Product Regulation and Metrology Bill [HL]

Lord Fox Excerpts

2nd reading
Tuesday 8th October 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Jackson of Peterborough— I think it was in Peterborough that I got caught in a ring road and went round and round without ever getting anywhere. It is also a pleasure to wind up this debate, but it was more of a pleasure to hear the excellent maiden speech by the noble Baroness, Lady Winterton of Doncaster. While other colleagues were describing her huge and lengthy parliamentary CV, they failed to observe her last two jobs. The most recent was that of Deputy Speaker, and before that she was buried in the shady depths of the Whips’ Office. Neither of those afforded much opportunity for her to stand up on the green Benches and make speeches. It is good to have her back making speeches, and I am sure she will contribute fully to the work of your Lordships’ House.

Brexit is the present that keeps on giving. I naively hoped that the post-Brexit replumbing of the statute book was done, but no. As the Minister explained, the Bill is another piece of work that we need to do as a result of the Brexit process and, while we have managed thus far, it provides a welcome—from these Benches—and much-needed legislative mechanism to introduce changes to regulations. On these Benches, as I think noble Lords have understood, we will work positively with the Minister. I welcome him to his new role, and we thank him and his team for the engagement that they have already given us and that I am sure we will get in future.

Overall, we will be looking for ways to ensure that the Bill advocates for strong consumer safety and well-being. Consumer safety should be built into the Bill and should ensure that all future secondary legislation must be designed to maintain a high level of consumer protection and well-being and to require that products be safe. Future regulation should also cover product recall and other areas, such as disposal. In these regards, there is tremendous scope to strengthen the Bill.

There is more joy in heaven over a sinner who repents. While it might not be heaven on the Liberal Democrat Benches, there is some ironic joy when we hear the voices of some on the Conservative Benches complaining about Henry VIII legislation. During a debate on one of the many Bills, I warned them to be careful what they wished for; what they wished for is what they are now getting. As the Minister explained, this is a framework Bill so there is no subterfuge, but it is one with few or no guard-rails. As we go through, I think that will be important. I look forward to hearing what the Delegated Powers and Regulatory Reform Committee has to say about this, because I suspect we may have to think through some areas around it.

Your Lordships’ House is familiar with, and a number of noble Lords have mentioned, the time-honoured complaint that secondary legislation is unamendable when it comes before us. In the absence of any details in the Bill, it is for this reason that colleagues are starting to raise issues, and many of these issues will come forward. They are anxious to pursue how the regulations will work on really important issues. An important subset has been the issue of lithium-ion batteries. It is not the only priority but is clearly one for some Members of your Lordships’ House.

I believe, as others have said, that the best way for the Minister to draw the sting of this debate is to show us what the proposed regulations will be. I think there will be a number of other areas, particularly around markets, where that strategy will be the best way to satisfy your Lordships’ House. Also, publishing the details of the consultation—which, in our meeting with him, the Minister told us would be coming forward—is very important and will draw some of the sting from the Conservative Front-Bench speech. More generally, there should be a commitment to publish that draft legislation and to give your Lordships an opportunity, once the Bill has passed, maybe in Committee or otherwise, to review that.

A real issue, raised by the noble Lord opposite and by my noble friend, is chemicals regulation. Chemicals regulation is one of the biggest bugbears facing British manufacturing, and one of the biggest hazards facing British consumers across the country. There is a roadblock thanks to the way in which REACH was to be ported across to this country with a new system—I will not bore the Minister on this issue; I have bored Parliament on several occasions on it. It is still a botch—the idea that data could be ported across from EU REACH into the British system was always wrong and there were warnings from the outset. That is why we have the stasis going on now. I would like the Minister to confirm that REACH is within the scope of the Bill, and if it is not we will table amendments to bring it into scope.

Liberal Democrats also believe that we should make future regulations that have regard to the sustainability of products, including the right to repair, reuse and safe disposal, which was mentioned by my noble friend—building in circular economy principles into future regulation. We will table amendments to enshrine that as part of the guardrails that I have talked about.

Next, the accompanying notes and ministerial communications have lauded how the Bill will respond to new and emerging business models. This is important and, as noble Lords heard from my noble friend Lord Foster and others, we will be probing the regulation of online marketplaces. Current product safety laws were developed before the evolution of online marketplaces. The Office for Product Safety and Standards thinks that the responsibilities on these online marketplaces are currently insufficient, and that the rules are unclear. We agree with that and will be seeking that clarity. We will seek an enforceable duty on online marketplaces to provide confidence for consumers. In addition, we will propose the extension of liability to online market- places for defective products, particularly those sold by third-party sellers. This needs to be supported by clearer definitions of the key terms, as some of my colleagues, including the noble Baroness, Lady Brinton, I think, mentioned.

The crucial issue of enforcement was also raised by my noble friend and it is clear that without an obligation to deliver resources to enforce them, these new regulations are essentially worthless. There can be no level playing field for bricks-and-mortar shops if these new rules are not properly enforced on the digital players in the economy.

Moving on, can the Minister please explain, as a number of your Lordships have asked, how this regulation will mesh with the United Kingdom Internal Market Act and with the Windsor Framework? The noble Lord, Lord Browne, and others pointed out that although product regulation is a reserved issue, the effects of the product being regulated are often not reserved. So can the Minister explain how the Bill will proceed, and how it will proceed if it does not receive legislative consent from one or other of the devolved authorities? Meanwhile, we have cross-border issues in the island of Ireland. This has been mentioned around the scope of the Windsor Framework. In some cases it has been mentioned as a menace, in some cases I think the Bill has the opportunity to solve some of those problems, and it will be good to know the Minister’s and the Government’s philosophy on that.

Part of the post-Brexit issue in dealing with the internal market was to create the common framework process. Nobody has talked about those common frame- works for a very long time. I would like the Minister to update your Lordships’ House, probably by letter, on where those common frameworks are, because this is an ideal topic for one of those frameworks, probably the environmental framework, to deal with. At the moment it is not clear to me whether those are completely moribund or whether there is a channel there to deal with it. If there is not, I think we will have to table something in Committee that has a way of bringing together the nations of the United Kingdom so that they can contribute to the process of the regulation that is going forward, rather than have it done to them all the time. That speaks to the spirit that the noble Lord, Lord Browne, was talking about just now.

I would like to use what remains of this speech to clarify two points. First, what is a product? This is not the start of a philosophical discussion. I was struck by one of the conversations I had with the Bill team—for which I was grateful—that the Bill is aimed at tangible products, such as an alarm clock, a vacuum cleaner, or a car, if it is in the scope of these regulations. Historically, the operationality of such things was self-contained. It had all the features that it had, and they were not mutable. That is no longer the case. Almost every product can be internet-enabled and can have its software updated, remotely, overnight, without me even knowing. So the properties of that product, which might have been legal, decent, honest and truthful at bedtime, can be positively dangerous by the morning unless the process of the software operating system updating is also part of the regulatory process. The Bill does not in any sense capture the spirit of that. We will certainly probe that in Committee.

My final point is distinctly Brexity—noble Lords would not expect otherwise. Interestingly, and unusually, the noble Lord, Lord Frost, and I have a shared interest, in that both of us would like some clarity around how the Bill will be used, though we definitely come at it from opposite angles. He and other noble Lords raised the spectre of Clause 2. I will not quote Clause 2(7) again, but a number of my colleagues have said that this is starting to look like a change of tone by the Government. Although some noble Lords on the Conservative Benches might consider this to be a sinister plot, those of us on these Benches would consider it cause for hope, and a sign that some sense is beginning to emerge from the chaos that this Government have been left by their predecessor. Can the Minister tell us whether this is cause for hope? Should I be hopeful? When will hope come riding through the corridors of Parliament?

What most manufacturers want to know is how adhering to future UK regulation will affect their ability to export to probably one of their biggest markets. They do not want two different standards, and the failure of UKCA is a good example of why having two regulatory structures does not work. The previous Government recognised that and kept kicking it into the long grass, while pretending it still existed.

There is a real and present issue—I think it was the noble Lord, Lord Jackson, who raised it at the last—in that the EU General Product Safety Regulations are coming down the line. This is a new instrument in the EU product safety legal framework which replaces the current general product safety directive and the food imitations product directive, and it comes into effect on 13 December 2024. This Bill will not be in place to deal with it, and there is a good deal of uncertainty and ignorance among our manufacturers about the very existence of the directive.

I know that the DBT has started to do some workshops, but there is a tremendous amount of work that needs to be done to explain to people exporting to the EU at the moment that they will have new regulations. These apply to non-food products and to all sales channels within the EU and exports to the EU; the aim is to ensure safety on their grounds. There will be new responsibilities for UK exporters, and these changes will be particularly impactful on SMEs and on businesses using online sales channels. It really is important that the DBT gives us a gap analysis as to what these new regulations bring that current UK regulations do not bring. Separate to this Bill but within the spirit of it, that would be an important communication for us to have. There are a number of issues around this directive, relating to producer responsibility, precautionary principles, internal risk analysis, product safety and traceability information, to name but a few. I know that Make UK is extremely concerned about the lack of activity around telling UK businesses what is going on.

On a more general basis, it would make a lot of sense for the UK Government to develop and create a monitoring capability so that divergence at EU level is communicated to British businesses. That would be to take the view that this Bill does not bring dynamic alignment and that there will always be changes going on. There is no sense that any alignment can be dynamic; it can be created, in that Governments can make alignment case by case, but there is no automation in this Bill. As far as international standards go, I do not think there is anything in this Bill that stops what the noble Earl, Lord Lindsay, wanted to do.

This Bill has a very anodyne title—it perhaps wins the prize for one of the more boring titles. Some have concluded that it is a wolf in sheep’s clothing. I hope that, with the help of your Lordships during Committee, we can make sure that it is a sensible approach to helping UK consumers get the safety and well-being they require from products, and that UK manufacturers have a fair wind behind them to trade with the EU and help to deliver the growth that everybody in this House craves.

--- Later in debate ---

[Lord Leong (Lab)]

I thank the noble Lord, Lord Sandhurst. I will ask my officials and come back to the noble Lord on that request.

The noble Lord, Lord Foster, asked about lithium-ion batteries. I am pleased to advise that, while we have been in this debate, Minister Madders, my colleague in the other place, is in Paris at the OECD global awareness campaign, which this year focuses on lithium-ion batteries. The UK and the Office for Product Safety and Standards have been leading on this campaign. The noble Lords, Lord Redesdale and Lord Fox, raised additional points about disposal. Ministers are referring proposals to consult on reforms to UK battery regulations before setting out next steps.

The noble Lord, Lord Russell of Liverpool, asked why the UK wished to be able to continue recognising the CE marking. This Bill will allow the Government to choose to recognise updates to EU product regulation to provide continued regulatory stability and avoid extra costs for business where this is in our interests. It will also allow us to end recognition of EU requirements where it is in the interest of business and consumers. We presently recognise current EU regulations for a range of products. Legislation passed in May 2024 to continue CE recognition for 21 product regulations is estimated to save UK businesses £640 million over a 10-year period, largely from avoiding duplicate compliance and labelling costs. Provisions in the Bill allowing us to continue or end recognition of EU requirements will enable us to provide the certainty that businesses need to plan for the future and innovate, supporting economic growth. The UK and EU share information on trade, including changes to the trade and co-operation agreement.

The noble Lord, Lord Foster, and several other noble Lords asked about the disposal of lithium-ion batteries. The Government are committed to cracking down on waste as we move towards a circular economy, where we keep the resources we use for longer and reduce waste. The existing product responsibility scheme for batteries and waste electronics makes producers responsible for the cost of end-of-life treatment. Under existing UK legislation it is already mandatory for all batteries placed on the market in the UK to be clearly marked with the crossed-out wheelie bin.

The noble Baroness, Lady Crawley, asked why there have been no changes to legislation on product safety since our exit from the EU. I can reaffirm that this is real, hence bringing forward powers in this Bill to allow us to make changes before divergence happens and we fall further behind.

The noble Lord, Lord Frost, asked why we cannot use existing powers. The new Bill powers are required to enable the Government to modernise and future-proof product regulation, ensuring that it is tailored to the needs of the UK. The powers in the retained EU law Act 2023 are limited, in that they can be used only to revoke and replace assimilated law and have other inbuilt restrictions—for example, secondary legislation that is made under REUL must be deregulatory. This means that we would not be able to use the powers to increase safety requirements to respond to new and emerging threats through further amendments and legislation which was not assimilated law before.

The noble Lord, Lord Frost, also asked whether the Bill will make the UK a rule-taker or a rule-maker. We are definitely not a rule-taker. We are a rule-maker, and the Bill will provide powers to give the UK greater flexibility in setting and updating its own product-related rules, as well as enabling the UK to choose whether to recognise relevant EU products requirements. Any further changes made using these powers will be subject to appropriate parliamentary scrutiny. The noble Lord asked whether the Bill protects internal markets. The Bill will give us flexibility to ensure product regulation and metrology now and in the future. It is tailored to the needs of the UK as a whole. It will enable us to make changes to product regulation and metrology legislation that will benefit businesses and consumers.

The noble Lord, Lord Frost, also asked about the Windsor Framework. In updating its regulation, the EU will be seeking to deal with many of the same challenges that the Bill will address: for example, online marketplaces and batteries. The Bill will enable a choice to be made as to whether it is in the interests of UK businesses and consumers for UK regulations to take the same or a similar approach, or indeed a different one.

The noble Baroness, Lady Brinton, asked whether the Government will commit to a policy of alignment with EU chemical protections. This Government are committed to protecting human health and the environment from the risks posed by chemicals. We are currently considering the best approach to chemicals regulation in the UK separately to this Bill and will set out our priorities and next steps in due course. The noble Baroness also asked how the Bill will help the Government respond to emergencies.

[Lord Fox (LD)]

Am I to understand that, if there is to be separate consideration for chemicals regulation, it will not be in this Session because it was not in the King’s Speech? So all those businesses that are currently struggling with where we are now have at least a year, and probably 18 months, to wait before any sense of a Bill—never mind that Bill becoming law.

[Lord Leong (Lab)]

I am coming back to that in the later part of my winding speech.

National emergencies such as Covid-19 highlight the importance of ensuring that our product regulation framework allows for flexibility in times of national emergency. This enabling Bill will allow the Government, in response to an emergency, to temporarily disapply and modify product regulation while maintaining high safety standards, thereby providing a faster process by which critical products are able to reach the market in order to sustain an adequate supply of such products.