Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

3rd reading
Wednesday 12th March 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friends Lord Hunt, Lord Sandhurst, Lord Frost, Lady Lawlor, Lord Jackson and Lord Lansley for all their contributions and for raising very important issues throughout the discussions on the Bill. I also thank the noble Lords, Lord Leong and Lord Hunt of Kings Heath, for their openness, collaborative approach and humour—it was very much appreciated.

On these Benches, we take pride in having pushed not only the Government but even the Liberal Democrats —yes, even them—to acknowledge the importance of protecting the pint. Although they were initially resistant, they eventually recognised its value, and we have ensured that the pint will remain untouched.

As the noble Lord, Lord Leong, noted, the Government made some welcome concessions on this Bill, such as the introduction of a requirement for consultation—a very welcome step. However, as highlighted by the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, this remains a skeleton Bill. We think it grants excessive power to the Executive with insufficient parliamentary scrutiny. Whether it is the affirmative procedure or, as once proposed by the noble Lord, Lord Hunt of Kings Heath, the super-affirmative procedure, we will still advocate for greater parliamentary oversight.

The question of dynamic alignment with the EU remains unanswered yet ever more topical. When my noble friend Lord Frost raised the issue, the Government could not rule out as a fact that the Bill could lead to dynamic alignment with the EU.

We still do not think this is a good Bill, but it is much improved. It not only allows for alignment with the EU but risks overregulation, and we confidently suspect that the lawyers will be busy for a while. But it would be churlish to finish on that note, so I once again thank noble Lords opposite for their incredible work on the Bill. I also thank their officials, who often go unremarked in these matters, and our research team led by Henry Mitson, and in particular the indefatigable Abid Hussain, for their enthusiastic and extensive help.

[Lord Fox (LD)]

My Lords, the speeches on this Bill have probably been exhaustive. I make just one observation: it appears that the noble Lord, Lord Sharpe, has had one pint too many as far as this debate is concerned.

This Bill turned out to be more exciting than its name promised. It has been an interesting process going through it. I thank the Ministers, the noble Lords, Lord Leong and Lord Hunt of Kings Heath, for their good humour—I agree with the noble Lord, Lord Sharpe, on that—their levels of engagement and the engagement from the Bill team and the political office, which helped us fashion this Bill. I thank the noble Lords, Lord Sharpe and Lord Hunt, and their Back-Bench posse, for making the debates on this Bill so interesting. I also thank Cross-Benchers for their support, who made some important interventions.

Special thanks go to my noble friends Lady Brinton, Lord Foster and Lord Redesdale, and a big thank you to Adam Bull, who was our legislative support officer and supported us ably. Your Lordships have shown great interest during this debate in the affirmative process and legislative scrutiny, so I look forward to seeing all of you in Grand Committee when the statutory instruments arrive.

Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

Report stage
Wednesday 5th March 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, this amendment, which is in my name, seeks to leave out Clause 2(2)(k), concerning authorised representatives. The introduction of an authorised representative is a critical concept, but this provision remains too vague and ill defined in the Bill. For businesses, this lack of clarity leads to uncertainty, especially when it comes to the exact role and responsibilities of an authorised representative. Businesses require certainty when it comes to compliance, and this uncertainty may hinder their ability to plan, operate or expand. By removing paragraph (k), we would eliminate potential confusion and ensure that businesses do not face unnecessary administrative burdens or legal risks.

Amendment 22 addresses the issue that these powers could allow Ministers to align UK law with EU regulations entirely or, conversely, to diverge from them in significant ways. Whether Ministers choose to follow EU rules or set our own course, these substantial decisions could have far-reaching implications for the future of UK businesses and consumers. What is particularly troubling, however, is that these decisions could be made through delegating legislation, which , as the DPRRC has stated, would be subject to only a relatively low level of parliamentary scrutiny.

We rehearsed these arguments in previous debates and I will not rehash them at length now. My noble friend Lord Frost addressed this point on the first day of Report and the risk of dynamic alignment with the EU through this Bill, which the Minister stated was not possible. However, he did not explain why, so I beg to move Amendment 15.

[Lord Fox (LD)]

My Lords, as we have heard, the amendments in this group from the noble Lord, Lord Sharpe, would remove specific provisions from Clause 2, including a paragraph on authorised representatives; a subsection defining who product regulations apply to, which I do not think the noble Lord mentioned; and a subsection on environmental considerations before introducing regulations. We strongly oppose these changes, particularly as we emphasised in Committee the importance of environmental considerations for products. I remind the noble Lord, Lord Sharpe, that since the DPRRC’s report, the Government took on board Amendment 9 on the previous day on Report and undertook to issue statements, which have a statutory consultation process, before such regulations are laid. The idea that there is no accountability has been somewhat set aside so, with those provisions, we do not feel it is conducive to support these amendments.

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[Lord Fox (LD)]

My Lords, I was nearly subject to a flashback, when the when the noble and learned Lord, Lord Hope, mentioned the internal market Act, to the memory of the long hours, deep into the night, spent debating the shortcomings and problems that Act could create—as, to some extent, it has. We are indebted to the noble and learned Lords, Lord Hope and Lord Thomas, that the framework arrangement was brought into that Act to avoid the clashes that were almost certainly going to occur under its original drafting. We owe them a great debt, and on that basis we should listen when they talk to us on these matters. That is why I was happy to sign the amendment.

Happily, I do not have to add much to this, except that it is necessary. This consultation will happen one way or another. The Minister will know that I specifically asked him when we debated Amendment 9 to confirm from the Dispatch Box that the devolved authorities would be part of the consultation process as set out in the Secretary of State’s statement that will arise from this Bill. I hope that the spirit of this amendment can be in that consultation process and in that statement, so that the devolved authorities know that they will get access, which is very important for all the reasons that have been explained by the noble Lord and the noble and learned Lords.

I have one final point on the Government’s attempt, which I think is sincere, to bring the nations of this country back together again. This is really important for lots of reasons, but it also calls into question how the common frameworks will be used in the future. I do not expect the Minister to answer now but he should set out, in either a letter or a meeting, how those common frameworks will develop. Some people may already know but I am certainly not aware of that. As we know, the future is changing and lots of things are happening. How will the common frameworks and central government’s liaison with the DAs adapt to deal with the changing trading environment? With those provisos, I am happy to support the amendment.

[Lord Sharpe of Epsom (Con)]

My Lords, I will be very brief. I could not agree more forcefully with the summation of the noble and learned Lord, Lord Thomas of Cwmgiedd. It was very well put indeed. In general, I also find that improving on the words of the noble and learned Lord, Lord Hope of Craighead, is nigh on impossible, so at this point I will confine myself to saying that I agree. On this occasion, I also join the noble Lord, Lord Fox, in his remarks on the consultation; I hope it achieves the things that he has set out. I have nothing else to add, but I look forward to the Minister’s remarks.

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[Lord Sharpe of Epsom (Con)]

My Lords, this amendment is not just about protecting the pint in the Bill; it would also ensure that the pint remains protected in law. That is why this amendment is rooted in primary legislation—the Weights and Measures Act 1985—rather than being limited to the scope of the Bill. By embedding these protections in the broader legislative framework, we ensure that the pint remains a legally defined unit of measurement, safeguarded from regulatory drift, ministerial discretion or future legislative changes that could weaken its status.

I am very grateful to the noble Lord, Lord Fox, for introducing his own amendment, for two reasons. First, it got me thinking about the broad, and therefore possibly flawed, drafting of my own Amendment 38; secondly, the noble Lord’s amendment is also flawed. It addresses the marketing of the pint, which is important, but it does not mirror the wording of the Weights and Measures Act 1985. If sales are banned, marketing is redundant. A mere definition of the pint within this Bill does not ensure that the existing legally binding protections remain intact.

That is where my amendment is different: we are closing any potential gaps, removing any possible loop- holes and ensuring that the pint remains fully protected in trade, measurement and law, and, most importantly, that there can be no future confusion with regard to existing legislation.

In the other House, Daisy Cooper said that the pint is well and truly safe,

“so this scaremongering is just total nonsense.”—”.—[Official Report, Commons, 26/2/25; col. 814.]

If that were true, why the change in Liberal Democrat hearts? Why introduce their own amendment on this matter? It seems that now, they recognise that explicit legal protection is necessary.

I understand that the Government were sympathetic to the purpose of my Amendment 38 but were concerned about the drafting and various technical details, so I hope this manuscript amendment addresses those concerns in full and will ensure that the pint remains Britain’s favourite. I hope the Government will now accept the amendment, and I look forward to their support, as well as that of the noble Lord, Lord Fox, and the Liberal Democrats.

“Fancy a pint?” remains one of the most pleasing questions in the English language. Let us make sure it stays that way. I beg to move.

[Lord Fox (LD)]

My Lords, when I saw the manuscript amendment some time mid-morning, I was disappointed. I thought we were not going to get a reprise of the speech of the noble Lord, Lord Sharpe, which very few of your Lordships will have appreciated, because it was in Grand Committee, but I am relieved that he was able to give another rendition of it before speaking to the amendment. I understand he may take it on tour to provincial theatres—if he can get the backing.

The noble Lord having tabled this amendment, we then find a manuscript amendment, on which I have to say I congratulate the noble Lord. I have not participated in a manuscript amendment process before, so it was quite good to see it in action. As he noted, last week the Opposition chose to use some of their time in the Commons to debate the noble Lord’s then amendment. He mentioned the speech of my colleague, Daisy Cooper. I commend it to your Lordships, because it was both engaging and very thorough, setting out all the things the Conservative Government did to make the job of a publican much, much harder.

On a serious note, I join the noble Lord in saying, “Minister, please don’t repeat those errors. Many of Britain’s pubs are teetering on the brink; please don’t be the Government who make the final push.” But that is a debate for another day and another Bill, which we will see soon. The issue described by this amendment is not that fatal push for those publicans. For some inexplicable reason, the noble Lord, Lord Sharpe, chose to split his amendment from my Amendments 38A and 38B. I will be giving the speech I would have given, had they been in the same group, but I assure your Lordships that I will not then repeat that speech when we get to the next group.

I do not believe that the Minister or his Government have ever had any intention of banning the pint glass, and I am sure the noble Lord, Lord Sharpe, does not believe that either. However, what we are talking about now is some form of reassurance. So while my honourable friend Daisy Cooper talked about this being unnecessary, she and I agree that this is an opportunity for the Government to reassure people that they have no intention of doing it, and that, as the noble and learned Lord, Lord Hope, mentioned in a different context, a future Government would not have that option either.

I ask myself, if the noble Lord, Lord Sharpe, is so passionate about the pint, why does he not also care about the pinta? The iconic pint milk bottle is so redolent of the UK, and it deserves the same reassuring protection as the pint glass. I have to say that my father milked cows: milk flows through my veins. So I tabled Amendment 38A, which ensures that both the pint and the pinta enjoy the reassurance of this Bill. It was the tabling of this new amendment, Amendment 38A, that caused the noble Lord, Lord Sharpe, to remember that, as well as bars, there are doorsteps. Perhaps the two should not be mixed—certainly not sequentially.

It caused him to realise that he was in danger of proposing an amendment that forgets the milkmen and women on their pre-dawn delivery rounds in so many of our streets—the whir of the float, the clink of the crates. A manuscript amendment was tabled this morning. I did not know that manuscript amendments could be used to completely change an amendment; I thought they were for spelling errors and suchlike. If my mother were still alive, she would have deemed it too clever by half. Sadly, she is not.

The purpose of this debate is to assure the public of the continuation of the use of this iconic imperial measure for the purposes we have discussed. I am not entirely sure that the manuscript amendment, Amendment 38ZA, buttons things down in the way that the noble Lord, Lord Sharpe, asserts, but I do know that Amendment 38A does this, in plain sight and with no cross-referencing.

I think that the Minister and I see eye to eye on this. That is why I am hopeful that he will indicate support for my Amendments 38A and 38B, and that the Government will accept both. It is clear that, in the event of that acceptance, the hastily amended effort from the noble Lord, Lord Sharpe, would be unnecessary. Amendment 38A covers both alcohol and milk. By persuading the Government to accept it, we will have ensured clear and overt reassurance of the preservation of the pint and the pinta. This assurance, and the knowledge that this measure will endure and not be reversed by a Commons majority, are important. We will not support the amendment from the noble Lord, Lord Sharpe, safe in the knowledge that we have rewritten the Bill effectively and avoided any reverse or any ping-pong.

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[Lord Fox (LD)]

My Lords, as noted, I have already spoken to this amendment. I thank the Minister for indicating that the Government will support it and Amendment 38B. It is on the latter that I shall say a few words. If Amendment 38A is there to reassure, Amendment 38B is there to define. There have been a number of statutory instruments that define the units we use. For the avoidance of doubt, Amendment 38B defines the volume of a pint in primary law as 0.56826125 cubic decimetres. For those of your Lordships querying the definition of a decimetre, I recommend the statutory instrument brought to your Lordships’ House during Covid in 2020. I believe that the then Minister, the noble Lord, Lord Callanan, and I were among the only Peers physically in Parliament when he brought to Grand Committee his amendment to the Weights and Measures Act 1985. That enshrined an accurate definition of both the metre and the kilogram in law. For metrology fans, it is a debate that I thoroughly recommend. That said, I beg to move Amendment 38A.

[Lord Sharpe of Epsom (Con)]

Obviously, we do not have a huge amount to say at this precise moment, but I point out for the record that manuscript Amendment 38ZA included reference to Part IV of Schedule 1 to the Weights and Measures Act 1985, which also specifies 0.56826125 cubic decimetres. Once again, I commend the noble Lord, Lord Fox, on his masterclass in semantics. Had he accepted mine, this amendment would have been entirely unnecessary. With that, I have nothing left to say.

Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

Report stage
Wednesday 26th February 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, Amendment 8 is a vital safeguard to ensure that the UK’s regulatory decisions do not inadvertently disadvantage our trade relationships with some of the world’s most dynamic economies. The global economic balance is shifting. Others have alluded to the statistics in previous debates, but they are very straightforward and bear repeating. The US economy is growing while the EU’s share of global GDP is shrinking. Fifteen years ago, the US and the EU each accounted for around 22% of global GDP; today, the US share has grown to 26.3% while the EU’s has declined to 17.3%. These are simple facts, not qualitative judgments.

The economic future lies with markets that are expanding, not contracting; for the record, that is not the same as arguing that it may not still be in our interests to align with some of those in certain cases. Britain’s membership of the CPTPP, for example—one of the fastest-growing trade blocs—will soon be under way, creating immense opportunities for British businesses. With the US, our largest single trading partner, which accounts for about 16% of all UK exports, Britain trades under its own laws. It is essential that our regulatory framework reflects this reality and does not impose unnecessary constraints that hinder our ability to capitalise on these agreements.

The importance of strengthening our economic ties with the US cannot be overstated. On 20 January, the Minister acknowledged that:

“The US is a country that we have to deal with, and our businesses ask us to work with the US”.—[Official Report, 20/1/25; col. 1474.]


We agree. We recognise and acknowledge that the slow progress is no fault of the Government’s, and there will be more to say on that in the months to come; but alignment with the EU, for example, as President Trump’s advisers have made clear, would make a free trade deal with the US all but impossible. Stephen Moore, a senior economic adviser to President Trump, recently stated that Britain must decide whether it wants to follow “the European socialist model” or embrace the US free market. His warning is clear: if the UK continues to shift towards EU-style regulations and economic policies, the United States will be far less inclined to pursue a free trade agreement with it.

This amendment ensures that our regulatory framework does not create barriers to securing future trade deals or diminish the competitive advantages that we have gained because of Brexit. This amendment is about ensuring that our trade policy remains aligned with our national interest and therefore supports jobs, investment and economic growth on the global stage.

I draw attention to a serious concern raised about deep regulatory alignment with the EU, particularly in the context of the UK’s position with the CPTPP. When the UK acceded to the CPTPP, it underwent a regulatory review to ensure that its domestic regulations complied with CPTPP obligations. This included scrutiny of various sectors, including agri-food, where Canada raised concerns about the UK’s precautionary prohibition on hormone-treated beef. The UK was ultimately allowed to accede despite this issue, but significant uncertainty remains about how the UK’s alignment with the EU’s regulatory model in the agri-food sector, among others, would be received by other CPTPP parties. Regardless of whether it is better for the UK to align with the EU or the CPTPP, can the Minister confirm that this should be a matter for debate in Parliament? The potential implications of such a decision are far-reaching, and Parliament must have the opportunity to engage in a thorough and informed discussion on this matter.

As the Government have put forward a Bill that has done nothing but provide uncertainty to this House, my Amendment 64 introduces the basic yet crucial requirement of accountability. If their No. 1 priority is truly growth, they must give serious consideration to this amendment. All it does is ask them to conduct an impact assessment on future economic growth—in other words, it allows room for manoeuvre. Businesses need stability, consumers need confidence and Parliament needs clarity.

As we have discussed at some length, unnecessary ambiguity about the future regulatory framework risks deterring investment and slowing economic progress at a time when we can least afford it. To be clear, growth is not achieved through vague promises or by blindly introducing sweeping powers without accountability. It is achieved by ensuring that every piece of legislation contributes positively to our economy. That is an aim we believe this Government should share, and for that reason I beg to move.

[Lord Fox (LD)]

My Lords, I will speak to Amendments 8 and 64 in the name of the noble Lord, Lord Sharpe. We are playing on a similar set of variations that we have already played on in several groups. These two amendments are intended to impose additional restrictions on the implementation of this Act.

As we have heard, Amendment 8 prevents the Secretary of State making regulations that could be seen as disadvantaging the UK, or conflicting with its trade agreements. The amendment goes on to list a range of trade agreements, which assumes that if you agree with one of them, you are going to agree with all of them. There is a nature where you have to choose; there are puts and takes. All those trade agreements have varying conditions, and the Government’s job is to try to choose the best option, in a sort of 3D chess game, to make sure that they do the best for this country, as the noble Lord, Lord Sharpe, pointed out. But there is a sort of “cake and eat it” idea, that if we do not do the EU, then we can somehow do all those in the list set out by the noble Lord, Lord Sharpe. His example then illustrates exactly that we cannot, because there are issues in all of these that we will agree and disagree with. The Government’s role is to have a sufficient tool that enables them to move in the right direction.

I am surprised that the noble Lord chose an agri-food example because, as far as I am aware, that is not in the scope of the Bill, but I may be wrong. Perhaps there are other examples but, using his example, I do not see the banning of the hormone boosting of beef as being something the Europeans imposed on me. I am very pleased we have it, and if I am not in the European Union, I still expect the United Kingdom to uphold those kinds of standards for rearing meat in this country. If the Minister is proposing a wholesale change in the United Kingdom’s animal husbandry processes, techniques and security, then perhaps he should tell your Lordships what other things he expects to change about our food, because they are there to protect consumers from the effects of hormones and antibiotics leaking into our system. I know the noble Baroness, Lady Bennett, will probably have lots of statistics, but I hope she does not use them at this time of night.

Neither of these amendments is helpful to the process, and in both cases—particularly the second— I question how an impact assessment of what I think the Minister is proposing can be done. The impact will happen through the regulations that the Act is used to implement. Until we know what the regulations are, we do not know what the impact will be. It is perfectly reasonable for the Minister to say that when the Government are tabling a new regulation, we want to know what the impact of that regulation will be on the economy, the environment and other things. We cannot do a holistic analysis of the impact of the Bill without taking into consideration all the regulations that the Bill will cause to happen. I hope he understands what I am saying. With that in view, it seems to me to be deliberately slowing up the implementation of the Act, and we do not see that the nation benefits from that.

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[Lord Sharpe of Epsom (Con)]

I thank both noble Lords for their responses. I will answer some of the specific questions asked by the noble Lord, Lord Fox. First, I am very grateful for him calling me a Minister on more than one occasion; I would that were the case.

[Lord Fox (LD)]

It is Stockholm syndrome.

[Lord Sharpe of Epsom (Con)]

Secondly, I point out that the amendment does not prevent; it just says that it should not “disadvantage”. That is not mere semantics but a very substantive point which, I would argue, invalidates the noble Lord’s arguments.

To both noble Lords I would say that the reason I chose the agri-food example—I am well aware that it is not covered in the scope of this Bill—is that it is highly topical and relates to a current trade agreement. I say to the noble Lord, Lord Fox, that I did not say that we should not have a ban on hormone-treated beef; I said merely that the merits of such a ban should be debated in Parliament.

I thank the Minister for his response. It was very comprehensive, but it is disappointing that the Government will not accept Amendment 8. We believe this is a proposal that does nothing but strengthen the Bill. It promotes the very growth that Ministers are claiming to prioritise. Given the importance of this issue, I think we have not found agreement and therefore I would like to test the opinion of the House.

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[Lord Fox (LD)]

My Lords, briefly, I thank the noble Lord, Lord Holmes, for bringing this up. It was a good idea to have these amendments, and clearly the issue comes in two different parts.

I was happy to vote for the amendment in the name of the noble Baroness, Lady Kidron. The issue of what I would call piracy is one that we should all be very concerned about, having as we do a national creative industry that we need to protect and preserve.

I am going to throw myself on the mercy of the Government, because I am not 100% sure that some of the products being mentioned in connection with music fall into this category. Consumer products can do, or not, so to some extent we may find that the noble Lord’s suggestions fall into categories that do not necessarily get covered by the Bill. I will be interested to hear from the Government on that, because I should know the answer, but I do not. My sense, having heard what the noble Lord had to say on his Bill, is that we should have another conversation with the Minister about the code of conduct. There is quite a lot of work to be done on the pre-scrutiny of products process to understand where AI has come in.

To single out the energy use of AI from any other energy use is a little strange. If you are buying a product and you care about energy use, it is not just a question of the energy consumed by AI technology. If it is made of steel, a large proportion of the energy came from somewhere else, and that is still important if energy is important to us. On subjects like energy use, there is one set of considerations, and on the use of other people’s intellectual property there is another. That is where we should have a conversation with the Minister.

On the issue of design for accessibility, I agree with the noble Lord. Again, when we have that conversation, the Minister can suggest what the best route might be to take that forward. Perhaps there is more work to be done, and I am happy to join the noble Lord, Lord Holmes, and the Minister if they want me there.

[Lord Sharpe of Epsom (Con)]

That was an interesting, if brief, debate. Before speaking to my amendment, I thank my noble friend Lord Holmes for his important amendments. As has been pointed out, Amendment 37 deals with the concept of “inclusive by design”, which is obviously vital in creating products that cater for everyone. It ensures accessibility, usability and fairness across all sorts of diverse populations. By designing products with inclusivity in mind from the start, we acknowledge the varied needs of consumers, including those with disabilities, elderly users and so on.

Through his Amendment 36, my noble friend has raised an important issue. Labelling AI-generated content, including music, is crucial to ensuring transparency and consumer protection. This subject is growing in prominence and importance, and I have little doubt that we will return to it. In a world where AI-generated works are becoming more prevalent, it is essential that consumers can distinguish between content created by humans and that created by AI.

In addressing my Amendment 43, I begin by referencing the Government’s Explanatory Notes, which, as my noble friend Lord Camrose has mentioned, state that consideration is given to the need to be able to adapt to new technologies such as artificial intelligence. With that in mind, we have tabled this amendment to promote innovation and investment in the UK’s AI sector, which will continue to be vital in the coming years.

I agree with the noble Lord, Lord Leong, that this not an AI Bill, but this is not particularly an AI amendment. It is not about what AI is or does. Many of those discussions, as we have heard in this brief debate, have yet to be had in broader society, never mind in this House. However, we have to acknowledge that the UK has a thriving tech sector that has consistently been a leader in developing cutting-edge technologies, and we want to strengthen it by ensuring that we have sensible, pro-growth AI regulation that fosters innovation while safeguarding consumer interests. That should include a focus on small and medium-sized enterprises, which are vital for generating new ideas and driving technological advancements.

International competitiveness is crucial, especially in emerging technologies like AI. We have already seen how overly burdensome regulations such as those proposed in the EU’s AI Act can have a stifling effect on innovation. When the EU’s AI Act was in the works, executives from 160 leading companies in the industry came together and drafted an open letter warning of the potential negative consequences of excessively strict regulations. They highlighted that such an approach could ultimately harm businesses, slow innovation, put Europe at a competitive disadvantage globally and therefore, by extension, aid those in other parts of the world whose intentions are perhaps not so benign as we like to think ours are.

We must avoid falling into the same trap here in the UK. It is essential to ensure that AI is developed responsibly and ethically, but we must strike the right balance. Overregulating this vital sector could choke off the growth of our tech ecosystem, discourage investment and drive the innovation that we need here overseas. This amendment aims to protect this growing and vital industry. It is specifically drafted in such a way as to ensure that British industries have their interests taken into account, and that, of course, includes SMEs. I urge the Government to accept.

Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

Report stage
Wednesday 26th February 2025 Lords Chamber

[Lord Fox (LD)]

My Lords, I was going to give a long analysis of the economics that demonstrate how poorly manufacturing businesses have performed since the implementation of the trade and co-operation agreement, but that would have been a Second Reading speech, so I decided not to give it. Instead, I will speak to the amendments we have before us. I am grateful to the noble Lord, Lord Russell, for tabling his amendment and for allowing me to sign up to it.

Members on the Conservative Benches seem to find terror wherever they go. There is danger; there are plots, schemes and Trojan horses all over place. I would not like to live in their world; it must be very frightening. This Bill does what it says it does, and this amendment does what it says it does. It makes simple a process that has been put forward very carefully and in a measured way by the noble Lord, Lord Russell of Liverpool.

There are all sorts of things that the Liberal Democrats would like to do that are far more extreme than the noble Lord’s amendment, but we recognise the limitations of this legislation and the nature of what we are debating. That is why I have supported the noble Lord, Lord Russell. It is a simple and modest measure that has the practical benefit of helping out businesses.

To close, the noble Lord, Lord Jackson, said that it would not be sensible to close off options—quite. Closer alignment with EU regulations within the government negotiated red lines would yield a boost to the UK economy of between 1% and 2%. That sounds like an option to me.

[Lord Sharpe of Epsom (Con)]

My Lords, in view of the lateness of the hour and the closeness of the dinner break, I will also be very brief. I thank my noble friends Lord Frost, Lord Jackson and Lady Lawlor for bringing forward these important amendments. I was happy to sign some of them. They raise a fundamental concern about the potential alignment with the European Union, specifically through regulations that could be made under the Bill. As my noble friend Lord Frost put it, that is a significant constitutional matter and, I might add, it is one that has been highlighted by the Constitution Committee—again, we are back to the committees of your Lordships’ House.

The issue at hand is that, as currently drafted, the Bill contains provisions which would allow the United Kingdom’s regulatory framework to align with EU laws in—this is key—a dynamic or ambulatory manner. This means that, as time goes on, our regulations could automatically change in line with the evolving laws of the EU without any further scrutiny or review by the Houses of Parliament. This is deeply problematic. It would allow the UK to be influenced by regulatory frameworks and standards that are set externally and potentially lock us into a regulatory direction that we do not wish to follow. That is not the same as saying that we should not be able to adapt, adopt, negotiate, recognise or seek mutual recognition of the best regulations from whichever equivalent regime they come from.

These amendments address and achieve the aims set out so eloquently by my noble friends. If my noble friend is minded to test the opinion of the House later, we will support him.

Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025

Debate between Lord Sharpe of Epsom and Lord Fox

Monday 3rd February 2025 Grand Committee

[Lord Sharpe of Epsom (Con)]

My Lords, the register of overseas interests—the ROE—was introduced under the Economic Crime (Transparency and Enforcement) Act 2022, which, if I may say, is an excellent Act. I know this to be true because I took it through the House of Lords with considerable advice and assistance from the noble Lords, Lord Fox and Lord Vaux—I have been looking forward to saying that, if I am honest.

The aim of the Act was to increase transparency regarding overseas entities, as has been noted—and let me thank the noble Baroness for her extensive introduction to these regulations. The primary objective was to ensure that beneficial ownership information was accessible, so that the public and authorities could better understand who owns land in the UK. However, as we consider these regulations and whether these measures truly enhance transparency or complicate the process and introduce further risks, we have a couple of concerns that are legitimate to raise.

The Government justify these amendments as a means to protect individuals at risk of violence or intimidation, while simultaneously permitting greater access to information on trusts. The reality is that these changes appear to broaden the scope of who can apply for protection as the noble Lord, Lord Fox, noted. That would make it easier for individuals to hide behind the shield of protection, even when they do not necessarily have a legitimate interest. It reads as if it is potentially an invitation to game the system. So I ask the Minister: are the Government convinced and happy that these regulations, as currently drafted, are robust enough to prevent that potential risk?

Additionally, the amendments propose new mechanisms to address trust information, but the conditions for such access, especially in bulk applications, also raise concerns about the potential for misuse. While the intention might be to make certain information available to those with a legitimate interest, the Government have only partially clarified what constitutes a legitimate interest, which we think leaves room for exploitation and, potentially, unnecessary legal battles.

There is also an application question as, again, the noble Lord, Lord Fox, mentioned. How will the registrar judge things such as how the disclosed information will be used? What criteria will they use to judge legitimacy? For example, is it okay if it was the Times of London asking and would it not be okay if it was some obscure online publication? How exactly will that situation be resolved? It is something I will come onto in a second, but will it be explained in greater detail in the explanatory guidance that will be published shortly?

These measures are proposed to expand the category of individuals who can apply to Companies House to have their information protected, where it may be disclosed under the register of overseas entities. It would also enable trust information on the register that is currently restricted from public inspection to be accessed by application if certain conditions are met.

A significant measure is that of the protection of information. Although expanding the categories of individuals who can apply for protection may sound like a good way to shield vulnerable persons, we are concerned that it risks creating opacity in the system where more people, beyond those in positions of risk, can hide their information from the public eye. The original purpose of the economic crime Act was to shed light on overseas ownership and its implications; we worry that that is now at risk of being undermined by this expansion.

As I and other noble Lords have noted, the Act aimed to simplify and enhance transparency, but these proposed changes seem to introduce additional layers of potentially complex bureaucracy. The process for accessing and protecting information could become more complicated, adding unnecessary burden both for the authorities responsible for managing the data and for the public. Will these changes create a more efficient system in the end, or will they merely add unnecessary red tape to an already complex regulatory landscape?

The Explanatory Notes say:

“Guidance will be made available”.


Can the Minister tell us when it will be made available and whether it will address some of these concerns, such as by going into considerably more detail on the definition of and circumstances surrounding “legitimate interest”? We agree with the Explanatory Notes that, if this measure is to work, extensive and expansive communications are absolutely key.

Broadly speaking, we support these regulations, of course, but we have legitimate questions. The noble Lords, Lord Fox and Lord Vaux, also asked legitimate questions, including about exactly how these regulations will be applied and so on.

[Lord Fox (LD)]

I have one further question, which I meant to ask earlier. The Minister talked about national security interests in the context of legitimate interests. How can national security interests be reflected in Companies House when it is almost certain that nobody there will have sufficient security clearance to be told what the national security interest is in order to apply it in its decision-making process? Clearly, it will not forward every single application to someone who does have security clearance, so how on earth will this be mechanically organised?

Reporting on Payment Practices and Performance (Amendment) (No. 2) Regulations 2024

Debate between Lord Sharpe of Epsom and Lord Fox

Monday 13th January 2025 Grand Committee

[Lord Fox (LD)]

My Lords, it is useful to have heard from the noble Lord, Lord Aberdare, and the noble Baroness, Lady Neville-Rolfe, as they have made it their business to address this issue over a number of years. I am pleased that they view this instrument with some positivity and I am happy to concur.

For too long, we have seen large companies use the cash flow of small companies to bolster their own cash flow. This happens not just in the construction sector, but it has been particularly apparent there. Of course, in some famous cases, such as Carillion and others, it became an industry unto itself and the core purpose of the organisations seemed to be to run cash flow on other people’s profit and loss accounts.

We have moved on some way, but I call into question the Minister’s comment—I also welcome her to her place—that it enables companies to make informed decisions about whom to trade with. In many cases, these companies already know what treatment they will get from those they trade with. They do not have a choice about with whom they trade, if they wish to continue in business. Sanctions and whistleblowing on those companies becomes an issue, as they dare not call foul because they will not get contracts in the future. That is the nature of the relationship: it is an abusive relationship, almost literally, between the contractor and the lead company. We need to understand the nature of that relationship to put into context some of the things we are talking about here.

Without wishing to sound nerdy, the average payment time can hide an awful lot of sins. Standard deviation could be more useful—as the noble Baroness will understand—because companies can be played against others.

I also wonder, rather suspiciously, whether retention becomes something else. It would be easy to look at this from the other end of the telescope, call it a completion bonus and retain that instead. We have to be a bit careful about naming things rather than describing them.

I was happy to be reminded of those halcyon days when we were working on the Procurement Act and of the mercurial rise of the noble Baroness from critical Back-Bencher to Front-Bench proponent. I ask a simple question: would it be legal, under current procurement regulations, for me as a local authority to refuse to take on a contractor which was in all other factors equal to a competitor bidder but had reported poor retention and payment numbers? Is it legal for me to turn it down on those terms?

[Lord Sharpe of Epsom (Con)]

My Lords, I join other noble Lords in welcoming the Minister to her place. The construction sector in the UK is not only one of the largest but one of the most vital industries underpinning our economy, as both noble Lords noted. In 2022, the sector achieved a turnover of £487 billion and employed over 3 million individuals, representing about 8% of the UK workforce. Its contributions are therefore fundamental in driving economic growth, fostering innovation and advancing development throughout the nation.

However, the sector is also characterised by considerable fragmentation. There are over 444,000 businesses engaged in a broad spectrum of work, ranging from contracting and product supply to associated professional services. The fragmentation is compounded by complex, multi-tiered supply chains, as major projects often involve 50 or more firms working collaboratively.

This brings us to the topic of retention sums, which are a long-standing practice in the construction sector. Retention—as it is still called for now—sums serve as a financial safeguard and ensure that work meets the required standards. Typically, half of the retention is released upon project completion while the remaining portion is withheld until the expiration of the defect’s liability period, proving additional assurance that all specifications are met. That, at least, is the dictionary definition of retention.

Given the current practices within the sector, we need to focus on the amendment introduced by these regulations. They all come into force on 1 March 2025 and apply to the financial year starting on or after 1 April 2025. The changes impose specific reporting requirements for qualifying companies and limited liability partnerships operating within the sector. The amendment extends existing reporting regulations and requires qualifying companies to disclose detailed information about their payment practices, policies and performance in relation to retention clauses in construction contracts.

Companies will be required to report on whether retention clauses are included in their contracts, the percentage of retention withheld and the procedures followed for releasing these sums. Additionally, businesses will be asked to disclose the contract value thresholds under which no retention clause applies and outline the standard rate of retention typically applied in their agreements. By 1 March 2025, qualifying businesses will be obliged to publicly report on their payment practices, specifically concerning retention clauses in construction contracts.

It is important that this amendment acknowledges the significant challenges caused by fragmentation within the construction sector, which of course affects businesses of all sizes. We understand that the aim of these regulations, as the Minister noted, is to enhance transparency by requiring businesses to report not only the inclusion of retention clauses but whether their retention practices align with industry standards or are more onerous than typical practices. Furthermore, companies will be required to provide clear descriptions of the processes that they follow to release retention sums, which is intended to ensure greater clarity and fairness for all parties involved. However, there are several important points on which further clarification is needed.

These amendments are said to provide increased transparency, fairness and clarity within the construction sector, but can the Government explain the mechanisms by which the regulations themselves will be enforced? How will compliance be monitored and what penalties will be applied to businesses found to be in breach of the new requirements? Additionally, while the new regulations seek to promote fairer payment practices, can the Government elaborate on how they plan to ensure that large companies are not able to exploit their market position, despite the new transparency measures? Will there be any safeguards in place to prevent larger firms imposing even more burdensome retention clauses on SMEs?

The regulations are presented as a solution to the ongoing issue of delayed payments, which have long caused a financial strain on SMEs, yet how will the Government measure the effectiveness of these changes? What evidence is there to suggest that requiring businesses to disclose their retention practices will have a significant impact on the cash-flow issues faced by smaller companies? As an aside, the noble Lord, Lord Fox, has raised an important point about how we will judge these companies in future, based on these particular metrics. These are not, of course, the only things by which one should judge a company or its potential to complete a project successfully and efficiently, so will there be some way of measuring that as well? If that has not been considered, it is something that should be.

While these measures are presented as steps towards promoting better cash-flow management and financial security for smaller businesses, we would urge the Government to further clarify how the regulations will be implemented and monitored to ensure that they achieve their intended outcomes. Will there be a review process to assess whether these regulations are having the desired effect on industry practices and the broader economy?

Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024

Debate between Lord Sharpe of Epsom and Lord Fox

Monday 13th January 2025 Grand Committee

[Lord Sharpe of Epsom (Con)]

My Lords, I too thank the Minister for his explanation. These regulations are clearly a crucial step in modernising and strengthening the UK’s corporate governance. Building on the Companies Act 2006, they were laid before Parliament, as the noble Lord, Lord Leong, noted, by the previous Conservative Government in May 2024 to address the growing concerns about corporate fraud and business registration transparency.

The regulations introduce unique identity verification for individuals involved in setting up and controlling companies and will ensure that the integrity of the business registration process is robust. The initiative aims to combat the use of fraudulent or stolen identities in business dealings and will make it harder for individuals to engage in corporate fraud. The core aim of the regulations is to ensure that only properly verified individuals can establish and control companies. The registrar is granted the authority to impose further requirements on applicants, with the flexibility to adapt as identity-verification technologies evolve.

The regulations also introduce unique identifiers for verified individuals and authorised corporate service providers, streamlining the registration process and ensuring that the Companies House register remains accurate and reliable. I think I was the Minister whom the noble Lord, Lord Fox, referred to. I sincerely hope that the funding remains robust, as it was a few months ago. I look forward to hearing an answer to that question.

The ACSPs are now subject to stricter oversight, including anti-money laundering regulations, with provisions for suspension or deauthorisation if they fail to meet required standards. I will come back to that in a second. The noble Lord, Lord Fox, also asked why we need ACSPs. They, or their equivalents, are common in many jurisdictions and they provide an incredibly useful service to people who wish to set up a business but have neither the time nor the inclination to get into the weeds of doing so and prefer to subcontract it. I think it is perfectly reasonable that ACSPs exist and they just need to be properly verified.

While the intention behind the regulations is clear—they improve the integrity of company registration and prevent fraud—there are several areas where further clarification is required. Given that the regulations were last discussed under the previous Government, I would like to understand how the current Government intend to address the evolving nature of identity-verification technologies.

In addition, these regulations impose new obligations on ACSPs, particularly in terms of record-keeping and in providing additional information to the registrar. Although these measures are essential for transparency, I ask the Government, as the noble Lord, Lord Fox, also asked, to clarify how these new duties will be enforced. What penalties will be applied to ACSPs that are found to be non-compliant and what measures are in place to ensure that these rules are upheld consistently across all service providers?

I am also concerned about smaller businesses and individuals who may be impacted by these additional verification processes. Will the Government ensure that the new regulations do not create undue burdens on smaller enterprises, which may already be facing significant challenges in meeting regulatory and other requirements?

Finally, while the power to suspend or deauthorise an ACSP is necessary to combat fraud, I would like assurances that proper safeguards will be in place to protect service providers from unjust penalties or removal.

In conclusion, these regulations are important reforms to strengthen the UK’s business environment and combat fraud. As with any regulatory framework, careful consideration is needed on enforcement, monitoring and adaptation, so a review process will be essential to assess the regulations’ impact on businesses of all sizes to ensure that they deliver their intended benefits without imposing unnecessary burdens.

[Lord Fox (LD)]

With the Committee’s permission, I have just one question that I had meant to ask the Minister. It is around the obligation to retain identity information over seven years, which the noble Lord just mentioned. In the event of the ACSP going out of business, what is the expectation of how that information, which would not otherwise be retained, would be retained for the potential use of Companies House?

Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

Committee stage
Wednesday 27th November 2024 Grand Committee

[Lord Fox (LD)]

My Lords, had I been a little shrewder on the grouping, I would have included in this group Amendment 106, which we will debate in the antepenultimate group of the Bill, as it also addresses Clause 7 and goes after the same objective of information sharing. Whether it is lithium-ion batteries or some other danger, it is important that we learn from the problems that are established and that the right people can get that information, so that learning process can start.

I suggest that, whether it is the process set down by the noble Baroness, Lady Finlay, which we support, or something like my Amendment 106, or something that the drafters sitting behind the Minister can do much better than we can, there needs to be a point in this Bill about a process of information sharing, whether it is set out in detail, as in my amendment, which talks about who or what those bodies are, or whether it is a more general duty, as the noble Baroness, Lady Finlay, has set out. We support these proposals, and I hope that we can have a debate next time. I hope that the Minister will acknowledge the need to understand dangers, learn from them and move to be able to prevent them.

[Lord Sharpe of Epsom (Con)]

I thank the noble Baroness, Lady Finlay, for her important amendments. I, too, am looking forward to exploring the meaning of “relevant authorities” in the next group. If this is really about product safety, of course we have to have regard to unsafe products, and of course that information ought to be shared with the emergency services, so I have absolutely no problem in supporting all those amendments.

--- Later in debate ---

[Lord Fox (LD)]

Briefly, I of course support these four amendments from my noble friends, but I will say a few words on Amendment 56. In a previous group, amendments tabled by me and the noble Baroness, Lady Bennett, on the circular economy and disposal, also touched on these issues and it would be worth while looking at those in conjunction with the amendments from my noble friend Lord Redesdale.

To give a bit of advice to my noble friend, the noble Baroness, Lady Finlay, made some interesting points about it being fulfilment centres rather than the actual online marketplace. In some cases, the supplier is foreign but the fulfilment centre is local. Perhaps there is some advice to take from the thoughts of the noble Baroness, Lady Finlay, on that, as they seemed a way of bridging the issue of the supplier being a long way away in a different country, whereas the people dispatching the item are most definitely here. With those provisos, I reiterate my support for all four amendments.

[Lord Sharpe of Epsom (Con)]

My Lords, I will be very brief. I found that a most interesting explanation of lithium-ion batteries and their various aspects. I confess to not being an expert at all, so it is very clear that I—and, I imagine, the general public—need to be better informed on this. I imagine that regulations will form an essential component of becoming better informed.

It was interesting how the noble Lord, Lord Redesdale, said that he was worried about the scope of the Bill. This Bill will take pretty much anything you like—it is enormous—so I would not have too many concerns about that. I ended up, funnily enough, with a couple of questions, which we can perhaps discuss later. I am curious to know how much of the safety of these batteries is contingent on the way that they are stored, used and maintained. That would be an interesting subject to explore further.

Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Fox

Committee stage
Wednesday 20th November 2024 Grand Committee

[Lord Fox (LD)]

My Lords, I will speak very briefly on Amendments 30, 115 and 125, which are in my name. As the noble Baroness, Lady Bennett, observed, they are designed to produce guard-rails that significantly strengthen the environmental and sustainability part of the Bill. It seems inconceivable to me that legislation of this kind would not carry these requirements.

Amendment 30, which is the substantive one, would add new subsection (2A) to Clause 2 in order to ensure that future regulations under the Act include provisions that relate to environmental impact assessments, the circular economy and granting consumers the right to repair products. On the latter, despite attempts, the tendency is to continue to find products manufactured with increasingly complex modules that defy cost-effective repair or sensible re-use, which should be an important part of the future economy. This amendment does not dot “i”s or cross “t”s, because that is the role of the actual regulation, but it sets a standard that we should be looking at for the regulation process. That is it; I could go into more detail, but I do not think I have to.

Amendments 115 and 125 are definitions that would help explain what we mean by “circular economy” and “right to repair”. I hope that His Majesty’s Government will find some sympathy with all of this group and find a wording. I am not proud about my words; I am sure that the noble Baroness, Lady Bennett, is the same. Let us find a way of putting these proposals into primary legislation because these are really important issues.

[Lord Sharpe of Epsom (Con)]

My Lords, I will be brief. I thank the noble Baroness, Lady Bennett, for introducing this group. I assure her and the noble Lord, Lord Fox, that we on these Benches want to see a bright future for our green and pleasant land. That said, we have some concerns about these amendments.

The first relates to the themes that the Committee has been exploring throughout this session. The Bill confers, as we have discussed at length, extensive Henry VIII powers on the Secretary of State. These amendments are broadly drawn and, we feel, have considerable holes in them. Given the wide Henry VIII powers conferred on the Secretary of State, it is not hard to imagine a world where a crazed zealot occupies the position of Secretary of State—it is not hard to think of those, is it?—and decides to apply these provisions in extreme ways without any scrutiny. We really should not lay ourselves open to that. These decisions should be subject to democratic scrutiny. Opinions will be sure to differ on the definitions of some of the phrases in these things. That is not to say they are wrong; it is just that opinions can, and will, differ.

My second point is that we are concerned that the amendments would impose significant costs on businesses. They will stifle competition and harm growth; obviously, this comes at a time when businesses are grappling with significant challenges. Although the proposals appear virtuous on the surface, in practice, they represent an unnecessary and impractical burden on businesses and consumers. That comes at a time when the country needs growth—a point that has obviously been acknowledged by the Government.

These amendments would create additional regulatory burdens, which would hamper industries already struggling with economic headwinds. I also note—I will expand on this theme in later debates—that the market is already supplying many of the solutions sought through these amendments. We believe that, for the many businesses —especially small and medium-sized enterprises—that are already struggling due to various factors, the cost of compliance with these rigid requirements could be devastating. It is not just businesses that will be affected because, of course, those costs will be passed on to consumers. Before any amendments in this group can be considered, surely we must assess the potential unintended consequences for businesses and consumers.

We have a strong record of delivering improvements for our environment but we on these Benches are clear that we should avoid overburdensome regulation on businesses. That said, informing consumer choice is an important component of efficient markets so, notwithstanding our objections, Amendments 28 and 30 in the name of the noble Lord, Lord Fox, have some merit. He is channelling his Orange Book foundations here. Overall, we would not support these amendments, for the reasons that I have outlined.