My Lords, the regulations were laid before the House on 14 September 2020. Our negotiations with the EU continue. As previously set out, we want a relationship with the EU based on friendly co-operation between sovereign equals and centred on a trading relationship based on free trade. These draft regulations form part of the important and necessary work being done to update our legislative framework in readiness for the end of the transition period. This will ensure that retained EU legislation continues to work effectively here in the UK.
The primary purpose of this statutory instrument is to update the 2019 EU exit regulations on consumer protection enforcement given changes in EU and domestic law since those regulations were considered and approved by this House on 15 January 2019. This SI does not alter the approach of the 2019 exit regulations; it merely enables them to work given those changes.
The 2019 exit regulations dealt with the collective redress regime for consumer protection laws. This regime applies where the infringement of certain consumer protection laws causes harm to the collective interests of consumers. It deals with systemic infringements of consumer law rather than any individual disputes.
The EU’s Consumer Protection Cooperation Regulation, known as the CPC Regulation, provides for reciprocal arrangements between enforcement bodies in member states, such as the UK’s CMA. It allows them to investigate and, if requested by an enforcer in another member state, to take action to end cross-border infringements of EU consumer law which harm the collective interests of consumers.
In the UK, the Enterprise Act 2002 allows enforcers to seek court orders to ensure the cessation of and, where appropriate, redress for infringements causing collective harm. The 2019 exit regulations revoke the CPC Regulation, which will not apply to the UK once the UK is no longer bound by EU law. The revocation is also necessary to prevent UK enforcers being obliged to assist their EU counterparts while, of course, EU enforcers are not under the same obligation. The 2019 exit regulations also amend the 2002 Act to allow the domestic collective redress regime to function effectively once EU law no longer applies in the UK. Those regulations replace the concept of a Community infringement—the breach of consumer protection laws in the EEA—with a Schedule 13 infringement for breaches of UK consumer protection laws.
Since the 2019 exit regulations were made, a new EU CPC Regulation, the 2017 CPC Regulation, has come into force. This statutory instrument updates the 2019 exit regulations so that they revoke this new CPC Regulation. This new exit regulation ensures that the UK collective redress regime will continue to apply to those retained EU-derived consumer protection laws to which the 2017 CPC Regulation has been extended.
This statutory instrument also ensures that the 2019 exit regulations amend the new material added to the 2002 Act by the CPC implementation regulations. That new material includes express online interface powers under which the Competition and Markets Authority can seek court orders requiring the removal
of online content from, or restriction of access to, websites. This statutory instrument will ensure that the 2019 exit regulations amend that Act as it stands now, and the improvements made to that Act are therefore retained. None of these changes alters the approach of the 2019 exit regulations.
This SI also makes a number of other changes to EU exit regulations relating to consumer protection. First, it makes a small number of changes to two previous UK-wide exit regulations that amend legislation relating to crystal glass, footwear and textiles. These are specified in the Northern Ireland protocol. These changes ensure that those regulations do not impact on the operation of the Northern Ireland protocol.
Secondly, this SI makes technical changes to replace references to “exit day” with “IP completion day”, which will now be 31 December 2020, and is necessary in the context of the transitional provisions of those exit regulations.
Finally, this statutory instrument makes some minor amendments to clarify drafting in the Enterprise Act 2002. This is in response to the 14th report for this Session by the Joint Committee on Statutory Instruments in relation to this year’s regulations implementing the new CPC Regulation.
My departmental officials have undertaken the appropriate assessment of the impacts of this instrument on businesses and relevant bodies. This showed there is likely to be a negligible impact on business. These amendments do not bring about a wider policy change or impose any new liabilities or obligations on any relevant business, organisations or persons.
Although consumer protection is devolved in Northern Ireland, following consultation, the Department for the Economy, Northern Ireland, has agreed for the SI to include Northern Ireland provisions which relate to areas that are devolved to Northern Ireland. Consumer protection is reserved for Scotland and Wales, although officials in both the Scottish and Welsh Governments have also been advised of these regulations and they have raised no objection.
This instrument is a sensible and necessary use of the powers of the withdrawal Act which will ensure that the law in this area continues to function effectively after the end of the transition period. I therefore commend the regulations to the Committee.
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