Wednesday 13 February 2019
My Lords, if there is a Division in the Chamber, the Committee will adjourn for 10 minutes.
Construction Products (Amendment etc.) (EU Exit) Regulations 2019
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.
Buckinghamshire (Structural Changes) (Modification of the Local Government and Public Involvement in Health Act 2007) Regulations 2019
Considered in Grand Committee
My Lords, a draft of these regulations was laid before this House on 14 January. They are an enabling element in the processes for implementing the locally led proposal to replace the five existing Buckinghamshire councils with a new single unitary council. If approved by Parliament and made, the regulations will allow orders to be made under the Local Government and Public Involvement in Health Act 2007 to implement the Buckinghamshire proposal. In short, this is the first of two steps for these proposals.
Specifically, the regulations provide that Part 1 of the 2007 Act is varied in relation to Buckinghamshire so that: proposals may be made for the purposes of the 2007 Act by any principal authority in Buckinghamshire on its own initiative; any unitary proposal received by the Secretary of State from Buckinghamshire councils, including pre-existing proposals from before the regulations are made, may be implemented with or without modification by order; and the requirement for the Secretary of State to consult the councils and other persons affected by the proposal does not apply, reflecting the extensive consultation undertaken by the county council and the subsequent period for representations.
The regulations would expire at the end of March 2021 to allow sufficient time for all necessary orders under the 2007 Act to be made, to give full effect to the proposal. For regulations made on or before 31 March 2019, the Cities and Local Government Devolution Act 2016 requires at least one of the councils to give its consent to the making of the regulations, if the regulations are to be made. Buckinghamshire County Council has given its unconditional consent to the making of these regulations.
Alongside these regulations, in addition to the usual Explanatory Memorandum, we have also laid a report explaining the effect of the regulations and why the Secretary of State considers it appropriate to make them, as required by Section 15 of the Cities and Local Government Devolution Act 2016. The report also provides contextual information about the regulations.
Regarding the context, as that report explains, the Secretary of State considers it appropriate to make these regulations which provide for Part 1 of the 2007 Act to be varied in its application to Buckinghamshire, to reflect the initiative of Buckinghamshire County Council to make a proposal for structural change without an invitation having been received from the Secretary of State.
The context to this proposal is that there is wide consensus that the current local government arrangements in Buckinghamshire are unsustainable and inappropriate. In September 2016, the county council submitted a proposal for a new single unitary council. In January 2017, the four district councils submitted a proposal for two unitary councils. My right honourable friend the Secretary of State and his predecessor evaluated these proposals against the Government’s criteria. They concluded that both proposals met the criteria about a good deal of local support. The over 3,000 representations we received on this matter showed overwhelming support for change, with 87% of all representations supporting unitarisation in principle, 35% of all representations supporting a single unitary council, and 47% supporting the two-unitary proposal.
Public sector service providers in Buckinghamshire—the police and crime commissioner, South Central Ambulance Service, Buckinghamshire Healthcare NHS Trust and Buckinghamshire CCG—expressed support for a shared geography with the council to improve the overall provision of services in Buckinghamshire and, reflecting that the majority of partner organisations operate on a county-wide basis, therefore support the creation of a single unitary council. Buckinghamshire business organisations strongly supported a single unitary council. The South East Midlands LEP supported two unitary councils and the Buckinghamshire Thames Valley LEP supported a single unitary council.
The question therefore for my right honourable friend was whether the two other criteria for local government reorganisation—namely improving local government and representing a credible geography—were satisfied. As set out in the Written Ministerial Statement I presented to the House on 1 November 2018, we concluded that the proposal for a single unitary met these other two criteria and hence should be implemented if Parliament approves. We also concluded that the two-unitary proposal did not meet those two criteria. It did not represent a credible geography, as highlighted by one of the LEPs, and it would have involved a unitary council with a population of 188,000, considerably below our recommendation that a unitary council population should be in excess of 300,000. That was in the north of the county. It also risked the fragmentation of services in Buckinghamshire, a particular concern for the Children’s Commissioner.
Looking at the next steps, these regulations pave the way for orders which, if approved by this House and the other place, and made, will implement the proposal for a new single unitary council in Buckinghamshire. We have been discussing with the five Buckinghamshire councils the detailed provisions to be included in the first of these instruments. Once we have finalised this instrument, after these discussions, we intend to lay a draft of the order before Parliament as soon as is practicable. The order will then be subject to full Parliamentary debate, both in this House and in the other place. If approved and made, it will provide for the existing five councils to be abolished on 1 April 2020 and replaced by a single new unitary council. It will also make provision for appropriate transitional arrangements.
In conclusion, we are responding to a locally led proposal to replace the existing unsustainable local government structures in Buckinghamshire with a new council that will be able to deliver high-quality sustainable local services to the people of Buckinghamshire, and provide for effective leadership at both the strategic and the most local level. All the existing councils have made clear their commitment to delivering the very best services for Buckinghamshire communities. These regulations open the door to delivering this and, on that basis, I recommend these regulations to the Committee. I beg to move.
My Lords, I declare my interest as a long-term resident of Buckinghamshire, although I am not directly involved in any of the bodies listed by the Minister. I have been aware of the debates and discussions that have been ongoing in Buckinghamshire for some time, and am slightly surprised that I am alone in this place as anybody who has direct knowledge of what is happening there. The House is full of Buckinghamshire residents, I am happy to say, many of whom serve in the Government, and I would have thought that one or two of them might have been present to represent their views on this interesting proposition.
If I follow the Minister correctly, there are three columns under which the Government intend to make their decision—first and primarily on whether there is voter engagement and confidence in sufficient support across the population of Buckinghamshire. That is, whether the bodies representative of activity in that county—the LEPs and various other bodies mentioned by the Minister—have supported the issues, particularly those directly funded by and operated through one or more of the councils. There is this rather wonderful phrase “credible geography”, which supports the decisions that are likely to be made.
The Minister has done a very fair job in trying to represent the confusion in this process. He was right to point out—it is worth looking at the Explanatory Memorandum in some detail on this—that there is a great deal of support for unitarisation in Buckinghamshire. I do not dispute that, but there is rather less agreement on what form it should take. He mentioned that the district councils were primarily concerned about there being two unitary councils in Buckinghamshire. I am delighted to see that another resident of that county, the noble Lord, Lord Gardiner of Kimble, has emerged from the dark recesses of your Lordships’ House. He will no doubt support me later—or he may not.
The variety of responses took the same sort of approach—that 87% of representations support unitarisation in principle—but the options were split again. Although it saw more support for single unitary operations, the public sector provider similarly highlights a lot of the difficulties that will arise when unitarisation takes place. On this first leg, I wonder whether there will be any opportunity to reflect further on this. Yes, all the right processes have been gone through, but the results are so disparate in how they line up to solutions that it is difficult to see how the Government can make the decision on the basis of that set of responses.
The second point concerns the process of employment in other involved bodies. I have touched on this slightly in my response to the Government’s first column. The business community—various issues are raised in paragraphs 10.9, 10.10 and 10.11 of the Explanatory Memorandum on this—is not universally in favour of a single unitary structure. I wonder how the Government have drawn that conclusion.
My final point is on the credible geography. The dog that has not barked in this debate is the question of Milton Keynes. In northern Buckinghamshire, Milton Keynes is a burgeoning separate institution with its own governance and practice; with no real logic in a longer-term perspective, it is constantly differentiated from the rest of Buckinghamshire. The town is growing. Under the circumstances in which it was set up, it is an efficient and well-run operation. It has plans for expansion, and has been picked out on many occasions by the Government for sustainable development in the creation of more houses and better communications, particularly as a link on the corridor between Oxford and Cambridge. Despite that, it is completely ignored in this reorganised structure. Would the Minister like to comment on that?
It seems extraordinary that, with such focus on its future growth, such a concentration of people and economic activity is ignored in the structure of the county in which it operates. As for credible geography, it seems absurd to have a county that is long and thin. Journeys from north to south in Buckinghamshire are extraordinarily difficult; I made one this morning and it took me almost an hour and a half to get to the north of the county from where I live in the south. We are talking about ignoring one of the biggest economic operators within it. One need only look at a map with an uncritical eye to see that the south of the county points more towards Windsor and the London fringes. All the communication lines that people use for commuting—it is a commuter area—are centred on and work into the area. Yet the north looks to the Midlands and gets around Milton Keynes in a way that is antipathetic to the way that local government structures will be working.
The Government have obviously decided that they want to take this forward. As the Minister said, there will be a chance to discuss the draft before a final decision is made; perhaps that will be the more appropriate moment at which to look at it. But will there be another opportunity, between now and when this appears in the Chamber, for him to reflect on whether other issues need to be brought into this equation? Is he confident that the earlier pillars of voter engagement and user experience have not been slightly undervalued in the discussions so far, particularly in light of the credible geography issue?
My Lords, it is fairly clear that there are two views in Buckinghamshire on how to establish a unitary structure. It is not for me to support one view or another; that is a matter for the people of Buckinghamshire.
The debate we are about to have will be helpful, but I would first like to pick up a comment made by the Minister when introducing the proposal. It relates to the population figure that should apply for a unitary council. As I recall, he said that if there were two, one would have a population of only 188,000, whereas, normally, a unitary council would be over 300,000. I can think of quite a number of unitary councils that are well under 300,000 and hover around the 180,000 to 200,000 mark. Will he comment on that? Is a new government standard being applied? There is a certain logic to it: 188,000 is a lot of people and may well be deemed a sufficient number.
I noted two things in the Explanatory Memorandum. One is a comment in paragraph 10.11 by the commissioner for children’s services in Buckinghamshire, who,
“indicated a preference for a single unitary as opposed to two unitary councils; and was strongly opposed to ‘any … [local government reorganisation] proposal which would break-up (disaggregate) the existing children’s services structures in Buckinghamshire’”.
That is clearly a professional view of the best structure for that area. There may well be other similar professional views. If so, can the Minister draw our attention to them? We have comments from a number of public services and businesses, but there will be others beyond those.
I also have a concern about the comments made by councillors from town and parish councils. They are,
“particularly concerned about their capacity to take on additional devolved activity in a single unitary arrangement”.
This matters greatly. One thing we have learned from unitarisation in other parts of England is that, when it happens, you need strong town and parish councils to undertake the work that inevitably is devolved from the single unitary authority. These things are not directly to do with me or your Lordships’ House, but, when talking with the town and parish councils in Buckinghamshire, I hope the Government will listen very carefully to all that is said and respond in a way that assists those councillors to do their job in the future.
My Lords, I declare an interest as a member of a local authority with a population of 280,000. I am also an honorary vice-president of the Local Government Association.
We are in the paradoxical position of passing regulations which effectively bypass the wishes of four district councils in Buckinghamshire and of the 47% of respondents to the consultation on the proposal to abolish these councils and merge them with the county council. As we have heard, they voted for two unitary authorities to be created from the four districts. Slough, which is geographically in Buckinghamshire, is already a unitary authority, and so is Milton Keynes. Their views were backed by the chair of the District Councils’ Network, who blamed the decision on what he described as “ill-conceived legislation”; namely, the Cities and Local Government Devolution Act. This includes a sunset clause expiring—curiously enough—in March, which permits the Secretary of State to fast-track changes with the consent of only one local authority; in this case, the county council.
Even the Secretary of State, who bears the uncannily appropriate name of Brokenshire, acknowledges the concern that a single unitary authority might weaken democratic engagement at the most local level. Incidentally, he said he would consult on whether this year’s local elections should be delayed to avoid councillors being elected for only one year. Can the Minister say what has been decided in respect of this matter?
The public consultation produced only a 35% response in favour of the proposals. How can the Government justify proceeding with such a slender measure of support? I understand that Chiltern and Wycombe District Councils—neither of them, I regret to say, yet Labour-controlled—wrote to the Secretary of State with notice of intention to institute a legal challenge. Joined by South Bucks, they are now seeking judicial review. Can the Minister indicate when the case is likely to be heard? Would it not be more seemly to defer any decision on the regulations until the legal proceedings are concluded?
In the debate on the draft regulations in the Third Delegated Legislation Committee, Dame Cheryl Gillan, the Member of Parliament for Chesham and Amersham, launched a blistering attack on the proposals. Among much else, she quoted the previous Under-Secretary of State, James Wharton, who, during the passage of the then Cities and Local Government Devolution Bill, stated that it was the Government’s intention to build consensus, saying:
“We are not going to impose change on areas that do not want it”.—[Official Report, Commons, 7/12/15; col.772.]
Given that four of the five authorities involved—that is all the district councils affected—oppose the proposals, how can the Government square their decision with that emphatic commitment? In addition to the unanimous view of the district councils, 70% of parish councils in the area support the proposal for two unitary authorities, as do local businesses and other stakeholders.
Dame Cheryl also drew attention to the Government’s effective imposition of the county council leader as the initial leader of the new authority, with a majority of county councillors on the executive and the potential appointment of the county chief executive as “implementation leader”. This looks uncannily like a county council takeover—a sort of Amersham Anschluss.
In his reply to the debate in the Commons, Minister Rishi Sunak said:
“It is time for a fresh start for Buckinghamshire. It is time for people to forget about what has happened in the past, leave aside the tags of district and county, and come together to work for the benefit of residents”.—[Official Report, Commons, Third Delegated Legislation Committee, 4/2/19; col. 18.]
This is all very well, but the people are being given no voice and no vote on the issue.
This is yet another example of government practice since 2010. Then, some councils were compelled to hold ballots on whether to move to elected mayors. Although many, including Newcastle, voted not to do so, the Government’s reaction over time was to require elected mayors as a condition of the establishment of combined authorities. Their contempt for local government was further exemplified by the abolition of regional offices of government—originally established by an earlier Conservative Administration—which had proved a successful way of building constructive relationships between the two tiers of government.
I trust that the Minister will not emulate his colleague in the Commons, who concluded the debate on the regulations by declaring that he was,
“confident that, before too long, we will have a happy resolution to all outstanding matters, and that the people of Buckinghamshire can look forward to a bright future”.—[Official Report, Commons, Third Delegated Legislation Committee, 4/2/19; col. 18.]
This is the utterance of a political Candide, believing that all is for the best in the best of all possible local government worlds.
My Lords, I thank all noble Lords who have participated in the debate on the proposals for unitarisation in Buckinghamshire. I remind noble Lords that a locally led proposal is the background to this—as it should be, as the noble Lord, Lord Beecham, rightly said. The provisions will run out on 31 March this year, when we will revert to the previous procedures and to legislation brought in under Tony Blair, if I am not mistaken. That would require an invitation from the Secretary of State to amend local government procedures, unless there is unanimity among local authorities, in which case it would not be necessary.
The noble Lord, Lord Stevenson, made a point about Milton Keynes. He is right that it is a dog that has not barked and was not part of the locally led proposal. I recognise that Milton Keynes is significant in that area but it was not part of the process. He also made a point about viable geography and the size of a unitary authority. I think this issue has been addressed; indeed, my honourable friend the Minister for Local Government dealt with this issue in the other place and followed it up with a letter that talked about the process. I will make sure that the relevant letter is sent to noble Lords.
Originally, we imagined a population range of between 400,000 and 600,000 people, but subsequently found that this was too high. I am not saying that no ranges are above that figure, but the norm is somewhere around the 300,000 mark I referred to. It is not a hard-and-fast rule, but it is a guiding principle. The size has an effect on the nature and the split of services; indeed, the children’s commissioner gave the view that one unitary authority would be more beneficial than two. That view was reflected in the consultation—not exclusively, I accept, but getting 100% support for proposals is always pretty unlikely in a consultation. There was certainly discontent from the authorities, all of which were not content with the status quo. We have not had representations from local parties saying that the proposals are untenable.
The choice facing my right honourable friend the Secretary of State was between progressing with one unitary authority for the four district authorities or with two. Obviously, a judgment of Solomon must be made. With respect, all the authorities are Conservative-led, so there can be no idea of this move being for political gain; that was not suggested but I want to make the point. The Minister acted in this way after looking at the viable geography and representations made, and trying to work out which proposal presented the best option for local government in the area. He thought that a single unitary authority was that best option.
I do not pretend that this will please everyone; clearly it will not. For example, it will not please the noble Lord, Lord Beecham, which I suggest will not change after I finish speaking and after the regulations have, I hope, been agreed to. As I say, we must look at the considerations I presented, the provision of services and the size of the entity. All are important but there was certainly little or no support for the status quo: 87% of people felt that the status quo was not viable, so the suggestion that this will upset everybody in the area is somewhat far-fetched. The noble Lord also mentioned the deferral of elections. They are being deferred for a year, in line with what all the authorities—district and county councils—asked for.
If I have missed any other points made by noble Lords, as I almost certainly have, I will pick up on them in a letter. Echoing the point made by the noble Lord, Lord Stevenson, noble Lords will get another bite of the cherry when the order comes forward and we look at some of its provisions in more detail. With that, I commend the regulations to the Committee.
Storage of Carbon Dioxide (Amendment and Power to Modify) (EU Exit) Regulations 2018
Considered in Grand Committee
My Lords, this draft statutory instrument ensures that the UK’s regulatory regime for the geological storage of carbon dioxide continues to function when the UK leaves the EU. This will be required in the event that the UK leaves with no deal, but may also be required in a negotiated outcome.
There is broad consensus that carbon capture, usage and storage—CCUS—is vital to keeping temperatures below 2 degrees and at least cost. For example, the Intergovernmental Panel on Climate Change, the IPCC, estimates that, globally, it could be almost 140% more expensive to meet the target of 2 degrees without CCUS; that equates to an additional $12 trillion. That is why this Government are committed to progressing CCUS, which has the potential to support meeting our 2050 climate reduction target and forms an important part of our industrial strategy, supporting the transition to a low-carbon economy.
A functional regime for the storage of carbon dioxide is essential for enabling the deployment of CCUS across the UK. In 2009, the EU introduced the CCS directive, which established a legal framework for the environmentally safe geological storage of carbon dioxide. It covers all carbon dioxide storage in geological formations in the EU for the entire lifetime of the storage sites. The UK implemented these requirements through the Energy Act 2008 and subsequent regulations. This SI ensures that the UK’s regulatory regime for the geological storage of carbon dioxide will continue to function in an environmentally safe way when we leave the EU.
The purpose of this instrument is threefold. First, it corrects references to the UK as a member state and removes obligations to consult with the EU Commission during the licensing and permit process. This will ensure that the UK continues to be able to issue licences and permits to future CCUS projects, and that licences already issued remain fully functional.
Secondly, it will give a new power allowing the Secretary of State to update technical requirements relating to storage site characterisation and monitoring in the light of technical or scientific progress. This is an equivalent to that held by the EU Commission under the CCS directive. I stress that this power can be used only to reflect technical and scientific progress and for no other purposes. It has similar safeguards to the current EU Commission power, ensuring that its use cannot adversely affect the standard of monitoring or level of safety of the carbon dioxide storage sites. Thirdly, this instrument will ensure that there continues to be robust monitoring and safety standards for carbon dioxide stores consistent with the current legislation.
To varying degrees, these amendments make provision in respect of devolved matters, for which we have sought and received formal consent from Scotland, Wales and Northern Ireland. In developing this instrument, we also consulted the Oil and Gas Authority as the licensing and permitting body.
These amendments will not have any adverse impacts or place any additional burdens on CCUS projects, including, for example, the Acorn project in north-east Scotland, which was recently awarded a carbon dioxide storage licence by the OGA. The effect of all these changes will be to ensure that the UK continues to have an effective, robust and safe regulatory regime for storing carbon dioxide, a vital component of supporting the progress of CCUS in the UK.
To conclude, the Government are committed to supporting the development of CCUS. To meet this commitment, it is imperative that we ensure we have a fully functioning regime for the safe and permanent storage of carbon dioxide in the UK. The amendments proposed by this statutory instrument do just that. They are an appropriate use of the powers of the withdrawal Act and form an important component in fulfilling our commitment to ensuring that the UK has the option to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently. I commend the draft regulations to the Committee. I beg to move.
My Lords, when I read this, particularly the Explanatory Memorandum, I started to feel it was an exercise in irony. Despite all the urgency of the potential Brexit, here we have a situation where it will probably be necessary to pass this legislation by 29 March 2029, given the current government decarbonisation strategy.
In 2017, as the Minister will probably remember, the Public Accounts Committee in the other place pointed out that the Government had wasted some £168 million on CCS projects—including £100 million on the one cancelled by George Osborne in the 2015 Budget—with no progress whatever.
Having said that, I agree with Claire Perry, the Minister responsible for the clean growth strategy. In the CCUS Cost Challenge Taskforce report, she said that,
“we want to have the option to deploy CCUS at scale during the 2030s”—
as long as the pricing is right.
The Minister mentioned the Acorn project. I agree that there may be some necessity to do this, but it reflects the rather tragic trajectory of government action. The fact that this core part of the clean growth strategy will not be implemented until the 2030s is most unfortunate.
The clean growth strategy called for a new CCS council—or CCUS as it is called nowadays. Has that been established and is it operating now?
As the Minister knows, I am interested in areas of international agreement, such as the Ospar Convention, which prevents the deposit of waste in marine areas of the north-east Atlantic. I seem to recall that the Government got an allowance through the Ospar Convention process for CCUS—it is seen as disposal of waste at sea, even though it is under the sea—potentially in the North Sea. The UK and the European Union are signatories of this. I am interested to understand whether the UK itself has enough permits under the convention, or a derogation in our own right to be able to continue this, rather than it being done in agreement with the European Union, with it as the signatory. Will we need any treaty revisions or further derogations from the Ospar Convention to move this forward once we are out of the European Union?
In a way, I am glad that BEIS has given this some priority—perhaps it is a sign of movement at last. I look forward to seeing those future plans for CCUS. We do of course have Drax, but I do not think it requires any geological resolution of storage, which this SI is all about.
I am grateful to my noble friend for moving this statutory instrument. I have just one question. He said that there has been consultation with only the Oil and Gas Authority, which presumably is the regulator in this instance. Page 5 of the Explanatory Memorandum says that it will apply to,
“activities that are undertaken by small businesses”.
Was a conscious decision taken not to consult widely with the industry, and, if so, what was the reason for that? Obviously the regulator will have a view, but those who work in the industry might have an alternative view.
My Lords, I am standing in for my noble friend Lord Grantchester, who cannot be with us this afternoon. This is another of the no-deal Brexit SIs, which would be completely unnecessary if the Government were to do the right thing: agree with Labour and others and rule out the possibility of a no-deal Brexit. If the Government were to do that, this House and the other place could spend more time dealing with far more important and relevant issues, and save the Civil Service, the ministerial Opposition and industry time and money—a simple solution.
This SI has already been through the other place, where it was passed in 10 or 11 minutes, so we are giving it a little more scrutiny in this House than in the other place. I note Dr Whitehead’s comments and those made by the noble Lord, Lord Teverson. On carbon capture itself, Dr Whitehead’s said that,
“it would be rather nice if we had some carbon capture and storage to put into those regulations”.—[Official Report, Commons, 28/1/19; col. 5.]
I have a couple of questions to add to the others asked by noble Lords. As the noble Baroness, Lady McIntosh, said, the Explanatory Memorandum details that BEIS engaged with the Oil and Gas Authority and the devolved Administrations. Could the Minister enlighten us as to the response from the authority and the Administrations?
The Government have stated that no specific monitoring arrangements are needed for this. Can the Minister detail whether the Government envisage any situation where the instrument will need to be looked at again? On the Minister’s second point, on changes to technical or scientific specifications, will there be any parliamentary scrutiny or oversight, or do those changes sit in the hands of the department and the Minister?
My Lords, I am again grateful to all noble Lords for their contributions. On the last point made by the noble Lord, Lord McNicol, I am not aware that there will be any further parliamentary oversight of this order once it has gone through. Of course, as I said in my opening remarks, we are clear that this deals with a no-deal situation, but it might possibly also be necessary in the event of a deal. We have to see what the deal is, and then see what precisely is needed. The important thing at this stage is to provide a degree of certainty to the industry to make sure that it knows what is happening; that is true of a large number of the regulations coming before us.
The noble Lord, Lord Teverson, seems to think that the Government’s action was not sufficiently vigorous, that we have not done enough over the years and that nothing will happen until 2030—that we could leave this order until 2029. I suspect that neither I nor the noble Lord will be here by that stage—the noble Lord, Lord McNicol, looks so young that I am sure he will still be here debating orders of this sort, which he will greatly enjoy. The important thing, as I said in response to the noble Lord, Lord McNicol, is to get certainty.
I believe that we have been ambitious. My right honourable friends Claire Perry and the Secretary of State are ambitious, and, moving wider than CCUS, we have acted well on all other matters relating to renewables. As I said in a recent debate, this applies both to the coalition Government, and therefore to the Lib Dems, and to the previous Labour Government, who passed the Energy Act with all-party support—all sides of the political spectrum have been acting well on this. We have an ambitious action plan designed to enable the first CCUS facility in the UK, with commissioning from the mid-2020s.
I also assure the noble Lord, Lord Teverson, that the CCUS Council has been established. It is co-chaired by James Smith; it held a meeting at the end of last year and will meet again in March. The noble Lord can be assured of action on that.
I can also offer assurance about consultation on the specific point raised by the noble Lord, Lord McNicol. As I said, both the OGA and the devolved Administrations were consulted; the latter, as is appropriate, gave their consent, and the OGA was also content.
My noble friend Lady McIntosh was concerned about consultation. She will not be surprised that we rather expect questions on consultation on all of these regulations, because that seems to be what has been happening. We have not formally consulted, as noble Lords will be aware, on this particular statutory instrument, as the impact on businesses and government will be minimal. This is because the changes are technical and enable the regulatory regime to continue functioning largely as it does now. We did not think it was necessary to consult formally on this, but, as I said, we consulted those particular bodies and published a technical notice in October setting out the climate change requirements in a no-deal scenario.
The noble Lord, Lord Teverson, also asked about the Ospar Convention. I apologise to him because I am unsighted on that matter, but I will write to him. With that, I commend the regulations.
Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019
Considered in Grand Committee
While we believe, as we have said on many occasions, that a deal with the EU is in our mutual interest, it would be irresponsible at this stage not to make appropriate plans for a no deal situation. This draft instrument ensures that in such a scenario our ecodesign and energy labelling legislation will continue to function effectively. It provides business and the public with the certainty they need.
Before I talk specifically about this instrument, it may be helpful if I speak briefly about the current EU framework for ecodesign and energy labelling. In recent years, the EU has introduced a suite of product-specific regulations through the ecodesign directive and the energy labelling regulations framework. The EU ecodesign regulations are about minimising the costs and environmental impact of products used in both homes and businesses by setting minimum performance requirements. Energy labelling regulations are about empowering consumers to make informed purchasing decisions through energy labels.
Both ecodesign and energy labelling regulations agreed to date will save household consumers around £100 on their annual energy bills in 2020, and, just as importantly, lead to greenhouse gas emissions savings of 8 million tonnes of CO2 in 2020. As well as bolstering our commitment to reduce carbon emissions, the policy also serves a purpose for industry. Setting minimum performance requirements can help to drive innovation and increase the competitiveness of businesses, in line with our industrial strategy.
This brings me on to the instrument being debated today. Using the power in the withdrawal Act, this instrument amends EU retained law to ensure that the ecodesign and energy labelling regime remains operable in the event of a no-deal outcome.
I will turn now to the amendments. The instrument replaces references to the “Union market” with the “UK market”, so that ecodesign and labelling requirements continue to apply to the UK market after exit. This amendment is essential so as to prevent less efficient and more polluting products being placed on the UK market. It also gives the Secretary of State the power, currently held by the Commission, to lay ecodesign and energy labelling product-specific regulations. As set out in the Clean Growth Strategy, this power will be exercised to,
“keep step with equivalent standards wherever possible and appropriate, or even exceed them where it is in the UK’s interest to do so”.
The instrument removes the requirement for suppliers placing products on the UK market to enter product information into the EU product database, a new EU online portal, live since January, where market surveillance authorities—the Office for Product Safety and Standards for the UK—can view information uploaded by suppliers. Instead, the market surveillance authority will be able to request technical product information, as it does now, directly from suppliers.
The next three amendments relate to changes the Government are making to the trading of goods subject to EU-wide product-specific rules. They are not specific to this instrument. One of these changes pertains to the conformity assessment of goods to ensure they meet relevant requirements. After exit, products needing to be assessed by a third party in order to show compliance with UK legal requirements will be assessed by UK “approved bodies”. This replaces the pre-exit requirement to use an EU “notified body”. To minimise disruption, however, businesses will for a time-limited period be able to continue using EU notified bodies when selling their goods to the UK after exit.
After exit, a new UK marking will need to be affixed to products for the UK market to indicate conformity with UK requirements. This will replace the CE marking which indicates conformity with EU requirements. To ensure continuity, most manufacturers will still be able to use the CE marking for the UK market. This is intended to be for a time-limited period.
The last of these changes relates to testing standards used for the verification of compliance of products with legal requirements. The current list of EU “harmonised standards” will be carried across but renamed for the UK as “designated standards”.
Finally, this instrument makes minor changes to ensure market surveillance can carry out its enforcement activities with regards to the labelling of household lamps and electric ovens. These are routine changes not related to exit.
In conclusion, these regulations are an appropriate and necessary use of the powers of the withdrawal Act and will maximise continuity in our ecodesign and energy labelling regulations as we leave the EU. I commend the regulations to the Committee and I beg to move.
My Lords, perhaps I will be more positive about these regulations and make the Minister feel better. I very much welcome the tone of the Explanatory Memorandum and its emphasis on the benefits of energy efficiency, which is clearly one of the least costly and most effective ways to reduce our carbon footprint. In fact, energy efficiency is one of the reasons why although energy prices have gone up, energy bills for households have gone down. This time, the irony is on not the Government but the broader British media because the famous Brussels-regulations-related vacuum cleaner efficiency scandal foisted on British citizens by the tabloids will remain. I welcome those product standards coming across.
My question are quite practical. I think that the Minister went through this, but who will police or register this matter and what will the additional cost of that be? Secondly, and perhaps more importantly, who will hold the register? Is the IT for that complete? How will what is on the European Union register get on to the UK register? That covers a series of intellectual property rights issues. We came across this with the REACH chemicals database: you cannot just copy this information across. How can we have a robust system that works in this regard? Without that, this scheme cannot work.
I understand the Minister’s point about continuing labels for a while but, more importantly, will it be legal to sell all the electric appliances covered by this SI in our home market from the point of our departure? I want to understand whether the preparation in those technical areas is right and things will work. Legislation is great but if it cannot work, even passing these regulations is not a lot of use.
My Lords, again, I am standing in for my noble friend Lord Grantchester so I apologise to my team in the Box if I do not get the language quite right. I spent time going through the regulations. The SI is quite a tome. I feel as if it covers more than just one issue and a number of SIs have been merged together.
I start with a point about no deal because large swathes of the SI cover that scenario. I know that it also covers what will be needed if there is a deal, but the parts of the SI covering a no-deal scenario would not be needed if the Government agreed with us and ruled out a no-deal Brexit. That would save so much effort, energy, time and money.
Looking at the specifics, like the noble Lord, Lord Teverson, I have a number of questions flowing from the draft SI. I want to work through those issues, some of which are technical and some of which are a bit wider than that.
The Secondary Legislation Scrutiny Committee declared the draft SI of interest to the House. I am sure that it will be scrutinised further after today. One of the big themes that came through—and one of my concerns—is about the powers that would be moved to the Secretary of State. There are a number of issues around that. The Minister said that these powers are about protecting and preserving the current standards, possibly increasing and building on them, but I do not see that in the language of the draft SI. Part of it says that the Secretary of State will,
“implement the strategy set out on page 44 of the Clean Growth Strategy which is to ‘keep step with equivalent standards [after exit]’”—
but then, “wherever possible and appropriate”. My reading of those words leads me to believe that the Secretary of State may not decide that keeping a level playing field or keeping the standards at a specific level is possible or appropriate, so those standards could dip. A bit of clarification from the Minister would be very helpful.
As has been touched on, the instrument also creates a stand-alone UK regime for third-party product verification, to be established in further detail in later SIs. Can the Minister assure us that these SIs will deal with that under the “made affirmative” procedure rather than the negative one? The text of the instrument is far longer than most, running to more than 80 pages; the five quite distinct schedules and areas contained in it could and should have been separated into separate SIs.
The Government have also chosen not to produce an impact assessment since, as they say, there will be “no imminent change”. Can the Minister clarify what this means? Are we talking about a week, a month or a year? As has been mentioned, there are financial, operational, organisational and oversight issues involved in setting up new bodies.
On page 7, paragraph (7) of proposed new Regulation 2A states:
“Where the Secretary of State removes the reference to a standard from publication, that standard is no longer a designated standard”.
Does this mean that the standard no longer exists in that area? If so, does that raise any implications or concerns?
The noble Lord, Lord Teverson, asked how other bodies would be constituted and what consideration was given to them. I look forward to the Minister’s response to that. On page 11, paragraph (4)(a) of proposed new Regulation 22 says that the Secretary of State must,
“consider the life cycle of the product and all its significant environmental aspects, including its energy efficiency, and the feasibility of their improvement”,
and paragraph (4)(f) says that they must,
“consult on the draft implementing measure”.
I seek clarification from the Minister on which bodies and organisations would be consulted on the draft measures. This would be helpful for the future.
More positively, on a matter of special interest to Parliament, we on this side agree that any changes in the legislation would have to come forward via the “made affirmative” procedure, rather than the negative one. I think an opportunity has been missed. The Government could have written into the legislation or the SI that there would be no diminution in or reduction of standards. It does not say anything about protecting and uplifting standards. It is great that this is coming back as an affirmative process, but the diminution of standards could have been ruled out. There are plenty of questions there.
I am very grateful to the noble Lord for ending on a positive note. I think I can say—I will write to him if I am wrong—that any further SIs will be affirmative. It is important to make a distinction between affirmative and negative orders. The noble Lord will know that, whenever legislation goes through, Governments of whatever political persuasion are often tempted to make some small concessions by offering to turn a negative order into an affirmative one. Oppositions often push for this, thinking that they have achieved some great victory. I have certainly done it in opposition. We then very often burden both Houses with some unnecessary affirmative orders. In the past, I can think of a large number of affirmative paralytic shellfish orders that kept littering the Order Paper. I cannot remember what they were about, but they would probably have been far better left as negative. I can see a Minister at some point making some generous gesture in the course of the Committee on a Bill to suit some Opposition of whatever colour. As far as I know, the orders will be affirmative. If, inappropriately, we try to make them negative, I am sure that the appropriate committees, chaired by the noble Lord, Lord Cunningham, and others, will correct us.
I briefly—but not completely—apologise for the size of the regulations. Rather rashly, I am tempted to say, “You ain’t seen nothing yet”. Speaking more honestly and frankly, very often, it makes life more convenient for the users if we put everything into one instrument. We get a better end product. The noble Lord is exactly correct in saying that this one is 81 pages long. There are a further few pages of the Explanatory Memorandum. To have to repeat this debate five times with five instruments—five into 80—might be a less satisfactory process. So I do not really apologise; I think this is the appropriate way of getting these things done.
I say the same to the noble Lord, Lord Teverson, who at least welcomed the tone of the Explanatory Memorandum. He told us just how much actions of this sort—even with rising electricity costs—could reduce one’s electricity bills.
I suggest another mechanism: to get one’s children out of the house, which happens when they get to a certain age. The noble Lord, Lord McNicol, shakes his head, but I think the noble Lord, Lord Teverson, knows exactly what I am talking about.
I was not thinking of those who had reached the maturity of 40; I was thinking of the somewhat younger ones who, despite their extraordinarily green credentials, take a slightly less purist approach to turning off lights and other procedure.
I shall deal quickly with some of the questions. On the impact assessment, I assure the noble Lord, Lord McNicol, that the instrument’s impact was assessed at below the annual cost of £5 million, which was why a full impact assessment was not required, but a de minimis impact analysis was undertaken to reach this conclusion and, in doing so, the department followed the guidance, so we are happy about that.
On consultation, I assure both noble Lords that we worked very closely with the industry and other organisations, meeting them and keeping them up-to-date via email. Last summer, officials met all the appropriate trade bodies to consult them. Views were sought on the proposal to keep the design of the energy label, remove obligations in relation to the EU product database and retain the legislative functions carried out by the Commission for the Secretary of State. In the main, as far as I know, the trade bodies supported all those proposals and stressed the importance of not imposing new costs on businesses and the UK being able to legislate after exit.
I shall deal with some of the more detailed points. The noble Lord, Lord Teverson, asked about the policing of this. Ecodesign enforcement and control activities are carried out by the Office for Product Safety and Standards. Energy labelling enforcement and control activities are carried out by that office and local authorities’ trading standards departments in Great Britain and by the Department for the Economy in Northern Ireland. The regulations will not result in any change in that policy.
The noble Lord also asked who holds the products register and whether there is one for the UK. There is no UK database, but there is an EU-wide database, which went live on 1 January this year. There have been delays on the public section of that database, but it remains broadly on track and, after exit, we will review whether to introduce a UK database. Again, I can give the assurance that we will consult on that. He also asked whether all appliances under the SI will be covered from the point of exit, and I can assure him that the changes come into force from exit day and there will be no gaps.
The noble Lord, Lord McNicol, was concerned that there could be a reduction in standards, but I can assure him that we continue to support all these policy measures, which cut energy bills and increase energy security. As stated in the Clean Growth Strategy, we will keep step with equivalent standards, but intend to go further where, as I think I said in my opening remarks, we believe that is in the interests of the UK.
I have dealt with the noble Lord’s concerns about consultation, but I just correct myself on the affirmative nature of SIs. Only the SIs that are not identical to EU standards will be affirmative. If they are not identical to EU standards, they will be negative. I think I have it the right way round.
It is the other way around, but the noble Lord has understood me anyway. He also wanted clarification on “designated standards” in the Explanatory Memorandum. The instrument renames the EU’s harmonised standards—the testing standards that can be used for the verification of products’ compliance with EU requirements—as “designated standards”. Designated standards will give rise to a presumption of conformity with UK legal requirements in the same way that the EU’s harmonised standards do in relation to EU requirements. To ensure continuity and not drive up testing costs, the testing standards in the UK and the EU will remain the same. That is what the UK industry wants. The reference to designated standards will again be published on GOV.UK. I believe that deals with the points that have been raised.
Kimberley Process Certification Scheme (Amendment) (EU Exit) Regulations 2019
Considered in Grand Committee
My note here starts with: “My Lords”. I am also addressing the public, but I am glad that the Deputy Chairman of Committees is also present, so the term applies most appropriately.
During the 1990s, the trade in conflict diamonds was a significant cause of instability, particularly in Africa. The Kimberley Process Certification Scheme is an important tool for reducing conflict, in Africa and elsewhere. Great strides have been made since its inception in 2002, and today more than 99% of the global supply chain of rough diamonds is certified as conflict-free.
From the beginning of the Kimberley process, the United Kingdom has been represented by the European Union. Together with our European partners and other participants, the UK has been active in our support of the Kimberley process and its principles: to increase transparency, to ensure trade is limited to Kimberley process participants, and, importantly, to apply effective controls.
The Kimberley process is not a treaty and has no basis in international law. Instead, it is simply a grouping of interested states—the “participants”—that have decided to enact domestically a uniform process for verifying the trade in rough diamonds at their borders. They then made the political decision to permit the trade in rough diamonds only with similarly minded states to establish the Kimberley process. The legal effects of the Kimberley process come from domestic legislation, hence this legislation is essential if we are to continue to participate in the process after we leave the European Union—as we intend to do.
As noble Lords will be aware, until 29 March 2019, the UK remains a full EU member state, subject to all the rights and obligations of membership. Those include trade arrangements that fall within the EU’s common commercial policy, including the Kimberley process. Under the terms of the withdrawal agreement, we have agreed with the EU that it will notify international partners that the UK is to be treated as a member state during the implementation period. This would mean that the UK would continue to participate, represented by the EU, and the UK trade in Kimberley process-compliant rough diamonds would continue. In the event that we are unable to enter into an implementation period, our participation through the EU would end and UK trade would be frozen until our application for participation was approved by other participants in the Kimberley process.
In either case, the legislation would ensure that we continue to comply with the requirements of the Kimberley process. It would secure our borders, prevent any non-compliant rough diamonds from entering the UK supply chain and send a strong message to would-be smugglers that the United Kingdom is not a recipient of conflict diamonds. It would also reassure the Kimberley process body of the UK’s commitment to the scheme, ahead of our application for independent participation. The instrument does not undermine the wider EU withdrawal negotiations, nor does it assume no deal. Instead it lays the groundwork for our future relationship with, and independent participation in, the Kimberley process. Essentially, it enables business as usual.
This matters because maintaining our relationship with the Kimberley process is an intrinsic element of our international commitments to conflict prevention. It is also pivotal in how we support UK business to operate responsibly in post-conflict and other difficult environments. The Kimberley process is not perfect, but as an independent participant, the UK will maintain our commitment to the ongoing reform process and continue to be an active and collaborative partner.
Some noble Lords have noted that a significant portion of UK trade in rough diamonds could fall away once we have left the EU. The reality is that, given the structure of the UK rough diamond market, trade statistics can be misleading. UK exports in rough diamonds outside the EU were valued at £67 million in 2017. We expect this to continue at around this level once we have left the EU.
The Government Diamond Office implements the Kimberley process in the UK, and is working closely with Border Force to ensure we meet the minimum standards set by the process. We are a well-respected participant in the Kimberley process as an EU member state and can expect to remain so as an independent participant. We have already informed the EU of our intention to initiate our application. Demonstrating that we have appropriate legislation in place is a fundamental part of that application process. That is the purpose of this instrument. Once passed, it will apply even if we are not a participant immediately at the point that the UK leaves the European Union, or after any implementation period.
Last week, this instrument was considered and approved by the other place—introduced by my right honourable friend the Minister of State for Europe and the Americas, Sir Alan Duncan—and has been approved. I welcome this opportunity to hear the views of the noble Lord on this draft order. I beg to move.
I reassure the Minister that I also welcome the opportunity to give him my views, once again—we have the opportunity at frequent intervals. I will say, right from the outset, that of course we support wholeheartedly the principles of the Kimberley process. It is not perfect and can certainly be improved on regarding impact, but it has certainly had a substantial impact in diminishing that awful, illicit trade in war diamonds. It is extremely welcome that we will continue to apply the principles after Brexit, and certainly ensure there are no gaps that could potentially be exploited.
One area of criticism is the fact that, as an exit SI, it is caught up in this overwhelming number that are coming forward, and whether there has been sufficient time for proper scrutiny. Irrespective of that—I have called this an “SI stampede”—whatever we have, the Explanatory Memorandum sets out, as the Minister has said, the reasons for this. It is an unusual SI in terms of an exit SI, because it is required in its provisions whether there is a deal or no deal. It is just that, if there were a deal within the transitional period, we would be able to ensure that our transition from EU involvement to being an independent participant goes smoothly.
There is a slight difference between a deal or no-deal situation. As the Minister said, 82 countries are members, and Sir Alan Duncan said in the other place that he was confident our existing participant status would be embraced by the 81 as we reapply on a slightly different basis. But doing so within the terms of an agreement to leave the EU is different from coming out at the end of March. We are faced with possible consequences, and it is those consequences that I will address.
As the Minister said, in the event that we are unable to enter an implementation period, our participation through the EU would end and UK trade would be frozen until our application for participation was approved by the other participants in the Kimberley process. In either case, as he says, this draft legislation will ensure that we continue to comply with the requirements of the process. It will secure our borders, prevent any non-compliant rough diamonds entering the UK supply chain, et cetera.
What assessment have the Government made of the impact such a break in our coverage of the process would have on our conflict prevention objectives and obligations? We have been a prime mover of this, so would there be any sort of impact? While we are saying we are going to ensure we remain compliant even outside the process, I want a better understanding of what assessment has been made if we are outside it.
Sir Alan Duncan said that the cost would be the same as now. Likewise, the impact is unchanged, hence the absence of a need for an impact assessment. Paragraph 13 of the Secondary Legislation Scrutiny Committee’s report quotes the Explanatory Memorandum on why there would be no significant impact on business—because it broadly replicates what we have now, and will apply in a no-deal situation. But the committee—I want to ask the Minister about this—found the Explanatory Memorandum,
“deficient for not articulating more clearly the potential financial and commercial consequences for the trade if endorsement of the UK’s application to the Scheme is delayed”,
coming back to this point that inevitably, if we fall out of EU at the end of March, there will be a period when we are not covered. What does that actually mean?
Is the Minister able to say categorically that a no-deal scenario, where for a period we may be outside the scheme, would not involve any additional cost to the UK diamond trade? Sir Alan Duncan responded to Bob Stewart in the other place on the fact that this is about rough diamonds, not the sort of imports and exports that Hatton Garden would have. He said that this SI,
“is about a particular category of diamond. The draft regulations mean that if we were a participant, anything legal in the Kimberley process would include us in that process; if we do not pass them today, it would not”.—[Official Report, Commons, Seventh Delegated Legislation Committee, 5/2/19; col. 8.]
I understand that this is a case for making this SI. I do not have any objection, but I want to be absolutely clear that, in this no-deal scenario, the Government are completely satisfied that there will be no financial impact, particularly on small businesses. Has there been any consultation with the trade on this specific point?
With these few remarks, I will leave it for the Minister to respond.
My Lords, I am truly grateful for the noble Lord’s participation, without which we might not be having this SI debate. I thank and pay tribute to the noble Lord. It is often said that you call your friends “diamonds”. We may call each other “noble Lord” and not “noble friend”, but I am grateful that I have a diamond of an opposition shadow Minister to deal with—often in a spirit of harmony. On the odd occasion we challenge each other, it is reflective of our mutual respect. I am grateful to the noble Lord for his contributions this afternoon.
As I outlined in my opening remarks, this instrument is crucial to the UK’s participation in the Kimberley process. This point was acknowledged by the noble Lord, and I thank him for his support in this regard. In turn, he raised the important issue of conflict-prevention objectives and obligations. As we have both acknowledged, the convention is not perfect, but this instrument seeks to ensure the continuity of the UK’s participation in a process that has seen results, especially when you see the commitment of the countries now participating in this process. It is right that countries come together to ensure that we protect this important sector and industry and send a clear message to those seeking to exploit the trade in rough diamonds. It is also important to note that this instrument maintains the status quo of the UK’s participation in the scheme.
The instrument is fully consistent with the Prime Minister’s commitment to be a supportive member of the European Union—both as we negotiate our departure and once we have left. It ensures the UK’s continuous compliance with the scheme.
I will pick up on a few of the noble Lord’s specific questions. He talked first about what would happen if the UK were not able to participate in the Kimberley process in the case of a no-deal exit from the European Union. This would of course affect the integrity of the process which we helped to establish. Without this legislation before the Committee, the UK would not have the power to seize illegal rough diamonds and would be perceived as a weak link in the process. Irrespective of how we leave the EU, this SI will ensure the UK’s adherence to the principles of the Kimberley process. It will demonstrate the UK’s continued commitment in this respect.
The noble Lord then built on the issue of conflict prevention. The fact that we are committed to participating, irrespective of the nature of our departure from the EU, underlines the importance of having this SI in place for both scenarios. Across the House, we are focused on the importance of ensuring that we prevent conflict—as I know the noble Lord is.
The noble Lord also asked about the costs associated.
Before the Minister leaves the point about maintaining our objectives and policy, I have a question. As it sort of states in the memorandum of agreement, I accept that, irrespective of whether we are able to participate as a member of the convention, we will continue to apply its conditions. That is how I read the statement. However, even if we continue to apply it, will our not being—potentially for a period—a participating member of the convention allow any gaps in our ability to ensure a continuation of this?
In passing this SI, we are committed to ensuring that in any kind of gap that would occur—irrespective of whether we are formally part of the Kimberley process or not—our own industry, sector and standing as a country would be protected. In addition, more importantly, as I said, we would be committed to prevent anyone using the exit from the European Union, if it is on the basis of a no deal, to exploit any such gaps. I hear what the noble Lord said. The way this SI is drafted is to ensure that we are ready and will apply those same rules, irrespective.
The noble Lord raises the specific issue—it is a valid one—that if we were not to be part of the Kimberley process if there is no deal and there is a delay in gaining our independent participation by a given date, that would result in issues around trade. That would have an impact and I do not shy away from that fact. However, it is our hope and—it was coincidental that we informed the EU of our application to join as an independent member, not just as a member of the EU, because the EU was actually the chair of the Kimberley process at that time—we have certainly not perceived any reason why we would not be able to join as an independent member.
Turning to trade and the costs, the noble Lord asked for a categoric assurance that there would be no impact. That kind of categoric assurance cannot be given. What we do have is the fact that the UK rough diamond trade currently comprises around 15 regular traders, with a few additional ad hoc traders. De Beers also imports rough diamonds for research and development and exhibition purposes. While I cannot give a categoric assurance, I assure the noble Lord that we have been in contact with traders who are making appropriate contingency plans, and we will be looking to support the industry in this respect. I assure the noble Lord that we understand that companies involved in this process will be taking appropriate contingency measures.
I appreciate that the noble Lord draws attention to the cost to the industry, and as best as possible we have certainly looked at it. We believe this will be limited. The statutory instrument itself is reflective of our intention to stay and be committed to the process. In passing this instrument today, we will ensure that and give an important signal not just to our EU partners but importantly to all members of the Kimberley process. I hope I have addressed the noble Lord’s questions quite directly.
Committee adjourned at 5.48 pm.