Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2019

Lord Fox Excerpts

Thursday 21st March 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)]

My Lords, this draft statutory instrument was laid before Parliament on 18 February and was approved in another place on 13 March 2019. The Government’s priority is to reach a negotiated settlement with the EU. However, it is our duty as a responsible Government to prepare for all eventualities, including leaving with no deal. This statutory instrument is one such contingency measure to ensure that regulations governing chemicals and genetically modified organisms for continued use stay operable under a no-deal scenario.

I take this opportunity to reiterate that this instrument will deliver on our commitment to protect workers’ rights as the UK leaves the EU by ensuring that health and safety regulation continues to provide a high level of protection in the workplace and for others affected by workplace activities. It will also deliver on the Government’s commitment that standards of protection for people and the environment will remain at least as high as at present as the UK leaves the EU.

Together with ministerial colleagues in the Department for Environment, Food and Rural Affairs, we oversee a number of key regulatory regimes that affect the chemicals sector. Since the referendum, our joint programme has conducted particularly intensive work to ensure that there will continue to be a functioning regulatory regime with associated enforcement activity for chemicals under any exit scenario. These draft regulations form part of the work being done to adjust our existing legislative framework in readiness for leaving the European Union.

I appreciate the technical nature of the regulations. They are made particularly complex by being a composite of several different regulatory regimes. It was decided to present these proposals as a single instrument for the benefit of your Lordships’ House in reducing pressure on parliamentary time and ensuring that we are able to deliver an orderly exit. Noble Lords should be assured that the proposals are sensible, proportionate and necessary.

If approved, these draft regulations will make necessary amendments to three retained EU regulations, as well as EU-derived domestic legislation affecting the whole of the United Kingdom, including Northern Ireland. As stated, the purpose of the instrument is to amend the relevant legislation to ensure that there is provision for an independent UK regulatory regime that maintains existing standards and protections. Going forward, the Government’s priority will be to maintain a legal framework to ensure the continued effective and safe management of chemicals in order to safeguard human health and the environment. That framework needs to be flexible enough to respond to emerging risks, while still allowing trade with the EU that is as frictionless as possible.

The first of the three retained EU regulations to be amended is the biocidal products regulation. This governs the placing on the market and use of products that contain chemicals which protect humans, animals, materials or articles against harmful organisms such as pests or bacteria. It is in place to ensure that these chemicals are safe for humans, animals and the environment, while improving the functioning of the biocidal products market. This market covers a wide range of products such as wood preservatives, insecticides such as wasp spray and anti-fouling paint to remove barnacles from boats.

Secondly, the classification, labelling and packaging of substances and mixtures regulation ensures that the hazardous intrinsic properties of chemicals are properly identified and effectively communicated to those throughout the supply chain, including at the point of use, partly through standardised hazard pictograms and warning phrases associated with specific hazards, such as explosivity, acute toxicity or carcinogenicity.

Lastly, the export and import of hazardous chemicals regulation implements the Rotterdam convention and requires exports of listed chemicals to be notified to the importing country. For some chemicals, the consent of the importing country must be obtained before export can proceed.

These regimes rely on EU processes to take and implement collective decisions. However, much of the business of these regimes already operates at national level. Decisions at EU level are taken on the basis of evaluations and assessments undertaken by member states or following consideration of scientific opinions reached by relevant expert committees. Under a no-deal scenario, this instrument provides for these evaluations or opinions to inform a national decision, rather than informing UK input into an EU decision.

The Health and Safety Executive currently acts as a UK competent authority within the EU regimes for chemicals regulations; therefore, it already has existing capability and capacity which can be built upon to take full UK regulatory authority responsibility. For example, across the whole of the EU, the Health and Safety Executive currently processes around an eighth of the biocidal active substance approvals and around a third of the biocidal product authorisations.

It is necessary to put in place arrangements for the Health and Safety Executive to recover its costs for work across the wider chemicals regimes, including for plant protection products, which is currently done by EU institutions and for which a fee is charged. This cost recovery approach is in line with Her Majesty’s Treasury policy and is a well-established procedure for charging industry for the various work and advice provided by the Health and Safety Executive, such as applications for approval of first aid training on offshore installations and pipelines, or evaluation of safety cases made under COMAH regulations.

This instrument also contains a small number of technical operability amendments to the Genetically Modified Organisms (Contained Use) Regulations 2014. These regulations pertain only to the use of genetically modified organisms in controlled settings, such as a laboratory, and currently refer to a number of European directives and regulations. The references, some of which are the responsibility of other government departments, are now updated with the corresponding repatriated UK domestic law. There are no policy changes or updates to duties, and all existing protections covering human health and the environment are maintained and will continue to work in the same way post EU exit.

The UK chemical sector is our second biggest manufacturing industry and second largest exporter. It is also integral to the provision of essential products and technologies on which society relies. This instrument will provide clarity to the chemical industry and regulators, ensuring that the legal requirements that apply in relation to chemicals regulations are clear immediately after exit and provide certainty to consumers that the use of chemicals in the UK will continue to be desirable and safe.

Before closing, I would also like to stress that the devolved Administrations have provided consent for the elements of this instrument which are considered devolved. I hope that all noble Lords will join me in supporting the draft regulations. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the Minister for introducing this statutory instrument; quite clearly it covers some important ground, albeit in a compendium of different issues.

I am not sure what we have done to deserve the raffle prize of the most coveted slot of the week. I was a little surprised—with all due respect—to see a DWP Minister putting this forward, but the Minister explained the Government’s perspective that worker protection is one of the clear priorities of this legislation, along with human health and the environment, of course. This SI is something of a younger sibling to another one—the REACH statutory instrument, which we will debate on Tuesday. In that respect, I will touch on some issues today, but I expect to deal with them at greater length next week. I do not know whether the Minister then will be the noble Baroness, Lady Buscombe, or the noble Lord, Lord Gardiner. Perhaps the audience in the “royal box” might carry to the noble Lord some of the issues that I put forward today; it would be good if he could come prepared. As the Minister said, these regulations cover the important chemicals industry, and touch on our research capability through the GMO issues. There is some very important ground for us to consider.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank the noble Lords, Lord Fox and Lord McKenzie, for their pertinent questions on this instrument, which is extremely important for the chemicals industry. In response to the noble Lord, Lord Fox, I am here as the DWP Minister. The DWP is the lead department for HSE operations. When the REACH regulations—on which the noble Lord has tabled a Motion—are debated next week, it will be my noble friend Lord Gardiner at the Dispatch Box, not me. He is the Minister for Defra, the department which is directly impacted. I will make sure that my noble friend is aware of today’s debate. I hope it will help him prepare for next week’s debate and that we can avoid a fatal Motion.

I will do my utmost to respond to the questions asked. As both noble Lords have emphasised, this is an incredibly important industry. The chemical sector is our second largest manufacturing industry and is vital to the economy and to many other industries, often leading the way in research and innovation. It is not only our second largest export industry but a key component in other important sectors, such as pharmaceutical, automotive and aerospace. We want to make sure that it continues to succeed and will do our utmost to support it.

The Government therefore seek to ensure that any potential new burdens on UK companies are minimised. The Health and Safety Executive is aware of the impacts and cost implications for business of any potential changes. It will, consequently, endeavour to keep such changes as simple and straightforward as possible. The Health and Safety Executive will implement an active communications programme on this point, leading up to exit and following it, to ensure that all stakeholders are aware of any potential changes in their responsibilities.

Both noble Lords asked about capability. This is understandable, because this adds to the already established role the HSE plays. Some of my ministerial colleagues in another place have had numerous, cross-government meetings with the HSE to discuss capability. The HSE, as we know, currently acts as the competent authority, but resources have been reprioritised to meet new pressures and to supplement existing capability and capacity. Under a no-deal scenario, the HSE would look to recruit around 120 additional staff in 2019, with an estimated cost per annum of £3.3 million. It should be noted that currently more than two-thirds of its budget for work carried out by the chemicals regulation division in the HSE is cost recoverable and the expectation is that cost-recoverable work will continue to form a reasonable proportion of its income after we exit the EU. Additional funding will also be made available to the HSE. The HSE keeps its resourcing plans continuously under review and will carry on assessing the impact, including on cost-recoverable work.

[Lord Fox]

Just to be clear, is 120 extra people the total number expected to be taken on to cover all the post-Brexit requirement? Is the £3.3 million not new money but money that has been moved from one HSE box to another? The noble Baroness talked about money being reprioritised: from which priority has it been moved in order that this becomes a priority? I would like a little more clarity around that.

[Baroness Buscombe]

I ask the noble Lord to bear with me in case my officials can reassure me on both those points: I would not like to take a punt, as it were, before we close this debate.

I thank the noble Lord, Lord McKenzie, for attending a recent meeting to which all Peers were invited, chaired by the then Minister for Disabled People and the lead Minister for the HSE in the Department of Work and Pensions. At that meeting it was helpful to have the opportunity to listen to representatives of the HSE, who were very clear about the pathways forward in the event either of a deal or no deal, and who work extremely well, I have to say, with our department and across government to support its crucial work now and the crucial work that will be placed upon it.

The noble Lord, Lord Fox, asked about accountability for decisions. The UK Government are committed to transparency so that citizens can hold the Government to account on how decisions are made that affect their lives. Decisions taken by the Secretary of State regarding chemicals regulation will be subject to the same processes that hold Ministers to account as any other decisions. In addition, for several decisions, the consent of the devolved Administrations will be required.

As for the cost to the industry, the proposed amendments in this instrument relate to the maintenance of existing regulatory standards. Therefore, the instrument has been calculated to have a net direct impact on business or civil society organisations of less than £5 million annually. The Government seek to ensure that any potential new burdens on UK companies are minimised. The HSE is aware of the impacts and potential cost implications to business of any potential changes and consequently will endeavour, as I have already said, to keep these as straightforward and simple as possible.

I can now respond to the noble Lord, Lord Fox. There will be 120 additional staff in 2019 and the £3.3 million is DWP funding for the HSE’s work and REACH is funded by Defra. The cost-recovery work is additional to this funding. I hope that that is clear.

On parliamentary scrutiny, after exit the same UK regulatory scientists will recommend updates to ensure the continued protection of people, the environment and the interests of UK business. This will be for the UK only, not as part of the EU system. When Ministers agree with a recommendation, they will issue a decision to this effect and the HSE will then ensure that the updates are given effect from an agreed date and alert duty holders to changes. Decisions taken by the Secretary of State on chemicals regulation will be subject to the same processes that hold Ministers to account on other decisions, as I have said. This approach is better suited to the volume and pace of the scientific and technical changes involved, and will allow for effective management of the downstream consequences. Enabling the updates in this way ensures that they are dealt with promptly and efficiently, which is necessary to provide legal certainty for UK businesses. The approach also prevents undue pressure on parliamentary time; under the BPR regime, for example, there can be up to 50 active substances approval decisions a year.

On the Biocidal Products Regulation and the active substance review programme, in a no-deal scenario the UK would be outside the EU review programme and responsible for taking on active substance approvals nationally. The UK could however take into account evaluations done by other regulators, and would seek to do so where feasible. This includes the EU, which would continue to work to the same standards as operated by the UK. However, we would also maintain the option to take different decisions from the EU 27. Submission deadlines specified under Article 89 of the Biocidal Products Regulation will continue to apply, allowing the use of products containing active substances that are within the scope of this review programme, permitting them to continue to be made available on the market for a specified period of time. Other rules for participation in and withdrawal from the review programme will also remain similar to those in the present EU review programme.

[Lord Fox]

I apologise for rising again, but I thought the Minister said that it is perfectly reasonable for the Government to expect that in some cases, if the European Union safety authority decides to ban a chemical for a particular use, the UK would follow that ban without doing its own work and assessment. Is that a correct assumption?

[Baroness Buscombe]

I said that the UK could take into account evaluations made by other regulators, and would seek to do so where feasible. This includes the EU, which will continue to work to the same standards as the UK. It would also maintain the option to take different decisions from the EU 27.

[Lord Fox]

I think that is a yes.

[Baroness Buscombe]

That is a yes.

The noble Lords, Lord Fox and Lord McKenzie, asked about data. In a no-deal scenario, following EU exit it is not expected that the UK would be granted any permission to access confidential information held by the European Commission or the European Chemicals Agency, so any information previously submitted via these processes would not be available for the Health and Safety Executive to refer to. Such data must therefore be resubmitted to the HSE where necessary for it to continue operating the regulatory regime.

The specific circumstances in which data resubmission would be required are set out in the Biocidal Products Regulation transitional arrangements. The HSE appreciates that the requirement for applicants to resubmit their data packages may result in some increase in cost to business. However, this increase is expected to be minimal, on the basis that any data the HSE requests will be the same information as previously submitted and can be submitted in electronic format.

The technical data requirements needed to support an approval of an active substance or an authorisation of a biocidal product would be the same as those specified under the EU regime. In the immediate period following exit day, the necessary processes will be in place such that applicants can submit data to and correspond with the HSE as the competent authority. Such processes and systems will be sufficient to process applications and permit the necessary communications to take place in the weeks following EU exit, with the intention that a more streamlined, efficient process will be developed in due course. More information on what systems will be used will be made available to applicants as soon as it is available.

As I have been corrected to an extent, I return to a point I made a few moments ago on taking decisions on active substance approvals nationally and whether we would just do what the EU has done and accept a ban. To clarify, we would always make our own assessment of EU conclusions, so we would not just accept them at face value. Perhaps that is helpful.

[Lord Fox]

That brings me back to the point I made in my speech: there are 488 chemicals to be reassessed if we follow the European Union’s work programme on this. In addition, it will be an extremely laborious, expensive and time-consuming process that will inevitably be slower than it would have been had we remained within the European chemicals regime.

[Baroness Buscombe]

My Lords, I think I can say confidently that in our discussions with the HSE it has said that it is confident that it could carry out this—albeit laborious—assessment as our competent national, domestic authority were we to leave without a deal.

The noble Lord, Lord McKenzie, asked specifically about impact assessments. The department has been provided with guidance that the impact of EU exit statutory instruments should be assessed in line with standard practice by following the existing better regulation framework, in accordance with Her Majesty’s Treasury’s Green Book guidance. The proposed amendments in this instrument relate to the maintenance of existing regulatory standards. Therefore, as I said, this instrument has been calculated to have a net direct impact on business of £5 million annually. This approach is in line with published guidance, and departmental chief analysts are responsible for ensuring that the proportionate level of analysis is provided. Costs arising for duty holders will be costs of exit rather than of this instrument, which are not applicable to this assessment. An analysis of the wider impacts of the UK’s exit from the EU was published in November 2018 in EU Exit: Long-Term Economic Analysis.

The noble Lord, Lord McKenzie, asked about transparency. The UK Government are committed to transparency so that citizens can hold the Government to account with regard to how decisions that will affect their lives are made. Therefore, in a no-deal scenario the Government would ensure that regulatory decisions are made with justification, in an open manner, with regular and full consultation on key decisions, in line with the Regulators’ Code, committed to transparency. The UK remains a signatory to the Aarhus convention, which guarantees the public rights on access to information, public participation and justice in environmental matters.

The noble Lord, Lord McKenzie, also asked for assurances with regard to scientific and technical updates. The Health and Safety Executive is a world leader in the regulation of chemicals and will continue to be so following EU exit. The Government will ensure that the best scientific and technical advice is available during the process. Indeed, we have to be proud of the extraordinary expertise and skills we have in this area; we must ensure that the best skills and advice continue to be available and that decisions are transparent and involve the opportunity for public participation.

On fees and cost recovery provisions—I apologise in advance if I am being repetitive—the UK will charge fees in line with Her Majesty’s Treasury’s policy and the Regulators’ Code, which requires regulators to clearly explain the basis on which fees and charges are calculated. Industry will be charged only for the work and advice provided by the Health and Safety Executive. This approach is a well-established procedure for ensuring a 100% cost recovery.

Potential changes to fee levels would require legislation to be passed through Parliament. The principle of transparency underpins any changes to fees, so there would be a wide consultation process. This instrument is a purely formal change of the location of powers. In response to the question from the noble Lord, Lord McKenzie, about paragraph 2.7 of the Explanatory Notes, I can say that the situation will not be operable after exit unless we make these changes to ensure clarity about the formal location of powers—that is, powers resting with the HSE.

I think that I am almost there. I think I said that the competent authority involved in scientific advice will be the HSE, alongside the Environment Agency and the devolved authorities’ relevant competent authorities, such as HSENI. It is important to make clear our involvement with the devolved Administrations. All the competent authorities will be involved in decision-making.

There was a question on enforcement. The Government are extremely committed to the protection of workers, the public and the environment. The Health and Safety Executive has sufficient enforcement capacity to police non-compliance with chemical regulations, but enforcement action will be proportionate to the health and safety risks and to the seriousness of any breach of the law, as the HSE enforcement policy statement sets out. HSE’s approach to enforcement will not change as a result of exit. Although some duty holders will have new or different roles to fulfil, depending on their position in the supply chain, the scope of the regulation and the number of duty holders affected will remain broadly the same. HSE has planned a modest increase in enforcement resource to cope with the potential increase in the number of enforcement cases that could arise as a result of increased scrutiny from other agencies, such as Border Force or HMRC.

I think that that covers pretty much all the questions. I hope that noble Lords will bear with me. I put it differently from the noble Lord, Lord Fox: I always call this the graveyard slot. But I want to touch on consultation, because I know that this has been of concern to noble Lords across the House in relation to a number of SIs. We have a very good story to tell about what the Government, working with the HSE, have been doing to ensure that those who are impacted by these changes are aware of what is going on.

Consultation on chemicals was conducted on an informal basis, although, until very recently, this was constrained due to sensitivities arising from the ongoing negotiations with the EU. At the beginning of February, HSE consulted all the major chemical trade associations and it has held a series of workshops and events to discuss changes with representatives of industry and non-governmental organisations. Indeed, in the past month alone, a series of roadshows was held in Belfast, Hull, Cardiff, London, Chester and Edinburgh. In total, across all events since February 2018, HSE has engaged with approximately 1,240 attendees and, since August, the EU exit chemicals regulations guidance pages on HSE’s website have had just under 100,000 views. In the past month, pages with specific EU exit guidance on each EU chemicals regulation have had approximately 3,600 views. So we take the issue of consultation seriously. It is not formal consultation, because there are no policy changes in the legislation, but we believe that it is necessary to ensure that all those who are impacted either directly or indirectly by the regulations and changes associated with our exit from the European Union are aware of what we are doing and the impact of this statutory instrument.

This instrument will provide clarity to the chemical industry and regulators, ensuring that the legal requirements that apply in relation to chemicals regulations are clear immediately after exit, and it will provide certainty to consumers that the use of chemicals in the UK will continue to be desirable and safe. I commend the regulations.