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Twenty Fourth Report Contents

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Drawn to the special attention of the House

Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2022 (2022/1244)

Date laid: 30 November 2022

Parliamentary procedure: Negative

These Regulations extend two post-Brexit transitional periods relating to overseas Central Counterparties (CCPs). CCPs reduce risk in the financial system by providing assurance to parties to a financial transition that contractual obligations will be fulfilled. CCPs must be ‘recognised’ under UK financial regulations, although there are two post-Brexit transitional regimes. One of the transitional provisions follows the standard model of recognising firms that had been authorised in the EU at the end of the Brexit transition period while a UK regime is established. However, the other allows any firm to benefit from the status of a Qualifying Central Counterparty (QCCP) simply by applying to be recognised. This presents risks that an unsuitable firm could benefit from QCCP status and, as a result, UK firms’ capital requirements could be unjustifiably reduced. It seems unlikely that the QCCP transitional regime is optimal, and we encourage HMT to consider reforming it before any further extension.

These Regulations are drawn to the special attention of the House on the grounds that they are politically or legally important or give rise to issues of public policy likely to be of interest to the House.

Background

1.These Regulations extend, for the first time, two post-Brexit transitional periods relating to overseas Central Counterparties (CCPs). CCPs sit between the buyers and sellers of financial instruments, for example equities or derivatives, and reduce risk by providing assurance to the parties that contractual obligations will be fulfilled. The process of transacting through a CCP is known as ‘clearing’. HM Treasury (HMT) says that transition extensions are necessary to ensure UK firms do not face sudden increases in risks and/or capital requirements if they cease to have access to CCPs, and thereby to “avoid disruption to the financial stability of the United Kingdom”.

2.The UK’s regulatory framework for CCPs is set out primarily in the European Market Infrastructure Regulation (“UK EMIR”), which forms part of retained EU law.

Temporary Recognition Regime

3.The first transitional regime is the Temporary Recognition Regime (TRR). The TRR enables overseas CCPs that were recognised by the EU at the end of the Brexit transition period to continue to offer their services in the UK until 31 December 2023. These Regulations would extend the expiry date to 31 December 2024. HMT says the extension will avoid UK firms being suddenly unable to continue to clear specific products at these CCPs, which would require them to make alternative arrangements that could be costly and risky. Thus, HMT believes the move will “provide certainty to business and avoid undesirable outcomes which could disrupt international financial markets and cause risks to UK and international financial stability”.

4.The intention is for the Bank of England to set up a UK-specific regime under which overseas CCPs can offer services to UK firms if they are domiciled in countries which the Bank of England has assessed to have an ‘equivalent’ regulatory framework to the UK, and if the Bank of England has ‘recognised’ the CCP. HMT states, however, that the extension is necessary because developing the new UK regime has “required significant amounts of time and resource”, including consultation, to complete. HMT also says that progress was delayed by the COVID-19 pandemic.

5.The Government and the UK regulators have known for some years that they need to establish a system of UK oversight for CCPs. Although we acknowledge the complexities involved, we are disappointed that the regime is not yet in place for this systemically important sector. We note that the EU has now removed its transitional regime as it has completed its CCP recognition assessments.

Qualifying Central Counterparties

6.The more problematic transitional regime relates to Qualifying Central Counterparties (QCCPs). These are CCPs that do not provide services directly to UK firms but allow UK firms with indirect exposures to the QCCP (for example, via an overseas subsidiary) to benefit from lower capital requirements.

7.The transitional regime for QCCPs allows any CCP that has submitted an application to be recognised under UK EMIR to be treated as if it were a QCCP for two years from the date of application. HMT says that a majority of such firms applied before the end of the Brexit transition period, so their transitional recognition would expire on 31 December 2022. Some firms applied after that date, so their recognition would expire later. The Regulations extend each firm’s transitional status by a year. HMT argues that this will ensure UK firms transacting with QCCPs “will not face a sudden and disruptive increase in their capital requirements” when the QCCP’s transitional recognition expires.

8.This transitional structure for QCCPs is unusual in that it allows new firms, as well as those recognised in the EU at the end of the transition period, to benefit from recognition with no further checks or conditions. As a result, UK firms could take significant reductions in capital requirements through (indirect) exposure to a firm that has done no more than apply for recognition. This creates a risk that an unsuitable firm could benefit from QCCP status and, therefore, that the reductions in the UK firm’s capital requirements are similarly inappropriate.

9.We asked HMT for further information on the QCCP regime and HMT’s responses can be found in Appendix 1. HMT did not dispute the proposition that the regime presented risks. It argued, however, that such risks were limited in practice. HMT put forward three reasons:

• “CCPs applying for recognition would do so on the basis that they believed that they met the necessary conditions required for recognition in the UK”.
• “UK firms with exposures to the CCP, and the intermediaries sitting between the two, would take appropriate measures to monitor and effectively manage their exposures”, with the UK firms being subject to supervision by UK regulators.
• “QCCP status, in of itself, does not allow UK firms to be direct users of the CCP”.

10.On the first bullet point above it is, in our experience, optimistic to assume that all firms applying for authorisation in a given area do in fact meet the criteria for authorisation, particularly if they are aware there will be no initial checks. We also would not rule out the possibility that some financial services firms would find ways to exploit this system for their own benefit. In any case, the fact that regulatory oversight exists for CCPs suggests that they are potentially the source of risk to the financial system.

11.It is, therefore, remarkable that a firm can become a QCCP without any initial checks or ongoing oversight. HMT also did not explain why a transitional regime, the aim of which is to prevent cliff-edge increases in capital requirements if firms cease to be QCCPs, also permits new firms to become QCCPs. We are not aware of any other transitional regimes that allow a company to begin conducting an activity that requires authorisation or recognition, simply on the grounds of having applied for it.

12.We also asked HMT how the QCCP transitional regime came to exist in its current form and how it could be changed. HMT said that the form of the transitional regime was inherited from the EU, which was also operating a transitional regime at the point of Brexit. Ministers only had powers to make changes to “prevent, remedy or mitigate any failure of EU law to operate effectively” in the UK. As noted above, the EU has now ended its transitional regime.

13.HMT said that, at present, the UK transitional regime could only be changed by primary legislation. It stated, however, that if the Financial Services and Markets Bill, currently before Parliament, passes in its existing form, then it will be able to amend the system through secondary legislation. HMT said that it was “considering the longer-term future of this regime”.

Conclusion

14.We are not in a position to judge how much risk these arrangements present to the UK and international financial systems. However, we struggle to believe that the current system is optimal. If the permanent UK regime cannot be established rapidly, we urge HMT to consider reforms to the QCCP transitional arrangements before any further extension.

Education (School Teachers’ Qualifications and Induction Arrangements) (Amendment) (England) Regulations 2022 (SI 2022/1256)

Date laid: 1 December 2022

Parliamentary procedure: Negative

These Regulations implement changes to the way overseas teachers can obtain Qualified Teacher Status (QTS) in England, with the intention of creating a consistent and fair approach for applicants from any country. As originally laid, the Explanatory Memorandum (EM) was inadequate, omitting key information on the policy, how it was formulated and its implications for the teaching workforce in England. We asked for further details in several areas and the Department for Education (DfE) agreed to revise and relay the EM.

In response to further questioning, and despite initially saying it could not provide the information, DfE has now published its projections about the effect of the policy on the number of overseas teachers being awarded QTS. The data suggests that the policy will only increase the number of overseas teachers if compared to 2021–22, when overseas QTS approvals were unusually low—compared to other recent years, overseas recruitment is expected to fall. Given that the changes take place against a backdrop of startling falls in the number of domestic teacher trainee recruits, we are worried about whether there is a coherent, holistic plan for the teaching workforce in England.

We are also disappointed in the Department’s original approach to the EM and its reluctance to provide further information when requested, both of which significantly hindered our ability to scrutinise the instrument.

These Regulations are drawn to the special attention of the House on the grounds that they are politically or legally important or give rise to issues of public policy likely to be of interest to the House.

Background

15.These Regulations implement changes, announced in June 2022, to the way in which those with overseas qualifications can obtain Qualified Teacher Status (QTS) in England.1 QTS is a legal requirement to be able to teach in maintained schools and non-maintained special schools in England.2 The Department for Education (DfE) says the aim is to create a “consistent and fair” process to ensure teachers with equivalent skills and experience can be fairly assessed for QTS regardless of their country of origin.

16.The reforms are being implemented against a background of domestic trainee teacher recruitment levels that are significantly below the Government’s targets. For example, in 2022–23, there were 12,356 entrants to postgraduate initial teacher training (PGITT) in secondary subjects in England, just 59% of the target and a fall of 23% from 2021–22.3 For primary and secondary PGITT combined, there were 23,224 entrants to PGITT in 2022–23, representing 71% of the target and also a fall of 23% from 2021–22.

New system for overseas teachers to obtain QTS

17.From 1 February 2023, there will be a single set of criteria against which to assess any overseas teacher wishing to gain QTS in England.4 For example, applicants will need to demonstrate that they have: a degree and a teaching qualification equivalent to those available in England; at least one school year of professional experience; and a certain standard of English language proficiency. Further details are contained in DfE’s June 2022 policy paper.5 Any overseas teacher who meets the criteria will be able to teach in maintained schools without further training or assessment.

18.The new system replaces one in which only teachers from certain countries are able to apply and the assessment process differs depending on the applicant’s country of origin.6 For example, there are currently country-specific routes that provide automatic recognition for teachers from Australia, Canada, New Zealand, and the USA. The Regulations close these country-specific routes. The new approach will also ensure that there is a mechanism for teachers from the European Economic Area (EEA) and Switzerland to gain QTS when the Government exercises powers in the Professional Qualifications Act 2022 to remove the EU-derived legislation currently used to recognise teachers from these countries.

19.DfE states that the only exception that will apply is to teachers who trained in Scotland, Northern Ireland, Wales and Gibraltar, who will be able to be qualified teachers in England after 1 February 2023 on the basis of their training in one of those countries. They will not need separately to meet the new criteria.

Other measures in the Regulations

20.DfE says that the new regime will complement a new international training route, International Qualified Teacher Status (iQTS), announced in 2021.7 iQTS involves government-approved English providers offering teacher training courses overseas. The Regulations provide that teachers who successfully complete the new iQTS qualification will be recognised as qualified teachers in England.

21.The Regulations also alter the requirements for overseas teachers to complete induction periods. These provide newly qualified teachers with, for example, a reduced timetable and specific training.8 Currently, certain categories of overseas teachers awarded QTS are exempt from undergoing statutory induction. The new policy will exempt only those overseas teachers who have more than two years of post-qualification experience, although the initial Explanatory Memorandum (EM) erroneously said that “the new policy will be to exempt only those overseas teachers who have less than two years of post-qualification experience” (our emphasis).

22.In addition, the Regulations change the main domestic route to QTS so that teacher trainees can complete their course either at an accredited provider or at a partner-provider working with that provider. DfE states that this better reflects the teacher training market.

Expected effect on number of overseas teachers

23.Against the background of low levels of recruitment to teacher training in England (see para 17), we were concerned that the new system might act to reduce the flow of overseas teachers and, therefore, impact the overall size of the teaching workforce. The June 2022 policy paper and the EM did not contain any information in this area. We asked the Department to elaborate. Our questions, and DfE’s responses, are attached at Appendix 2. DfE stated that it believed the changes would act to increase the numbers being awarded QTS. DfE said:

“These changes are mostly about making our system consistent and fair, and to ensure that those awarded QTS have a greater chance of being a successful teacher in England. Overall, we expect the number of QTS awards to rise, and for more of these teachers to gain teaching posts. However, whilst teachers from more countries will be able to apply, some teachers from historically eligible countries may be less likely to be successful, and so whilst we expect the number of awards overall to increase, we do not expect this to be dramatic.

The number of teachers who have been awarded QTS in recent years is as follows:9

Table 1: QTS awards in most recent three years by country of origin10

QTS awards made to qualified teachers from:	2019–20	2020–21	2021–22
EEA and Switzerland	2,458	1,975	704
Other eligible countries	1,410	965	980
Total	3,868	2,940	1,684

Overall, internal analysis projects that the number of teachers awarded QTS from overseas will increase. However, as these projections are currently unpublished, we cannot share these at this point. However, given your interest we will find a way to publish these, with the appropriate caveats and methodology in due course. The projections themselves are indicative and based on a series of assumptions, as data around the international demand for English QTS (and the underlying qualifications of teachers) is scarce.”

24.We believe, as a fundamental principle of transparency and accountability, that any information relied on to formulate policy should be published alongside the instrument or, at a minimum, be made available to Parliament on request. We were, therefore, surprised and disappointed in the Department’s unwillingness to share its projections. We wrote to the Minister of State for School Standards, the Rt Hon Nick Gibb MP, on 14 December 2022 to express our concerns and to request sight of the data. Appendix 3 contains our letter and Mr Gibb’s reply.

25.On 19 December 2022, DfE published its projections.11 They show forecasts of the total number of QTS awards for overseas teachers per year, and the number of these going to teachers who would not be able to apply under the current system as they are not from an eligible country (“newly eligible” awards). DfE provided ‘low’, ‘central’ and ‘high’ estimates, which are shown in Table 2.

Table 2: Projected QTS awards per year

Projected numbers per year	Total QTS awards	Of which, QTS awards to teachers from newly eligible countries
Low estimate	2,097	413
Central estimate	2,303	619
High estimate	2,922	1,283

26.DfE states that the numbers in Table 2 should be compared to a baseline of 1,684 QTS awards in 2021–22 (the total in the final column in Table 1). The projections represent an increase of 25% (low estimate), 37% (central estimate) and 74% (high estimate) on this baseline. This, presumably, underlies DfE’s original response to us that “the number of teachers awarded QTS from overseas will increase” under the new system.

27.This conclusion holds only because QTS awards in 2021–22 were significantly lower than in the previous two years, as Table 1 shows. The central projections in Table 2 would represent a drop in QTS awards of 22% compared with 2020–21 and 40% compared with 2019–20. Even the ‘high’ estimate is 24% below the actual figure for 2019–20.

28.We applaud the overall intention to provide a fair and consistent application process for overseas teachers from all countries, and we support the Government’s view that only well-qualified teachers should be permitted to teach in maintained schools in the UK. We have, however, noted that domestic recruits to teacher training are falling sharply and DfE’s own projections suggest that overseas QTS recruits will be well below the levels of recent years. Taking this information together, we are concerned about whether there is a holistic and coherent strategy to maintain the teaching workforce in England.

29.When DfE initially said it could not provide its projections on the effect of the policy on overseas QTS numbers, we took reassurance from the Department’s assertion that it expected the number of awards to rise. Having subsequently seen the figures, however, it is clear that this is only true on a particular reading of the data, and that if compared to earlier years, the data shows a considerable drop in QTS awards. It is often the case that the data contributing to a policy is capable of being interpreted in different ways. This example illustrates the need for all underlying information to be published for analysis from the start of the scrutiny process.

Countries from which qualified teachers arrive

30.Table 1 shows a sharp drop in teachers arriving from the EEA and Switzerland, while Table 2 shows DfE’s projections of between 413 and 1,283 teachers recruited from newly eligible countries per year. DfE does not provide any further split on the countries from which it expects these teachers will come. While we have concerns about maintaining the overall size of the workforce, we would not want to see the new system being used to compensate for falls in recruitment from EEA countries by recruiting more from developing countries that may have a pressing need for, and shortage of, skilled teachers. We expect DfE to monitor this closely as the system beds down.

Status of existing teachers not meeting the criteria

31.The June 2022 policy paper and the EM did not clearly explain the position of existing overseas teachers who did not meet the new criteria. We asked the Department about this. DfE provided reassurances that all teachers who hold QTS prior to 1 February 2023 will remain qualified. DfE also stated that overseas teachers who have made a request to be a qualified teacher before 1 February 2023 but who have not yet had their status as qualified teacher confirmed (for example, because the Teaching Regulation Agency needs more information before this can be confirmed) will be considered under the previous regulations.

Consultation process

32.The EM provided an excellent summary of the consultation process on the iQTS proposal. However, the description of the consultation for the main proposals on the criteria for recognising overseas teaching qualifications was extremely cursory. When prompted for further information on this, DfE provided a much more detailed description, which is reproduced in full in Appendix 2.

33.We took significant reassurance from this fuller description, although we believe that representatives of parents and school governors should also have been consulted during policy testing. In all cases, however, the consultation description in the EM laid alongside the instrument should be comprehensive and accurate to assist us in advising the House and facilitating scrutiny of the instrument.

Conclusion

34.We welcome the policy intention to provide a consistent and fair standard by which to judge overseas applicants for QTS. We also believe that it is important to maintain the high standards of the professional teaching workforce in England.

35.We are, however, also concerned about possible workforce shortages. The changes in these Regulations take place against a backdrop of sharp falls in domestic teacher trainee recruitment, making the possible effect of the new system on overseas recruitment even more important.

36.The Department states that the new approach will increase the number of suitably qualified teachers from abroad and its projections, albeit “indicative”, do suggest higher inflows than in 2021–22, DfE’s preferred comparison. However, overseas recruitment in 2021–22 was well below that in the previous two years. Expected overseas QTS awards are anticipated to be below 2019–20 and 2020–21 levels. Combining this with the domestic recruitment situation, the House may wish to probe the Minister on whether there is a coherent and holistic approach to teacher recruitment in England.

37.We are also disappointed about the lack of information in the original EM about many key aspects of the policy, and one error that described one aspect of the policy as the opposite of what it actually is. The Department was reluctant to provide us with some of the information on which it had relied in formulating the policy and, when published, the data did not entirely support the Department’s assertions. DfE has revised and re-laid the EM, and eventually provided us with the information we needed. However, in all cases the version of the EM laid alongside the instrument should be comprehensive and accurate to assist us in advising the House and facilitating scrutiny of the instrument. It is also a fundamental principle of transparency and accountability that any information relied on to formulate policy should be published alongside the instrument or, at a minimum, be made available to Parliament on request.

Communications Act 2003 (Restrictions on the Advertising of Less Healthy Food) (Effective Date) (Amendment) Regulations 2022 (SI 2022/1311)

Date laid: 9 December 2022

Parliamentary procedure: Negative

These Regulations delay for 33 months, until 1 October 2025, the implementation of the ban on advertising “less healthy foods and drinks” before the 9pm watershed on television, on radio and on online media. The Explanatory Memorandum (EM) states that in 2019, under current voluntary restrictions, children were exposed to 2.9 billion “less healthy food and drink TV impacts and 11 billion less healthy food and drink impressions online”: there is no mitigation of these in the interim.

The Department of Health and Social Care (DHSC) states that the delay is necessary because the underpinning secondary legislation is not ready and the industry is unprepared. The benefits to industry from this delay are evident but the negative impact on the NHS and public health is unquantified. We believe that the amount of work that DHSC still needs to do indicates that the practicalities of the policy were not properly thought through before the change to primary legislation was made.

We are disappointed that DHSC has again presented a poor EM that fails to evaluate the effects on public health and the NHS from this delay. It also fails to explain the use of a different definition from previous legislation or why a partial or staggered implementation process is not possible. The change in tone from DHSC since the factsheet promoting the Health and Social Care Bill in 2022 is remarkable. We once again question how the Government’s stated target of reducing childhood obesity by 2030 can be achieved if key elements of the strategy are unpicked. The House may, therefore, wish to seek a more detailed explanation of the rationale for the extended delay imposed by this instrument and how the short-term benefits to industry compare to the continuing negative impact on public health from such advertising.

These Regulations are drawn to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.

38.The purpose of this instrument is to delay from 1 January 2023 to 1 October 2025, that is by 33 months, the introduction of restrictions on advertising “less healthy food and drink” before the 9pm watershed on television, on radio and on online media.

39.These advertising restrictions were originally made by the Health and Social Care Act 2022 (“the Act”) to take effect on 1 January 2023. The Act inserted a new section 321A into the Communications Act 2003, which set out the definition:

• a food or drink product is “less healthy” if—
  • it falls within a description specified in regulations made by the Secretary of State, and
  • it is “less healthy” in accordance with the relevant guidance;
• “the relevant guidance” is the guidance entitled “Nutrient Profiling Technical Guidance” published by the Department of Health on 1 January 2011.

40.On 16 May 2022, the Department of Health and Social Care (DHSC) announced to Parliament that the introduction of the advertising restrictions would be delayed to 1 January 2024 in order to give industry more time to prepare for implementation of the restrictions.12 Subsequently DHSC announced on 9 December 2022 that the start date would be delayed again–until 1 October 202513–because ahead of implementation there are still a number of steps that need to be taken.14

What steps are needed?

41.We asked DHSC to explain what steps are needed. The Department’s response is published in full in Appendix 4. It said that the following were required:

• a Government consultation on the draft regulations that are required to set out the details of the advertising restrictions, such as the definition of product categories in scope of the advertising restrictions and the definition of the exemptions for small and medium enterprises, audio only content and services connected to regulated radio (the consultation was launched on 9 December 202215);
• the subsequent making of such Regulations, as required by the Communications Act 2003;
• legislation detailing what businesses are deemed food and drink SMEs (for their exemption);
• a consultation from the statutory regulator (Ofcom) on the designation of a frontline (day-to-day) regulator and the possible designation of a frontline regulator by Ofcom;
• what means of enforcement this frontline regulator would employ to ensure compliance;
• publication of guidance to support business compliance with advertising restrictions, following consultation on such guidance from the frontline regulator.

42.DHSC continued: “Without these details circulated before implementation, the restrictions would be difficult to enforce as, amongst other issues, businesses would not know legally what products could be advertised. This will also allow time for businesses to work on reformulating their products.”

What is the cause of the delay?

43.Paragraph 7.2 of the EM says that “a delay in implementation is necessary due to a delay in the Health and Care Act 2022 receiving Royal Assent, which had a consequential impact on the timetable for the aforementioned consultation, regulations and guidance”. As the delay in Royal Assent was only one month, we are not persuaded by this: it simply underlines our suspicion of poor analysis and planning by DHSC regarding the implementation of the legislation.

44.This view seems supported by DHSC’s admission that, following the announcement of the initial 12 month delay in applying the restrictions, “Government did not immediately publish the necessary consultation or lay the SI needed to implement the restrictions in January 2024. In part, this was due to the previous administration conducting a review of the obesity policies.”

45.We are always in favour of consultation with affected groups, but we note that this will be the third one on this policy: there were previous consultations in 2019 and 2020.16 This again leads us to question why the policy still appears to be so tentative.

46.We find more convincing the statement that because of the number of steps that still need to be taken “feedback from industry and the regulators is now clear that there is insufficient time to prepare for implementation on the previously announced date of 1 January 2024”. We regret to note that, once again, no mention is made of the NHS’s views on the delay.

Definitions

47.One of the aspects that the EM fails to explain is why the terminology used in these Regulations is different from previous SIs. The recent Food (Promotion and Placement) (England) (Amendment) Regulations 2022, on which we commented in our 15th Report, prohibited promoting high fat, sugar and salt (HFSS) products.17 These new Regulations use the different term of “less healthy foods”, but both terms refer back to the same 2011 technical guidance to the 2004–05 Nutrient Profiling model to determine a product’s status. The rationale for using a different term is not explained. If the guidance already exists and is being applied by industry, it is not clear to us why the advertising ban cannot operate initially on the core of established HFSS foods.

48.The EM also does not explain that it is DHSC’s intention to bring additional categories of foods into scope of the advertising ban, and that it is these that the further Regulations need to define. The new categories are food and drink advertised from the out-of-home (restaurants, bakeries etc.) and retail sectors, including sandwiches of any kind. DHSC has not explained why the implementation of the advertising restrictions could not be staggered to bring these additional categories into the regime at the later date but allow restrictions on more familiar products to be brought into effect as previously planned.

49.DHSC also states that it needs the extended period to consult on the definition of the exemptions for small and medium enterprises (SMEs). As there are well established criteria for SMEs already in use, this seems a very poor reason for adding more than another year of delay, further to the delay to 1 January 2024 that was previously announced in May.

Failure to analyse the impact of delay

50.The most obvious gap in the Department’s EM is the failure to analyse and describe the effects of this delay on public health and the NHS beyond simply saying the benefits will take additional time to start accruing. The focus is entirely on “a growing recognition that industry required further time to prepare after digesting final regulations and guidance. This is something that industry have been asking for, in representations to ministers but also in correspondence to officials.” The views of the NHS are not addressed or explained, which we find surprising in legislation from the department responsible for promoting public health.

51.Neither does the EM address the harm that will continue because of the continued advertising of “less healthy” food and drink. Paragraph 7.4 of the EM says that the current voluntary restrictions to limit the advertising of less healthy products on children’s TV, programmes of specific appeal to children and in non-broadcast media with a high child audience (over 25%) are inadequate. It states that “Analysis conducted to inform the Government’s Impact Assessment of the advertising restrictions found that under current restrictions children were exposed to 2.9 billion less healthy food and drink TV impacts and 11 billion less healthy food and drink impressions online in 2019.” In supplementary evidence DHSC admitted that this will mean that children continue to be exposed to advertising for less healthy food and drink on TV and online until the policy comes into effect in October 2025.

52.A DHSC factsheet promoting the Health and Social Care Bill18 stated that:

• “Childhood obesity is one of the biggest health problems this nation faces, with 1 in every 3 children in England leaving primary school overweight or living with obesity.
• The content that youngsters see can have an impact on the choices they make and habits they form. With children spending more time online it is vital we act to protect them from unhealthy advertising.
• This action on advertising will help to wipe billions off the national calorie count and give our children a fair chance of a healthy lifestyle.
• Evidence suggests that exposure to this type of advertising can affect what and when children eat, shaping children’s food preferences from a young age.19
• Analysis from September 2019 demonstrated that almost half (47.6%) of all food adverts shown over the month on ITV1, Channel 4, Channel 5 and Sky1 were for less healthy food and drink products and this rises to nearly 60% during the 6pm to 9pm slot.20
• Therefore, the combined impact on children from TV and online advertising underlines the importance for the government to address less healthy food and drink products advertising.”

53.The change in tone between the Bill factsheet and the current EM that seeks to justify a significant delay to something previously described as “imperative” and “vital” is startling.

Conclusion

54.We believe that the amount of work that DHSC still needs to do indicates that the practicalities of the policy were not properly thought through before the change to primary legislation was made.

55.We are disappointed that DHSC has again presented a poor EM that fails to evaluate the effects on public health and the NHS from this delay. It also fails to justify the length of the extension and several of the steps that are to be taken during this period, including revising definitions for established concepts such as SMEs or HFSS foods. Nor does DHSC explain why a partial or staggered implementation process is not possible. The change in tone from DHSC since the factsheet promoting the Health and Social Care Bill in 2022 is remarkable. We once again question how the Government’s stated target of reducing childhood obesity by 2030 can be achieved if key elements of the strategy are unpicked. The House may, therefore, wish to seek a more detailed explanation of the rationale for the extended delay imposed by this instrument and how the short-term benefits to industry compare to the continuing negative impact on public health from such advertising.

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