Fifteenth Report Contents

Instruments of interest

Draft Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment Etc.) (EU Exit) Regulations 2019

49.These contingency Regulations preserve the existing controls on dangerous chemicals, biocides, pesticides and Genetically Modified Organisms in case of a ‘no-deal’ Brexit. They set up the Health and Safety Executive as a UK regulator should the European competent authorities no longer be available. The Explanatory Memorandum (EM) sets out the changes that will affect industry throughout the supply chain from the import of raw materials, to the labelling of products. In particular, the fee basis will change from the European system, which relates to the size of the firm submitting the application, to one based on the UK system of full cost recovery for the work involved.16 The EM notes that there may be duplication of approvals and additional costs for firms if they wish to market new products in both the UK and the EU, but that it is an inevitable result of leaving the EU; the regulatory system will minimise this where possible. The EM also explains a legislative change which will enable amendments to the list of regulated substances to be issued by the Secretary of State,17 including the current system of ambulatory references to EU Regulations. This means that updates can be issued swiftly without the need to produce a new Statutory Instrument every time. The EM explains that biocides alone might require about 50 such changes a year. The EM also indicates extensive liaison with industry and with the Devolved Administrations in producing these Regulations. We commend the EM which is both thorough and clear.

Draft Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019

Draft Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019

50.The purpose of these two sets of draft Regulations is to address failures of domestic legislation and other deficiencies arising from the withdrawal of the UK from the EU. According to the Department for Environment, Food and Rural Affairs (Defra), they aim to ensure that, in a ‘no deal’ scenario, the existing arrangements for the import of live animals, animal products (including meat), animal by-products, germplasm, and the non-commercial movement of pets, circus animals and equines can continue, and no import barriers are created. Defra highlights the importance of the sector: 52 million tonnes of live animals and products of animal origin are imported into the UK annually, worth around £58 billion, of which an estimated 34 million tonnes and £41 billion are from trade with the EU. In addition, around 300,000 pet animals move into the UK annually through the EU Pet Travel Scheme, which provides relatively disruption-free travel between participating countries. The Committee recommended an upgrade of the draft Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019 to the affirmative procedure when the instrument was initially laid as a proposed negative instrument. The Committee noted at the time that, while the instrument sought to maintain current arrangements for imports from the EU into the UK in a possible ‘no deal’ scenario, the question of whether the EU would reciprocate these arrangements was subject to negotiations with the EU. The Committee found that if treated as a third country, the UK would face considerable additional administrative requirements and potential costs in relation to the export of animals and animal-related products and the non-commercial movement of pets to the EU. The Committee concluded that the House would welcome an opportunity to debate the Department’s choice of unilateral recognition of current import arrangements and the potential impact of a ‘no deal’ in this area.

Draft Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019

51.Existing primary and secondary legislation, including retained EU legislation, relating to financial services sets out the gateways for disclosing confidential information within the UK, to European Economic Area (EEA) regulatory authorities and to third-country regulatory authorities. In the Explanatory Memorandum to these Regulations, HM Treasury (HMT) says that, after the UK’s exit from the EU, these provisions in both domestic legislation and retained direct EU legislation will become deficient, and that the instrument addresses these deficiencies to ensure that the legislation continues to operate effectively at the point of exit. The Regulations will ensure the continuation of robust protections for how the UK’s financial services regulators disclose confidential information with other regulatory and supervisory authorities in the UK and elsewhere. HMT has said that, in relation to certain types of confidential information, the UK will have to enter into cooperation agreements with the European Supervisory Authorities and EEA authorities in order to continue to share such information, in some cases before exit day.18 We asked HMT whether it was confident that, where necessary, such cooperation agreements would be concluded in good time. The Department told us:

“While HM Treasury is responsible for ensuring that the legislation functions appropriately, the UK financial services regulators (namely, the Prudential Regulatory Authority and the Financial Conduct Authority) are ultimately responsible for drafting and concluding these cooperation agreements with the relevant EU and EEA national authorities. UK and EU authorities have made good progress in their discussions on memoranda of understanding (MoUs), which includes the essential provisions for information-sharing and co-operation to continue between those authorities after exit. The regulators are continuing to negotiate these MoUs with the relevant EU authorities, and they expect to reach agreement sufficiently in time before the end of March.”

Draft Road Vehicles and Non-Road Mobile Machinery (Type-Approval) (Amendment) (EU Exit) Regulations 2019

52.To sell and register vehicles and components in the EU, manufacturers must hold a European Community type-approval (“EC type-approval”) issued by the responsible authority in an EU Member State (the Vehicle Certification Agency (VCA) in the UK). In the event of ‘no deal’ with the EU, EC type-approvals issued in another Member State will no longer be accepted in the UK. Manufacturers holding an EC type-approval will be issued with a Provisional UK type-approval during a transitional period of two years. The Explanatory Memorandum explains that “all of this is an interim arrangement valid for a maximum of two years, pending a comprehensive review and re-working of the UK’s type approval arrangements (with legislation planned for mid-2019).” Existing EU approvals issued by the VCA will remain valid. When this instrument was previously presented as a Proposed Negative, the Committee recommended that this instrument be upgraded to the affirmative resolution procedure.

Railways (Access, Management and Licensing of Railway Undertakings) (Amendment) Regulations 2019 (SI 2019/82)

53.There is currently a package of EU legislation governing the access, management, and licensing of railway undertakings. The fourth package of legislation, which includes the ‘Market Pillar Directive’,19 aims to improve competition within the EU by extending access rights into domestic passenger services and to ensure the impartiality and independence of infrastructure managers of rail networks.

54.Using powers under the European Communities Act 1972, the Department for Transport (DfT) is implementing the provisions of the Market Pillar Directive until 31 December 2020. DfT points out that the UK’s obligations to give effect to the Market Pillar Directive will cease on exit day. However, subject to the terms of a proposed ‘EU Withdrawal Agreement’, EU law will continue to apply to the UK during an implementation period until 31 December 2020. The Government believe that extending the compliance with the Market Pillar Directive will provide greater flexibility to determine railway policy and legislation after exit, especially in light of the ongoing Williams Rail Review.20

55.DfT explains that the legislation is being implemented as part of the Government’s continuing obligations as an EU Member State prior to exit. The UK obligations under the Market Pillar Directive are being preserved as retained domestic law after exit. However, any deficiencies which need to be corrected as a result of the UK leaving the EU will be dealt with in an EU exit instrument which DfT states will be laid in due course.

16 Section 12 of the EM provides indicative lists of where there are likely to be specific changes in fee.

17 Following advice from the HSE or Environment Agency experts, as appropriate.

18 HM Treasury, Guidance: The Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019: explanatory information (9 January 2019): [accessed 6 February 2019].

19 Directive (EU) 2016/2370.

20 A call for evidence has been published to support a review of the organisational and commercial frameworks of the UK rail industry. This consultation closes at 11:45pm on 31 May 2019. See HM Government, Williams Rail Review: [accessed 6 February 2019].

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