My Lords, we recognise the concerns, particularly of small businesses, about burdens arising from the EU regulation on the registration, evaluation, authorisation and restriction of chemicals. We welcome the recommendations for better guidance for small businesses in the recent report of the Prime Minister’s business task force. These closely reflect the work that we have been doing to bring together those interested, including the Commission and UK industry, to develop guidance that is more focused and relevant to SMEs.
I thank the Minister for that reply. I know that he is very knowledgeable and has a lot of expertise in this matter so perhaps I may ask him to spell out in a little more detail, in relation to SMEs, whether they will they be given financial assistance; whether they will be allowed to use these substances until alternatives are brought forward; how this will be licensed; and whether they will have the right of appeal.
My Lords, it would take me quite a while to answer all those questions properly. However, in the context of the financial question he asked, there are two aspects to this—the first is about fair cost-sharing, and the second about fee levels. Businesses tell us that a major concern is the lack of transparent and fair cost -sharing when companies are pooling data on the same substance. As a result, that was the top recommendation for helping SMEs in the review report. There is a commitment across the board to sort that out, and we are playing a major role in it. As regards fee levels—that is, for fees payable to the European Chemicals Agency—the revised fee levels were voted through by the UK and other member states and came into force in March. They mean that the smallest companies are now eligible for fee discounts of up to 95%, which can mean a one-off registration fee of as little as €64.
My Lords, is this not another example of the perverse effects of EU overregulation? Thousands of products that have been with us and fully approved for many decades by our own safety regulation authorities are now to be banned; and that, in many instances, will put out of work small businesses which cannot afford the very high costs of trying to prove that something that is safe, is safe. Is this really the sort of democratic situation we want to be in—where our own Ministers can do nothing to put this matter right except mumble about trying to ease the pain in some way or another? The actual effect will be devastating on small businesses. It is a gross pity that we cannot control these affairs ourselves.
My Lords, it might be helpful if I quote the words of the Chemical Industry Association to the business task force. It said that,
“we see REACH as a positive development and support its principles. It has made many businesses outside our sector realise that they do in fact use chemicals every day and that they also have to comply with controls. For us, this is an important step towards achieving safe chemical management and we support the scope and objectives of the legislation as a consequence. However”— in line with what my noble friend says, it goes on to say that—
“interpreting the legislation is proving extremely complex”.
Reducing those burdens is the focus of our attention here and in Europe.
My Lords, I think that the whole House is concerned about the future of manufacturing in the United Kingdom, and we are keen to see a strong manufacturing base. My noble friend Lord Hoyle has touched on a very complicated industry on which the Minister has given positive answers. Therefore, could the Minister advise—
No? Can he tell me then—can he tell the House—how applications from companies in the United Kingdom to use banned substances while alternatives are being developed will be judged? What will be the cost of such applications to the companies themselves? Are you happy with that?
My Lords, I touched on the matter of cost earlier, but the noble Lord will appreciate that this is definitively a complex area, regardless of how we regulate it. Chemicals are a complicated business and they need careful attention. However, I am now going to go into some technical language.
Adding a substance to annexe 14 is a multi-stage process involving several factors. The ECHA has recently finished conducting a public consultation on its draft recommendation. It will then consider the opinion of the member state committee in its final recommendation to the European Commission. It is important to stress that this is a recommendation. The ECHA does not have the power to ban a chemical. It is the European Commission, in conjunction with member states and the European Parliament, which decides whether to take a recommendation forward to add a chemical to annexe 14. I emphasise that if a substance is added to the annexe, it does not constitute a ban. Instead, it is the trigger for industry to make the case for continued authorised use of a chemical.
My Lords, is my noble friend’s quote from the trade association not a classic example of how big business loves regulation which destroys small business and removes its competition? What has happened to the Government’s initiative to stop the continuing gold-plating of legislation from Europe? Is it simply to say that nothing can be done because we cannot change European regulations?
As my noble friend asks about gold- plating, perhaps I may say that REACH is a directly acting regulation so there is little scope for gold-plating.
However, the UK approach is in fact the opposite of that; for example, our approach to enforcement is to help companies get back into compliance. My noble friend might like to know that the Environment Agency has developed helpful tools for that process. It uses its expertise to look for illegal use of restricted chemicals, and it can then focus on suspected wrongdoing with little or no burden on compliant companies.
My Lords, there are significant consequences for small and medium-sized enterprises of incomplete registration. Can the Minister please tell us how many businesses have already been informed by the European Chemicals Agency that their registration is incomplete, and what action has he taken to ensure that businesses complete all of the agency’s registration requirements in time to avoid those significant consequences?
My Lords, I will ask the question that I tried to ask. Would not the best tool be the use of plain English which everyone can understand, whether they are in small business, medium business or any other sort of business?
My noble friend, as always, speaks so much sense. I am discovering, as Defra’s science Minister, that the world of chemicals does not easily lend itself to simple language. However, I will do my best for my noble friend.