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Thirty Eighth Report Contents

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Drawn to the special attention of the House

Draft Medical Devices (Amendment) (Great Britain) Regulations Draft 2023

Date laid: 27 April 2023

Parliamentary procedure: affirmative

This instrument delays the sole use of UK conformity assessment marking for medical devices placed on the market in Great Britain from 30 June 2023 to 30 June 2030. This is a significant extension to the post-Brexit transition period during which both UK and EU conformity marks will be accepted, and this report expands on the Explanatory Memorandum to set out in more detail the Government’s reasons why a seven-year extension is required.

The extension is partly in response to a Europe-wide shortage of assessment capacity for these and other goods and also due to the Medicines and Healthcare products Regulatory Agency’s intention to strengthen the future regulatory framework for medical devices in the UK in a way that both improves safety while also enabling innovation.

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

1.The UK Conformity Assessed (UKCA) marketing regime for medical devices, which checks their quality and efficacy, has been in operation since 1 January 2021. Since then, manufacturers wishing to place medical devices on the market in Great Britain have had the option to use either the UKCA route or to continue to comply with the CE marking requirements under EU legislation. The original intention was to run the two systems in tandem for a transitional period until 30 June 2023, however, this instrument extends the dual system until 30 June 2030. The regulatory system in Great Britain is run by the Medicines and Healthcare products Regulatory Agency (MHRA).

2.The future regime will regulate medical devices for Great Britain. The regulatory arrangements for medicines under the Windsor Framework do not apply to medical devices. The EU Medical Devices Regulations (EU MDR and EU IVDR) apply in Northern Ireland and will continue to do so.

Background

3.The term “medical devices” includes most healthcare products, other than medicines, used for the diagnosis, prevention, monitoring and treatment of disease, injury, or disability. Medical devices cover everything from artificial hips to wound dressings, incubators to infusion pumps and MRI scanners to scalpels. The legislation also refers to “in vitro diagnostic medical devices” (IVDs) which are used to test samples taken from the human body and are used to monitor a person’s overall health or to treat or prevent diseases. These include blood tests to detect HIV and hepatitis, tests for cancer biomarkers, and COVID-19 and flu tests from nasal swabs.

4.The UK medical technology sector comprises an estimated 4,924 UK businesses, and nearly 11,000 other businesses have registered medical devices with MHRA solely with CE marking, not yet with UKCA marking.

Reason for extension

5.Extending by seven years the cut-off date, after which only UKCA marks will be accepted, required further explanation. The original date of 30 June 2023 was set as part of the arrangements for the UK exiting the EU. This was to provide manufacturers with time to adjust to future UK regulations that were to be consulted on and published at a later date.

6.Progress with assessing medical devices has also been quite slow: the MHRA does not have an estimate of the total number of registered medical devices that are UKCA, rather than CE, marked, but can state that of the 789,581 new medical products registered with the MHRA in the 12 months from April 2022–March 2023, only 71,469 (9.1%) were UKCA marked.

7.MHRA identified two key factors for requiring a longer transition period:

• There is limited third party conformity assessment capacity, that is UK Approved Bodies which need to assess certain higher risk medical devices before they can be affixed with UKCA marks and placed on the market in Great Britain. This shortage is not limited to the UK, and was cited in the recent extension to timelines for implementation of the EU medical devices regulations.
• The MHRA has observed the EU’s experience in delivering its new medical devices regulations and wants to ensure it adopts a workable timeline to deliver a robust, modern regulatory framework that, from day 1, is fit for purpose for both innovative and well-established devices.

A new regulatory system

8.The MHRA has already carried out a public consultation on its plans to reform the current system. Further legislation is to follow, but the length of the extension period is also intended to provide time for industry to adapt to the revised requirements under the UK Medical Devices Regime.

9.The MHRA states that the planned reform is extensive and includes plans to reclassify products, to increase information gathered at the point of devices’ registration, to strengthen post-market surveillance requirements to ensure better incident monitoring reporting and vigilance, and to introduce alternative routes to market.1

Firms’ incentive for seeking UKCA mark?

10.We had a practical concern about what the incentive would be for firms to seek UK authorisation at additional cost if a CE marking is still accepted, as the CE mark gives firms access to the whole of the EU as well. MHRA replied:

“We anticipate gradual movement from CE marking in the GB market to UKCA marking, allowing for capacity in Approved Bodies to be built and helping ensure there is no ‘last minute rush’ to get devices approved. Manufacturers will be prompted to consider shifting to the UKCA mark as they will not be able to rely on expired CE certificates (other than those the EU has extended under EU medical devices regulations).

The government intends to make a further amendment in future (not as part of this SI). This will provide that, once the future regime for medical devices is in place, it will not be possible to rely on EU MDR or EU IVDR CE certificates that are renewed after the future regime fully applies (due from 1 July 2025) for placing medical devices on the Great Britain market. This would be a further prompt for manufacturers to consider shifting to UKCA marking on devices being placed on the GB market when such certificates come up for renewal.”

Draft Public Order Act 1986 (Serious Disruption to the Life of the Community) Regulations 2023

Date laid: 27 April 2023

Parliamentary procedure: affirmative

These draft Regulations are intended to assist the policing of protests by providing clarity around when the police can intervene to prevent “serious disruption to the life of a community”. The instrument would lower the threshold for “serious” disruption and would make other changes, for example referring to the cumulative impact of repeated protests. The same changes were rejected by the House of Lords when put forward as amendments during the passage of the Public Order Bill (which, when enacted, became the Public Order Act 2023), and the Home Office has not provided any new arguments as to why they should now be approved. The House may wish to consider both the possible constitutional issues that arise and whether it retains its earlier view on the measures. We also have concerns that the Explanatory Memorandum (EM) does not mention the defeat during the debates on the Bill. The EM should acknowledge and address significant concerns expressed about the policy. Finally, there were weaknesses in the consultation process, which was confined to groups likely to support the measures. Given the profile of the issue and the wide range of interested parties, the Home Office should, according to the Government’s own Consultation Principles, have consulted more widely before bringing forward the proposals.

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

Background

11.This instrument would amend the Public Order Act 1986 (“the 1986 Act”) to provide greater clarity about, and a lower threshold for, whether a procession or assembly in England and Wales is likely to cause “serious disruption to the life of the community”. This phrase provides a test that, if met, allows the police to impose conditions on the event, such as specifying a particular route or prohibiting the event altogether. The changes are intended to allow the police to react more appropriately and consistently to protests, such as those carried out by Extinction Rebellion and Just Stop Oil.

12.The Regulations use powers inserted in 1986 Act by the Police, Crime, Sentencing and Courts Act 2022 (“the 2022 Act”). The 2022 Act did not attempt to define “serious disruption to the life of a community” but provided a non-exhaustive list of examples in which the threshold might be met, as well as powers for the Secretary of State to make further provision about the meaning of the phrase. The Explanatory Memorandum (EM) states that further definition is needed because in cases such as Extinction Rebellion and Just Stop Oil, even with the examples provided by the 2022 Act, “the police were clear that their powers to impose conditions on such protests were limited”.

13.We asked further questions of the Home Office on these Regulations. The questions, and Home office’s responses, can be found at Appendix 1.

What changes do the Regulations make?

14.The Regulations seek to correct current deficiencies in, and provide clarity to, the definition of “serious disruption to the life of a community” by:

• Providing that serious disruption can include the cumulative impact of concurrent and repeated protests in the same area.
• Referring to absolute disruption: that is, whether or not there may be disruption in an area regardless of the procession or assembly. We found this concept unclear; the Home Office told us that it is to “avoid the circumstances where deliberately disruptive acts are justified by the fact that certain forms of disruption [such as traffic jams] may occur regularly in an area when there are no protests”.
• Stating that the definition of “community” can include persons affected by the protest and not just those who live or work in the vicinity of that procession or assembly.
• Amending the list of examples provided by the 2022 Act to include where a protest may result in “the prevention of, or a hinderance that is more than minor to, the carrying out of day-to-day activities (including in particular the making of a journey)”.
• Lowering the threshold for serious disruption from “significant” and “prolonged” to “more than minor”. There is no further definition of “minor”, which again leads to some lack of clarity and uncertainty, although the EM states that the phrasing “aligns with” recent protest case law.

Lords rejection of the measures earlier this year

15.The measures in the Regulations were originally brought forward, and in the same form,2 as new Government amendments to the Public Order Bill (now the Public Order Act 2023 (“the 2023 Act”)) at Report stage in the House of Lords but were rejected by the House.3

16.We asked the Home Office why it was appropriate to bring back a measure defeated during the passage of primary legislation as secondary legislation, which is subject to less scrutiny. The Home Office responded that this was to ensure consistency across the statute book and to provide clarity to the police, the courts, and the public. Specifically, the Home Office referred to other amendments agreed by Parliament in the passage of the 2023 Act that defined serious disruption using the “more than minor” threshold, in relation to two new offences of ‘locking-on’ and ‘tunnelling’. The Home Office said, therefore, that it was trying to avoid a situation where “serious disruption” has different definitions in different areas of public order legislation. As mentioned above, the Home Office also stated that the “more than minor” threshold aligns with recent case law.

17.We accept that consistency across the statute book, and with case law, could be a desirable aim. However, the arguments about consistency were made prominently during the debate on the defeated amendments. It might, therefore, have been the House’s deliberate wish that different situations merit different thresholds. In addition, the Regulations contain elements other than the change in the threshold to “more than minor”; for example, that cumulative impact can result in serious disruption. In other words, the Regulations seek to introduce changes wider than would be necessary solely to create consistency within the statute book and no justification has been advanced for bringing back these wider changes.

18.As well as not justifying the substance of the provisions, the Home Office has not provided any reasons for bringing the measures back in the form of secondary legislation, which is subject to less scrutiny, so soon after they were rejected in primary legislation. We are not aware of any examples of this approach being taken in the past; the House may wish to verify this with the Minister. We believe this raises possible constitutional issues that the House may wish to consider.

Transparency

19.The EM is the main explanatory material for the Regulations. However, the EM did not mention the defeat of the measures during the passage of the 2023 Act. We asked the Home Office why this was, but the Home Office did not directly respond. The EM was not satisfactory. In its main explanatory material, the Home Office needs to acknowledge and address significant concerns expressed about its policy.

Inadequate consultation

20.The EM stated that the Home Office had consulted a number of law enforcement bodies and National Highways, the body that looks after England’s major roads, when drawing up the policy. The Home Office told us its view was that “consulting those who would help ensure the Statutory Instrument would be operationally useful was most important”.

21.However, the Government’s own Consultation Principles4 state that departments should “consider the full range of people, business and voluntary bodies affected by the policy.” In an Economic Note accompanying the Regulations, the Home Office acknowledges that a wide range of groups will be affected, including the public and protestors.

22.Given that this is a controversial policy with a wide range of interested parties and strongly felt views, the consultation processes described in the EM are not adequate. A full public consultation, before bringing forward the proposals, would have been appropriate to maximise the chances that the outcome was clear and workable. A wider consultation might have resulted in clearer definitions within the Regulations.

23.In the Economic Note, the Home Office said that one reason there was not a public consultation was that “a similar provision was debated during the House of Lords Report Stage of the Public Order Act 2023”. While important, a debate in Parliament is not a substitute for in-depth consideration by a range of interested parties and those with expert knowledge at the policy formation stage. Moreover, the House of Lords expressed its view by rejecting the measures, yet they have been brought back unchanged.

Conclusion

24.These Regulations are intended to assist the policing of protests by providing clarity around when the police can intervene to prevent “serious disruption to the life of a community”. The instrument would reduce the threshold for “serious” disruption from “significant” and “prolonged” to “more than minor” and would make other changes, for example referring to the cumulative impact of repeated protests. We find some of the definitions unclear and, therefore, unhelpful—something which, perhaps, could have been improved by a more comprehensive consultation.

25.The same changes were rejected by the House of Lords when put forward as amendments to the Bill that became the Public Order Act 2023—although the Home Office did not refer to this in the main explanatory material. The Government justify bringing the measures back by stating that they will provide consistency with other parts of the statute book. However, not all the provisions are relevant to consistency, and, in any case, the House of Lords was fully aware of this argument when it rejected the original amendments. The House may wish to consider both the constitutional issues that may arise and whether it retains its earlier view on the measures.

Draft REACH (Amendment) Regulations 2023

Date laid: 20 April 2023

Parliamentary procedure: affirmative

These draft Regulations propose to extend by three years several deadlines under the transitional arrangements which were put in place after Brexit for the move from the EU’s regime for the Registration, Evaluation, Authorisation and Restriction of Chemicals (EU REACH) to the UK’s new domestic regulatory regime (UK REACH). This would be the second extension of the deadlines. Defra says that the extensions are proposed in response to concerns by industry about the costs of the current transitional arrangements, and that they will allow the Department to work with the Health and Safety Executive (HSE), as the regulator of UK REACH, and others to develop, legislate for and implement by “late 2024” an Alternative Transitional Registration (ATR) model for EU REACH registrations that have transferred to UK REACH.

We have received a submission from the CHEM Trust which raises a number of questions and concerns about the instrument, including about a potential weakening of protections of human health and the environment, about the development and implementation of the new ATR model and about HSE’s capacity to carry out its regulatory function in this area. Given the complexity of the transition from EU REACH to UK REACH and of the development of the new ATR model, we are concerned that the deadline of late 2024 for its implementation may not be achievable; and we are disappointed that while the Retained EU Law (Revocation and Reform) Bill is about to progress to Report Stage in the House of Lords, the Department is not able to say whether the Bill and its sunset provisions will impact on the proposed extended deadlines in these draft Regulations. These are issues on which the House may wish to press the Minister further.

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

26.These draft Regulations have been laid by the Department for Environment, Food and Rural Affairs (Defra) with an Explanatory Memorandum (EM) and Impact Assessment (IA). The purpose of the instrument is to extend by three years several deadlines under the transitional arrangements which were put in place after Brexit for the move from the EU’s regime for the Registration, Evaluation, Authorisation and Restriction of Chemicals (EU REACH) to the UK’s new domestic regulatory regime (UK REACH).5 This would be the second extension of the deadlines.6

27.We have received a submission from the CHEM Trust which raises a number of questions and concerns about the instrument. We have published the submission and Defra’s response in full on our website.7

Background and policy rationale

28.While UK REACH regulates the use of chemicals in Great Britain (GB), EU REACH continues to apply in Northern Ireland under the Northern Ireland Protocol. UK REACH is administered in GB by the Health and Safety Executive (HSE) with the aim of ensuring appropriate protection and management of the use of chemical substances and their associated risks.

29.Both EU REACH and UK REACH operate on the basis of ‘no data, no market’. UK REACH requires substances that are manufactured in, or imported into, GB to be registered with HSE. To register a substance, registrants need to provide information on the hazards, uses and environmental and human exposure of the substance. The registration information is used by HSE for regulatory purposes and by the registrants to identify appropriate risk management measures for themselves and other users in the supply chain.

30.Following Brexit, GB-based companies with existing registrations under EU REACH were able to transfer these to UK REACH, and GB-based suppliers and users of chemicals that were registered in EU REACH but for which they were not the registration holder were given time to prepare for UK REACH registration. Under these arrangements, registrants had to provide HSE with an initial notification, followed by the remaining technical dossier and a chemical safety report, where required, within certain deadlines. The aim of the transitional provisions was to reduce the disruption to industry from moving from EU REACH to the new UK REACH regime.

31.The Department says that in response to concerns by industry about the costs of obtaining the information needed to comply with the transitional provisions, it is working with HSE and the Environment Agency, to develop an Alternative Transitional Registration model (ATR) for EU REACH registrations that have been transferred to UK REACH. The aim is to “reduce the need for replicating EU REACH hazard information by placing a greater emphasis on improving our understanding of the uses and exposures of chemicals in the context of Great Britain”. The IA that has been provided with the draft Regulations estimates that the current regulatory requirements could cost industry £2 billion by 2027, adding that this figure is “highly uncertain” and that it could fall within the range of £1.3 billion to £3.5 billion, depending on industry behaviour.

32.The Department says that because it will take until “late 2024” to develop, legislate for and implement the new ATR model, including changes to the IT system, the current submission deadlines under the transitional arrangements need to be extended. According to Defra, this will avoid industry incurring costs of complying with registration requirements under the current policy when the information requirements may change under the new alternative approach. Given the complexity of the transition from EU REACH to UK REACH and of the development of the new ATR model, we are concerned that the deadline of late 2024 for its implementation may not be achievable.

Proposed extension of the deadlines

33.The deadlines that this instrument proposes to extend are those for registrants to submit information to HSE; the period in which users and distributors who were importing chemicals before the end of the Brexit Implementation Period can continue to import chemicals from the EU without submitting a full registration; and the deadlines by which HSE is required to carry out compliance checks, so that the HSE deadlines align with the extended information submission deadlines.

34.The deadlines are to be extended as follows, depending on the tonnage and hazard profile of the relevant substance:

• From 27 October 2023 to 27 October 2026 for substances included on the EU REACH candidate list before UK REACH came into effect on 31 December 2020; substances that are carcinogenic, mutagenic or toxic for reproduction and manufactured or imported in quantities of 1 tonne a year or more; substances that are very toxic to aquatic life and manufactured or imported in quantities of 100 tonnes or more a year; and all substances manufactured or imported in quantities of 1,000 tonnes or more a year.
• From 27 October 2025 to 27 October 2028 for substances added to the UK REACH candidate list before 27 October 2023; and all substances manufactured or imported in quantities of 100 tonnes or more a year.
• From 27 October 2027 to 27 October 2030 for all substances manufactured or imported in quantities of 1 tonne or more a year.

35.The current arrangements place a duty on HSE to carry out compliance checks by 31 December 2023 and 2027 on no less than 20% of the registration dossiers received, according to tonnage. As these compliance checking deadlines fall before the proposed new submission deadlines, the instrument proposes to amend the dates by which HSE must carry out its compliance checks to 27 October 2027, 27 October 2030 and 27 October 2035, to correspond to the three extended information submission deadlines set out above.

Devolution

36.Defra says that the Devolved Administrations of Scotland and Wales were consulted on the proposed extensions and have consented to this instrument.

Retained EU Law (Revocation and Reform) Bill

37.As UK REACH draws on retained EU law, we asked to what extent the Retained EU Law (Revocation and Reform) Bill (“the REUL Bill”), which is to go to Report Stage in the House of Lords on 15 May, would impact on this instrument, in particular how the proposed three-year extension of the UK REACH deadlines would interact with the sunset provisions contained in the REUL Bill, and whether further legislation would be needed to preserve UK REACH. Defra told us that:

“At this stage, decisions have not been made on specific pieces of Defra’s REUL. The Government is analysing all retained EU law to enable us to determine what should be preserved as part of domestic law and what should be repealed or amended.”

38.We are disappointed that while the REUL Bill has completed its stages in the Commons and is about to progress to Report Stage in the Lords, the Department is not able to say whether the REUL Bill and its sunset provisions will impact on these draft Regulations and the proposed extended deadlines.

Concerns

39.Given the significant costs to industry arising from the transitional arrangements, we asked the Department about the incentive for businesses to seek registration under UK REACH (for the GB market only) in addition to EU REACH (for the EU market) and whether the UK could continue to accept EU REACH registrations, thus avoiding additional costs to industry. Defra responded that:

“Companies which introduce chemicals onto the GB market by manufacture or import should be responsible and accountable for understanding the information which is necessary to ensure safe use within GB. That accountability would be absent if we were to rely instead on registrations submitted by EU operators for the purposes of EU REACH. Registration also provides data on chemical substances to UK Regulators to inform regulatory measures to control the highest risk chemicals in GB. UK Regulators do not have access to the full EU REACH registration database for those purposes. The aim of the work on the Alternative Transitional Registration model is to try to reduce costs to industry while ensuring the UK regulator can ensure high levels of environment and health protections.”

40.Defra explains that during public consultation,8 82% of the 289 responses, in particular responses from industry, had a strong preference for a three-year extension, while Non-Governmental Organisations (NGOs) preferred no extension at all due to concerns that the new ATR model would be weaker and less protective of human health and the environment than the current transitional arrangements. This concern is reflected in the submission we received from the CHEM Trust which also questioned whether the ATR model would signal a move away from the precautionary principle that underpins EU REACH towards a risk-based approach. In response to the concerns raised, Defra explained that:

“There was overwhelming agreement from respondents that the changes will not significantly impact on the high levels of protection. Both options we consulted on were consistent with Article 1 of REACH, as is a requirement in the provisions in the Environment Act, in ensuring a high level of protection of human health and environment as evidenced in the Consistency Statement and impact assessment which accompanied the public consultation.

The ATR model itself is intended to address a number of the issues raised in previous parliamentary debates on REACH, including the potential costs to business and the risk of duplicating tests, especially animal tests.

The new model is still under development and Defra are working with Industry and NGOs, including CHEM Trust who are members of the stakeholder Oversight Group, to develop a model that would address the costs to industry, while continuing to ensure high levels of protection of Human Heath and the Environment.”

41.The Department added that:

“This SI and its associated documentation do not provide for or consider the ATR model itself, as it is still under development. That model will involve a much wider range of issues which will be examined in its own consultation process and impact assessment in due course.

‘Doing nothing’, as suggested by some of the NGOs who responded to the consultation, including ChemTrust, is not a viable option as it could lead to industry having to expend considerable resources providing full registrations by October 2023 according to the existing regulatory requirements when those requirements are likely to change under the ATR model.

UK REACH remains underpinned by the precautionary principle. This is established in Article 1 of REACH, which is listed as a ‘protected provision’ in Schedule 21 to the Environment Act 2021, meaning that it cannot be amended under the Act. Any amendments to UK REACH using the powers in the Environment Act must also be consistent with Article 1. The regulatory procedures in REACH are clearly linked to the assessment of risk, which does not contradict the precautionary principle.”

42.The CHEM Trust also questioned whether, given the cost of EU REACH data packages, HSE would be more reliant on EU hazard data that is publicly available. Asked whether HSE would have the right to request the full chemical safety data submitted to EU REACH if the publicly available data was insufficient for evaluating a substance, Defra responded that:

“There are already processes in UK REACH (under Articles 36, 41 and 46) whereby the regulator can require companies to provide additional information. These powers remain unchanged under the provisions in this draft SI. Regulatory assurance is an important factor in the development of the ATR model and various options are being considered as part of the development of the ATR model.”

43.The CHEM Trust further raised concerns about the capacity of HSE to carry out its regulatory function under UK REACH. The Department responded that HSE had increased staffing levels in its Chemicals Regulation Division by 46% between September 2020 and March 2022 and had continued to build capacity in the last year.

Conclusion

44.The extensions proposed by this instrument would be the second time that the deadlines for the transition from EU REACH to UK REACH are extended. The Department acknowledges concerns by industry about the costs of the transition and has committed to developing an alternative model. Given the complexity of the transition from EU REACH to UK REACH and of the development of the new ATR model, we are concerned that the deadline of late 2024 for its implementation may not be achievable. In addition, there are concerns by environmental NGOs about a potential weakening of protections of human health and the environment and about HSE’s capacity to carry out its regulatory function in this area. There is also uncertainty about the impact of the REUL Bill and its sunset provisions on the proposed extended deadlines in these draft Regulations. These are issues on which the House may wish to press the Minister further.

Russia (Sanctions) (EU Exit) (Amendment) Regulations 2023 (SI 2023/440)

Date laid: 18 April 2023

Parliamentary procedure: made affirmative

With immediate effect, these Regulations, the eighteenth in the series, further extended current trade sanctions to ban the export, supply and delivery of a range of UK goods that Russia has been found using on the battlefield, and extended the ban on revenue-generating goods originating or consigned from Russia. In addition, from 30 September 2023, the Regulations extend existing bans on importing Russian iron and steel goods to cover the import of Russian origin goods that have been processed in third countries.

At our request, the Foreign, Commonwealth and Development Office (FCDO) has provided an evaluation of the effectiveness of the sanctions imposed so far. The FCDO also indicates how they are addressing non-compliance by third countries, including through these Regulations.

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

Background

45.Since the start of the conflict in Ukraine, the UK has imposed a range of sanctions on both individuals and on the Russian state, as part of an international approach to encourage Russia to end the war.

46.These Regulations, the eighteenth in the series, further extended the trade sanctions with immediate effect to:

• Ban the export, supply, and delivery of a range of UK goods that Russia has been found using on the battlefield, and related ancillary services. This list includes certain aircraft and vehicle parts, radio equipment and other electronic equipment, biotechnology, and 3D printing machinery.
• Ban the import and acquisition of further goods and ancillary services which generate revenue for Russia, as set out in new schedule 3DA including iron and steel products, originating or consigned from Russia,
• And, from 30 September 2023, extend existing bans on importing Russian iron and steel goods to cover the import of Russian origin goods that have been processed in third countries.

Effectiveness of sanctions so far

47.We were particularly perturbed to read in the Explanatory Memorandum that UK goods are still being used by Russia on the battlefield. This prompted us to question how effective the 17 sanctions instruments we have already seen have been. The Foreign, Commonwealth and Development Office (FCDO) responded:

“Our unprecedented trade sanctions have led to a 99.2% reduction in UK goods imports from Russia in the 3 months to January 2023 compared to 3 months to January 2022, and a 69.3% reduction in UK goods exports to Russia in the 3 months to January 2023 compared to 3 months to January 2022.

Sanctions on Russia are having a major effect. They have sent Russia into recession, significantly degrading the building blocks for Russia’s long-term growth and Putin’s ability to fund his war machine. Russia’s budget is in deficit and by March it had already spent 81% of its forecast GDP deficit in 2023. Russia is now cut off from Western financial markets and service sectors, constraining growth and productivity. By sanctioning products including all of those found on the battlefield, Russia is forced to source lower quality substitutes elsewhere, where they are often less capable and liable to failure. We continue to monitor the effectiveness of all of our sanctions.”

48.We also asked why any trade is still permitted. FCDO replied:

“Taking 2021 as a year of reference, 96% of UK-Russia goods trade (£20 billion) has been brought under full or partial sanctions. As a result, trade with Russia is at its lowest point since record began. Some sectors, such as the export of pharmaceutical products, have deliberately not been brought under sanctions, to minimise the impact on ordinary Russians.”

49.It therefore appears that those goods found on the battlefield may have been supplied by third countries. We asked FCDO what is being done to prevent that:

“Not all countries have developed effective sanctions, which enables Russia to circumvent some of the sanctions Western allies have put in place. We will continue to support those countries that lack the necessary strategy and infrastructure to enforce sanctions effectively.

We also recognise that some countries are continuing to deliberately circumvent sanctions. We are engaging these countries in private to make our lobbying most effective. The UK is working jointly with US and EU sanctions co-ordinators to raise circumvention with a number of countries as part of this work. The Government undertakes assessment into all credible allegations of trade sanctions offences.”

Lead time for products processed in a third country

50.As the stated intent of the sanctions regime is to reduce Russia’s income, we asked why the intended restrictions on iron and steel products were not being implemented until 30 September 2023, that is not for five months. FCDO told us that:

“UK businesses will need time to prepare for the ban on processed iron and steel, to review and adapt supply chains where needed. The Government will also be engaging further with businesses to support them to comply with these measures in the coming months. Further, the UK has sought, and taken a leading role in, an internationally coordinated approach to imposing sanctions on Russia following its invasion of Ukraine. This helps ensure sanctions have the maximum impact, including through working together with international partners to tackle circumvention. EU measures on third-country processed iron and steel are also coming into force on 30 September 2023, so we have chosen to mirror this date to maximise impact and reduce opportunities for potential avoidance.”

Energy Bills Discount Scheme Regulations 2023 (SI 2023/453)

Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 (SI 2023/454)

Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 (SI 2023/455)

Energy Bills Discount Scheme Pass-through Requirement Regulations 2023 (SI 2023/463)

Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 (SI 2023/464)

Date laid: 25 April 2023

Parliamentary procedure: made affirmative

This set of five made affirmative Regulations establishes the Energy Bills Discount Schemes (EBDS) for Great Britain and Northern Ireland, as announced by the Chancellor in January 2023. The EBDS will provide discounts on the electricity and gas bills of non-domestic customers, including businesses, charities, and public bodies such as schools and hospitals, as well as domestic customers of heat networks between 1 April 2023 and 31 March 2024. The EBDS replaces the Energy Bill Relief Scheme (EBRS) which supported non-domestic customers between 1 October 2022 and 31 March 2023. Additional information from the Department shows that customers raised few complaints about not receiving the support they were entitled to under the previous EBRS, suggesting that the pass-through requirements under the EBRS which have mostly been replicated for the new EBDS scheme, were effective in getting the support to the intended beneficiaries. We welcome that the Department will monitor the new EBDS and intends to publish an evaluation report before the end of 2024 specifically in relation to the support received from domestic customers of heat networks.

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

51.This set of five made affirmative Regulations has been laid as a package by the Department for Energy Security and Net Zero (DESNZ) under the Energy Prices Act 2022 (“the Act”). The Regulations establish the Energy Bills Discount Scheme for Great Britain (EBDS GB) and the Energy Bills Discount Scheme for Northern Ireland (EBDS NI) (collectively referred to as “the EBDS” or “the Schemes”), as announced by the Chancellor in January 2023.9 The Regulations also make provision for the operation of the EBDS, including requirements for any intermediaries, such as landlords, to pass on the support to end users as the intended beneficiaries of the Schemes.

52.The EBDS will provide discounts on the electricity and gas bills of eligible non-domestic customers, including businesses, charities, and public bodies such as schools and hospitals, as well as domestic customers of heat networks. The Schemes will apply discounts to energy usage between 1 April 2023 and 31 March 2024. They replace the Energy Bill Relief Scheme (EBRS) which supported non-domestic customers between 1 October 2022 and 31 March 2023.

Overview of the different instruments

53.SI 2023/453 and SI 2023/454 share an Explanatory Memorandum (EM); they establish the EBDS GB and EBDS NI respectively. SI 2023/455 and SI 2023/463 also share an EM and ensure that support is delivered to the intended beneficiaries of the EBDS by requiring landlords and other intermediaries to pass on benefits received from the Schemes to end users such as businesses, charities, schools, hospitals and domestic customers of heat networks.

54.SI 2023/464 provides for the operation and delivery of the EBDS for Non-Standard Cases (EBDS NSC) in GB and NI. This specific scheme is designed to provide support for certain non-domestic customers which consume gas or electricity supplied by a license-exempt supplier, for which they pay a price that is pegged to wholesale energy prices. These non-domestic customers will not receive support under the standard EBDS which is focused on providing support through licensed suppliers. According to DESNZ, this is a relatively small part of the market: customers range from large chemical manufacturers that operate directly in the wholesale market, to smaller businesses on industrial estates that receive electricity from an energy from waste plant.

How the EBDS will work

55.The Department says that the Schemes strike “a balance between supporting businesses between 1 April 2023 and 31 March 2024 and limiting taxpayers’ exposure to volatile energy markets”. The EBDS is subject to a cap set at £5.5 billion; this compares to spending of £18 billion on the previous support package for non-domestic customers, mainly through the EBRS, reflecting the fall in energy prices since September 2022.

56.The Schemes consist of three components:

(i)Baseline discount: this support will be applied automatically to any non-domestic customer in GB and NI facing gas and electricity prices beyond a set threshold.

(ii)Discount for Energy and Trade Intensive Industries (ETII), such as cement, glass, and steel, but also libraries and archives: this will be a higher level of discount for around 44,400 businesses and organisations which carry out 50% or more of their activity in an EEII and which face gas and electricity prices beyond a set threshold that will be lower than the threshold for the baseline discount. Businesses will need to register to receive this support.

(iii)Support for domestic customers on heat networks: heat suppliers are captured under the EBDS, as they purchase energy through commercial contracts and then supply heating and hot water to both domestic and non-domestic customers. A higher level of discount will be available for domestic customers who receive their heat from a heat network, to ensure that the support they receive is in line with that received by other domestic customers via the Energy Price Guarantee (EPG).10

EU approval in Northern Ireland

57.The Department says that some elements of the EBDS as it applies in NI engage Article 10 of the Windsor Framework,11 and that approval from the EU was therefore sought under the Temporary Crisis and Transition Framework for State Aid measures.12 Asked whether the EU had given its approval, DESNZ told us that while discussions were “ongoing” with the EU, all eligible businesses would be offered baseline support under the EBDS as soon as they sign up, and any additional support, once provided, would be backdated to 1 April 2023. Asked why the discussions with the EU had not yet concluded, DESNZ told us that “there are constructive discussions underway with the European Commission, which should soon be concluded”.

Review & consultation

58.The Department says that, as part of the review of the previous EBRS, it consulted widely across all sectors of the economy and with trade bodies, and that it is developing further research to assess the level of support that intermediaries will pass on to heat network customers and others under the new EBDS. For domestic households, this will mainly be covered by interim evaluations which seek a better understanding of the experiences of households and how effectively support was passed through by intermediaries to domestic customers. Asked about the timetable for these evaluations, the Department told us that they are “expected to be completed by autumn 2024”, with the final report to be published “before the end of 2024”.

Pass-through requirements & experience of the previous Schemes

59.The draft Regulations include provisions to ensure that landlords and other intermediaries are required to pass on benefits received from the Schemes to end users such as businesses, charities, schools, and hospitals as well as domestic customers of heat networks. These pass-through requirements mostly replicate the requirements that were introduced for the previous EBRS support scheme.13 The pass-through provisions include a role for the Energy Ombudsman to provide independent redress in GB to domestic and microbusiness heat network customers that are unable to resolve a complaint about the pass-through requirements with their heat supplier, as under the previous EBRS, and an equivalent role for the Consumer Council for Northern Ireland (CCNI).

60.We asked the Department about the volume and outcome of any complaints submitted to the Energy Ombudsman and the CCNI under the previous EBRS. DESNZ responded that:

“As of 23rd April the Energy Ombudsman started proceedings in 7 complaints raised to it where in the view of the ombudsman the case warranted at least additional documentary checks to be progressed.

CCNI has received 949 contacts regarding the energy support schemes being delivered by the [DESNZ]. These contacts accounted for 6% of the 15,024 enquiries and complaints handled by CCNI during the period 1 April 2022 to 28 April 2023. The complaints handling expertise of CCNI’s staff has enabled them to appropriately determine the nature of each enquiry and the remedy required.

To date no complaints (zero) have been raised with CCNI relating to the actions of heat network suppliers in the pass through of the [EBRS].”

61.The number of complaints appears to have been small in the context of the Department’s estimate that over 500,000 fixed contracts/meters were supported under the EBRS,14 suggesting that the pass-through requirements under the EBRS, which have largely been replicated for the new EBDS, were effective.

62.In the shared EM to SI 2023/463 and SI 2023/455, however, the Department acknowledges that:

“[T]here may be some implications for more vulnerable customers who may be less able to raise issues with their intermediary regarding their discounts. To mitigate against this, we are developing guidance and a communications strategy to ensure that intermediaries are aware of their obligations, so pass on support in a just and reasonable manner. Some public sector bodies, such as local authorities, may be classed as intermediaries. Civil courts will be impacted if end users decide to claim pass-through of scheme benefits as civil debts from intermediaries. Intermediaries who are required to pass-through include local authorities where they provide for council housing.”

63.We asked DESNZ whether there was any evidence from the implementation of the previous EBRS that vulnerable customers, such as council housing tenants, struggled to access their discounts or were not able to raise issues with their landlords, and whether the experience of vulnerable customers had been monitored and looked into as part of the review of the EBRS. The Department said that this had not been a specific focus of the review but added that:

“Intermediaries, including heat network operators, are required to pass on support to their end users. For the 440,000 domestic customers on a non-domestic meter connected to a Heat Network, they will receive a ‘bespoke’ level of support under EBDS. This will ensure households on Heat Networks do not face disproportionately higher bills compared to a boiler heated equivalent household at the Energy Price Guarantee (EPG) level. The Government is aware that statistically heat networks are more likely to serve more vulnerable and elderly consumers than comparable heat sources.

Intermediaries are responsible for meeting requirements to pass on the benefit of support to their end users. Heat network operators are responsible for meeting requirements to pass on the benefit of the higher tariff provided by this support to end users.

We are aware of only one case15 that was taken to First tier Tribunal where a leaseholder claimed their landlord had not passed through energy support from the EBRS. If domestic customers believe their discounts have not been passed on in a just and reasonable way and are unable to resolve their complaint directly with their heat supplier, they will have access to alternative dispute resolution (as under the EBRS).”

Conclusion

64.We take some assurance from the information the Department has provided about complaints that the pass-through requirements under the previous EBRS scheme, which have largely been replicated for the new EBDS scheme, were effective in getting the support to the intended beneficiaries. We welcome that the Department will monitor the new EBDS and intends to publish an evaluation report before the end of 2024 specifically in relation to the support provided to domestic customers of heat networks.

Education (Induction Arrangements for School Teachers) (England) (Amendment) Regulations 2023 (SI 2023/448)

Date laid: 25 April 2023

Parliamentary procedure: negative

These Regulations provide that Local Authorities (LAs) will no longer be able to act as Appropriate Bodies (ABs) overseeing induction programmes for early career teachers. The aim is to raise the quality and consistency of AB services across England, by ensuring quality assurance mechanisms are in place to hold ABs to account. There are a number of possible practical issues, including the required speed of the transition to other providers and the potential loss of expertise, which could undermine the policy intent of raising standards in ABs. There are, however, also questions about the development of the policy. The process appears to have been quite extensive, but the key decision was made as a result of “informal stakeholder engagement” and an analysis of the costs and benefits of various options, neither of which have been published. The use of unpublished and informal policy development processes reduces transparency in decision making and makes it difficult to conduct proper scrutiny on the instrument. The House may wish to press the Minister for further details on the outcome of this engagement and analysis.

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

65.This instrument provides that Local Authorities (LAs) will no longer be able to act as Appropriate Bodies (ABs) overseeing induction programmes for early career teachers (ECTs). The aim is to raise the quality and consistency of AB services across England, by ensuring there are quality assurance mechanisms in place to hold ABs to account.

66.Support for ECTs is delivered through the Early Career Framework. The Framework features two years of induction support, including a dedicated and trained mentor for each ECT. ABs are the organisations that quality assure this statutory induction. Every school that employs ECTs must appoint an AB before induction can begin. The headteacher and the AB are then jointly responsible for the monitoring, support and assessment of the ECT. In addition to these core roles, ABs often give support and assistance on induction to schools and trusts and keep ECT records and assessment reports.

67.The Department for Education (DfE) told us that there are currently 193 ABs in England, of which:

• 112 are Local Authorities.
• 79 are Teaching School Hubs (TSHs). The Explanatory Memorandum (EM) to the Regulations states that TSHs are “a network of 87 designated schools operating across all areas of England that provide centres of excellence for high-quality professional development and support to teachers at all stages of their careers”, including training programmes for ECTs.
• Two are national ABs, designated by the Secretary of State, that were originally set up to serve the needs of independent schools and academy trusts respectively.

68.We asked further questions of DfE on these Regulations. The questions, and DfE’s responses, can be found at Appendix 2.

What do the Regulations change and why?

69.The Regulations state that LAs will no longer be able to act as ABs after 1 September 2023. There is a one-year transition period, so that an LA can continue to act as an AB in a limited capacity until 31 August 2024, if it was appointed before 1 September 2023.

70.DfE explains that the change is intended to raise the quality of AB services. It offers three supporting arguments.

71.First and foremost, DfE says its existing formal agreements with TSHs allow the Department to hold TSHs to account and will provide a mechanism to “introduce more robust quality assurance”, thereby allowing the Department to raise standards in the sector. DfE states that, in contrast, there is no existing mechanism to ensure quality control in LA ABs, and that to create one would “require a more developed infrastructure that would create costs and would risk duplicating cost and reporting functions”.

72.It is not entirely clear to us, and DfE has not explained, why a regime developed for TSHs could not also be applied to LAs without significant additional cost. DfE’s cost/benefit analysis (below) might have helped in understanding this, but the Department has not made it available.

73.Second, DfE suggests that a reduction in the number of providers of AB services might be beneficial by reducing the “unintended negative impacts of competition”. ABs are only allowed to charge fees to cover their costs. However, DfE argues that, at present, ABs may offer inconsistent levels of service. For example, one offering lower levels of scrutiny could charge a lower fee and schools might choose the provider on this basis, which could result in lower standards.

74.Suggesting that reduced competition might increase standards is an unusual argument. Even if correct, DfE has offered no justification why removing LAs from the provider market is the most effective way to achieve this goal. For example, DfE does not appear to have conducted or published a specific comparison of LA and TSH charges and service levels, stating that “the relevant evidence on fees and costs was considered via an extended period of stakeholder engagement”

75.We also note that, if true, the logic of this argument is that some schools will face increased costs for AB services. In response to our question on this, DfE said that it does not collect data on ABs’ fees and it therefore does not have an estimate of this effect. At a time when school finances are stretched, it is surprising that DfE is introducing a policy deliberately designed to increase costs without an analysis of the size and impact of the change.

76.Third, DfE states that the reforms would “support the wider changes to the role of LAs away from education services”, as outlined in a 2022 Education White Paper.16 The paper described a system “with LAs at the heart as champions of the best interests of children in their area, as they step back from their role in directly maintaining schools”. DfE says that, under this model, “AB services were no longer a suitable fit for LAs”.

Policy development process

77.We asked DfE a number of questions about the policy development process. In response, DfE stated that this had been “an iterative process of working out the viability and effectiveness of potential options” that had taken place over “several years”. Initially, this took the form of a “targeted consultation”, which led to the announcement of an intention to reform the AB sector in March 2021.17 In this document, the Department said:

“Over time, we want to ensure that all appropriate bodies meet the same high standards and to do this we will carefully review options around quality assurance of appropriate bodies through accreditation. We will consult on the possible criteria and options for accreditation through engagement with the sector during 2021 with the potential for accreditation to be considered from September 2022. We will work closely with appropriate bodies to test options and rationales before introducing any changes.”

78.DfE told us that alongside “several rounds of informal stakeholder engagement with a range of stakeholders from the AB sector” including LAs, TSHs and their representative organisations, the Department also conducted a cost/benefit analysis of the various options. Following this, DfE concluded that “removing LAs from those that are listed as ABs had the least costs associated with it”.

79.Having reached this conclusion, DfE then consulted publicly only on when to remove the AB role from LAs.18 The Department told us that it would not have been appropriate to consult on whether to keep the LA AB role “because there was no scope for the already agreed policy position to change”.

80.Although the Department noted that “a number” of respondents to the public consultation opposed the principle of the change, it was not able to quantify this, as the question was not in the scope of the consultation. The Department told us, however, that these views were stated primarily by either LAs acting as ABs, or schools currently using a LA as their AB.

81.It is a striking feature of these Regulations that, although preceded by a number of steps in the policy development process, the key element has not been the subject of a public consultation. Moreover, the results of the “informal stakeholder engagement” and the cost/benefit analysis have not been made public. Without more details on these key steps in the process, it is difficult to assess whether the evidence supports the Department’s decision. We reiterate that all underlying information should be published from the start of the scrutiny process and the House may wish to press the Minister further on the evidence used to support this policy.

Practical issues

82.Respondents to the 2022 consultation identified a number of possible practical issues with the proposal.19

83.First, the 2022 consultation response acknowledges that “many local authorities have significant experience and expertise as ABs and show great commitment to their ECTs and schools”. We asked DfE whether consideration had been given to ways of retaining this expertise. DfE pointed to revised AB guidance, published alongside this instrument, which is the product of engagement with ABs.20 DfE has provided guidance to LAs and TSHs on coordinating to ensure a smooth handover, including creating local transition plans. DfE also stated that “some TSHs are considering with LAs where TUPE [Transfer of Undertakings (Protection of Employment)] or staff transfers may be applicable to retain specific individuals”. The Department said, however, that TUPE will not apply automatically. We encourage DfE to take all possible steps to retain the experience and expertise that exists in LAs, otherwise the overall intention to improve the quality of AB services may be undermined.

84.Second, the main reforms in this instrument come into force on 1 September 2023, with some transitional provisions on 31 August 2024. In this time the functions of 112 LA ABs will need to transfer to TSHs. We asked the Department whether TSHs will be able to build sufficient capacity quickly enough to provide a high-quality service. DfE said that all TSHs have been asked to submit “transition plans” for their local area and that the Department has identified areas where further capacity may be needed. The House may wish to seek further reassurance from the Minister that the time available is sufficient to allow a smooth transition.

85.Third, TSHs can also be accredited providers of Initial Teacher Training (ITT) and this could produce a conflict of interest if the TSH is also acting as AB provider. Some schools are, therefore, required to have relationships with two TSHs. The 2022 consultation response promised to review this issue and “test any potential changes [ … ] in due course”. The reforms could exacerbate the conflicts of interest issue and we encourage the Department to review the position as soon as possible.

Conclusion

86.These Regulations provide that LAs will no longer be able to act as ABs overseeing induction programmes for early career teachers. The aim is to raise the quality and consistency of AB services across England, by ensuring there are quality assurance mechanisms in place to hold ABs to account. DfE says these would be more complex and costly to put in place for LAs than for other AB providers.

87.The reasons provided by the Department are not wholly convincing; for example, it is not clear, and DfE has not explained, why the oversight regime for other providers could not easily be adapted for LAs. Furthermore, the key policy decision was not subject to a public consultation but was taken after “informal stakeholder engagement” and on the basis of an internal cost/benefit analysis. The results of these have not been made public. The use of unpublished and informal policy development processes reduces transparency in decision making and makes it difficult to conduct proper scrutiny on the instrument. The House may wish to press the Minister for further details on the outcome of this engagement and analysis.

88.There are also a number of possible practical issues with the policy proposal, including the time available to make the significant changes to the system that will be necessary and the potential for loss of expertise, which could undermine the policy intention to raise the quality of AB provision. Again, the House may wish to seek further reassurances on these points.

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