Draft Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019

Claire Perry Excerpts

Monday 11th February 2019 General Committees

[The Minister for Energy and Clean Growth (Claire Perry)]

I beg to move,

That the Committee has considered the draft Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019.

It is a pleasure to serve under your chairmanship, Mr Paisley. The draft regulations were laid before the House on 19 December last year. I will set out the framework for why we are here, and then plunge into the detail of what we want to introduce.

Obviously, there is a strong belief across the House that a deal with the EU is in our mutual interest, but it has always been the case that a responsible Government must plan for all eventualities, including a very unwelcome no-deal outcome. The draft regulations will ensure that in such a scenario our eco-design and energy labelling legislation will continue to function effectively.

Committee members will be aware that in recent years the EU has introduced, through the eco-design directive and energy labelling regulation frameworks, a suite of product-specific regulations that have been of enormous benefit to consumers and businesses alike. They have worked to minimise the costs and environmental impacts of products used both in the home and in businesses by setting minimum performance requirements. They also help consumers, as anyone who has gone to buy a new appliance will know, to make informed purchasing decisions through universal energy labelling.

The suite of regulations is one of the reasons that bills have gone down since 2012, and will save household consumers about £100 on their annual energy bills by 2020. It will also lead us to save about 8 million tonnes of carbon dioxide in 2020. The policy has therefore been one of the most cost-effective ways of meeting our carbon budgets.

The policy has also served a very strong purpose for industry. It has allowed companies to set minimum performance requirements that have helped them to drive innovation and increase competitiveness, and to export to the world’s largest and most successful single market. It is therefore imperative that we can continue to deliver those benefits in the unwelcome event of a no-deal Brexit.

Using the power in the European Union (Withdrawal) Act 2018, the draft regulations will amend EU-retained law and ensure that eco-design and energy labelling requirements will be the same as they are now in any outcome. That will give businesses and consumers the certainty that they need.

There is a suite of amendments. The first is on a technical labelling term, and replaces “Union market” with “UK market”. Without that tiny amendment, less efficient and more polluting products could be put on the UK market, meaning that consumers who thought they were buying something energy efficient were not. That would be an unwelcome outcome.

The second amendment transfers powers held by the Commission to the Secretary of State—repatriating sovereignty—to introduce eco-design and energy labelling product-specific regulations for the UK market after exit. The Secretary of State would use that power in the event of no deal to lay before Parliament new energy labelling and eco-design product-specific regulations that the UK voted for and helped to shape as a member state. Because they will enter into force and apply after exit day, those regulations have not been saved in the UK statute book by the withdrawal Act. That is part of the reason for introducing today’s legislation.

One of the questions I have received is whether Brexit—whether orderly or disorderly—will mean the UK rowing back in any way on its climate change commitments, including commitments to transparent labelling and design. The answer is absolutely not. Not only will our existing eco-design and labelling requirements stay the same in the eventuality of our having to use the provisions in the draft regulations, but we have been very clear that we wish to be more ambitious than the EU in our climate change commitments, as we have been, and as we will continue to be regardless of the shape of our relationship after exit day.

The third aspect of the draft regulations is the EU product database. Suppliers placing products on the UK market have to enter product information into the EU product database—an online portal, which went live in January of this year, where all the market surveillance authorities can view product information uploaded by suppliers. If we have a no-deal Brexit, it will be replaced by a UK market surveillance authority that will request technical product information directly from the suppliers, as the authorities have historically done.

The next three amendments relate to changes that the Government are making to the trading of goods subject to EU-wide product-specific rules. They are not specific to this SI. The fourth amendment is the UK regime for third-party assessment. One of the changes pertains to the conformity assessment of goods to ensure they meet relevant requirements. After a no-deal exit we would have a UK-only system for conformity assessment. Products needing to be assessed by a third party in order to show compliance with UK legal requirements would be assessed by UK testing bodies called “approved bodies”. However, to minimise disruption and any burdensome red tape, businesses would be able to continue to use EU testing bodies when selling their goods to the EU after exit. That is intended to apply only for a time-limited period.

The fifth amendment is a new UK conformity-marking procedure. After exit, if we had no deal, a new UK marking would need to be affixed to products to indicate conformity with UK requirements. This would replace the CE marking that members of the Committee might be familiar with, which indicates conformity with EU requirements. Again, to ensure continuity and that manufacturers do not face a huge and unwelcome burden of regulation should we have no deal, in opposition to what they were promised, most manufacturers will be able to use the CE marking for the UK market, again for a time-limited period. The sixth amendment is a new UK regime of product testing standards. This SI carries across the current list of EU harmonised standards used for the verification of compliance of products with EU legal requirements, but renames them UK designated standards.

Finally—I am sure this will come as a welcome relief to the Committee—the regulations make tiny, minor changes to update our domestic energy labelling regulations to ensure market surveillance can carry out its enforcement activities on the labelling of household lamps and electric ovens. They are routine changes not related to Brexit. We felt it was a good use of the Committee’s time to debate that change along with the others.

These regulations are an appropriate and necessary use of the powers in the withdrawal Act and will maximise continuity in eco-design and energy labelling regulations should we have the unwelcome outcome of a no-deal Brexit. I commend them to the House.

--- Later in debate ---

[Claire Perry]

I wonder why, Mr Paisley. I thank the hon. Gentleman for his usual thoughtful and in-depth analysis and scrutiny. I will try to answer some of his questions and then explain why I cannot answer them all.

He asked a question that comes up reasonably frequently in these Committees: why are the Government using this form of legislation and not primary legislation? The response in this case, as in many of the others, is that the European Union (Withdrawal) Act is a wide-ranging Act that effectively allows us to transpose EU legislation, with tweaks, into UK statute. In this case, we are making technical fixes to retained law to ensure that the functioning statute book would work if we were to have a no-deal exit.

The hon. Gentleman raises valid points about the intent of policy and its design. There is no change in policy intent. If we were to go down that route and create a conforming or, in some cases, diverging, group of regulations, that would be subject to further primary legislation. However, I want to reassure the Committee that the instrument has been subjected to the usual detailed scrutiny provided by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee. Members of both those Committees deserve our thanks for what can be a thankless task. They are scrutinising well and passing things with, if you like, a bill of health. We are where we are with introducing legislation.

The hon. Gentleman asked an important question about time-limiting periods and about what happens immediately. We have always said that in the event of a no deal we will have a continuity principle, with no divergence on exit day between UK and EU requirements. That is in the best interests of business, and we are anxious to avoid any increase in red tape or any consumer confusion arising from the decision. There would be a continuity principle on day one and, as we set out in our technical notice on 13 September 2018, we would then allow a grace period in which products assessed by EU testing bodies, those bearing the CE mark and those meeting EU requirements could continue to circulate in the UK. If we were then to change that or to set a time-limited closure for those allowances, we would go through the usual process of consulting businesses heavily.

As I think the hon. Gentleman alluded to in his closing remarks, this matter has material consequences for other members of the EU, as well as for the UK. A disorderly, no-deal Brexit is not in the interests of any member of the EU, because the millions and millions of consumer goods items that are manufactured and imported into the UK would be subject to confusion and a loss of consumer confidence. That is why, when we talk about no deal, we must get the message out very clearly that it is a real problem for anyone hoping to export to one of the continent’s largest markets.

The hon. Gentleman rightly alluded to a related SI, the draft Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, which are part of this suite of regulations. I can assure him that that SI was laid last week on 7 February, and I am sure he looks forward to debating it very shortly—I cannot wait. Essentially, if we were going down this route of being able to diverge, we would potentially have the opportunity to review our own testing and marking limits.

I believe in theory there is nothing to stop us adopting the CE mark through negotiation, if it was a trusted mark, assuming that we had agreement on what that meant in terms of testing standards, but those will be decisions that we will take in the interests of the UK, based on what works for our businesses and our public consumers. We would work to minimise disruption to ensure that those changes could be usefully made.

I thank the hon. Gentleman for allowing us to proceed with the regulations, which are an important part of our no-deal preparation. Of course, that brings home once again just what myriad tasks are involved in unpicking 40 years of close conformity; it is my strong belief that this would be a most undesirable outcome for the continent and for the UK, but any responsible Government must prepare for all eventualities. On that basis, I commend the regulations to the Committee.

Question put and agreed to.