Major Accident Hazards Involving Dangerous Substances

The Committee consisted of the following Members:

Chair: Mr David Crausby 

Baldwin, Harriett (West Worcestershire) (Con) 

Bingham, Andrew (High Peak) (Con) 

Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab) 

Carmichael, Neil (Stroud) (Con) 

Clappison, Mr James (Hertsmere) (Con) 

Clarke, Mr Tom (Coatbridge, Chryston and Bellshill) (Lab) 

Connarty, Michael (Linlithgow and East Falkirk) (Lab) 

Hoban, Mr Mark (Minister of State, Department for Work and Pensions)  

Johnson, Joseph (Orpington) (Con) 

Paisley, Ian (North Antrim) (DUP) 

Pugh, John (Southport) (LD) 

Timms, Stephen (East Ham) (Lab) 

Wood, Mike (Batley and Spen) (Lab) 

Kate Emms, Committee Clerk

† attended the Committee

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European Committee B 

Tuesday 23 October 2012  

[Mr David Crausby in the Chair] 

Major Accident Hazards Involving Dangerous Substances

8.55 am 

The Chair:  It might help the Committee if I explain today’s procedure. In a moment, I will ask a member of the European Scrutiny Committee, Mr Clappison, whether he wants to speak for up to five minutes by way of an introductory statement. I will then call the Minister to make an opening statement, which should be largely factual and explanatory, and should last no more than 10 minutes. No interventions may be taken during his speech. 

When the Minister has sat down, we will have up to an hour for questions. I have discretion to extend that for a further 30 minutes. When all that is done, we will move on to the formal debate. The Minister will probably want to move the motion formally, and the Opposition spokesman may want to speak. We will then follow normal debate procedure. When the debate finishes, I will put the motion to the Committee. Our meeting must finish by 11.25. 

Does a member of the European Scrutiny Committee want to give a brief explanatory statement about the decision to refer the relevant documents to this Committee? 

8.56 am 

Mr James Clappison (Hertsmere) (Con):  If I may, Mr Crausby, I will make a brief opening statement on behalf of the European Scrutiny Committee, because it is customary for a member of that Committee to do so. Before doing so, may I say what a great pleasure it is to serve under your chairmanship this morning? 

The background to this debate is that European Union legislation on responding to major industrial accidents is set out in the Seveso directive. That includes an annex identifying named substances and broad categories of potentially hazardous substances, the current classification being based on that in two other directives. However, these are being replaced with a new regulation with effect from 1 June 2015, which will require a consequential amendment to the Seveso directive. The Commission took the opportunity to carry out a wider review of its effectiveness and, as a result, produced document 18257/10 in December 2010. Its main effect will be to align the current annex with the classification in the new regulation, and to enable further technical amendments to be made to adapt its scope to new technologies and emerging risks. 

The Government generally welcome the new directive as an important step in the development of major accident hazards legislation. They said that they will provide an impact assessment, and the European Scrutiny Committee therefore decided to report the proposal, but to hold it under scrutiny pending developments. An initial impact assessment subsequently drew attention to the main issues, and the European Scrutiny Committee was told by the Government that, subject to final confirmation, a first reading deal had been reached that met the UK’s concerns. The Government also said that

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the European Parliament was likely to have a vote in a plenary session in the week commencing 11 June, followed by adoption by Council, probably in the second half of 2012, which we have now entered. Despite that, the Committee took the view at its meeting that a new directive would give rise to increased costs, and that a number of uncertainties remained. It therefore recommended that the proposal should be debated before the package is formally endorsed by the European Parliament and the Council. 

However, it should be noted that the Government subsequently wrote to the Scrutiny Committee asking it to release the document from scrutiny at its meeting on 20 June, as early adoption by the Council was likely, and the Government believed that the UK should support the package. That request was refused, and in his reply the Scrutiny Committee’s Chairman suggested that the scrutiny override was an issue that should be considered in this debate. No doubt the Minister can now tell us exactly what state of play has been reached in this matter. 

8.59 am 

The Minister of State, Department for Work and Pensions (Mr Mark Hoban):  It is a pleasure, Mr Crausby, to serve under your chairmanship this morning. 

As my hon. Friend said, Seveso III updates previous Seveso directives, all of which are aimed at controlling sites where dangerous substances are processed. Seveso III is needed to update standards on the information available to those living close to those sites and, crucially, to manage the transition between existing, but soon to be defunct classification directives, and the classification, labelling and packaging regulations 2009. 

Given the importance of the chemical industry to the UK economy, and the need for a proportionate approach to the regulation of sites, this directive is a high priority for the Government. Our principal concerns about the draft directive are with its scope, public information and inspection. There are difficult balances to strike: to broaden scope would lead to disproportionate cost being borne by consumers and others, whereas to narrow it would lead to inadequate protection for residents; we need to provide sufficient information to allay the concerns of the public without compromising security or imposing disproportionate burdens on business; and we need a risk-based inspection regime consistent with the current approach of the Health and Safety Executive, rather than a tick-box approach. 

We are pleased with the outcome of the negotiations. We worked hard to build alliances with member states and, latterly, the Danish presidency so that we could reduce the cost uncertainty of the original proposals. Our efforts built good will and were influential. Consequently, on scope, we succeeded in limiting the initial proposal and kept the focus on substances with real major accident potential. Regarding information for the public, the system will now be modernised, which will allow the public living near major hazard sites to access important information through the internet, while keeping requirements to provide information proportionate for businesses and public authorities. Sensitive information will be restricted, with provision for member states to make that judgment. For inspections, we managed to maintain our flexible risk or hazard-based inspection

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frequencies despite the set intervals prescribed in the original proposal. Such successes will all help to limit the costs of implementation to businesses and regulators by around £40 million over a 10-year period, compared with the original estimate provided in 2011 of a total cost of between £50 and £70 million. Those figures, however, will be subject to change once we have a better understanding of how the directive will be transposed into UK law. 

As a compromise to reach a first reading agreement and in order to secure the good progress that we had already made in the negotiations, we had to accept a less responsive system than originally proposed for excluding substances that are initially in scope through CLP regulations but may subsequently be assessed not to have major accident potential. Sites could therefore inadvertently come into scope before arrangements to take them out of scope can be agreed. During that time those sites would have to comply with the rigour of the legislation. Our current analysis, however, indicates that that is unlikely to occur in many cases and likely to occur in only very few cases, although we are unable to be specific on numbers at this point. We are continuing to work with member states and the Commission to find practical examples to deal with such cases. 

Referring to the point made by my hon. Friend the Member for Hertsmere about how the directive is approved, I will set out why my predecessor decided, exceptionally, to vote in favour of the directive at Council on 26 June. I am well aware of the European Scrutiny Committee’s disappointment with that decision, but to have done otherwise would have lost us much good will which, as I have explained, is still needed to defend our position in those areas in which there is still concern. We had achieved a great deal through patient negotiation with the Danish presidency and other members of the Council, and we thought that it was right to recognise the progress we had made by voting in favour, in spite of that meaning we were overriding scrutiny. It was not a decision that my predecessor took lightly, given the importance that we place on parliamentary scrutiny of such proposed legislation, but he felt that at the time it was the right decision to make, given the progress we had made in achieving our negotiating objectives. 

The Chair:  We now have until 9.55 am for questions to the Minister which, I remind Members, should be brief. It is open to a Member, subject to my discretion, to ask related supplementary questions. 

9.3 am 

Stephen Timms (East Ham) (Lab):  Thank you, Mr Crausby. I am delighted to be serving under your chairmanship this morning. I have a number of questions. First, there are a number of references in the document, such as in the impact assessment, to opportunities that the revision of the directive provides to join up regulatory regimes—policy issue 6—and that is also referred to in the Minister’s explanatory memorandum. For example, to remove requirements for companies to provide some pieces of information to multiple regulators and, on the other side of the picture, to ensure that there are no gaps in coverage. Can the Minister tell us a little about how he envisages that opportunity being taken in the process of revising and updating the directive? 

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Mr Hoban:  I am grateful to the right hon. Gentleman for his question. The process provides an opportunity for co-operation between regulators in different member states. I think co-operation at a European level is particularly helpful. The directive is goal-orientated. As we work through the implementing measures, we need to ensure a joined-up approach across member states to provide consistency of information, but at the same time allow member states themselves to exercise some discretion about the type of information that is provided. 

Stephen Timms:  I am grateful to the Minister for that answer. I take his point that regulators in other countries are involved as well, but there are quite a number of UK regulators listed in his predecessor’s explanatory memorandum. Paragraph 23 refers to 

“The bodies responsible for enforcing the legislation...(HSE, the Environment Agency the Scottish Environment Protection Agency, the Health and Safety Executive for Northern Ireland, the Northern Ireland Department of Environment) and relevant other government departments”. 

There is a problem sometimes. We have multiple agencies within the UK seeking the same information. Sometimes local authorities can do it as well. The Minister’s predecessor is right to draw attention, as the impact assessment does, to the opportunity to rationalise some of that and try to ensure that the information required is requested by only one regulator rather than several. Can the Minister encourage us to think that that opportunity will be taken in revising the directive? 

Mr Hoban:  Of course. As the right hon. Gentleman is aware, some of the issues are devolved matters. On the environmental side, as paragraph 23 indicates, the interests of Scottish and Northern Ireland authorities must be taken into account. Our goal generally has been to ensure much greater consistency, particularly when it comes to health and safety matters, between the HSE, for example, and local authorities, which have their own role in this. We are working very closely with local authorities at the moment to ensure that a consistent regime for health and safety is applied not only by the HSE, but by local authorities. We work very closely with the devolved Administrations and their executive bodies to ensure consistency within the UK as well as between the UK and other bodies. 

Stephen Timms:  I am grateful to the Minister. If we go back to the impact assessment, paragraph 2.6 rightly makes the point: 

“The review process identified some concerns about shortcomings in coordination between authorities, both within and between Member States” — 

as I said, it is the “within Member States” that I am concerned about— 

—“that can lead to inconsistent implementation, conflicting or overlapping requirements and unnecessary administrative burdens for operators.” 

I am eager to establish whether the Minister intends that the opportunity will be taken to address some of those problems that certainly arise in the UK, as elsewhere, in the context of implementing this revision. 

Mr Hoban:  I am keen to make sure that we have consistency. We will be working across Government to implement the directive so that chemical companies and

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others, regardless of where they operate, know exactly what the regime is and what they have to comply with. We will ensure that the benefits of the regime under the new directive flow across the United Kingdom. 

Stephen Timms:  I am encouraged that that is the Minister’s intention. I hope that he will specifically address the concern about overlapping requirements with multiple agencies asking for the same information. There is an opportunity, as the directive is taken forward, to do that. 

May I ask what consultation the Minister is planning for implementing the directive? Will he consult the chemical industry, environmental groups and trade unions? 

Mr Hoban:  We have sought throughout the process to engage with industry and stakeholders. We have had extensive discussions with them as the directive has been discussed. For example, industry was represented on the technical working group that the Commission established to ensure that the views of those in industry were heard. We have been able to refine our impact assessment as a consequence of working with the industry. Now we are moving on to the next stage, which is to look at the implementation of that. It is the Department’s custom to engage fully with a range of stakeholders to ensure that we get it right. As is often the case, the devil is in the detail and we need to ensure that we work closely as we develop implementing measures both here in the UK and at a European level. 

Stephen Timms:  Can the Minister confirm that he intends that environmental organisations and trade unions will be part of a consultation? 

Mr Hoban:  The consultation will be open to all stakeholders and that includes trade unions and environmental groups. But the point is to focus on the management of major incidents, which is the thrust behind Seveso III, and on the management of sites where hazardous chemicals are processed. That will be very much the focus of the consultation that we will be holding. 

Stephen Timms:  I know that in the UK we have until 31 May 2015 to transpose the directive. Can the Minister tell us something about the time scale that he envisages between now and then? 

Mr Hoban:  The directive has only relatively recently been formulated, but we will be working with industry to develop guidance on this issue and the consultation process will start shortly to help to flesh out how we will implement the directive in the UK. However, this is a continuing process. We work very closely with industry when we are negotiating on the directive. I would say that it is not so much different chunks of time but almost a seamless process of engagement. 

Stephen Timms:  Does the Minister envisage transposing this directive ahead of 31 May 2015, or around about 31 May 2015? Roughly how long will it take? 

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Mr Hoban:  There is quite a lot of work that we need to do. We will embark on informal consultation with industry and stakeholders in the latter part of this year. Then, in the early part of next year, we will produce a formal consultation document, which will be an opportunity for people to engage in the process. Sorry—the consultation with industry will take place in the latter part of this year and throughout next year, because these are complex directives, with a view to consulting in January—I mean, in the spring of 2014. Given the complexity of this process, it would be reasonable to ensure that we get the consultation document right and that there is proper engagement. So we envisage quite a longer time scale than perhaps would otherwise be the case, but it is important to get things right because this is a very valuable sector of the UK economy and unless we get the consultation right and the implementation of the directive right, we will see unnecessary cost imposed on the sector. 

Stephen Timms:  I am grateful to the Minister for that response. I think that I have understood him, but can he just confirm that a consultation document will be published in January 2014? Is that the date he envisages? If so, can I ask him to confirm that, on that basis, it should be possible to transpose this directive by 31 May 2015? 

Mr Hoban:  Yes. We are on track. The consultation process is on track to transpose this directive by the deadline of 31 May 2015. We intend to publish a consultation document in the first part of 2014—it will appear between January and April—to ensure that there is time for industry and the other stakeholders to engage in that process, to ensure that the regulations are properly drafted and properly implemented. 

Stephen Timms:  Can the Minister tell us what changes he envisages in UK law in order to implement this directive? At the moment, we have the Control of Major Accident Hazards (COMAH) Regulations 1999. What proposals does he have to implement the new directive? 

Mr Hoban:  Once we have worked with industry and the other stakeholders to understand how to implement the new directive, and to get the policy of implementation right, we will then have the opportunity to look carefully at the regulations that will be changed. We expect there to be new COMAH regulations and also revised planning guidance as a consequence. 

Stephen Timms:  I am grateful for that. Will the Minister say a little more about his response—I am quoting his predecessor’s letter—to the concerns raised by the Committee on 

“the cost of implementation and uncertainties such as the possibility for sites without major accident potential to inadvertently fall into scope of the Directive”? 

The previous Minister recognised those concerns. Will the current Minister tell us how satisfied he is about how those concerns might be addressed? 

Mr Hoban:  They are a significant concern. As is always the case, the original cost assessment produced by the European Union was done at a fairly high level. As a veteran of the process, I am sure when the right

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hon. Gentleman was in government, he dealt with the European Union on such matters and the impact assessments were—“vague” is not quite the right word—designed at a fairly high level. 

We sought to work with industry to establish the costs in the UK. Through our negotiations, we have been able to reduce the directive’s impact on UK industry through a range of approaches, such as by having an inspection regime that is consistent with the Health and Safety Executive. We are reducing costs through a review of operator notification. We are ensuring that we have the right alignment between the CLP regulations and the Seveso III regulations. The CLP regulations have been designed to bring into Seveso III certain chemicals from which we judge that perhaps there is not a major accident risk, and we are working on a process to take such chemicals out of the scope of Seveso III. 

So our starting point is the CLP regulations, which are quite broad. Those regulations feed into Seveso III, and there is a mechanism within Seveso III to take out chemicals that should not fall within its scope because they do not present a major risk. 

Our analysis to date is that of the chemicals that we believe fall within the scope of Seveso III, there are very few in connection with which businesses will incur an additional cost. We continue to work with other member states to ensure that the mechanism for taking chemicals out of Seveso III is as effective and as smooth as possible, to reduce the costs on the sector and to ensure that Seveso III is a proportionate directive. 

Stephen Timms:  As I understand it, the background to the measure is a change in the UN’s classification of hazardous substances. Is that what the Minister is referring to in the CLP regulations? I am not quite sure—I ought to know this, but I do not—what CLP stands for. Could the Minister clarify that? 

Mr Hoban:  I thought the right hon. Gentleman would understand straight away what CLP stands for, because he probably has his own. They are the classification, labelling and packaging regulations, which I understand implement the UN regulations. There was a previous set of classification directives that are superseded by CLP. The fact that this is a broader set of chemicals than are deemed to be a major hazard requires the process to identify those that should properly fall within Seveso III, because they do present a major risk, and those that should not. We are trying to align a UN definition with the practical implementation. We are ensuring that the right chemicals are covered by the regulations. 

Stephen Timms:  I certainly do not normally associate hazards with CLPs. The directive enhances access to information for people affected by a major accident. What ideas do the Government have at this stage about how those improvements could be taken forward in the UK? 

Mr Hoban:  The Commission is using the directive as an opportunity to update information requirements in line with the Aarhus convention on public participation and information. Those updates include the modernisation of public information requirements, thereby expanding the information available to the public and allowing for

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public participation in decision making, particularly on planning and emergency planning arrangements. There is an opportunity through the directive to increase public engagement and understanding of those risks. It also enables information to be made available through the internet, which is important. The challenge, which we are dealing with through our informal consultation, is to understand what the right information is, and how it should be made available to the public. 

There are important issues to balance. We do not want the information requirements to be disproportionate. There are security implications, too, arising from the publication of information. We are therefore trying to work through with the industry and stakeholders at the moment quite what the information requirements should be, and how they should be made known. The principle on which the Government operate is to maximise transparency as a way of reassuring public anxiety and maximising engagement. 

Stephen Timms:  The Minister has described two things that the Government will do, one of which is to issue revised control of major accident hazards regulations. The other is to issue planning guidance. Which of those two is likely to deal with the issue of better information for the public about what is happening? Is that a matter for planning guidance or is it a matter for the regulations that he is proposing? 

Mr Hoban:  In a way, the guidance will help local authorities and residents understand the nature of the sites and the planning implications of those sites, but it is really through the regulations that we will see the increase in information. Of course, that information will be helpful to the public and to local authorities in looking at planning applications, but it is really through the regulations, not the planning guidance, that information will be made available. 

Stephen Timms:  I am grateful to the hon. Gentleman. Will he tell us a little more about how planning guidance will need to be changed in order for the directive to be transposed? Will the consultation in early 2014 set out the proposed new planning guidance? Can the hon. Gentleman say what will be in it? 

Mr Hoban:  We must first ensure that we take the opportunity of Seveso III to update the planning guidance. There is clearly a matter of how local authorities should deal with planning applications that are close to sites processing hazardous materials. We expect the changes and scope that flow from the directive to be reflected in land use planning legislation, so if we identify that with particularly hazardous sites, which emerge from the Seveso III period, clearly the chemicals that give rise to that will then have to be brought within the scope of planning legislation, and planning use will have to be updated to take that into account. 

The process is complex. We are working on it. We need to make sure that the legislation is updated to take into account the change in scope. We are working with the Department for Communities and Local Government to ensure a similar consultation time scale on planning consistent with the consultation time scale on the COMAH regulations. 

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Stephen Timms:  Do I understand then that the consultation to which the Minister referred is on the COMAH regulations and will be in parallel to that on the planning guidance? Will he explain the financial penalty—effective, proportionate and dissuasive penalties are referred to—that is likely to apply for infringement of the directive? What is proposed for United Kingdom implementation? 

Mr Hoban:  The right hon. Gentleman asked about the planning process. There is a twin-track process, and I am working closely with colleagues at CLG to ensure that it happens. There is already a penalty regime in place in the UK through HSE. I am not sure to what extent that penalty regime will be changed by the directive, but usually a wide degree of discretion is given to member states in such matters. 

Michael Connarty (Linlithgow and East Falkirk) (Lab):  I have one or two more fundamental questions for the Minister. I have deep, deep concerns, as I represent an area where there are many major accident hazard sites. Is there something wrong with the present COMAH regime in the UK that requires the EU to become involved? 

Mr Hoban:  There is a Europe-wide framework for health and safety matters, and of course this falls within that framework. It is as a consequence of that European framework and the implementation of the change in the UN categorisation of chemicals that the update to Seveso III is required. There is recognition from time to time, even on these Benches, that the European Union has some merits. Clearly, given the impact that a major chemical accident could have, not just on the immediate area but cross border, co-ordination at European level is helpful in this case. 

Michael Connarty:  My understanding of the list of competences, which the Government are about to review—I read the brief yesterday about the joint meeting of all the EU committees for the UK devolved Assemblies, which discussed it in some detail—this is a shared competence. It is not a competence that is given to the EU. If we agree the directive and the matter goes into the remit of the EU, will it possible for the UK to get that competence back in its review? 

Mr Hoban:  The review of competences is ongoing and I will not prejudge the outcome. The way we have been able to negotiate this directive demonstrates that the UK has a strong and powerful voice in the discussion of directives. We have been able to shape the directive and get a satisfactory outcome that allows the UK discretion on implementation and transposition and safeguards some of the most effective features of our own regime. 

Michael Connarty:  I recognise that lengthy reply to be what is in paragraph 2.2 of the brief, which is that 

“the Government had agreed that, as the risks in this area can be trans-boundary, this warranted action at EU level”. 

The reality is that the Minister did not answer clearly and succinctly. The answer, I believe, is no. Once this competence is given away to the EU, the EU will become more and more involved in how those major accident hazard sites should be regulated. 

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In paragraph 2.3, we see that there is still some substantial controversy about what the EU wishes to regulate and how far it wishes to go. There was even a comment in the Government brief about 

“whether there should be a later extension to include offshore oil exploration”. 

Given that we are fighting a massive rearguard action against the attempt to bring in a regulation to allow the incentive in our energy market using the remit of the environment, when in fact it was the energy directorate-general that put forward the proposal, not the environment department, it is clearly an attempt to further intrude into the operation of our onshore and offshore oil and gas and chemical industries. I wonder why the Minister is so sanguine about accepting this competence-creep by the EU Commission. 

Mr Hoban:  I do not think the directive represents competence-creep. It is the third Seveso directive. It is not some new competence that is being given to the EU; it is of long standing and previous Governments have signed up to it as well. I think it is important to modernise the regime and put proper safeguards in place to ensure that the UN regulations are applied proportionately. In a way, the problem with this debate is that it is happening rather after the event, but that is the way the parliamentary process works. The final directive excludes offshore so those concerns have been addressed in the negotiations. 

Michael Connarty:  I do not know whether it was in the Minister’s term of office, but paragraph 2.3 of the brief refers to 

“a request that the Commission should examine whether there should be a later extension to include offshore oil exploration, pipelines and certain nano-materials”. 

I do not know whether the Minister is naive or whether he thinks I am. I have been on the European Scrutiny Committee for 14 years and I have seen those little phrases turned into further regulations. I notice, in fact, that the document mentions the use of delegated Acts. The European Scrutiny Committee is involved in a dialogue with the Government about whether they will give the Committee time to comment on delegated Acts and their implementation, and whether such comments will be taken into account. It seems to be a new strategy of the EU to use regulations to advance its cause. These are areas of great controversy. 

I would like to correct the record by stating that the previous Government did not sign up to the proposals. Although not everyone might have approved of their approach to the Lisbon treaty, they fought and won a hard fight to secure the extraction of energy from sole EU competence, which was demanded by those drafting the Lisbon treaty. It worries me that the Government talks about looking at repatriation of competences while giving away a substantial power to the EU. The costs of the directive come on top of the already massive costs of the REACH—registration, evaluation and authorisation of chemicals—directive, which grew like Topsy from an original look at some very critical areas into a regime that is costing the chemical industry in this country a fortune. COMAH and REACH already cost companies a massive amount of money, and this is an additional cost. 

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I would like to ask the Minister what the Chemical Industries Association said—I presume he has spoken to the organisation. What did the offshore oil and gas industry say? What did the people in the industry, who are fighting day by day to win their markets, say about allowing more intrusion by the EU into business that our Government should deal with? 

Mr Hoban:  It would have been helpful if the hon. Gentleman had been here at the start of the debate, when I set out the consultation that has taken place with industry stakeholders. As a consequence of that engagement, we have been able to introduce changes to the directive that will reduce the cost to the industry by about £40 million, which is a significant result. The directive does not affect the offshore oil and gas industry and it does not encroach on energy. Raising red herrings does not improve the debate. We have tackled that issue in the directive. It is about health and safety, not about giving competence to the EU through the back door on energy issues. 

Michael Connarty  rose—  

The Chair:  Mr Connarty, may I ask you to keep your questions reasonably brief? You will have the opportunity during the debate to make long statements. 

Michael Connarty:  I am trying to tease out the Minister’s approach, because he did not tell me what people in the industry had to say about the directive. As a vice-chair of the all-party chemical industry group, I would like to know what, if any, dialogue took place between the industry and the Minister and his officials, and whether account was taken of that dialogue. Everything in paragraph 2.3 concerns me because whenever the EU marks something out as its territory, although we might rebuff it in the first round, it will use delegated legislation and the issue will come back. The Minister said that the reassurances that I sought were red herrings, but we will see when the catch is landed which of those red herrings turn out to be live fish. 

Mr Hoban:  As I said before the hon. Gentleman arrived, there was industry representation on the technical working group established by the Commission to look at the directive, so the industry was fully engaged in the process. There has been extensive consultation with the industry on the directive, which is why we were able to get some of the changes made and focus on the mechanism for alignment. 

A number of industry representatives support the Seveso III directive because it allows a level playing field across Europe, which is particularly important for multinationals. The right hon. Member for East Ham and I had an exchange about co-ordination in the UK. A Europe-wide directive ensures that there is co-ordination across the EU between member states, which creates a level playing field for business. There has been extensive engagement, and there will continue to be extensive engagement with the industry. This is very much a collaborative process, and although there are still concerns among stakeholders, many welcome the fact that we have made progress and that we now have a level playing field throughout Europe. 

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The Chair:  If no more Members want to ask questions, we will proceed to the debate on the motion, to which no amendment has been tabled. 

Motion made, and Question proposed,  

That the Committee takes note of European Union Documents No. 18257/10 and Addenda 1 and 2, relating to a draft Directive on control of major accident hazards involving dangerous substances; and welcomes the Government's efforts, during the negotiations on the Directive, to secure appropriate controls on sites with major accident potential while ensuring that the burdens on operators and regulators of such sites are kept to a minimum [2nd Report of Session 2012-13, HC86-ii, Chapter 2].(Mr Hoban.)  

9.35 am 

Stephen Timms :   I will take the opportunity to say a little more. I was going to start by thanking the Minister for his speech, but as he has not made one, I will not. Nevertheless, I am grateful to him for his answers to our questions, and to the hon. Member for Hertsmere for his comments. 

This is European health and safety week, so it is appropriate that we are having this discussion today. The topic is extremely important. We are all aware of the hazards attached to dangerous substances. Modern industry is dependent on a wide range of chemicals for effective functioning, and we all benefit from the way those chemicals are used. The chemicals industry is an important part of our economy: as my hon. Friend the Member for Linlithgow and East Falkirk frequently and rightly reminds the House, the UK’s chemicals industry provides direct employment for well over 200,000 people, I notice that on his website he estimates that the overall level of employment dependent on the industry is 600,000, so it is extremely important economically. At a time when growth is so elusive, we all want to maximise the potential of this part of the economy. 

It is important to note that full-time earnings in the sector are almost 20% higher than in manufacturing generally, so it is a high-value part of the economy. The sector is characterised by high skills, good productivity levels, and high levels of investment in training, but there are significant hazards, as well. If the chemicals that the industry works with are mishandled, they can cause serious harm to human health and serious and lasting damage to the environment. The protests relating to the Olympic games in the summer reminded us of the appalling consequences of one of the worst such accidents, at Bhopal in India, but much closer to home, the fire at Buncefield in 2005 underlines the fact often in this country, places where dangerous substances are handled are near people’s homes. It is therefore absolutely right to be vigilant in the regulation, oversight and management of such substances. 

I feel I ought to defend the Minister’s position to some extent. These substances do not respect national borders. It is entirely possible, for example, that a problem in Rotterdam could affect London, so it is right to ensure a consistent response throughout Europe. There is a role for European regulation, as the Minister said, and our existing COMAH regulations derive from the Seveso II directive. It is right to ensure good standards throughout Europe, and it is in our interests to ensure that operators in some other countries do not gain a financial advantage over UK firms, such as those in my hon. Friend’s constituency, by saving costs and running too high a level of risk. We support health and safety

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legislation, including when appropriate, as here, legislation drafted at European level, so long as it is risk based and proportionate, protects citizens, communities and the environment, and provides businesses with the confidence to meet market demands and to know that they will not be in conflict with the law. 

We have heard that the proposals are designed to update the Seveso II directive, in the light of changes that the UN has introduced to the global classification of chemicals. The directive was named after one of Europe’s worst industrial accidents in recent decades, at Seveso in northern Italy in 1976, when a large quantity of dioxins were released from the plant. The proposal seems relatively uncontroversial, and my colleagues in the European Parliamentary Labour party have welcomed it. They recognise that in the wake of UK accidents such as the 2005 Buncefield refinery fire and the more recent chemical fire in Tockwith, North Yorkshire, in 2010, it is right to update the legislation to protect against such accidents. 

I therefore welcome the changes that the replacement directive makes. It refines the scope of dangerous substances covered to take account of changes in UN chemicals classification. It provides better access for citizens to information about risks and about how to behave in the case of an accident, and the Minister has given us some indication of how that provision will be delivered in the UK. It provides for more effective rules on public participation in land use planning in relation to plants covered by the directive. It provides for redress for people denied appropriate access to information or participation, and provides for stricter standards for the inspection of establishments to ensure more effective enforcement of safety rules. 

Labour Members are certainly amenable to the arrangements being updated through the proposals, which appear broadly non-contentious, including as far as the industry is concerned. The proposals seem to enhance and update the protection owed to individuals, communities and employees in the light of the risks posed by the handling of chemicals in industry, and they do it in a way that reflects the need to constrain administrative burdens as well. 

9.42 am 

Michael Connarty:  Mr Chairman, if you look at the process used by the European Commission when it fails to get an overall competence in an area, its strategy is simple. It attempts mainly to bring in regulations, which it then controls, and it tries to prevent us from getting directives. In the case that I mentioned earlier, we got the new directive on the health and safety of the offshore oil and gas industry only because we fought alongside the Chemical Industries Association and the Offshore Oil and Gas Industry Association to bring the process to a standstill. We talked to the Government, people in industry and people in the trade union movement across Europe, and we lobbied fiercely to get a number of people alerted to what was going to happen. We managed to get a directive, but we did not prevent the European Commission from encroaching on an area, by using the energy directorate to put forward an environmental proposal that gave it a toehold in the offshore oil and gas industry. 

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The example that we are debating is very similar. I heard my right hon. Friend the Member for East Ham talking about the need to be worried about not implementing Seveso properly. The directive would not actually have prevented Buncefield or the other incident that he mentioned, because that is not the kind of thing it is aimed at. The only thing it would have prevented is Seveso, because it is aimed at chemicals. 

As has been said, I have a large constituency interest in the matter. I have Syngenta, which sells the biggest-selling biodegradable fungicide in the world—at $1.5 billion-worth a year, with 340 people employed. The product did not exist previously. I saw the fight for that company to get its licence to store the chemicals it required to carry out the process that brings that product to the market. The company has also developed two other products, which are now made elsewhere in the Syngenta network. 

Paragraph 2.1 of the European Scrutiny Committee’s report talks about requirements the severity of which depends on the quantities. The strange thing about the COMAH regulations is that they do not say, “How much do you have on site?” They say, “Do you have between 1 tonne and 1,000 tonnes? Then you have to get a licence for 1,000 tonnes.” That is the reality. It is an argument that we had toe to toe in the health and safety department under the last Government, when we tried to stop the blight that happens when such regulations are put in place. Because what happens if a fallout zone is thrown around a local plant? It can be up to a mile and a half wide, based on the fact that the licence is for 1,000 tonnes of something of which the company holds only 1 tonne at any given time. 

It is that kind of regulation. It is a big, big hammer to crack a small nut, but companies get on with it. Major investment schemes have been blighted by the fallout zones designed by such regulations. Companies live with it because they are aware of incidents such as those at Bhopal and Seveso, and they have to cope with it. They have had to cope with REACH, which I mentioned. I was involved in the dialogue, because the Committee went by chance to the environment directorate at the time. The directorate was looking at some chemicals. Anyone in the industry could have named about 400 chemicals that needed to be seriously looked at. Now we are spending a fortune testing practically every chemical that has ever been used in the chemical industry, either in compound or individually. It is costing the industry a massive amount and disadvantaging the EU against the rest of the world by about 15% in terms of its price structure. The industry copes with all these things. 

The draft directive discusses quantities held at a particular establishment. Above a certain tonnage, you would get an alert. The European Scrutiny Committee report also mentions the potential to have derogations for chemicals that are not considered to be hazardous; chemicals that will be considered hazardous will be covered by the requirements. The problem is that if the quantity of the substance falls within 1 to 1,000 tonnes, the site becomes a major accident hazard site under the directive and there will be implications for British industry, affecting costs and its ability to do business. 

The question that should be asked is, “Is this acceptable?” Clearly, we must accept it on the basis of joint responsibility, but is the scope of the measures proportional? The European Scrutiny Committee report says, in paragraph 2.3, that the European Parliament adopted 

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“145 amendments, some of which were helpful to the UK, and others less so.” 

What a lovely little phrase: “others less so”. 

“Those in the latter category included endorsement of the Commission's proposed expansion of scope regarding the dangerous substances included in the Directive”. 

In other words, it added things to the directive, just like REACH. No doubt it will grow via delegated legislation, which we will be unable to do much about. It will grow and grow like Topsy. That is the problem: the Government did not prevent that from happening. I take the point made by my right hon. Friend the Member for East Ham on the Front Bench, who consulted our colleagues. Let us be frank: when Members are elected to the European Parliament, they go native. They do not look back. I remember, sadly, that at the last election the EPLP had a manifesto for Europe different from the one held by the UK national party. It happens in all parties. There is a race to the top—to be more effective, to be much more green and so on—in the European Parliament. 

We do not seem to be able to control that; and if we cannot control it there, we will not control it as the process unwinds, because we are giving more competence to the EU in this matter. The Government are making a big play of the fact that they are considering competence and rebalancing our relationship with Europe, but it is a con. Ask industry about the reality of what we have been doing under the last Government and this Government. It is the same process, slowly but surely. Lisbon made it inevitable, because it was a tipping point. 

When I was Chairman of the Committee, I spoke at Lisbon. It tipped the balance of power away from national Parliaments and national Governments to the Commission in Europe. It was a democratic move—it gave co-decision-making power to the European Parliament—but it also gave massive power of implementation to the Commission, which is using it to intrude into things where it should be resisted strongly. I am not happy that the Government have managed to do that. The Minister said, “Oh, we have taken offshore out, at this moment.” Whether we like it or not and whether the Minister likes it or not, in its statement the European Parliament said that its position was that it supported the request that the Commission—it, the Parliament, asking the Commission—should 

“examine whether there should be a later extension to include offshore oil exploration, pipelines and certain nano-materials”. 

That is the agenda that has been set, and my worry is that we have not resisted enough. The Government have not been taking seriously the promise they gave to the electorate and their Back Benchers. Once these things are gone, they are gone for ever, unless we leave the European Union. That may be the dream of some of the more radical Eurosceptics, but I do not think it is ever likely to happen. We have given over to the EU the policy that means they will continue to push the boundaries more and more in a way that we should have resisted. Maybe the Minister did not have the ability to do so. I know that these negotiations are somewhat tortuous and I am sure that our own Front Bench were involved as well. However, the proposal should have been resisted very strongly, and I believe the people in the industry believe it should have been resisted strongly. 

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We have good COMAH regulation. It is difficult to work with, but the industry works with it. It is not about just adding costs; it is the whole process of interference—products that were not on the list being added to the list, the processes that have to be gone through, the consequences for our Health and Safety Executive or local authorities telling industries that they cannot have licences, or that if they give licences they have to blight huge surrounding areas, unrealistically, all because the European Union says there is a cross-border dimension. When we have a directive and they say they are going to use delegated legislation, we are not in a good place, so I speak very strongly against this. We should not approve it and the Government should not have approved it. They may have had to come to a conclusion at some point, but they should have fought much more strongly. 

What will happen in the future is what the European Parliament has said, which is about expansion. The disproportionate expansion of the directive will not just harm British industry, but it will disproportionately harm an industry that has already taken on massive costs from energy reduction and the REACH directive. I have seen the industry take many positive environmental steps, but now it is going to have to deal with even more unnecessary burdens. That is the point—they are not necessary. We already have a good COMAH process that industry has to cope with, and the directive should have been resisted much more strongly by the Government. 

9.53 am 

Mr Clappison:  I will be brief, but I want to draw attention to the European Scrutiny Committee’s point about the override of the scrutiny reserve. Before I do so, I congratulate the Minister on the thorough way in which he has dealt with the debate, and the tremendous grasp of detail he has shown. The right hon. Member for East Ham, who speaks for the Opposition, has also shown a great mastery of detail on this important subject. However, be that as it may, I have to draw the Committee’s attention to the nature of these proceedings. 

We have assembled to debate a measure that the Government have already agreed to, and agreed to its becoming law in this country. The purpose of the scrutiny reserve is to give Parliament, through these Committees, the opportunity to have a debate on a measure before the Government agree to it and commit to it, and before it turns into binding legislation at European level. As it happens, this Minister did not agree to it, and he has provided an explanation. However, the fact remains that we are in the position of debating this matter after the Government have already signed up to it. 

That is not the normal order of things in Parliament, as we all well know, Mr Crausby. Think what the electorate would have to say to us if we made a habit of having debates on legislation after the Government had passed it; if legislation was given a rubber stamp before we came to debate it in Parliament. What purpose would there be for a Member of Parliament if legislation was debated at that stage? We have assembled here this morning to debate something that has already been agreed to. I make that point about the nature of the proceedings that we are engaged in. 

Some good points have been made, which the Minister has answered extremely well. Good points have been made by the right hon. Member for East Ham about the

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coverage of the measure, and others have been made by the hon. Member for Linlithgow and East Falkirk about the costs to the industry and the impact on his constituency. That is all in the air now, because the measure has already been agreed. Those points, and any others made by any hon. Member or any of our constituents—perhaps we have constituents who are not stakeholders and might want to come along and express a view about something—are all put into the margins and consigned to oblivion, because none of it matters: it has all been agreed. 

I have made that point before and I have to say that, as an exercise this morning, our proceedings have to be put in that context. We have assembled to debate something that is already an established fact. To me, that is a shame. It goes to the nature of our relationship with the European Union, and one effect, among others, is to deliver yet more power to entrenched powerful bureaucracies, particularly that of the European Union, which introduces the proposals and has command of all the detail, while we end up having to send our civil servants to negotiate and plead our case. That is really not satisfactory and takes a lot of power away from this House, but it is the nature of our position this morning and the European Scrutiny Committee was right to draw the measure to our attention. 

9.56 am 

Mr Hoban:  The debate has been helpful. I will come back to my hon. Friend’s point about this being a rather ex post debate in a few minutes. I will not repeat the eloquent remarks of the right hon. Member for East Ham, who did my job for me; I am sure that we should move on to other matters. 

I will deal with some of the specific issues, particularly those raised by the hon. Member for Linlithgow and East Falkirk. He argued that the industry was against the measure; the reality is that the industry has been heavily engaged with it and has welcomed some of the changes. In 2004, the Chemical Business Association lobbied for changes to Seveso to bring it into line with the globalised, harmonised system. It wanted a set of European regulations that was consistent with the emerging international consensus on categorisation. That reflects the complexity of this area, in which there are global standards—classifications are put forward by the UN, articulated through European directives and then applied locally. 

There is a complex set of interactions and, to go back to a point made by the right hon. Member for East Ham, our challenge is to ensure that global European standards are introduced in a way that is proportionate and risk-based, and takes into account the impact on the UK industry’s competitiveness. As I have said, some chemical firms have welcomed the measure, because it creates a level playing field and ensures a proper basis for competition with other Europe-based chemical firms. We need to get the measure right. Our engagement with the industry as we discussed the draft directive, and now during its implementation and transposition, is a good sign of how we can work together to ensure that proportionate implementation takes place. 

The hon. Member for Linlithgow and East Falkirk talked about the planning issue and the cordoning off of areas around sites. That is a consequence of the

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hazardous substances consent regime. That needs to be looked at again in the context of COMAH, and we are working with the Department for Communities and Local Government to ensure that that takes place. 

The hon. Gentleman referred to the use of delegated and implementing acts. Let me be very clear: article 4 of the directive sets out the criteria for assessing the major hazard potential of a substance, and that flows into annex I. The Commission can use implementing or delegated acts to make technical changes, but any substantive change has to be made through the ordinary legislative procedure, which is what would be used to amend the parameters set out in article 4. A change on the scale that he suggested could happen only by changing the article, which would require the full engagement of member states, the Parliament and the Commission, so we have not given away as much as he believes. From my experience of dealing with financial services issues in the Treasury, I know that there has been close engagement on the technical implementing acts. That is not just by UKRep, but by the industry as well. There is a role that we can play in that to get that right. 

The hon. Gentleman also commented on the role that the European Parliament played in trying to expand the definition. One of the consequences of Lisbon is that there is co-decision making and that is why it is important to ensure that we are keen to demonstrate our support when there is agreement in the Council that supports the UK’s position and gives us what we want, because the stronger the Council position is, the easier it is to reach a satisfactory conclusion in trialogue. That speaks a little to the point that my hon. Friend the Member for Hertsmere made. 

I agree that it is not a perfect solution, but what we were offered at general approach was a good outcome for the UK. There was pressure from the Parliament to water it down and extend the directive. Sometimes we have to make the decision that if we want to see the Council position upheld in trialogue, we need to override the scrutiny breach. I want much closer co-ordination between the European Scrutiny Committee and Departments to ensure that we minimise the risk of scrutiny override, but sometimes it happens. In this case, it happened because the general approach was reached more quickly than we anticipated. I do not think that anyone expected it to be reached under the Danish presidency; there was an assumption that it would take place under the Cypriot presidency. This debate was scheduled for just after the reshuffle, which is why it was delayed until now. It would have been better held sooner, but that is where we are. 

I say to my hon. Friend the Member for Hertsmere and the hon. Member for Linlithgow and East Falkirk, who are both members of the European Scrutiny Committee, that Ministers take seriously not only these debates, but also the engagement that we have with the European Scrutiny Committee when these matters are under discussion. That is why we spend a great deal of time on explanatory memorandums and why we respond to the letters that come back from the Committee. While this debate may not be perfectly timed, there has been significant engagement between Departments and the European Scrutiny Committee before we reached this point and I, for one, value that engagement. It is hugely helpful when we are negotiating in the Council

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to say, “This is Parliament’s view.” It may be that the formal expression of that process happens too late in these debates, but up-front early engagement is helpful. 

In conclusion, the directive is a positive outcome for the UK, but as was teased out during questions, this is not the end of the road. A lot of work needs to be done on transposing it into UK law and ensuring that we not only get COMAH updated to reflect the directive, but sort out planning guidance so that there is consistency of implementation. The final outcome will be a better result not only for the industry, but for the public as

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well. The public need to understand the risks of these sites and the information requirements will help in that process. Modernising the framework to be in line with UN standards will be beneficial too. I hope that hon. Members from all parts of the House will be able to support the motion. 

Question put and agreed to.  

10.3 am 

Committee rose.  

Prepared 24th October 2012