Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2019

Motion to Approve

Moved by

That the draft Regulations laid before the House on 18 February be approved.

My Lords, this draft statutory instrument was laid before Parliament on 18 February and was approved in another place on 13 March 2019. The Government’s priority is to reach a negotiated settlement with the EU. However, it is our duty as a responsible Government to prepare for all eventualities, including leaving with no deal. This statutory instrument is one such contingency measure to ensure that regulations governing chemicals and genetically modified organisms for continued use stay operable under a no-deal scenario.

I take this opportunity to reiterate that this instrument will deliver on our commitment to protect workers’ rights as the UK leaves the EU by ensuring that health and safety regulation continues to provide a high level of protection in the workplace and for others affected by workplace activities. It will also deliver on the Government’s commitment that standards of protection for people and the environment will remain at least as high as at present as the UK leaves the EU.

Together with ministerial colleagues in the Department for Environment, Food and Rural Affairs, we oversee a number of key regulatory regimes that affect the chemicals sector. Since the referendum, our joint programme has conducted particularly intensive work to ensure that there will continue to be a functioning regulatory regime with associated enforcement activity for chemicals under any exit scenario. These draft regulations form part of the work being done to adjust our existing legislative framework in readiness for leaving the European Union.

I appreciate the technical nature of the regulations. They are made particularly complex by being a composite of several different regulatory regimes. It was decided to present these proposals as a single instrument for the benefit of your Lordships’ House in reducing pressure on parliamentary time and ensuring that we are able to deliver an orderly exit. Noble Lords should be assured that the proposals are sensible, proportionate and necessary.

My Lords, I thank the Minister for introducing this statutory instrument; quite clearly it covers some important ground, albeit in a compendium of different issues.

I am not sure what we have done to deserve the raffle prize of the most coveted slot of the week. I was a little surprised—with all due respect—to see a DWP Minister putting this forward, but the Minister explained the Government’s perspective that worker protection is one of the clear priorities of this legislation, along with human health and the environment, of course. This SI is something of a younger sibling to another one—the REACH statutory instrument, which we will debate on Tuesday. In that respect, I will touch on some issues today, but I expect to deal with them at greater length next week. I do not know whether the Minister then will be the noble Baroness, Lady Buscombe, or the noble Lord, Lord Gardiner. Perhaps the audience in the “royal box” might carry to the noble Lord some of the issues that I put forward today; it would be good if he could come prepared. As the Minister said, these regulations cover the important chemicals industry, and touch on our research capability through the GMO issues. There is some very important ground for us to consider.

As the Minister might be aware, I have a common problem in this and other SI debates: in many respects, they are importing regulatory responsibility into the United Kingdom when in many cases there is no ready-made regulatory body to deliver those regulations. In this case, the Health and Safety Executive is clearly there and ready. However, it is getting pulled into a variety of other needs and requirements. For example, although not in the scope of this SI, the debate around Grenfell Tower includes looking at a massive extension of what the HSE might do, while the REACH legislation will massively change and increase what it is expected to do. But yet the 2016-17 business plan forecasts that central government funding will be £100 million less in 2019-20 than it was in 2009-10; a 46% cut. Can the Minister explain how these extra tasks will be taken on while the Government are continuing to cut from the HSE? Or, if funding is not going to be cut, by how much will it be increased? How many extra people do the Government expect the HSE to take on just to cover this statutory instrument alone, without even touching on some of the others we will talk about in future? What extra resource, or people, should we expect?

I have some specific questions. As I understand it, for EU businesses with valid authorisations for their products, those will continue to be valid in this country after Brexit for a period. However, after 12 months, if they do not have a valid UK company registration, that will not be the case. Has the department’s assessment come to any understanding of what changes that will bring to available products—available chemicals—in the UK market? In other words, will some companies that currently have registration in this country choose not to register to deliver those products? I was pleased that the Minister talked about the cost-recovery mechanism, but she did not say what level of return this process is expected to give to the HSE—I assume it is the HSE that levies this.

By my understanding, applications for product approval that are ongoing will have to be resubmitted to the HSE within the defined deadline. The Government say that this evidence will be the same, and so therefore need not be duplicated. However—and this is an issue we will come back to on Tuesday—in many cases UK-based companies do not own that data, and REACH data is copyrighted. That means the data has to be reproduced in some way. This is a very big issue that is extremely important to the chemicals industry, which has raised it with me and, I know, with Defra in a number of different ways. As yet, there has been a completely unsatisfactory answer from Defra on this issue. Does the Minister understand the issue? Given that the answer to that is, I hope, yes, what are the Government planning to do about it?

Active substances are currently in the process of being systematically re-examined by Europe under REACH. Currently, the member states divide up this re-examination process between them. Now, assuming that we go ahead with this go-it-alone regime, the UK will take possession of the reassessment process for all 488 of those substances. The EU has set a deadline of 2024 for this reassessment process, and the Government have given themselves powers to extend that deadline. The Explanatory Memorandum admits that the UK has not yet developed a programme for how these 488 active substances will be reassessed, and it is very clear that, for the UK to take that all on board, the timeframe will be extremely difficult to maintain. What is the plan on this? It is worrying if the Government do not have one; it is also worrying if they decide to stretch this process out. These are chemicals of concern, and, as the noble Baroness rightly pointed out, these issues will affect the people who work with them. They need reassurance, and this reassessment process needs to happen. My contention is that, unless something drastic happens, this will stretch out into the 2030s, which is clearly not acceptable.

I turn briefly to the powers in this SI. The statutory instrument gives power to Ministers to implement new technical and binding legislation, without parliamentary oversight. Ministers will be able to: approve or reject the sale of biocidal products in the UK; devise their own classification and labelling scheme, which, unlike EU classification, will bind UK-based suppliers; and decide what chemicals go on an administrative list, which relates to what hazardous chemicals can be imported into the UK. In each case, Ministers will act following recommendations from the relevant agency—largely, the Health and Safety Executive and/or the Environment Agency. How can the decisions of the Secretary of State be challenged, particularly if Ministers go against the scientific recommendations they are presented with, for whatever reason? This is a really important issue.

My Lords, I thank the Minister for her introduction and explanation of these regulations. I acknowledge the contribution of the noble Lord, Lord Fox. Perhaps he might see it as a starter for 10 for Tuesday’s main event. He made some important points, particularly on data, and I am interested in the Minister’s response on that.

As should be clear from debate in the other place, we will not oppose the instrument, given its expressed intent to ensure that the regulation of UK chemicals and genetically modified organisms will operate effectively when the UK leaves the EU. We are mindful of other regulations that have been referred to and which have been tabled, including the draft REACH etc. (Amendment etc.) (EU Exit) Regulations 2019, which have been the subject of comment by Secondary Legislation Scrutiny Sub-Committee B. Its report has been drawn to the special attention of the House on the basis that the explanatory material laid in support of the draft regulations provides insufficient information on their expected impact and gives rise to issues of public policy likely to be of interest to the House. These regulations have been scheduled for consideration next week and are the responsibility of Defra. I do not propose to stray into this territory this afternoon in any detail, except where there is an overlap with these regulations.

My understanding is that the DWP has responsibility for the regulations before us today as it is the host department for the HSE. The HSE and Defra oversee several regulatory regimes which impact the chemicals sector. When approved, it is understood that the regulations will cover the whole of the UK and provide for an independent UK regulatory regime which maintains existing standards and protections. As the Minister spelled out, this afternoon we are concerned with: the biocidal products regulations, which govern the use and placing on the market of biocidal products; the classification, labelling and packaging of substances and mixtures regulations, a single market measure which applies to the supply of chemicals; the export and import of hazardous chemicals regulations, which require exports of limited chemicals to be notified to the importing country, with consent needed for some; and minor technical amendments to the GMO provisions, as we have heard.

My Lords, I thank the noble Lords, Lord Fox and Lord McKenzie, for their pertinent questions on this instrument, which is extremely important for the chemicals industry. In response to the noble Lord, Lord Fox, I am here as the DWP Minister. The DWP is the lead department for HSE operations. When the REACH regulations—on which the noble Lord has tabled a Motion—are debated next week, it will be my noble friend Lord Gardiner at the Dispatch Box, not me. He is the Minister for Defra, the department which is directly impacted. I will make sure that my noble friend is aware of today’s debate. I hope it will help him prepare for next week’s debate and that we can avoid a fatal Motion.

I will do my utmost to respond to the questions asked. As both noble Lords have emphasised, this is an incredibly important industry. The chemical sector is our second largest manufacturing industry and is vital to the economy and to many other industries, often leading the way in research and innovation. It is not only our second largest export industry but a key component in other important sectors, such as pharmaceutical, automotive and aerospace. We want to make sure that it continues to succeed and will do our utmost to support it.

The Government therefore seek to ensure that any potential new burdens on UK companies are minimised. The Health and Safety Executive is aware of the impacts and cost implications for business of any potential changes. It will, consequently, endeavour to keep such changes as simple and straightforward as possible. The Health and Safety Executive will implement an active communications programme on this point, leading up to exit and following it, to ensure that all stakeholders are aware of any potential changes in their responsibilities.

Both noble Lords asked about capability. This is understandable, because this adds to the already established role the HSE plays. Some of my ministerial colleagues in another place have had numerous, cross-government meetings with the HSE to discuss capability. The HSE, as we know, currently acts as the competent authority, but resources have been reprioritised to meet new pressures and to supplement existing capability and capacity. Under a no-deal scenario, the HSE would look to recruit around 120 additional staff in 2019, with an estimated cost per annum of £3.3 million. It should be noted that currently more than two-thirds of its budget for work carried out by the chemicals regulation division in the HSE is cost recoverable and the expectation is that cost-recoverable work will continue to form a reasonable proportion of its income after we exit the EU. Additional funding will also be made available to the HSE. The HSE keeps its resourcing plans continuously under review and will carry on assessing the impact, including on cost-recoverable work.

Just to be clear, is 120 extra people the total number expected to be taken on to cover all the post-Brexit requirement? Is the £3.3 million not new money but money that has been moved from one HSE box to another? The noble Baroness talked about money being reprioritised: from which priority has it been moved in order that this becomes a priority? I would like a little more clarity around that.

I ask the noble Lord to bear with me in case my officials can reassure me on both those points: I would not like to take a punt, as it were, before we close this debate.

I thank the noble Lord, Lord McKenzie, for attending a recent meeting to which all Peers were invited, chaired by the then Minister for Disabled People and the lead Minister for the HSE in the Department of Work and Pensions. At that meeting it was helpful to have the opportunity to listen to representatives of the HSE, who were very clear about the pathways forward in the event either of a deal or no deal, and who work extremely well, I have to say, with our department and across government to support its crucial work now and the crucial work that will be placed upon it.

The noble Lord, Lord Fox, asked about accountability for decisions. The UK Government are committed to transparency so that citizens can hold the Government to account on how decisions are made that affect their lives. Decisions taken by the Secretary of State regarding chemicals regulation will be subject to the same processes that hold Ministers to account as any other decisions. In addition, for several decisions, the consent of the devolved Administrations will be required.

As for the cost to the industry, the proposed amendments in this instrument relate to the maintenance of existing regulatory standards. Therefore, the instrument has been calculated to have a net direct impact on business or civil society organisations of less than £5 million annually. The Government seek to ensure that any potential new burdens on UK companies are minimised. The HSE is aware of the impacts and potential cost implications to business of any potential changes and consequently will endeavour, as I have already said, to keep these as straightforward and simple as possible.

I can now respond to the noble Lord, Lord Fox. There will be 120 additional staff in 2019 and the £3.3 million is DWP funding for the HSE’s work and REACH is funded by Defra. The cost-recovery work is additional to this funding. I hope that that is clear.

I apologise for rising again, but I thought the Minister said that it is perfectly reasonable for the Government to expect that in some cases, if the European Union safety authority decides to ban a chemical for a particular use, the UK would follow that ban without doing its own work and assessment. Is that a correct assumption?