Product Regulation and Metrology Bill [HL]

Debate between Lord Sharpe of Epsom and Lord Lucas

Committee stage
Monday 25th November 2024 Grand Committee

[Lord Lucas (Con)]

My Lords, I rise to move Amendment 20 and speak to the others in this group. Each of these amendments has a role, I hope, in improving or at least elucidating the provisions of the Bill, but they are also put together from the point of view of “Let’s collect the tax”.

This Government have not been shy of hurting people in pursuit of a few hundred million pounds in tax per year. They have threatened the basis of family farms, chucked children out of school in the middle of their exam years and frozen old age pensioners. Why, then, are they leaving a billion pounds a year lying on the floor, uncollected, from scamming Chinese and other—Asian, by and large—traders? It is quite extraordinary. It not only fails to collect the tax but damages the British businesses that would be doing the business if we were not giving a 20% price advantage to the likes of Shein and Temu. Now we see that Amazon has to follow them down this track because it has been so damaged by Shein and Temu that it has to go into the same business. This is economically illiterate and ridiculous.

I am very grateful to the noble Lord, Lord Leong, for arranging a meeting to discuss this. He very kindly invited a Treasury official along. I have had a reply now from the Treasury saying basically, “Don’t ring us, we’ll ring you”. I find this extraordinary, but I do not particularly blame this Government. The last Government was just as bad on it. However, it is extraordinary not to collect tax when the Government are going to such lengths to collect additional tax now.

I will add one more thing: for goodness’ sake, make the marketplaces liable for VAT. Stop trying to make the individual traders liable for VAT. They are here today, gone tomorrow, registering 500 new companies with Companies House, with lots of new VAT numbers. As soon as you put your finger on them, they are gone. Make the marketplaces collect VAT. It would be simpler and easier for them and for us, and much more effective.

Amendment 20 asks that we get a sensible amount of information on the origin, the identity of the local representative, the value and the beneficial ownership of the goods, so that everybody involved can see where the liability for product regulation sits, where the liability for any charges can sit and how things can be enforced. The more difficult you make it to track down who should be collared, the less it will happen. In these regulations, we must make it easier to chase people.

Amendment 24 basically says, “Make sure the representative who is appointed has the financial strength to stand behind what’s going on”. If the Minister cares to browse Amazon when he has the time and looks for, say, a three-terabyte drive—the sort of thing I shall need to pack up my 30 years in this place and carry it away with me—he will find that there are some very reputable products on the market for around a hundred quid. That is astonishing. I remember buying my first serious computer, which had 20 megabytes of hard drive, and thinking that was extraordinary. So—three terabytes for a hundred quid from a good manufacturer.

However, there are also products on the market for fifty quid from weirdly named companies. The game being played there is that the products do not contain three terabytes. They probably contain only 256 megabytes. But it does not show on the outside and by the time that anyone gets around to complaining and putting bad reviews in place, the company has changed; it has gone; it is someone else and there is no one to pursue. With a product such as a hard drive, it takes a while for someone to realise that it has been mis-sold. If you are going to pursue these people properly, you need to know that you can go after them for several months of turnover and succeed, which means that the representatives in the UK have got to be good for the money. Otherwise, you just do not have effective product regulation.

Amendment 25 also relates to “Let’s collect the tax”, since we are creating these structures to look after product quality, which could quite easily be used to help collect tax. Amendment 26 says, “Look, we’ve got a trading standards system that is really short of money, so let’s make it easier for us to extract money from the process we are creating in the Bill and feed it through to trading standards so that we get an effective and efficient system of enforcement”. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Lucas, for his proposed amendments to Clause 2, which, as highlighted by the Delegated Powers and Regulatory Reform Committee, has been recommended for removal due to the broad and vague nature of the powers it grants. The liability for regulations and charges related to products is a matter of extreme importance. Without clear guidelines and transparent information, businesses could face significant uncertainty, which in turn undermines their ability to comply effectively.

The Government’s focus on clarity in other areas will ring hollow if they fail to address the critical need for clarity in liabilities—an issue that the amendments in the name of the noble Lord, Lord Lucas, seek to address directly. Regarding Amendment 20, by ensuring that products are marked with clear and comprehensive information, such as origin, local representation and ownership, we can establish clear responsibility for product compliance. This would not only improve regulatory transparency but foster trust with consumers and businesses alike.

I urge the Government to take this opportunity to acknowledge the importance of clear liability and responsibility frameworks. Although these amendments are to Clause 2, and we continue to discuss its broader issues, nevertheless the noble Lord’s proposed changes are a necessary step towards ensuring both accountability and transparency in product regulations.