Product Regulation and Metrology Bill [HL]

Lord Lucas Excerpts

Committee stage
Monday 25th November 2024 Grand Committee

Moved by

[Lord Lucas]

20: Clause 2, page 2, line 30, at end insert “with information including their origin, the identity of the local representative, their value and beneficial ownership”
Member’s explanatory statement
This amendment will enable discussion of what information might usefully be marked on the product, such that the liability for regulations and charges can be clearly established.

[Lord Lucas (Con)]

My Lords, I rise to move Amendment 20 and speak to the others in this group. Each of these amendments has a role, I hope, in improving or at least elucidating the provisions of the Bill, but they are also put together from the point of view of “Let’s collect the tax”.

This Government have not been shy of hurting people in pursuit of a few hundred million pounds in tax per year. They have threatened the basis of family farms, chucked children out of school in the middle of their exam years and frozen old age pensioners. Why, then, are they leaving a billion pounds a year lying on the floor, uncollected, from scamming Chinese and other—Asian, by and large—traders? It is quite extraordinary. It not only fails to collect the tax but damages the British businesses that would be doing the business if we were not giving a 20% price advantage to the likes of Shein and Temu. Now we see that Amazon has to follow them down this track because it has been so damaged by Shein and Temu that it has to go into the same business. This is economically illiterate and ridiculous.

I am very grateful to the noble Lord, Lord Leong, for arranging a meeting to discuss this. He very kindly invited a Treasury official along. I have had a reply now from the Treasury saying basically, “Don’t ring us, we’ll ring you”. I find this extraordinary, but I do not particularly blame this Government. The last Government was just as bad on it. However, it is extraordinary not to collect tax when the Government are going to such lengths to collect additional tax now.

I will add one more thing: for goodness’ sake, make the marketplaces liable for VAT. Stop trying to make the individual traders liable for VAT. They are here today, gone tomorrow, registering 500 new companies with Companies House, with lots of new VAT numbers. As soon as you put your finger on them, they are gone. Make the marketplaces collect VAT. It would be simpler and easier for them and for us, and much more effective.

Amendment 20 asks that we get a sensible amount of information on the origin, the identity of the local representative, the value and the beneficial ownership of the goods, so that everybody involved can see where the liability for product regulation sits, where the liability for any charges can sit and how things can be enforced. The more difficult you make it to track down who should be collared, the less it will happen. In these regulations, we must make it easier to chase people.

Amendment 24 basically says, “Make sure the representative who is appointed has the financial strength to stand behind what’s going on”. If the Minister cares to browse Amazon when he has the time and looks for, say, a three-terabyte drive—the sort of thing I shall need to pack up my 30 years in this place and carry it away with me—he will find that there are some very reputable products on the market for around a hundred quid. That is astonishing. I remember buying my first serious computer, which had 20 megabytes of hard drive, and thinking that was extraordinary. So—three terabytes for a hundred quid from a good manufacturer.

However, there are also products on the market for fifty quid from weirdly named companies. The game being played there is that the products do not contain three terabytes. They probably contain only 256 megabytes. But it does not show on the outside and by the time that anyone gets around to complaining and putting bad reviews in place, the company has changed; it has gone; it is someone else and there is no one to pursue. With a product such as a hard drive, it takes a while for someone to realise that it has been mis-sold. If you are going to pursue these people properly, you need to know that you can go after them for several months of turnover and succeed, which means that the representatives in the UK have got to be good for the money. Otherwise, you just do not have effective product regulation.

Amendment 25 also relates to “Let’s collect the tax”, since we are creating these structures to look after product quality, which could quite easily be used to help collect tax. Amendment 26 says, “Look, we’ve got a trading standards system that is really short of money, so let’s make it easier for us to extract money from the process we are creating in the Bill and feed it through to trading standards so that we get an effective and efficient system of enforcement”. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Lucas, for his proposed amendments to Clause 2, which, as highlighted by the Delegated Powers and Regulatory Reform Committee, has been recommended for removal due to the broad and vague nature of the powers it grants. The liability for regulations and charges related to products is a matter of extreme importance. Without clear guidelines and transparent information, businesses could face significant uncertainty, which in turn undermines their ability to comply effectively.

The Government’s focus on clarity in other areas will ring hollow if they fail to address the critical need for clarity in liabilities—an issue that the amendments in the name of the noble Lord, Lord Lucas, seek to address directly. Regarding Amendment 20, by ensuring that products are marked with clear and comprehensive information, such as origin, local representation and ownership, we can establish clear responsibility for product compliance. This would not only improve regulatory transparency but foster trust with consumers and businesses alike.

I urge the Government to take this opportunity to acknowledge the importance of clear liability and responsibility frameworks. Although these amendments are to Clause 2, and we continue to discuss its broader issues, nevertheless the noble Lord’s proposed changes are a necessary step towards ensuring both accountability and transparency in product regulations.

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I hope I have given sufficient explanation. We think the main issues that the noble Lord has raised are covered by this and other legislation, but I look forward to his comments.

[Lord Lucas (Con)]

My Lords, I am very grateful for the Minister’s comprehensive reply. On Amendment 24, I remain unclear whether the powers in the Bill allow for representatives to have to demonstrate deep pockets. I would be happy to be written to if the Minister cannot reply now. If he could point me in the direction of homework related to Amendment 25, such as the OBR analysis and so on, I would be most grateful.

[Lord Hunt of Kings Heath (Lab)]

I would be very happy to do that.

[Lord Lucas (Con)]

I beg leave to withdraw the amendment.

Amendment 20 withdrawn.

Moved by

[Lord Lucas]

21: Clause 2, page 2, line 31, at end insert “, including a requirement that the name, address and email address of the seller is provided prominently next to the price with a statement that the customer is not buying from the marketplace;”
Member’s explanatory statement
This amendment is to ensure that people are aware that they are often buying from China when buying on Amazon/eBay and the product hasn’t undergone any quality checks.

[Lord Lucas (Con)]

I will also speak to Amendment 22. Amendment 21 is fairly self-explanatory. It asks that people be made aware of where the goods they are buying come from and, therefore, what confidence they can place in their quality. Secondly, it explores whether we might place liability on marketplaces for the quality of the products they allow to be listed there, which is clearly not the case at the moment.

My view is that Amazon makes a great deal of money out of selling what are, essentially, counterfeit products. This is not a satisfactory state of affairs. Amazon is quite well enough off to do a bit of investigation, which does not take long with these products, to make sure that they are what they say they are. This would result in greater stability and higher quality of companies doing business through Amazon. I do not think it would lose Amazon any business, but I am prepared to be shocked to find that the Government disagree with me. For now, I beg to move.

[Baroness Brinton (LD)]

My Lords, Amendment 45 in this group is in my name. I also support my noble friend Lord Foster’s Amendments 117 and 122.

I come back to an issue debated at some length on the first day of Committee. I am particularly pleased to see the noble Lord, Lord Jackson of Peterborough, in his place because my amendment relates directly to his Amendment 33, which questions whether Clause 2(3)(h) should stand part of the Bill; my amendment also looks at paragraph (h). He spoke about it in the context of parliamentary scrutiny and consultation, but my focus is a different one: I am trying to look at how it will work in practice. During our debate last week, my noble friend Lord Fox said that

“the wording of Clause 2(3)(h) is ‘any other person carrying out activities’. All the other items refer to the activity of the sale and marketing of that product. This does not refer to it but any person carrying out activities unspecified”.—[Official Report, 20/11/24; col. GC 40.]

We are moving from products to people in this debate.

At Second Reading, I asked the Minister who is caught by this very wide, catch-all paragraph. In his letter of 17 October, in which he responded to issues that he did not have time to cover at Second Reading—I thank him for it—he said:

“These supply chain roles may be undertaken by individuals as well as by businesses. The Bill will enable the responsibilities of supply chain actors to be rationalised and modernised, including to reflect the development of new business models that were not anticipated by current legislation, such as online marketplaces”.


I read his reply carefully, but it did not answer my question. That is partly because “actors” could mean anybody; it does not necessarily mean somebody mentioned in one of the clause’s previous paragraphs. I remain concerned about that in the context of Clause 2(3), which identifies the

“persons on whom product regulations may impose product requirements”.

It appears that paragraph (h) can include absolutely anyone involved in selling a relevant product, without limitation. This matters because a private individual selling an item with a lithium-ion battery, for example, on eBay or Vinted may be an actor at the very end of a long supply chain, but that does not mean they are a professional in the business. The wording is important.

Where does the responsibility for satisfactory compliance lie? In our Second Reading debate, there was some discussion about online marketplace platforms having responsibility for ensuring compliance but, frankly, eBay and Vinted cannot check the detail of a regulated item—in the case I gave, a lithium-ion battery in a bicycle—or how it meets the regulations. Also, the individual at the end of the supply chain has no obvious way of finding out whether they are responsible for ensuring that the item they wish to sell meets the regulations. Of course, there is a future actor in all of this: the person who buys it.

Which?, in its very helpful briefing prior to Second Reading, pointed out that the Bill needs strengthening in a number of areas, including clearer definitions of key terms, so that existing and future online marketplaces cannot take advantage of gaps to avoid responsibility. Clause 2(3)(h) is one such area. Will the Minister help by making it clear who is covered? Can he also explain exactly how the online marketplaces can manage the extension of liabilities for defective products sold by individuals, which those online marketplaces have not seen themselves? Alternatively, if individuals selling items are covered by Clause 2(3)(h), how do those individuals become aware of their responsibilities under the Bill for ensuring that the goods they sell meet the requirements and are not defective? Frankly, eBay sending them an email saying, “You are entirely responsible” is not good enough for compliance. If this is not clarified, we have a gaping hole in the Bill.

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[Lord Leong (Lab)]

The Bill is drafted in this way to address who is going to be accountable. My invitation to all noble Lords to a meeting stands, and I welcome each and every one of them. I hope this amendment can be withdrawn.

[Lord Lucas (Con)]

My Lords, I am very grateful for the long and detailed reply given by the noble Lord, Lord Leong. I recommend a meeting with him to anybody. He is a most welcoming and courteous Minister, and you get good results out of a meeting with him. If, on rereading what he has said, I have any further questions, I shall attend the meeting. For now, I beg leave to withdraw the amendment.

Amendment 21 withdrawn.