for much of our product safety legislation until, broadly speaking, it was augmented or replaced by the general product safety regulations coming out of the European Union. Those regulations, through the assimilated legislation, are the basis on which much of our subordinate legislation has been created for product safety.

Why do I want to do this? I freely admit why I am moving my amendment and have already told the Minister so. Partly, I am trying to find out why the Government believe that the language of the Bill—which, as noble Lords will recall, is that it should have the purpose of

“reducing or mitigating risks presented by products”—

is a better construction than the proposition that products should be safe; it is certainly different. The noble Lord, Lord Fox, in the debate on the previous group, helpfully used a very straightforward analogy: when he uses his lawn-mower, he wants it to be safe. I do not think, if I may paraphrase him, that he wants to stand there, with the lawn-mower going across his toe, and think, “I do wish that the Government had introduced regulations that mitigated the risk of this happening”; he wants it to be safe.

I have included Amendment 12 because, of course, there is no point in putting the word “safe” back into the legislation unless one defines it. The Consumer Protection Act 1987 defines “safe”; for these purposes, I have amended that definition by taking out “goods” and inserting “products”, because that is consistent with the structure of this Bill, which relates to products. There has been case law that has found difficulty in the limitations of the interpretation of “goods”.

Amendment 3 is there to ask Ministers whether it would not have been better—and it is not too late, in either this House or another place—to consider whether it might be straightforward to maintain the intention that products should be safe, and define “safe”, alongside the reduction and mitigation of risk? There is arguably—only arguably—a difference between the two. I know that when you use different language in legislation you are generally thought to be intending to secure a different objective. Since we are, in this Bill, removing the requirement for products to be safe, and inserting a requirement for products to have their risks reduced or mitigated, I suppose there is a difference that is more than semantic between these two constructions. If the Minister can assure us that they will, in effect and in reality, mean the same thing, then I will not press my amendment.

I turn to Amendment 28, which proposes a new clause. Its purpose is to build on what is in the Bill about the regulation of online marketplaces. There is some rather helpful material in Clause 2(3)(d) which brings online marketplaces within the scope of the product regulation and product requirements. Amendment 49 to Clause 10, which we have not yet reached, also helpfully clarifies the definition of online marketplaces. That is all good news. However, none of that would change the fact that limitations remain in relation to the determination of liability for unsafe or defective products that are sold through intermediary online marketplaces. I do not need to tell the House of the increasing use of online marketplaces, or that many of them are not necessarily domiciled in the United Kingdom.

In Committee, the Minister, in response to a helpful amendment from the noble Lord, Lord Foster of Bath, said:

“The primary route to seek damages for harm caused by defective products is through the Consumer Protection Act 1987”—


I should point out this is a different part of the Consumer Protection Act 1987 from those parts which are to be deleted by this Bill. The Minister went on to say:

“My department is currently reviewing this legislation and we will consider the UK’s product liability regime holistically”.—[Official Report, 27/11/24; col. GC 232.]


However, we have here a situation which is very similar to that in relation to product regulation generally, but in relation to product liability: the European Union has moved and we have not moved with it. I am not making an argument for dynamic alignment—the Minister laughs as he knows I have never been one for dynamic alignment in these debates—but I can see the merit in our ability to align where it is in our interests to do so.

There is clearly a problem. Under the existing legislation, the liability applies to the producer of the product, somebody who holds themselves to be the producer —for example, through trademark—or the importer. That does not necessarily apply to online marketplaces, which often do not fit within any of those definitions.

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[Lord Leong (Lab)]

I can confirm that. In fact, the Secretary of State will publish a Written Statement when the consultation happens and this will extend invitations to civil society groups, any stakeholders, parliamentarians and interested parties.

[Lord Lansley (Con)]

My Lords, I know that we are all most grateful to the Minister for what I thought was an extremely helpful response to these important and interesting issues that we have debated in this group.

For my part, in relation to Amendment 3 and the use of “safe”, I agree with the noble and learned Lord, Lord Hope of Craighead, that the use of “safe” in a Bill that is intended to ensure that products are safe would be most helpful. He will note that Amendment 12 defines “safe” in a similar way—not precisely the same as the Consumer Protection Act does at present—as meaning

“that there is no risk, or no risk apart from one reduced to a minimum”,

so it is not to say that a product has no risk.

The Minister is right that this is about product safety—I completely agree—and identification of risk. I think where the noble Lord, Lord Fox, is coming from is on understanding how risk is identified and so on. I have some sympathy with the points he makes on Amendment 9, but I find it entirely arguable whether the definition of safe in the present legislation and the definition in this Bill are very close to one another. I slightly rest my argument for the Minister, and perhaps his officials, to think about: would it not therefore be helpful to include a provision in Clause 1 saying that products should be safe, meaning that there is no risk or a risk that is reduced to a minimum or mitigated, since that is what the Government intend to do? They are intending that people should be able to say that products are safe; they have just chosen to take the word out of statute. I think it would be rather helpful to put it back in. I rest my case there and will not press it further.

On Amendment 28, the Minister very helpfully said more than he said in Committee, although it was not inconsistent with what he said then. In particular, he gave us a timetable, which, of course, is immensely helpful. It is quite a long one and goes to the end of 2026, but I know how these things grind through the machines. He will find that there is a pressing need for a review of the product liability directive, especially in relation to online marketplaces, not least because the Law Commission identified this as an area for reform of the law in its 14th work programme—and that was something like three years ago. We are not only well out of date but well beyond the point at which a need for action on product liability had been identified. I hope we might keep pressing, alongside the Minister, for the progress that needs to be made in the consultation and subsequent legislation.

I have one more point. On Amendment 26 and the question of period products, I say to the noble Baroness, Lady Brinton, that I was wondering about this. I have checked, but if I understand the position correctly, period products are not regarded as medical devices; they are regarded as consumer products. Incontinence pants—disposable body-worn pads—are treated as medical devices by the MHRA. That is a distinction without a difference, one that I do not understand. I think that period products are regarded as medical devices by the Food and Drug Administration in America. Of course, we follow where the European Union’s general product safety regulation has been and the definitions it has put into its own regulations. One area that Ministers might think about is whether it would be more appropriate for these products to be regarded as medical devices and brought under the scope of the regulations.

[Baroness Brinton (LD)]

I have a very minor and technical point, but I referred to products and not just pants, because the whole line of products has changed. I do not believe that either period or incontinence pants are covered. That is my concern but I thank the noble Lord for his point.

[Lord Lansley (Con)]

I will not argue but there is probably a good basis for thinking about whether—rather than including them in the Bill, I say with great respect to the proposers of Amendment 26—it would be more appropriate to revisit the question of having them covered under the Medicines and Medical Devices Act 2021. I will leave it there.

On the basis of the point that we have reached with Amendment 3, and that the Minister will have heard, at the very least, the argument for the consumer and communications benefit of saying that we are aiming to make products safe, I will leave it in his capable hands and not seek to press this. I beg leave to withdraw Amendment 3.

Amendment 3 withdrawn.

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[Lord Russell of Liverpool (CB)]

My Lords, I have put my name to one of the many amendments in this group, Amendment 13, which in essence is perhaps a more balanced version of the amendment tabled in Committee. This more balanced amendment seeks to ensure complete and utter equivalence and transparency, whether the Government decide—for reasons that have to be stated, clear, transparent and the result of consultation—to align with the EU or with any other country or group of countries. It is simply to try to make sure there is complete equivalence and transparency, with no hidden agendas, no constitutional crisis, as the noble Lord, Lord Frost, described it, in understanding the rationale behind the decisions that are taken. As I stated at Second Reading and in Committee, however people may interpret my intentions, they are decidedly Cross-Bench and apolitical. I have no interest in revisiting some of the painful politics and turbulence of the last decade or so, which this country has willed on itself.

In relation to the specific amendment, what is really driving this is what I think should be paramount: the interests of the country, obviously. In an instance such as this, I personally regard the interests of the country to be predominantly to do with the views of the businesses most directly affected by these regulations. The organisation that I think has taken the closest interest in this and has been talking to its members in great detail about it is the British Chambers of Commerce. Your Lordships may or may not be aware that I should declare an interest in that its president is a fellow Cross-Bencher, the noble Baroness, Lady Lane-Fox. It did an extensive survey of its membership, which was published just before Christmas. I remind your Lordships that the chambers represent about 50,000 businesses across the UK, which employ about 6 million people and have an aggregate turnover across all the companies involved of about £600 billion per annum—a not inconsiderable part of the economy.

The views of the membership are pretty clear. They are in no way ideological about this, but there is a clear view on the part of a majority of the businesses that, in many instances, alignment with the EU is in the direct interests of their businesses and employees, particularly if they wish to grow their businesses. Many are involved in exports—and imports—to the European Union, which continues to be their single largest export market. They have an understandable wish for the ability to grow their businesses to be as easy as possible. What has happened over the past few years has, in many cases, made it a great deal less easy than they would wish.

There is, therefore, a very clear stated wish. They have come up with a wish list that they hope the Government will focus on. It is interesting that one thing they said should be a medium-term view relates specifically to the Bill that we are discussing. They say that the UK should build on the Product Regulation and Metrology Bill to facilitate alignment of UK regulation with relevant—but only where it is relevant—primary, secondary and tertiary EU decisions in the traded goods sectors. That does not deny the fact that, in some areas and in some sectors and instances, it will not make sense to align with the EU. The point that the noble Lord, Lord Frost, made—and I am sure others will make—about having the ability to align with other countries or groups of countries is entirely open to the Government to do. I think, however, that they will do that only as a result of careful consultation with the interested bodies. They would then have to make a judgment call on what is in the best economic interests of the UK in terms of which direction they go in.

That is quite simply what this amendment is about. It is meant to promote growth. Those businesses are looking for greater predictability, transparency and consultation—the feeling that they have actually been listened to. Above all, what I think they are looking for—and what sometimes one senses, from some of the interventions on this Bill, is missing—is rebuilding a sense of genuine trust between those who may have slightly different views about the direction that we should take on issues such as this, as well as a relationship that is more trust-based and transparent and where dialogue is easier with some of the bodies, including the EU but also those other countries that we might align with, than has been the case hitherto.

[Lord Lansley (Con)]

My Lords, I want to speak briefly to Amendment 20 in this group, which is in my name. It is an opportunity to restate an argument, which I will not dwell on at length but which noble Lords may recall from Committee: there is an inherent advantage and desirability that, when we are determining product requirements and regulations, we should, wherever possible, do so by reference to international standards and agreements.

This is of course something that the Government, like the previous Government, are committed to, not least under the latest statement of public policy in relation to standardisation, which was published this year. It gives very useful examples of how this country, the British Standards Institution, some of the organisations to which we contribute and the innovations that we have led have been the basis of the establishment of many of those international standards. I am convinced that it is not absolutely necessary to put it into the legislation in order for this to be the case. I hope that, in response to this debate, the Minister will again restate the Government’s intention that international standards should be the basis.

However, I wanted the opportunity to add one further thought. If we were to arrive at a point where EU legislation or regulations diverged, in our view, from an international standard or agreement or from sound science—for example, the precision breeding legislation and statutory instruments that have just been brought forward, which technically diverge from where the European Union is now; I hope, declaring an interest in the European Union context, that the EU will change its legislation to bring it much closer to us, rather than the other way round—there should be a presumption that adherence to international standards would be the priority. We should look to that as the basis on which we set our standards and not treat the decisions made by the European Union as ones to which we should necessarily incline.

Product Regulation and Metrology Bill [HL]

Lord Lansley Excerpts

Committee stage
Wednesday 27th November 2024 Grand Committee

Any further specification would limit our ability to ensure that enforcement authorities can be equipped with necessary powers to enforce their areas of responsibility. Relevant authority and inspectors’ functions are outlined within Clause 3(3), 6(3), 3(4) and 6(4).

[Lord Lansley (Con)]

I apologise for interrupting the Minister, but Amendment 60 asks who the relevant authorities are. Paragraph 3 of Schedule 5 to the Consumer Rights Act 2015 tell us in statute, as things stand, who the domestic enforcement authorities are. That is not in subordinate legislation—it is in primary legislation. The Minister appears to be taking a list that is in primary legislation, which is amendable by regulation, and turning it into something that is a power to specify by subordinate legislation. What was wrong with retaining the enforcement authority list in Schedule 5 to the Consumer Rights Act and adding to or subtracting from it as necessary?

[Lord Leong (Lab)]

I thank the noble Lord for that point. As I said earlier, as it stands the relevant authorities are exercising public functions—that is, the Secretary of State or the Health and Safety Executive, in the examples that I gave earlier. However, because of the evolving and changing nature of the new products on the market, we may need more people with specific technical knowledge. We do not want this Bill to straitjacket us so that, every time we need to appoint somebody, we have to come back with new primary legislation.

[Lord Lansley (Con)]

But can the Minister tell us why the list in primary legislation under Schedule 5 of that Act, which has been amended from time to time since 2015 by regulation, is not a suitable basis for proceeding in future? What is wrong with using that list?

[Lord Leong (Lab)]

Personally, I do not see why there is anything wrong with it—but in this Bill itself, I am trying to say that we need the flexibility. I just have to continue.

Further clarification of powers and functions would restrict the ability for enforcement regulations to provide powers needed to enforce new product and metrology regulations. We must enable flexibility so that we do not create gaps in enforcement powers now or in the future. We intend to plug the gap in enforcement by making regulation applicable at the border, so that enforcement can take place before unsafe or non-compliant products are sold.

I understand the good intentions behind these amendments but, equally, I hope that I have resolved the concerns that led to them. The Bill provides simple, flexible powers that will help enforcement authorities to fulfil their roles. I submit that we have balanced parliamentary scrutiny with the necessary flexibility in a way that best serves the rule of law. It is for these reasons that I ask the noble Lord to withdraw his amendment.

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[Lord Fox (LD)]

My Lords, I also support Amendment 35 in the name of the noble Lord, Lord Lansley. As opposed to the last group, which focused on a large number of slightly different issues, these two amendments focus on one area and, given that they are only in the names of the noble Lord and myself, you can be sure that they will be technical in content.

I am sure the Minister has often wondered why his mobile phone can operate on Bluetooth in any country of the world, and why the automated vacuum cleaner that my noble friend Lord Foster so ably described in the last session can pick up wireless instructions no matter where it is working. The answer is that sitting underneath all of those are things called standard essential patents, or SEPs. They are patents that are necessary to the implementation of a collectively-agreed technical standard—5G, wifi, Bluetooth and so on. Standardisation across communications technologies makes it possible for devices to work with one another wherever they are.

Connectivity is increasingly a part of the products that the Bill seeks to regulate, as we have heard. UK industry is at the forefront of developing connected products that aim to address some of the biggest issues that we face, including healthcare and climate change. The Bill is about ensuring product compliance with technical standards. Compliance or conformance with the technical standard can often be premised on the implementation of a particular technology; as I have said, wifi is an example. For a product to use the wifi logo and technology, its technical performance with the chip set has to be tested and certified. Bluetooth and other wireless technologies used for power management in the context of electric vehicle chargers and smart metering are all examples of where the technical standards of operation are underpinned by these SEPs.

I realise that the Bill is not about intellectual property, but it is about regulating the properties of things. Unless the situation of SEPs is fixed, those properties can be in a state of flux. SEPs should be treated differently from other patents, which is why we are introducing them into this debate.

Of necessity, as a result of a dominant market position, the SEP holders have to voluntarily commit to license their technologies on fair, reasonable and non-discriminatory terms. The licensing of SEPs is important in ensuring that UK businesses are able to use the most modern and effective versions of these technical standards. In practice, SEP holders often evade their voluntary commitments to license their patents fairly because of a lack of clarity over what constitutes fair, reasonable and non-discriminatory, caused by weaknesses in the UK’s legal framework. SEP holders can abuse their position as gatekeepers of these technical standards by using the threat of costly court action and injunctions to force potential licensees to accept excessive royalty demands or quit the market. That can effectively prevent smaller companies from entering into, and being able to operate in, a market. In the previous group, the noble Lord, Lord Sharpe, asked whether the Bill was pro-innovation or anti-innovation. Unless we round up this issue on SEPs, I have to say that it is absolutely stifling innovation.

In most cases, SEP holders are well resourced and aggressive, while many licensees, especially SMEs, lack the knowledge and resources to defend their rightful position in court or push back against the mere threat of litigation. Increasingly, there is a third sector of people who buy up the rights to these patents and treat them as a revenue stream, whereby they go after and literally squeeze the people who have to use these SEPs. In essence, it becomes a secondary market for these things, without the necessary protections.

There are two issues. First, the availability of injunctions to the UK’s current SEP framework means that both small and large technical innovators who operate downstream of the primarily foreign SEP holders can be forced to accept excessive SEP licensing fees because they want to use this technology. The second problem is the lack of transparency: they quite simply do not know who holds these patents until they get an injunction through the mail. That is the problem. With the threat of injunctions and lack of transparency, UK manufacturers are frequently faced with a no-win situation. They have to either pay these fees or get out of the market, because they cannot afford to defend them at an injunction. This is in spite of the SEP holders making a voluntary commitment to license the SEPs on fair terms as part of the standard-setting process. So there is a problem.

The situation creates significant cost and uncertainty for some of the most innovative UK firms, it stifles innovation and, importantly, in the context of this Bill, it challenges the efficiency and effectiveness of products that rely on SEPs and are regulated by this legislation. That is why it is appropriate to have this discussion here today. The UK IPO is aware of issues concerning the licensing of such technology but to date has done nothing, or has insufficiently acted, to protect UK businesses that must use these technologies. This amendment is an opportunity for the Minister to commit to legislative action on SEPs to address the critical issues of products being threatened with exclusion from the people who need them, the imposition of unfair royalties and SEP licences being refused to companies that need them. I beg to move.

[Lord Lansley (Con)]

I am most grateful to the noble Lord, Lord Fox, for explaining so expertly what standard essential patents—SEPs—are and how important they are to the use of legislation in specifying product requirements, which of course are directly linked to the standards that we will go on to talk about. We have previously talked about the importance of standard-setting, but there is no point in setting standards if they cannot be fulfilled, turned into product requirements and brought to the market—that is what we are talking about. In particular, the noble Lord was absolutely right to stress that we should be thinking in this legislation about how we can promote innovation. Addressing this issue is one of the central ways in which we can do that.

Our two amendments serve the same purpose. The only distinction is that I was trying to suggest, in this particular instance, the importance of taking a power and not attempting in the primary legislation at this point to specify precisely how that power should be structured, because it is necessary for there to be a full consultation about the changes that would need to be made—not least, probably, to the Patents Act itself. When we come back on Report, if we go down this path there may be a need to have a power to amend the Patents Act as well.

The point here is that, as the Intellectual Property Office itself said, SEPs will be

“of growing importance to the UK economy”.

This is not a small matter, and it is becoming more important because of connectivity, the internet of things and the multiple range of SEPs associated with many of these standards. The noble Lord, Lord Fox, is absolutely right about the problems that can emerge for companies, particularly SMEs, in understanding the visibility of SEPs and who holds them—and, for that matter, in being absolutely clear about which ones are essential and which are asserted to be so, but which are not in fact essential to the standard.

I shall not delay the Committee now, but I want to focus on the question of why we need a power. First, the Intellectual Property Office is trying to do its best within the powers available to it. In July, Ministers announced the establishment of the resource hub, which gives guidance in relation to SEPs and enables companies to understand the SEP ecosystem. However, that does not change some of the fundamental issues to which the noble Lord, Lord Fox, referred. There are licence holders who are delaying access to their patents, and who are using that as a mechanism to get terms that are not fair, reasonable and non-discriminatory. SMEs are finding it very difficult to know what FRAND terms look like in relation to many of these products.

There is another issue: not only the individual royalties that must be paid in relation to these licences, but the global royalties that need to be available. Although there is case law that can be looked at, it is very difficult for SMEs in particular to understand how that may be applied to them. Of course, there are global royalties being established through large cases, which delay access to this intellectual property for some of those who need to use it; they are therefore unable to know how viable their product may be.

These issues have been addressed in the European Union. At present, there is a regulation agreed between the European Commission’s proposal and the European Parliament, and it is awaiting the conclusions of the Council of Ministers. Let us just focus on that for two seconds. What does it do? It sets out that there needs to be transparency, a mandatory register, and the ability for an official body to undertake a reality check asking, in essence, whether something is actually essential to a standard. It facilitates fair, reasonable and non-discriminatory terms. It also delays for nine months the point at which any licence holder could go to court to secure an injunction for these purposes while there is a requirement for a negotiated process; indeed, it entertains the possibility that, under the regulation, this may relate not only to individual royalties for licences but to the aggregate of those royalties for licences. So there is a legal structure in the European Union for these purposes, in order to overcome what is otherwise, for SMEs in particular, an extremely difficult set of circumstances arising from case law for them to understand and interpret.

This is not a small problem for some SMEs. For example, I have been talking to Tunstall Healthcare, which I know well from its role in providing connectivity, particularly for people who require care at home; it looks after more than 100,000 of them. In order to access licences for 4G and wifi connectivity, it needs to negotiate many licences and to identify where they exist. A company called Bullet was trying to develop and market highly resilient smartphones, but it ceased trading, owing millions of pounds to SEP holders, which contributed to its inability to continue trading. So I think we need to act.

The IPO has said that it will respond to the consultation at the end of 2024—so any minute now. I am told, however, that that will not now happen in 2024. What I really want to hear from the Minister is, first, that this is a suitable Bill and a suitable opportunity to take a power—without specifying all the details of that power—to make provision in relation to SEPs. Secondly, I want to hear that the IPO and Ministers will undertake to respond to the consultation in the early part of next year, putting forward proposals for how the new power is to be used and inviting responses.

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Moved by

[Lord Lansley]

38: Clause 2, page 3, line 37, at end insert—
“(7A) Provision made in reliance on subsection (1) may (among other things) identify product requirements by reference to international agreements or standards relating to the marketing or use of products, including agreements or standards as they have effect from time to time.”Member's explanatory statement
This amendment would enable product requirements to by met by reference to international standards.

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[Lord Lansley (Con)]

My Lords, there was a substantial debate on a previous day and earlier group on whether product requirements should, from time to time, be set by reference to the European Union standards to which they should be aligned dynamically or, as my noble friends Lord Frost, Lady Lawlor and Lord Jackson of Peterborough argued, set by reference to standards in other jurisdictions. “Relevant foreign law” was the term that they used.

I think that we should lift our eyes beyond that debate and say that we want not simply to arrive at a point where we set our standards by reference to those determined in other jurisdictions, but that we should maximise the opportunity for international standards to be the basis on which standards and product requirements are set in all these jurisdictions. I say this not least because in June, before the election, when regulations were going through for the temporary effect to which this Bill gives a permanent basis, there was some legitimate concern about whether the competencies inside our standards-making organisations would be retained in this country if the UK conformity assessment is little used relative to other conformity assessment processes.

I have two amendments in this group by which I want to do two things. First, I want to be clear in the Bill that product requirements may refer directly to international standards. Secondly, I want to promote through a new clause a strategy, which I am asking the Office for Product Safety and Standards to lead, for the United Kingdom to lead in the further establishment of international standards.

I mentioned in some detail at Second Reading how I do not think we are doing this in any way contrary to the thrust of thinking in other jurisdictions. The European Union strategy for standardisation in 2022 pointed directly towards the importance of the greater use of international standards:

“Traditionally, the EU has been a strong leader in international standardisation activities but needs to take account of a changed geopolitical situation, as other countries start to approach international standardisation more strategically”.


So, the European Union is working in that direction. Mario Draghi’s report to the European Commission emphasised the importance of international standards as a means of promoting regulatory harmonisation and reducing trade friction and said that the European Union should lead in framing international standards. We are not alone in this process.

On Monday, my noble friend Lady Lawlor referred to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Article 8.5 states:

“The Parties recognise the important role that international standards, guides, and recommendations can play in supporting greater regulatory alignment, good regulatory practice, and reducing unnecessary barriers to trade”.


I hope that with the Ministers and the Government I am pushing at an open door and that international standards are at the heart of how we want to proceed. I have been given an estimate that something like 80% of standards in some form or to some extent derive from international standards. That would be the case, not least if one includes many that are part of a process in which they are incorporated into existing European Union standards. It is not that this is something we do not presently do; it is something we do at present, but we want to do more and to make it a clear priority.

Why do we need it in this legislation? One expert to whom I talked said that the Secretary of State has the power to designate standards and that it is frequently used in relation to international standards. That is fine, but let us remember what this Bill does. Later on, the Bill contains the power to repeal Section 11 of the Consumer Protection Act. Unless I am missing something, it is Section 11 of the Consumer Protection Act that gives the Secretary of State the power to designate standards in that way, so we do not know how the Government intend to use the powers that the Minister has explained are going to be taken and used flexibly in relation to Section 11. How is that power going to be used in future? If it is to be effectively recreated under this legislation, it is important for this legislation to state that the power should reference international standards wherever appropriate and effective.

I am supported in that view in that, in 2021, Ministers—the noble Lord, Lord Hunt of Kings Heath, was a participant in those Committee and Report debates—took medical devices out of Section 11 of the Consumer Protection Act and put them into the Medicines and Medical Devices Act and created a power to regulate medical devices in the same way as this Bill creates a power to regulate many other products. In the Medicines and Medical Devices Act particular language was used, which is the language that is reproduced for the purposes of this Bill in Amendment 38:

“Provision … may (among other things) identify product requirements by reference to international agreements or standards relating to the marketing or use of products, including agreements or standards as they have effect from time to time”.


I have not invented that language. It is the same as is in the Medicines and Medical Devices Act 2021. If we do not include that language in the Bill, people will wonder why, when making similar new legislation, we did not use the language in relation to other products and standards setting that was used in 2021 in relation to medical devices. I think it is best that we use the same language.

Secondly, for the reasons I have just explained, I do not know whether the power to designate standards by reference to international standards might be diminished in some way by the future repeal of the Consumer Protection Act. I want to make sure that, in so far as new powers are used, they are used to deliver a strategy of using international standards wherever appropriate and effective. I beg to move.

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[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Lansley, for tabling Amendments 38 and 43. I know from when I was on the Opposition Benches that he brings great expertise to this House, debating legislation as varied as the Trade Act 2021, the Procurement Act 2023 and the Bill before us today. His amendments raise important points about the role that international standards can play in domestic product regulation and in ensuring a strategic approach to their delivery and implementation.

Regarding Amendment 38, I reassure the noble Lord that Clause 2(6) enables product regulations to continue to reference international standards to support regulatory compliance, as is the case for medical devices. Provision is already made in current product regulations for the ability to designate a standard adopted by an international standardising body.

We work closely with all departments, including the Medicines and Healthcare products Regulatory Agency, and will continue to work with them to ensure the supply of safe and compliant products. However, each responsible department must individually consider the best approach for its own area.

Before the Secretary of State designates the standard for products regulated under the Bill it is assessed by government. The standard may be designated fully, with restrictions or not at all, depending on how far the standard ensures the relevant product requirements. Therefore Clause 2(6) sufficiently addresses the noble Lord’s concern. There is also no need to specifically reference the ability to designate international standards because that provision is already covered in product safety sector-specific legislation already on the statute book.

[Lord Lansley (Con)]

Which legislation is the Minister referring to? Is it not Part 2 of the Consumer Protection Act, which is able to be repealed by this legislation?

[Lord Leong (Lab)]

I have been told by officials that it is a specific product regulation.

[Lord Lansley (Con)]

Where is the power? Is it in the Consumer Protection Act?

[Lord Leong (Lab)]

I will write to the noble Lord on that.

On Amendment 43, the Government published a memorandum of understanding with the British Standards Institution on 16 September, of which there are copies here available to noble Lords. This sets out in respect of its activities as the UK’s national standards body its role in supporting government policy and acting in the UK’s national interest in the international standards-setting arena. This includes supporting UK policy to strengthen the global approach to standardisation and maximise UK influence.

Within the international standards system the UK already occupies a strong leadership position through the BSI’s membership of international and non-EU private sector European regional standards organisations. The BSI also manages a significant number of important committees in those organisations. In its role, the BSI systematically adopts international and European standards that representatives of UK stakeholders have influenced and withdraws standards that are no longer relevant. This includes internationally agreed standards designed to support regulatory compliance to UK product legislation.

In Articles 2 and 3 of the memorandum of understanding, the Government and BSI agree on the primacy of international consensus and that the two parties will co-operate with each other on international standards policy, while Article 4 ensures that the BSI provides the necessary standards the Government require for UK regulations. The Government are in the process of finalising a document entitled “The UK Government’s Public Policy Interest in Standardisation”, which is referenced in the MoU with the BSI, that explains why standards are a key factor in support of a number of government policies. It also reinforces the policy of influencing international standards and the importance of maintaining a constructive relationship with the BSI.

Given the close collaboration and the mechanisms in place, I believe that the objectives of Amendment 43 are already being met on the points I have just outlined. I hope that I have been able to provide sufficient reassurance to the noble Lord that what he seeks to achieve is not only already possible through the Bill, but also common practice across a range of sectors. If helpful, I will ask my officials, following Committee, to provide further information on the important role that international standards play in the UK system. With that in mind, I respectfully ask the noble Lord to withdraw his amendment .

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[Lord Lansley (Con)]

I am grateful to the Minister for his response. He has obviously taken some trouble to think about it quite carefully.

First, I do not dispute that current powers enable international standards to occupy a central role in our standards-setting process, and I share the Minister’s admiration of the British Standards Institution as our national standards body in doing that, although I note that many of its experts are now in Amsterdam. Let us leave that on one side as noble Lords know which side I was on in that argument and that it was not the same side as my noble friend Lord Frost.

However, not least with the way the European Union is moving and the commitments we are entering into with the new ratification of the CPTPP, would it not be useful to take language such as where Article 8.9 of the CPTPP says the parties should seek

“greater alignment of national standards with relevant international standards, except where inappropriate or ineffective”?

There is language of that kind to which we are party, which in my view it is suitable to incorporate into legislation where we are setting out new legislation that is intended to say how powers should be used in future. That is the point I make. I am not arguing in any sense in a way that is at odds with the intentions of the Government, but I think they have to look and say, “Well, legislation sometimes must be very clear about how people should think and act in the future”. I hope Ministers might think more about this before Report. However, on the basis of the discussion we have had, I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

Product Regulation and Metrology Bill [HL]

Lord Lansley Excerpts

Committee stage
Monday 25th November 2024 Grand Committee

[Lord Kirkhope of Harrogate (Con)]

My Lords, I came here full of hope and expectation this afternoon; indeed, I even indicated to my noble friend Lord Sharpe that, on this occasion, I was here to support his Amendment 11 and Amendment 11A in the name of my noble friend Lady Lawlor, because, as one reads them on the page, they seem to have a lot of merit. However, I regret that, as my noble friends have spoken, they have in their speeches used these amendments to diminish the importance of our major market in Europe and our relationship with the European Union. Noble Lords will be delighted to know that I am not, therefore, going to concentrate any further on those matters but shall instead turn immediately—to my own relief and that of those parties—to Amendments 104A and 124A.

I want to refer in particular to sandboxes, a very interesting area that most members of the public probably do not have a clue about, other than from their visits to coastal regions during the summer holidays. Of course, sandboxes are terribly important in the context of this Bill. My noble friend Lord Sharpe was right to allude to them and to say how important they are; indeed, there are already in place regulations referring to their use, to how IP can be protected, as has been mentioned to me, and so on. However, I want to broaden this issue out a tiny bit. In winding up on this group, can the Minister clarify the way in which sandboxes are protected and how, from the point of view of UK plc, we can make use of them without danger either to the thinking that goes into innovation in them or to the overall position of this country apropos markets, wherever they may be in the world?

I am particularly interested—I know that other noble Lords present this afternoon may well speak on this—in sandbox use in the development of technology and AI. This is an area in which this country has every opportunity to lead the world. Certainly, sandboxes are one way that one can experiment and bring in new ideas without the risk or danger of them being exploited by others, against the interests of this country. I merely say that I support Amendments 104A and 124A, in the principles that they debate, but I would like the Minister to clarify how we can bring together sandboxes, in whichever field they may be deployed, to the benefit of the country.

[Lord Lansley (Con)]

My Lords, I apologise that I was not able to be with the Committee on its first day, nor will I for much of this afternoon, but I look forward to returning for my amendments on Wednesday. I support my noble friend Lord Sharpe’s amendment.

When we debated the regulation of medical devices in the Medicines and Medical Devices Act 2021, we established that safety and safeguarding public health was its overriding objective. However, we went on to say in what is now Section 15(3) of that Act that in considering whether regulations should be made, and whether they would contribute to the objective of safeguarding public health,

“the Secretary of State must have regard to”—

I commend that language to my noble friend, rather than “must support”, which I think takes it a bit far and creates conflicting duties—

“the safety of medical devices … the availability of medical devices … the likelihood of the United Kingdom being seen as a favourable place in which to … carry out research relating to medical devices … develop medical devices, or … manufacture or supply medical devices”.

I draw attention to the third of those. The structure of the existing legislation on the product requirements for medical devices already incorporates an expectation that we consider economic activity, economic growth and our comparative position in the manufacture or supply of such products. I say to my noble friend that that is an alternative formulation which thoroughly supports, through the precedent of a very closely related area of regulation, the idea that economic activity of that form should be part of the consideration of whether and how regulations should be made.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, and the noble Baroness, Lady Lawlor, for their contributions on Amendments 11 and 11A, which specify that regulations made under the Bill should promote investment, foster innovation and encourage economic growth and investment. This Government are committed to attracting investment, as illustrated by the £63 billion pledged at the recent international investment summit. Britain is open for business.

I assure noble Lords that growth is the number one mission of this Government and our new industrial strategy, to be published in the spring, is central to it. The strategy will focus on tackling sector-specific and cross-cutting barriers to growth for our highest-potential growth-driving sectors and places, creating the right conditions for increased investment and high-quality jobs and ensuring a tangible impact in communities right across this country.

I also thank the noble Lord, Lord Sharpe, for his Amendments 104A and 124A, which seek to create regulatory sandboxes where new products could be trialled under regulatory supervision, as indicated by the noble Lord, Lord Kirkhope. I recognise and welcome the intention behind the amendments, which seek to encourage innovation. The Office for Product Safety and Standards within my department already works to provide businesses with guidance and support as they develop and market products. We also support local authorities in their work as primary authorities. This allows businesses to receive assured and tailored advice on meeting environmental health, trading standards or fire safety regulations from a single local authority, then applying this advice nationally. The underpinnings of our product safety regime are based on extensive engagement with businesses. Whether it is on regulatory change, the development of standards or the work of the OPSS as a regulator, the relevant bodies consult extensively across industry.

I am always open to new ideas on how to support businesses to innovate. I understand that in 2022 the Office for Product Safety and Standards supported the Home Office in a regulatory sandbox trialling electronic ID for alcohol sales. However, I am concerned about mandating regulatory sandboxes in the Bill. Product safety is, after all, about avoiding potentially serious risks to people and their property, and anything that would relax regulations in this way, even as a trial, would need careful consideration. It could also commit local responsible authorities to run trials in their areas without sufficient consultation or preparation. This could place an undue burden on local authorities, diverting resources and capacity from their primary responsibilities.

This Government are committed to ensuring that any regulations made under this Bill will support the interests of UK businesses and consumers, providing regulatory certainty and creating the conditions for investment, innovation and economic growth. The Government are always open to debate to ensure that we can support businesses to deliver safe and effective products. I hope I have demonstrated to the noble Lord the extent to which regulators already work closely with businesses to achieve this.

In response to the point from the noble Lord, Lord Sharpe, about SMEs, I was an SME once; we do not want to burden SMEs with additional regulatory or financial cost, if possible. This Government are pro-business and pro-worker and have provided certainty, consistency and confidence—for which investors have been looking for a very long time. Massive tax reliefs are available to investors through the EIS, the SEIS, VCTs and all kinds of grants, including patent grants for any new industries. The Government have shown that we are committed to investment and growth.

I hope that I have been able to reassure noble Lords that the Government are committed to fostering growth through all our policies. This will be set out in more detail in the forthcoming industrial strategy, which we will publish in the spring. I therefore ask the noble Lord to withdraw his amendment.