Country of Origin Marking

– in the House of Commons at 8:49 pm on 9th May 2011.

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Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire 8:59 pm, 9th May 2011

It is a great privilege to open this important Adjournment debate. I must begin by declaring my interest, as outlined in the Register of Members’ Financial Interests.

We are all passionate about developing our manufacturing base. It is vital that we, as politicians, do all that we can to promote British manufacturing and production to begin to rebalance our economy. I will place an emphasis on country of origin marking for manufactured products such as consumer goods, but I am sure that other Members will raise other areas.

This debate comes at a useful time, because only last week or the week before, Stoves, the cooker manufacturer, released information from a survey it had conducted with consumers, which found that half of British consumers were baffled about what products were made in Britain and what products were not. It also showed that two thirds of British consumers wanted to see a “Made in Britain” mark on products. I could not agree more with that sentiment, except for one small point: it should not be “Made in Britain”, but “Made in Great Britain”.

Photo of Mark Spencer Mark Spencer Conservative, Sherwood

I hope that my hon. Friend recognises that the food industry is different from other industries in that it is possible to make a chicken pie in Nottinghamshire using south American chicken, and say that it is made in the United Kingdom. Does he agree that there are many loopholes that need to be closed?

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

My hon. Friend makes a pertinent point. The manufacture of chicken pies is not an area of speciality for me, but I am fortunate that in the village of Wombourne in my constituency, there is a McCain factory that produces some of the finest smiley faces in the world. Members will be pleased to hear that they are all made from British potatoes. It is not only McCain’s smiley faces that are important. British people want to see British brands manufacturing in Britain once more. We need to give those companies an incentive by making it clear what products are manufactured in Britain.

Photo of Chris White Chris White Conservative, Warwick and Leamington

Does my hon. Friend agree that if a customer is given more information, such as the country of origin, there is a high probability that businesses will move to countries with better records in ethics and sustainability?

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

My hon. Friend makes an important and prescient point. I will go on to touch on the ethics of where products are manufactured.

Forty per cent. of British consumers have stated that if they knew that products were made in Britain, whether they be food products or consumer products such as chinaware, glassware or clothing, it would influence positively their decision to buy those products. We want to promote manufacturing. If the Government can do anything to promote our products and encourage people to buy them, they need to do so.

Photo of Heather Wheeler Heather Wheeler Conservative, South Derbyshire

The Toyota plant at Burnaston is making the new hybrid Auris, and they are being branded as, “Made in Britain”. It is really interesting that manufacturers are starting to do that themselves.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

Absolutely. There is a real sense of pride. That pride was felt even by the Department for Business, Innovation and Skills when, not long after the general election, a JCB—another great product from my home county of Staffordshire—was proudly displayed in front of the Department in the full livery of a Union flag. Well, if it is good enough for BIS, I say it is good enough for the rest of the country.

Britain is still a great manufacturing nation, despite the many years of decline and the fact that employment in manufacturing has declined from 4.3 million to 2.5 million. We should not be disheartened, because we can rebuild this great manufacturing nation and have a second industrial revolution, with manufacturing businesses spawned right across the nation—hopefully, most importantly of all, in South Staffordshire. I am sure all Members would agree with that.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

Anywhere with the compass direction “south” in its name.

The Government can make the simple move of ensuring that all manufactured goods have country of origin markings. That can help in various sectors—food has been mentioned, but I particularly wish to point out chinaware, glassware, clothing, domestic electrical appliances and furniture. People would know when they made their purchases that they were buying British, supporting the British economy and making a real difference.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

The manufacturing sector in my constituency is very small, but we do have a growing food production sector and are trying to add value to locally produced food. One of the big issues is that people want to buy ethically produced food and be sure that animals have been treated properly. In buying British, they know that that is the case. My hon. Friend’s points are therefore very important to the food sector in my constituency.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

I know that my hon. Friend has been involved in promoting all manufacturing businesses in his constituency, including a Welsh cake shop in Betws-y-Coed, which I am sure is there as a direct result of his interventions and help.

My hon. Friends who have mentioned ethics touch on a vital issue. Country of origin marking makes it very clear where products come from and the standards to which they have been produced. I always notice, Mr Deputy Speaker, what a fine and wonderful suit you sport on occasions such as today. I can only imagine that it was manufactured by one of the finest tailors in all of Savile row, as you always look so elegant and wonderful as you sit there looking nobly over us all.

Without a shadow of a doubt, that is a direct result of fine English craftsmanship. Many Members do not have sufficient income to support such fine wear, but when we go to the tailor’s, the gentlemen’s outfitters, Tesco or wherever we go to purchase our suits, we make our choice based on price, quality and design. We need transparency about where products come from.

When I have been to China and Vietnam and seen some of the factories that produce consumer goods for the UK, I have seen that it is not just the wages that are different from those in the UK but the working conditions and the humanity with which the work force are treated. I did not think I would often make a speech in the House and find common cause with the TUC, but I agree that we need to tell people in Britain that when they buy something cheap, they are not paying a high price for it but other people are. We need to make it clear which products are British and which are Italian, German or from any other part of the world, such as China or Indonesia.

Photo of Justin Tomlinson Justin Tomlinson Conservative, North Swindon

I congratulate my hon. Friend on an extremely passionate speech, which I am sure will gather much support throughout the House. I agree with his point about informing consumers, because in debate after debate, we are told that we need consumer power to influence matters. However, we can deliver that only if the consumer is informed, so I fully echo his comments.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

My hon. Friend touches on an important point. Indeed, supposing I went back to my old trade of being a potter and I set up a company called Gavin Williamson English Chinaware, what country does my hon. Friend the Minister think a plate sold by my company would have been produced in?

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I think my hon. Friend is asking a rhetorical question, and I would like him to give the House the answer.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

My hon. Friend gives a very wise response. The simple reality is that such a plate could come from any country. It would not have to come from England, which is a great tragedy, because that is misleading consumers. We should treat customers with honesty and dignity so that they can make their choices on prices, design, value and so much more.

Photo of Mark Spencer Mark Spencer Conservative, Sherwood

My hon. Friend is being very generous with his time. There is a thirst among consumers for information. He makes a strong case about ethics, so would he support extending labelling to detail not just place of origin, but whether a food product contained genetically modified materials or whether a meat product was halal, so that the consumer could be informed?

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

I am fearful, because as soon as we get on to meat products I am always at a disadvantage—I can talk about chinaware. My hon. Friend makes a point about the integrity of products, which is something that we need to encourage. We only have to look at Waitrose to see a business that puts the highest standards on telling its consumers where its products come from, and people reward it with their custom.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk

Let me help my hon. Friend on meat products, particularly pork products. Is he aware that 70% of imported pork in this country is produced overseas to standards that would be illegal here, yet it can still be packaged in a way that makes consumers believe that it is British?

R

Subject: Re: English Meat

Submitted by Robert Feal-Martinez

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

That is a great tragedy, and it is common not just in food manufacturing. So many of the products that we see on the shelves of so many retailers right across the country are passed off as British when actually they are not. They are often manufactured to far lower standards. We have to take a lead on this issue.

I must confess that when I got this debate my heart fell slightly. In my heart of hearts I know that the Minister will probably not quite be able to give me answers that I so desperately want to hear coming from his lips—that he is a passionate believer in country of origin markings and that this is something that we will roll out as a Government, helping manufacturing businesses large and small, right across the country. I had a look through something that the Department for Business, Innovation and Skills had produced setting out some of its concerns. I know that the Minister always listens closely to Members of Parliament, as we want to guide him away from the sometimes, let us say, constraining influence of officials and give him some exciting information to go back and challenge them with.

One thing that officials constantly say is that the benefits to consumers are questionable. I cannot understand how any official could ever say that the benefits to consumers were questionable, when all that we would be doing is telling them where products come from. What could be more pure, more innocent or more helpful to consumers than telling them about the integrity of the products that they are buying—that is, about whether they are right and true—or where they have come from? Officials will probably say that country of origin marking will increase costs. I assure the Minister that it will not, for the simple reason that companies that are significant producers in furniture manufacturing, domestic appliances, chinaware, glassware or other sectors will already have to do country of origin labelling if they want to export into the US, Japan, South Korea and China. I remember exporting an awful lot of chinaware to China, and I always had to put the country of origin on the product. There is therefore no extra cost to manufacturers, because we already do it.

I spoke just this morning to the chief executive of Royal Crown Derby, Hugh Gibson. I asked him, “Why do you want this country of origin marking?” and he said to me, simply, “Gavin, on every piece of ware that I produce, I put my Royal Crown Derby back stamp on it, and proudly, ‘Made in England’.” He added, “Other producers put their back stamp on products but no country of origin. I can only assume that they are ashamed of where they produced that product.”

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

My hon. Friend makes a powerful case. Does he agree that such labelling is in the interests of British exports? All around the world, whenever I pick up a coffee cup in a hotel, I automatically, as a true Staffordshire man, turn it over to see whether it has come from Staffordshire, whether from Steelite,

Dudson or one of the other fine companies that Joan Walley so ably represents.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

We cannot forget that “Made in England” and “Made in Great Britain” have value for consumers in this country, but probably more so around the globe. If we are not seen jealously to guard the labels “Made in England”, “Made in Great Britain”, “Made in Staffordshire” or “Made in the West Midlands”, and show that they are important to us, why should they mean anything to the rest of the world? We need to show the world that we are proud of “Made in Great Britain”, but if we do not insist upon having such labels on our products, why should the world believe it?

The Department for Business, Innovation and Skills will probably say that it is difficult to enforce such a provision. However, if we introduced it initially to some sectors and then further, it would be self-enforcing, because businesses that are involved in the manufacture of the product will be on to trading standards immediately if they see any products that do not have country of origin marking. I must speak very highly of Staffordshire trading standards. I am sure that it and Stoke-on-Trent trading standards and many others throughout the country would be very proactive in enforcing the measure and in ensuring that the law and writ of the land is obeyed by all.

The Minister’s officials might say that businesses do not want such a measure, but manufacturers do. Oddly enough, retailers and importers do not want it, but 95% of companies that employ people to manufacture products in this country will say, “Yes, we want it. Yes, we need it,” because that labelling is showing our added value on the products that we produce in this country when we create British jobs.

I should like to extend an invitation to the Minister. I shall put a week of my recess aside to take him around as many manufacturing businesses that produce goods in this country as possible, so that he can listen to every single one of them say, “Yes, we want country of origin labelling on products so that people know that ‘Made in Britain’ means something in this country.”

Photo of Joan Walley Joan Walley Chair, Environmental Audit Committee

With the hon. Gentleman’s permission, I was hoping to have the opportunity to make a few comments before the Minister speaks. I am just taking out an insurance policy to ensure that I do.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

Yes—I was just coming to the end of my speech.

Finally, officials might be concerned about what message country of origin labelling sends out to the world. They might say that country of origin marking on our products says that we are not a free-trading nation. I assure the Minister that there is not a country out there that does not recognise Britain as one of the most laissez-faire nations in trade and promoting world trade around the globe. No one would doubt our commitment to that, and I am quite sure that no foreign nations would do so either. This is a real opportunity to send a message to British business, industry and manufacturing that we are proud of what they do, and that we value the British work force and British products. I therefore urge the Minister to support country of origin labelling.

Photo of Joan Walley Joan Walley Chair, Environmental Audit Committee 9:20 pm, 9th May 2011

I congratulate Gavin Williamson not only on securing the debate, but on bringing it to the Chamber in the manner he did. In calling it a generic debate about origin markings, he not only talked about issues affecting the ceramic and pottery industry, which is of major concern to me as a representative of parts of north Staffordshire—as opposed to South Staffordshire, which he represents—but made it clear that this is an issue for all kinds of trade. Hopefully the food that we eat—whether labelled as genetically modified or for the quality of the pork, chicken or whatever—is all served off plates and ceramics made in and from Staffordshire. I am grateful, therefore, for the permission of the Minister and the hon. Member for South Staffordshire to speak briefly in this important debate and to put a few comments on the record.

In Staffordshire, this debate has all-party support. MEPs on all sides have led the debate on the ceramics and potteries industry in the European Parliament. For that reason, I believe that the Minister has a particular opportunity to think again and perhaps to listen to some independent thoughts, as was the case in the preceding debate. Given the decision taken in the European Parliament approving a proposal for origin markings, it is possible for the UK no longer to oppose the idea in the discussions involving the Department for Business, Innovation and Skills. Objections to the proposal have been raised—by Germany, I think, as well as the UK—but we now have a unique opportunity not to be afraid of going along with what the European Parliament has said. It is in all our interests to have country of origin markings.

For the potteries and ceramic industry, it is clear that this issue has been going on for far too long. Time is now available to debate this matter, and much progress has been made in Europe. From the point of view of jobs, it is certainly in our interests to have “Made in Britain” markings. Like my colleagues, I have been talking with the British Ceramic Confederation, which at times has been wholly in favour of this proposal. Some of its members have not been in favour, but perhaps they have been those who like to think that what is manufactured under their brand is not manufactured here. Nevertheless there are real issues about transparency. We hear so much about choice, and when people go out and buy a product, they want to be able to make an informed decision. They want information consistent with the best trading standards practice so that they can know what they are buying and where it was manufactured.

By reconsidering their opposition to origin markings, the Government could give us the opportunity to enable British manufacturing in Stoke-on-Trent to proceed in the way it needs to. We have lost so many jobs in the pottery industry, and it is not in our interest for people buying ware—whether for wedding gifts or whatever—to have the impression that they are buying a brand-name product manufactured in Stoke-on-Trent, if it has been manufactured in the far east, the United Arab Emirates or elsewhere. I hope that the Minister will recognise the long-standing complaint and that the European Parliament has given its support to the proposal. Rather than kicking this idea into the long grass, the British Government have the opportunity to do what they say they want to do and support UK manufacturing, the importance of which the Chancellor has spoken about. Items of ceramic ware designed and manufactured in places with the best innovation need to have on their turn-it-over side an origin marking stating “Made in the UK” or “Made in Britain”, and ideally “Made in Stoke-on-Trent, Staffordshire” as well. If the Minister could look again at this issue, in the spirit in which the debate has been brought to the House today, we could really make some progress on it. I urge him to liaise with all the MPs and MEPs who have been working for so long on this campaign, to see what progress we can make.

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills 9:25 pm, 9th May 2011

I congratulate my hon. Friend Gavin Williamson on raising this issue and on the passion with which he spoke. I am aware of his background in the ceramics industry, and he has shown the House his knowledge this evening. Ceramics is a UK sector with a well-deserved worldwide reputation for the design and quality of its products. It is also a sector that has had to restructure, often painfully, to remain competitive and successful in the global marketplace. I am also aware of the importance that the UK ceramics sector attaches to the clear origin marking of its products, and its strong, consistent support for the European Commission’s proposal for an EU regulation on the compulsory labelling of certain imported products.

I share my hon. Friend’s pride in products that are made in Britain. The Department for Business, Innovation and Skills is also proud of Britain, and we have been showcasing British design, engineering and manufacturing in exhibitions every two months in the entrance to the BIS headquarters across Parliament square at No. 1, Victoria street. Those exhibitions have been a celebration of the success of UK engineers and manufacturers. The companies’ products that were showcased were excellent examples of cutting-edge UK innovation and ones that were vital to contributing to a low-carbon future. The companies have come from a cross-section of UK manufacturing and, in the context of this debate, I am extremely pleased that one of the leading UK ceramics companies—Dudson, one of the world’s leading specialists in the manufacture of ceramic tableware—has been part of the showcase. Other UK ceramics producers have a similar global reputation. We are proud of British manufacturing, and my hon. Friend rightly referred to what the Chancellor of the Exchequer said in his Budget speech about driving the UK back into growth through proclaiming what is made in Britain, invented in Britain and designed in Britain.

The Government are not opposed to labelling, or to labels such as “Made in England”, “Made in Scotland”, “Made in Wales” or “Made in Northern Ireland”. That is positive country of origin marking, and it should be done because UK manufacturers believe that it is the right thing to do, for themselves and for their customers. That does not need legislation, however; it can be done voluntarily. There is no legal bar to such marking, and many producers already do it. Of course, in most circumstances, there is no legal requirement in the UK or anywhere else in the European Union for goods to be marked with an indication of their origin, but producers may do so if they wish. If overseas competitors see origin marking as a marketing benefit, they will follow suit. It is essential for the consumer that any such labelling is clear and accurate, and does not mislead. Indeed, it is a criminal offence under the Consumer Protection from Unfair Trading Practices Regulations 2008 to give consumers misleading information. However, it is important to recognise that UK business, including the ceramics sector, operates in a global economy. The days when the majority of goods bought by British people were manufactured here have unfortunately passed. The UK is a trading nation, and it relies on open global markets, as I am sure my hon. Friend recognises. This provides consumers with benefits such as lower prices and greater choice through variety, quality and price of products.

I agree about providing appropriate consumer information, but we must be clear about what is important to the consumer. A Eurobarometer survey across all 27 EU member states last autumn asked a number of questions about consumers’ purchasing attitudes towards country of origin labelling. I accept that the ceramics sector was not covered by the survey. However, in relation to textiles and clothing, 75% of those questioned said that origin did not affect their purchasing decisions. For electronic products, the figure was 68%. That is not to dismiss my hon. Friend’s comments; I simply want to highlight the need to be clear about how consumers rank price, design, brand name and origin in their purchasing decisions.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

Does my hon. Friend accept that country of origin labelling is even more important for luxury products, to which this country is increasingly geared to manufacture? That is why we need to be proud and specific about what is produced in this country and to protect that market.

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

There is absolutely nothing wrong, as I have said, with British manufacturers being able to describe and label their products as “Made in Britain”. The question is whether or not they wish to do that; it is totally voluntary and there is nothing to stop them doing so.

Photo of Joan Walley Joan Walley Chair, Environmental Audit Committee

The Minister referred to the 2008 regulations, and I was very much involved in trying to get them on to the statute book. The point about having transparency and ensuring a level playing field is important. The real issue is that goods are being sold in a confused way, and consumers are buying products without realising that they are not manufactured, designed, decorated and so forth in the UK. They are paying large amounts of money, without knowing that the goods are being manufactured overseas. If our manufactured goods, when exported, have to have the country of origin indelibly marked on the underside of the wares or on the packaging, why can we not have the same rule applying in this country, which would not be inconsistent with the general agreement on tariffs and trade?

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

As I said, the hon. Lady knows that British manufacturers are completely free to put country-of-origin markings on their products. Many of them, particularly in the ceramics industry, believe that so doing gives them a marketing edge. I will come on to deal with the European Commission proposal, which both the hon. Lady and my hon. Friend mentioned. It is important to do so because that is part of the policy debate on which we are focused.

As currently drafted, the EC proposal would require the compulsory country of origin marking of certain imported, mainly consumer products. It might well be to this matter that my hon. Friend is directing his remarks. Let us be clear about what these products are. They include crushed and finished leather, including footwear components, saddlery and travel goods; textiles, clothing and footwear; ceramic products, glassware, jewellery, furniture and brooms and brushes. Those items are all defined by customs code classification. In the case of ceramics, the Commission proposal covers floor and wall tiles, tableware, kitchenware and giftware.

The European Parliament, voting on the draft regulation last autumn, proposed that the scope should be narrowed to cover only end-consumer products. This would limit it to products subject to further processing or assembly in the EU, although some flexibility was proposed for certain textile and footwear components. At the same time, the European Parliament proposed adding to the list of products covered by the regulation: tyres for agricultural vehicles, tyres for forestry vehicles; certain inner tubes; metal fasteners such as screws, nuts and bolts; non-electric hand tools; furniture casters; and taps, cocks and valves.

The House will perhaps understand from that list one of the reservations held by the UK about this proposal. It is the absence of any objective criteria for determining why a particular product is or is not within the scope of the proposed regulation. In our view, it is not enough that a particular EU industry believes that its imported competition should be origin-labelled. At the moment, the best the Commission have offered as “criteria” is where its consultation has shown that there was “value-added” by requiring origin marking. Even the Commission admits that this is a pretty loose criterion. The European Parliament has not even addressed the issue, so I invite suggestions from my hon. Friend—perhaps he is about to make one—and others, on what might constitute meaningful and objective criteria in this regard.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

I must confess that I am no expert on the numerous EU regulations, but I have always believed that this Parliament is sovereign. If we think that we have a good idea that will benefit British business—that consumer products coming into this country or manufactured in this country should have country of origin labelling—let us just ignore the EU, create our own Bill and put it on the statute book. I say we should just ignore Brussels, start from scratch and enact what we think will make a difference for Britain.

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I think that my hon. Friend misunderstands the position. It seems to be Brussels that agrees with him and, I am afraid, his Government who do not. I do not think that he can blame Brussels, and indeed I expected him to pray Brussels in aid. He, like Brussels—or some parts of it—wants to regulate, while the Government are saying that we want to think twice before adopting the regulatory route. I hope he recognises that the premise of his intervention is not entirely valid.

Photo of Mark Spencer Mark Spencer Conservative, Sherwood

My hon. Friend Mr Bacon mentioned the pork industry. The United Kingdom Government introduced regulation of pork production that applied higher animal welfare standards to British pigs. By not labelling products that come from other parts of the European Union, we are effectively allowing meat from pigs that have been subject to poorer welfare standards to sit on shelves next to our pork and to command the same value.

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

The position is quite complicated. We are discussing the current European Commission proposal about country of origin marking on goods imported from outside the EU. Mr Bacon—whose point has been repeated by Mr Spencer—was referring to agricultural products imported within the European Union, from other EU countries. That involves a slightly different regime. The United Kingdom has supported a political agreement on the “Food information for consumers” dossier, and we are pleased to see that it has reached the second reading stage.

I hope that the hon. Gentleman will not question me in much more detail, because this is a matter on which Ministers in the Department for Environment, Food and Rural Affairs are focusing. I think I have it made clear that his question relates to a different issue, to which a different approach is taken. I should add that my wife never allows me to buy any pork other than British, and that I would not want to do so anyway.

The proposal that may well have sparked tonight’s debate was originally presented by the Commission in 2005. At that time, it provoked a very mixed response from member states. Many saw it as primarily a protectionist measure, because its origins lay in concern in the Italian textiles and clothing sector about imports from China. Others argued that there was a need to address persistent breaches of copyright and design protection in relation to consumer products. That was coupled with the view that consumers needed such information to avoid being misled about the origin of products. While the UK recognises the validity of all of those concerns, we do not believe that this proposal is the best way of addressing them, and we continue to have strong reservations about it.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

I too have some reservations. What I was trying to convey in my earlier intervention is that I would always be very sceptical about whether anything that came out of Brussels was a good idea. Why do we not put together our own set of proposals for Britain, building on what is good in the EU proposals, and put them on our statute book?

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I think that my speech will deal with many of the issues that my hon. Friend has raised. I am afraid that he is in danger of supporting the Brussels-based regulation while the Government support a British deregulatory approach, but I hope that as I continue my speech I may be able to win him round to our approach.

As I have said, we have strong reservations about the proposal, but, unlike some member states, the UK does not oppose it outright. The Government have been ready to engage directly with the Commission and supporters of the proposal, notably Italy, and to explore ways forward. My Department consulted widely when the proposal was first issued. We consulted UK business and other interests, including other interests within Government, and that consultation has been repeated on a number of occasions to ensure that we remain abreast of the latest developments.

A clear majority of UK interests were, and remain, opposed to the Commission’s proposal. They include the CBI, the British Chambers of Commerce, the British Retail Consortium, the hallmarking association, and a number of sector as well as consumer interests. Within Government, the UK Intellectual Property Office and Her Majesty’s Revenue and Customs have also consistently opposed the proposal.

Photo of Joan Walley Joan Walley Chair, Environmental Audit Committee

The objections largely come from retailers, who have a vested interest in being able to import without making the full information available, so there is not transparency at the point of purchase. Why will the Minister not listen to manufacturers such as Steelite in my constituency, which does everything the Government are asking yet cannot compete fairly?

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

First, the views of British retailers and consumers are not to be discounted. Both this Government and the previous one have paid a lot of attention to getting a good deal for consumers in respect of competition policy and consumer policy. However, the list of business interests I set out a few moments ago included the CBI and the British Chambers of Commerce, who do not represent retail interests alone.

The Commission’s proposal, while never formally withdrawn, is now actively back on the Brussels table. The European Parliament is pushing the proposal hard, deploying its new powers under the Lisbon treaty in the trade policy area. Last autumn, it gave its formal support to the proposal and proposed a series of amendments. The proposal is now back with the Council to consider, but there remain deep divisions between member states, close to a 50:50 split. Nevertheless, technical level discussions began in February and are ongoing in the commercial questions council working group. These involve trade policy and customs officials from the 27 member states. The UK is participating fully and constructively in these discussions. However, there has been resistance from the Commission to recognising that the trade policy landscape has changed since 2005. It has refused a request from many member states for an updated impact assessment, and I am sure my hon. Friend the Member for South Staffordshire agrees that regulations should have an impact assessment.

A number of free-trade agreements have been negotiated by the EU over the last five years, all of which contain a provision explicitly prohibiting discrimination between EU-produced and imported products. Only recently, World Trade Organisation members raised concerns in Geneva about the compatibility of this proposal with WTO rules. While it is true that some other WTO members have country of origin requirements—in the case of the US, these are both long-standing and comprehensive—our research has not shown, as many claim, widespread comparable requirements in most other countries.

The UK retains its position of having strong reservations, but however strong they might be, reservations are capable of being overcome. So far however, neither the Commission’s explanations nor the European Parliament’s amendments have allayed our concerns. Our main concerns in addition to those arising from our overall approach to new regulation and the absence of objective product coverage criteria, to which I have already referred, relate to the need for this regulation and the costs imposed on business and on public authorities. There are genuine issues in relation to trade mark and design breaches and mislabelling of imported goods from some sources, but the Commission has yet to demonstrate that this proposal adds anything other than an additional administrative and cost burden to existing EU legislation, which includes the EU intellectual property rights regulation and the unfair commercial practices directive. The latter makes it an offence across the EU for products to be labelled in such a way as to mislead consumers. This includes information about the country of origin of products.

The proposal is also likely to impose increased costs on producers, distributors and consumers. We estimate the proposal could prove more costly than the Commission has claimed—experience in the North American Free Trade Agreement area suggests up to 2% of the sale price, which is twice the Commission’s estimate.

There is a further important cost dimension in this time of public expenditure constraints. The enforcement regime would, despite Commission claims to the contrary, impose additional burdens on national customs authorities. The proposal envisages additional physical control at the border. This detracts from efforts to strike a balance between effective control and facilitating free movement of legitimate trade across borders. The increased resources needed to implement this regulation, for example, those relating to the need to make verification inquiries, to which not all countries are legally obliged to respond, could have a negative impact on the priorities of UK and other customs authorities in respect of tackling illegal drugs and dealing with alcohol, tobacco, and firearms.

Finally, I wish to address the issue of consumer information. UK consumer interests have been opposed to the Commission proposal from the outset, partly because they consider existing provisions to be adequate but primarily because they saw it as a protectionist measure. Similarly, the Commission’s own consumer consultative group came out against the proposal. The proposal is still being considered by the Committees that scrutinise European legislation in this House and in another place. The Government have undertaken to keep them abreast of developments in Brussels, and I wrote to them last on 12 February with an update. I am sure that those Committees will also take note of tonight’s debate, particularly the passion with which my hon. Friend the Member for South Staffordshire introduced it. May I end by congratulating him on his remarks, on securing this debate and on ensuring that this House had a full chance to hear the arguments on both sides?

Question put and agreed to.

House adjourned.