UK Chemical Industry: Regulatory Divergence

Victoria Prentis Excerpts

Wednesday 26th February 2020 Westminster Hall

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)]

It is a great pleasure to serve under your chairmanship, Mr Sharma. I welcome the hon. Member for Newport West (Ruth Jones) to her place, and look forward to many happy hours spent together discussing interests that have always engaged us both, particularly those involving the environment and food waste.

I congratulate the hon. Member for Sefton Central (Bill Esterson) on securing this important debate. As he made clear, our chemical sector is world leading and vital to a wide range of other key industries, such as pharmaceuticals, automotive and aerospace. He gave some good examples from his own constituency and demonstrated his knowledge of how important that is, as did other Members present. We all know that the chemical industry is an important one, and want to ensure it continues to succeed.

In 2018, the total trade in chemicals in the UK, including chemical products, was worth £60.2 billion. The UK chemical sector directly employs more than 100,000 people. That sector is an important part of the economy in all the UK regions, with some major chemical clusters that are, unsurprisingly, represented in the Chamber today. They include Teesside, Humberside, Southampton, Grangemouth—mentioned by the hon. Member for Angus (Dave Doogan), whom I welcome to his place—and north-west England, which has the highest number of employees in the sector, with some 24,000 people in the region working in the chemical industry.

Leaving the EU provides us with a unique opportunity to develop a regulatory environment that will not only deliver the high standards mentioned by the hon. Member for Newport West, but be flexible according to our current and future needs. Now that we have left the EU, our priority is to maintain an effective regulatory system for the management and control of chemicals, to safeguard human health and the environment, and to respond to emerging risks. We need to ensure that our chemical industry continues to flourish in the UK and abroad, building on our strong trading links with the EU and seizing new export opportunities now we have the freedom to trade with the rest of the world.

[Alex Cunningham]

I, too, welcome the Minister to her place. I hope that she will accept an early invitation to Teesside, which I extend to my hon. Friend the Member for Newport West (Ruth Jones). As a lawyer, the Minister knows that the EU REACH regulation is extremely complicated. What on earth are the impediments to simply adopting it? What is the additional flexibility that she talks about that we actually need to trade with the rest of the world?

[Victoria Prentis]

As a lawyer, I tell the hon. Gentleman that that is an extremely long and complicated question, to which I will endeavour to provide some of the answers, but not all, because, as he knows, it is a live negotiating situation. I recognise that that brings uncertainty for business—I really do—which is uncomfortable for many of us, but it is important that the country voted to leave the EU and through various—[Interruption.] The hon. Gentleman has been here for the last few years, as I have.

Through various emanations, we have reached a position where we are definitely leaving the single market and the customs union, and we will no longer participate in the ECHA or the EU regulatory framework for chemicals. I will set out what the Government’s position is in the immediate future. I ask the hon. Gentleman to accept that we do not have all the answers, but I emphasise that my door, and the door of the Minister with responsibility for the issue, will be open as we go through the negotiations this year.

[Dave Doogan]

It is helpful and candid of the Minister to clarify that the Government do not have all the answers. In pursuit of those answers, may I ask whether the Minister and her officials will give due cognisance to the fact that the scale of the European chemical industry, and the regulation that underpins it, is the global benchmark? A UK post-Brexit chemical industry would divest from that at its peril.

[Victoria Prentis]

In many ways, the hon. Gentleman will find that we are on exactly the same page, so I ask him to listen to the rest of what I have to say. We can then discuss the position as it emerges in the negotiations this year.

As I said, we are leaving the single market and the customs union, so we need to prepare for life outside at the end of this year. Many in the sector have already started to prepare and we will help them as much as we can. First, we must create our own independent regulatory regime, which is called UK REACH, as we have heard. Hon. Members will note that that is not a million miles away from the name of EU REACH. That will ensure continuity and minimise disruption for businesses and consumers, and will give us the freedom to do things differently where we consider that in our best interest. UK REACH will be our own framework but will retain the fundamental approach of REACH, including its aims of ensuring a high level of protection for human health and the environment, and of enhancing innovation and competitiveness. We have developed transitional measures, such as grandfathering and downstream user import notifications, that address the industry’s concerns about maintaining continuity of supply between the UK and Europe.

The building blocks of REACH will all remain. Through the Environment Bill, we will make provision to allow us to amend REACH in future to ensure that our chemicals management remains fully up to date. All change will remain consistent with the fundamental aims and principles enshrined in EU REACH. There will also be a series of protected provisions that cannot be changed, such as the last resort principle on animal testing, which will be included in the Environment Bill, as has been said. The UK will, of course, continue to be at the forefront of opposing animal tests where alternative approaches can be used. We have led the way on that in the EU system to date.

I recognise the concerns that several hon. Members have raised during the debate about the UK diverging from the approach taken in the EU to the regulation of chemicals, which are obviously shared by all our stakeholders. We will not diverge for the sake of it. If we diverge, it will be done in the best interests of the UK and the environment, and of course we will take account of the impact on industry. What matters is that the decisions we take will be our own, reflecting our new autonomy. Robust scientific evidence lies at the heart of the decisions we take, and that will continue, as provided for in the UK REACH legislation. As I said, we are continuing to develop the proposals, to make sure that we take decisions transparently and with stakeholder engagement. I am keen that we go forward in that vein.

[Alex Cunningham]

I bear in mind what the Minister is saying, but it frightens the life out of me, because the regulation changes every day. I do not know how we will manage to keep pace with that in Britain. Industry will incur considerably greater costs as a result of the changes. What assistance will the Government give to chemical companies and the chemical industry as a whole to overcome the additional burden that the Government are placing on them?

[Victoria Prentis]

While I am unable to tell the hon. Gentleman exactly where we will end up, I am also unable to answer that question as fully as it deserves. If I may, I will continue to tell him where we are now. As matters progress with the negotiations, I remain willing to talk to him about specific industry difficulties, and I am sure the Department for Business, Energy and Industrial Strategy will too.

[Alex Cunningham]

Will the Minister give way again?

[Victoria Prentis]

I think I had better carry on, if the hon. Gentleman is happy.

[Alex Cunningham]

The hon. Gentleman is not happy.

[Victoria Prentis]

Well, as we have time, I will make the hon. Gentleman happy.

[Alex Cunningham]

I am grateful to the Minister for giving way. She says that she cannot answer the questions, but they are the questions that the chemical industry is asking us. We are talking about a matter of months before the changes actually kick in and affect industry in this country. That involves thousands of jobs in my constituency and tens of thousands across the country, so I am naturally anxious, and I can understand the industry being anxious as well. When are we going to get some answers?

[Victoria Prentis]

I understand the hon. Gentleman’s anxiety. What I will say to reassure him, in so far as I can in a live negotiating situation, is that we will avoid change for change’s sake. We will do our best. We are fully cognisant of the need to minimise the burdens on business. That lies at the absolute heart of all that we are doing to put UK REACH in place.

Let me give the hon. Gentleman an example. In building the UK REACH IT system, we have made sure that it will work very much like the ECHA REACH IT system, including the same software requirements and many of the processes that businesses have been using and understand. I am aware that we will require businesses to provide us with the data that supports their registrations. I understand the concern that that may not be as straightforward as they would like and may generate costs. That is why we have introduced the transitional arrangements that I mentioned earlier, which give businesses two years, starting from the end this year, to provide that information. We will keep those timeframes closely under review.

We are often asked why we need the data and why information that has already been provided to the ECHA needs to be reprovided to UK REACH. In short, we need it because we will not be able to rely on the fact that the data has already been sent to the ECHA. Registration is how a company shows its understanding of the hazards and risks of a chemical. It does not mean that the ECHA has, in legal terms, approved a chemical or endorsed it as safe. The data is necessary for any regulator, such as the Health and Safety Executive, to operate an effective regulatory regime, to understand the hazards and risks of chemicals, and to ensure their safe use. We are making sure that the HSE as the UK regulator, the Environment Agency and the Department for Environment, Food and Rural Affairs have the resources and evidence they need to ensure the safe management of chemicals and to protect public health and the environment.

With the UN projecting a doubling in the size of the global chemicals industry by 2030, it matters more than ever that the UK continues to be a world leader in the management and regulation of chemicals. Our internationally recognised scientific expertise and evidence-led, risk-based approach give us a strong and influential voice as we advocate for ambitious global action on chemicals and waste management after 2020.

I want to finish by saying something about the chemicals strategy we are developing, which will set out our priorities and approach to domestic regulation now that we have left the EU. It will be our first such strategy for 20 years. We aim to drive sustainability, circularity and innovation in the chemicals industry, while protecting human health and the environment from harmful chemical exposure. A call for evidence will be published very shortly—this spring—and we will then undertake a public consultation on a draft strategy before its final publication, which is scheduled for 2021-22. We genuinely want to hear from the industry.

[Bill Esterson]

I am grateful for some of the answers that the Minister has given, but one of the points she has not addressed is exports. Some 57% of UK chemical exports and 54% of car exports go to the EU market; the role of chemicals with the correct regulatory registration will be vital, as will approval for the European market. Will she address the export problem that is faced both directly in the chemical industry and, more generally, in industries whose products contain chemicals—not just the car industry—in having these two systems?

[Victoria Prentis]

As the hon. Member says, the export market is very important. There are exports worth £28.3 billion, with 57% of that going to the EU and 43% going elsewhere. It is clearly important that we get to the end of our trade negotiations as soon as possible, so that certainty can be provided. He knows as well as I do that the situation is fluid at the moment, and I am unable to give him all the answers he seeks. What I can say is that we have a new and exciting chemicals strategy, on which we will be consulting.

[Alex Cunningham]

I have a very simple, straightforward question. Will we accept European REACH regulations for imported goods, or will they also have to be compliant with the UK REACH regulations? Will we just accept that products coming in are fine because they are covered by EU REACH, when we have our own independent regime as well?

[Victoria Prentis]

As a new Minister, I am not sure that I am qualified to answer that question properly.

[Alex Cunningham]

Will the Minister write to me?

[Victoria Prentis]

Yes, absolutely. I undertake to write to the hon. Gentleman with the correct answer. It is really important that we do not misspeak at this point of a live trade negotiation. I am also conscious that the matter is not directly within my brief but within that of the Secretary of State for Environment, Food and Rural Affairs, who is currently leading the debate on Second Reading of the Environment Bill in the main Chamber. I do not want to answer that question without full instructions, for which I apologise.

I thank the hon. Member for Sefton Central for securing a debate on this important industry at this critical time in the negotiations and for stressing that it is important that we do not diverge for the sake of it, and that we ensure we have a regulatory regime that works for us and fulfils all the aims we hope for, and that makes life as easy as we can for people who work in the chemical industry, including those in his constituency.