† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)
† Tarry, Sam (Ilford South) (Lab)
Thompson, Owen (Midlothian) (SNP)
† Tomlinson, Michael (Lord Commissioner of Her Majesty’s Treasury)
† Twist, Liz (Blaydon) (Lab)
† Vara, Mr Shailesh (North West Cambridgeshire) (Con)
Liam Laurence Smyth, Committee Clerk
† attended the Committee
First Delegated Legislation Committee
Monday 16 November 2020
[Esther McVey in the Chair]
Draft Product Safety and Metrology Etc. (Amendment Etc.) (UK (NI) Indication) (EU Exit) Regulations 2020
The Chair
Before we begin, I would like to remind hon. Members about social distancing. Spaces for Members should be signified; if not, please make sure you are at a safe distance. Please could anybody who is going to speak send your notes to hansardnotes@parliament.uk and not hand them over?
That the Committee has considered the draft Product Safety and Metrology etc. (Amendment etc.) (UK (NI) Indication) (EU Exit) Regulations 2020.
It is a pleasure to serve under your chairmanship, Ms McVey. As I am sure hon. Members recognise, the UK product safety and legal metrology system is among the strongest in the world. It is essential that we continue to have a robust product safety framework in place to prevent unsafe and non-compliant products, whether toys, cosmetics, lifts or machinery, from entering the UK market. At the end of the transition period, the Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019 will come into force.
This instrument was originally drafted for a no-deal scenario and needed to be amended before it could come into force to take account of the withdrawal agreement, and in particular the requirements of the Northern Ireland protocol. The original product safety SI will be amended by a series of statutory instruments—the regulations are the sixth instrument in the series—and together they will ensure that the UK continues to have a fully functioning product safety and legal metrology framework in place from the end of the transition period.
This amending SI will do a number of things to complete the picture on how goods from the EU and from Northern Ireland will be treated on the market in Great Britain and provide businesses with certainty about how to comply. This includes allowing for continued acceptance of CE-marked goods on the UK market for 12 months before making the new UK CA mark mandatory from January 2022; providing for unfettered access for Northern Ireland to the rest of the UK and introduction and implementation of the UK NI mark; and introducing a number of transitional arrangements to help minimise costs to economic operators and giving them time to prepare.
The SI does two main things. It amends domestic legislation to take account of the withdrawal agreement, implementing the Northern Ireland protocol with respect to product safety and legal metrology. It provides greater legal certainty about the dates by which companies need to comply with new regulatory requirements for the Great British market, such as confirmation that the new UK CA marking will become mandatory from the start of 2022.
To the extent that the Committee is being televised, I make it absolutely clear that although I speak from the Opposition Benches, I am a full member of the Conservative party and usually sit on the Government Benches. I am standing here for the purposes of social distancing.
Will the Minister make it clear that the SI in no way impacts on the quality of the products? I ask for that clarification to make that point clear to those who wish to cause mischief as we seek to find a trade agreement with the EU. There are some who still wish that we had not left and they misinterpret things, saying, “This will lead to a deterioration in the quality of products.” Will he therefore make it clear that the highest standards will be maintained?
I do not want to stray too far from the point of the SI, which is to give businesses legal certainty so that they can plan their future. However, because it is so important for the trading opportunities that will arise, I will say that British safety standards are among the best, if they are not the best, in the world. We are known for our brands and our skill, whether in precision engineering or other manufacturing. Our standards and metrology are among the best in the world and it is important that that will not change, no matter what the stamp is. Products will be certified as UK CA and UK NI, depending which market they come from.
On amending domestic legislation, I will ensure that provisions in previous EU exit legislation are updated to reflect the Government’s approach to phasing in new GB regulatory requirements. The previous product safety EU exit SI introduced a new domestic regulatory regime, with the UK CA marking replacing EU conformity marking, including the CE marking, alongside a system of UK-approved bodies to replace EU-certified bodies. That system will come into force at the end of the transition period. That original SI also set out that the EU’s CE marking could still be accepted in GB to give businesses time to prepare. However, the original SI did not put a specific end date on how long the CE and other conformity markings could continue to be accepted.
Now that we have greater certainty through the withdrawal agreement and an end date for the transition period, the amending SI that we are considering introduces a 12-month end point. We now have a clear date for independently approving goods for sale on our market rather than relying on the EU. We believe that that will give businesses clarity about when they should be ready for the new regime.
We have also gone further than the original SI by increasing the number of easements for businesses, which includes offering the option to affix the UK CA marking on to products using labels or on accompanying documentation rather than on each individual product. That will be allowed from the end of the transition period for 24 months. It will help reduce costs to businesses of retrospectively changing their marking and labelling mid-production and allow new UK importers of products into Great Britain to place their contact details on accompanying documents, again for 24 months from the end of the transition period. That is an increase from 18 months, which was the timeframe in the original SI. That measure will give businesses more time to implement the labelling requirements for the UK regime, again saving them time and money.
It is an absolute pleasure to serve under your chairmanship, Ms McVey, in place of my hon. Friend the Member for Manchester Central.
Colleagues who were here in 2019 will know that the House has debated a previous incarnation of the SI. For those who were not here, that probably seems quite a long time ago. A lot has changed since then, including the context in which businesses find themselves and the unknowns of what is happening in Government negotiations on a deal with the EU. It does not look as though the ingredients of that deal are out of the cupboard, let alone mixed and ready to go in the oven, as the Prime Minister so famously promised.
We are also in the midst of a global pandemic, which has hit businesses, our economy and local authorities hard. That makes them less able to deal with the end of the transition period. British businesses of course do the best they can—they are among the very best on the planet—but many have told us that they do not have the bandwidth for the end of transition and the likely changes it will mean, alongside trying to stay afloat as the coronavirus crisis continues to rage.
The 2019 SI was described at the time as a “beast of an SI” in The Times on 12 February. It was 636 pages long, weighed 2.5 kg and put together 11 issues that would usually be in separate documents to be sifted through. The Secondary Legislation Scrutiny Committee was damning about the length and scope of the SI and the Government’s approach to bringing it to Parliament. For that reason, we voted against it then. Today, we will not vote against the changes because they are necessary to update the situation as we come to the end of the transition period.
The legislation will ensure that the UK has a meaningful regulatory framework for product safety and legal metrology, including the ability to amend its own regulations in future in the interests of UK businesses and consumers and to provide adequate protection for UK consumers. It will also ensure that unsafe and non-compliant products can continue to be removed from the market. That will provide businesses and consumers with reassurance about the safety and accuracy of products.
I thank the hon. Gentleman—and, indeed, the rest of the Committee—for the consideration of the statutory instrument and for his contribution to this important debate. He talked about whether the EU deal is oven ready. I can say that if it were a British-made oven with a UK CA marking, he could be sure of its standard.
I have set out the importance of the SI for completing the picture on how goods from the EU and Northern Ireland will be treated on the market in Great Britain. It will provide businesses with certainty on how to maintain compliance and allow for continuing acceptance of CE markers, which answers the hon. Gentleman’s questions about certainty and what we are doing with businesses. The instrument will allow for the continued acceptance of CE-marked goods into the market of Great Britain for 12 months after the transition period, before making the new UK CA marker mandatory from January 2022, giving an extra length of time.
The instrument will provide for unfettered access for Northern Ireland to the rest of the UK, which means no new regulatory checks, customs checks or additional approvals for Northern Ireland businesses to place qualifying goods on the GB market. It will provide clarity for the GB market and for businesses that use UK-based conformity assessment bodies and wish to supply products on the Northern Ireland market, by setting out the rules on the UK NI indication. That will ensure that we take full advantage of options in the protocol that benefit UK-based businesses, and will introduce transitional arrangements to help to minimise costs to economic operators arising from uncertainty and to give them time to prepare by clarifying the obligations with which they are required to comply at the end of the transition period.
We have been working with businesses, consumers goods manufacturers and important and exporters since the original SI back in 2019, so although they have not had the final detail, which is before the Committee, they have had notification of our direction until now. We have continued that conversation with businesses to get them ready. The hon. Gentleman made a vital point: no matter what happens in the negotiations with the EU in the next week or two, businesses of all sorts will have to adapt. If they have not already done so, it is so important that they go to gov.uk/transition to use the business checker. Deal or no deal, there will be changes of which businesses need to be aware and towards which they will need to move. I thank him for highlighting that.
Committee rose.
On the protocol, the SI provides for unfettered access to the rest of the United Kingdom market for qualifying Northern Ireland goods, subject to product safety and metrology legislation. The SI will introduce and implement the UK NI marking, which will accompany the CE marking for some goods when placed on the market in Northern Ireland. This includes the introduction of an appropriate set of sanctions should the UK NI marking be missing or misused, in line with the penalties that apply when other product safety rules are broken.
I will now consider each of those areas briefly but in more detail. In respect of unfettered access, the Government committed to legislating by 1 January 2021 to guarantee unfettered access for qualifying Northern Ireland goods to the rest of the United Kingdom market. That commitment is intended to be delivered through both primary and secondary legislation, with the Government having already laid a draft affirmative SI to define qualifying Northern Ireland goods. This SI references that definition in order to implement unfettered access provisions with respect to product safety and legal metrology. The changes made by the SI will be inter- dependent with other required protocol work, for example to establish a Northern Ireland-facing product safety and legal metrology system, so the SI must be in place to ensure all aspects work coherently from day one.
On the UK NI marking—Members will find an illustration in schedule 1—the SI provides for two aspects of the introduction and implementation of the product marking requirements of the Northern Ireland protocol. It introduces the design of the marking and implements the approach to sanctions should the marking be missed or misused. As laid out in the protocol, the UK NI marking will be used to indicate that a UK-based conformity assessment body has undertaken third-party testing against EU requirements and approved a product for placing on the Northern Ireland market. That also means that such products cannot be placed on the market in the EU. That is a vital part of the operation of the protocol. Not proceeding with the legislation would mean not fully implementing the protocol and also cause business uncertainty about the UK NI marking and what exactly must be done to comply at the end of the transition period.
The SI will also ensure that all GB-authorised representatives must be based in the UK from the end of the transition period. That will mean that any legal entity that has been authorised to act on behalf of the manufacturer can be held to account in the UK. I urge the Committee to approve the SI.
The instrument makes amendments to regulations relating to a diverse range of subjects, including container bottles, toys, lifts, gas appliances and personal protective equipment enforcement. It is perhaps a mini-beast compared with its predecessor.
It is likely that there will be a lot of work for companies to understand and act on the changes in this SI. The Government’s impact assessment estimates that between 10,000 and 17,000 UK manufacturers and up to 135,000 UK wholesalers and retailers will be impacted by its implementation. With a total cost of over £35 million—£25.7 million for conformity marking, £3.7 million for conformity assessment and £6.6 million for familiarisation for businesses—the assessment warns that those costs could be passed on to UK consumers and businesses through increased prices or reduced product availability. Will the Minister confirm what support the Department is offering businesses, which are already struggling through the pandemic, to limit these costs as far as possible?
If we are to ensure that there is consumer confidence about product safety, it is important too that the organisations that engender that confidence are properly supported. As we have pointed out before, trading standards teams have seen huge cuts of 40% since 2010. Clearly, we want good product safety and consumer confidence, but we will get them only if those services are properly resourced. Given the pressures local authorities are under through the coronavirus crisis, what assessment has the Minister made of the impact of ongoing changes on trading standards teams?
Following our departure from the EU, the UK will no longer be able to use the CE mark to identify safe products. That will be replaced in the UK with a new UK conformity-assessed marking—the UK CA. What work have the Government undertaken to ensure that people are aware of the new UK CA marking?
We must not forget that the SI also relates to Northern Ireland. As we have recently warned, it is questionable whether GB-NI trade systems will be ready, following repeated warnings. What contingency plans do the Government have to ensure there is not widespread disruption on 1 January? Businesses in Northern Ireland could be very hard hit by all these changes. What extra support are they receiving from the Government?
The costs that businesses will incur as a result of these changes are not insignificant, and a large number of businesses will be affected. I hope that the Minister and his team will do all they can to mitigate the impact on businesses as far as possible, given the huge pressures they face.
We have been working at pace with colleagues at trading standards to ensure that we have a robust enforcement process in place for the post-transition period. As I said to my hon. Friend the Member for North West Cambridgeshire, the UK’s product safety and metrology systems are among the strongest in the world and we want to ensure that we continue to have an effective and robust product safety and legal metrology framework in place from day one. It is important that we maximise readiness for the end of the transition period so that we can get to that point.
The Committee will be pleased to note that this is the final SI in this series of instruments, which, together, will ensure that the UK continues to have a fully functioning product safety and legal metrology framework in place from the end of the transition period. I am happy to commend the regulation to the Committee.