Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019

Lord Stevenson of Balmacara Excerpts

Monday 4th March 2019 Grand Committee

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

My Lords, these regulations were laid before the House on 7 February 2019.

The protection of consumers from unsafe products is at the heart of the legislation before us today. It has a single yet crucial objective—to ensure that, in the event of no deal, the UK continues to have a robust and highly effective product safety and legal metrology regime. It ensures continued protection for consumers across the UK and provides certainty and clarity for businesses.

The UK product safety and legal metrology regime is among the strongest in the world. It is vital that we continue to retain such a robust system, even if the UK leaves the EU without a deal in place. The legislation will not change the existing system or approach taken, which I know is supported by stakeholders. The changes are limited to those necessary to ensure that the 38 product safety and metrology laws it covers will still work effectively on exit.

Before I say more, I would like to explain the approach we have taken, because I appreciate that some noble Lords may have concerns that such a large instrument may be difficult to navigate.

[Lord Stevenson of Balmacara (Lab)]

My Lords, it is not the navigation but the strain on our hands.

[Lord Henley]

I make no comment.

I assure the Committee that this approach has been designed to increase understanding and reduce the number of similar instruments that would otherwise be needed. Many cross-cutting issues are the same for different products. These have similar definitions, obligations and requirements. As a result they require similar amendments, which it makes sense to group together into one instrument rather than to separate out into many different instruments. Another reason for the size of this instrument is the lengthy technical schedules. These are used widely by industry, and incorporating them here from retained EU law makes it easier for businesses to see and understand the legislation as a whole.

During development of this instrument, we have been mindful of the impact on business of changes to processes as a result of the UK’s exit from the EU. Where possible, we have given businesses time to adjust, including an 18-month transition period for importers for any labelling changes and a 90-day transition period for companies notifying key safety information for cosmetic products already on the market. We have also engaged with businesses on the drafting. Drafts of the schedules were shared with stakeholders and feedback obtained. Stakeholders, including trade associations, industry experts and enforcement agencies, took part and welcomed this approach. As a result we have a better understanding of the main requirements and concerns of stakeholders, including businesses, and have been able to reflect these in the legislation that is before us today. In addition, and given the importance of this area of law, we have completed and published a full impact assessment to ensure complete transparency—despite the impact being below the threshold at which an impact assessment is required.

On the detail of the instrument, it is important to repeat that it will not change the UK’s approach to product safety. It keeps important elements; for example, it retains the requirement for conformity assessment to ensure that products meet the essential requirements set out in the legislation, including the need for assessment by third-party organisations where that is currently required. It retains the use of standards that give rise to presumptions of conformity with the legislative requirements, making it easier for businesses to ensure that their products are safe by following a designated standard.

Taking action to protect consumers from unsafe products remains vital, and this legislation ensures that the UK’s market surveillance system will continue to work to limit the number of unsafe and non-compliant goods available to UK consumers and businesses. It also gives ongoing recognition of existing authorised representatives in the European Economic Area for any appointed before exit, while those after exit will need to be in the UK.

For cosmetic products, due to the risk they pose to human health, responsible persons—who play a key role in ensuring the safety of cosmetic products—will be required to be based in the UK from the point of exit. By addressing these issues we are able to give business certainty and—crucially—we will retain our ability to remove unsafe or non-compliant products from the market.

To conclude, I hope that the Committee will agree that maintaining a functioning product safety framework in the event of no deal is essential both for consumer safety and business confidence. Without this legislation in place, there would be major risks to the safety of consumers—the safety of the toys our children play with, the cosmetics we all use every day, and the electrical items which are found in abundance in our homes. Maintaining these protections is vital to people across the country. I beg to move.

--- Later in debate ---

[Baroness Burt of Solihull (LD)]

My Lords, I add my thanks to the Minister for conducting a consultation on this “minor” piece of legislation last week and for his explanatory letter to the noble Lord, Lord Fox, which has been passed on to me. However, after the meeting last week I have rather more questions now than I had in the first place.

In the event of a no-deal Brexit, this SI creates a new independent regime for checking product conformity, initially mirroring EU product-safety standards. The Government have combined 38 measures into one, creating a piece of legislation over 600 pages long. The concerns that I outlined at the meeting—which were subsequently outlined by the noble Baroness, Lady Crawley, as well—regarding the breadth of industries and the number of sectors covered by this instrument remain. It makes it difficult for Parliament to read and scrutinise let alone those organisations to which it actually applies. Any company, small or otherwise, looking at this piece of legislation would be daunted, and I do not accept the argument that the repetition over all the different sectors covered will be reassuring and ensure consistency of treatment between different areas, as was mentioned at the meeting last week.

I also do not think that the 241,000 businesses which will be covered by this instrument will thank the Government for making them wade through so much paperwork to find what they need. Surely one of the fundamental principles of a democratic society is that people should be able to know what the law is and easily understand how it applies to them. Today’s SI has the potential to undermine that principle.

We know that there is a premium on time before 29 March, and we certainly have plenty of SIs to get through, but the Government could have laid each of the measures separately and then grouped them together in smaller debates. Companies, and consumers, will not thank them for this tombstone of an SI.

At the meeting last week, I also raised the costs of implementation, which have been calculated at a total of £25 million. The analysis and evidence summary talks of a corporate manager or director taking an average of three hours to familiarise themselves with the new legislation. The £25 million is supposed to cover an estimated £54 billion-worth of GVA and £63 billion-worth of goods from our exporters to other EU countries, with about £104 billion imported from EU countries.

The impact assessment does not include the wider impact caused by the separation of the UK and EU product safety regimes. It is surely here where the biggest costs to businesses of a damaging no-deal Brexit would lie. No assessment that I can see is made of the cost of relabelling products—removing the old CE marker and substituting the new UKCA one. The manufacturers’ organisation Make UK told the BBC that,

“thousands of companies are going to have to spend millions of pounds collectively on changing all their markings to comply with the new mark”.

It does not include the cost to British exporters of having to seek approval from two notifying bodies: one based in the UK and one based on the EU.

My first question is: what assessment have the Government made of those costs to UK businesses and what knock-on effect will they have on consumer prices? Is this not another reason why the UK would be foolish to leave on 29 March without a deal? That is a rhetorical question: the Minister and I both know the answer to it.

My second question, to which I would appreciate an answer, regards the impact of a no-deal Brexit on our 176 notified bodies operating in the UK which provide more than 4,000 jobs between them. If the EU does not allow UKCA-marked products to be sold in the EU, there will be no incentive for foreign manufacturers to have their products certified in the UK. They will go to an EU-notified body to receive the CE mark and then import the products into the UK. Does the Minister agree with that assessment? In the light of it, are the Government seeking assurances from the European Commission that it would accept UKCA products in a no-deal scenario?

On the subject of the CE mark, I should like to ask a question on behalf of the charity Electrical Safety First. It is concerned that although the UK Government have created their own mark, it will not be a consumer mark widely recognised by the public. What plans do the Government have to raise awareness of the new mark among consumers? What are the timings and what transition plans are there? Electrical Safety First would like the Government to work with it and industry to raise awareness of the UKCA. That sounds like a fair offer to me. How does the Minister respond?

Next, I should appreciate some clarification on the expiry of the CE mark. The Government have decided that they will continue to allow products imported from the EU that bear the CE mark to be sold on the UK market and that this will happen unilaterally, regardless of whether the EU agrees to allow UKCA-marked products to be sold to the EU. At the meeting with the Minister, he referred to a transition period of 18 months using the existing marks for importers, and to one of 90 days for cosmetic product imports. We discussed that earlier today. But there appears to be no sunset clause on the SI. I presume the Government will have to change the law to ban CE marked-products from being sold in the UK should they ever wish to do so. Can the Minister clarify whether that is correct?

Finally, I will mention market surveillance. The UK will lose access to RAPEX—the EU’s rapid alert system—and ICSMS, the Information and Communication System on Market Surveillance, which we will replace with our own databases for market surveillance and public protection to help remove unsafe or non-compliant products from the UK market. The charity Electrical Safety First is unsurprisingly exercised about counterfeit goods as well, particularly those sold online. What plans are there to prevent more counterfeit and substandard electrical goods from being sold, particularly online, after Brexit?

I am sorry for the length of my remarks and promise to make it up to the Minister in the next SI, but this is, as I have mentioned, an inordinately long one. I appreciate that I have asked a lot of questions, so will the Minister undertake to write to me on any he may not manage to answer today?

[Lord Stevenson of Balmacara]

My Lords, I join other noble Lords in thanking the Minister for organising the meeting held last week on this SI—as has been said, it was very useful in covering a lot of the ground that otherwise would have needed to be raised today. It is interesting to have had the experience of going through such an extraordinarily large tome with so many details; it took me into areas of public policy where I did not think I would ever have to go. I particularly enjoyed, and of course immediately read first, the intoxicating liquor order 1988, which was closely followed by the strawberry regulations. Both were of immense interest and, for those who have not yet managed to get that far through the document, worth the journey.

I will not raise many of the points which have been made, but I will come back to a point raised during the meeting which has not yet been properly answered. There is substantial additional work implicit in the change in regulations, which has already been mentioned by the noble Earl, Lord Lindsay, and my noble friend Lady Donaghy, for the United Kingdom Accreditation Service and the Health and Safety Executive. It is not yet clear that the additional resources that may be required will be funded and that support will be offered. Could the Minister confirm that that will be the case? Additional work will clearly be required; it may be of a short-term and temporary nature, but I suspect that it will be continuing. Assurances need to be given that the additional work will be properly covered, or we will lose.

On that same theme, the Minister said as he introduced this that it was really all about consumer confidence and product safety. Of course, that will be only as good as the body and individuals which have to police it. That will largely fall to trading standards—we have already discussed some of the issues that are raised in this. I asked at the meeting, and ask again: what will the financial arrangement be for this? Clearly we want good product safety and consumer confidence, but will get them only if we pay for them. In the past it has been assumed that the additional work can be picked up by those responsible for trading standards, which are largely local authorities. When primary legislation has gone through this House in the past, we have also asked these questions and had assurances that substantive new additional work applying from primary legislation—such as the recent Bills going through this House—would be funded. Indeed, mechanisms for that have already been described and put in place. Can we again have some confirmation that the additionality implied in these regulations will also be funded?

[Lord Henley]

My Lords, I forget who it was who said, “Never apologise, never explain”, but I will start with an apology for the sheer size of this SI, which has received some comment—not just at this meeting, but at the meeting I held last week. I am grateful for the comments made by all those who came to that meeting and more widely by others, particularly the concerns of the Secondary Legislation Scrutiny Committee, on which the noble Baroness, Lady Donaghy, and the noble Lord, Lord Rooker, sit. I also discussed that with the chairman of that committee, the noble Lord, Lord Cunningham. I know he has also had correspondence with my honourable friend Kelly Tolhurst, who has ministerial responsibility for these matters within the department, and with my right honourable friend the Secretary of State.