Market Surveillance (Northern Ireland) Regulations 2021

Lord Callanan Excerpts

Thursday 8th July 2021 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Market Surveillance (Northern Ireland) Regulations 2021.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I beg to move that these regulations, which were laid before the House on 10 June 2021, be approved.

The Regulation on Accreditation and Market Surveillance, 765/2008, known as RAMS, is the current market surveillance legislation for the UK and is included under the Northern Ireland protocol. It is worth noting that RAMS continues to apply in Great Britain, as it now forms part of our domestic law. The EU Market Surveillance and Compliance of Products Regulation, EU 2019/1020, which I will refer to as MSC, will replace RAMS and therefore, under the protocol obligation, MSC will apply in Northern Ireland. However, the enforcement system for both regulations will be similar, with both based on risk and proportionality.

The SI we are here to debate sets out to implement a uniform set of regulatory powers to avoid gaps and inconsistencies when the RAMS provisions are repealed in Northern Ireland on 16 July. These powers will be available to market surveillance authorities that operate within Northern Ireland. It results in some minor operational changes and a number of new traceability requirements for businesses placing products on the Northern Ireland market. The SI will ensure that consumers in Northern Ireland continue to be protected from potentially unsafe and non-compliant products, whether that is gas appliances, radio equipment, lifts or PPE, via the UK’s robust product safety framework.

Within the UK, market surveillance authorities have the vital role of ensuring that products are safe and compliant. They can also take action as needed when unsafe and non-compliant products are discovered. This reduces the risk to consumers. Noble Lords will agree that the protection of UK consumers is a vital role for government. This SI applies to Northern Ireland. It will provide market surveillance authorities with the necessary regulatory powers to carry out this invaluable work. It will also provide effective, appropriate and proportionate sanctions for breaches of the regulations. Market surveillance authorities will continue to monitor and, where appropriate, enforce in Northern Ireland all the requirements of product safety law outlined in this SI. I will now consider areas covered by the SI in more detail.

A key objective of the SI is to provide a consistent set of regulatory powers to market surveillance authorities with respect to Northern Ireland. Although most of these powers already exist across the current suite of product legislation, they are not consistent. This is not in the interests of the consumer, so we need to take action. Therefore, we will introduce a uniform set of regulatory powers. These will consolidate the powers already available to market surveillance authorities. The SI will make these powers expressly available in respect of a range of products to the extent they are needed. We have set out powers in this SI which are drawn from existing goods legislation such as the Health and Safety at Work (Northern Ireland) Order, the Consumer Rights Act and the Consumer Protection Act. Market surveillance authorities will therefore have consistent access to the regulatory tools they are familiar with in other goods legislation. These tools include compliance, recall and withdrawal notices.

Turning now to offences, the inclusion of criminal offences within this legislation is again consistent with the existing UK-wide sanctions regime for products, and therefore illustrates that market surveillance sanctions are not new. I confirm that the penalties for such offences within this SI are at the lower end of the range of penalties within the existing regime, and that this SI ensures that offences remain available to market surveillance authorities. It contains offences in respect of withdrawal and recall notices, offences relating to obstructing an investigation and offences for breaches of MSC. The offences under this statutory instrument will give rise to a maximum fine of up to level 5, which is currently £5,000, or up to level 3, which is currently £1,000, on the standard scale, depending on the offence. These will not have provision for imprisonment and will be heard in a magistrates’ court. The offences are expected to be prosecuted only in rare circumstances and when necessary, primarily to protect consumers from unsafe products and to address deliberate or persistent non-compliance.

There is a new requirement in MSC: Article 4, which requires a business supplying certain goods to have a responsible person based in the EU or Northern Ireland. This can be a manufacturer, importer, authorised representative or a fulfilment service, and they must undertake certain compliance responsibilities to be able to place certain goods on the EU or Northern Ireland market. The requirement in Article 4 is directly applicable, and this SI provides for enforcement mechanisms for a breach of that requirement. Many businesses supplying customers in Northern Ireland or the EU already have the necessary arrangements in place.

On 11 June, my department published Article 4 guidance for businesses and market surveillance authorities, answering many of the questions that businesses may have. We have actively engaged with a wide range of organisations to ensure that businesses engage with the guidance. We have a comprehensive plan to work further with trade associations and businesses to ensure that they understand the requirements and support available. My officials will continue assisting business organisations to ensure that MSC does not place a disproportionate burden on trade into Northern Ireland for businesses that do not already have a person responsible for compliance, while ensuring that the product safety framework itself remains robust and effective. Additionally, my department is offering MSC-specific training to all market surveillance authorities to support consistent understanding of its application across the regulatory landscape.

This SI is required under the withdrawal agreement, which is given effect in domestic law by the European Union (Withdrawal) Act 2018 and the subsequent protocol. MSC itself is directly applicable, as an EU regulation, meaning that no action is needed on the part of EU member states, and as such, it applies in Northern Ireland under the protocol. It is important to emphasise that while MSC requires businesses in some product sectors to have a person responsible for compliance, established in the EU or Northern Ireland, it does not create new burdens on the movement of goods from Great Britain to Northern Ireland.

As set out following the last withdrawal agreement Joint Committee in June 2021, the UK has taken extensive steps already to operate the protocol, both by the UK Government and the Northern Ireland Executive, and by businesses across the United Kingdom. This reflects that we will continue to operate the protocol in a pragmatic and proportionate way, focused at all times on minimising its impact on day-to-day lives in Northern Ireland. I must emphasise that the MSC regulation and our implementation of it will not create checks on goods from Great Britain.

In summary, this SI ensures that Northern Ireland consumers remain protected from potentially unsafe and non-compliant products and will implement the legislative requirement of the protocol, which will bring a new aspect to market surveillance and ensure that there are no regulatory gaps within the area of product safety. This will result in the maintenance across the UK of a cohesive and effective regulatory regime for manufactured products which will protect all UK consumers, including those in Northern Ireland. The Government will of course ensure that they monitor the implementation of the new regulation and that they continue to work with businesses and market surveillance authorities to help them adapt, providing the necessary guidance and support where needed.

I therefore commend this statutory instrument to the House.

--- Later in debate ---

[Lord Callanan (Con)]

I thank both noble Lords for their valuable contributions to this short debate. For reasons that I will summarise, it is vital for the product safety regime that this SI comes into force in Northern Ireland on 16 July 2021.

First, the SI will provide continued robust protection for consumers. It will ensure that safe and compliant products can be placed on the market in Northern Ireland as part of a cohesive and modern product safety framework across the whole United Kingdom. The SI builds on the powers set out in the existing product safety regime in a way that regulators and businesses will be familiar with.

To achieve this, the SI provides a uniform set of powers for regulators, designed to fit with the existing products legislation across the United Kingdom. This includes powers in respect of criminal offences that can be used by market surveillance authorities on the occasions where they are required, which we expect to be rare. The Regulators’ Code will continue to apply across the United Kingdom. It provides powers that can be relied on if needed by all market surveillance authorities, irrespective of product. It also protects consumers from potentially unsafe products sold online by setting out a mechanism that market surveillance authorities can use to request co-operation from an online service provider. Without this SI, there would be gaps in the enforcement of product safety within Northern Ireland when the existing market surveillance chapter of the prior regulation is repealed. The powers in RAMS would otherwise fall away, risking disruption and confusion for businesses and enforcement authorities.

The Government have been engaging closely with businesses and regulators on the introduction of these new market surveillance regulations; we have published guidance for both and will continue to provide support to them in the coming months.

In response to the questions raised by the noble Lord, Lord Stevenson, there are a range of administrative and civil sanctions—for example, compliance, recall and withdrawal notices—available in MSC which can be used by market surveillance authorities. These enforcement tools are backed by criminal offences, which are in line with other legislation in the goods sphere. While civil penalties such as fines are not included, the Government are reviewing the product safety framework for the whole United Kingdom to ensure that it is fit for purpose, protects consumers and supports businesses to innovate and grow.

The call for evidence has concluded, closing on 17 June, and a government response on its findings will be published in due course. In terms of any changes that might be seen in activities on the ground, neither MSC nor our implementation of it will increase checks on goods. In Northern Ireland, as in Great Britain, market surveillance checks will follow an intelligence-led and risk-based approach.

The noble Lord also asked why there is no enforcement provision or penalty for online services. While services are not included in the protocol, the primary aim of these provisions is not to create an enforcement power to regulate online service providers; instead, it creates a power for the MSA to request co-operation from an online service provider to assist it in mitigating the risks presented by unsafe products, in order to protect consumers in Northern Ireland.

The noble Lord, Lord Bassam, raised concerns about how the implementation of the regulation will impact on British businesses, particularly those that sell online. As I pointed out to the noble Lord, Lord Stevenson, GB businesses will need economic operators, for compliance, to sell within Northern Ireland and the EU single market. My department will continue with a targeted, sector-specific engagement approach up to and beyond the date the regulation comes into force, 16 July, so that they are aware that the legal obligations remain unchanged in terms of the controls and targeted, risk-based approach to goods entering the market.

Consumers in Northern Ireland who are concerned that a product is unsafe or believe it may not comply with UK regulations can contact their district council environmental health service trading standards, which is responsible for enforcement of product safety legislation in Northern Ireland, or they can contact Consumerline. The relevant enforcement body will then decide whether an investigation should take place and what action should be taken regarding instances of compliance. Unsafe products, by presenting a serious risk, are notified to the product safety database. Unsafe product reports are publicly available to consumers.

In response to the noble Lord’s concerns about whether our approach is proportionate, risk-based and intelligence-led, enforcement of this regulation has been agreed with the EU. Market surveillance activity under the MSC regulation is risk-based and targeted. This is set out in legislation. We explained our approach to the EU last year; we have always been open with the EU that we have never envisaged many checks taking place at points of entry.

As I noted in my opening speech, my officials will of course continue to assist business organisations to ensure that MSC does not place a disproportionate burden on trade in Northern Ireland. We will continue to update the guidance. I hope I have dealt with the queries raised by both noble Lords. I therefore commend these draft regulations to the Committee.

Motion agreed.