Exiting the European Union (Consumer Protection)

John Redwood Excerpts

Monday 25th February 2019 Commons Chamber

[Dr Coffey]

I am saying that, as it stands today, chemicals regulation is a devolved matter in how Governments can apply these things. We have a particular regulation that currently applies only to England and Wales. The Scottish and other Administrations will have made their own applications in legislation for that. That is why this is the only bit of the entire statutory instrument that does not apply to the whole of the United Kingdom.

[John Redwood (Wokingham) (Con)]

Will the Minister confirm that there will be absolutely no reduction in safety standards—because we all want high safety standards—and does she recall that when REACH first came in, quite a lot of industry voices said that it was more bureaucratic and more expensive but no safer?

[Dr Coffey]

The costs are still going to be significant for administering our own chemicals system in future, but I can assure my right hon. Friend that the safety standards will be consistent and, indeed, we will continue to learn from ECHA in future. As he will be aware, in the future economic relationship that has been put forward through the political declaration, and in ongoing statements by my right hon. Friend the Prime Minister, we would seek to become an associate member of ECHA in future to share these things in order to try to reduce or mitigate some of the challenges that people like Rolls-Royce are anticipating. But that is not yet an agreed matter, and it is important that the Government set before the House appropriate regulations to make sure that we have that continued safety of chemicals.

Before I explain the provisions further set out in the SI, I want to emphasise that we are absolutely keeping the fundamental approach of REACH, with its aims of ensuring a high level of protection of human health and the environment, as well as enhancing innovation and competitiveness. The building blocks of REACH will all remain: industry’s primary duty to understand the hazards and risks of chemicals and to ensure safe use, all tied to the principle of no data, no market; registration by industry of the chemicals it produces and places on the market; dossier evaluation by the regulator of at least 5% of registration dossiers to check compliance and quality, exactly as ECHA is expected to do today; and substance evaluation, which is investigation by the regulator of outstanding concerns about a chemical often leading to a requirement on industry to fill the knowledge gaps. The UK has been responsible, through ECHA, for making sure that there have been 24 evaluations—for example, of the chemical climbazole, which is used in anti-dandruff shampoos but is suspected of causing feminisation in fish. Then there is the authorisation process that forces industry to apply for and justify continued use of substances of very high concern. Finally, there is restriction of the most dangerous chemicals where unacceptable risks remain.

On the definition of duty holders, article 3 of schedule 1 of the statutory instrument changes the definitions of the various industry duty holders so that they refer to the United Kingdom rather than the European Union. Obviously, this is a simple change, but essential. Without it, UK industry would have no duty to ensure the safe use of the chemicals it produces and uses.

UK REACH will continue with an independent regulatory agency to carry out a central role with a range of technical, scientific and administrative functions—the role that is currently carried out by ECHA. The statutory instrument allocates this role to the Health and Safety Executive under article 2A of schedule 1. The HSE will receive industry’s registrations of chemicals. It will make many technical decisions itself—for example, in dossier and substance evaluations, as well as in scrutinising authorisation applications and making scientific recommendations on restrictions. This builds on the HSE’s existing activities as the UK competent authority for REACH. At the same time, the Environment Agency and the devolved environmental regulators will have the role of providing the advice that the HSE will need on environmental matters, as set out in article 2B of schedule 1.

The HSE, as the UK agency, must also draw on independent expert scientific advice when developing its opinions on restrictions and authorisations. This will add to the robust evidence and analysis underpinning its opinions. We expect the HSE to obtain external advice, but there may sometimes be reasons why it does not feel it needs to do so, such as where ECHA has already published a robust opinion on a chemical. In such cases, where the HSE decides not to take further scientific advice, it must publish its justification, as set out in article 77. Finally, appeals against the HSE’s decisions will be heard by an independent body, the first-tier tribunal, as set out in article 91.

--- Later in debate ---

[Dr Coffey]

In effect it will be for the HSE, as the regulator, to make decisions on each level of the process. I have no reason to doubt that the HSE and ECHA will have similar principles in how they go about this. We are not seeking a change in any policy to move away from the REACH process.

It is fair to say that the UK has been trying to get some chemicals restricted much more quickly than ECHA and other EU member states have sought, so there may be opportunities to move more quickly on some of these matters. Again, it will be a judgment call for the HSE on whether to make that recommendation to the Secretary of State.

As for stakeholders, we held a series of informal briefings last summer at which we outlined the proposed regulatory approach, and representatives from the chemicals sector and beyond and other stakeholders, including non-governmental organisations and scientific societies, came to those briefings. Since then, we published a technical notice in September and additional guidance in December and continued with more stakeholder engagement to explain in detail what UK REACH is and what it means for industry. The House will also be aware that I invited MPs, particularly those with chemicals companies in their constituency, to attend briefings.

I recognise the concerns about why businesses have to submit data to the HSE when they have previously registered with ECHA and the potential costs involved. Such concerns were also expressed in the report by the Secondary Legislation Scrutiny Committee in the other place. As the Government said in the White Paper, we want a strong deal under which the UK will continue to participate fully in EU REACH and the work of the ECHA. The impact assessment considered the question of data in detail, and the Regulatory Policy Committee stated that the assessment used a proportionate level of evidence to support estimates of the impacts, including impacts on business. We should not expect a repeat of the costs of complying with EU REACH. For example, businesses that have already invested in putting together the EU registration dossier will not face administration costs again.

To be clear about the importance of information. The “no data, no market” principle is fundamental to REACH, and we will not weaken that in any way. It underpins effective chemicals management by both industry and the regulator. We cannot rely on the fact that such data has already been sent to ECHA. It is simply not correct to say that a chemical is deemed to be safe once it has been registered under EU REACH. Registration is how a company shows its understanding of the hazards and how to control the risks, but it does not mean that ECHA and other regulators have approved that chemical or endorsed it as safe.

ECHA will not evaluate the UK dossiers that it received for the June 2018 deadline. ECHA has also stated that, in the majority of dossiers it opens for evaluation, it needs to follow up with requests for important safety information on chemicals, meaning that the company’s safety measures may also not be adequate. Only the UK agency will be able to provide the assurance that chemicals are safely managed in the UK. To give a sense of scale, we will be grandfathering over 12,000 registrations into UK REACH—35% of them from 2018—representing 5,700 chemicals. Looking forward, we would then expect 50 to 100 new chemicals to be registered each year. We have much less understanding of how many notifications there will be for chemicals imported from the EU, because there is currently no duty to report that information in most cases. That emphasises the importance of the notification process so that we know what chemicals are being used in the UK.

REACH is one of the largest and most complex pieces of EU legislation and Members and others have rightly wondered how we would transfer it into UK law. I am confident that the provisions in these regulations mean that we will continue to ensure the highest levels of protection for human health and the environment, based on robust evidence and strong scientific analysis.

[John Redwood]

Maybe I can help the Minister. Is it not the case that the Intrastat declarations provide the necessary information about the current trade in European chemicals?

[Dr Coffey]

I do not know the answer to that, but I will share the suggestion with my officials, some of whom are conveniently in the Box.

I want to assure right hon. and hon. Members that we are taking steps to provide the industry with the legal certainty it needs to operate and to preserve the supply chains for the chemicals on which we all depend.

[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?