Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)Country of Origin Marking
Ed Davey Excerpts
Gavin Williamson
My hon. Friend touches on an important point. Indeed, supposing I went back to my old trade of being a potter and I set up a company called Gavin Williamson English Chinaware, what country does my hon. Friend the Minister think a plate sold by my company would have been produced in?
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I think my hon. Friend is asking a rhetorical question, and I would like him to give the House the answer.
Gavin Williamson
My hon. Friend gives a very wise response. The simple reality is that such a plate could come from any country. It would not have to come from England, which is a great tragedy, because that is misleading consumers. We should treat customers with honesty and dignity so that they can make their choices on prices, design, value and so much more.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on raising this issue and on the passion with which he spoke. I am aware of his background in the ceramics industry, and he has shown the House his knowledge this evening. Ceramics is a UK sector with a well-deserved worldwide reputation for the design and quality of its products. It is also a sector that has had to restructure, often painfully, to remain competitive and successful in the global marketplace. I am also aware of the importance that the UK ceramics sector attaches to the clear origin marking of its products, and its strong, consistent support for the European Commission’s proposal for an EU regulation on the compulsory labelling of certain imported products.
I share my hon. Friend’s pride in products that are made in Britain. The Department for Business, Innovation and Skills is also proud of Britain, and we have been showcasing British design, engineering and manufacturing in exhibitions every two months in the entrance to the BIS headquarters across Parliament square at No. 1, Victoria street. Those exhibitions have been a celebration of the success of UK engineers and manufacturers. The companies’ products that were showcased were excellent examples of cutting-edge UK innovation and ones that were vital to contributing to a low-carbon future. The companies have come from a cross-section of UK manufacturing and, in the context of this debate, I am extremely pleased that one of the leading UK ceramics companies—Dudson, one of the world’s leading specialists in the manufacture of ceramic tableware—has been part of the showcase. Other UK ceramics producers have a similar global reputation. We are proud of British manufacturing, and my hon. Friend rightly referred to what the Chancellor of the Exchequer said in his Budget speech about driving the UK back into growth through proclaiming what is made in Britain, invented in Britain and designed in Britain.
The Government are not opposed to labelling, or to labels such as “Made in England”, “Made in Scotland”, “Made in Wales” or “Made in Northern Ireland”. That is positive country of origin marking, and it should be done because UK manufacturers believe that it is the right thing to do, for themselves and for their customers. That does not need legislation, however; it can be done voluntarily. There is no legal bar to such marking, and many producers already do it. Of course, in most circumstances, there is no legal requirement in the UK or anywhere else in the European Union for goods to be marked with an indication of their origin, but producers may do so if they wish. If overseas competitors see origin marking as a marketing benefit, they will follow suit. It is essential for the consumer that any such labelling is clear and accurate, and does not mislead. Indeed, it is a criminal offence under the Consumer Protection from Unfair Trading Practices Regulations 2008 to give consumers misleading information. However, it is important to recognise that UK business, including the ceramics sector, operates in a global economy. The days when the majority of goods bought by British people were manufactured here have unfortunately passed. The UK is a trading nation, and it relies on open global markets, as I am sure my hon. Friend recognises. This provides consumers with benefits such as lower prices and greater choice through variety, quality and price of products.
I agree about providing appropriate consumer information, but we must be clear about what is important to the consumer. A Eurobarometer survey across all 27 EU member states last autumn asked a number of questions about consumers’ purchasing attitudes towards country of origin labelling. I accept that the ceramics sector was not covered by the survey. However, in relation to textiles and clothing, 75% of those questioned said that origin did not affect their purchasing decisions. For electronic products, the figure was 68%. That is not to dismiss my hon. Friend’s comments; I simply want to highlight the need to be clear about how consumers rank price, design, brand name and origin in their purchasing decisions.
Gavin Williamson
Does my hon. Friend accept that country of origin labelling is even more important for luxury products, to which this country is increasingly geared to manufacture? That is why we need to be proud and specific about what is produced in this country and to protect that market.
Joan Walley
The Minister referred to the 2008 regulations, and I was very much involved in trying to get them on to the statute book. The point about having transparency and ensuring a level playing field is important. The real issue is that goods are being sold in a confused way, and consumers are buying products without realising that they are not manufactured, designed, decorated and so forth in the UK. They are paying large amounts of money, without knowing that the goods are being manufactured overseas. If our manufactured goods, when exported, have to have the country of origin indelibly marked on the underside of the wares or on the packaging, why can we not have the same rule applying in this country, which would not be inconsistent with the general agreement on tariffs and trade?
Mr Davey
As I said, the hon. Lady knows that British manufacturers are completely free to put country-of-origin markings on their products. Many of them, particularly in the ceramics industry, believe that so doing gives them a marketing edge. I will come on to deal with the European Commission proposal, which both the hon. Lady and my hon. Friend mentioned. It is important to do so because that is part of the policy debate on which we are focused.
As currently drafted, the EC proposal would require the compulsory country of origin marking of certain imported, mainly consumer products. It might well be to this matter that my hon. Friend is directing his remarks. Let us be clear about what these products are. They include crushed and finished leather, including footwear components, saddlery and travel goods; textiles, clothing and footwear; ceramic products, glassware, jewellery, furniture and brooms and brushes. Those items are all defined by customs code classification. In the case of ceramics, the Commission proposal covers floor and wall tiles, tableware, kitchenware and giftware.
The European Parliament, voting on the draft regulation last autumn, proposed that the scope should be narrowed to cover only end-consumer products. This would limit it to products subject to further processing or assembly in the EU, although some flexibility was proposed for certain textile and footwear components. At the same time, the European Parliament proposed adding to the list of products covered by the regulation: tyres for agricultural vehicles, tyres for forestry vehicles; certain inner tubes; metal fasteners such as screws, nuts and bolts; non-electric hand tools; furniture casters; and taps, cocks and valves.
The House will perhaps understand from that list one of the reservations held by the UK about this proposal. It is the absence of any objective criteria for determining why a particular product is or is not within the scope of the proposed regulation. In our view, it is not enough that a particular EU industry believes that its imported competition should be origin-labelled. At the moment, the best the Commission have offered as “criteria” is where its consultation has shown that there was “value-added” by requiring origin marking. Even the Commission admits that this is a pretty loose criterion. The European Parliament has not even addressed the issue, so I invite suggestions from my hon. Friend—perhaps he is about to make one—and others, on what might constitute meaningful and objective criteria in this regard.
Gavin Williamson
I must confess that I am no expert on the numerous EU regulations, but I have always believed that this Parliament is sovereign. If we think that we have a good idea that will benefit British business—that consumer products coming into this country or manufactured in this country should have country of origin labelling—let us just ignore the EU, create our own Bill and put it on the statute book. I say we should just ignore Brussels, start from scratch and enact what we think will make a difference for Britain.
Mr Davey
I think that my hon. Friend misunderstands the position. It seems to be Brussels that agrees with him and, I am afraid, his Government who do not. I do not think that he can blame Brussels, and indeed I expected him to pray Brussels in aid. He, like Brussels—or some parts of it—wants to regulate, while the Government are saying that we want to think twice before adopting the regulatory route. I hope he recognises that the premise of his intervention is not entirely valid.
Mr Spencer
My hon. Friend the Member for South Norfolk (Mr Bacon) mentioned the pork industry. The United Kingdom Government introduced regulation of pork production that applied higher animal welfare standards to British pigs. By not labelling products that come from other parts of the European Union, we are effectively allowing meat from pigs that have been subject to poorer welfare standards to sit on shelves next to our pork and to command the same value.
Mr Davey
The position is quite complicated. We are discussing the current European Commission proposal about country of origin marking on goods imported from outside the EU. The hon. Member for South Norfolk (Mr Bacon)—whose point has been repeated by the hon. Member for Sherwood (Mr Spencer)—was referring to agricultural products imported within the European Union, from other EU countries. That involves a slightly different regime. The United Kingdom has supported a political agreement on the “Food information for consumers” dossier, and we are pleased to see that it has reached the second reading stage.
I hope that the hon. Gentleman will not question me in much more detail, because this is a matter on which Ministers in the Department for Environment, Food and Rural Affairs are focusing. I think I have it made clear that his question relates to a different issue, to which a different approach is taken. I should add that my wife never allows me to buy any pork other than British, and that I would not want to do so anyway.
The proposal that may well have sparked tonight’s debate was originally presented by the Commission in 2005. At that time, it provoked a very mixed response from member states. Many saw it as primarily a protectionist measure, because its origins lay in concern in the Italian textiles and clothing sector about imports from China. Others argued that there was a need to address persistent breaches of copyright and design protection in relation to consumer products. That was coupled with the view that consumers needed such information to avoid being misled about the origin of products. While the UK recognises the validity of all of those concerns, we do not believe that this proposal is the best way of addressing them, and we continue to have strong reservations about it.
Gavin Williamson
I too have some reservations. What I was trying to convey in my earlier intervention is that I would always be very sceptical about whether anything that came out of Brussels was a good idea. Why do we not put together our own set of proposals for Britain, building on what is good in the EU proposals, and put them on our statute book?
Mr Davey
I think that my speech will deal with many of the issues that my hon. Friend has raised. I am afraid that he is in danger of supporting the Brussels-based regulation while the Government support a British deregulatory approach, but I hope that as I continue my speech I may be able to win him round to our approach.
As I have said, we have strong reservations about the proposal, but, unlike some member states, the UK does not oppose it outright. The Government have been ready to engage directly with the Commission and supporters of the proposal, notably Italy, and to explore ways forward. My Department consulted widely when the proposal was first issued. We consulted UK business and other interests, including other interests within Government, and that consultation has been repeated on a number of occasions to ensure that we remain abreast of the latest developments.
A clear majority of UK interests were, and remain, opposed to the Commission’s proposal. They include the CBI, the British Chambers of Commerce, the British Retail Consortium, the hallmarking association, and a number of sector as well as consumer interests. Within Government, the UK Intellectual Property Office and Her Majesty’s Revenue and Customs have also consistently opposed the proposal.
Joan Walley
The objections largely come from retailers, who have a vested interest in being able to import without making the full information available, so there is not transparency at the point of purchase. Why will the Minister not listen to manufacturers such as Steelite in my constituency, which does everything the Government are asking yet cannot compete fairly?
Mr Davey
First, the views of British retailers and consumers are not to be discounted. Both this Government and the previous one have paid a lot of attention to getting a good deal for consumers in respect of competition policy and consumer policy. However, the list of business interests I set out a few moments ago included the CBI and the British Chambers of Commerce, who do not represent retail interests alone.
The Commission’s proposal, while never formally withdrawn, is now actively back on the Brussels table. The European Parliament is pushing the proposal hard, deploying its new powers under the Lisbon treaty in the trade policy area. Last autumn, it gave its formal support to the proposal and proposed a series of amendments. The proposal is now back with the Council to consider, but there remain deep divisions between member states, close to a 50:50 split. Nevertheless, technical level discussions began in February and are ongoing in the commercial questions council working group. These involve trade policy and customs officials from the 27 member states. The UK is participating fully and constructively in these discussions. However, there has been resistance from the Commission to recognising that the trade policy landscape has changed since 2005. It has refused a request from many member states for an updated impact assessment, and I am sure my hon. Friend the Member for South Staffordshire agrees that regulations should have an impact assessment.
A number of free-trade agreements have been negotiated by the EU over the last five years, all of which contain a provision explicitly prohibiting discrimination between EU-produced and imported products. Only recently, World Trade Organisation members raised concerns in Geneva about the compatibility of this proposal with WTO rules. While it is true that some other WTO members have country of origin requirements—in the case of the US, these are both long-standing and comprehensive—our research has not shown, as many claim, widespread comparable requirements in most other countries.
The UK retains its position of having strong reservations, but however strong they might be, reservations are capable of being overcome. So far however, neither the Commission’s explanations nor the European Parliament’s amendments have allayed our concerns. Our main concerns in addition to those arising from our overall approach to new regulation and the absence of objective product coverage criteria, to which I have already referred, relate to the need for this regulation and the costs imposed on business and on public authorities. There are genuine issues in relation to trade mark and design breaches and mislabelling of imported goods from some sources, but the Commission has yet to demonstrate that this proposal adds anything other than an additional administrative and cost burden to existing EU legislation, which includes the EU intellectual property rights regulation and the unfair commercial practices directive. The latter makes it an offence across the EU for products to be labelled in such a way as to mislead consumers. This includes information about the country of origin of products.
The proposal is also likely to impose increased costs on producers, distributors and consumers. We estimate the proposal could prove more costly than the Commission has claimed—experience in the North American Free Trade Agreement area suggests up to 2% of the sale price, which is twice the Commission’s estimate.
There is a further important cost dimension in this time of public expenditure constraints. The enforcement regime would, despite Commission claims to the contrary, impose additional burdens on national customs authorities. The proposal envisages additional physical control at the border. This detracts from efforts to strike a balance between effective control and facilitating free movement of legitimate trade across borders. The increased resources needed to implement this regulation, for example, those relating to the need to make verification inquiries, to which not all countries are legally obliged to respond, could have a negative impact on the priorities of UK and other customs authorities in respect of tackling illegal drugs and dealing with alcohol, tobacco, and firearms.
Finally, I wish to address the issue of consumer information. UK consumer interests have been opposed to the Commission proposal from the outset, partly because they consider existing provisions to be adequate but primarily because they saw it as a protectionist measure. Similarly, the Commission’s own consumer consultative group came out against the proposal. The proposal is still being considered by the Committees that scrutinise European legislation in this House and in another place. The Government have undertaken to keep them abreast of developments in Brussels, and I wrote to them last on 12 February with an update. I am sure that those Committees will also take note of tonight’s debate, particularly the passion with which my hon. Friend the Member for South Staffordshire introduced it. May I end by congratulating him on his remarks, on securing this debate and on ensuring that this House had a full chance to hear the arguments on both sides?
Question put and agreed to.