Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit for the following debate is one hour.
Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021
Relevant documents: 51st Report from the Secondary Legislation Scrutiny Committee, Session 2019–21
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, the combined heat and power quality assurance scheme has been in place since 2001 to certify highly energy-efficient combined heat and power plants across the UK. Combined heat and power plants can be fuelled by natural gas or renewable fuels and are up to 30% more efficient than conventional methods of generation by making use of both the heat and the electricity they produce. To incentivise deployment of CHP, certification through the quality assurance scheme enables access to a variety of financial benefits which form part of the business model for CHP owners. Over 1,400 sites across the UK certify their combined heat and power plants through this voluntary assurance scheme, accessing over £500 million in benefits each year.
Combined heat and power plants are a vital technology for some of our most valued but energy-intensive industries. They will play a key role in our move towards net-zero emissions due to the variety of benefits they bring to an increasingly renewables-based electricity network and the ability to adapt in the near future to hydrogen fuel or carbon capture and usage technology. Both hydrogen and carbon capture and usage will be crucial in the decarbonisation of the UK’s energy use, particularly for energy-intensive industrial processes. Therefore, operators of combined heat and power plants should be appropriately supported, as they will support us to decarbonise.
The initial Covid-19 lockdown restrictions in 2020 impacted a large number of businesses. Multiple CHP users, across a variety of sectors and industries, approached the Government with concerns over the impacts the restrictions would have on their businesses. Restrictions meant that they were unable to operate their combined heat and power plants effectively and risked not being able to recertify as normal through the combined heat and power quality assurance scheme as a result. There were two key issues affecting their operation. First, for some industrial processes, demand for power remained but heat customers had shut down, meaning that useful heat was being wasted. Secondly, there were reports of a significantly reduced quality of biomass supply, which was negatively impacting the volume required to meet demand. These issues impacted the operational data that is used in the certification process, presenting a risk for operators that they might not be able to certify for their usual level of benefits in 2021.
A consultation was launched on 15 December 2020 to measure the number of affected operators and to seek views on a proposed temporary amendment to the certification process which we are here to discuss today. Agreement to support CHP operators was unanimous. The consultation received support from a wide variety of stakeholders, including unimpacted operators confirming that they agreed the solution was fair and appropriate.
The rules and procedures relating to the CHPQA are contained in the quality assurance scheme’s standard. Issue 8 of the standard has been amended to allow for a temporary revision to the certification process to allow operators to use their unimpacted 2019 operational data for their 2021 certification instead of impacted 2020 operational data. This will allow affected operators to access appropriate levels of financial benefits in 2021 based on their energy use, thereby avoiding further Covid-related financial impacts on key businesses and industries in the UK. To ensure that this easement is provided only to operators impacted by the Covid-19 lockdown restrictions, all operators seeking to utilise this easement must provide sufficient evidence, which will be assessed on a case-by-case basis by the experienced quality assurance delivery partner.
These regulations give effect to the amended Issue 8 of the standard through amendments to references in the Renewables Obligation Order 2015 and the Emissions Performance Standard Regulations 2015. Certification through the combined heat and power quality assurance scheme provides access to benefits under multiple policies implemented through a variety of powers. Associated instruments are being laid by Her Majesty’s Revenue & Customs, as well as in Scotland and Northern Ireland, over the coming weeks, to update the CHPQA standard to Issue 8 across the relevant legislation. The regulatory amendments will be in place for 12 months following this instrument coming into force.
The Government do not intend to extend the amendment to the quality assurance scheme’s processes for further years, as it is expected that businesses have now had the opportunity to adapt their processes, and we hope that there will be no additional extended periods of restrictions related to Covid-19 for the rest of 2021 and beyond. This update to the standard also removes references to EU directives.
This change to the CHPQA certification process will avoid increased operational costs being passed on to consumers, and will support vulnerable businesses and industries in the UK to avoid further financial impacts and potential job losses caused by the Covid-19 pandemic. Due to the financial incentives accessed through the CHPQA predominantly being exemptions from a variety of operational costs, such as taxes, no new or additional funding is required to implement this support.
I conclude by emphasising the important role that combined heat and power technology will have in our route to decarbonising energy use. Therefore, stake- holders affected by Covid-19 restrictions should be supported. This amendment provides excellent value for money for the public purse as no additional funding is being allocated to the support and it avoids additional running costs being passed on to consumers. This is a proportionate, transparent and widely supported administrative amendment that will avoid further financial impacts on crucial, vulnerable businesses and industries in the UK. I commend these regulations to the Committee.
Baroness McIntosh of Pickering (Con)
I am delighted to contribute to this little debate and I welcome the regulations. I congratulate my noble friend on setting out their remit so clearly and comprehensively. I place on record my enthusiasm for combined heat and power and I recognise the advantages of this form of use, particularly given that it has efficiency of over 80%. Operators typically save around 20% on energy bills and can save up to 30% on carbon emissions. Transmission and distribution losses are reduced while fuel supply security is increased.
I should like to put a number of questions for my greater understanding of the impact of the regulations. My noble friend said that the Covid situation, particularly lockdown in 2020 and at the beginning of 2021, has led to the need for these regulations. However, if, heaven forfend, a lockdown were to be reinstated later this year, what will happen to the regulations when they come to their natural expiry date, which I understand is 12 months from 18 May?
Also, my noble friend referred to the fact that one of the issues leading to the need for the regulations before us is that there was a reduced supply of biomass. Is that still the case or has the situation been redressed? Are we still heavily dependent on imports of biomass? If so, I plead an interest, given that I was a North Yorkshire MP for 18 years.
Farmers in this country stand prepared to contribute to the supply of biomass. I could be wrong, but I understand that one of the sources could be fast-growing willow trees. It would be a much better and more sustainable supply, while contributing to the income of farmers in the UK, if we could secure biomass from a UK source rather than importing it. Will the Minister address the issue that she herself raised about the reduction in biomass supply? Is that still the case? Are we completely dependent, for the large part, on imports? Has the supply now been reinstated?
What happens at the expiry of this instrument on 18 May next year? Will it fall or be reviewed to see whether it could be reinstated?
I understand that there is a difference between combined heat and power plants and energy from waste. I am also an enthusiastic supporter of energy from waste. I am delighted to see that the energy from waste plant constructed near the A1 in North Yorkshire is working so well. My one regret is that the energy created is not being put into the local grid, because there is an argument—particularly in a cold part of the country, such as the north of England—that the supply should be for domestic consumption.
Can the Minister address how many CHP plants currently have the capability to operate CHP but are not yet functioning as CHP plants? To what extent does she imagine that the regulations will address that issue, or are they only addressing the issue of those who have benefited from the scheme in the past and who wish to have the amendments set out in the regulations?
I note that there are no plans to consolidate the Renewables Obligation Order 2015 or the Emissions Performance Standard Regulations 2015 for the simple reason that these are temporary modifications. That is very welcome indeed.
I support the regulations before us. They will come as a huge relief to those operators who have been caught on the hop in this way. With those points and questions, I wish the Minister a fair wind with these regulations.
Lord Bhatia (Non-Afl) [V]
My Lords, this instrument has been prepared by the Department for Business, Energy and Industrial Strategy. The CHPQA scheme, through the CHPQA standard, outlines the CHPQA methodology, definitions, thresholds and criteria for “good quality” certification of a CHP plant. The latest version of the CHPQA standard, Issue 8, was published by the department on 11 March 2021 to reflect the temporary easement for CHP plants impacted by measures implemented in response to the Covid-19 pandemic and to remove references to the energy efficiency directive.
The instrument modifies for a period of 12 months, beginning with the day on which it comes into force, the Renewable Heat Incentive Scheme Regulations 2018 to refer to the CHPQA standard as Issue 8. CHPQA certification enables access to incentives through multiple schemes legislated for by different departments and the devolved Administrations, which all intend to modify these schemes via separate instruments as soon as they can. Separate modification regulations for 2021 are also being laid by the department, the purpose of which is to make similar modifications to the Renewables Obligation Order 2015 and the Emissions Performance Standard Regulations 2015 via the affirmative procedure.
CHP is an energy-efficient technology that allows generation of both heat and power on-site, providing fuel and carbon savings compared with separate generation. The scheme was launched in 2000 as a voluntary programme to assess and certify CHPs. To encourage CHP installations and efficient use of the technology, certification through CHPQA enables operators to access multiple benefits, including exemptions from the climate change levy and carbon price support taxes and emissions performance standards limits and, for renewable-fuelled CHP, the renewable heat incentive and renewables obligation.
The CHPQA standard outlines the methodology, definitions and criteria for “good quality” certification. The CHPQA standard is referenced in the individual legislation for each scheme that CHPQA certification provides a benefit in relation to.
To certify, CHP operators submit operational performance data for the previous calendar year to claim taxes and benefits in the next calendar year. There are two key parameters for CHPQA certification: quality index and power efficiency. The QI calculation is based on the amount of useful heat, electricity output and fuel input. CHP schemes can achieve either full certification if they pass the thresholds or partial certification, with benefits deducted proportionally to the overall QI and power efficiency values.
Finally, a six-week consultation was held between 15 December 2020 and 29 January 2021. This consultation period was considered appropriate because of the straightforward nature of the changes, narrow stakeholder interest and timing pressures to confirm certification for 2021. This was paired with direct stakeholder engagement, including with all CHP plants certified in 2019.
Baroness Bowles of Berkhamsted (LD) [V]
I thank the Minister for introducing this statutory instrument. She has already touched on some of the topics that I wanted to pursue a little further.
As has been explained, the instrument temporarily modifies the certification process for the combined heat and power quality assurance scheme, which certifies energy-efficient combined heat and power plants and gives access to financial incentives, including environmental tax exemptions. As with many businesses, the pandemic and lockdown have given rise to a highly abnormal year, so some schemes that would normally have qualified for incentives may not, because their 2020 operational data does not qualify them. Where those businesses can show a direct effect from the pandemic, the Government are allowing use of their 2019 data instead of the anomalous Covid-impacted 2020 data for the purposes of qualifying for the financial incentives in 2021.
That is a logical approach, and this is not the first SI that I have seen which makes adjustments because of the pandemic. I am pleased to see that the safeguard is there: there has to be a direct effect of the pandemic, rather than the ability to choose 2019 data automatically if it was better, potentially for other reasons. Therefore, I agree with the changes and I hope that the Minister will indulge me as I use some of the time available to ask a few general questions about combined heat and power, and indeed energy from waste.
One thing I noticed in the Explanatory Memorandum was the use of the expression “Good Quality” CHP, which is what the incentive is about. That is key, and it set me wondering where CHP sat in the context of net zero more generally. The Minister explained that much depended on carbon capture and the development of hydrogen for the future, but there are also problems—such as how to utilise the heat, especially in the domestic environment—that have restricted how well CHP developments have proceeded to deliver on not wasting the heat. What are the Government doing to help in that?
It seems that, in some ways, CHP as a technology has not quite fulfilled its promise in terms of uptake and utilisation of what was otherwise waste heat. I am aware that some of the incentives are now closed to new entrants. I am not sure whether that is to discourage less environmentally friendly types of CHP or that it reflects a cost or “job done” situation, such as with solar feed-in subsidies. What types of CHP plant are presently encouraged? In the future, for example, will gas CHP systems be phased out, as is planned for new domestic boilers, and what is the timescale? I appreciate that I formulated that question before the Minister made the comments about carbon capture, so that is a part of it, but ultimately we probably cannot solve everything that way.
I also want to explore the situation with energy from waste. As I understand it, pretty well all recent energy-from-waste plants are CHP-ready, but there are challenges of using the heat. Given that the financial success of energy-from-waste plants does not hinge on using the heat, what incentives are there for plant owners to overcome the various legal and technical problems—and, indeed, reluctance from the public—to address those issues?
Energy from waste is of course a high carbon-footprint method of generation, as indeed is biomass at the point at which it is utilised, although both run on the basis that they are less bad than the alternatives. But it will be important to stop the release of that carbon, no matter whether there is—as in biomass—a good history of there being some carbon absorption during the process of growth. How does that play out in trying to solve the heat distribution issues? Are these technologies seen as insufficiently long-term projects to make sorting it out worth while? If they are not, they really are not living up to the promise of what the combined CHP, in its wider sense, is meant to do. Indeed, looking to the future and potential nuclear microgeneration, is solving the heat distribution problems not also key for that to be successful?
I appreciate that these questions are beyond the subject of this regulation, but my curiosity was piqued. If there is not information to hand right now, I would be happy for the Minister to write or direct me to the relevant documents that give the answers or provide more information. As I have said, I have no objection to the regulation.
Lord Grantchester (Lab)
I thank the Minister for her introduction to the regulations before the Committee today. This instrument is simple but effective and its aims are largely technical. It modifies for a period of 12 months the application of two aspects of the combined heat and power quality assurance scheme in relation to the effects of the Covid-19 pandemic on the performance of CHP operators that resulted in shortfalls in their standards in the provision for the previous calendar year.
The Government have agreed to allow a temporary easement to the certification process necessary to enable CHP operators to continue to access multiple benefits, such as carbon price support taxes and emissions performance standard limits. Indeed, 2020 was a very abnormal year as well as an inappropriate one on which to submit performance data. These regulations modify two instruments—the Renewables Obligation Order 2015 and the Emissions Performance Standard Regulations 2015—to refer to the technical Issue 8 of the CHP quality assurance standard. CHP operators can submit their 2019 operational data instead of the 2020 data for the 2021 certification. Issue 8 was published on 11 March 2021 to reflect this temporary easement for CHP plants impacted by measures implemented in response to the pandemic.
I am content to approve this order to allow a recovery period in which CHP operators can continue with data from the previous year’s performances. Do the Government believe they have judged the length of dispensation period correctly? What calculations have they undertaken to assess the slippage effect of the pandemic and whether a shorter period of time might have been sufficient for operators to get back on track?
I imagine that all the failing operators will have applied for this dispensation. Can the Minister tell the Committee how many operators the Government estimate may apply, and will the submission only of data from 2019 qualify them for certification? Will the operators need to demonstrate how Covid-19 impacted their business performance? Have the Government considered that there could be CHP plants that might have fallen short and yet not have been severely impacted by Covid-19? Would this matter, as it is the data that is not impacted and not the quality of standards? Perhaps the Minister might explain, as the measures implemented to combat Covid-19 may well have affected all performances, irrespective of district or operational abilities. However, that the data provided in 2019 would be sufficient to qualify for continuation of benefits would suggest that a large degree of compliance will not have changed, only the data achieved in 2019 for those shut or intermittently open during 2020.
I agree that it may not be necessary to implement a complicated bureaucratic quality assurance threshold for the various degrees of impact in 2020, and this SI seems straightforward in that respect. Can the Minister say whether any serious concerns were raised in the consultation?
I hope that as the economy recovers and the inoculation process continues to offer protections from the extremities of disease impact we will see a swift return to better operational performances. Do the Government consider that the audit of standards should become part of next year’s process of certification or do they consider that the return to data standards provided by the immediately preceding year will be sufficient? Naturally, I sincerely hope that there will be no need for further reconsiderations for next year if the UK should experience a return to lockdown measures.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank all noble Lords for their valuable contributions to this short debate on a very important subject. I start by saying that my response to the noble Lord, Lord Bhatia, will be provided in writing after the debate.
I make the following points in response to those raised by my noble friend Lady McIntosh—and I am very grateful for her support for the proposed amendments. The public consultation published in December 2020 discussed only the option of providing support for the 2021 certification period. While we expect businesses will be able to adapt to further impacts in 2021, if circumstances change we can consider extending the support. The UK supports only biomass that complies with strict sustainability criteria. We are reviewing the air quality impacts of biomass to ensure that our energy policies can jointly tackle climate change and improve air quality. We understand that biomass CHP operators have been able to re-establish supplies.
My noble friend also asked how many CHP plants were not functioning as they should. By 5 May 2021, 261 sites, representing 19% of all certified CHP sites, had expressed an interest in submitting evidence to access the easement; 197 were in England, 33 in Scotland, 18 in Northern Ireland and 13 in Wales. I think that answers a question raised also by the noble Lord, Lord Grantchester.
In answer to the noble Baroness, Lady Bowles, I am very grateful to her for her support for this important safeguarding and welcome her comments on the broader issues of energy from waste, as indeed I do those of my noble friend Lady McIntosh. It is an area in which I am particularly interested, but my briefing does not really cover a lot of the questions that she asked in detail. However, I would be delighted to write to her with more details, and perhaps there will be more questions in the House relating to energy from waste.
The CHPQA requires that heat is used usefully; to qualify for benefits, sites must demonstrate that the heat being used displaces alternative heat generation, such as by boilers. Noble Lords mentioned some wider policy challenges around the effective distribution of heat and support for decarbonisation, which will help us to reach 2050 targets. There is a great deal going on in this space, such as strategies for hydrogen and industrial energy, and it may be easier for me to write to provide a more detailed list.
I can tell the noble Lord, Lord Grantchester, that almost all operators will use 2019 data for their recertification, but those without 2019 data will use their design data, as is the usual process within the scheme. Evidence will be required to access the easement to show sufficiently the impact of Covid on the operation of CHPs. No serious concerns were raised during the consultation.
The noble Lord also asked about checks and balances. To ensure that this easement is provided only to operators impacted by the Covid-19 lockdown restrictions, all operators seeking to utilise this easement must provide sufficient evidence, which will be assessed on a case-by-case basis by the experienced quality assurance delivery partner. The CHPQA delivery partner has the required technical experience to access these applications, and I am assured that they have sufficient manpower to process the applications.
Following the Covid-19 restrictions throughout 2020, support for the impacted combined heat and power operator is crucial, as this technology holds significant opportunity to help decarbonise energy use. Without this support, valuable jobs in green industries could be lost and efficient technologies abandoned in favour of carbon-intensive alternatives. This administrative amendment is transparent and fair, as confirmed by stakeholders during public consultation, and represents excellent value for money, with no additional capital required to implement. I commend these regulations to the House.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. The time limit for this debate is one hour.
Air Quality (Legislative Functions) (Amendment) Regulations 2021
(2 years, 11 months ago)
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Lord Goldsmith of Richmond Park
That the Grand Committee do consider the Air Quality (Legislative Functions) (Amendment) Regulations 2021.
The Minister of State, Department for the Environment, Food and Rural Affairs and Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con) [V]
My Lords, before you today are the Air Quality (Legislative Functions) (Amendment) Regulations 2021, which were laid before this House on 22 March. The Government are committed to continuing our high standards of industrial pollution reporting. All the changes introduced by this instrument are technical and are required to ensure that the United Kingdom’s industrial pollution reporting remains relevant and up to date, reflecting scientific, technical and international progress.
These regulations make amendments to our regulations on pollutant release transfer registers, or PRTRs, and specifically a piece of retained direct EU law. The original regulation 166/2006 was amended on EU exit and provides for a PRTR to be maintained for the United Kingdom in the form of a publicly accessible electronic database. Now that the transition period has ended, this EU-derived legislation otherwise risks being left partially ineffective, should there be a rapid industrial or technological change.
These regulations amend the PRTR regulation to confer two powers. The first power will enable the Secretary of State and the devolved Administrations to make regulations on reporting on releases of pollutants from diffuse sources. Diffuse pollution can be caused by a variety of activities that have no specific point of discharge, or are difficult to place at a specific location. The appropriate authority can do this if it determines that no data on the release from diffuse sources exists, and it must use internationally approved methodologies where appropriate.
The second power means that the Secretary of State can amend annexe II of the PRTR regulation for the purposes of adapting it to scientific or technical progress, or to reflect any future amendments to the Kiev protocol on PRTRs. I assure the Committee that this power could be used only for that purpose. Annexe II of the PRTR regulation sets out a list of pollutants and threshold values which, if exceeded, operators of industrial facilities are required to report any releases of the pollutants to air, land or water.
Both these powers are limited in their scope and can be exercised only for specified purposes. These powers are critical to ensure that the UK Government and devolved Administrations can act quickly to strengthen pollution reporting on emerging scientific or technical evidence—for instance, should there be a new pollutant on which it is in the public interest to report pollution information. It is therefore appropriate for these powers to be exercisable by secondary legislation.
These powers also ensure that the Government can reflect in UK legislation any changes made to the Kiev protocol on PRTRs so that we can continue to meet our obligations as a party to the protocol. We anticipate that any future changes to the protocol will strengthen parties’ reporting to better fulfil the aims of the protocol, rather than being fundamental changes to the principles of the protocol.
These powers mean that future technical changes to the regulations can be made with secondary legislation, which is the most proportionate approach. Such amending legislation would be subject to the negative procedure, which would allow appropriate scrutiny, given the technical nature of any changes.
The PRTR regulation will continue to function similarly to how it always has, but with UK authorities now having legislative functions under the regulation. I should make it clear that all the amendments introduced by this instrument are technical operability amendments to maintain the effectiveness of this important UK industrial emissions reporting obligation. These regulations maintain existing regulatory standards and do not create new policy.
Provision for the transfer of powers for PRTR was included in the Environment and Wildlife (Legislative Functions) (EU Exit) Regulations 2019. However, the PRTR regulation was amended in EU law after the 2019 EU exit statutory instrument was made, which meant that the PRTR part of the EU exit statutory instrument no longer operated as intended. Therefore, further amendments to the PRTR regulation are needed to ensure that the transfers of legislative powers are reinstated and have effect as intended following EU exit.
This instrument is subject to the affirmative procedure as it involves the transfer of powers. Furthermore, because the instrument does not alter existing reporting, it was not subject to consultation. There has been no need to conduct an impact assessment for this instrument, in line with published guidance, because there is no foreseen impact on the private or voluntary sector as the instrument relates to maintenance of existing regulatory standards, and there are no direct or cost impacts from these regulations.
This statutory instrument forms part of our important air quality and industrial emissions legislation. Noble Lords will be aware of other important legislation we have introduced to improve air quality. For instance, the new legislation restricting the sale of the most polluting fuels used in domestic burning came into force on 1 May 2021. This will restrict the sale of traditional house coal, small volumes of wet wood and high sulphur manufactured solid fuels.
In addition, our ground-breaking Environment Bill will protect and improve the environment for future generations. The Bill will improve air quality by setting a duty to introduce a legally binding target to reduce fine particulate matter—PM2.5—which is the most damaging pollutant to human health. I beg to move.
Lord Whitty (Lab) [V]
My Lords, I thank the Minister for his explanation. I declare an interest: I have just retired as president of Environmental Protection UK, which almost started its life as the National Society For Clean Air, and I am still a vice-president. Therefore, anything with “air quality” in the title attracts my attention.
I have to confess that I first put my name down for this debate under a bit of a misapprehension. The title of this SI, with its reference to legislative functions, implied to me that we might get to know which of the functions hitherto carried out by the European Commission and its agencies would be transferred to which UK bodies and regulators. Indeed, I hoped that we might get a clearer idea than is apparent from either the latest version of Defra’s air quality strategy or the text of the Environment Bill—in its present form at least—on which authorities will be responsible for the regulations and the enforcement of which bits of that strategy, thus indicating which public authorities would be responsible for those functions that previously rested with the European institutions. I hoped that we could get some clarification with this SI, but no such luck.
As the Minister explained, the SI deals with a much wider issue in a sense, but also a much narrower one. The wider context is that we are now internationally a party to the UNECE agreement on dangerous pollution registration as an independent signatory, having previously been party via our membership of the EU and the European pollutant release and transfer register. We therefore have little leeway on a long-standing international agreement under the Aarhus convention, transposed into EU law, as I understand it, in 2006.
What is before us is also narrower because the main obligation under it is not on government bodies but on the industrial operators to maintain their register of pollution and waste release, leakages and transfers. But, of course, this registration system requires government bodies to oversee its operation, and it is not clear even from what the Minister said, let alone the text, which government bodies we are talking about. The crude transfer from the European Commission to the Secretary of State does not answer that question—which body in practice is, as the text says, the “appropriate authority”? Is it Defra? Is it the Environment Agency? Is it local authorities, which generally bear the brunt of air quality enforcement in practice? Is this UK-wide? What are the responsibilities of the devolved Governments in Scotland, Wales and Northern Ireland, all of which have direct regulatory relations with the relevant operators that have to maintain registers under these provisions? Even if it is England only, it is not all that clear who is responsible.
I was for a number of years a Minister in Defra and its predecessor departments, and then for six years a member of the board of the Environment Agency. I briefly had responsibility for air quality at Defra, but in the six years I was on the Environment Agency board, every year we considered a chart of our performance against our KSIs. Most of the achievements were amber and many gratifyingly green, but on air quality, year after year, they were red, and that never changed. The reason for that lay not in the responsibilities of the Environment Agency itself, nor, indeed, of the local authorities of which the Environment Agency had oversight, but because the largest air-quality issues were largely problems for the Department for Transport or its agencies, or for BEIS or whatever the department covering energy and construction was called at the time. In other words, the department and agency which were formally responsible for air quality strategy had no jurisdiction over the largest problems of air-quality pollution and health hazards—road transport being the largest, but there were also major contributions by static machinery on construction and energy sites.
The issue of what is the appropriate authority goes beyond this particular SI, and we may need to return to it at a later stage. We need eventually to be clear on this. I hope that we will be before we start substantive discussion on the Environment Bill, but I have to tell Ministers that in its present form, the Bill is not clear on air quality.
I have just a couple of other questions. First, the UNECE agreement prevents signatories from deleting pollutants from the list but allows signatories—previously the EU and now the UK—to add to the list for their jurisdictions. Do Her Majesty’s Government at present have any plans to add to the list or to change the thresholds for reporting that are in Annexe 2, Article 5 of the protocol?
Some of those thresholds seem very high for releases into the atmosphere per annum, and some of the releases into water and soil really ought to be banned altogether in a sustainable system. The whole issue of what is the threshold for reporting probably needs to be addressed now that we have “taken back control” of our rules. Otherwise, a number of smaller entities that release pollutants and waste will not really be covered. Do the Government have plans to review the thresholds and, if so, will that be part of the Environment Bill, or will it be later?
Lastly, I go back to the devolution issue. We talk about “appropriate agencies”. Are decisions in this area to be taken by Defra and/or the Environment Agency, which are the key entities for England, or are we to have a four-nation framework, under which all four UK Governments will take an agreed position? If there is not a unified position, the companies obliged to run the register will be required to do so in a number of different jurisdictions. They will find that bureaucratically difficult if there are marginally different criteria north and south of the Tweed, or east and west of Offa’s Dyke, for example. Even if the criteria are the same, the duty to record the register and provide it to the appropriate authority will be fourfold rather than, as currently, a single reporting system.
As I said, I was under a bit of a misapprehension as to how wide this SI went, but it raises some of those problems. I am happy to nod the SI through this afternoon, but we will need some clarification of those issues—if not today, I ask the Minister to consider it in the course of the passage of the Environment Bill, if not before.
Lord Randall of Uxbridge (Con) [V]
My Lords, I thank my noble friend for his clear explanation of these rather complicated regulations. I welcome them and am pleased they do not represent a weakening of existing protections. As we have heard, the amendments proposed concern provisions of Regulation 166/2006 that confer supervisory powers on the Commission, and transfer them to the Secretary of State. However, as the primary reporting obligations fall on operators, this is not the self-regulatory shift that we have seen introduced in some other SIs that have been tabled as a result of our leaving the EU.
As with the noble Lord, Lord Whitty, when I see air quality mentioned it attracts my attention. I know that this Government, in particular my noble friend, take the whole issue of air quality seriously. I therefore hope, as we have already heard, that we will see more legislation in the Environment Bill that will ensure that we maintain and improve our air quality, and that it remains a government priority.
I have been raising these issues for a long time, from when I was in the other place. When I have done so it has often been related to the proximity of where I live to Heathrow Airport and the M4. I am afraid to say that those problems still exist, as we all know. Like many last year, I noticed the real improvement during lockdown when traffic and air traffic were at a minimum. The air actually tasted better, if that does not sound too dramatic.
While recognising that this is a debate on a statutory instrument, I hope that I may be allowed a gentle and brief foray into some other air quality issues that I hope we can address in the Environment Bill. After all, my noble friend mentioned some of the things that the Government were doing. One issue that I and the noble Lord, Lord Whitty, pushed on in the Agriculture Act was that of pesticides. We urgently need regulations to prohibit the application of chemical pesticides near buildings and spaces used by residents and members of the public, with the aim of improving air quality and protecting human health and the environment in rural areas. This is a matter of urgency. Although we have received assurances that regulations already in force amply protect the public, I am afraid that I am still far from convinced. Perhaps I, other noble Lords and some campaigners may have the opportunity to discuss this matter with my noble friend during or before the passage of the Environment Bill in your Lordships’ House.
A final plea before I close my comments is again to ask the Government seriously to consider including the World Health Organization PM2.5 limit value as a minimum level of ambition for the air quality target in the Bill. I heard what my noble friend said and I hope that we can put that in legislation.
With those friendly shots across the ministerial ship’s bows, I reiterate that I welcome these regulations.
Baroness Altmann (Con)
My Lords, it is a pleasure to follow my noble friend Lord Randall, who has done so much good work in this area for so long. I thank my noble friend the Minister for his clear explanation of this SI, which of course I support. I am grateful to him for all the work that he is doing on these important issues.
Air quality needs to be measured and we must ensure that our industrial pollutants are properly registered. I am pleased that we aim to fulfil the Kiev protocol on PRTRs. I echo the question from the noble Lord, Lord Whitty, as to whether there are any plans to potentially improve on some of the targets set by the international protocols.
I should also like to congratulate the Government on the already-achieved reduction in air pollution with, for example, nitrogen oxides reportedly having fallen by about a third since 2010 and emissions of fine particulate matter, which is so damaging, having fallen by around 10% since then. Indeed, our clean air strategy, published in 2019, was praised by the World Health Organization as an example for the rest of the world to follow. In that context, therefore, does my noble friend the Minister have plans to continue to be world-leading and is he considering any other measures that could pave the way for others to follow?
We have air pollution from transport, industry, solid fuel heating and cleaning products. It is the single greatest environmental risk to human health, particularly given the problem of nitrogen dioxide and its concentration around our roads. Can my noble friend comment on any further actions that are planned for local authorities to monitor and control their local emissions and report back to government on the overall developments in this area?
Clearly, we urgently need cleaner and healthier air, especially if we want to improve the health of the nation, which is one of the major aims that I hope we will foster as a result of the pandemic and the terrible impacts it has had. Again, especially with respect to fine particulate matter, which is so damaging to the elderly, children or others susceptible to asthma and lung problems, which have been such a particular drawback for human health during this Covid outbreak, have the Government measured the reductions in emissions that may have resulted from lockdown? Have they any report on what has happened to air quality in, for example, London and major cities? Has this been measured? Have any improvements been noted? Have any resulting benefits to human health been measured? Perhaps that is too difficult. On any of these questions I am of course happy for my noble friend to write to me if he does not have the answers to hand. I apologise that I did not give him prior notice of these questions.
What impact does my noble friend anticipate the Government’s extension of electric vehicles across our vehicle fleet might have on our air pollution? Indeed, too often one hears the suggestion that electric cars are not such a great benefit to the environment because, although they themselves may not emit carbon, they are particularly involved with carbon emissions in their production. Does my noble friend agree that actually that omits one of the other huge potential advantages of switching to electric vehicles and away from diesel or petrol cars: the improvement in air quality as pollutant emissions are reduced? That in itself can be a significant contributor to improvements in air quality.
I welcome this SI. I am glad to see the Government’s commitment to improving air quality and our environmental credentials. I look forward to hearing my noble friend’s response.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to support the regulations before us and to follow my noble friend Lady Altmann. My enthusiasm and excitement for hybrid and electric vehicles are strongly tempered by their cost, the inability to charge them up in rural areas and the rising cost of insurance, which I understand is significant for hybrid and electric vehicles.
I welcome the measures before us to reduce industrial pollution much more than some of the Government’s measures referred to by my noble friend the Minister, who so eloquently presented the regulations. The measures I hesitate more over are those that will negatively impact on rural areas, such as those restricting the sale of traditional household coal and small volumes of wet wood, as well as of solid fuels. These need to be considered with great care, particularly weighing up what the impact will be on deeply rural areas, particularly those that are vulnerable to cold spells, such as the north of England.
I support a number of the issues that the noble Lord, Lord Whitty, raised, in particular understanding the Government’s role in amending and changing the categories in the UNECE protocol. In this regard, is there an opportunity to amend them in the forthcoming COP? If that is the case, could my noble friend the Minister identify which countries, including our erstwhile partners in the European Union, are likely to support such an amendment?
Perhaps my greatest concern is how we can ensure that these amendments today and the broader thrust of the government measures, most of which I welcome, to improve air quality will be implemented and enforced. All of us who are familiar with and have worked with environmental law over the past 20 or 30 years know the role of the European Commission as the safeguard of the treaty obligations into which we have entered. I understand that today’s regulations transpose those, as agreed in Regulation 166/2006 of the European Parliament and the Council, to which my noble friend referred in outlining the regulations this afternoon.
There is a very real issue here: for the first time—this is something that we should welcome, if we could only understand it more fully—we are going to cover public authorities in the round and their environmental responsibilities. Many of us are familiar with water companies and farmers who are heavily censored for any spillage or pollution. It is currently unclear—it really is a lacuna—who is applying the rules in the event of a breach of the air quality rules as currently exist and will apply these regulations if we adopt them today. If it is to be the office for environmental protection, I would welcome that, but we have not yet had the chance to consider what its role, staffing and resources will be and what the relationship will be between the office for environmental protection and other bodies such as the Environment Agency and Natural England.
As the noble Lord, Lord Whitty, asked—and I know it causes great concern across the devolved nations—are we going to have disparity in the way that regulations such as these will be implemented in the four nations of England, Scotland, Wales and Northern Ireland, as we are going to have at least three offices of environmental protection operating? In welcoming the regulations and enthusiastically supporting the positive approach that both the Minister and the department are taking in this regard, I believe we have a long way to go to ensure that any breaches of these air quality regulations are firmly stamped on and that we, and those who might be accused of transgressing, actually understand what the remit of the OEP and other bodies will be. I welcome the regulations.
Baroness Hayman of Ullock (Lab)
My Lords, as we have heard, this SI makes amendments to retained direct EU legislation relating to air quality under Section 8 of the European Union (Withdrawal) Act 2018. This is to ensure that it continues to operate effectively, as the Minister outlined. It is important to note that the corrections that are being made through restatement are necessary to clarify the retained direct EU law covered by the SI. The instrument is designed to ensure that the legislation operates properly.
As the Minister outlined in his helpful introduction, this SI will allow UK authorities to operate specific legislative functions in the UK to ensure that the regime of the retained direct EU law continues to function smoothly without the need for further primary legislation every time a change is required. The SI is specific and focused and, as the Minister said, does not make changes to substantive policy content. It is a technical set of regulations. If we look at the proposed amendment, however, it states that the “appropriate authority” could make regulations governing the release and transfer of emissions from diffuse point sources; but the purpose of the provision remains the same, which is to allow for the collection and provision of missing data.
As my noble friend Lord Whitty asked, which bodies in practice will be the appropriate authorities? It is not clear from this SI, and it is critical that we understand where responsibilities lie in the issue of air pollution, both in England and, as my noble friend mentioned, in the devolved Administrations, where that is appropriate. The noble Baroness, Lady McIntosh of Pickering, also asked for more information in this area, including on the important question of what happens when there is a breach and who is responsible.
Having said all that, however, this SI is a classic case of Her Majesty’s Government having to correct a previous error. Paragraph 2.4 of the Explanatory Memorandum states that the amendments contained in the previous instrument
“did not operate as intended.”
We support these corrections, of course, by way of restatement, but we would like to draw attention yet again to the fact that this is not the first time that Defra has identified and then had to correct issues in the body of retained EU law. I know that many would say that teething problems are inevitable. But does the Minister agree that when errors happen over and over again and have to be corrected, no matter how minor they are, it undermines confidence in the integrity of the statute book?
As we have already noted, this SI is specific and focused. However, as others have noted, air pollution remains a major public health challenge. The Opposition will be looking very closely at this important issue during the passage of the Environment Bill, because we are concerned, as my noble friend Lord Whitty said, about the responsibilities of the appropriate authorities and the resources that will be supplied to them in order for them to carry out their jobs effectively and efficiently. We also have concerns on the issue of pesticides, which was raised by the noble Lord, Lord Randall of Uxbridge. The noble Baroness, Lady Altmann, raised the issue of transport emissions—again, critical for us to tackle if we are to resolve the issue of severe air pollution.
The Environment Bill will give us an opportunity to properly address and tackle the shocking levels of air pollution in parts of our country that lead to so much ill health, particularly among our young and vulnerable people—and sadly, on some occasions, to early death. I finish by welcoming the regulations and saying that I look forward to working constructively with the Minister and other noble Lords.
Lord Goldsmith of Richmond Park (Con)
My Lords, I thank Members of the Committee who have contributed to today’s debate. The UK continues to support the UNECE Kiev protocol and to publish industrial pollution release and waste transfer data on an annual basis. I thank the noble Baroness, Lady Hayman, for her support for this instrument. As she said, it is vital that we keep our UK PRTR up to date according to technical, scientific or international developments, and all the changes introduced by this instrument are necessary to enable this to happen. My understanding in relation to one of her points is that we are not actually correcting an error but reinstating giving of powers to the appropriate authorities.
In answer to questions from the noble Lord, Lord Whitty, which were also raised by the noble Baroness, Lady Hayman, about the division of these powers between devolved Administrations and the Secretary of State, the power to change the annexes of the PRTR have been transferred to the Secretary of State. The power to update the reporting of diffuse sources has been transferred to the appropriate authorities, which include the Secretary of State and devolved Administrations—but the Secretary of State can act with the consent of the DAs.
We have agreed with the devolved Administrations that it is important to continue to have a single UK PRTR, which will ensure the uniformity of this important industrial pollution release and transfer register. Therefore, the power has been given to the Secretary of State to exercise for the whole of the UK, with the consent of the DAs. The updates would be triggered if there were scientific and technical progress or updates to international agreements that needed to be reflected in the reporting parameters. If each UK Administration worked to different technical annexes, there would be a risk to the uniform UK PRTR approach and a single coherent register would not be possible.
The power to take measures to initiate reporting on releases of relevant pollutants from diffuse sources where no data exists has been transferred to the appropriate authorities—the Secretary of State, the Welsh Ministers, the Scottish Ministers and the Department of Agriculture, Environment and Rural Affairs—to exercise in their respective areas. The Secretary of State can also exercise the function for a devolved Administration, with their consent. Although we do not have any plans to update the list of pollutants, we closely consider technical and scientific evidence that will inform possible future changes.
On the timing of these regulations, a question raised by a number of noble Lords, the vast majority of legislation needed for EU exit was made prior to finishing the transition period. The transfer of powers for PRTR was completed alongside other environmental legislation in 2019, via the Environment and Wildlife (Legislative Functions) (EU Exit) Regulations 2019 (S.I. 2019/473). However, new PRTR legislation adopted since that SI inadvertently reversed the effect of the previous statutory instrument, meaning that the Secretary of State’s powers needed to be reinstated. This is the earliest opportunity to lay and debate this legislation.
I reiterate for the Committee that the legislation will not change PRTR reporting. These regulations maintain existing regulatory standards and do not create new policy or change any aspects of the PRTR reporting. These regulations just ensure that the UK statute book remains operable now that we have left the European Union. Any future changes that are made to PRTR reporting are more appropriate for Ministers to make through secondary legislation, with parliamentary scrutiny throughout the process. This will be the best use of parliamentary time, given the technical nature of updates which will be made, which will be made only if there is technical or scientific evidence to suggest an update is needed, or if the PRTR protocol itself is updated. We anticipate that any future changes to the protocol will be to strengthen parties’ reporting to better fulfil the aims of the protocol, rather than fundamental changes to the principles of the protocol. Therefore, updates to reporting parameters will be best managed through secondary legislation instead of primary legislation.
With regard to the international origins of this legislation, the UK is continuing to work with other countries on PRTRs through the United Nations Economic Commission for Europe—UNECE—and the OECD.
We undertook a call for views on the UK’s implementation of the Kiev protocol on PRTRs last year, and no responses raised concerns or issues with the accessibility of publicly available information. This regulation is an important part of our wider legislation on air quality and industrial emissions. Our commitment to air quality and industrial emissions is also, as a number of noble Lords commented, underpinned by our ambitious environmental agenda, including our 25-year environment plan and our clean air strategy, which has been praised by the WHO as
“an example for the rest of the world to follow”.
We are delivering a £3.8 billion plan to clean up transport and tackle NO2 pollution and going further in protecting communities from air pollution, particularly PM2.5 which is especially harmful to human health. Through the Environment Bill we are also setting ambitious new air quality targets, with a focus on reducing public health impacts.
In response to my noble friend Lord Randall of Uxbridge, of course we want a dramatic reduction in the use of pesticides. However, pesticides are authorised for use when scientific assessment demonstrates that this will not cause harm to human health. Pesticide users are required to take all reasonable precautions to protect human health and the environment and to confine the product to the area intended to be treated. When using a pesticide in areas used by the public or vulnerable groups, operators must also ensure that the amount and frequency of use is as low as reasonably practicable. Pesticide users must follow the statutory conditions of use for every pesticide they use. However, as I say, we absolutely want to see a dramatic reduction in their use.
On Heathrow, we have worked together for many years on this issue and noble Lords know my views. The Government have been clear that it is a private sector project which must meet strict criteria on air quality, noise and climate change, as well as being privately funded and delivered in the best interest of consumers. It is now down to an applicant to demonstrate that it can meet all those criteria.
Also in response to my noble friend Lord Randall, our landmark Environment Bill will improve air quality by establishing a duty to set a target to reduce fine particulate matter—PM2.5—alongside a further long-term target on air quality as part of the wider framework for setting legally binding environmental targets. The Government are committed to evidence-based policy-making and will consider the World Health Organization guideline level for PM2.5 as we approach setting the targets, alongside independent expert advice, evidence and analysis on a diversity of factors.
Finally on this point, following comments by my noble friend Lady Altmann, it is important to set out the Government’s record on and commitment to improving air quality. Air pollution at a national level has reduced significantly since 2010. Emissions of fine particulate matter—PM2.5—have fallen by 11%, while emissions of nitrogen oxides are at their lowest level since records began. She asked about the impact of lockdown. I am afraid that I cannot give her the precise figures at this point, but I shall follow this up. We know that NO2 fell during lockdown, but we also know that levels are now rising again, unfortunately, as traffic increases. She also asked about the efficacy of electric vehicles. Certainly, they are a critically important part of the transition, but we are continuing to invest in research to ensure that we fully and properly understand all aspects of the issue.
Again in response to my noble friend Lady Altmann, while emissions continue to improve year on year, we know of course that there is much more to do. She asked what steps we were planning to take, and I have mentioned some already. Our clean air strategy outlines a package of measures across the whole economy to meet our 2030 commitments and the Environment Bill contains the new legal framework to do this. We have a strong pipeline of action, including on particulate matter, controlling emissions from domestic burning and, also on particulate matter, work to establish new air pollution targets. We are continuing to tackle emissions from agriculture following our consultation on solid urea fertilisers. We are establishing the most suitable approach for non-road mobile machinery, and we are controlling industrial emissions by driving innovation and enabling regulatory certainty through UK BAT.
Looking forward, we have committed in the Environment Bill to a systematic review of the national strategy, which focuses on local air quality management, aiming to better align national and local policies to deliver air quality improvements, and build the capacity of local delivery partners to effectively tackle localised air quality issues, which is a critical part of the national effort to reduce and address air pollution.
My noble friend Lady McIntosh also raised the issue of electric vehicles. She probably already knows that we are spending £880 million on retrofitting vehicles. Powers in our Environment Bill will enable government to force the recall of vehicles when they do not meet the environmental standards that they are legally required to meet.
As I have outlined, the Air Quality (Legislative Functions) (Amendment) Regulations 2021 make no change to the existing content of the UK industrial reporting or the nature of PRTR legislation. Therefore, I commend the draft regulations to the Committee.
Arrangement of Business
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee.
Food and Drink (Miscellaneous Amendments Relating to Food and Wine Composition, Information and Labelling) Regulations 2021
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Food and Drink (Miscellaneous Amendments Relating to Food and Wine Composition, Information and Labelling) Regulations 2021.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, this instrument is required to address inconsistencies in our food labelling rules arising from the UK’s departure from the EU. It deals with a number of EU exit-related issues, particularly technical standards, which are not critical but which were not able to be addressed before the end of the transition period. This instrument amends certain retained direct EU legislation, including general food labelling, the labelling of non-beef meats, the labelling of primary ingredients, the labelling of geographical indication products for wines and agri-foods, authorised analysis methods, and oenological practices for the production of wine sector products and rules on their labelling and marketing. It also amends certain pieces of domestic food legislation in England to ensure continued operability following the end of the transition period.
While this instrument introduces no changes to policy, there are some real-world effects on food and drink information and the way in which it is presented to consumers. Transitional provisions have been included in the instrument to enable businesses to adjust to the required changes. The instrument will, as far as possible, ensure that retained EU law and existing domestic law continue to have the same effect and ensures that consumers and businesses can provide and make use of information in the same way following the transition period.
In the area of food labelling, where our rules prior to the end of the transition period required a food label to include an EU address of the business responsible for the information on the label, this will now need to be a UK or Crown dependency address. This is needed to ensure a direct and simple way for consumers and trading standards officers to contact those responsible for a food and the information relating to it. In addition, where a specific country of origin is not provided for certain meats, terms such as “non-EU” will no longer be appropriate for the GB market and will be replaced by UK-appropriate terms.
On food compositional standards, UK caseins sold in business-to-business transactions will now have to be labelled with the address of the responsible business operator in the UK, and for honey blends comprised of honey from several countries, the term “a blend of honeys from more than one country” or similar wording can now be used. It continues to be acceptable to name specific countries of origin instead. The use of previous EU-centric terms on their own will no longer be acceptable.
For wines, this instrument will make certain changes to ensure that retained EU rules on wine labelling and marketing reflect the GB context and remove, as appropriate, EU-centric terms. Similarly, it will ensure that practices available to produce wine are also adapted to fit the products that can or could legally be produced in the UK.
For geographical indications, this instrument provides a period of adjustment regarding the use of GI terms on labelling, such as “protected designation of origin”, or PDO, and “protected geographical indication”, or PGI. This means that, for a period of three years or until wine products are exhausted, enforcement bodies are compelled not to take action if a product is labelled for sale as a wine or agri-food GI but is not in fact protected on our registers. This applies as long as that product name had been protected in the UK up until the end of the transition period and the GB labelling was compliant. It is expected that application of this provision will be very seldom, relating just to a small number of GIs included in trade deals that have not yet transitioned to a UK footing.
As well as geographical indication labelling, the instrument also introduces transitional arrangements to enable businesses to adjust to the changes required. Businesses will have until 1 October 2022 to comply with the food labelling changes on the English market, and wine products will be able to be marketed with EU or UK importer details until that date. The longer three-year period for GI labelling is to align with the same timeframe applying to the adoption of the new GI logo, set out in separate legislation.
The House of Lords Secondary Legislation Scrutiny Committee raised two areas of interest regarding the use of EU origin designators on the GB market following the period of adjustment and what steps will be needed at the end of the period of adjustment to allow Northern Ireland food labelled as required for the Northern Ireland market to have unfettered access to the GB market, which we addressed accordingly with the Committee.
Despite this instrument delivering no substantive changes to policy, there has been stakeholder engagement, including public consultation on how the retained legislation should be reframed to fit the UK context and how those necessary changes should be approached. Views on changes to food information to consumers rules were sought under the “Food labelling: amending laws” consultation in 2018. Honey and caseins labelling options were considered in a separate public consultation in 2018 and in discussions during stakeholder meetings. There has also been regular consultation with the UK wine and spirits industry and with the designated competent control bodies: the Food Standards Agency and Food Standards Scotland.
I am pleased to say that the devolved Administrations have been informed throughout the making of this SI and that they are content. I beg to move.
Lord German (LD)
My Lords, this legislation reads like a stopgap—a set of rules that will apply for a fixed period of time while more detailed solutions are sought. For that reason I want to concentrate on the route map that it sets out and, in particular, the impact it will have on the wine industry. I appreciate that rolling over the EU legislation has posited issues in this area: first, that rules on products placed in the EU market now apply to the UK as a third country since we left the EU; and, secondly, that the withdrawal Act itself does not grant the power to amend the EU rules at this stage.
The wine industry is very important to the UK economy. It provides around 130,000 jobs, generates £11 billion in sales annually and returns £4.4 billion in duty paid to the Exchequer. Our wine exports are the sixth most important food and drink products exported—ahead of beef, pork and beer—and those exports go mainly to the EU. While we have a burgeoning English and Welsh wine industry, we export only about 5,500 bottles a year of home-produced wine. The vast bulk of our wine exports are as a result of our importing bulk wines from the USA, Australia and Chile, bottling them in the UK and then exporting those bottles primarily to the EU. There is an obvious question I must ask the Minister in relation to the proposed Australia trade deal: with 24% of our non-EU wine imports coming in bulk from Australia—much for re-export into the EU—is the current wine trade deal we have with Australia under reconsideration? This is a sector that could damage our own export business if additional trade barriers were to be put in place in any new trade deal.
I understand that there are also issues relating to labelling for the re-exporting trade to the EU. The EU Commission has expressed concern that including details of a non-EU importer, bottler or producer address in addition to an EU importer, bottler or producer on the label of a wine placed in the EU market could be misleading and incompatible with EU law. I would be grateful if, in replying, the Minister could explain how the Government intend to resolve this difference of view between the UK and EU and what the major barriers are to a resolution. The UK drinks 10 million to 12 million bottles of wine a day, and we are the second largest importer in the world by volume, after Germany, and by value, after the USA. Given the importance of the industry and the fact that we are rolling over the EU regulations in this area—now as a third country—there are important issues about adding cost to the business activity.
At the end of the grace period, businesses will no longer be able to use one label for both the UK and EU markets. This affects the 56% of our wine that we import from the EU, which is about 6 million to 7 million bottles a day. That means 6 million to 7 million extra labels to be put on bottles every day, labels which will generally be placed on bottles by the EU exporter rather than the importer. EU wine exporters bottle their wine and then lay them on skins—that is, label-free. Labels are affixed after the purchase order has been received. The cost of producing and affixing each extra label runs to about 12p on average. Wines that are sold in limited quantities will require hand labelling, which is a much more expensive operation. That cost will be passed on to the importer and, ultimately, the consumer in this country. So, at a stroke, that is over £700,000 a day of extra cost passed on to GB wine businesses. While these regulations provide a grace period on EU imports, can the Minister explain whether the Government intend to review the dual labelling requirement before September 2022, so as to remove cost from the businesses working in this area?
Finally, I would like to examine the difference in these regulations between the requirements for wine and those of other food and drink importers. Under the EU regulations, all food and drink imports except for wine require the address of the operator responsible for the food information, under whose name or business name the food is marketed. The food business operator can be any business within the supply chain as long as they are an established business which will take legal responsibility for placing the goods on the market. This is a much more flexible approach than the requirement for wine. Making the rules for wine the same as other food and drink products would simplify the rules for producers, importers and enforcement bodies. Can the Minister state whether this is the Government’s intention? I recognise that I have asked some very technical questions, so I would be happy to receive a written reply if the Minister cannot reply to me in detail today.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I declare my interest as chair of the Commission on Alcohol Harm, and I previously chaired the 2006-07 Science and Technology Select Committee on allergy.
Having left the EU, we could be doing better to provide all the relevant information people need for their purchasing decisions. For those with a food allergy, labelling is essential to survival. The burden of allergy is in infants, in whom the prevalence is 5% to 7%. There is a range of manifestations, from a rash to life-threatening anaphylaxis. In adults, the prevalence is 1% to 2% and persists through life. The LEAP—Learning Early About Peanut Allergy—study built on desensitization. In addition, many adults have intolerance to some foods but do not have an IgE-mediated allergic reaction.
As there is no universal threshold amount that triggers an allergic reaction, some manufacturers resorted to defensive labelling, but this is of almost no help to those with an allergy. Although food labelling requires documenting known allergens—such as egg, milk, nuts, shellfish, fish and so on—the profile of allergens is changing. For example, the incidence of peanut allergy has risen dramatically in recent decades. Can the Minister reassure us that there will be flexibility in approach and that labelling will be reviewed in three years’ time?
Looking at the labelling of honey, will these regulations ensure that all honey is 100% pure honey from bees, and cannot be called “honey” if it is bolstered by syrups?
Eating out is particularly hazardous for those with food allergies. Teenagers and young adults sometimes take dangerously high risks when buying food, and we have heard of tragic deaths in young people all too often. Can the Minister explain how food outlets will be required to ensure that the food they serve is appropriately labelled, as it is not in these regulations?
The Commission on Alcohol Harm recommended better alcohol labelling. Currently, 80% of people do not know the Chief Medical Officer’s weekly consumption guidelines. Similarly, 80% of people are unaware of the calorie content of common drinks. They do not know that a small glass of wine has the same calories as three Jaffa Cakes or that one pint of beer is equivalent to eating a Mars bar. In the EU, alcohol has been exempt from labelling requirements that apply to all other food and drinks, so alcohol product labels are devoid of information on ingredients, calories, nutrition, drinking guidelines or health warnings. Covid-19 revealed that obesity is linked to high death rates. Severe obesity is rightly called “morbid obesity”. Information empowers consumers to take control of their health and make informed choices about what and how much they consume.
Research from the Alcohol Health Alliance has demonstrated the inadequacy of alcohol labels. Despite the Government’s efforts to encourage alcohol producers to reflect the drinking guidelines on labels, more than 70% of the labels reviewed did not include the up-to-date guidelines and only 7% displayed full nutritional information, including calories. Yet, when asked, 75% of people want the number of units in a product on alcohol labels, and 61% want calorie information.
The Government are committed to reducing obesity, so why are alcoholic drinks not included in the regulations? Why is only wine included and why does wine labelling restrict itself to the provenance of the wine? Will sulphites still have to appear on the label? They can be potent allergens. Better alcohol labelling should form part of an obesity strategy and a comprehensive alcohol strategy. If the role of food labelling is to inform, to empower people to protect themselves from harm and to allow regulation to support that duty to protect our citizens from harm, updating the labelling becomes a moral imperative.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Baroness. I broadly welcome the regulations, but I have a number of questions. I congratulate my noble friend the Minister on her clear introduction, but am I right that a grace period will now apply for the GB market until the end of September 2022, but there is no grace period for those products, particularly wine, being placed on the EU market from 1 January 2021? Those products now need to comply with the current EU labelling rules as we are a third country?
I am grateful to the Wine and Spirit Trade Association for its briefing in preparation for this afternoon. It has pointed other the SI includes a provision that means that businesses will no longer be able to use one label for the UK and EU markets at the end of the grace period—30 September 2022—for products placed on the GB market. It is calling on the Government to change the inherited EU wine labelling rules to allow businesses to use one label for both the UK and EU markets and to help ensure that the UK remains a hub for the world wine trade. I am grateful to the noble Lord, Lord German, for setting this out. I do not intend to repeat what he said, but this is a significant local, domestic and global trade.
There is a very simple plea from the Wine and Spirit Trade Association that the problem could be solved if the UK removed the requirement for the term “bottled by” or “imported by” and simply required a UK address on the label, as is currently allowed for food and drink, making one label acceptable for both the UK and EU markets. Otherwise, the rules as currently being rolled over will require a UK address on the label, preceded by one of the terms outlined in EU law, such as “bottled by”, with a UK address, or “imported by”, with a UK address. The EU will not accept any labels with those terms on if they are accompanied by the address of a third country.
For importers, either their producer will need to add a UK-specific label or a UK importer will need to have an over-sticker. Exporters will need to label stocks specifically for the EU market. This requirement for different SKUs for different markets means different labels, which, as the noble Lord, Lord German, pointed out, will increase costs for designing, printing and logistics. Simply put, if a business has 200 products, that means 200 additional labels. In addition, most businesses do not know where their stock is going when they add their labels. Over-stickering is very expensive for businesses as, in nearly all cases, it has to be done by hand. The more businesses have to change labels, the more expenses they need to incur. Businesses are usually given two years to allow for such label changes. I urge my noble friend the Minister to look very sympathetically on this idea of going to one label, as set out by the Wine and Spirit Trade Association, in her summing up.
My noble friend the Minister also referred to the report prepared by the Secondary Legislation Scrutiny Committee, which said that those are real-world effects on food information and the way in which it is presented to consumers, as set out in the regulations. For example, in relation to the origin of meat—excluding beef, which is dealt with in separate legislation—the instrument will require the use of a non-UK, rather than a non-EU origin designator. That new requirement does not preclude the use of a designator showing the specific country of origin. I welcome the fact that a 21-month adjustment period is given to give businesses time to adjust to the new requirement, and also applies to Wales and Scotland.
I should like to put a question to my noble friend regarding the fact that consumers will no longer be able to tell whether meat, excluding beef, is from the EU or not after the adjustment period. That will have the potential to reduce the key information available at present about the origin of a product and, therefore, about associated food standards. In response to questions from the Secondary Legislation Scrutiny Committee, Defra told it that,
“further steps will be taken to continue unfettered access for Northern Ireland food products to the GB market”.
Can she set out what the separate measures will be and when they might be taken? Will the House have the chance to scrutinise them before they come into effect?
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady McIntosh of Pickering, as I often seem to do in Committee. I should like to express the Green group’s support for the expert concerns expressed by the noble Baroness, Lady Finlay of Llandaff, both on the issue of allergens and the inadequacy of alcohol labelling.
The policy background paper for this statutory instrument states that the aim is,
“to provide and make use of the same information, presented in the same way as before.”
However, as the Minister said in her introduction, there are real-world implications in the regulations. There are changes in the information that will be available to consumers, which is why your Lordships’ House insisted that this Committee considers this SI, even though it was not considered in the other place. It is clear that it weakens the information going to consumers.
I shall start with honey. We are talking about shifting to a label that states, “A blend of honeys from more than one country”, or similar words. Knowing whether a honey is sourced from within the European Union or the rest of the world is a significant issue for a number of reasons. One issue to which the noble Baroness, Lady Finlay referred is that honey is one of the most faked products in the world—by one ranking the third most-faked product. That problem is most common in countries that produce honey on an industrial scale, notably China. Historically, it was difficult to detect whether alleged honey had been adulterated or contained no honey at all, with substitutes such as corn syrup, rice syrup and palm sugar being used. This is an issue of transparency. Obviously, people should be getting what they actually pay for but this is also an issue of health. Rice syrup contains considerably higher levels of arsenic, which in many cases can be found in drinking water, for example. The fructose in corn syrup has issues around obesity, such as those to which the noble Baroness, Lady Finlay, referred.
There is also the issue of concern to many consumers regarding what bees have been eating to produce the honey and whether, in order to extract unsustainable amounts of honey, they are being fed sugars such as, again, corn syrup, which studies have shown are linked to colony collapse disorder. I note that just last month in the United States, thousands of commercial beekeepers started a major court case, highlighting their concern about the damage being done to them by imports from China.
So I would say that if we are shifting from “produced in the EU” to just “produced in a range of countries”, we are significantly reducing the information, the choice, available to consumers and preventing them making choices about health and the conditions under which their food is produced. While the European arrangements are no doubt far from perfect, they are stronger—there are more controls on the production of honey—than in the US, let alone other countries.
I come to the second group I will address, on meat issues. As the noble Lord, Lord German, mentioned, this brings us to the issue of a free trade deal with Australia. I note that in Prime Minister’s Questions this morning, responding to the right honourable Ian Blackford, the Prime Minister was sending very positive signals about a potential Australian trade deal and suggesting that we could be exporting Scottish beef to Australia. I would have to ask: what is the point in swapping meat, with all the environmental costs of shipping goods, particularly refrigerated goods, around the world? I should perhaps declare my position as an agricultural science graduate from an Australian university who has worked on Australian beef farms, and this really does seem to be sending coals to Newcastle.
Again, we come to non-beef meat and minced meat excluding beef. If we go from a label that says “produced in the EU” to “produced anywhere in the world”, we are providing consumers with less information. Surely this labelling could have been “produced in the UK”, “produced in Europe” or “produced in non-European countries”. Those three labels would have given consumers far better levels of information.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for her introduction and am grateful to her officials for providing a briefing on this extremely complex statutory instrument, which is all about the labelling of a wide variety of products. Although the Brexit transition period has finished, this is a transitional SI and covers an additional period, providing a 21-month adjustment period for businesses to be able to comply with import product labelling. The products under discussion are caseins, or milk products, which nobody has so far mentioned and which are the ones for human consumption, honey, meat and minced meat and trimmings, excluding beef, and wine.
The instrument concerns relabelling of products with the name of their UK importer and the information on prepacked food, including blended honey. The Explanatory Memorandum states at paragraph 2.12:
“EU-centric rules will not be appropriate for the UK.”
This may well be true for some people, but there are consumers who will want to know where the produce covered in this SI has come from and how it has arrived on market shelves. The noble Baroness, Lady Finlay of Llandaff, raised the issue of allergens, and it is extremely important that this information is included on labelling; I declare my interest as an allergy sufferer myself.
While trying to separate ourselves from the EU and its legislation, it is important accurately to reflect the provenance of consumables. As my noble friend Lord German indicated, much of the wine imported to the UK will be bottled here, relabelled and then exported again, mainly to the EU. The same is likely to happen to honey in terms of blending. I should like the Minister’s reassurance that honey, which has a particular identity and flavour and is produced in a specific locality, will be correctly labelled and not blended with inferior honey or syrup, as the noble Baroness, Lady Bennett of Manor Castle, said. Such a practice of blending is likely to destroy, not enhance, consumer confidence.
Paragraph 12.2 of the Explanatory Memorandum states:
“There is no … impact on the public sector.”
However, trading standards officers will be inspecting wine and prepacked food to ensure that it is correctly labelled as to the proper UK importer. Therefore, there will be additional work for the local authority officers. However, trading standards officers are not permitted to take any action if they find that products have not been correctly labelled until after the end of the transition period. I find this disturbing.
While I understand that this is to allow businesses to make a smooth change to their labelling, there is a likelihood that this could lead to confusion and misinformation not being dealt with but left until the very last date before enforcement action could be taken. Does the Minister think this is acceptable?
I have one very serious issue that I wish to raise. On Monday, during the debate on the Queen’s Speech, the Minister—the noble Lord, Lord Goldsmith of Richmond Park—gave an assurance to those Peers who raised issues concerning animal welfare that the UK intended to be a world leader in that area. Paragraph 7.6 of the EM refers to meat excluding beef. Its last sentence states:
“Instead, the amended legislation will allow the use of ‘non-UK’ where the country in which the period of rearing specified in this legislation according to species is not available or the indication ‘several countries’ in the case of meat reared in several non-UK countries.”
This is very confusing, and I apologise for that, but it is not my Explanatory Memorandum.
The noble Baroness, Lady McIntosh of Pickering, referred to the importation of meat and meat products. Does the Minister believe that there is a golden thread that puts animal welfare at the heart of all Defra’s work and that this statutory instrument upholds this view and ensures that meat reared in non-UK countries will indeed have come from animals reared in accordance with UK standards and not from inferior rearing practices? Unless she can give this reassurance, all the Government’s words on animal welfare are fairly meaningless. This apart, I support this statutory instrument.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for arranging the very helpful briefing with her officials in advance of today’s debate. This SI is, clearly, largely about labelling, and the Minister referenced the “real world” effects on consumers that may occur. However, I draw attention to paragraph 2.3 of the Explanatory Memorandum, which shows that these “real world” effects are minor. As already raised in the other place, we are not convinced that all of these effects are necessarily minor. The changes provided for in the SI, as the noble Baroness, Lady Bennett, reminded us, were originally presented as a negative instrument, which was then recommended for upgrade to the affirmative procedure by the sifting committee, as the subject matter was considered sufficiently sensitive as to need to be properly considered.
There has been a lot of discussion about honey, so I am going to consider meat labelling at this point. The noble Baroness, Lady McIntosh of Pickering, pointed out that the Secondary Legislation Scrutiny Committee noted that meat, excluding beef, will be labelled as “non-UK” rather than “non-EU”. While we accept that some EU-centric terms or rules may no longer be wholly appropriate after the transition period, moving towards a system where food items are labelled merely as “non-UK”, rather than “non-EU”, risks an overall decrease in the information available to consumers. The committee was quite specific on this point. It stated that
“as consumers will no longer be able to tell whether meat (excluding beef) is from the EU or not after the adjustment period, this may have the potential of reducing key information that is available at present about the origin of a product and therefore about the associated food standards.”
I support the concerns of the noble Baroness, Lady Bakewell, about the potential impact on animal welfare. These may well be unintended consequences of the changes, but these are consequences that really need to be looked at when we consider the higher standards of production in the EU compared with many other countries. Why do the Government wish to remove this information from labels?
The Secondary Legislation Scrutiny Committee also pointed out, as has already been mentioned, that, after the adjustment period, different requirements will apply in GB and Northern Ireland, where EU requirements will continue to apply as a result of the Northern Ireland protocol—as with so many other SIs we have debated. Defra did tell the committee, as we have heard, that further steps will be taken to continue unfettered access for NI food products to the GB market, so perhaps I can also ask the Minister, as other noble Lords have, whether she could outline what these steps will be.
On devolution, the changes relate to England, with similar provisions planned by Wales and Scotland. As it has been some time since the SI was first tabled, can the Minister provide any update on progress in the devolved Administrations?
Consultation is an area in which I am always particularly interested. I was pleased to note that this was mentioned by the Minister in her opening remarks. The Explanatory Memorandum, in paragraph 10, does make it clear that the consultation was some time ago, at the end of 2018.
I will mention briefly the changes to wine labelling. The Wine and Spirit Trade Association, as we have heard from the noble Baroness, Lady McIntosh of Pickering, is not entirely happy, and the noble Lord, Lord German, explained in great detail the importance of the wine industry, so I will not go into any detail. Paragraph 10.7 of the Explanatory Memorandum talks about “regular contact”, so, again, perhaps I could ask the Minister for a little more information on this because, as I have just mentioned, the consultation was some time ago and it would be helpful to have an update on the kinds of discussions with industry organisations that have taken place since then.
Paragraph 12 of the Explanatory Memorandum also talks about the changes for businesses contained in the instrument. Costs were mentioned by other noble Lords and, while they may not meet the threshold that requires publication of an impact assessment, changing labelling laws undoubtedly presents logistical and financial challenges, in particular for smaller producers. So perhaps I can ask the Minister whether Defra has estimated such costs and whether she will be able to provide us with details. Clearly this is something that she may well not have at her fingertips, so I would be very grateful if she could write to me with more detail.
Finally, the new rules are quite complex—this came across in the briefing we had with officials yesterday—with the varying transitional periods and adjustments, so what support has been put in place for not just industry but trading standards? In conclusion, we do not oppose these changes, but believe that some of the potential consequences should be given greater consideration.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank all noble Lords who have taken part in this short debate, in particular for the questions they have asked that raise important issues. Some of them I cannot answer today, but I will write with further details if I have not been able to cover everything.
To ensure the continued operability of our food labelling rules and to reflect the fact that the UK is no longer a member of the EU, it is important that we amend certain retained and domestic food legislation and provide transitional arrangements to allow businesses time to adjust.
The noble Lord, Lord German, asked a number of questions about wine. Wines that are exported to the EU would be required to meet areas of the label that are considered mandatory under EU labelling requirements. These requirements are for wines that have been rebottled here. They include indications of the provenance—for example, “Wine of Australia” et cetera—alcoholic strength, the category of wine, lot marking and so on. As with foods, wines marketed in GB will also have to have a GB-based importer or bottler on the label. To allow time for the sector to adjust, we have included that easement until 30 September 2022, and during that time we will continue to work with the industry to find a long-term solution to the issue of potentially having to produce two labels. We will look for practical solutions that will allow two importers to be shown on a single label, where necessary, but make them distinguishable to address the EU’s concerns. We will look at all options for labelling importers on wines, including alignment with horizontal rules.
The fine wine trade is an unusual industry, as the noble Lord knows, in terms of its marketing practices, with wines traded widely for years after production. We are aware of the unique challenges that certain areas of the wine industry face. The easement and transitional measures will, for the time being, address any concerns, but we will consider this in the interim. It is fair to say that both the UK, as possibly the single largest trader in fine wine today, and the EU, as the largest fine wine producer, have a vested interest in finding a solution.
The noble Baroness, Lady Finlay, asked a number of questions relating to obesity and calorie labelling, and asked why we are not using this opportunity to make more substantive changes to food labelling law in the UK. The purpose of this legislation, along with other exit SIs, is to maintain operability of retained EU law in the UK, and legislative action beyond that function is prescribed under the powers used to make this SI. More substantive changes, should we choose to make them, will follow an appropriate period of consultation and assessment involving all interested parties.
We have the opportunity to review food and wine labelling now that we are no longer bound by EU rules to ensure that information supports consumers’ choices and the marketing of quality British food and wine products. The opportunity to review food labelling will include careful consideration of the findings in the final report of Henry Dimbleby’s independent review of the food system, due later this year. The Department of Health is planning to issue a consultation on calorie labelling for alcohol in the near future with a view to making it a requirement from perhaps 2024, which may be reassuring to the noble Baroness. Specific proposals on this will be consulted on later this year.
The noble Baronesses, Lady Finlay and Lady Bennett, and a number of other noble Lords referred to honey. All honey available in the UK market complies with our strict rules and the addition of syrups is prohibited in those regulations. Honeys from particular locations or special floral origins are not blended since they lose their value in the market, and if they are, they can no longer be referred to by their specific origin in the label. The noble Baronesses also asked whether consumers would be less well informed about where the honey they buy comes from. Consumers will still be aware that the honey consists of a variety of honey from differing origins even though they will not be able to distinguish blends of European honey from non-European blends, but businesses would be free to supplement the label with this additional information.
The noble Baroness, Lady McIntosh, also asked a question on why we did not use this opportunity to make more substantive changes to the food labelling law in the UK, as did the noble Baroness, Lady Finlay, and she asked about what engagement we had had with industry. A public consultation entitled “Food labelling: amending laws” was held and promoted to food industry stakeholders at the end of 2018, and the government response was published on 5 February 2019. Alongside this we have released a broader Defra communication about food information to consumers on labelling in a no-deal scenario. Discussions continued via a range of stakeholder meetings, where industry and trade associations were encouraged to share information about their plans to adjust labelling on pre-packaged food for the UK and EU markets to flag other no-deal changes that might have affected their labelling, and to give views on what government can do to help businesses make the required labelling amendments.
We have maintained a constant dialogue and engagement with key wine production, trade and enforcement organisations in the time leading up to the end of the transition period. We have been in regular contact with the Wine and Spirit Trade Association and WineGB, which represent the majority of wine sector businesses in the UK, and the Food Standards Agency and Food Standards Scotland, the designated competent controlled bodies. So these discussions are ongoing, which I hope will also be of comfort to the noble Baroness, Lady Hayman.
The noble Baronesses, Lady McIntosh and Lady Bennett, asked how EU-centric labelled food from Northern Ireland would be provided unfettered access to GB after the period of adjustment. This will be considered during the period of adjustment. Goods meeting the legal criteria of qualifying Northern Ireland goods will be allowed unfettered access into the GB market. This will be considered further, and implementation, including how it is administered, will be determined and informed through consultation with Northern Ireland businesses and UK enforcement authorities.
The noble Baroness, Lady Bennett, asked why we are not allowing mincemeat placed on the GB market to continue to use “origin EU” as a permitted alternative to the specific country of origin. Since we are no longer a member state of the EU, the rules on labelling must treat food from EU countries the same as that from other WTO countries. This means that, for example, where for mincemeat from outside the UK the specific country of origin is not given, the correct indication is “non-UK”. To provide for a special indication for meat from the EU would be seen as more favourable treatment than for other WTO countries and therefore contrary to WTO most favoured nation rules. This position also aligns with UK law already in place for a range of other foods, including beef and veal, and it is important for both business and consumers that the rules for different foods remain consistent.
The noble Baroness, Lady Bakewell, asked about paragraph 7.11 in the Explanatory Memorandum. This specific provision applies only if the product would have been correctly labelled and complied with the law in GB immediately before the end of the transition period. It essentially provides a period of adjustment both for enforcement bodies and for producers to use up already labelled stock.
The noble Baronesses, Lady Bakewell and Lady Hayman, asked an important question about whether this was part of Defra’s golden thread of legislation to improve animal welfare outcomes. This SI makes necessary changes immediately related to the EU legislation being retained as per ministerial undertakings in relation to the EUWA powers under which it is to be made. Measures around the Government’s ambition to improve animal welfare outcomes are being taken forward separately. Defra’s animal welfare team would be very happy to put your Lordships in touch with those leading on the consultation on animal welfare-related food labelling.
The noble Baroness, Lady Hayman, asked about the assessment of cost to the industry. The purpose of this SI is to make legislation retained by the withdrawal Act operable in the UK context. There are no other changes to the effect of retained legislation other than operability and, therefore, no significant impacts that stem specifically from this SI. During the consultation held, business expressed a wish for a reasonable period of adjustment to the changes so that they could be made as part of normal packaging cycles and to enable stocks of existing packaging to be exhausted. The 21-month or 36-month periods of adjustment provided in the SI allow for this.
The noble Baroness, Lady Hayman, also asked about consultation with the devolved Administrations. Amendments to retained direct EU legislation will apply across the UK, although not in Northern Ireland because of the Northern Ireland protocol. Wales and Scotland have provided formal consent and, while formal consent is not required from Northern Ireland, it has been consulted. England-only provisions enabling a period of adjustment for labelling in England will align with similar provisions planned for Wales and Scotland.
To wrap up on the consultation that the noble Baroness, Lady Hayman, talked about, I just reassure her again that we have released a broader Defra communication about food information to consumers and discussions are continuing via a range of stakeholder meetings. Industry and trade associations are encouraged to share information about their plans to adjust labelling on pre-packaged food in the UK and the EU markets, to flag other no-deal changes that may affect their labelling and to give views on what the Government can do to help business make the required labelling amendments.
With that, I reiterate my thanks to all noble Lords for contributing to this debate. Any questions that I have not been able to answer at the Dispatch Box I will answer in writing.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
As we do not seem to have the Minister for the debate on the next statutory instrument—we have the noble Lords, Lord Kennedy and Lord Mann—I will adjourn the Grand Committee until the Minister is here.
Arrangement of Business
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
My Lords, the hybrid Grand Committee will now resume. All Members are here in person, and I ask them to respect social distancing. The time limit for the following debate is one hour.
Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) (Amendment) Regulations 2021
(2 years, 11 months ago)
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Lord Greenhalgh
That the Grand Committee do consider the Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) (Amendment) Regulations 2021.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
I beg to move that the House consider the draft Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) (Amendment) Regulations 2021, which were laid before the House on 22 March 2021.
My Lords, the purpose of these regulations is to amend the Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) Regulations 2020 to correct an error in that instrument. Specifically, these new regulations change the reference in Regulation 3(5)(a) to the Local Government Finance Act. The year of this Act was incorrectly given as 1992, and this is now amended to show the correct year, which is 1988.
On 23 September 2020, we made principal regulations to prohibit the use of land in England as a relevant protected caravan site—a site on which year-round residential occupation is allowed—unless the relevant local authority is satisfied that the owner or manager of the site is a fit and proper person to manage it. This will be guided by a fit and proper person test.
I will set out the reasons for the reference to the Local Government Finance Act 1988 in the principal regulations made on 23 September. The fit and proper person requirement does not include sites that are operated by local authorities; operated for holiday purposes only; exempt from requiring a site licence; or being occupied by members of the same family and not run as a commercial residential site.
To determine if a site is a commercial residential site, a local authority will take into consideration both the amount that any person is required to pay the site owner in respect of the right to station a caravan, to reside, or use the common areas of the site, and whether that amount exceeds a fair contribution towards the relevant costs.
Part of the definition of relevant costs in the principal regulations is:
“any amount which the occupier”—
who for the purpose of this debate we will refer to as the site owner—
“is liable to pay as regards the site by way of a non-domestic rate under Part 3 of the Local Government Finance Act 1992”.
The reference to the Local Government Finance Act 1992 is an error, as it is Part 3 of the Local Government Act 1988 that deals with non-domestic rates. This amendment is therefore necessary to ensure that local authorities are able properly to apply the intended exemption from the fit and proper person test requirements for non-commercial, family occupied sites when the principal regulations come into force on 1 July and 1 October this year. I emphasise that these regulations will not amend or affect any other aspects of the principal regulations, which were laid before noble Lords last year.
To conclude, the fit and proper person test requirements form part of the comprehensive programme of work that we announced in 2018 to drive up standards of management and conduct across the park homes sector and ensure that residents’ rights are respected. Good site owners who already provide a professional service will not be concerned about being unable to meet the required standards. The minority who continue to abuse and exploit residents will have to improve or make way for more professional people to manage the site. The fit and proper person test will also be a useful addition to local authorities’ existing powers to help them tackle the worst offenders in the sector. I commend these regulations to the House.
Lord Mann (Non-Afl)
My Lords, I wholeheartedly back this important change to the legislation. If the law is not operable because it is technically wrong, it will create many foreseen circumstances that will be negative to those living in park homes.
Specifically, having had a number of battles over the rights of park home residents—there has been some horrific stuff—I wanted to ask two questions of the Minister in welcoming the Government’s approach. He may not be able to answer now, but I should be keen to get the information. How many local authorities to date have challenged in any way the fitness of an owner, and which ones? What are the Government doing to monitor whether local authorities are choosing to use the powers available to them?
In terms of the severity of the incidents that I have personally dealt with, one is talking about things that are almost beyond description such as forced removal of tenants, arbitrary removal from tenants of core services such as electricity, or the sending of people of dubious motive to persuade tenants to pay unauthorised money or not pursue complaints. Those are fairly heavy-handed acts against people who are often relatively vulnerable and have got themselves into situations where they are living on such sites not out of choice but from economic necessity because of major financial mishaps—for example, a company going bankrupt. In a previous life in the other House, I have dealt with a majority of residents living in such accommodation for such reasons. For them, this is a major issue and I suspect that there are others in a similar situation in other parts of the country. I should therefore be keen to know if the Minister can assist.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I draw the Committee’s attention to the fact that I am a vice-president of the Local Government Association. I endorse the comments of my noble friend Lord Mann and look forward to the Minister’s responses to those points. Obviously, I supported the main order when we discussed it last September, and I am very happy to approve this one today.
My only question here concerns the error and how it was detected. How did the error happen? I assume that it was just a mistake. How was it detected, and what would the consequences have been if it had not been detected? It would be quite useful to find that out. In my 11 years in the House I have done lots of SIs and I do not recall ever doing one where we had to come back because we had got the name of the Act wrong. In this case, it does not seem to be too much of a problem, but potentially it could be very serious in other situations. With that, however, I am happy to approve it.
Lord Greenhalgh (Con)
My Lords, we have had a short but informative debate this afternoon. I am grateful for the insightful and helpful contributions from the noble Lords, Lord Mann and Lord Kennedy. I have been in the House for a relatively short time and work as a Minister across two departments, and I have now had two issues with SIs where we have had to come back and repeat them. One was in the Home Office, and it was a little unfortunate; we had to almost redo things. This is now in my other department, HCLG. I am fairly sure that this was a cock-up rather than a conspiracy. I had to determine that it was caused by an error, because it was not offered up particularly as something that people wanted to dwell on. However, the consequences are very minimal, because the fit and proper regulations have not come into force yet; we have nipped it in the bud. So I think we should be reassured that this was a genuine error; it has been picked up and there are no consequences.
To respond to the noble Lord, Lord Mann, I do not have the specifics on the number of authorities that have challenged the fitness of individuals who run these sites. I shall need to get back to the noble Lord after I find out whether we have any figures, and I shall certainly write to him with the information that we do have. There is no doubt that local authorities are very much in the front line of implementing this, and we are providing them with a quite considerable degree of support and guidance to ensure that they understand how to implement these important regulations to ensure that we get the people we want in this sector and get rid of the rogues. We are encouraging them to share information, so that an individual who is known to be a troublemaker is then put on a list so that other local authorities can pick that up.
In conclusion, these regulations are to correct a small error to the principal regulations that we made on 23 September. I reiterate that the majority of site owners are responsible and compliant, and make a valuable contribution to the park homes sector and the housing market, providing well-maintained and safe sites for their residents. But we recognise that a minority do knowingly flout their responsibilities, and these regulations are designed to deal with that. The residents deserve our protection and support. I am glad that noble Lords recognise this, and I am very pleased that we have been able to correct this small error in time.