Leaving the EU: Chemicals Regulation

Thérèse Coffey Excerpts

Thursday 1st February 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Wakefield (Mary Creagh) on securing this debate and I thank her Committee for its report.

The Government recognise that the UK chemicals sector is vital to the economy and to many other industries, often leading the way in research and innovation. Not only is it our second largest export industry, but it is a key component in almost all our other huge sectors. As the hon. Lady explained, chemicals are in many of the products and processes that we use. I am fully aware of the extent to which they can be in everyday products, and indeed in medicines and elsewhere.

The Committee’s inquiry took place nearly a year ago and we replied to it in July. I note that the Committee invited comments on our response. I have continued to meet the industry, and across Government, engagement with the industry and stakeholders will continue. I recognise that the principal concern of the industry—to ensure that existing REACH registrations remain valid—has not changed.

I also recognise that trade associations and other organisations have continued to call for the UK to stay in REACH. As I have explained elsewhere, given the principles set out by the Prime Minister in her Lancaster House speech, we will not stay in REACH per se but, through the provisions set out in the European Union (Withdrawal) Bill, we will bring into law the regulations that put REACH into effect. That is important because the continuity will provide an effective regulatory system for the management and control of chemicals to safeguard human health and the environment. It will also minimise any market access barriers for UK companies trading with the EU.

It has been suggested that we are not listening to the voice of business, but I humbly point out that the Government are listening to the voice of the people by respecting the referendum result. It was reiterated throughout the 2016 campaign that a vote to leave was also a vote to leave the single market.

[Angela Smith]

I differ on the point that people voted to leave the single market. Nevertheless, I am sure the Minister just said that the Government will do their best to minimise any lack of access to the European market. Is that not an acknowledgement that there will be some damage to the industry if we leave REACH and have to set up our own regulatory regime?

[Dr Coffey]

The hon. Lady will recognise that our future relationship is still a matter for negotiation. Phase 1 has happened and we are moving into phase 2. Having exactly the same regulation the day before and the day after we leave the European Union will minimise market access barriers for UK companies trading in the EU.

We agree that ensuring the continued validity of REACH registrations is a critical issue and fully recognise the investment that UK companies have made in the REACH registration process. We are clear that we want existing registrations, authorisations and approvals to remain valid in the EU and UK markets, which is clearly in the interest of businesses operating in the UK and the EU. That recognises the complex compliance activity that takes place through supply chains. As the hon. Member for Wakefield pointed out, it is not just about sales between companies but about the movement of goods through the supply chain within a company.

We want to avoid the unnecessary duplication of compliance activities undertaken by businesses prior to exit. That was set out in the Government’s position paper, “Continuity in the availability of goods for the EU and the UK”, published in August 2017, which also set out our principles for maintaining the availability of goods after exit.

It is likely that some products will be undergoing testing, registration or authorisation processes at the point of exit. For such cases, given the ambition for a close future relationship, the body carrying out the assessment should be permitted to complete it and the results should be recognised in UK and EU markets. That would be in the best interests of businesses across Europe, and I encourage them to work together to support that pragmatic outcome.

Although it would not be appropriate to pre-judge the outcome of the negotiations, we will discuss with EU member states how best to continue co-operation in chemicals regulation in the best interests of the UK and the European Union. That extends to aspects of knowledge sharing—it would be ideal to continue that work through the negotiations. For example, the EU is highly reliant on the expertise of the Health and Safety Executive in the assessment of chemicals, particularly biocides and pesticides.

I am aware that the guidance that the European Chemicals Agency published on its website about the UK’s withdrawal from the EU has caused concern. That guidance reflects the EU’s view of what would need to happen if there were no future relationship between the EU and the UK. It does not, of course, take into account potential negotiated outcomes and I am pleased to note that that has now been acknowledged on the ECHA website. As hon. Members may be aware, the guidance has recently been updated to reflect issues about the transfer of registrations and authorisations.

We have increased resources within my Department, in the HSE—a body sponsored by the Department for Work and Pensions—and in the Environment Agency to work on chemicals policy and prepare to deliver an effective regulatory regime after we leave the EU. We have established a joint programme of work with HSE to deliver what we need to have in place for day one. I work with ministerial colleagues across Government from the Department for Business, Energy and Industrial Strategy, the DWP, the Department for Exiting the European Union, the Department for International Trade and the Treasury.

We are also planning for a non-negotiated day one outcome to have a functioning chemicals regulatory and enforcement system. We are now scoping and designing what such a system would look like, including an IT system to replicate REACH. As the hon. Member for Wakefield pointed out, that includes the budget that has been released so far to scope that system.

On leaving the EU, our regulatory system and laws will be identical to those of the EU. There could be opportunities to consider improving the regulatory system to maintain standards in protecting the environment and human health. That is why we have considered the regulatory approaches of other countries, including those that are largely modelled on REACH.

Although we will not be part of REACH, there is an opportunity to work internationally to strengthen the standardisation of methods that assess chemical safety in support of the mutual acceptance of data to identify and share information on emerging concerns and on new approaches to risk assessments. In a global world where we share chemicals and have several existing chemicals conventions, it makes sense for our regulatory authorities increasingly to share that information to ensure that we have greater compliance and convergence in understanding and recognising the benefits and hazards that chemicals can pose. I do not see any reason why we cannot have that ambition once we leave the EU.

[Dr Drew]

After the dreadful experience of the Rural Payments Agency’s IT system, will the Minister confirm whether the IT system to replicate REACH has already been commissioned? Will it be put out to private contractors or done in-house within Government?

[Dr Coffey]

The system is at the stage where we are waiting for an aspect of the business case to be signed off. I have met the new Minister responsible for the Health and Safety Executive—the Minister for Disabled People, Health and Work, my hon. Friend the Member for Truro and Falmouth (Sarah Newton)—and work is ongoing between our Departments and the HSE.

The most relevant environmental principle to chemicals regulation is the precautionary principle, which is embedded in international conventions relevant to the regulation of chemicals, such as the Stockholm convention on persistent organic pollutants, to which the UK will continue to be a signatory in its own right. The Secretary of State has announced that we will consult on how we will incorporate various environmental principles and governance mechanisms, and we are carefully considering our proposals at the moment.

As the hon. Member for Stroud (Dr Drew) noted, we recently published our 25-year environment plan, in which we acknowledged that chemicals provide substantial benefits to society, but their widespread use in industry, agriculture, food systems and homes has led in some cases to pollution of land, water, air and food. We will publish a new chemicals strategy to tackle chemicals of national concern. The new strategy, which will build on existing regulatory approaches, will set our priorities for action and will detail how we will achieve our goals. It is intended to support collaborative work on human biomonitoring, address the combination effects of different chemicals and improve how we track chemicals across supply chains. I am not able to set out a timeline, but I certainly do not anticipate that the strategy will be published this year, because our main focus is implementing a smooth transition and continuing existing regulations.

We also need to consider the domestic market within the United Kingdom. REACH currently gives us a consistent framework across the UK, and we would like that consistency to continue. We have already started discussions with the devolved Administrations on a future chemicals framework across the UK.

Let me tackle some other questions raised by hon. Members. Is REACH the preferred methodology for chemicals regulation? In our international discussions, as I told the Environmental Audit Committee, we are not minded to take the United States’ approach. We think that REACH has shown its worth. As has been pointed out, a lot of chemical companies were not necessarily its greatest fans when it was introduced but are now embracing it. When I discuss the matter with Ministers from Brazil and other countries, it is clear that they are trying to get the best of all worlds, which is what we need to ensure for ourselves as we go forward. I have spoken to Switzerland, and I think officials have had discussions with South Korea. A lot of countries are taking a REACH-style approach but may not be replicating it in every detail.

On early warning and horizon scanning, I hope we can set out our approach in more detail when we publish our chemicals strategy. In answer to the question about sufficient expertise, I must point out that the HSE is the responsible authority and there is no reason to doubt its expertise; I commend it for its work in support of the chemicals industry.

I fully understand hon. Members’ concerns about bureaucracy, which is why we are in negotiations. I am afraid that I cannot give hon. Members an update on where we are, because phase 2 of the negotiations is yet to start; I fully understand the uncertainty that that brings. I have engaged with stakeholders. We have seen only representatives becoming part of networks or opening branch offices in different countries or a presence in the European Union. As I told the Committee, from my experience of working in multinational companies, I fully expect them to be contingency planning, but that does not mean that they will be abandoning this country all of a sudden. Far from it: the size of the market in this country, not only for chemicals but—as has already been explained—for many other manufacturing sectors, absolutely means that they will keep a permanent presence in the United Kingdom.

I do not anticipate any new approaches to risk assessment. The precautionary principle is well embedded in what we do. As I have articulated, we will be bringing different regulations into law, as will the devolved Administrations. We sit on committees now and we hope to retain those links in the future, but that is a matter for the negotiations.

The hon. Member for Stretford and Urmston (Kate Green) raised third-party country status. We still need to consider and negotiate elements of that. The approach set out by the Prime Minister on behalf of the Government, in which not being governed by the European Court of Justice is a guiding principle in what we do, still applies, so some assessment is still needed. Bioaccumulation is among the matters that we intend to cover in our chemicals strategy.

Let me assure hon. Members that ensuring we have a regulatory regime that continues to be effective is a very important part of my portfolio, but my top priority has been a smooth transition. As I am sure hon. Members recognise, I cannot answer questions today about exactly what our future customs arrangements with the rest of the European Union will be. However, I am highly conscious that we want to help business to continue to be successful, and I would like it to get certainty as quickly as possible. I am sure that I have disappointed hon. Members today by not being able to do that, but I will move on to the next phase of negotiations shortly.

I reiterate that we will do all we can to ensure a smooth transition and a successful industry for years to come. I saw the hon. Member for Stroud and members of the Environmental Audit Committee yesterday. I am sure that broad consideration of the environment in different ways and across different industries will continue, quite rightly, to be a key topic for debate in Parliament.

[Mary Creagh]

I thank Environmental Audit Committee members present—the hon. Members for Gordon (Colin Clark) and for Falkirk (John Mc Nally), and my hon. Friend the Member for Bristol East (Kerry McCarthy)—for their support, along with the Minister’s Parliamentary Private Secretary, the hon. Member for Taunton Deane (Rebecca Pow). I certainly feel that the Committee is waking up, having been a sleeping giant on the Committee Corridor; it is finally finding its voice.

I agree with the Minister that her response was very disappointing. Based on what she is offering the sector, I think the verdict is “Must try harder”. She has told us that the chemicals strategy will not be published this year, which is deeply worrying. She is not offering continuity, as she said, but rupture and multiplication of uncertainty. She is in danger of sounding complacent when she talks about only representatives setting up in other countries. These are the people through whom business flows, so if they leave, the business leaves with them.

[Dr Coffey]

indicated dissent.

[Mary Creagh]

The Minister says no, but we can have a debate about that. She talks about setting up a database with £5.8 million of our money, yet she says that a business case has not yet been developed for it.

[Dr Coffey]

May I add some information? Clearly the system will cost more than £5.8 million. That is part of the release of money.

[Mary Creagh]

How much will it cost?

[Dr Coffey]

We do not have a final estimate for the budget, because the system is still to be finalised. That is why the business case still needs to be assessed.

[Mary Creagh]

This looks like a release of initial moneys to scope out and make the business case for the rest. I wonder about DEFRA’s capacity to deal with this. DEFRA has lost 5,000 civil servants in the past seven years.

The ECHA website states:

“Only a mutual agreement between the EU and UK authorities can change this date”,

meaning 30 March. It also states:

“It is the European Commission that conducts the withdrawal negotiations with the UK Government under a negotiating mandate…ECHA is not party to these negotiations.”

We face the uncertainty of whether there will be a transitional period, how long it will be and what will happen, and then the further uncertainty of what will happen afterwards. Lord Bridges said that the transition period was set to be one of “muddling through” and

“a gangplank into thin air.”—[Official Report, House of Lords, 30 January 2018; Vol. 788, c. 1423.]

The Minister says that when people voted in the referendum, they were voting to leave the single market. Daniel Hannan, her Tory MEP colleague, said that only a madman would leave the single market. Well, I am afraid the Minister’s party seems to have been taken over by the madmen. We need a sensible, rooted debate based on the reality of people’s lives and the reality for businesses in this country, not constant reassuring words that give solidity to mere wind.

Question put and agreed to.

Resolved,

That this House has considered the Eleventh Report of the Environmental Audit Committee of Session 2016-17, The Future of Chemicals Regulation after the EU Referendum, HC 912, and the Government response, HC 313.