REACH etc. (Amendment etc.) (EU Exit) Regulations 2020

Lord Teverson Excerpts

Tuesday 8th December 2020 Lords Chamber

[Lord Teverson (LD) [V]]

My Lords, I have the privilege of chairing the House’s EU Environment Sub-Committee. Soon after the referendum, we looked at the area of REACH chemicals and we had the then Secretary of State—not the present one—and the Permanent Secretary in front of us. It was quite clear that this was an area the department had not spent a lot of time on. It had concentrated on agriculture, fisheries and wider environmental areas, but absolutely not the chemicals area at all. There was a rather naive view among some people at that time that somehow all the data on chemicals in the European Chemicals Agency could be cut and pasted and put on the UK REACH database—something that we disabused them of, as it was quite clear that it was not true.

The department has certainly picked up a lot of speed since then, but not necessarily with the right answers. One could say that never in the history of corporate life has so much cost and red tape been created for absolutely zero purpose whatever. In fact, it will have a very negative effect on the UK chemicals industry—which, let us not forget, is the second largest manufacturing sector in the United Kingdom after the food industry.

The committee took evidence more recently—in fact, earlier this year—from the British Coatings Federation, which told us that 97% of its members buy chemicals from the European Union, some 65% of their exports go to the European Union and some 55% of their imports come from the EU. EU chemicals are absolutely integrated into the UK supply chain. Beyond that, nearly every other physical goods industry in the United Kingdom is affected in some way by the chemicals supply chain as inputs to their own products.

The result of this is not that UK standards will be particularly important—they will be absolutely essential to UK companies, obviously, and UK importers—but that they will continue to follow EU REACH regulations. If companies want to export, or if they export to the United States, they will have to comply with those regulations as well. This means that the only outcome of this is an additional cost and an additional registration system, which is expected to cost the industry some £1 billion extra—I am interested to hear that the Minister does not reject that figure. I welcome the fact that this might be spread over more time, but that cost is still very much there.

Because of that cost, there is another issue, which I do not think has been raised so far. It is estimated that some 27% of non-UK businesses importing chemicals—those EU companies—will not bother to register in the UK because of the extra cost of doing so. Of course, they cannot usually be replicated by a UK company’s supply because of the intellectual property held by those companies. So we have a system that is unnecessary and is there because of a philosophical choice, not one of safety and not one that is good for British industry.

I have some questions for the Minister. Is the HSE, which I respect hugely in its core functions, really going to have the expertise there in time, and will it be able to recruit sufficiently? I hear the Minister’s assurances, but the fact that it is still recruiting some days before the end of the transition period is, I think, a concern. Are the IT systems ready? The Minister did not mention those; they are absolutely fundamental, and I suspect rather more complicated than an Excel spreadsheet. Will there be sufficient independent advice on the science side for the HSE? Will there be animal retesting, which clearly all of us would want to avoid? What happens about those missing chemicals because importers will just not bother to re-register? I hear the wish that there would be some extra connection with EU REACH in the future, but I would really appreciate hearing from the Minister some determination to make sure that there is in future that connection with Europe that enables us to avoid the hugely expensive duplication of information and data.