Instruments of Interest
Draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019
1.The purpose of these draft Regulations is to introduce a new requirement for employment agencies to provide people who are seeking work with clearer information on their prospective pay. The instrument forms part of the Government’s response to the Matthew Taylor Review of Modern Working Practices,1 which, according to the Department for Business, Energy and Industrial Strategy, found that the various fees, deductions, and different ways in which agency workers can be paid can cause confusion. The Review recommended that government should improve the transparency of the information available to agency workers, particularly around pay. This instrument proposes a requirement on employment agencies to provide agency workers with a “key information document” before workers sign the terms of employment. The draft Regulations set out requirements in relation to the information that the document must contain, such as the minimum rate of remuneration payable and the nature and amount of any deductions, limitations as to the length of the document, and when it must be provided. The intention is for the new requirements to apply to new workers signing on to an employment agency after April 2020.
Draft Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019
2.The Intellectual Property Office (IPO) states that, as a Member State of the EU, the UK is currently part of an EU-wide system for protection of designs. The Community Designs Regulation (CDR)2 defines two forms of designs protected at EU level: the Registered Community Design (RCD) and the Unregistered Community Design (UCD). An RCD is granted by the EU Intellectual Property Office through an application for registration. A UCD enjoys protection if it is new, has individual character, and is made available to the public in the manner provided for in the CDR. The IPO says that, after the UK’s exit from the EU, the CDR will no longer confer protection for existing RCDs and UCDs in respect of the UK. These draft Regulations, however, allow for the continued UK protection of these acquired rights for businesses, trade mark holders and designers, and as far as possible maintain the current system. Holders of RCDs registered before exit will receive a “re-registered” UK design on exit day. Where a UCD is in existence before exit day, rights holders will continue to have the benefit of the UK protection conferred by this right through the “continuing unregistered community design”. The IPO explains that it will be creating approximately 700,000 “re-registered” UK rights on exit, with each of these rights being present on the UK register at exit and treated as if registered under the Registered Designs Act 1949. It gives a preliminary estimate of around £375,000 as the administrative cost of converting some 700,000 RCDs into the comparable UK right. The work of conversion is clearly a major exercise. The IPO has told us, however, that it is adequately resourced to cover the cost of conversion, and it is built into its planning assumptions. The IPO explained that it receives no central government funding and that costs are recovered through fees; any additional resources required, for example to deal with increased demand, would be covered by the associated additional fees paid.
Draft European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) Regulations 2019
3.These draft Regulations propose changes to regulations on European Structural and Investment Funds (ESI Funds) where they apply to the European Regional Development Fund (ERDF), European Social Fund (ESF) and European Territorial Cooperation (ETC). This is to ensure that in a possible ‘no deal’ scenario, projects supported by these funds can continue to operate in a UK domestic context, under the Government’s funding guarantee. The Department for Business, Energy and Industrial Strategy (BEIS) explains that the UK has been allocated £8.4 billion of funding under ESI Funds for the 2014–20 period, supporting growth, low carbon, transport, research, innovation, SMEs, employment opportunities and social inclusion. If there is no agreement with the EU, the Government have committed to continue the support provided by these funds until the planned closure of the funds in 2020. This instrument proposes the changes needed to enable payments to continue in a ‘no deal’ exit. BEIS explains that, for ETC projects involving Northern Ireland and the Republic of Ireland, the European Commission has prepared a new regulation that will enable the UK to take part in specific ETC programmes (such as PEACE and Interreg VA) even in a ‘no deal’ scenario, until these programmes come to an end in 2020. The Department says that this is in recognition of the role these programmes play in supporting peace and reconciliation, and that the instrument proposes specific powers for the Government and relevant authorities to continue payments under these specific ETC programmes.
Draft Financial Regulators’ Powers (Technical Standards etc.) and Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2019
4.In its 38th Report of the current Session, the Secondary Legislation Scrutiny Committee drew the draft Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018 (“the 2018 Regulations”) to the special attention of the House on the ground that they gave rise to issues of public policy likely to be of interest to the House.3
5.Binding Technical Standards (BTS) set out very specific requirements and standards in order to ensure that financial services institutions are able to comply with the requirements of the EU’s financial regulation. European Supervisory Authorities are currently responsible for drafting BTS.
6.The 2018 Regulations proposed that UK Regulators perform the task of making corrections to deficiencies in existing BTS so that these rules operate effectively in the UK on exit day.
7.Since the 2018 Regulations were laid, additional BTS have come into force and will be transferred to the UK statute book on exit day. The main purpose of this instrument is therefore to amend the 2018 Regulations to add the BTS that have come into force since the laying of those Regulations.
Draft Human Medicines (Amendment Etc.) (Eu Exit) Regulations 2019
Draft Medical Devices (Amendment etc.) (EU Exit) Regulations 2019
Draft Medicines for Human Use (Clinical Trials) (Amendment) (EU Exit) Regulations 2019
Human Medicines (Amendment) Regulations 2019 (SI 2019/62)
8.The UK currently participates in a EU-wide system for the testing and approval of medicines and medical devices. In the event of a ‘no deal’ exit, this group of regulations, laid by the Department for Health and Social Care, transfer responsibility for these activities to the Medicines and Health products Regulatory Agency (MHRA) as a stand-alone medicines and devices regulator for the UK. The MHRA already carries out a wide range of work including medicines licensing, pharmacovigilance, inspections, and standards and enforcement, but would take an expanded role in registration, assessment, and post-market surveillance of medical devices. The legislation provides transitional “grandfather” rights for medicines and products that have already been authorised in Europe up to the date of exit. The Committee expressed concern about authorisations at an advanced stage of development at the point of exit. MHRA has confirmed that a UK licence would be required but, through administrative measures, are taking steps to ensure authorisation is not delayed by that additional step. The regulations also include certain provisions which would allow the Secretary of State to make temporary changes to the authorisation process, or to allow alternative medicines to be dispensed in case of potential shortages.4
Draft Securitisation (Amendment) (EU Exit) Regulations 2019
9.Securitisation refers to the process of packaging and converting loans into tradable financial assets (securities), which can then be sold to investors. The EU Securitisation Regulation5 defines a set of criteria for securitisations to qualify as simple, transparent and standardised (STS) securitisations.
10.The Securitisation Regulation creates a framework for the regulation of these STS securities, and asset-backed commercial paper (ABCP) products (a type of security used by companies to raise short-term financing, backed by company assets). These draft Regulations, laid by HM Treasury, propose amendments to the Securitisation Regulation, and to a number of other items of EU and UK secondary legislation, to ensure that the UK’s regulation of securitisation can operate effectively at the point at which the UK leaves the EU. They transfer functions of certain EU bodies, including the European Securities and Markets Authority, to the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) after exit. Responsibility for making Binding Technical Standards under this instrument will be transferred to the FCA and PRA as appropriate, through a sub-delegation of powers.
Draft State Aid (EU Exit) Regulations 2019
11.The Committee drew the draft State Aid (EU Exit) Regulations 2019 to the attention of the House on the ground of policy interest in its last report.6 At the time, the Committee noted the assurance provided by the Department for Business, Energy and Industrial Strategy that it had “extensive technical discussions with the devolved administrations on the proposed State aid regime” and that there was “broad agreement on the substance of the Government’s policy”. The Committee also noted that the UK Government had “not sought political consent from the devolved administrations to the draft SI, as the UK Government considers the regulation of State aid to be a reserved matter”.
12.The Committee has received a letter from the Constitutional and Legislative Affairs Committee of the National Assembly of Wales, expressing concern that the draft Regulations propose to transfer functions to non-devolved public authorities in a way that would restrict the legislative competence of the National Assembly, and that the instrument is being taken forward without any prior notice being given to the Assembly and without the Regulations being laid before the Assembly. In addition, the Constitutional and Legislative Affairs Committee points to a disagreement between the Welsh Government and the UK Government as to whether State aid is a devolved or reserved matter, suggesting that the UK Government have not responded to a request by the Welsh Government for an explanation of its position.
13.We are publishing the letter at Appendix 1 as the House may wish to be aware of the concerns of the National Assembly when debating the draft Regulations.
Merchant Shipping (Prevention of Oil Pollution) Regulations 2019 (SI 2019/42)
14.These Regulations, laid by the Department for Transport, implement Annex I (Regulations for the Prevention of Pollution by Oil) of the International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1998 (“MARPOL”), an International Convention made by the International Maritime Organization (IMO) for the prevention of pollution from ships (including offshore installations). The Regulations establish a survey and certification regime for ships, and prescribe technical requirements relating to the construction and operation of ships and on-board equipment. The Impact Assessment explains that the amendments being made date back to 2004 as the UK currently has a “backlog of some 40 separate items of maritime regulation.” The Secondary Legislation Scrutiny Committee has previously expressed concerns about the backlog in maritime legislation,7 and has corresponded with the Minister about the extent of the backlog.8 We remain concerned about this and urge the Government to act swiftly to rectify the statute book.
15.The Regulations also bring UK law in line with recent updates to MARPOL requirements and introduce ambulatory referencing to refer UK industry to international legislation in this area. The introduction of ambulatory referencing will mean that ship operators can focus on convention text in technical areas instead of having to refer to both the convention and national legislation. The Secondary Legislation Scrutiny Committee has clear guidance on the use of ambulatory references,9 which notes that the use of this mechanism has been of concern to the House because it takes future changes to legislation out of the normal legislative scrutiny process. Our guidance states that ambulatory references should therefore only be used for technical updates, such as adding items to a list of banned chemicals, and that the Explanatory Memorandum accompanying the instrument should make it clear if an ambulatory reference is being introduced. If the power is applied to anything other than simple technical updates, the Committee expects to see a full explanation of why it is being proposed, including how any risks or unintended consequences are to be managed in the absence of further parliamentary scrutiny.10 We asked the Maritime and Coastguard Agency about the nature of the ambulatory references proposed in this instrument and their response is set out at Appendix 2.
Education (Student Fees, Awards and Support Etc.) (Amendment) Regulations 2019 (SI 2019/142)
16.The instrument aligns the legislative framework for student finance with the new regulatory regime in England established by the Higher Education and Research Act 2017,11 which required the Office for Students (OfS) to register all English higher education institutions.12 This instrument updates definitions and terminology in the Student Support Regulations to limit student support to courses provided by, or on behalf of, registered providers. This instrument also prescribes the fee loan rates applicable for the academic year commencing 1 August 2019. While the maximum fee for a standard undergraduate course at an Approved (Fee Cap) institution remains at £9,250, the instrument introduces a higher fee of up to £11,000 for an accelerated course. It also increases the maximum loans for living costs for students attending full-time and part-time undergraduate courses in 2019–20 (£8,944 outside London, £11,672 in London), increases disabled students’ allowances and introduces a new means test for full-time students who apply for a grant for dependents.
1 Department for Business, Energy and Industrial Strategy, Good work: the Taylor review of modern working practices (July 2017): https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices [accessed 12 February 2019].
2 Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs.
3 Secondary Legislation Scrutiny Committee, 38th Report, Session 2017–19 (HL Paper 179).
4 See for example new regulation 344A of the Draft Human Medicines (Amendment Etc.) (EU Exit) Regulations 2019 or regulation 9 of Human Medicines (Amendment) Regulations 2019 (SI 2019/62).
5 Regulation (EU) 2017/2402 of 12 December 2017.
6 15th Report, Session 2017–19 (HL Paper 281).
7 Secondary Legislation Scrutiny Committee, 20th Report, Session 2017–19 (HL Paper 82).
8 Secondary Legislation Scrutiny Committee, 34th Report, Session 2017–19 (HL Paper 157).
9 Secondary Legislation Scrutiny Committee, Guidance for departments submitting statutory instruments to the Secondary Legislation Scrutiny Committee (July 2016): https://www.parliament.uk/documents/lords-committees/Secondary-Legislation-Scrutiny-Committee/SLSC-Guidance-for-Departments-July-2016.pdf [accessed 12 February 2019].
10 The agreed Whitehall position on the use of the power is set out in the Merits of Statutory Instruments Committee 25th Report, Session 2008–09 (HL Paper 151), appendix 1. It states: “ The agreed position is that care should be taken before the power to make ambulatory references is used. Particular care is needed before a criminal offence or other penalty is involved. This is highlighted because of the effect that an ambulatory reference may have and that it will catch all future amendments to the Community instruments, and not just technical ones. Such future amendments may be significant, and may not necessarily be foreseen at the time of making the ambulatory reference. To minimise the risk of any unintended results Departments are asked to note that the ambulatory reference can apply to only certain sections or parts of a Community instrument e.g. an Annex.
Further it is noted that transparency is important, and so if an ambulatory reference brings in a substantial change in the law, it is good practice for the responsible department to publicise it, in order to draw it to the attention of people affected by it. For example, an updated transposition note can be put on the departmental website or a press release issued.”
11 See also 14th Report, Session 2017–19 (HL Paper 56).
12 The register is published at Office for Students, The Register: https://www.officeforstudents.org.uk/advice-and-guidance/the-register/ [accessed 13 February 2019]. Registrations are expected to be completed by the end of March 2019.