Exiting the European Union (Consumer Protection)

Baroness Hayman of Ullock Excerpts

Monday 25th February 2019 Commons Chamber

[Sue Hayman (Workington) (Lab)]

Labour believes that this statutory instrument needs urgent modification to avoid disruption to UK businesses in the event of a no-deal Brexit. It shows insufficient understanding of how chemicals are actually managed in complex supply chains, and is therefore unworkable and will unnecessarily create supply disruption issues for UK businesses. Labour believes that continued participation in REACH is the surest way to avoid extra costs and burdens for business, to save jobs and to protect animal welfare, health and safety, and the environment.

The value of the UK chemicals industry cannot be overstated. The sector directly employs 88,000 people, and the industry is worth £6.4 billion to the UK economy every year. It is vital in the supply chain to many other sectors including automotives, pharmaceuticals and aerospace, as well as the production of everyday items such as cleaning products, clothes, and electronics. It is therefore extremely disappointing that we have only been given half a sitting day’s notice of this SI. It represents the second iteration that the Government have published, yet it does little to address the concerns with the first version. The Secondary Legislation Scrutiny Committee said of this re-laid SI that it remains

“concerned that the Department has provided insufficient information on the possible impact of the proposed changes”.

Given the concerns expressed by the Committee, industry, environmental and animal welfare groups and the Opposition, does the Minister agree that the prudent thing would be to take this SI back to the drawing board?

I am particularly worried because I am told that the Health and Safety Executive lacks the capacity, resource, experience and expertise in such a complex field to carry out the functions that the Government propose to transfer from the European Chemicals Agency. As with so many public sector organisations, the HSE has suffered brutal cutbacks. Between 2010 and 2017, its budget was cut by 40%, so why does the SI contain confirmation of its funding? Will the Minister confirm today that funding and resources will be available to the HSE and the Environment Agency for them to perform the proposed duties outlined?

The SI also removes layers of supporting committees at EU level that help to ensure that decisions are based on the best scientific advice and that there is proper scrutiny and oversight. Those committees allow stakeholders from industry, non-governmental organisations and trade unions to collaborate in informing decisions and to ensure balance. In the SI, that is replaced with a duty for the HSE to seek external advice, but no formal committees of experts and stakeholders are being proposed to review and scrutinise the scientific knowledge relating to chemicals.

Furthermore, the SI establishes that the Secretary of State for Environment, Food and Rural Affairs will make final decisions relating to the status of particular chemicals, whereas the European Commission makes them at EU level. Although we hope it is unlikely that a Secretary of State will diverge from HSE recommendations, they are not explicitly prevented from so doing. We know that the current Secretary of State is notoriously no fan of experts, but he may have gone too far in asking us to grant him powers to override recommendations from the HSE.

As my hon. Friend the Member for Wakefield (Mary Creagh) said, the Government initially said that they could cut and paste data from the REACH database. However, there seems to have been a significant rowing back from that, with current guidance indicating that companies will provide all the data. As the Minister will no doubt be aware, in order to have copied data from the REACH database, the UK would have needed a licence from the European Chemicals Agency. Will the Minister confirm what progress she and Government colleagues have made in acquiring permission to access the REACH database after 29 March?

Many UK-based companies do not own or have sufficient rights to use the data needed for registration, for a variety of complex reasons, including the fact that many REACH registration dossiers have been developed and submitted by consortia of companies under a joint submission agreement with specific and restricted access rights. A survey of 38 companies by the Chemical Industries Association found that 75% of them do not own the data that would be required for them to register chemicals under UK REACH. Does the Minister recognise that meeting the two-year registration deadline is an almost impossible and extremely costly task for many companies? The hon. Member for Brighton, Pavilion (Caroline Lucas) asked about the current status of the IT provisions, and I was unconvinced by the Minister’s response that they will be ready and fit for purpose on exit day.

After Brexit, companies registered with REACH will no longer be able to sell into the EEA market without transferring their registrations to an EEA-based organisation. How many companies have taken such action to date, and what support has the Department for Environment, Food and Rural Affairs provided to them? Given the likelihood that companies will have to duplicate tests already conducted if the Secretary of State cannot agree access to information in the REACH database, there is a real risk that animal tests would have to be reconducted. In evidence to the Lords EU Energy and Environment Sub-Committee, the Minister refused to rule out the idea that a UK REACH system would not lead to more animal testing.

[John Redwood]

Surely global companies are used to selling into a variety of jurisdictions with different regulatory requirements, and each company has a body of intellectual property that it owns and sends to the appropriate regulator. I do not see any need to duplicate the work if that is already there. If a company wants to sell into the UK, it will share that with the UK authority.

[Sue Hayman]

I am afraid that that is not the information I have been given. As I said, the Minister did not rule that out to the Lords Committee, and when I went to Brussels to visit the REACH team, they confirmed that they believed this would be the case. Will the Minister categorically confirm whether these proposals have the potential to lead to further animal testing?

[Mary Creagh]

My hon. Friend has triggered a memory that I thought I had buried. On the animal testing point, when our Committee held an update hearing in December, one concern raised was about where the intellectual property that UK companies have submitted into the REACH database lives. There was a great deal of concern that the Minister’s reassurances that companies could just go and get that intellectual property, which they have paid for and registered, out of the database is problematic, because it is now owned by REACH, and once the UK leaves, we ironically will not have access to our own intellectual property. Does that not show the complete misunderstanding of the right hon. Member for Wokingham (John Redwood) of how the world trades in chemicals, on which REACH sets the global standard?

[Sue Hayman]

I thank my hon. Friend for making that important point, and I will be interested to hear the Minister’s response.

If we voted to pass this SI, we would be voting for legislation that is likely to increase animal suffering through duplicate testing. It would also mean that critical decisions on chemicals were made by a body with little experience and layers of accountability and scientific expertise stripped away. Greener UK has said:

“As currently drafted, the chemicals SI significantly weakens the regulation of chemicals, including those with links to cancer and hormone disruption.”

How can we responsibly let this secondary legislation pass, in the light of these serious and grave reservations? Does the Minister recognise those risks, and can she guarantee that British people will continue to receive the same health and safety and environmental benefits that we currently do as a member of REACH?

In a no-deal Brexit scenario, we would become a third party to REACH on 29 March, with all existing REACH registrations and authorisations held by UK companies becoming immediately invalid. Companies wanting to continue to export into the EU would need to transfer their registrations to EU-based companies or rely on their customers making importer registrations.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend is making a good and interesting point. This issue does not only cover products and the environment. We have industries that use very dangerous chemicals, to say the least. It is important that we have the highest standards, if for nothing else than to protect people’s rights at work. Does she agree?

[Sue Hayman]

I completely agree. In fact, representatives of trade unions have made exactly that point to me, and they have deep concerns about this.

Companies wanting to transfer their registrations would potentially need customers to make importer registrations. That could lead to serious ramifications down the supply chain and interruptions to the many billions of pounds’ worth of trade between the UK and EU.

[Mary Creagh]

I thank my hon. Friend for giving way; she is making an excellent speech and being very generous with her time. I wanted to intervene on the Minister on the issue of grandfathering rights. Is not the truth that British companies are now in an invidious position where, if they want to keep trading with the EU after exit day, whenever that may come—goodness knows what will happen in the next 48 hours, let alone the next five weeks—they will have to transfer their registrations to an affiliate in the EU? How can they then grandfather those rights into the UK’s chemical regulation system when they have given them away in the European Union?

[Sue Hayman]

Once again, my hon. Friend makes an extremely important point. Of course, we also need to look at the huge costs to companies of these actions. The problems and difficulties that will be caused are not short-term but long-term.

Does the Minister acknowledge that a no-deal outcome brings with it huge risks to industry, jobs and our environment? Due to the numerous deficits and risks posed, we will be voting against this SI and would encourage Members across the House to do the same in good conscience.