Considered in Grand Committee
My Lords, I beg to move that the Committee has considered the draft Construction Products (Amendment etc.) (EU Exit) Regulations 2019.
My Lords, these regulations were laid before both Houses on 18 December 2018. They are part of the Government’s programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning statute book. Securing a deal with the EU remains the Government’s top priority, but it is appropriate to accelerate no-deal preparations to ensure that the country is prepared for every eventuality. This is the responsible thing to do. To confirm, the regulations would come into force in March only in the event that there is no deal and no implementation period. They are made using powers in the European Union (Withdrawal) Act 2018 to fix legal deficiencies in retained EU law. They are needed to reflect that the UK will no longer be an EU member state after exit day.
I trust noble Lords will allow me to provide a brief overview of how the regime works at present. The Construction Products Regulation—the CPR—is directly applicable in all EU member states. It seeks to remove technical barriers to the trade of construction products. It does this by harmonising the methods of assessment and testing, the means of declaring the performance, and the system of conformity assessment of construction products. Through this, the CPR seeks to ensure that reliable information is available to professionals, public authorities, and consumers, so that they can compare the performance of products from different manufacturers. I should make it clear that the CPR does not harmonise national building regulations across the EU. Individual member states remain responsible for safety, environmental, energy and other requirements applicable to construction works. The CPR applies UK-wide, and the devolved Administrations have been kept informed throughout the process of developing this approach and are content with it.
Moving on to how the CPR works in practice, where a harmonised standard has been adopted, the CPR places obligations on manufacturers, distributors and importers of that product. This includes that the product must have a declaration of performance and be CE-marked—that is, marked with the letters “CE”. The CPR will form part of the UK’s legal system as retained EU law when we leave the European Union. Without the amendments made by the regulations, the requirements of the CPR would cease to apply in the United Kingdom.
The general policy is to keep the same requirements but to convert them into a UK regime. This instrument will ensure that the same standards apply immediately after exit day as applied immediately before the UK left the EU. The key requirements of the regime will not change. The effect of these regulations can be considered in five parts.
First, on standards, existing European product standards will be preserved in the UK. Immediately following exit day, the same requirements will apply as were in place the day before. The standards that businesses must meet will therefore be unchanged. Thereafter, new UK standards will be designated by the Secretary of State. Standards have their own review cycles, typically of five years. The consideration of new standards will be supported by expert advice from the British Standards Institution and consultation with wider industry. Those standards are now, and will continue to be, mandatory.
The second area is about conformity assessment and the new UK mark. This element relates to where third-party conformity assessment is required. Existing UK conformity assessment bodies will be granted the new status of UK-approved bodies under these regulations. Where a UK-approved body undertakes the third-party conformity assessment required under the relevant UK standard, the product must be affixed with the new UK mark. The UK mark is being established under separate legislation and details of the new mark were published by the Department for Business, Energy and Industrial Strategy at the start of this month.
The third area is the continuity approach. Alongside the domestic arrangements I have just outlined, for an initial period after exit day we will continue to accept products that comply with the European CPR regime. This will mean that products which meet requirements under the European CPR can continue to be placed on the UK market without the need for re-testing or additional marking. As I have mentioned, all European and UK standards will be the same immediately after we leave the European Union. This approach is necessary to ensure that goods continue to have access to the United Kingdom market, and to help minimise disruption for businesses and consumers.
The intention is that these arrangements will be time-limited. We will ensure that businesses are given sufficient notice in advance of this period coming to an end. I can confirm, however, that ending the recognition of CE-marked products would require further legislation by affirmative resolution. Such legislation would be preceded by a period of consultation with industry.
The fourth and penultimate area concerns technical assessment where product marking is not compulsory. This relates to products not covered by a mandatory UK-designated standard. In some instances, it is helpful to the manufacturer to affix a marking to these products, although there is no legal requirement to do so. Therefore, in the same way as is the case under the current regime, there will be an optional route available to enable products to be UK-marked. That will continue.
Fifthly, these regulations give the Secretary of State powers to make regulations to enable the UK to make technical updates to the CPR framework. This is simply a case of the functions currently resting with the European Commission passing to the United Kingdom. These functions enable the Commission to make delegated and implementing Acts limited to specific areas, as set out in the CPR. We are making no changes to the scope of these powers. To be clear, this is simply a case of the existing functions passing from the EU to the UK. This is necessary to ensure that the UK’s CPR regime can respond to technical progress and new or emerging issues. Parliament will be able to scrutinise any new measures and this provides a similar level of oversight as exists under the EU’s regime currently.
I also note that these regulations make a number of technical fixes to correct deficiencies in the market surveillance regime arising from EU exit. This regime is provided for under domestic legislation. These technical amendments will ensure that the enforcement regime can continue to work in the same way as now.
At this point, I confirm that the UK’s ability to take action against products that do not comply with their declared performance—or are illegally on the market—is unaffected by these regulations.
To summarise, I hope the Committee agrees that these regulations are necessary. They serve a specific purpose: to ensure continuity of the regime in the event of a no-deal scenario, providing certainty if the UK leaves the EU without a deal or an implementation period. I stress that this is not the Government’s intended outcome. These draft regulations have been considered by both the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments; no concerns were raised by either.
To conclude, this instrument is necessary to ensure that the Construction Products Regulation continues to function appropriately if the UK leaves the EU without a deal or implementation period. I hope noble Lords will join me in supporting the draft regulations. I beg to move.
My Lords, the Minister was not his normal courteous self in declining to give way at the beginning. The reason he was not—indeed the reason Ministers are increasingly discourteous and disrespectful to the Grand Committee and the House on these matters—is of course that they are deeply frazzled by what is going on. They are having to rush through huge numbers of regulations in preparation for a totally unacceptable no-deal scenario, and it is therefore in their interests, as they see it, to suppress debate. What we have today is a classic instance of that.
I think the Minister would accept that these are important issues; the whole future of product standards and regulations is a vital issue for the future of the country and goes to the heart of our whole system of trade. At the same time as we are supposed to be debating this string of statutory instruments in the Grand Committee, the House itself is debating the whole state of the Brexit negotiations. That may account for the fact that there is almost nobody in the Grand Committee, because it is difficult for most of us to divide ourselves in two and be in two places at once.
I am very surprised that the usual channels agreed to the debate taking place in the Grand Committee today. I certainly would not have done if I was responsible for these matters, because it seems straightforwardly unacceptable that the Grand Committee should be discussing exactly the same matters that are being discussed in the Chamber. I hope the Minister might take back to the Chief Whip the concerns being expressed about these issues being debated here at the same time as the House is debating them. I see that one of my noble friends has come in, who is in the Opposition Whips’ Office; perhaps I may convey to the Opposition Chief Whip through him that it is totally unacceptable for the House to be debating statutory instruments in the Grand Committee on the same subject as is being debated in the Chamber. For that reason, I will certainly decline to express consent to this Motion at the end of the debate, and the House will need to debate this matter again fully when it goes to the Chamber, on the grounds that many noble Lords have not had an opportunity either to hear the debate or to participate in it.
On the substance of the issue, the status quo on exit is, as the Minister said, unchanged. Indeed, my understanding—perhaps he could confirm this in his reply—is that it is unchanged in all respects. The big issue is what happens to divergence thereafter. On that, he will say that it is a matter for government and Parliament thereafter, and this needs to be a dynamic situation. But—this goes to the whole issue of Brexit itself—if there is to be no divergence whatever and we are to continue to mimic the standards set for products in the EU, what on earth was the point of Brexit in the first place? Why are we going through this gruesome process, taking back control only to decline to exercise it because the best way of serving our industries and our economy is to continue to have the same product standards as the EU? However, if we diverge, which would largely be a matter of ideology, it would cause big problems of its own through the impact on the economy.
I note that Kit Malthouse, the Minister in the House of Commons, when dealing with exactly this issue, was unable to give any assurances, and quite rightly so. He said:
“I cannot speak for future Ministers, Secretaries of State or indeed Governments, who might decide to do something other”.—[Official Report, Commons, Fifth Delegated Legislation Committee 4/2/19; col. 10.]
That is completely true—of course he cannot speak for them. However, that goes to the whole point that no assurances can be given whatever that we will not in due course diverge—we may have a capricious Minister, for example. The Minister himself raised in his remarks the issue of Grenfell, aluminium product standards and building standards. That goes to the heart of the issue. What will happen quite quickly is that, perhaps because of domestic circumstances, developments or crises, and maybe not entirely wisely, we will decide quite rapidly to set and apply new product standards, different from those of the EU, which lead progressively —because this is an accretive process—to our divergence from European standards. The impact of that over time —maybe not each individual change but their cumulative effect—will be seriously to disadvantage our industries and businesses, and maybe our consumers, as standards diverge over time.
I know that the Minister will be unable to say anything other than “Nothing is changing on exit day” and “It is not our intention by these regulations to bring about any divergence”, but I think he will accept, as did his colleague in the House of Commons, that the whole purpose of the regulations—the whole purpose of Brexit—is to make such divergence possible. That divergence over time—perhaps not in each specific case, but over time—could be deeply damaging to our industries and consumers. That goes to the heart of the problems not only with a no-deal Brexit but with any Brexit at all.
However, as I will be making the same speech in the Chamber in due course, when other Members will be able to take part, because they are now debating the wider issue of whether we should be doing Brexit, I shall not elaborate any further.
My Lords, I sympathise with the view of the noble Lord, Lord Adonis, about the volume of statutory instruments that we have to consider, the lack of time to consider them and, thereby, the lack of time to do justice to them. I shall, nevertheless, comment on the statutory instrument. The noble Lord, Lord Adonis, has raised a number of crucial issues on the possibility of divergence to which we need to be alert.
As the Minister said, the statutory instrument is to come into force only if there is a no-deal outcome on 29 March. It aims to preserve the current outcomes—that is, properly licensed and tested construction products, tradeable without barriers across all 28 EU countries, as far as possible. However, the only one it can actually guarantee, it does: that any approved EU kitemarked products will continue to be recognised as compliant under UK law.
It gives the Secretary of State the power to set new UK standards for products in future, either those that are purely UK-tested or by simply adopting future EU standards. Given that up to a quarter of all components and materials used in construction are imported from the EU, it is clearly hugely in the interests of the UK industry to maintain common standards, and it is unlikely that it would ever welcome a divergence from whatever was the current EU standard. In practice, any UK manufacturer wanting a test certificate for a new product would want it to comply with the EU version of the testing and carry a kitemark, so that it was accepted across the EU and the UK thereafter, whereas there is no automatic right for our tests to be accepted across the Channel, limiting our export potential. Inevitably, the Government will have to set up a UK system, but in real life nobody will want to use it. It is therefore wrong to say that there is no impact and so no need for an impact assessment, although that is the conclusion the Government seem to have reached.
It is not that there are deficiencies in the drafting of the statutory instrument; it is yet another shocking example of the complete waste of time that all this work on no deal is producing—for the Government, for Parliament and for the industry. If, by any chance, there was no deal, the additional cost of setting up a system parallel to the EU which practically no one would ever volunteer to use is certainly not a minor matter. I hope that when he responds, the Minister will comment on that and, I hope, express his agreement with that conclusion.
I raise one further issue, which relates to the responsibility for enforcement before and after. It will lie with trading standards, mostly decimated by funding cuts. What estimate have the Government made of the increased workload for trading standards as a consequence of the introduction of the proposed new regime?
My Lords, I concur with many of the points made by preceding speakers about this process and this instrument as an example of the secondary legislation on which we are having to spend so much time.
In the light of the Grenfell disaster, the subject of these regulations assumes greater importance than might otherwise have been the case. It is therefore even more unsatisfactory that no impact assessment has been published. What assurances can the Minister give that, in the absence of a deal, there will continue to be comparisons for industry and the public as to the performance and safety of products from other countries? Will the Government ensure that EU regulations are constantly kept under review and that steps will be taken to ensure that our standards keep pace with increased safety considerations applied within the EU? In the absence of an impact assessment, has there been any conclusion on the potential cost to businesses as a result of the change? The noble Lord, Lord Shipley, made that point.
What will be the process for designating standards under the new regime? Will parliamentary scrutiny of such new or amended standards take place? If so, will that happen under the “made affirmative” procedure? What form of consultation will be applied? In particular, will the British Standards Institution remain a member of the European Committee for Standardization? The Explanatory Memorandum declares:
“Existing European harmonised standards will become UK ‘designated standards’”,
and will be “identical”. Is that to be a permanent position? If not, what timescale is anticipated within which they may be reviewed or changed? What cognisance will be taken of any changes in the EU standards during that period, and by what methods?
Finally, is it to be a requirement that manufacturers must affix a UK mark to products? If so, to what extent have the Government received assurances that such a mark will suffice to satisfy buyers in the European Union or elsewhere?
My Lords, I thank noble Lords for their contributions to these undoubtedly important regulations; indeed, I do not deny that they are important. Obviously, I am not responsible for the usual channels and the timetabling of matters in the House and the Moses Room. I firmly believe that the comment made by the noble Lord, Lord Adonis, has probably been picked up elsewhere so I will leave others to deal with that matter. I apologise if he thought I was being discourteous but I do not think he asked me to give way, which is perhaps why I did not. However, I will deal with his points.
I can confirm that the regulations will not change the law, except mutatis mutandis, in that we are coming out of the EU so some of the terminology is different. The regulations seek to preserve the existing position on exit day, which is why there is no impact assessment. Bear in mind that both scrutiny committees have not commented on the lack of an impact assessment; there will be no impact because the law on exit day will remain exactly the same because of the regulations. To pick up on a point made by the noble Lord, Lord Beecham—I think I covered this in my opening speech but perhaps not at sufficient length or with sufficient clarity—any departure from existing standards will require new legislation through the “made affirmative” procedure, on which consultation will be necessary. At the moment, the normal review period for standards is a five-year cycle. I am not saying that this will always necessarily be the case, but any reason to depart from it would have to be strong.
The second general point made by noble Lords concerns the likelihood of our suddenly diverging, or diverging at all, if it is inappropriate for British industry and if there is no great clamour from the British public. It is hard to see why this would be done; indeed, it would not make sense. We should credit our legislators and builders—people with more common sense. There would be no reason to diverge just for the sake of it, particularly given the necessity of the consultation I mentioned. It is hard to see how that would become a priority in any way or something that anybody would want to do.
I take issue slightly with another theme that seemed to come through in noble Lords’ remarks: that the regulations are about safety. Essentially, they are not. They are about standardisation. We have a separate domestic safety regime, as one can see from the Hackitt review and the Grenfell disaster. This has not emanated from Europe; by and large, Europe has not been the focus of the Grenfell inquiry or the response to it, nor of the Hackitt review. This is domestic. I am not denying the importance of these regulations, but essentially they are about standardisation and supply chains so that, for example, bricks and window frames are of a standard size. They are not largely about safety, so I want to keep the focus where it properly belongs. That is the point. That is the reason for the lack of an impact assessment and, as I said, one of the committees would have picked it up if we were in breach of proper procedures. As noble Lords will know, they are very effective committees.
The noble Lord, Lord Shipley, talked about trading standards and additional burdens. He will know that there is already an existing provision that new burdens have to be properly financed. We would expect to consult on that with the LGA and interested parties. If there are new burdens to be imposed, that would be a necessary consequence.
With those comments, and with the certain knowledge this will be brought up again in the Chamber, I commend these regulations.