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My Lords, I refer to Amendment 62 in my name, which is part of a series of amendments in this group concerning mutual recognition— mutual recognition of good manufacturing practice, in this instance. I was prompted to table the amendment not least because many people in the pharmaceutical industry see this issue as an important part of our future economic partnership arrangements with the European Union, whether we continue to be EU members or in the single market or not.
Like Amendment 42 on the mutual recognition of authorised economic operators, Amendment 62 relates to instances of where the European Union has substantial mutual recognition agreements with third-party countries. In the case of authorised economic operators, those countries include Switzerland, Japan, the United States and similar countries—although not China in the instance of good manufacturing practice. It would be deeply perverse for us to start with standards that align entirely with those of the European Union, whether on authorised economic operators or good manufacturing practice, looking at the two amendments. If we lost that relationship with the European Union, it would make obvious good sense to maintain that mutual recognition.
In that context, the amendments commend themselves to my noble friends on the Front Bench because they are about continuity and trying to maintain the existing structure of agreements. Of course we want mutual recognition of good manufacturing practice with not only the European Union but the United States, Japan and Switzerland because, if we leave the European Union, four of the five largest pharmaceutical companies will be outside the European Union, with two in Switzerland and two in the United Kingdom. This issue matters a great deal to this important industry. Unfortunately, given the uncertainty and the way in which the European Commission sent advice to companies on their responsibility to prepare as if there would be no deal, pharmaceutical companies have, of course, already invested a considerable amount in ensuring that their batch authorisations and conformity assessments—and the authorisations associated with those—can be conducted inside the EU 27. That has cost quite a lot of pharmaceutical companies quite a lot of money already.
The noble Lord, Lord Fox, was quite right: this group of amendments is about the plumbing, the innards, of this issue. I am afraid that day by day, evidence of the enormity of the cost—in time, energy and money—of trying to stay as close as we can to the position we would have been in if we had stayed in the European Union is mounting. It does not do to dwell on that but there we are.
Finally, I am really surprised that some of our Brexit-supporting colleagues are not here to laud Amendment 38—the lead amendment in the group— on the common transit convention, which will assist significantly with customs simplification and the achievement of some reduction in the friction that might otherwise occur in trade. It is achieved with third-party countries and is not something that the EU absolutely has to offer. However—although I stand to be corrected by my noble friends—as the noble Lord, Lord McNicol, has said, it appears to have been agreed not only that we would remain within the common transit convention after exit day but that we would continue to remain in it even if we were to leave without a deal. That is a positive development.
Associated with it is the new computerised transit system which will help us to try to make progress on some of the customs simplifications that, whatever happens, will be important to the reduction of business costs. I commend to my noble friends Amendment 62, which should certainly be an objective of the Government in their current discussions about the future relationship with the European Union.