Product Regulation and Metrology Bill [HL]

Lord Leong Excerpts

Committee stage
Wednesday 27th November 2024 Grand Committee

[Lord Fox (LD)]

My Lords, very briefly, and complying with time constraints, I warned your Lordships and the Government when speaking to another group that the skeletal nature of the Bill allows everybody to superimpose all their worst suppositions on it. We have just heard a thorough example of that from the noble Lord, Lord Sharpe.

I am of course here to help. In considering previous Bills, it helped when the Government published their draft code of practice between Committee and Report, so that we could get an inkling of their thinking. Doing so will not change our need to address the skeletal nature of the Bill, but it might allay some of our worst fears about the intention, and guide us in wording the amendments we could table on Report to help tie things down a little more, along the lines of the fears outlined by the noble Lord, Lord Sharpe. Can the Minister say whether a code of practice is planned, and undertake to show us a draft of it between now and Report?

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their detailed consideration of the Bill, and especially the noble Lord, Lord Sharpe, for his thorough exposition of his amendments, based on his experience at the Home Office and previously as an enforcement officer. He obviously knows a lot about the various amendments he has tabled.

I hope to clarify the Government’s position and explain the reasons behind the approach we have taken. First, I will address the use of delegated powers in the Bill, noting the concerns of the Committee.

Product regulation must legislate for innumerable kinds of products, ranging from heavy machinery to children’s toys. This is best done through regulation, due to the amount of very technical and scientific detail required. In some cases, sectors can be covered by general requirements. However, often they require specific tailored regulations that recognise their individual requirements. For example, a penalty for failure to properly mark a product “harm suffered” is likely be different when comparing a highly sensitive product in a nuclear energy installation versus a lower-risk product.

To proportionately reflect the dangers of a sector, requirements, enforcement powers, offences and penalties must be tailored. This is how the regulators operate at the moment, with over 2,500 pages of technical product safety regulation on the statute book. Alongside reviewing this existing legislation, we will need to consider on an ongoing basis whether there are emerging products or hazards that would benefit from specific rules.

Product regulation is a regulatory area that we have seen go through significant disruptive change with the growth of e-commerce, and this looks set to continue with AI and 3D printing. The activities conducted by different kinds of businesses have changed as well. The spine of the existing system was codified in primary legislation based on bricks-and-mortar businesses, and that led to uncertainties and gaps in duties, penalties and enforcement powers.

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[Lord Lansley (Con)]

I apologise for interrupting the Minister, but Amendment 60 asks who the relevant authorities are. Paragraph 3 of Schedule 5 to the Consumer Rights Act 2015 tell us in statute, as things stand, who the domestic enforcement authorities are. That is not in subordinate legislation—it is in primary legislation. The Minister appears to be taking a list that is in primary legislation, which is amendable by regulation, and turning it into something that is a power to specify by subordinate legislation. What was wrong with retaining the enforcement authority list in Schedule 5 to the Consumer Rights Act and adding to or subtracting from it as necessary?

[Lord Leong (Lab)]

I thank the noble Lord for that point. As I said earlier, as it stands the relevant authorities are exercising public functions—that is, the Secretary of State or the Health and Safety Executive, in the examples that I gave earlier. However, because of the evolving and changing nature of the new products on the market, we may need more people with specific technical knowledge. We do not want this Bill to straitjacket us so that, every time we need to appoint somebody, we have to come back with new primary legislation.

[Lord Lansley (Con)]

But can the Minister tell us why the list in primary legislation under Schedule 5 of that Act, which has been amended from time to time since 2015 by regulation, is not a suitable basis for proceeding in future? What is wrong with using that list?

[Lord Leong (Lab)]

Personally, I do not see why there is anything wrong with it—but in this Bill itself, I am trying to say that we need the flexibility. I just have to continue.

Further clarification of powers and functions would restrict the ability for enforcement regulations to provide powers needed to enforce new product and metrology regulations. We must enable flexibility so that we do not create gaps in enforcement powers now or in the future. We intend to plug the gap in enforcement by making regulation applicable at the border, so that enforcement can take place before unsafe or non-compliant products are sold.

I understand the good intentions behind these amendments but, equally, I hope that I have resolved the concerns that led to them. The Bill provides simple, flexible powers that will help enforcement authorities to fulfil their roles. I submit that we have balanced parliamentary scrutiny with the necessary flexibility in a way that best serves the rule of law. It is for these reasons that I ask the noble Lord to withdraw his amendment.

[Lord Fox (LD)]

I asked a specific question about publishing the code of practice in advance. Can I have an answer, please?

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[Lord Leong (Lab)]

I thank the noble Lord for that. We would expect regulators and authorities to carry out enforcement in line with the regulators’ code, which I am happy to share with noble Lords.

[Lord Lucas (Con)]

My Lords, the debate ranged a long way beyond my amendment, and I shall not attempt to summarise it. I suspect that I shall be listening to many of the arguments again at Report, specifically those from my noble friend Lord Sharpe of Epsom and perhaps the noble Baroness, Lady Crawley, too. In his reply to my amendment, I felt that the Minister rather missed the point, which is that, no, they do not have the powers at the moment. That is why this amendment has been tabled, because they are saying that they do not have the powers. Yes, you can name a product and have it taken off, but if it appears in 100-plus different guises, which all claim to be different but are actually the same, you are stuffed. That is what I am trying to get at. I shall come back to this at Report, after taking further advice.

I am also grateful to the noble Lord for reminding us of how overregulated our nuclear industry has become and that allowing it to continue to be the subject of such a ridiculous free for all—resulting in us paying five times more than it costs the Koreans to build a nuclear power plant—is not something that should be waved away in the breadth of the powers that we have in this Bill. I beg leave to withdraw my amendment.

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[Lord Sharpe of Epsom (Con)]

My Lords, I will be very brief indeed. I have learned a lot from this brief debate and thank both noble Lords for their expert explanations. As a novice in this subject, I cannot think of a single possible objection, frankly, to either of the amendments from the noble Lord, Lord Fox, and my noble friend Lord Lansley. I hope the Government will welcome these as an example of well-informed common sense and give due consideration to some sort of amendment along these lines. I believe the Government to be sincere in their intention to promote growth and innovation, and it seems to me that both these amendments would, in some form or another, help to deliver that. If the Government do that, we will be supportive.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Fox and Lord Lansley, for their Amendments 34 and 35. When I saw the first amendment, I had to go and check what SEPs means. Now, after speaking to officials, I think I know a little bit and I welcome the opportunity to address the issues raised regarding software products that rely on standard essential patents, or SEPs.

These amendments go far beyond the intended focus of this legislation by expanding the scope of regulatory powers. Due to their complexity, the regulation of SEPs should not be reduced to a short provision in a Bill that was not drafted with the intention of regulating in this sphere. Any policy measures need to achieve a balance between rights holders being able to appropriately protect and enforce their rights, and users’ ability to access such technologies and innovations through fair and appropriate licensing forms.

However, I agree with the noble Lords that this is an important issue. The Intellectual Property Office has already engaged extensively with industry and business to determine whether any change to the framework for SEPs is necessary in order to ensure that businesses can license SEPs effectively and fairly. This engagement has included a call for evidence and views, and a questionnaire has been sent out to small and medium-sized enterprises. In response, the IPO has already launched a SEPs resource hub—an information resource that helps to address the very problem the noble Lords have identified. The IPO is also considering whether to consult formally next year on measures, as indicated by the noble Lord, Lord Lansley, and further to improve transparency in the SEPs ecosystem and enable more efficient dispute resolution. Any such consultation would be subject to ministerial decision, and we are currently working on that. In the meantime, I assure noble Lords that the IPO is continuing informal engagement with industry on both this matter and the SEPs ecosystem more generally. I hope that is reassuring to the Committee.

While I agree that this is an important issue, this Bill is not the right avenue to address the problems that the noble Lords raise. I therefore ask that they withdraw or do not press their amendments.

[Lord Fox (LD)]

I sort of thank the Minister for his response, but not much, because I think he could have acknowledged that this is a problem, rather than that SEPs exist, because it is a problem. Whether or not the Bill is the solution to it, the Department for Business and Trade should have an interest in solving that problem, but it did not seem that there was much appetite for that. Perhaps the Minister could disabuse me of that by acceding to the suggestion of the noble Lord, Lord Lansley, to have a meaningful round table with the right people for us to further this discussion. If this is not the avenue to deal with it, we need something else, because it is a real and present problem that needs a meaningful solution.

While the efforts of the IPO are clear, the point of the noble Lord, Lord Lansley—I should call him my noble friend in this case—is that the IPO needs more power and something needs to be done. If it is not this, it needs to be something else.

[Lord Leong (Lab)]

I want to be very clear that the Department for Business and Trade wants to support businesses of all types and sizes, but we have to be fair as well, so as not to burden too many SMEs with regulations and financial costs. This area is being led by the IPO but, at the same time, there is a way that the Department for Business and Trade can engage with the IPO. I am than happy to arrange a meeting between the noble Lords, Lord Fox and Lord Lansley, and officials from the IPO and the Department for Business and Trade.

[Lord Fox (LD)]

I thank the Minister for that offer, which I am sure we will take him up on. If the Government wish to unburden small and medium-sized businesses, solving this problem would be a slam dunk. With that, I beg leave to withdraw Amendment 34.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Lansley for introducing his amendments so incredibly clearly and expertly. It is obvious that international standards are vital for facilitating global trade. Products that adhere to international standards are more easily accepted across borders. They reduce trade barriers, open new markets for UK business and so on. They ensure that UK products can continue to compete internationally and maintain their high reputation for quality and reliability.

Aligning product requirements with international standards ensures that UK consumers also benefit from high levels of safety. This alignment builds consumer trust, as consumers know that the products they are buying meet rigorous global benchmarks. Amendment 43 specifies that this requires consultation. It is vital that consultation takes place with experts. In principle, we absolutely support the spirit and intent of these amendments.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Lansley, for tabling Amendments 38 and 43. I know from when I was on the Opposition Benches that he brings great expertise to this House, debating legislation as varied as the Trade Act 2021, the Procurement Act 2023 and the Bill before us today. His amendments raise important points about the role that international standards can play in domestic product regulation and in ensuring a strategic approach to their delivery and implementation.

Regarding Amendment 38, I reassure the noble Lord that Clause 2(6) enables product regulations to continue to reference international standards to support regulatory compliance, as is the case for medical devices. Provision is already made in current product regulations for the ability to designate a standard adopted by an international standardising body.

We work closely with all departments, including the Medicines and Healthcare products Regulatory Agency, and will continue to work with them to ensure the supply of safe and compliant products. However, each responsible department must individually consider the best approach for its own area.

Before the Secretary of State designates the standard for products regulated under the Bill it is assessed by government. The standard may be designated fully, with restrictions or not at all, depending on how far the standard ensures the relevant product requirements. Therefore Clause 2(6) sufficiently addresses the noble Lord’s concern. There is also no need to specifically reference the ability to designate international standards because that provision is already covered in product safety sector-specific legislation already on the statute book.

[Lord Lansley (Con)]

Which legislation is the Minister referring to? Is it not Part 2 of the Consumer Protection Act, which is able to be repealed by this legislation?

[Lord Leong (Lab)]

I have been told by officials that it is a specific product regulation.

[Lord Lansley (Con)]

Where is the power? Is it in the Consumer Protection Act?

[Lord Leong (Lab)]

I will write to the noble Lord on that.

On Amendment 43, the Government published a memorandum of understanding with the British Standards Institution on 16 September, of which there are copies here available to noble Lords. This sets out in respect of its activities as the UK’s national standards body its role in supporting government policy and acting in the UK’s national interest in the international standards-setting arena. This includes supporting UK policy to strengthen the global approach to standardisation and maximise UK influence.

Within the international standards system the UK already occupies a strong leadership position through the BSI’s membership of international and non-EU private sector European regional standards organisations. The BSI also manages a significant number of important committees in those organisations. In its role, the BSI systematically adopts international and European standards that representatives of UK stakeholders have influenced and withdraws standards that are no longer relevant. This includes internationally agreed standards designed to support regulatory compliance to UK product legislation.

In Articles 2 and 3 of the memorandum of understanding, the Government and BSI agree on the primacy of international consensus and that the two parties will co-operate with each other on international standards policy, while Article 4 ensures that the BSI provides the necessary standards the Government require for UK regulations. The Government are in the process of finalising a document entitled “The UK Government’s Public Policy Interest in Standardisation”, which is referenced in the MoU with the BSI, that explains why standards are a key factor in support of a number of government policies. It also reinforces the policy of influencing international standards and the importance of maintaining a constructive relationship with the BSI.

Given the close collaboration and the mechanisms in place, I believe that the objectives of Amendment 43 are already being met on the points I have just outlined. I hope that I have been able to provide sufficient reassurance to the noble Lord that what he seeks to achieve is not only already possible through the Bill, but also common practice across a range of sectors. If helpful, I will ask my officials, following Committee, to provide further information on the important role that international standards play in the UK system. With that in mind, I respectfully ask the noble Lord to withdraw his amendment .

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[Lord Sharpe of Epsom (Con)]

Again, I think that my ignorance probably suggests that the public ought to be slightly better informed about that. Maybe they are; maybe it is solely me being ignorant. I do not know.

The other thing that struck me, while I again say to the noble Lord, Lord Redesdale, that I like his Amendment 56, is that surely we need to be a little bit careful about exploding Amazon trucks if they are this unstable. I will leave that thought with him.

There is, finally, a third subset of safety issues that I thought about when the noble Lord was talking about bikes. It is about those, Lime bikes in particular, that are left lying in the middle of the road unexpectedly as you go round a corner—he said, speaking from personal experience.

All these amendments have considerable merit. I am very interested to follow them and will consider supporting them.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords who have spoken, in particular the noble Lord, Lord Foster, for speaking on behalf of the noble Baroness, Lady Brinton. The issue of lithium-ion battery safety is rightly getting a lot of attention and I am grateful for the opportunity to discuss it. I also mention the work of the noble Lord, Lord Redesdale, who has tabled a Private Member’s Bill on this same topic and with whom I have had valuable discussions during the passage of this legislation.

The Government have already taken significant steps to protect people from the dangers posed by products containing lithium-ion batteries. The Office for Product Safety and Standards has been working with colleagues across government and industry to identify the root causes of safety issues associated with lithium-ion batteries and to ensure that steps are taken to protect consumers and remove dangerous products from the market. We are also working with UK businesses to ensure that they comply with regulations. In addition, we have collaborated with fire and rescue services to identify products involved in incidents and have taken the appropriate action when unsafe products are identified.

Since 2022, efforts have resulted in 20 separate product recalls and 22 other enforcement actions for unsafe or non-compliant e-bikes or e-scooters. The OPSS has issued 26 withdrawal notices to eight online marketplaces, two manufacturers and 16 separate sellers to halt the sale of two dangerous e-bike battery models manufactured overseas by Unit Pack Power—UPP—that were discovered during fire and rescue investigations.

In terms of regulatory change, we need to ensure that any regulation is effective at stopping harmful products reaching the market. We also need to make sure that good businesses, which are in the majority, are not undercut by these unscrupulous traders.

The Bill is designed to provide powers across a broad range of products, including lithium-ion batteries. It does not highlight particular sectors that are in need of regulation. Noble Lords will appreciate that a very large range of products are covered by the Bill; therefore I would be hesitant to draw out lithium-ion batteries or specific measures in it. That would also limit our flexibility to work with all interested groups to identify the most effective way to tackle this issue. Today it may be lithium-ion batteries, while tomorrow it may be magnesium batteries, sodium batteries, salt or seawater—all of which may pose some safety features. So we need the flexibility to identify those new products on the marketplace.

Indeed, during Second Reading of the Bill in the name of the noble Lord, Lord Redesdale, a number of Peers highlighted that battery technology is changing. That is part of the reason why the Product Regulation and Metrology Bill works in this flexible way, as I stated earlier. It is to ensure that future regulations are able to take account of developing technologies.

We are, none the less, considering what change will make a meaningful difference to lithium-ion battery safety. My department has commissioned extensive research from the Warwick Manufacturing Group to better understand battery safety, including compatibility issues. This research is being finalised and we expect to publish it in due course. This will help us identify the root causes of battery risks and options to better protect consumers.

We want to take action about these unsafe products. We cannot commit to a timescale as we want to take the right action—but we do want to take action. One area where we have been very clear about the need for action is products sold via online marketplaces. I thank the noble Lord, Lord Foster of Bath, for his Amendment 49—and his well-informed advocacy in this area—that would require online marketplaces to take reasonable steps to ensure that products containing lithium-ion batteries sold on their platform are compliant.

In addition to the action I just mentioned, the OPSS wrote to major online marketplaces earlier this year, expressing concerns about the availability of unsafe products online. The OPSS has issued online marketplaces with legal notices that prohibit the supply of unsafe products. However, while much has already been done to keep people safe, our product safety regulations could go further.

As mentioned at Second Reading, we will use the Bill to clarify and modernise the responsibilities of online marketplaces in secondary legislation. These requirements will build on best practice to create a proportionate regulatory framework where online marketplaces take steps to prevent unsafe products from being made available to consumers. This will help prevent unsafe goods, including unsafe lithium-ion batteries, from reaching UK consumers.

The enforcement provisions in Clause 3 enable the introduction of enforcement powers for the purposes of monitoring and investigating, and securing compliance with product regulations. A requirement for the production of safety certificates that the noble Lord, Lord Foster, seeks as part of Amendment 49 could be implemented using the Bill’s powers as drafted. As I said, we are keen to continue working with noble Lords and others to identify the regulatory work that would be most effective.

Specifically on Amendments 55 and 56 on bikes, e-bikes and lithium-ion battery products sold on online marketplaces, we agree that online marketplaces should take steps to provide relevant information to consumers so that they can make well-informed purchasing decisions. This is also important to bridge the gap between the information consumers see before a purchase online, compared to the high street, where they can see the product and packaging.

In general terms, the Bill would enable us to introduce requirements on online marketplaces, including the provision of specific information, for the purpose of reducing or mitigating risks presented by products or ensuring that products operate effectively.

I thank the noble Lord for raising another important issue where consumer information can be beneficial to provide product traceability. As he discussed with me previously, this might help to deter the sale and assist the recovery of stolen bikes. The Home Office works closely with policing and academic leads to examine what more can be done to tackle the disposal market for stolen goods. We will therefore engage with the Home Office on this topic to explore whether product regulations could contribute to crime prevention. I will ask my officials to organise a meeting with the noble Lord and officials from the Home Office and other relevant authorities.

I also thank the noble Lord for his Amendment 56, which seeks to require online marketplaces to put in place a return policy for products containing lithium-ion batteries for the purpose of appropriate battery disposal. The Environment Act 2021 provides powers for the Government to introduce new requirements on online marketplaces with respect to the take-back of lithium-ion batteries and products containing lithium-ion batteries. Under the existing producer responsibility legislation, producers of industrial batteries, which include e-bike and e-scooter batteries, must take back waste products free of charge on request. Ministers are currently reviewing proposals to consult on reforms to UK batteries regulation before setting out next steps on battery disposal.

At this point, I wish to mention that I have spoken to my noble friend Lady Hayman of Ullock, Parliamentary Under-Secretary of State at Defra. It is clear to me that noble Lords will discuss the issue of disposal of lithium-ion batteries.

I hope this assures noble Lords that the Government take the issue of lithium-ion battery safety extremely seriously. We have already taken enforcement action and are keen to work with all interested groups to ensure that further regulatory change is effective. Consequently, I ask the noble Lord, Lord Foster, to withdraw his amendment.

Before I sit down, I wish to say that my private office has sent an invitation to noble Lords who have expressed an interest in visiting the OPSS. I very much hope they will take up that offer.

[Lord Foster of Bath (LD)]

My Lords, on behalf of my noble friend Lord Redesdale, I thank the Minister for his kind offer to him. I am sure the Minister will understand that I will want to go and put a wet towel over my head and read very carefully what he has just said in response to this group of amendments. However, I say to him that reading a list of successful examples of unsafe products coming into the UK by the OPSS is something I did myself in a previous debate. It does not indicate that we have got it right. The figures on the number of fires from lithium-ion batteries, for instance, are going up dramatically, so something is not quite right.

The problem, which the Minister touched on both in this answer and the answer he gave to a previous group when I raised the issue of high-risk products, is that the current arrangements are somewhat discretionary, and not at all clear so that we know what they are. For animal products, there is a very clear procedure: everything has to be checked for whether it is low risk, medium risk or high risk. Earlier, I proposed that we do exactly the same for all products. I am grateful to the Minister for agreeing to meet me and other people about that.

In the light of that and the discussions we will have, for the time being I beg leave to withdraw my amendment. However, I assure the Minister that we will come back to these issues at a future stage.

Product Regulation and Metrology Bill [HL]

Lord Leong Excerpts

Committee stage
Monday 25th November 2024 Grand Committee

[Lord Lansley (Con)]

My Lords, I apologise that I was not able to be with the Committee on its first day, nor will I for much of this afternoon, but I look forward to returning for my amendments on Wednesday. I support my noble friend Lord Sharpe’s amendment.

When we debated the regulation of medical devices in the Medicines and Medical Devices Act 2021, we established that safety and safeguarding public health was its overriding objective. However, we went on to say in what is now Section 15(3) of that Act that in considering whether regulations should be made, and whether they would contribute to the objective of safeguarding public health,

“the Secretary of State must have regard to”—

I commend that language to my noble friend, rather than “must support”, which I think takes it a bit far and creates conflicting duties—

“the safety of medical devices … the availability of medical devices … the likelihood of the United Kingdom being seen as a favourable place in which to … carry out research relating to medical devices … develop medical devices, or … manufacture or supply medical devices”.

I draw attention to the third of those. The structure of the existing legislation on the product requirements for medical devices already incorporates an expectation that we consider economic activity, economic growth and our comparative position in the manufacture or supply of such products. I say to my noble friend that that is an alternative formulation which thoroughly supports, through the precedent of a very closely related area of regulation, the idea that economic activity of that form should be part of the consideration of whether and how regulations should be made.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, and the noble Baroness, Lady Lawlor, for their contributions on Amendments 11 and 11A, which specify that regulations made under the Bill should promote investment, foster innovation and encourage economic growth and investment. This Government are committed to attracting investment, as illustrated by the £63 billion pledged at the recent international investment summit. Britain is open for business.

I assure noble Lords that growth is the number one mission of this Government and our new industrial strategy, to be published in the spring, is central to it. The strategy will focus on tackling sector-specific and cross-cutting barriers to growth for our highest-potential growth-driving sectors and places, creating the right conditions for increased investment and high-quality jobs and ensuring a tangible impact in communities right across this country.

I also thank the noble Lord, Lord Sharpe, for his Amendments 104A and 124A, which seek to create regulatory sandboxes where new products could be trialled under regulatory supervision, as indicated by the noble Lord, Lord Kirkhope. I recognise and welcome the intention behind the amendments, which seek to encourage innovation. The Office for Product Safety and Standards within my department already works to provide businesses with guidance and support as they develop and market products. We also support local authorities in their work as primary authorities. This allows businesses to receive assured and tailored advice on meeting environmental health, trading standards or fire safety regulations from a single local authority, then applying this advice nationally. The underpinnings of our product safety regime are based on extensive engagement with businesses. Whether it is on regulatory change, the development of standards or the work of the OPSS as a regulator, the relevant bodies consult extensively across industry.

I am always open to new ideas on how to support businesses to innovate. I understand that in 2022 the Office for Product Safety and Standards supported the Home Office in a regulatory sandbox trialling electronic ID for alcohol sales. However, I am concerned about mandating regulatory sandboxes in the Bill. Product safety is, after all, about avoiding potentially serious risks to people and their property, and anything that would relax regulations in this way, even as a trial, would need careful consideration. It could also commit local responsible authorities to run trials in their areas without sufficient consultation or preparation. This could place an undue burden on local authorities, diverting resources and capacity from their primary responsibilities.

This Government are committed to ensuring that any regulations made under this Bill will support the interests of UK businesses and consumers, providing regulatory certainty and creating the conditions for investment, innovation and economic growth. The Government are always open to debate to ensure that we can support businesses to deliver safe and effective products. I hope I have demonstrated to the noble Lord the extent to which regulators already work closely with businesses to achieve this.

In response to the point from the noble Lord, Lord Sharpe, about SMEs, I was an SME once; we do not want to burden SMEs with additional regulatory or financial cost, if possible. This Government are pro-business and pro-worker and have provided certainty, consistency and confidence—for which investors have been looking for a very long time. Massive tax reliefs are available to investors through the EIS, the SEIS, VCTs and all kinds of grants, including patent grants for any new industries. The Government have shown that we are committed to investment and growth.

I hope that I have been able to reassure noble Lords that the Government are committed to fostering growth through all our policies. This will be set out in more detail in the forthcoming industrial strategy, which we will publish in the spring. I therefore ask the noble Lord to withdraw his amendment.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all speakers, in particular my noble friend Lady Lawlor for so eloquently introducing her amendment. I say to my noble friend Lord Kirkhope that my remarks are in no way meant to diminish any of our trading relationships; the point is that these amendments are designed to look after our national interest. It may well be that aligning with the EU is in our national interest, in which case we absolutely should, but if it is not, then we should not, and any reference to relative economic growth is merely factual. I thank my noble friend very much indeed for his supportive remarks on Amendments 104A and 124A.

I also thank my noble friend Lord Lansley for his perspective, which will be very helpful when we come to later stages of the Bill. I also thank the Minister for his remarks, which provided helpful clarity. I take comfort from the fact that he remains open to new ideas. We will consider his remarks carefully but are very pleased to hear his reassurances regarding SMEs. For now, I beg leave to withdraw my amendment.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Baroness, Lady Crawley, for her remarks. Obviously, defining “products” is a key consideration in much of what we have to discuss in this Bill. It is a subject to which we will return later today. I thank the noble Lords for introducing their amendments. It was very eloquently done. They certainly deserve consideration and comprehensive answers from the Government.

I will speak to Amendments 18 and 19 standing in my name. The Bill as it stands—and I am afraid this is going to be rather labouring a point that we discussed a lot last week—has been widely criticised for being skeleton legislation with much of the substance being delegated to Ministers through statutory instruments. The Delegated Powers and Regulatory Reform Committee has rightly pointed out that this leaves “almost no substance” or perhaps, as the noble Baroness, Lady Crawley, described it, no clear markers in the Bill, giving Ministers excessive and unaccountable discretion to regulate in important areas, such as product marketing and safety, without sufficient parliamentary scrutiny or oversight.

Clause 2 is a prime example of this, because it grants wide powers to Ministers to make regulations on a wide range of product characteristics—but without any clear or substantive detail. By keeping paragraph (a), the Bill opens the door to the possibility of Ministers creating regulations that lack transparency or specificity. I find the wording concerning and unnecessarily vague. For example, the phrase “other characteristics of products”—or, as the noble Lord, Lord Foster of Bath, described it, “just things”—is far too broad and could allow the Government to regulate anything under this clause, with little or no clear limit or definition.

The lack of clarity here is a significant issue, not least because businesses and producers rely on clear, specific regulations to know what is expected of them and to ensure that they remain compliant. Under this clause, they are left in the dark. What exactly are we talking about when we refer to “other characteristics”? Are we talking about the design of products, marketing methods or even the raw materials that are used in manufacturing? Small businesses and start-ups are especially vulnerable to such unclear regulations, as they may struggle to interpret or comply with such an open-ended provision.

This provision, in effect, gives Ministers the power to define and change the scope of regulations without sufficient clarity or transparency. Ministers could, under this clause, make regulations to cover an incredibly wide range of product characteristics, creating significant uncertainty for the market. We believe that this is an unacceptable level of ministerial discretion. With such a clause, the Government could, in effect, regulate anything and everything related to products. We do not think that we can afford to pass a Bill that leaves businesses and consumers in the dark and subject to the whims of ministerial power. This clause should be completely rewritten or removed. If the Government cannot provide a more specific targeted framework for these regulations, we must consider removing it entirely on Report.

With Amendment 19, there are the same issues. At present, there is no clear definition of what constitutes the “use of products”, nor any explanation as to how the Government intend to regulate it. This lack of clarity presents a significant issue, as it allows Ministers broad and undefined discretion to determine how products should be used and how they are to be regulated. This could easily lead to overreach, and, given how the Government have argued so far in some areas, regulations could be imposed with little or no accountability or scrutiny, leaving businesses uncertain about the future of their operations.

I am very pleased that the Minister has talked repeatedly about giving businesses certainty, particularly in aligning with EU regulations. However, we need more in the Bill to suggest certainty in the areas that I have just described, and I hope that he will be able to provide some reassurance.

[Lord Leong (Lab)]

My Lords, as technology and regulation continue to develop, we need new powers to address future threats and hazards and to ensure a continued supply of safe, accurate and compliant goods.

I thank my noble friend Lady Crawley and the noble Lord, Lord Fox, for their Amendments 12 and 13, and the noble Lord, Lord Foster, who introduced the latter. I agree that we need a robust product safety framework that can reflect the latest risks and hazards and keep consumers safe and protected. The Government have worked hard to ensure that the powers in the Bill capture the multitude of products that fall within our product safety framework, as well as new products that might be placed on the market and present risks to consumers in future.

For the purposes of the Bill, products are defined as

“tangible items that … result from”

a “method of production”. This definition ensures that we can capture a wide range of manufactured products marketed or used in the UK, from cosmetics to complex machinery. There are a number of instances where our current regulation and product safety work covers software: for example, where certain products are reliant on software, or our work to enforce certain software security requirements under telecommunications legislation. Following my noble friend Lady Crawley’s comments on smart doorbells, I confirm that an app connected to a smart doorbell would be covered by the Bill where it affects the physical safety of the product. The Product Regulation and Metrology Bill would ensure that our general ability to regulate the safety of all products can take account of software, as well as the impact of software on the performance of any particular product.

Let me assure noble Lords that we have carefully considered the scope of products that we seek to cover, and we are future-proofing as much as we can by allowing regulations to also cover intangible components of physical products. This includes things such as software, as I mentioned, where they form part of a tangible product. As such, the Bill will allow us to regulate interconnected products in so far as the safety of the physical product is affected. In this way, we can ensure that we are able to regulate the role of these intangible components in the risk that physical products may present.

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[Lord Foster of Bath (LD)]

I am grateful, because this takes this back in a sense to an earlier group. The Minister has again referred to the issue of installation. Can he say categorically, on the issue of use, whether use will always include installation—or is it that it “may” include installation, as he said? Is it “will” or “may”?

[Lord Leong (Lab)]

I can give the noble Lord the assurance that it is “will”.

[Baroness Crawley (Lab)]

My Lords, I thank my noble friend the Minister and the noble Lords, Lord Sharpe and Lord Foster, who have contributed to this short but useful debate.

I will not repeat the valid and important points that have been made, but I ask the Minister to have another look at the Bill’s definition of “product” in the light of our discussion this afternoon. However, I accept his explanation of software regulation going forward: that was an important point he made. For now, I beg leave to withdraw the amendment.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Holmes for his superb introduction to this group. I also thank the noble Baroness, Lady Brinton, for confirming my suspicion of dentists.

I shall speak in general terms because I cannot improve on the eloquence with which my noble friend Lord Holmes put his arguments. To return to the point, these amendments illustrate the limitations of Clauses 1 and 2, I am afraid. These amendments have considerable merit on a stand-alone basis but, in aggregate, they—Amendments 75 to 78 in particular—would in effect seek to define artificial intelligence. This is obviously a fast-moving and rapidly evolving subject; frankly, it deserves a national, never mind parliamentary, debate, as my noble friend Lord Holmes eloquently argued. AI will clearly demand definition and regulation, as the noble Lord, Lord Foster, rightly pointed out. Philosophically, I am not even sure that it qualifies as a product in the traditional sense; frankly, what is in this Bill suggests that we do not really know.

I cannot help thinking that some of the arguments made by the noble Lord, Lord Leong, in our debate on the previous group reinforce this point to some extent. AI can be benign, obviously, but the same application might not be. So, how do we define risk in these terms, even if it regards only the temperature of cheese? I therefore question whether this Bill is the right vehicle for these amendments or whether AI deserves a stand-alone debate and argument. The fact that they are in scope again illustrates, as I said earlier, the inherent weaknesses of Clauses 1 and 2. They are too broad and lack definitions. Ideally, they should be removed; at the very least, they should be extensively rewritten and tightened. I hope that the Government will listen but, if they do not, I will certainly have conversations with my noble friend Lord Holmes about what we shall do next.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords and noble Baronesses who have spoken. The use of software and AI in physical products covered by our product regulation regime is still in its early days. It is important to take the opportunity of this Bill to ensure that future regulation can keep pace with technological change.

The amendment tabled by the noble Lord, Lord Holmes, would require a review of all product regulations in terms of how AI may impact them and a specific labelling requirement for AI. The Bill gives powers to ensure that product regulation can be updated or new regulations can be passed to cover emerging risks. They include measures such as labelling and verification requirements. However, mandating specific measures in the Bill would limit our ability to determine the most effective ways to protect consumers. A more flexible approach will allow us to adapt as this technology evolves and to ensure that protections remain robust and relevant.

To be clear, this Bill does not seek to regulate digital products or artificial intelligence in and of themselves; it is focused on the regulation of physical products and future-proofs our ability to keep product and metrology regulation up to date with emerging technologies. The Government have a wider programme of work on the regulation of artificial intelligence, where, in most cases, the UK’s expert regulators are responsible for enforcing the rules on AI in their domains; we are working with regulators to ensure that they have the resources and expertise to do this effectively.

Additionally, as set out in the King’s Speech, the Government will bring forward separate legislation to ensure the safe development of AI models by introducing targeted requirements on companies developing the most powerful AI systems. We will undertake a full public consultation to hone these proposals before presenting them to Parliament in due course.

The noble Lord, Lord Holmes, raised the issues of data protection and intellectual property. As we know, UK GDPR and the Data Protection Act 2018 form the legal framework for protecting personal data in the UK; this already covers things such as personal data, photographs and voice recordings.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords for introducing their amendments in this group. I shall briefly speak in favour of Amendments 48 and 71. I thank the noble Baroness, Lady Crawley, for bringing attention to the critical issue that addresses the responsibilities of online marketplaces and also, if I may, pay tribute to her wider work in this area as well as that of my noble friend Lord Lindsay, who is not in this place but whose exemplary work as president of the Chartered Trading Standards Institute deserves a mention.

This sector has grown exponentially in recent years and plays a dominant role in modern commerce. This amendment, therefore, highlights essential duties for online marketplaces. For example, a 2023 TSB study found that Facebook Marketplace accounted for 73% of purchase fraud cases. If you think about fraud and its growth in terms of the British crime statistics, that is a significant percentage of British crime, not just online crime. Over one-third of adverts on Facebook Marketplace are scams, we are told, so this amendment would help to level the playing field by ensuring that online marketplaces meet the same safety standards as physical retailers. This would foster fair competition and ensure that businesses prioritising consumer safety are not undermined by unscrupulous practices.

It is vital that we ensure online marketplaces, which facilitate the sale of billions of products, do not become conduits for unsafe goods or fraudulent activity, as all noble Lords have rightly highlighted. Without robust regulations, consumer trust and market integrity are at significant risk. We ask noble Lords to take seriously this amendment to uphold consumer protection, market fairness and safety standards, and think that the Government ought to recognise the urgency of addressing these concerns and act decisively.

On Amendment 71, I support it as a necessary step to protect consumers in the rapidly growing online marketplace sector. The extension of liability to online marketplaces and others under Section 2(3) ensures that those who facilitate the sale of unsafe or defective products are held responsible. Such measures are crucial to maintaining consumer confidence, especially as online shopping becomes so dominant.

We think it is essential that the Government protect consumer rights in all the marketplaces, especially online. We urge the Government to listen to those two amendments in particular but, frankly, there is merit in all the amendments we are debating in this group, and I hope to hear some positive news from the Minister.

[Lord Leong (Lab)]

My Lords, before I respond to this group, I say to the noble Lord, Lord Sharpe, that I will write to him in respect of the points he has raised.

I thank all noble Lords for their contributions to this debate and for Amendments 21, 22, 32, 45, 48, 71 and 117 to 124. These amendments have raised important points on the scope and application of the Bill’s powers, and I hope to provide clarity and reassurance. Around one-third of UK retail sales are now conducted online, but our product safety legislation has not kept pace with changes in shopping habits, in particular the development of online marketplaces and other platforms.

Online platforms may sell goods themselves and/or provide a platform for third-party sellers—in the UK or aboard—including consumers, to sell goods. The most well-known online marketplaces in the UK are probably Amazon, eBay, ASOS and Etsy, and others are widely used. The online marketplace industry in the UK is booming. In 2023, the UK e-commence market was valued at close to £137 billion and is projected to grow to £152 billion this year. I thank the noble Lord, Lord Sharpe, for setting out the landscape of online fraud and scams on online marketplaces; we really need to take note of that.

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[Baroness Brinton (LD)]

I thank the Minister very much for the detail he has gone into in his answer, but there are two types of regulation. The one he has described is the one that you would expect the Government, trading standards and other bodies to take. But, in litigation terms, if somebody bought an electric bike in good faith, who would they sue? Paragraph (h) does not make it clear. This is not purely about the parameters of the products and the Bill; it is about the consequences of having something that is very general. I think platforms will say, “It’s nothing to do with us”, and the individuals will say, “But I’m not part of the chain, as described”. I am genuinely struggling to understand and I wonder whether the Minister can help me.

[Lord Leong (Lab)]

I thank the noble Baroness for that; I will come to it. We are talking about product liability to some extent; I have a paragraph on it in my brief, if she will bear with me for a moment.

Amendments 32 and 45 highlight some of the different actors in online supply chains that may need to be captured appropriately in these new requirements. The Bill gives powers to introduce requirements on online marketplaces to improve the safety of products sold online. These requirements can be tailored and updated appropriately to reflect the wide range of online marketplace models, and other relevant supply chain actors and their activities, now and in the future. Clause 2(3) is therefore sufficiently broad to enable requirements to be introduced on any persons carrying out activities in relation to a product. This could include, where appropriate, private individuals selling products via online marketplaces, whether in return for payment or free of charge.

I will now focus on Amendments 117 to 124, which seek to broaden the definition of online marketplaces. The definition of online marketplaces in the Bill has been created in a way that is broad enough to capture the full range of online marketplace business models, including social media platforms such as TikTok Shop, which was mentioned earlier. I assure the Committee that all the changes proposed in the amendments are captured within the existing definition. For example—and of relevance to Amendment 123—the expansion of the term “marketing” within the definition of an online marketplace is not required due to the definition of “marketing” within the Bill, meaning the “making available” of products. This in turn is defined as goods

“supplied or advertised for distribution or use on the market, whether in return for payment or free of charge”.

Amendments 117 and 122 in the name of the noble Lord, Lord Foster, seek to change the definition of an online marketplace, replacing “internet” with “internet service”, as defined in the Online Safety Act 2023. The definition we have used in the Bill includes a service on any other platform by means of which information is made available over the internet. We are therefore confident that the issue the noble Lord raises in his amendments is covered by the Bill as drafted.

I also thank the noble Lord, Lord Foster, for his clarification about data and GDPR being captured by the Data (Use and Access) Bill. I shall read Hansard and confirm accordingly. I totally agree with him that all unsafe products should never be allowed to be offered for sale on any online marketplaces, whether original or second-hand. We have to address his point about accountability. Who is accountable to be held responsible for some of these unsafe products?

The Bill also includes a power in Clause 10(2) that allows for the definition to be amended later by regulations, if this were necessary to capture any future models not captured by the current definition. I will come back to the issue of product liability.

Amendment 71, tabled by my noble friend Lady Crawley and spoken to by the noble Baroness, Lady Brinton, would allow the Secretary of State to make provisions to ensure that online marketplaces can be held liable for products purchased via their platforms. The primary route to seek damages for harm caused by defective products is through the Consumer Protection Act 1987. Depending on the specific facts, an online marketplace may have responsibility under this legislation. The Government are currently reviewing this legislation and we will consider the UK’s product liability regime holistically, including the question of how it should apply to online marketplaces. This is not a change that we would seek to make without considering all the evidence, so we do not want to pre-empt this important work by adding to the scope of the Bill.

Product liability also covers products that extend beyond the scope of the Bill, including, for example, food and medical devices. A considered review of this area would be the most appropriate way to ensure that our product liability laws are up to date and fit for the future and to take account of the broad-ranging interests in this body of law. I will keep the Grand Committee updated on the Government’s progress with this review and plans for wider engagement.

I say to the noble Lord, Lord Jackson, and other noble Lords: we have listened to the debate and reflected on all the points made. We are aware of the Grand Committee’s strength of feeling on a number of points, including the scrutiny of secondary legislation. With that, I hope that I have been able to reassure noble Lords that these amendments are therefore not required to achieve their laudable aims. Consequently, I would ask for the amendments in this group not to be pressed.

[Baroness Brinton (LD)]

Clause 1(5) says that

“‘marketing’ means making available on the market”,

which is a much shorter definition than the one that the Minister just read out at the Dispatch Box. Is he telling me that I am not correct in saying that I market a product on eBay when I put it up on eBay?

[Lord Leong (Lab)]

Sorry, can you repeat that?

[Baroness Brinton (LD)]

This is very important, because this is partly about liability and partly about the clarity in the Bill about who has responsibility. Whether it is a buyer or, as I think the Minister argued, an individual seller, someone has to tell them that they have to follow the regulations, and they need to know how to do that. When he read out the definition of marketing in his speech, he gave a whole sentence more than is included in the definition in the Bill, which very simply says,

“‘marketing’ means making available on the market”.

It goes on to discuss “related terms”, but they are not relevant to my problem. While he ponders between Committee and Report, can he look at that? More than one of us is likely to come back with amendments on Report on this issue.

[Lord Leong (Lab)]

I thank the noble Baroness. We are trying not to be too prescriptive because it is constantly changing. I am sorry about this, but the Bill defines “marketing” as

“making available on the market”.

Clause 10, line 8, states,

“a product or goods … supplied or advertised for distribution or use on the market”—

[Baroness Brinton (LD)]

That is exactly what happens with a private individual. They will advertise an item on eBay. The language the Minister is using is what I would describe as the old-style manufacturing and business model. It does not take into account all the comments that people have made about where online marketing is in the 21st century. Therein lies the problem, and I would be very grateful if the noble Lord would look at that.

[Lord Leong (Lab)]

I thank the noble Baroness for that as well. Online marketplaces are changing overnight. I have just learned over the weekend of dropshipping. Dropshipping means that if someone orders a product on eBay, the person supplying it is not eBay or whoever claims to be on eBay. It is dropshipped by AliExpress straight to that buyer’s home. How are we going to control that? How are we going to capture that? That is why we cannot be too prescriptive. We need to have the flexibility to address ever-changing marketplaces. That is what this Bill is trying to do. If the noble Baroness is still unclear or unsure about this, perhaps we can have another follow-up meeting so we can discuss this in depth.

[Baroness Brinton (LD)]

I think a number of noble Lords who have participated in this debate might be interested in a meeting, if that is okay. I shall very briefly respond to the Minister to say that flexibility is fine, until the point at which there is nobody to hold accountable. That is the problem.

[Lord Leong (Lab)]

The Bill is drafted in this way to address who is going to be accountable. My invitation to all noble Lords to a meeting stands, and I welcome each and every one of them. I hope this amendment can be withdrawn.

[Lord Lucas (Con)]

My Lords, I am very grateful for the long and detailed reply given by the noble Lord, Lord Leong. I recommend a meeting with him to anybody. He is a most welcoming and courteous Minister, and you get good results out of a meeting with him. If, on rereading what he has said, I have any further questions, I shall attend the meeting. For now, I beg leave to withdraw the amendment.