Protecting consumers from unsafe products

Introduction

Unsafe and dangerous products can cause harm in different ways. Harm can be visible, such as the estimated 3,000 house fires each year in the UK that are caused by appliance faults. It can also be less obvious, such as toxic or carcinogenic chemicals in products or disinfectant that is not as effective as it claims. UK regulations require businesses that make or sell products to ensure they are safe when used normally or in a way that could be reasonably foreseen. Products which are at greater risk of safety problems, such as cycling helmets and electricals, have additional requirements. Since EU Exit, product safety regulations are set by the UK government (although many are still derived from EU regulations and directives) and are sometimes based on internationally recognised product standards.

Until 2018, consumer product safety regulations (apart from food, medicines and vehicles) were enforced entirely by local authority Trading Standards services. In response to increasingly complex national and international product markets, the government created the OPSS in January 2018 to regulate consumer product safety at a national level. Its role includes identifying and assessing product risks and intervening directly on nationally significant product issues. It works alongside Trading Standards services which still regulate at local level and undertake most enforcement activity. For expediency, in order to tackle immediate issues including known problems with household appliances and preparing for EU Exit, the OPSS was set up as a new office within the Department for Business, Energy & Industrial Strategy (the Department). The OPSS’s product safety operations budget has grown from £10 million in its first year to £14 million in 2020–21, and in 2022 it will be taking on new duties for regulating construction products.

Conclusions and recommendations

1. The OPSS lacks the data it needs to proactively identify and address risks to consumers from unsafe goods. Data and intelligence are key resources for every regulator to identify risks and prioritise interventions. The OPSS has so far reacted well to some known product safety issues, such as with Whirlpool appliances and with hand sanitisers and face coverings during the COVID-19 pandemic. However, it acknowledges that it does not have the data it needs to be a proactive regulator. Although some useful data are available, such as fire and accident data, they are not routinely shared with regulators. The OPSS therefore must rely on manufacturers and other stakeholders to identify safety problems. This has slowed its response to some serious areas of harm, such as small high-powered magnets that can be swallowed and cause serious problems, which led to 40 paediatric admissions in the UK in 2020 alone. The OPSS collects better data in some sectors, particularly in cosmetics, but has not applied this approach more widely. It is working to improve its intelligence base, including developing a data strategy and undertaking a pilot with five NHS hospitals to explore data on product-related injuries. However, there are challenges with delivering this initiative in practice, relating to building a consistent and useful reporting mechanism in hospitals.

Recommendation: The OPSS should write to us within six months and set out the progress made in its data strategy, including its data-sharing pilot with the NHS and whether it is achievable in practice. Its response should set out what other data sources it has identified and begun to collect to improve its intelligence base.

2. The OPSS has struggled to reach some businesses and consumers to prevent harm being caused by unsafe products. Businesses are responsible for ensuring that the products they make and sell are safe. The OPSS and local regulators therefore rely on influencing businesses to ensure they comply with the rules. Despite issuing guidance and advice, the OPSS has found that 24% of businesses remain unaware of their product safety responsibilities. The OPSS struggles to reach smaller firms, such as home sellers, and to influence or support them to follow the relevant product safety regulations. The OPSS also aims to communicate directly and indirectly with consumers and make them aware of product safety risks, for example to encourage them to avoid buying unsafe goods, respond to recalls or use products correctly. However, only 17% of surveyed consumers consider product safety when making purchases. People from lower socio-economic groups may be at greater risk from unsafe products if they are more likely to purchase cheap or fake goods. The OPSS does not know which consumer groups are most at risk from unsafe products or how to reach these groups to make them aware of the potential dangers.

Recommendation: The OPSS should develop a detailed plan for proactively communicating with and influencing industry and consumers. This should set out how different industry and consumer groups, including vulnerable and hard to reach demographics, will be targeted using different approaches.

3. There is insufficient coordination between the OPSS, local authorities and other parts of government. The OPSS works with a range of organisations to protect consumers from unsafe products, but the regulatory system is not well coordinated. The OPSS does not have a full picture of investigation and enforcement activity by local Trading Standards services and is therefore unable to align its work with local intervention. The OPSS has introduced some welcome new forms of support to local authorities, such as providing training and ensuring that all services had free access to product standards from the British Standards Institution. However, there is more the OPSS can do to work with local regulators to improve the data it collects and the coordination of enforcement activities. The OPSS, the Department and other parts of government are also not sufficiently joined up in tackling cross-government issues such as staffing and capacity challenges in Trading Standards services. Looking ahead, there is also scope for the OPSS to improve its influence and effectiveness by working with international partners to take a leading role on product safety standards, and by learning from more established regulators on areas such as understanding vulnerable consumers and measuring impact.

Recommendation: The OPSS should work with the Department and other parts of government to ensure the regulatory system is better coordinated. In particular, it should engage with MHCLG and other relevant departments to address concerns around the long-term sustainability of the Trading Standards workforce. In their update to this Committee, they should explain how they intend to resolve this issue.

4. Gaps in the regulatory framework make it harder to protect consumers from new risks presented by online marketplaces and emerging technologies. People increasingly purchase goods online, including through online marketplaces such as Amazon, eBay and Etsy which are now used by nine in ten adults who use the internet. Online marketplaces are not responsible for the safety of products sold by third parties on their platforms. As many sellers are small operators working from their homes, or based abroad, regulators struggle to enforce safety regulations to the same extent as on the high street, due in part to gaps and limitations in their powers. These gaps make it harder to protect consumers, and can give online sellers an unfair competitive advantage over high street traders. Changes in product technologies present new risks but also opportunities. For example, an estimated 15% of products bought for the home now include ‘smart’ technology. Software in smart products can identify faults, prompt recalls or use updates to increase safety features, but may also be susceptible to hacking. The government faces a challenge in ensuring that regulations keep up with social and technological changes, and recently consulted on a major review of the regulatory regime that is considering how to respond to changes in product lifecycles and technologies.

Recommendation: The Department and OPSS should write to us within six months to update us on the progress of their product safety review, and how and when they will address gaps in the regulatory framework. This should include a clear assessment of the key constraints the regime faces in regulating product safety through online marketplaces and keeping regulations up to date with changes in product technologies.

5. The regulatory system is lacking capacity and skills to meet the challenges it faces. Regulators need enough resources and the right mix of capabilities to be effective. Local authority Trading Standards services are a key element of the regime, as they still conduct most investigation and enforcement of product safety regulations. But they face significant resourcing challenges. For example, in England they have had a 39% real-terms reduction in spending between 2010–11 and 2019–20. This has impacted the consistency of local product safety enforcement throughout the UK, as some services struggle to undertake any product safety regulation work which mean some consumers are at more risk of harm from dangerous products. The OPSS is a new and relatively small regulator facing multiple new challenges: EU Exit means new regulatory functions for the OPSS and additional goods to check at the border; UK regulators need to adapt to technological changes and new risks; and in 2022 the OPSS will be taking on new duties for regulating construction products on behalf of the Ministry of Housing, Communities & Local Government. Tackling these issues, and ensuring it will be an effective product safety regulator for the future, will require new capacity and skills, particularly in software, engineering and science.

Recommendation: The Department and OPSS should evaluate the regulatory resource needed for the future of the regulatory regime. This should reflect the impacts of product checks at the UK border, the OPSS’s new duties on construction products and the loss of resource at local Trading Standards services.

6. The government has not yet set out a clear vision and detailed plan for the future of UK product safety regulation. As well as ensuring there are the right skills and resources in place, it is also important for government to have a clear strategy to ensure the regulatory regime is fit for purpose now and in the future. Developments in product technologies and consumers buying products online have resulted in new and changing risks to consumers. The UK’s exit from the EU also has implications for the wider regulatory framework—as well as repatriated regulatory functions previously carried out at EU level, the UK will no longer recognise the EU’s CE mark signifying compliance with standards, and there will be an expected increase in goods checking at the border. There are serious concerns over the sustainability of local Trading Standards services, the OPSS will need to contend with all of these issues while also taking on responsibility for regulating the safety of construction products. The government has consulted on a review of the product safety regime but has not yet set out its vision for how the OPSS, and wider regulatory system, will address these challenges, including whether and when the OPSS should become independent of the Department with its own statutory duties and powers.

Recommendation: In their update to the Committee on the product safety review, the Department and OPSS should set out a timetable for the next UK product safety regulatory strategy. This strategy should set out clearly what type of regulatory system the UK will adopt to best combat the challenges it faces, and consider at what point the OPSS would be most effective as an independent regulator.

1 The OPSS’s regulatory operations

1. On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Business, Energy and Industrial Strategy (the Department), including its Office for Product Safety and Standards (the OPSS), on product safety regulation in the UK.¹

2. While most goods we buy are safe, dangerous products can have serious consequences for consumers. Harm can be visible, such as the estimated 3,000 house fires each year in the UK caused by appliance faults. It can also be less obvious, such as toxic or carcinogenic chemicals in products, or disinfectant that is not as effective as it claims.²

3. UK regulations put responsibility on businesses that make or sell products to ensure they are safe when used normally or in a way that could be reasonably foreseen. Products at greater risk of safety problems, such as cycling helmets and electricals, have additional requirements. Since EU Exit, product regulations are set by the UK government, although many are still derived from EU regulations and directives. Regulations are sometimes based on internationally recognised product standards, with more than 3,000 different standards used for this purpose.³

4. Until 2018, consumer product safety regulations (apart from food, medicines and vehicles) were enforced entirely by local authority Trading Standards services, which sit within local authorities. In response to increasingly complex national and international product markets, the government created the OPSS in January 2018 to regulate consumer product safety at a national level. Its role includes identifying and assessing product risks and intervening directly on nationally significant product issues.⁴

5. The OPSS works alongside Trading Standards services which still regulate at local level and undertake most enforcement activity. For expediency, in order to tackle immediate issues including known problems with household appliances and preparing for EU Exit, the OPSS was set up as a new office within the Department. The OPSS’s product safety operations budget has grown from £10 million in its first year to £14 million in 2020–21, and in 2022 it will be taking on new duties for regulating construction products.⁵

Data and intelligence

6. The OPSS has so far reacted well to some known, high-profile product safety issues. Soon after it was established in 2018, it was asked by Ministers to intervene in the Whirlpool tumble dryer incident after concerns were raised surrounding the effectiveness of the product’s modification campaign. The OPSS worked with Whirlpool to assess the modifications and to improve the reach of the recall process, including with vulnerable consumers.⁶ More recently, the OPSS reacted quickly to safety risks with consumer products arising from the COVID-19 pandemic. It told us that joint action with Border Force and Trading Standards services led to the detention of approximately 1 million unsafe consumer PPE items, such as hand sanitiser and face masks, at Heathrow Airport.⁷

7. However, data and intelligence are essential resources for regulators to identify emerging risks more quickly and decide what action to take in response. The OPSS described to us some useful data sources, such as its cosmetics database and fire and accident data. However, the OPSS acknowledged it needs to collect better data and insight to identify safety problems more effectively.⁸ This concern was echoed by the consumer body Which?, who stressed to us that the OPSS needs systems to collect, analyse and share data across the product safety regime to ensure a more proactive and intelligence-led approach.⁹ Similarly, the London Fire Brigade told us that better data on fires exists through insurance bodies and forensic investigators, but there are no formal reporting mechanisms and the regulatory regime relies on manufactures and other stakeholders to self-identify safety problems.¹⁰

8. The OPSS’s lack of data has slowed its response to some serious areas of harm, such as small, high-powered magnets that led to 40 paediatric admissions in the UK in 2020 alone. Issues with these magnets have been reported for a number of years, but the OPSS did not initiate a response until 2021.¹¹ It explained to us that it was first alerted to the issue by NHS paediatricians who had observed an increase in the number of operations to treat internal damage to children’s bowels. The OPSS is working to improve its intelligence base. For example, it is undertaking a pilot with five NHS hospitals to gather data on product-related injuries directly at the point of A&E. The OPSS noted the challenges in delivering this initiative, including building a consistent reporting mechanism which specifies important details on the causes of harm.¹² The OPSS is also developing an overall data strategy, which the National Audit Office assessed as being a good start but less mature than in other parts of government.¹³

Influencing businesses and consumers

9. The regulatory regime places responsibility on businesses to ensure the products they make and sell are safe. The OPSS therefore relies on influencing businesses to follow regulations and prevent harm being caused by unsafe products. Despite the OPSS’s work issuing advice and guidance, 24% of businesses are unaware of their product safety responsibilities.¹⁴ Evidence submitted by Which? indicated that many companies may find it difficult to understand safety regulations.¹⁵ The OPSS acknowledged that business awareness needs to improve. It told us it had conducted unpublished research that found the lowest awareness among smaller firms and businesses in low safety risk sectors. The OPSS also emphasised the importance of local regulation in supporting small and home-based business in their local area.¹⁶

10. The OPSS also aims to communicate with consumers, directly and indirectly through other organisations, to encourage them to avoid buying unsafe goods and use products correctly. It has produced consumer safety campaigns on specific products, such as fireworks and Halloween costumes, and works with consumer groups to raise awareness on how to report product safety issues.¹⁷ Despite this, only 17% of consumers consider safety when purchasing a product, behind factors such as price and ease of purchase.¹⁸ The OPSS acknowledged that part of the challenge, particularly with goods sold online, is that consumers assume that if a product is on sale it must be safe, which is not always the case. It told us it is looking to make sure consumers that are buying products online have the relevant information, such as on where the product comes from and who has produced it, to make an informed choice.¹⁹

11. The London Fire Brigade told us that low-income households may face higher product safety risks, as they are more likely to purchase cheaper or counterfeit products.²⁰ The OPSS said it aims to ensure that all products sold in the UK are safe, regardless of what price they are sold at and who they are being used by. It has undertaken limited research into how particular groups, such as older people, interact with products. However, it recognised that it has not yet articulated more generally which consumer groups are more vulnerable to product safety risks, when they are vulnerable, and how it can work to inform people of these risks. The OPSS and the Department accepted that they had more work to do to develop a strategy in this area and will learn from other regulators where possible.²¹

OPSS coordination with regulatory partners

12. The OPSS works with a range of organisations to protect consumers from unsafe products. For example, it provides expertise and support to local Trading Standards services and works with the British Standards Institution to help develop internationally-recognised product standards.²²

13. There is a gap in the coordination between local and national regulation. The OPSS does not have a full picture of investigation and enforcement activity undertaken by local Trading Standards services, and is therefore unable to align its work with local intervention.²³ The OPSS recognised it has more work to do to improve coordination with local regulators, and described some of the recent work it has done in this area. It introduced a new Product Safety Database to better share data within the regulatory system and told us this has led to a 600% increase in the number of data entries from local authorities, compared with the previous system. The OPSS has also introduced new forms of support to local authorities. This includes funding to ensure all services have free access to product standards from the British Standards Institution, and providing 4,000 officer days of training across 200 local authorities in the last three years.²⁴

14. Responding to the key challenges the regulatory system faces requires collaboration with other government departments. For example, the Department told us of its engagement with the Department for Digital, Culture, Media and Sport regarding cyber-security threats in products that contain software. It also noted that it is working with the Ministry of Housing, Communities and Local Government to mitigate resource constraints experienced by local Trading Standards services. It hopes this work will help government to better prioritise local regulatory services’ time and resource.²⁵

15. Written evidence from Which? highlighted the increasing importance of international cooperation to support product safety in the UK, particularly in relation to information sharing and enforcement cooperation. Which? suggested that this be achieved through trade negotiations and international organisations such as the OECD and the UN Conference on Trade and Development.²⁶ The Department told us that it sits on the OECD’s working group on consumer product safety and has close working relationships with its counterparts in the United States, in Australia and in Canada.²⁷ The OPSS also recognised that it can learn from more established national regulators in other sectors to improve its effectiveness, particularly in the areas of understanding vulnerable consumers and measuring the impact of its work.²⁸

2 Improving the regulatory system

Gaps in the regulatory framework

16. The products consumers buy, and the way they buy them, are changing quickly. For example, internet sales as a proportion of total retail sales in the UK jumped from 27% in 2020 to 36% today—while this jump was likely related to the COVID-19 pandemic the OPSS expects the trend to continue.²⁹ Online marketplaces, such as Amazon, eBay, and Etsy, are now used by an estimated nine in ten adults who use the internet and are a significant source of potential product safety harm.³⁰

17. The OPSS explained that, under current legislation, online marketplaces are not responsible for the safety of products sold by third parties on their platforms. This responsibility remains with the individual product sellers, who may be small home sellers or businesses based overseas that are harder to reach to ensure compliance.³¹ The OPSS told us that it has a dedicated team examining the safety of products sold online and has removed 5,000 unsafe product listings in the first three months of this year. Despite this, there is concern around gaps in regulatory powers to tackle the issue. Regulatory powers are limited over sellers based overseas if no UK business is involved in the supply chain, and local regulators experience legislative challenges in enforcing regulations on home sellers.³² The Department noted that regulation is also a challenge simply due to the large number of small sellers in operation. It recognised that these issues may have resulted in an unlevel regulatory playing field between online sellers and high street retailers, with the latter being subject to greater levels of regulatory enforcement.³³

18. The OPSS estimated that 15% of products bought for the home now include ‘smart’ technology. Products that are connected to the internet create new product safety risks, such as cyber-security risks in the example of a baby monitor which could be subject to hacking. The Department and OPSS recognised such risks, but also noted the opportunities presented by technology to make products safer. In particular, the OPSS described the potential of ‘smart’ technology to identify and alert consumers to product faults, prompt recalls or use updates to increase safety features. The Department and the OPSS recently consulted on a review of the product safety regime. The Department told us that it is considering how to better regulate products with a mix of hardware and software as part of this review.³⁴

Regulatory capacity and skills

19. The regulatory system for product safety is facing multiple new challenges that it will need the skills and resources to be able to respond to. For example: the OPSS and Trading Standards services will need to give greater consideration to how they regulate safety risks arising from product software and changing technology; there are new regulatory functions and an expected increase in goods checking at the border following EU Exit; and the OPSS will be taking on additional responsibilities for the regulation of construction products on behalf of the Ministry of Housing, Communities & Local Government.³⁵

20. The OPSS is still quite a new regulator with only a £14 million budget for product safety operations. The Department told us that it is providing additional funding for goods checking at the border, while the OPSS noted that additional resources and tools would be needed to effectively regulate the scale of products now sold online.³⁶ The OPSS also stressed the importance of having adequate competences to regulate product safety into the future, particularly in areas such as science, engineering and emerging technologies. It pointed to recent work it has undertaken to build its capabilities in these areas, including recently appointing a scientific advisory group and working with academic institutions.³⁷

21. Local authority Trading Standards services have experienced significant resourcing challenges, including a 39% real-terms reduction in funding in the past 10 years. The OPSS told us that services’ funding varies enormously throughout the UK, as some Trading Standards are very well resourced to tackle product safety risks while others do not have the funding to deal with the most minor product safety issue.³⁸ The OPSS advocated to us the important role played by local Trading Standards services within the regulatory system, particularly with respect to frontline enforcement of product safety regulations. In particular, the OPSS commented on the strengths of Trading Standards services as being part of local communities, which provides useful knowledge and insight of local businesses when investigating different product safety risks and threats in a local area.³⁹

A vision for the future of UK product safety regulation

22. As well as having the right skills and resources to address current and future challenges, it is important for government to have a clear strategy to ensure the overall regulatory regime is and remains fit for purpose. The OPSS will undertake a range of new regulatory functions following EU exit, such as providing technical product safety input in UK trade negotiations, and there will be an expected increase in goods checking at the border. The Department also told us that it would have to respond to wider implications, such as the UK no longer recognising the EU’s CE mark signifying compliance with standards.⁴⁰ Technological developments in products and how we buy them have resulted in new and changing risks to consumers, and there are concerns about the sustainability of local regulators.⁴¹ The OPSS recognised the importance of assessing its regulatory approach and current legislation, to examine whether the regime is fit for purpose.⁴²

23. The OPSS’s review of the product safety regime, which it recently consulted on, is an opportunity for it and the Department to set a clear vision and strategy for the future of the regulatory regime. The recent call for evidence sought views on the current regulatory approach and whether it is fit for the future. It covered several broad issues, including: product design, manufacture and placing on the market; new models of supply (including online); and new products and product lifecycles.⁴³ The OPSS told us it has received over 100 responses and has spoken with stakeholders, including consumer groups and online platforms, to inform its future approach.⁴⁴

24. There is also a question over the status and governance of the OPSS, and whether it could be more effective with its own independent duties and powers. It was originally set up as an office within the Department, rather than as a separate arms-length body or independent regulator, as the best means of getting started quickly given the amount of work it had to undertake immediately. The Department told us that setting the OPSS up as an office within government allowed it to make use of its existing people, structures and processes. The Department recognised that, over time, the OPSS’s governance structure and independence needs to be re-examined. However, it believes that it is currently functioning strongly within its current structures, and noted that Ministers are currently not minded to change its status at present.⁴⁵

Formal minutes

Thursday 16 September 2021

Members present:

Dame Meg Hillier, in the Chair

Draft Report (Protecting consumers from unsafe products), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 24 read and agreed to.

Summary agreed to.

Introduction agreed to.

Conclusions and recommendations agreed to.

Resolved, That the Report be the Nineteenth of the Committee to the House.

Ordered, That the Chair make the Report to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

[Adjourned till Monday 20 September at 2:00pm

Witnesses

The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website.

Thursday 1 July 2021

Sarah Munby, Permanent Secretary, Department for Business, Energy and Industrial Strategy; Graham Russell, Director Office for Product Safety & Standards, Department for Business, Energy and Industrial Strategy; Jaee Samant, Director General for Market Frameworks, Department for Business, Energy and Industrial StrategyQ1–67

Published written evidence

The following written evidence was received and can be viewed on the inquiry publications page of the Committee’s website.

PCP numbers are generated by the evidence processing system and so may not be complete.

1 Association of Personal Injury Lawyers (PCP0002)

2 Electrical Safety First (PCP0005)

3 London Fire Brigade (PCP0003)

4 Safer Disinfectant Network (PCP0004)

5 Which? (PCP0001)

List of Reports from the Committee during the current Parliament

All publications from the Committee are available on the publications page of the Committee’s website.

Session 2021–22

Session 2019–21

Footnotes

1 C&AG’s Report, Protecting consumers from unsafe products, Session 2021–22, HC 294, 16 June 2021

2 C&AG’s Report, para 1; Safer Disinfectant Network submission, page 1

3 Q 25; C&AG’s Report, para 1.2, 2.3

4 C&AG’s Report, para 1.3, 1.4

5 Qq 1, 49; C&AG’s Report, para 1.4

6 Qq 6–8

7 Q 9

8 Qq 58, 33–35

9 Which? submission, page 4

10 London Fire Brigade submission, page 2

11 C&AG’s Report, para 3.8

12 Qq 18, 33

13 C&AG’s Report, paras 3.9–3.10

14 Q 19, C&AG’s Report, para 10

15 Which? submission, page 2

16 Qq 19, 20

17 Qq 26, 37

18 Q 34; C&AG’s Report, para 2.9

19 Q 19

20 London Fire Brigade submission, page 1

21 Q 35

22 Q 23, 25

23 C&AG’s Report, para 3.13

24 Q 23

25 Qq 22–23

26 Which? submission, page 4

27 Q 31

28 Qq 35, 59

29 Q 5

30 C&AG’s Report, para 4.9

31 Qq 44, 19

32 Qq 19–20; C&AG’s Report, para 4.10

33 Q 46

34 Q 22; OPSS, UK Product Safety Review: Call for evidence, March 2021

35 Qq 22, 38–39, 49

36 Qq 38, 48

37 Qq 63 - 66

38 Qq 23, 54

39 Qq 14, 20, 23

40 Qq 21, 38–39; C&AG’s Report, para 4.5

41 Qq 19, 22–23, 54–55

42 Qq 19

43 OPSS, UK Product Safety Review: Call for evidence, March 2021

44 Q 19

45 Q 1