My Lords, in the light of that, I should like to speak to my amendment and to the contributions made so far. It is some time since I have found myself on the Front Bench, so I had better observe the niceties.
First, I thank the Minister for spelling out these complex regulations. No one denies the need, post Brexit, for robust regulation in this field. However, I contend that the way in which the Government are going about it is causing excessive bureaucracy and cost. The Minister rightly referred to the work that his department has done in talking to the industry, and the industry appreciates that, but he must be aware that there are still grave concerns among large sectors of the industry and firms, as well as downstream firms, about the situation post Brexit. I thank his department for all that work and I thank him for producing the latest UK REACH guidance yesterday, bringing together previous technical notes and updating them, but it is a little late given that these regulations were laid when we thought that by Friday we might be out of the EU.
I also thank the noble Lord, Lord Fox, for his amendment. I agreed with pretty much every word he said and I will try not to repeat his points—at least not at great length—but I disagree with the purport of his amendment. The regrettable fact is that we are in an unenviable position here. These regulations could have come into effect on Friday and might still come into effect in two and a half weeks’ time. As is the case with so many of the no-deal contingency regulations that we have been through, whatever we might think and whatever the ideal outcome might have been, industry, consumers and the workforce need some degree of certainty about what happens on Brexit day and the day after. If we do not have these regulations, as is the intention of the amendment of the noble Lord, Lord Fox, we will be in a legal vacuum. Given the complexity of this area, the potential danger and the hazardous nature of many of the chemicals covered by the regulations, as well as the legal and insurance situations, I suspect that a lot of trade will grind to a halt. That would be very dangerous for the environment and very expensive to the sector.
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The Government should have taken a different approach to this, the central reason being that they should have sought in all post-Brexit circumstances to remain within the purview of the European Chemicals Agency. Some of us with long memories may recall that, during the rather lengthy passage of the withdrawal Bill, I became quite obsessive about the issue of EU agencies. I tried on several occasions to get Ministers to say what the future arrangements would be with those agencies post Brexit.
At one point in the protracted negotiations—during the Mansion House speech—I was greatly heartened when Theresa May said clearly that there were at least three agencies with which she felt we would need to maintain a relationship in all circumstances: aviation, medicines and chemicals. Continued participation in ECHA was the preferred solution of virtually the whole industry and the vast majority of the environmental groups that commented. I thought the PM understood this, and that we would therefore move to a situation in which we somehow maintain our relationship with ECHA, albeit on a temporarily or provisionally. But these regulations go down a different route: they go for replication and duplication here in the UK of what ECHA has done in this area, and REACH is the biggest single process that ECHA oversees.
There are circumstances in which the EU side has made the situation worse. In the event of a deal and our moving to a transition period, the EU has said we would no longer participate in these agencies albeit that the ECHA board includes as observers the representatives of the EEA EFTA countries, Norway, Iceland and Liechtenstein. A similar arrangement ought to have been available to us.
On other agencies mentioned in the Mansion House speech—for example, those relating to aviation, with which I am familiar from my Select Committee work looking at aviation changes and regulations and as vice-president of BALPA, an interest I must declare—the EU has proposed, and the UK has reciprocated, that for the first 12 months airlines will continue, with one or two exceptions, more or less flying their current routes. That gives leeway, even in a no-deal situation. But here we are immediately constructing a whole new edifice of UK duplication and replication of the ECHA situation.
The noble Lord, Lord Fox, has spelled out just what this means in many circumstances. There are a number of different situations; for example, those that already have ECHA authorisations and access to the UK market, to which the Minister is providing the opportunity for grandfathering rights. The difficulty is that access to the intellectual property, which has been lodged with ECHA to get those registrations, authorisations and restrictions, is not necessarily available either to UK operators or to people importing to the UK. That was not immediately obvious to the department, but it became clear that it would be extremely complex.
As the noble Lord, Lord Fox, says, some of these tests and intellectual property issues rest with consortia and companies, including some not in the UK or even in the EU but which have indirect ECHA registration. Acquiring all that information to register in a duplicate UK situation is both expensive and legally quite difficult.
Other groups are also affected. UK companies with a REACH organisation that wish to continue to export to the EU while also operating in the UK will themselves have to duplicate their REACH authorisations in the UK. New products and products in the pipeline, if destined to be used in both markets, will have to register in two places in the future as new chemicals, combinations and formulations come into play.
That is just the chemicals industry itself, in its broadest sense. The importer and user sectors, which range from aerospace, motor manufacturing and
agriculture to sectors that, by and large, are made up of SMEs, such as furniture, clothing, printing and toys, have never had to do this, but will have to assure themselves that the products they are using, which could be as simple as paint, have at some point received a UK—and, if they export, an EU—authorisation. As I understand it, the department is now aware that one-quarter of REACH registrations cannot provide the data immediately as the ownership lies with a lot of other companies and consortia. That means that the granting of grandfather rights, while it sounds very cosy, will not operate at 100% even over the two-year period that they have been given for providing the full documentation.
I understand the road that the Government have gone down, but there was a much simpler way to try to maintain some engagement with ECHA. These regulations have had quite a bumpy ride: they went through a number of iterations by the department before they were produced and have had a rough ride with the House of Commons Environmental Audit Committee, our own Secondary Legislation Scrutiny Committee and, above all, the EU Select Committee, for which the noble Lord, Lord Teverson, who chaired the inquiry, is about to speak. I will leave his points until he does so.
On the possible duplication of animal testing, I understand the Minister’s reassurance but this could also fall foul of the complication of what the authorisation within ECHA has provided. For many substances there has been animal testing to get a REACH authorisation, and that may not be available directly to people who are going to try to produce a parallel authorisation in the UK. The history of all this is that it has been largely due to British influence that Europe has minimised animal testing and made it more humane. It would be an irony if some degree of duplication followed from the British decision to leave Europe and we had to repeat its work because we could not get hold of the information or were developing new products.
The other dimension that I will mention is the whole question of the resources and structure of the HSE. For a year I was the Minister for the HSE and I have a very high regard for it. I reflect that there have been large cuts to the HSE’s resources, manpower and scientific expertise over recent years, which it would have to build up again in this area. It is important to understand that the resources that need to be available to the HSE for it to genuinely parallel what ECHA has done are significantly greater than the Government have so far indicated. It is not entirely clear, given that it will obviously not have all the expertise in-house, quite how it will construct parallels to the committees and advice that ECHA has had over the years. Indeed, Mary Creagh, chair of the Environmental Audit Committee in the other place, said that there is no provision for committees of experts or other committees to help the HSE to form its opinion. How are we to ensure that the HSE has available capable systems of scientific advice, which it would have to build up from scratch?
This is a question of resources, access to scientific information and priorities. In effect, when we delete “EU” and substitute “UK”, the HSE will take on the
role of the Commission in this regard, yet it will be a relatively new part of the HSE’s responsibilities, even when it is acting in concert with the Environment Agency and the devolved environment agencies. There is a really serious issue for the industry and it has been drawn to our attention by a wide range of environmental bodies, including the Royal Society of Chemistry and Greener UK.
I understand the position that the Government have got themselves into but there is an alternative way. Even at this stage, the Government should consider whether to adopt that other way and negotiate continuing involvement in the ECHA.
My amendment regrets this duplication and requires the Government to make sure they do what they have said they will do in other contingencies and make participation in the ECHA a negotiating goal. That goal should be there for a no-deal situation, as well as any other situation. We are going down the wrong road by spending money, resources and time on seeking to establish a completely replicate system in the UK.