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

Motion to Approve

That the draft Regulations laid before the House on 19 October be approved.

My Lords, the regulations have three main purposes: they fulfil the UK’s obligation to effectively implement the Northern Ireland protocol with regard to REACH; they provide for access by Northern Irish goods to the Great Britain market; and they amend the existing transitional deadlines for GB businesses to submit information about their chemicals and their safe use into the domestic REACH system. The SI also makes some technical amendments to ensure that cross-references in the UK REACH regulation are up to date at the end of the transition period. After the transition period, UK REACH will regulate the GB market, while EU REACH will apply to Northern Ireland.

The provisions that implement the protocol are straightforward. They redefine the scope of the domestic REACH regime from the UK to Great Britain. They provide for the Northern Ireland competent authority function to continue to be exercised jointly by the Department of Agriculture, Environment and Rural Affairs and the Department for the Economy. The provisions also ensure that there will still be effective enforcement arrangements for REACH in Northern Ireland.

The provisions concerning chemicals moving from Northern Ireland to Great Britain reflect our commitment to unfettered access for Northern Ireland businesses as well as the need to ensure that UK authorities have the appropriate information and regulatory safeguards in respect of chemicals placed on the GB market.

The instrument permanently removes the requirement for a full REACH registration for chemicals that are, or are in, qualifying Northern Ireland goods being placed on the GB market. It replaces that with a light-touch notification process, which will ensure that the HSE will know what chemicals are being placed on the GB market. Information necessary to ensure safe use will also still be passed down the supply chain within Great Britain. Substances of very high concern entering Great Britain from Northern Ireland will still need a UK REACH authorisation. This is necessary in order to manage the risk to GB consumers and workers, and the environment, from these hazardous chemicals. This simply replicates the approach taken at present to placing these substances on the EU market, where the authorisation process ensures that due account is taken of local environmental and other factors. We need to ensure that this happens where these chemicals are being placed on the market and used within Great Britain.

The changes to the deadlines for the submission of notification and registration information to the Health and Safety Executive follow a review of the data submission deadlines in the transitional provisions of UK REACH. The Government had committed to keep these deadlines under review when the first REACH exit SI was debated in the House last year, and the review involved detailed discussions with a range of industry and NGO stakeholders. The initial notification period for existing downstream users and distributors is being increased from 180 to 300 days. The deadline for submitting full registration information, which is currently two years across the board, is replaced by a phased approach that spreads the duty over two, four and six years from the end of that 300-day period.

Amendment to the Motion

Moved by

At end insert “but that this House regrets that the Regulations (1) fail to provide an analysis of the costs of the new domestic Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regime, (2) introduce additional costs and administrative burdens for United Kingdom businesses, and (3) create unacceptable risks around the availability of chemicals safety data; notes concerns about the ability of the Health and Safety Executive to fulfil its additional responsibilities when the domestic REACH regime becomes operable on 1 January 2021; and further regrets that Her Majesty’s Government have not addressed concerns raised by Parliament when proposals for a domestic REACH regime were debated in 2019.”

My Lords, I thank the Minister for introducing this statutory instrument. My amendment spells out the deficits and risks that remain in the REACH regulations and our disappointment that the Government have brought forward an amended proposal that fails to address any of the serious concerns that were raised when it was debated last year. It shows insufficient understanding of how chemicals are actually managed in complex supply chains, with analysis neither of the cost of setting up the new regime or the additional costs to business.

The Government have said that these regulations are necessary to ensure that UK REACH will operate domestically and to implement the Northern Ireland protocol. But they will not provide the same level of protection from harmful chemicals that we currently enjoy, and there are huge challenges in trying to replicate EU REACH. The Government have failed to demonstrate that the Health and Safety Executive, as the new regulator, will have the necessary skills and capabilities to match what has been provided by the European Chemicals Agency. When the original SI was introduced, it was indicated that the budget would likely be £13 million a year, and this figure has not been updated. The HSE will have a similar number of chemicals to regulate as the European Chemicals Agency does, with an annual budget of around €100 million. So we have serious concerns about the readiness of the HSE to take on this role and about the lack of staff with the necessary expertise. Despite the Minister’s previous assurances, he needs to set out exactly how the new system will be staffed and resourced to ensure that current levels of protection continue.

Schedule 2 amends the 2019 regulations to extend the date by which companies with EU REACH-registered chemicals must provide full safety data. As explained, the deadline has been extended from two years after exit day to be staggered over six years plus 300 days, so that the full registration dossier will now need to be submitted within two, four or six years. I understand the Minister’s reasoning behind this, which he just explained, but it does mean that the period in which the new regulator will be unable to protect human health and the environment from harmful substances has been extended. Without this data, it will be difficult, if not impossible, for the HSE to implement legally enforceable restrictions and authorisations.

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.

My Lords, I am grateful to my noble friend the Minister for introducing these regulations and explaining their effect. I regret that the Northern Ireland protocol has made it necessary to have two different versions of REACH: UK REACH, which will apply in Great Britain, and the EU version of REACH, which will continue to have effect in Northern Ireland.

I trust that our departure from the EU will enable us to revert to a simpler, clearer, common law style of regulation such as we used to apply before the centralising and harmonising powers obtained by the Commission through the Maastricht treaty were applied. This instrument makes it very clear that there is some way to go before we can start to move in that direction.

It is very difficult to follow the detail of the instrument because it amends the 2019 regulations, which were not designed to apply in a situation where the EU regulations continued to apply in Northern Ireland. Therefore, one needs to refer to several different documents, which I find rather testing.

Paragraph 2.4 of the Explanatory Memorandum introduces a definition of GB REACH, and all references to “UK” in the 2019 regulations are being changed to “GB”. However, I ask my noble friend if he agrees that we should call it “UK REACH” rather than “GB REACH”, because GB is an island, not a country. Of course, the instrument would still have to apply the EU REACH regime in Northern Ireland. It is more confusing because, as noble Lords are aware, GB is the two-letter acronym used by the EU to refer to the UK throughout its years as a member state.

It occurred to me that since the REACH regimes are different in Great Britain and Northern Ireland, could not Northern Ireland be made subject to both regimes simultaneously? That presumably would not add any additional bureaucratic burden for Northern Irish businesses, since the content of the regimes is identical on IP completion day. However, would it not offer reassurance to the communities of Northern Ireland that they really are still an integral part of the UK and that this United Kingdom Parliament makes laws which apply to them?

My Lords, I would like to echo the regret that others have expressed that we have allowed ourselves to walk into this unnecessary nightmare.

EU REACH started in 2007, and it took nearly 10 years to iron out all the wrinkles and become, according to our own Chemical Industries Association and the charity CHEM Trust, the best chemicals regulatory system in the world. With a staff of 600 people, ECHA—the European Chemicals Agency—deals with tens of thousands of chemicals in over 20 countries, which makes the evaluation and authorisation of individual chemicals good value for money. But more importantly, it has had 13 years to build up a huge database and prove to the world that its stamp of approval is a recognised safety guarantee when it comes to trading in chemical products—products that touch almost everything we do, from toothpaste, toothbrushes, toys, frying pans, paints, varnishes and chairs to sofas, to name just a few domestic items.

Originally, under Theresa May, and when Michael Gove was Secretary of State, we were going to go for full alignment with EU REACH and try to get associate membership. This would have been a very sensible approach, and indeed was recommended by your Lordships’ energy and environment committee, on which I am lucky enough to serve under the able chairmanship of the noble Lord, Lord Teverson. But then UK politics changed, and seemingly alignment with any EU programme or institution became a no-no, whatever the cost.

We are therefore now going to leave the best system in the world at a cost of over £1 billion to a vitally important UK industry; an industry—or industries—which probably employs over 100,000 people. It is an industry which, as the noble Lord, Lord Teverson, mentioned, is inextricably linked with the EU, and, as he said, research indicates that 27% of the EU companies involved do not intend to register with UK REACH.

In supporting my noble friend Lady Hayman of Ullock, I am concerned about the resources and capability of the Health and Safety Executive to carry out its new role, about the risk of safety issues falling through the gaps and about the cost to business, which the noble Lord, Lord Cameron of Dillington, just outlined so graphically. This House is on record as regretting the Government’s decision not to participate in the European Chemicals Agency, which would have saved all this uncertainty. I am sure that my noble friend Lord Whitty, whose regret Motion was carried in 2019, will want to say more about that.

Let me make it clear: I am a supporter of the wonderful work carried out by the Health and Safety Executive. I worked closely with it 10 years ago when I was preparing my report on fatalities in the construction industry, and I have been horrified at the extent of the cuts to its budget by successive Conservative Governments. As the UK chemicals authority, the HSE will take on the role that was formerly carried out by the European Chemicals Agency. The question of staffing and resources of the HSE has been raised before. I was a member of Sub-Committee B of the Secondary Legislation Scrutiny Committee in 2019. It expressed concern in its report on the REACH regulations that the HSE did not have the resources to recruit the necessary expert staff. Now the current Secondary Legislation Scrutiny Committee, under the able leadership of the noble Lord, Lord Hodgson of Astley Abbotts, is expressing deep concern about the same thing over a year later. Why have the Government not taken action when they were warned of the difficulties? The new regime comes in on 1 January 2021 but recruitment to the HSE is nowhere near concluded.

What contingency plans exist to ensure that safety and standards are maintained during this crucial period? What assurances can the Minister give that the HSE will be adequately funded? Will the Government work with stakeholders to develop an open and transparent structure? As the noble Lord, Lord Teverson, explained, the advantage of the European Chemicals Agency, which the Government have decided to leave, is that it had a committee structure which ensured that its work would be challenged, and Cruelty Free International has emphasised that this open structure ensures that “the best information is available, including on animal testing.”

My Lords, I thank my noble friend the Minister for his explanation of these regulations and for his clear delivery to the House of what are clearly regulations that may be of significant concern. In particular, he has assured us that Defra is putting in resources and that the HSE is recruiting. However, concerns have been expressed about the adequacy of resources for the HSE, which does a tremendous job, and the required oversight, when one compares the budget of the ECHA, with €100 million, and the HSE, with £13 million. What are the targets for recruitment to the HSE? How are we locating the required personnel? Where are they coming from? Can my noble friend say how much the adequacy of the resourcing has been assessed and whether there are any reports that may give us some comfort?

I also encourage my noble friend to relay the message this House has clearly given over the last two to three years, that data on safety and data sharing are essential for public safety. I appreciate that the JCSI report and the concerns raised, as my noble friend already mentioned, may not be directly relevant to this SI. However, clearly, the issues raised are enormously important, and its broader concerns about the potential £1 billion cost to our valuable UK chemicals industry and the readiness of the HSE to conduct its role are serious matters.

As the noble Baroness, Lady Hayman, and the noble Lord, Lord Teverson, rightly said, the risks to our chemicals industry, public safety and indeed economic performance are being imposed for no added value. I have pointed this out many times in the past four years in the various debates on this issue. We are trying to reinvent the wheel, but we do not have the resources to make sure that it is as robust as the wheel we are replacing.

Like my noble friend Lord Trenchard, I regret the need for us to have a separate REACH programme for Northern Ireland and GB—but for rather different reasons. We will have our own GB REACH, but Northern Ireland will be under the EU REACH regime. Both will operate independently, with exporters and importers between the EU, the EEA and Northern Ireland—with Great Britain on the other side—having to ensure that their relevant duties are met under both regimes. Can my noble friend the Minister outline the differences that we anticipate between the two regimes and how firms will be prepared for any such divergence?