My Lords, it is a pleasure to follow the noble Lord, Lord Kirkhope. Tempted as I am to follow his lead and comment on some of the other amendments in this group—other than the ones I put my name to, that is—I shall resist that temptation. My intention is to speak to Amendment 17 only and, even then, in a restricted way.
Before I do so, I join others in congratulating the noble Lord, Lord Sharpe, on his new appointment. He and I have debated consistently and for a period a number of issues; I will miss those opportunities because it is unlikely that I will be back in this space, in policy terms, in future.
I do not intend to rehearse in any detail the arguments that have already been made. I just want to emphasise why this amendment is squarely consonant with the aims of this Bill and will increase our agility in providing British businesses with a greater degree of certainty. As my noble friend the Minister outlined at Second Reading, the Bill aims to underpin the UK’s position at the forefront of international trade and enable the recognition of EU product requirements where it is in the UK’s interests to do so. It is precisely in that spirit that I added my name to Amendment 17; in the short time I will detain the Committee for, I shall attempt to explain why I believe that this provision will smooth our path to accomplishing these goals. Perhaps most importantly, the Bill in general—and Amendment 17 in particular—aims to move beyond the wrangling consequent upon Brexit and to provide our businesses and industrial sector with the certainty they need and crave.
I have had occasion in other contexts to make the case that regulatory certainty does not diminish our economic strength but is a prerequisite for those businesses on which our economic strength depends. The certainty that Amendment 17 would provide will not inhibit economic animal spirits but will allow businesses to plan and co-ordinate their commercial activity with the same confidence that their competitors in the EU and elsewhere currently enjoy. It is for that reason that the 50,000 businesses represented by the British Chambers of Commerce, and those businesses belonging to the Engineering and Machinery Alliance, support the policy of dynamic alignment, which would be instituted by the adoption of this amendment. We have tried the inverse of this approach and ought to have learned the lessons.
The brave new world of a UK-only system for the regulation of goods and products was widely disregarded by domestic businesses, who overwhelmingly chose to continue to conform with the CE mark because it allowed them access to an exponentially larger market. Indeed, the previous Government’s own regulatory impact assessment in this area showed that some overseas suppliers stated their intention to limit product supply to GB if CE was no longer recognised. Overall, the then Government’s best estimate was that around 18,500 UK manufacturers were involved in affected industries and that the average annual value of all manufactured goods imported into the UK subject to UKCA or CE requirements was £110 billion, with around half of these imports from the EU. In 2019, products that were subject to UK or CE requirements represented around a quarter of all UK-imported goods. As we have heard, the previous Government’s own impact assessments of duplicative conformity and labour time, to which the noble Lord, Lord Kirkwood, drew our attention, estimated total costs of up to £1.6 billion over the next decade. As your Lordships’ Committee is aware, in May 2024, after repeatedly extending the deadline to transition to the UKCA, the UK Government admitted defeat and indefinitely extended the recognition of CE goods in GB markets.
As I said at Second Reading, I have lost track of the number of Conservative Ministers I have seen in my 27 years in Parliament announcing their determination to kindle a bonfire of regulations, to take an axe to red tape, or some similarly strenuous deregulation measure. If that really is their desire, there are few things better calculated than this amendment to obviate the need for business to undertake rigorous conformity assessments and, consequently, smooth the path for frictionless trade. As such, this amendment preserves the intentions of the Bill to update our regulations according to a calculus of national self-interest, giving our businesses regulatory certainty while still allowing us to diverge from EU regulations when it is to our advantage.
At the risk of repeating an element of my remarks from Second Reading, we have seen a parallel scenario emerge in respect of our chemical regulations. The last Government decided to leave REACH, the EU’s body dictating the registration, evaluation, authorisation and restriction of chemicals regulations, to set up a parallel organisation. Since then, we have not adopted a single registered restriction on a harmful substance, compared with 10 new protections offered by EU regulation, including on harmful microplastics deliberately added to products. While REACH has regulated PFAS in the EU, not a single river or water body in England is in good chemical health. Since we left REACH, the EU has initiated 23 risk assessments related to harmful substances, while we have initiated just three. It may be that this is a function of a more vibrant, freebooting approach, or that we have superior data or a more effective methodology, but I fear it may just be that our duplicate body has simply proven less effective, which in turn imperils the safety of people in this country.
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For these reasons, this amendment is supported by England’s largest wildlife and environmental coalition, which stated that a
“standard model of alignment would help protect against these harms and contribute to wider efforts to address the chemical pollution poisoning UK habitats and species”.
This amendment engages that challenge directly, as it does the challenge facing businesses. As I said in my opening remarks, it is also consonant with the aims of this legislation, smoothing the path to trade while retaining the ability to diverge when it is in our interests. It does not, therefore, dilute the other provisions in the legislation but strengthens them, and in so doing conforms with the Government’s wider industrial strategy. In that strategy, the Government rightly defined their role as providing
“the certainty that inspires confidence, allowing businesses to plan not just for the next year, but for the next 10 years and beyond”.
It is because I believe Amendment 17 provides that certainty that I support it today, and hope that a version of it finds its way into the Bill and on to the statute book.