Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

2nd reading
Tuesday 8th October 2024 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, I thank the Minister for his analysis. It is a pleasure to congratulate him on his appointment and welcome him to the Government Front Bench. I have greatly enjoyed working with him on other enabling Bills, such as the CPTPP Bill, and find myself in agreement with him on many issues. I also welcome the noble Baroness, Lady Winterton of Doncaster, and congratulate her on her winning maiden speech and her extremely impressive parliamentary career. I look forward to her future contributions to this House.

This Bill can be read in two ways. First, it can be read as an enabling Bill, to enable regulation on product safety and consumer protection to be updated, to keep pace with new products hitting the marketplace and new platforms for the market, especially online retail. The Bill, as we have heard, will update product regulation to keep pace with market developments and new marketplaces, and provide, as we have also heard, a means of recognising new or updated EU product requirements, with the intention of preventing additional costs for business. Noble Lords across the Chamber have commented on this, and we have heard many examples of the scary risks from e-bikes, the safety mechanisms that do not work and the calls on the London Fire Brigade. This is all very illuminating and, where necessary, I would totally support the updating of safety and product regulation.

Secondly, in addition to the first way of reading the Bill, it can be seen, as other noble Lords have pointed out, as a Bill to rationalise the UK’s product regulation across the UK’s internal market and to keep it up to date with EU product regulation, which Northern Ireland has been obliged to accept. The King’s Speech guidance illuminates the second reading of this measure, although I am afraid that the Bill is less than forthright about it. I hope the Minister will forgive me if I have questions about that. Page 38 of the guidance says:

“As most product safety legislation falls within scope of the Windsor Framework, EU changes to product regulation only apply in Northern Ireland, resulting in divergence within the UK internal market as EU laws are updated. This Bill gives the Government specific powers to make changes to GB legislation to manage divergence and take a UK-wide approach, where it is in our interests to do so”.


The House of Lords Library briefing, for which I am most grateful, highlights this provision as follows:

“The Government has stated the Bill would give it specific powers to make changes to … GB … legislation to manage divergence within the UK internal market. … Under the bill’s provisions, the government would be able to amend GB legislation in order to … take a UK-wide approach”,


et cetera.

In the impact assessment for the Bill, section 4 explains that the Government’s preferred option to change the law on product framework will ensure the framework is

“agile in its response to emerging threats, new technologies and changes in EU law … This option will ensure that the Government can fully implement a framework for recognising existing EU requirements for a range of products”

and ensure powers

“to enable the Government to manage divergence pragmatically”.

This suggests that the Government will be empowered, in order to manage divergence, to introduce and impose EU goods and product law as they decide. It implies that the EU goods laws now imposed on Northern Ireland could or will be extended to the whole of the UK. Can the Minister clarify whether this is correct and what precisely the Government intend in order to take a UK-wide approach to the internal market, and under which powers particularly conferred in the Bill?

Are the Government planning to end the dual system either at one stroke or in a piecemeal way? This is a dual system in which we have an EU system for Northern Ireland products and UK arrangements which may diverge from inherited EU regulation. Will that be by imposing EU product laws on the whole UK manufacturing sector in order to promote the integrity of the internal market?

I now turn to specific questions on Clauses 1 and 2. Clause 1(2) gives the Secretary of State powers to make regulations for

“marketing or use of products in the United Kingdom, which corresponds, or is similar, to a provision of relevant EU law for the purpose of reducing or mitigating the environmental impact of”

goods. The Henderson Chambers barristers, Prashant Popat KC and Noel Dilworth, in an analysis published on the web, for which I am grateful, say that Clause 1(2)

“empowers the Secretary of State to harmonise UK law with EU law in order to reduce or mitigate the environmental impact of products”.

Can the Minister confirm that he agrees with this analysis and that the UK Government can now decree that our producers must follow such EU legislation as they—the Government—decide, for the purpose, of course, of reducing or mitigating the environmental impact of products?

If so, can the Minister point me to specific pieces of EU legislation, which, to date, fall in this category—since, of course, 2018—that is, any existing EU regulations, and which UK goods and producers will be affected by and subject to it?

I am sorry for the list of questions, but I hope the Minister will bear with me. Is it supposed to be a dynamic alignment, as other noble Lords have suggested, so allowing the continued keeping up with EU laws on product safety? If so, what is the certainty that producers can have as to whether the rules will change, even when some product is already on the assembly line? Who will judge whether a product falls within the law—in fact, EU law—and who will operate the law?

I now move on to the powers given for product requirements in Clause 2, to require conditions to be met for products in the UK. I refer to Clause 2(7), which allows that

“product regulations may provide that a product requirement is to be treated as met if … a requirement of relevant EU law specified in product regulations is met, or … such a requirement is met and conditions specified in the regulations are also met”,

provided due regard has been taken of

“the social, environmental and economic impact of making the provision”.

Does this mean that, in addition to the assimilated or inherited EU law, the Government intend to allow or impose a replacement of UK product law with EU product regulation, and in practice, the shadowing of the EU’s level playing field laws and EU economic law for goods in a dynamic alignment?

If my reading is correct—I would like some confirmation on this—it suggests that the Government intend, under cover of the Bill, to bring in the Chequers agreement piecemeal by the backdoor, which was rejected by the House of Commons three times. Would the Minister agree with that analysis in general?

To conclude, I urge the Government to embark on their new term of office, for which I wish them very well, by being open and transparent with the people of this country, to rethink the Bill to allow only for standard updating procedure for product regulation and metrology where absolutely necessary, and to drop the enabling powers in the Bill which allow them to impose EU law and regulation alignment by the backdoor.

I conclude by proposing, as other noble Lords on this side have already outlined, that the UK recognises the best international standards, wherever they come from, and that it plays its part in helping to shape these standards for product regulation, as it has done so successfully in so many other areas. I note here international financial services regulation in particular. Indeed, I echo the noble Lord, Lord Lansley, in saying that the UK is well-placed to chart its own course and to reflect the best international standards, without looking over its shoulder to enact EU regulation. Much of it, I fear, is unequal to keeping pace with the best—and the worst—new products as they hit the market and the best international standards.

Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

Committee stage
Wednesday 20th November 2024 Grand Committee

[Lord Russell of Liverpool (CB)]

I shall quickly respond to the noble Lord. One of the reasons why I asked the Minister for some detail about the breadth and depth of the consultation his department has had with business was to find out what business really thinks. I would say, in riposte to the noble Lord, that the key thing that should drive decisions on whether we align with the European Union or any other jurisdiction should primarily be what business is telling the Government. Businesses have a far better idea of the economic state, presently and potentially, of the markets they do business with. In fact, they have a much better idea than either Ministers or civil servants. From my point of view of trying to speak on behalf of business, listening to them on what they think should be the priority would seem the sensible thing to do.

[Baroness Lawlor (Con)]

My Lords, I thank the Minister for his generous allocation of time the other day to discuss some of the issues; I am very grateful for that and to his officials. I apologise for missing the debate on group 1 because of train delays for hours, but I rise now because my Amendment 6 cannot be called if Amendment 4 is agreed. I will speak to Amendment 9, which would disallow regulations that disadvantage the UK under its trade treaties. I will highlight the CPTPP and the UK’s main bilateral trade agreements with Australia and New Zealand. I support Amendments 15 and 37 in the name of my noble friend Lord Frost, and I add my Amendment 39 to prevent dynamic alignment with the EU.

The aim of these amendments is to ensure that the UK can help shape and promote free trade globally to the benefit of free trade under a rules-based agreement at international level. That is inconsistent with locking the UK into the EU’s protectionist arrangements, even on a case-by-case basis, I fear. They are different; they are under code-based legal systems and they are shaped by different legal thinking from that underpinning UK law, which is more pro-entrepreneurial and innovation-open. I do not believe we should saddle UK producers and consumers with the cost of complex EU protectionist law rather than be open to the best and most similar arrangements elsewhere—foreign laws—or our own laws that can benefit our economy.

I shall give an example of what I mean by protectionist and inward-looking EU law and then look at how it affects growth figures and jobs; I disagree with noble Lords who suggest otherwise. One illustration comes from the EU’s digital commerce and AI sector. The damage was annotated in a September 2024 study, Rules Without End: EU’s Reluctance to Let Go of Regulation, by two EU-friendly economists, Guinea and du Roy. They concluded that,

“the EU rulebook added 562 new pages and 511 new articles on Data & Privacy; as well as 271 new pages and 247 new articles on E-commerce and Consumer Protection”,

amounting to nearly 2,500 new restrictions for data and privacy and 1,200 for e-commerce and consumer protection. The cost was highlighted former MEP Luis Garicano, who concluded that this coincided with a 50% drop in the number of new apps coming onto the market. Meanwhile, the report said, a study by the Bank of Spain,

“found that each additional regulatory provision was associated with a 0.7 percent decline in the employment rate of the affected sector”.

Other noble Lords with whom I disagree have tried to draw our attention to employment rates. The Ernst & Young investment monitor for 2024 indicated that the UK had the largest number of jobs created by FDI in 2023. The UK was at 52,000, France was at 40,000 and Germany was at 14,000. Project numbers in the UK were increasing; in France and Germany, they were falling.

The other indicator to which I would like to draw your Lordships’ attention—I hope the Minister will look sympathetically on these amendments—is GDP share. The EU’s declining share of global GDP is mirrored in its recent growth figures. Whereas UK growth in the year ending June 2024 was 0.7%—yes, that is disappointing—the eurozone’s was behind that, despite having three G7 members among its number. In the third quarter—that is, since June—figures for UK growth are up by 0.5% and the eurozone’s by a disappointing 0.2%. For those reasons, there is a strong economic case for not locking us into the EU’s protectionist arrangements. Despite the best will in the world in Brussels to move out of them, the EU seems to get stymied each time by ever greater protection, as these studies suggest.

--- Later in debate ---

[Baroness Lawlor (Con)]

May I clarify something? I specified that e-commerce was part of this study, in line with other digital arrangements. Many producers sell their goods through e-commerce.

[Lord Sharpe of Epsom (Con)]

My Lords, before I start, I thank all noble Lords, who have been incredibly generous to me this afternoon and this evening. I am immensely flattered.

I say to the noble Lord, Lord Hunt of Kings Heath, that, having been on the wrong end of a couple of punishment beatings by the Secondary Legislation Scrutiny Committee, I am a changed man. I have seen the light. I am reformed. I urge the Government to follow my lead and reform themselves.

This has been a most interesting debate. I thank all noble Lords for introducing their amendments and points of view with such admirable clarity. I thank in particular my noble friends Lord Frost and Lady Lawlor for their amendments. I have signed Amendments 4, 9, 15 and 42; I will explain why.

These amendments would ensure that we maintain our competitiveness on the global stage without being governed solely by EU standards. Amendment 4 seeks to remove a broadly drawn power that allows the Secretary of State to align UK product regulations with EU environmental laws. The provision, as currently drafted, could potentially lead to extensive regulatory alignment on environmental standards without proper parliamentary scrutiny or oversight. I am sorry to harp on about this but the Delegated Powers and Regulatory Reform Committee has expressed significant concerns about this clause, stating that it grants

“Ministers maximum flexibility to choose the direction that the law will take”.

Specifically, the committee warned that this could allow Ministers to align UK law “completely” with EU regulations, even when that may not be in the best interests of the UK or its regulatory framework. Through an overreliance on EU standards, we risk locking ourselves into a regulatory framework that does not necessarily reflect our national interests; of course, we acknowledge that it also might.

Amendment 6 in the name of my noble friend Lady Lawlor and Amendments 15, 36, 37 and 42 in the name of my noble friend Lord Frost are critical for positioning the UK as a global leader in product regulation and consumer protection. They would allow the UK to benefit from the best practices in product safety and environmental regulation from across the world, including from the US, Canada, Japan and other advanced economies. By allowing broader access to international standards, we would ensure that the UK can adapt to global trends and provide consumers with high-quality products. There should be no reason for the Government to oppose such an amendment—unless they are looking for dynamic alignment with the EU.

Amendment 15 is an excellent amendment that would ensure that the UK’s trade agreements with key partners are not undermined by regulations introduced under Clause 1. Those agreements represent some of the most dynamic and rapidly growing economies in the world; ensuring that we do not disadvantage our position with these treaties is crucial to the future growth and success of our global trade. This amendment is about maintaining and strengthening the UK’s competitiveness on the global stage.

The countries involved in these trade agreements, such as those in the CPTPP, are the fastest-growing economies in the world. In ensuring that regulations do not undermine our standing in these markets, the UK is better positioned to take advantage of these growing economies. If we align rigidly with Europe in this way—this is not an ideological point but a practical one—we risk missing opportunities in these markets, where growth is happening at a much faster pace than in the EU.

My noble friends Lord Jackson and Lady Lawlor hinted at this, and I also looked at some of the figures. To put things into perspective on the US versus the EU, in 1982, US and European Union GDPs were broadly similar. However, fast forward to today and the US’s economy is now roughly 45% larger than the EU’s, both in nominal terms and on a per capita basis. Those figures are from the World Bank. Purchasing power parity in the US is 38% larger than in the EU. The US has outpaced the EU significantly in its economic growth. I am not saying that this is due solely to differing regulatory regimes—of course it is not. These numbers encapsulate many varying factors, but it cannot be denied that regulation plays a major part in economic development. The simple conclusion is not that we should slavishly align with the US, just that we should retain flexibility.

The argument is clear: the EU is not the only partner with which the UK should align. We are seeing stronger growth opportunities in markets such as the US, Japan and Australia, with countries that are part of key trade agreements such as the CPTPP and in other areas. Given that the Government have talked extensively about boosting the UK’s growth prospects post Brexit—arguments with which we wholeheartedly agree—it is difficult to understand why they would not support an amendment that protects the UK’s position in these high-growth markets.

If the UK is to remain competitive, it must have the flexibility—which I do not believe is an abstract notion, as claimed by my noble friend Lord Kirkhope—to engage with the most dynamic global markets, rather than being rigidly shackled solely to the EU. There is no logical reason to oppose this amendment, unless there is an ideological fixation on aligning solely with the EU.

This amendment gives the UK the flexibility to take advantage of the best international practices without being locked into EU-centric frameworks that might not be in our best interests in the long term. I urge the Government to accept Amendment 15 in the name of my noble friend Lord Frost.

I will speak briefly on Amendment 17. I have great respect for the arguments made by all its proponents—my noble friend Lord Kirkhope, the noble Lords, Lord Russell, Lord Browne and Lord Fox, and others. In fact, I agree with their reasons for proposing the amendment, but it is perfectly reasonable to arrive at different conclusions. I agree with the noble Baroness, Lady Ritchie, who is no longer in her place but who, in an earlier debate, said that we should reset our relationship with the EU. Of course we should but, for the reasons that I have outlined, this is the wrong way to do it.

I oppose Amendment 17, which proposes to replicate EU law in relation to relevant product regulations. The notion of mandating such alignment with EU regulations post Brexit is not only inappropriate but, we believe, detrimental to the UK’s ability to independently shape its regulatory future. The amendment, by insisting on replicating EU law as the default position, undermines the very essence of the UK’s independence post Brexit. It will inevitably involve importing aspects of EU law that do not suit this country’s future. The entire purpose of leaving the European Union was to take control of our laws, regulations and trade policies. This amendment would force us to retain EU regulatory alignment, unless Ministers could justify divergence—a process that still places undue reliance on the EU framework. Our focus should be on maximising global competitiveness and exploring new trade opportunities, not tying ourselves to EU standards that might not be in our best interests while also accepting that they might.

Finally, I reassure the noble Lord, Lord Russell, that the new leader of the Opposition is well aware of what we are doing. I urge the Government to accept the amendments that I have signed, as I believe they are pro-business, pro-trade and pro-consumer.

Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

Committee stage
Monday 25th November 2024 Grand Committee

[Lord Sharpe of Epsom (Con)]

My Lords, in moving Amendment 11, I shall speak also to Amendments 104A and 124A in my name.

As highlighted by the Delegated Powers and Regulatory Reform Committee, Clause 1 in its current form should be removed—a theme that we have explored already and to which we will no doubt return. This amendment, however, directly addresses a critical gap in the current Bill by ensuring that regulations do not focus merely on product safety, environmental concerns and operational efficiency but actively promote investment and foster innovation.

The news coming from today’s CBI conference makes sobering reading. The chief executive of the CBI has said that employers have been forced into “damage control mode”. The head of the company that makes McVitie’s digestive biscuits said that

“it’s becoming harder to understand what the case for investment is … to make a difference in the growth rate of the economy”.

Again, the chief exec has said that CFOs are asking, “Can we afford to invest?”

I have no wish to talk down the economy or try to score cheap party-political points, but the fact is that life has got harder for big business recently. No doubt noble Lords opposite will say, “Well, they would say that, wouldn’t they?” But they are also committed to providing an environment that fosters growth and I know them to be sincere in that ambition, so we should all take these comments seriously.

It is not just big business. Last week, analysis by the Altus Group said that the planned reduction in business rates relief would lead to a more than doubling of rates for shops, pubs and restaurants next year. Coupled with rises in national insurance contributions and other operational pressures, SMEs are facing difficult times. But they represent the heartbeat of our economy and some of them will hopefully go on to become big businesses.

In today’s competitive global economy, economic growth cannot be secondary. The Bill should prioritise creating an environment where businesses can thrive, develop new technologies and compete internationally. It is vital that our regulations should be aligned with the strategic aim of positioning the United Kingdom as a global leader in innovation. In the post-Brexit world, the UK’s economic success is intrinsically tied to its ability to lead in innovation, which is why my Amendment 11 is critical. It ensures that product regulation supports the creation of an environment conducive to technological advancement and cutting-edge industrial leadership. It strengthens the Bill by ensuring that it is not about just managing risks or regulating product use but about creating a dynamic, forward-thinking market where businesses have the tools, resources and incentives to innovate and expand. Without these provisions, there is a risk that the UK could fall behind in the global race for innovation and business growth. If we do not explicitly ensure that our regulations align with our growth objectives, we could inadvertently stifle entrepreneurship and technological progress.

So how are we to become a global leader? The answer surely lies in aligning ourselves with the strongest global partners in the world today. If we are to maintain and enhance our position as a leading economy, we must look beyond a single trading bloc, particularly one whose economic influence is shrinking on the global stage—a theme we explored in debate last Wednesday. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP, represents some of the fastest-growing economies in the world. Countries such as Japan, Australia, Canada and New Zealand, as well as emerging markets in Asia, are showing much more significant economic growth potential than others.

To lead the world, the UK must be flexible in its approach to trade and regulation. We need to reduce barriers and align ourselves with the economies that will drive future growth and innovation, rather than being tethered to a bloc that is not growing as fast as others. Amendment 11 in my name will enable us to do just that: focus on fostering global partnerships with the most dynamic economies.

Regarding Amendment 104A, a regulatory sandbox means an environment that allows businesses to explore and experiment with new, innovative products under regulatory supervision. This amendment is important for the development of innovative products affected by the Bill. It is an important step forward in fostering a regulatory environment that encourages creativity and innovation while ensuring safety and compliance. Regulatory sandboxes are an effective and proven model used to support businesses in testing innovative ideas. By introducing the importance of regulatory sandboxes in the Bill, we are not just helping businesses to navigate regulatory hurdles but promoting innovation by giving businesses the space to trial and refine their ideas.

Regulatory sandboxes will create a framework in which businesses can develop and test new products, contributing to the growth of the economy and the success of British businesses in the global marketplace. I urge noble Lords to support this amendment to pave the way for more innovation, more competitive businesses and, ultimately, a stronger economy.

I thank my noble friend Lady Lawlor for bringing forward Amendment 11A. The amendment is a clear and strong signal that we are committed to ensuring that our regulations actively foster economic growth, innovation and the global competitiveness of UK businesses. By encouraging the marketing and use of products in domestic and foreign markets, we are helping to open doors for UK businesses to grow their customer base, create jobs and increase exports. I commend my noble friend for this amendment. I look forward to a positive reception for all these amendments from the Government. I particularly look forward to the positive impact that they will have on businesses across the United Kingdom. I beg to move.

[Baroness Lawlor (Con)]

My Lords, I shall speak to my Amendment 11A, which would insert a new subsection to the effect that regulations

“must promote growth and effective production, foster innovation and encourage the use and marketing of products in the UK’s domestic and foreign markets”.

I declare an interest in that I have commissioned a number of studies and analyses at Politeia, the think tank where I am research director, which aim to examine and promote UK international trade and the UK economy. I support the aims of safety, containing costs and compliance with safety regulations, but I urge that we think about products having to operate efficiently and effectively. The problem we face is how best to do this consistent with promoting the entrepreneurial and innovative instincts of those bringing new products to the market, who my noble friend Lord Sharpe mentioned, and the growth this allows. I support my noble friend’s amendment to put growth at the heart of this measure.

During the consultation process for a product regulatory framework since 2021, of which this Bill is the outcome, producers and their representatives stressed their priorities for regulation. I am grateful to the Government for their response to this long consultation process. Producers stressed that it should be outcomes-focused and risk-based, should have greater simplicity, proportionality and consistency across legislation and powers and should deal with the serious challenges and opportunities that this country now faces. A further consultation to develop the product safety regime took place in August 2023, with businesspeople and business representatives that are listed in the Government’s helpful response. It found broad agreement on the need for a regulatory approach that promotes a regime ready to respond to hazards but that allows temporary derogation during emergencies for supplying essential products—in other words, it is dynamic—and makes for safer online shopping and promotes digital labelling and an enhanced national regime.

The Minister said at Second Reading and has reiterated to this Committee that the Government have listened to business. Their priorities are summarised in the Government’s consultation document. They are designed to allow for effective operations and to promote growth as a priority, which I and my noble friend Lord Sharpe are urging we need. The rules should be demand-led and reflect the capacity of our businesses to innovate, be entrepreneurial and grow their workforces and their range of products along with the high standards and competitive costs that consumers want.

Nowhere in the Government’s response document do we find businesses wanting a regulatory regime that brings greater rigidity in process rather than being outcomes-led, one that is risk-averse rather than equipped to deal with the real level of risk posed by products or processes, one that treats every product as bearing the same risk or being under a one-size-fits-all rule, or a regime that is disproportionate, untargeted and unduly complex. Yet that scenario, rejected by business, is inherent in the EU legal arrangements that the Government wish to be able to adopt for our businesses under Clause 1(2), to which my amendment is addressed. That can only stymie growth, contrary to the express wishes of the Government. For those reasons, I propose that growth should take priority over the arbitrary exercise of power to introduce the rigidity and complexity of an EU system which is not outcomes-focused or risk-based; nor is it proportionate or known for simplicity.

I will give your Lordships an illustration, for which I owe thanks to Professor David Collins, who holds the chair of international economic and trade law at City, University of London. He draws attention to the unnecessarily burdensome EU REACH regulation—on the registration, evaluation, authorisation and restriction of chemicals. Collins explains that it has extensive requirements for registering very low-risk substances. For example, certain food-grade natural substances that have been used safely for centuries will require expensive registration. Under the EU’s REACH, if a company uses more than one tonne per year of natural fruit extracts or oils, and products such as soaps or cosmetics, it needs full registration, including extensive safety data packages, even when these substances have been safely used in food for ages. This can cost tens of thousands of euros per substance. The relevant EU legislation is Regulation (EC) 1907/2006 REACH, and the key sections on registration requirements are primarily in Title II, Articles 5/24.

The EU’s post-Brexit UK REACH maintains similar core principles but has proposed a more proportionate approach for these well-established natural substances, with simplified registration requirements planned for ingredients with long histories of safe use. Although the overall goal of chemical safety is vital, requiring extensive registration for substances such as olive oil or lemon extract when used in non-food products adds to cost without proportionate safety benefit, and it is not needed. The safety of these materials could be adequately assured through simpler mechanisms. The UK REACH regulation, created through the REACH etc. (Amendment etc.) (EU Exit) Regulations 2019, Statutory Instrument 2019/758, aims to do this and does it very effectively.

Moreover—I refer to my noble friend Lord Sharpe urging that we align the UK economy with the strongest, most dynamic economies in the world—by relying on our own laws it will not only help our businesses but will allow us to do exactly that. My noble friend Lord Sharpe mentioned the CPTPP agreement; as Professor Collins says, it

“does not mandate blanket mutual recognition of conformity assessments for food safety among its members”

but it does

“include provisions that encourage members to accept other members’ conformity assessment results. It also facilitates acceptance of conformity assessment results through mechanisms like technical discussions and explanations of requirements. It also allows for sector-specific mutual recognition arrangements to be negotiated between members”—

which are very important. Professor Collins continues:

“So the CPTPP promotes regulatory cooperation and transparency but preserves each member’s right to maintain their own food safety standards and assessment procedures. Members must ensure their requirements are based on science and international standards where they exist, but aren’t required to automatically accept other members’ assessments. This is similar to what the WTO TBT Agreement does, but it goes further in terms of cooperation”.

--- Later in debate ---

[Baroness Lawlor (Con)]

My Lords, I will make a very brief intervention because I want to repeat my illustration from the first group about the REACH regulations. I have concerns about including this amendment to Clause 1 at line 13 of page 2 of the Bill as I do not agree that the EU REACH regulations are necessarily better equipped to target sectors and individual products than UK regulations. I will not go through the reasons I gave earlier. The noble Baroness, Lady Brinton, whose introduction I learned a great deal from and am very grateful for, mentioned cosmetics. In my earlier intervention I pointed to the use of olive oil and lemon in some soaps and said that UK REACH regulations recognise that these products can be eaten safely and, indeed, have been used for a long time. Requiring, as EU REACH does, that they go through stringent chemical REACH processes and labelling is a bit over the top and would put expense on our producers. I urge us to think of the wider implications of unsensitive or disproportion regulation where we can.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank noble Lords who have spoken in this debate. I will speak to Amendment 16 in the name of the noble Lord, Lord Fox, which was introduced by the noble Baroness, Lady Brinton.

Regarding the EU’s REACH scheme, I shall refer to a specific example which relates to my time at the Home Office in the previous Government. It relates to cosmetics, as outlined by the noble Baroness, Lady Brinton, and my noble friend Lady Lawlor. In 2019, the Home Office aligned UK policy with two decisions by the European Chemicals Agency board of appeal which related to the testing on animals for the registration of cosmetics-only substances—specifically homosalate and 2-ethylhexyl salicylate. The marketing of cosmetics tested on animals is banned in the EU under cosmetics products regulation, but the ECHA—the European Chemicals Agency—confirmed that under REACH substances used solely in cosmetics may sometimes be tested on animals, as a last resort, to prove their safety for workers or the environment.

An NGO called Cruelty Free International, quite rightly, in my view, took the Government to court arguing that the UK’s alignment in effect led to the weakening of the long-standing—I think it was a 25-year—ban on animal testing of cosmetics and cosmetic ingredients. The UK court found in the Government’s favour but as the then Minister for Animals in Science, which somewhat surprisingly sits with the Home Office, the Home Secretary and I were firmly of the opinion that this was unjustified, so as of May 2023 we decided that no new licences should be issued to carry out this function. A small number of licences had been issued between 2019 and 2022.

The noble Baroness, Lady Brinton, and the noble Lord, Lord Browne, made persuasive arguments about why it might be in this country’s interest to align with the EU but, equally, it might not be, and this is a very nuanced subject. Failings of the domestic chemicals regulator—real or imagined—are an entirely separate subject. Alignment with, or invention of, our own rules that suit our national and public interest most definitely is in our interest. When I say public interest, in this case 76% of the public are against animal testing according to the RSPCA. So can I ask the Minister to guarantee that this ban on new licences in these cases will be maintained? I am disappointed that the noble Lord, Lord Fox, is not here because I was going to ask him if, in the spirit of nominative determinism, he would withdraw his Amendment 16. However, I say to the noble Baroness, Lady Brinton, that it certainly raised hackles, not necessarily human ones.

On the subject of dynamic alignment, I have two questions for the Minister about an apparent contradiction in our debates last Wednesday. I pored over Hansard, and I found that he said:

“If the UK makes a sovereign decision to mirror EU provisions, the Bill provides the mechanism and flexibility, on a case-by-case basis, to do so. This would avoid primary legislation each time technical changes are needed and would increase the certainty that businesses are crying out for”.—[Official Report, 20/11/24; col. GC 74.]


However, he went on to say:

“The powers in the Bill do not allow regulations to make automatic or ambulatory references to changing EU law. I reassure noble Lords that the Government will return to Parliament to make any changes to references to EU law within our regulations”.—[Official Report, 20/11/24; cols. GC 74-5.]


On careful reading, these statements seem a bit contradictory. So, although I am totally willing to be persuaded otherwise, perhaps the Minister could write to explain to the Committee exactly what is proposed and what was meant. If I am being particularly thick, I would be very happy for him to explain why.

Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

Committee stage
Wednesday 11th December 2024 Grand Committee

[Baroness Lawlor (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Sharpe, to which the noble Viscount, Lord Trenchard, and I have added our names. They would ensure that in the Bill we have a statutory procedure for assessing the impact on the economy in general on consumers and the choices they have to make, and on the producers.

The Bill poses potential costs for producers, which are likely to have an impact on the economy of which they form part. Even though the general scope, as set out in Clause 1, seems sensible and reasonable and appears to reflect consumer protection arrangements which have proven their worth over decades, there is in this very slim Bill less clarity as to what the precise requirement may be, or where precisely liability for transgression lies. It is something of a leap in the dark. Lawyers will be needed to work out who exactly may be covered by the provisions, sanctions and punishments, given that the Bill will touch on many features of production and marketing, and many sorts of person will be involved in the process.

The question really is, if I am an entrepreneur or a small business innovator, do I risk my small pot of savings and those chipped in by my family to get the idea from the drawing board—possibly in the garage—off the ground, into the retail outlet and into use? Sir Hermann Hauser, the technologist and entrepreneur who set up Acorn in Cambridge, did that in the 1970s. He once told me that when you start a business like his—and most start in the garage—they do not have any money, and with what they have, they want reasonable certainty that the law will stay the same, that it will do what it says on the tin, that they can buy the stock they need for the component parts, they can use their judgment within reason about whether a product is safe, and they can take a risk. They have good arrangements for risk assessment, and our law also has pretty good arrangements, as well as for consumer protection. But if—and this is the danger of the Bill—there are open-ended powers, and there is the possibility for a regulation-mad Government to make constant changes, and if, as I have spoken about before, so I will not come back to it, EU law, which is based on the precautionary principle, is mirrored or otherwise imposed, we will be causing greater uncertainty and there will be a greater possibility of costs and of lost stock, because it goes out of date. Such people will also not have time to develop their product properly, bring it to market and make a profit. They may go bankrupt, thanks to a raft of new provisions and new uncertainties.

These three amendments—Amendment 103, on consumer choice and an impact assessment; Amendment 104, on an impact assessment on the whole economy; and Amendment 104B, on an impact assessment on SMEs to be laid before both Houses of Parliament within six months—will help us find out exactly what the impact of these rules are, even if we do not know what they will be when we set out on this road. Successful businesses—small, medium and big—and the consumers who buy their products and services, both in this country and overseas, are the beating heart of our economic life. If businesses are to flourish, the rules need to be clear from the start. Compliance needs to be affordable and the rules must encourage innovation, entrepreneurship and risk-taking.

Most businesses in this country are small—there are 5.51 million of them, as we have heard—with zero to 49 employees. There are only 40,000 businesses that count as medium-sized, with 50 to 250 employees. These small and medium-sized businesses provide most of the employment of people, but the vast majority of them—3.1 million—are sole traders. November’s House of Commons analysis, which is the most up-to-date analysis that I have found, gives the figures, with SMEs accounting for 99% of the business population, providing 60% of UK employment and 48% of business turnover. As the noble Baroness, Lady Brinton, pointed out, they are far less able to bear the costs of the regulatory steamroller that may face us. This is one of the big problems that we hear about all the time from small producers and entrepreneurs: the costs of compliance and of dealing with the uncertainties this brings in. Even the bigger businesses, which provide 40% of the jobs and almost half the turnover, also have to pay—I was told by an NHS trust—almost 18% of their overheads.

Whether or not this Bill directly affects the product market—it does—or the service market, we are a service economy. This is a product regulation Bill, but most services use products. Let us take the hospitality trade: it needs to buy products to ply its trade and make money. Cabbies need to buy cars. Every single service—except financial services, perhaps, which is indirectly affected—will be affected by this Bill. It will have a very big impact on the whole economy. If we price risk-taking and innovation out of the product market, on top of the costs of employment—including through higher tax and higher employees’ NICs—UK small businesses will shrink or close. Jobs will be lost. We shall go the way the French went, with their high- tax protectionist model and a centralised structure in which the small challenger is driven out of the game—and with it, the hope of keeping a competitive economy open to new entrants. That is what has happened in France in the post-war years and is now cast in stone by the EU model, with ever bigger national, transnational or multinational corporations having a monopoly and driving up prices for the consumer while driving choices down.

I fear that this is an alien model to our market economy of competitive small businesses that can have a go without fear or favour under the protection of good law. We cannot afford to lose jobs or businesses and raise prices. Our productivity in GDP per hour is already lower than that of our most similar G7 neighbours, France and Germany. I am sorry that this figure is in dollars, although I am sure that noble Lords are very dollar literate: they earn $92 and $95 respectively per hour, while we earn only $79 per hour. If the Government want higher productivity and higher growth, they need simpler and clearer rule books; I must add that that will not happen by mimicking Brussels’ notorious system, whether it is an imported version or a home-based mirror image of what goes on over there.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I shall speak to Amendments 110, 111 and 112, standing in my name. Clause 9 is a skeleton clause, as has been pointed out by the DPRRC, which recommended its removal—a point that may have been made a few times over the course of this Committee, often by me. In giving this degree of power to repeal existing legislation around consumer protection and metrology regulations by negative procedure, the Government have argued that aspects of the regulatory regime may need to be updated swiftly and frequently. However, they have failed to explain why they should be done with little scrutiny. In their response to the DPRRC, they suggested that it is because existing legislation has proven ineffective at times. The most recent consultation on the Bill suggested that 87% of respondents supported reviewing inspection powers, but it is one thing to review powers and another to have the power to completely repeal existing legislation and replace it with whatever an undefined—that word again—relevant authority feels is necessary.

I am very grateful to my noble friend Lord Lansley for his thoughts on Amendment 110. He is not in his place but I wish him a happy birthday, as I am sure most Members of the Committee do too. I am very grateful for his opinions, some of which I am incorporating in my next remarks. On Amendment 110, he pointed out that the Government are proposing to take the power to repeal Part 2 of the Consumer Protection Act 1987. If they were to do so, we would lose Section 2, which sets out primarily that the Secretary of State may make regulations for the purpose of securing goods that are safe. We would also lose Section 19, which defines “safe”. Section 19(1)(c) includes that “safe” means,

“there is no risk, or no risk apart from one reduced to a minimum, that … the keeping, use or consumption of the goods”

will

“cause the death of, or any personal injury to, any person”,

and that “unsafe” should be “construed accordingly”. The Bill does not make the equivalent provision: “reducing or mitigating risks” in Clause 1 is lesser than “safe” as defined, and the 1987 legislation has a long history of implementation, interpretation and enforcement.

At this late stage of the Bill, the question is: is it His Majesty’s Government’s intention to repeal Sections 2 and 19 of the Consumer Protection Act 1987? If it is not, we can assess the overall legislative framework which will result. If it is, we will need to revisit this issue when looking again at the purpose of the Bill. If His Majesty’s Government say they will decide later and seek to avoid overlap, we should again look at how this Bill and how the Consumer Protection Act 1987 may overlap, and consider whether the continuation of a defined requirement for safe products should be included in the Bill.

The other two amendments follow a very similar vein. I think I have said enough, and I beg to move.

[Baroness Lawlor (Con)]

My Lords, briefly, I support this. It is important that we do not give the Minister powers to repeal one of the best-known Acts, which many consumers in this country have had experience of. We all know it is a flagship Act, and it has been proven in the decades since 1987.

I strongly support my noble friend’s proposals to remove the concern about giving the Government the power to do away with these protections which are in those sections of the Act. The meaning of “safety” is particularly relevant and needs to be very clear for businesses and consumers alike. Were we to go along this route, heaven knows what a Government could do. It is wrong for this House to allow that to happen; it is constitutionally out of order that such a well-known piece of legislation—which is so important to our economy and those who make our economy—can be done away with using sleight of hand and without any proper scrutiny or discussion.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord and the noble Baroness, but I disagree with her. From the debates we have already had, there is a recognition that what businesses need is certainty and for government to move quickly when it is clear that action needs to be taken to protect the consumer and the other aims of the Bill.

I accept that there has been criticism by your Lordships’ Select Committees and by noble Lords here about the skeletal nature of the Bill, but the point is that we need flexibility to keep pace with fast movement in this consumer area. That is the reason why the Bill is constructed the way it is. I will come on to the Consumer Protection Act, but I hope I can reassure noble Lords on that.

The Government are of course looking very carefully at the reports of both the Delegated Powers Committee and the Constitution Committee and we are reflecting on them. Clearly, as I have said, we are trying to get the right balance between proper parliamentary accountability and the need for flexibility and clarity for all the people affected by the legislation. For instance, in Clause 9 itself, subsection (4) enables us to make minor technical adjustments to ensure coherence across the legislative framework without the need to introduce separate primary legislation for every amendment. I have to say that a general consequential power is typical and required to keep the law functional. If you remove that power, it would mean new primary legislation for adjustments that are primarily procedural or corrective in nature.

Also, the Bill includes safeguards to ensure that the use of the Clause 9 powers is proportionate and justified, with changes to primary legislation subject to the affirmative procedure. Of course, this means debates in both Houses.

As far as the Consumer Protection Act 1987 is concerned, I of course accept the importance of that legislation. As noble Lords will know, Part II of that Act grants powers to the Secretary of State to make regulations to ensure the safety of products, but the powers in Clauses 1 and 2 are intended to replace those powers. So, when product regulations are made under this Bill, it may be appropriate to repeal any or all of Part II of that Act in order to avoid duplication.

Likewise, Part IV of that Act sets out provision for the enforcement of regulations made under Part II. So, because the Bill includes provision in Clause 3 relating to the enforcement of product regulations made under this Bill, it may be appropriate to repeal any or all of Part IV of that Act when new product regulations are made. Included here are the powers for enforcement authorities to investigate and seize goods that have not yet reached the market and the power for customs officers to detain goods.

Part V of the Consumer Protection Act contains miscellaneous and supplemental provisions that may also require amendment when new regulations are introduced. There is no attempt here, nor any desire on the part of the Government, to undermine the Act fundamentally. We simply have to make adjustments in the light of this legislation.

I have listened to the noble Lord and the noble Baroness. As I say, we are considering very carefully the reports of those two Select Committees; clearly, we will reflect on them between now and Report.