Draft Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019

Kelly Tolhurst Excerpts

Tuesday 12th March 2019 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

I beg to move,

That the Committee has considered the draft Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019.

It is a pleasure to serve under your chairmanship, Mr Gray. Since the referendum decision to leave the EU, the Department for Business, Energy and Industrial Strategy has undertaken a significant amount of work on withdrawal agreements, preparing for a range of potential outcomes, including a no-deal scenario. This statutory instrument has a single, yet crucial, objective to continue to protect consumers and give businesses the clarity that is needed to operate under a no-deal scenario. It will ensure that in the event of no deal, the UK continues to have a robust and highly effective product safety and legal metrology regime.

The UK product safety and legal metrology regime is among the strongest in the world. The toys our children play with, the electrical items in our homes and the petrol pumps on our garage forecourts all rely on the legal framework carried by that legislative regime, and it is vital that post exit we retain such a robust system. This SI will not change the system or approach, which I know are supported by business and enforcement authorities.

The changes made by this instrument to 38 product safety and metrology laws will ensure that the UK’s product safety and legal metrology framework will remain as it is—as followed by the UK as an EU member state—but that it is converted into a UK regime. The changes include: retaining the requirement for conformity assessments to ensure products meet the essential requirements set out in the legislation; retaining the need for assessment by a third-party organisation to confirm that a product can be placed on the market, where it is currently required; retaining the standard systems to give rise to presumptions of conformity with the legislative requirements; and ensuring UK market surveillance systems will continue to work, to limit the number of unsafe and non-compliant goods available to UK consumers and businesses.

Without this no-deal SI, we risk disruption and confusion for businesses and enforcing authorities, limiting our ability to remove a wide range of unsafe or non-compliant everyday and high-risk products from the market, as there will be uncertainty about the extent, impact and application of the existing legislation.

Before I set out the key provisions in more detail, I will explain the approach we have taken and highlight what we have done to make an unusually large SI easier to navigate. We are laying a number of separate product regulations before the House together, because there are many cross-cutting issues that are the same for the majority of products featured. They have similar definitions, obligations and requirements needing similar fixes, and it made sense to group them together into one SI. For example, many of the product areas require third-party conformity assessment bodies to assess the products against the legislative requirements and some require the manufacturer to self-certify and mark the product, as confirmation that the product complies with the requirements. This similarity across the SI makes it easier to use for businesses that have to comply with the legislation and for the enforcement authorities, such as trading standards, which advise and enforce across the wide product safety system.

Another reason for the size of the instrument is the lengthy technical schedules that are included. These are widely used by industry. Including them together removes the effort for business and stakeholders in having to cross-reference separate EU directives and allows them to understand the requirements of UK law, given that they are all set out in one place alongside the related product schedule. Incorporating those annexes accounts for a third of the SI.

Throughout November, after the publication of the technical notices, the draft SI was shared with several stakeholders for information, via a series of reading rooms. The purpose of this exercise was to inform and update stakeholders on our plans for the product safety and legal metrology framework after exit. Stakeholders told us that this was a worthwhile exercise, reassuring them about our approach, which they supported. Furthermore, this engagement has meant that we have been able to understand the main requirements and concerns of businesses, industry experts and enforcement agencies, which were also able to give their feedback on some specifics about the draft SI, and which we welcomed, allowing us to make drafting amendments as appropriate.

[Maria Eagle (Garston and Halewood) (Lab)]

I am interested to hear the Minister refer to stakeholders and these reading rooms. It is all very well referring to business, but there are other interests—what about consumers? Were there any consumer organisations at these reading rooms? We do not have a number for how many stakeholders in each area were actually consulted.

[Kelly Tolhurst]

I thank the hon. Lady for that intervention, and I can answer her questions. We consulted with more than 6,000 business, which are quite important in this legislation as they have to understand and implement it, and are ultimately responsible for placing safe products in the marketplace. It was therefore vital that we could confirm that with stakeholders. I can reassure the hon. Lady that organisations such as Which? were invited to our reading rooms and fed into the process, and that consumer groups were given the same amount of access to the draft SI.

I appreciate that there are concerns about the impact of such a significant instrument on business. Despite being de minimis, we have completed and published a full impact assessment given the importance of this SI and in the interests of transparency. During development of it, we have been mindful of the impact on business of the changes to processes as a result of the UK’s exit from the EU. Where possible, we have made specific arrangements, including an 18-month transitional period for importers regarding labelling and a 90-day transition period for notifying a new UK database of cosmetic ingredients. Businesses have welcomed that.

Having touched on process, I move on to addressing some more detailed points about the substance of the regulations, given the issues that cut across many of the individual schedules. The regulations provide for continued recognition of goods assessed against EU regulatory requirements, including continued acceptance of products lawfully carrying the CE marking and of product certifications carried out by EU recognised bodies. This means that products that meet EU requirements in these areas can still be placed on the UK market after exit. In the event the UK leaves the EU without a deal, this is intended to be for a time-limited period and will help minimise disruption to the public and business in the event of no deal. At the same time, the regulations establish an equivalent UK framework to ensure that the legislation functions domestically once we leave.

I will now turn in more detail towards some of the further elements of the framework, including the new UKCA marking and the establishment of UK approved bodies.

[Hannah Bardell (Livingston) (SNP)]

On the point about CE marking, I knocked a door in my local area at the weekend, in Livingston, and was met with a chap who worked for a mechanical engineering company. He was particularly concerned about this and asked how, despite the fact that the UK may want to have its own regulations, we will keep up with the EU and what impact that will have on businesses. Can the Minister tell us about what impact assessment she has done on that?

[Kelly Tolhurst]

I thank the hon. Lady for her intervention, particularly regarding CE marks, which I shall go on to discuss. I want to reassure her that part of developing this UK framework and having it all in the one place is to ensure that, in a no-deal scenario, we can improve and keep in step with any improvements in regulations. In fact, when scientific evidence suggests that we can make a change, powers that previously referred to the European Commission are given to the Secretary of State. In some respects, the SI gives us more flexibility to make those changes.

From my past knowledge, I can tell the Committee that we were part of the formulation of some of the regulations, particularly as regards some the areas covered and some of the technical and particular product requirements, when they were considered by the European Union. I am therefore confident that, with our focus on product safety and the development of requirements, that we in the UK will continue to operate as we always have done in this area.

The UKCA marking will cover most goods subjected to CE marking. Whereas the CE marking indicates compliance with EU rules, the UKCA marking will indicate compliance with UK rules. Products lawfully made and assessed against EU regulatory requirements, including those with CE markings affixed, will continue to be accepted on the UK market. The vast majority of businesses will therefore be able to continue applying the CE marking as they do now, and they will not need to use the new UKCA marking.

It is legally necessary to create the new UK marking as part of a domestic legal framework so that products can still be assessed by UK-based conformity assessment bodies, which will no longer be recognised as meeting the requirements of the EU legislation in a no-deal scenario, meaning that manufacturers using them will no longer be able to affix a CE marking to products.

There is a requirement that some of the products covered by the legislation should be assessed by third-party organisations, called conformity assessment bodies, before the product can be placed on the market. For most of the products within the scope of this legislation, the conformity assessment bodies are usually called “a notified body”, and they play a valuable role in ensuring products available to businesses and the public are safe, and are produced according to a legal framework.

The EU has made it clear that in the event of a no-deal exit, it would no longer recognise work carried out by UK-notified bodies to assess products for sale on the EU27 market. That is why we are putting in place a UK framework that will allow UK bodies to continue to assess products. This benefits not only the bodies themselves but also their customers, who might not be seeking to export to the EU and would prefer to continue to have their products assessed by a body established in the UK. Therefore, for areas within the scope of the legislation, UK-based notified bodies will automatically be given new status as UK-approved bodies. Products successfully assessed by these bodies will then be marked with the UKCA marking before being placed on the UK market.

A further common element of the product legislation covered by this SI is the use of authorised representatives, commonly known as ARs. These are natural or legal persons established in the European economic area who can be appointed by a manufacturer of a product to carry out certain tasks on their behalf. The regulations provide for the ongoing recognition of existing ARs in the EEA, however any new AR appointed after exit day will need to be based in the UK.

For cosmetic products, a different approach is being taken because of the risk they pose to human health. Responsible persons playing a key role in ensuring the safety of cosmetic products on the market will be required to be based in the UK rather than the EEA from the point of exit.

To conclude, the regulations establish a domestic product safety framework in the event that the UK leaves the EU without a deal. They are making only the changes to the framework that are needed to ensure the UK’s product safety and metrology system functions effectively and to the same high standard after exit; otherwise they maintain and secure the current system in domestic legislation. As hon. Members will recognise, it is essential that the UK has a functioning product safety framework in place in the event of a no-deal to prevent a flood of unsafe and non-compliant products into the UK market. I urge the Committee to approve the regulations.

--- Later in debate ---

[Kelly Tolhurst]

I thank Committee members for their contributions. I will correct a statement I made to the hon. Member for Garston and Halewood. I said that over 6,000 businesses had been part of the consultation, but the number was 4,000—I knew that, but I was thinking about a figure for something else. I apologise.

The reason the SI is 600 pages long is purely to allow us to bring changes across a number of pieces of product safety together into one bundle, to make it easy for businesses, trade associations, enforcers and consumers to go to one place to find all the legislation that affects similar and cross-cutting issues, in a no-deal scenario. There is absolutely no intention to use this process as an opportunity to reduce transparency or the amount of scrutiny that SIs receive.

The hon. Member for Garston and Halewood is quite right that the intention of the SI is absolutely not to change policy; it is about making the statute book function from day one, were we to leave the European Union without a deal. As a Minister responsible for this area, and having spent my whole life prior to entering the House working with products, whether in the European Union or the UK, I would not want my legacy to be to have done something detrimental to consumers or businesses in a no-deal situation.

[Maria Eagle]

The Minister is being generous in giving way. I accept that the regulations are all in one place, but does she accept my point that if a fictional local businessman from a microbusiness were to come along and think, “Well, I need to check what I am doing if there is no deal,” he would be unable to understand what on earth this meant. It refers to documents that are not attached to it. Anyone would need to have the House of Commons Library available in order to get all the documents together to cross-reference them and understand what on earth any of it means

[Kelly Tolhurst]

I understand the hon. Lady’s concerns, but the majority of the changes in this SI are fixes. I take her point; she is an experienced parliamentarian who has been a Minister in the past. I understand that I am doing things in a way that are not really up to the standard that she would have expected from me. However, on the issue of establishing a framework, businesses are keen to have all the information in one place, where it is simple to access. I know from my previously work that having to keep up to date with EU regulation, which changes every other week, can sometimes be a challenge. The beauty of this arrangement is that it is a UK framework. It does not make a policy change; it concerns a functioning statute book after exit.

We have consulted businesses and trade associations because, in the event of no deal, they are fundamentally responsible for product safety. We have engaged with business. I do not know whether members of the Committee have been lobbied directly by firms, but I have had MPs ask me when the mega-bundle is going through and the SI coming to the House, because they want assurances on EU exit, particularly on conformity. I know that what I am saying might not alleviate some of the Opposition’s concerns, but I want to make it clear that these provisions are about making the process easier for enforcers and businesses, so that we are able to maintain the high standards that we currently have in the UK.

I mentioned that there are no significant changes to elements of product safety. The measures are about fixes and making the process workable. Many of the businesses that will be interested in the SI, or need to understand its content, will not need to refer to all 600 pages. They obviously include the 38 different sets of regulations that cover different areas. We have put the schedules in with those 38 areas, alongside the changes, so that people can turn to the specific areas in the UK framework that interest them.

As for business impact, there will of course be an impact on business when moving to any new framework. In the event of a no-deal scenario, businesses or individuals may have to familiarise themselves with particular changes. To be frank, it is quite within the competence of organisations that are already adhering to the existing legislation to understand where the small changes have been made.

The hon. Member for Sheffield, Brightside and Hillsborough asked how we will assess the timeframe in which we will continue to maintain or accept the CE mark for products placed on the UK market. The timeframe is yet to be decided. It will be discussed in conjunction with businesses and interested parties. The focus is on making this an easy transition for businesses in the UK and for the flow of products. The intention is to have a UK mark so that UK manufacturers, when they have to place a product on the UK market, can establish that they are certified in the UK and meet the necessary requirements.

In a no-deal scenario, however, any UK business wanting to place a product on the EU market would still have to comply with certain regulations there. Currently, the EU has said that it will not recognise or accept the UKCA mark. Quite rightly, the EU has the CE mark to indicate conformity. Any acceptance of a UKCA mark would be part of further trade negotiations, into which the Government may or may not enter, regarding acceptance of our product standards in future. That would be usual in any trade deal as a third country, when operating not just with the EU but with any other country in the world.

The shadow Minister rightly pointed out the concerns about access to European databases. I must give her some comfort that we will still have public access to the RAPEX database, and we are already developing the three databases to do that. Market surveillance is carried out in a number of different ways, and is not reliant just on those databases; it also comes from border and customers, and we hold our own data. I am confident that we will be able to continue carrying out the same level of market surveillance, and it is in the UK’s interests to ensure that unsafe products that should not be here are not placed on the market.

The hon. Member for Sheffield, Brightside and Hillsborough asked whether I could give her details of the meeting on the consultation that was carried out. I would be happy to write to her about that. With regard to trading standards enforcement, we have had the debate about trading standards enforcement many times in the House in recent weeks. Although the shadow Minister is right to challenge me, I hope that she accepts that trading standards enforcement is a particular interest of mine as a Minister. I would therefore like to give the Committee some comfort by pointing out that the Office for Product Safety and Standards has trained over 600 local trading standards professionals in 200 local authority areas, and at no cost to the local authorities. They will ensure that we are preparing our enforcers in the event of no deal, and for the wider aspect of when we do leave the European Union.

With regard to planning and the future direction of the Office for Product Safety and Standards—as well as what we are doing on data and increasing surveillance—we are bringing in more investment: the £12 million is focussed directly on the Office for Product Safety and Standards and the work going on with the border project. I know that the hon. Member for Sheffield, Brightside and Hillsborough has looked into this in great detail.

On the impact on business, labelling is a key concern. That is one reason why we have given organisations 18 months to comply. As a Minister, I have taken an interest in the matter, as Committee members would hope and expect, and have challenged officials in many of these areas, including by asking them how we could do things better or give businesses more opportunities. We have struck the right balance there. It is feasible for even a small business to be able to comply with what we have been able to do, including by familiarising themselves with the legislation.

Again, I thank Committee members for their contributions and I understand their concerns. I reiterate that this is about ensuring that we are in the right place if we leave the European Union without a deal on day one. The regulations are essential to ensuring that people across the UK continue to have confidence in the safety of the products they buy and use every day. If this legislation is not in place, the UK’s product safety regime simply would not work if the UK leaves without a deal agreed by both sides.

Without regulation, unsafe products could more easily be placed on the market, with no effective mechanism for removal, with the result that the British public would have less protection from unsafe and non-compliant products than they do today. The UK product safety and metrology regime is currently among the strongest in the world, and it is vital to ensure that we continue to have an effective product safety and metrology legal framework post exit. Without this, we risk disruption and confusion for businesses and enforcement authorities. Most significantly, we would limit our ability to remove unsafe or non-compliant products from the market. I am disappointed that the Opposition will be voting against the SI today. Many stakeholders out there will be looking for the Committee to approve the SI so they can have assurances on the requirement if we leave the European Union without a deal.

Question put.