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MHRA Appearance Before Select Committee On Brexit

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Exiting the European Union Committee – Airbus, FSA, EDF, MHRA – Progress of the UK’s negotiations on EU withdrawal

Analysis

Overview

During a meeting of the Exiting the European Union Committee on the progress of the UK’s negotiations on EU withdrawal, the Committee heard from:

  • Katherine Bennett, Senior Vice President, Airbus UK
  • Rod Ainsworth, Director of Regulatory and Legal Strategy, Food Standards Agency (FSA)
  • Angela Hepworth, Director of Corporate Policy and Regulation, EDF UK
  • Dr Ian Hudson, Chief Executive, Medicines and Healthcare Products Regulatory Agency (MHRA)

 

Summary

 

Medicines

Opening the session, Labour Committee Chair Hilary Benn noted that some had argued that creating a separate medical and healthcare products regulatory process in the UK posed the risk manufacturers would choose to submit their products for approval elsewhere in the EU.

Replying, Dr Hudson noted that the Government’s intention was to continue collaborating with the European Medicines Agency (EMA). If this proved impossible, contingency work was underway to ensure an appropriate regime to ensure the UK could maintain a “global role” and remain as attractive as possible.

 

Aerospace

Turning to Ms Bennett, Conservative MP Richard Graham noted that the UK was already an independent member of the International Civil Aviation Organization (ICAO), but that the aerospace industry supported remaining in EASA, the European Aviation Safety Industry. He asked how the UK’s relationship with EASA would look in future.

Replying, Ms Bennett said that ICAO was very important as global regulation was “the future”. She said she believed the UK ought to be able to continue its high-profile role in EASA. Airbus wanted it to remain a full member to avoid duplicating regulation and preserve voting rights, she said. She noted that this was a reflection of the interests of the whole sector, rather than those of Airbus itself. She noted that the US and Chinese aviation authorities had an important role in EASA, though they were not full members.

The Department for Transport (DfT) and the Civil Aviation Authority (CAA) had been involved in detailed discussions with the industry about Brexit, she said.

Mr Graham asked about the UK’s continued involvement in the EU’s Global Navigation Satellite System (GNSS) “Galileo” programme. Replying, Ms Bennett said that European Commission officials felt EU-funded work could not continue to take place using EU funds, and had made some individual representations to firms about this. She called on the Government to clarify its intentions.

Asked about what would happen if the UK fell back on WTO rules for trade, she replied that civil aerospace would be tariff free, but non-tariff barriers posed a greater concern. Airbus was considering how it could import and export wings as quickly as possible, given the crucial importance of exports for the company. “We can’t have anything that holds up our production line”, she said.

SNP MP Joanna Cherry asked whether Ms Bennett knew any of the details of the Government’s plans for the UK’s future relationship with EASA. Ms Bennett reiterated that Airbus wanted the UK to be as involved as possible in EASA. She warned about the danger of a loss of influence, noting that Norway and Switzerland were not full members, and lacked voting rights. There was a risk companies could move their certification staff to EU member states, she noted.

When it came to air safety agreements with the USA, she noted the UK could fall back on older accords if needed.

SNP MP Peter Grant asked Ms Bennett about the US Federal Aviation Administration (FAA)’s recent warning that the UK had just a month to clarify post-Brexit aviation safety plans to avoid potential disruption.

Ms Bennett said that as she understood the FAA’s position, it related to concerns that the UK could need to re-establish a system of repair stations if it left EASA, impacting US airlines.

On the significance of EASA for component manufacturers, she explained that it administered certifications. Much of the CAA’s expertise was put to use in EASA, she said, stressing that the regulator could face additional costs as a result of the Brexit transition. She asked whether the Government would provide funding to reflect this.

Asked what would happen if no EASA associate membership were granted, Ms Bennett emphasised that a separate process existed for Switzerland so it could avoid the jurisdiction of the European Court of Justice (ECJ). If all participation in EASA were precluded, this would cause “chaos”, and the CAA would face significant additional costs, she said.

Food Safety

Next, the Chair asked Mr Ainsworth what would be lost by altering the UK’s relationship with the European Food Safety Authority (EFSA).

Mr Ainsworth explained that the UK was involved in setting EFSA’s work programme through its advisory forum, and also noted that EFSA provided the risk assessment function to the FSA. Losing this would mean the FSA had to create the means to do its own risk assessments, he explained, noting that the body was undergoing contingency planning. He added that while EFSA judgements were published, not participating in it would mean not having access to the underlying data.

He noted that the FSA supplied significant scientific expertise to EFSA, and said he would be surprised if this did not continue. Asked if the UK would still have access to the Rapid Alert system, he said it had a limited public-facing dimension, and thus the UK would be made aware of incidents affecting it, but would not be privy to data around other risks elsewhere in the EU. The UK would lose one aspect of its “surveillance jigsaw” relating to risky products, he explained.

He said that the FSA was currently building bilateral relationships with individual bodies in other EU countries which provided information to EFSA. He said that the FSA had told DExEU that reciprocal access to the Rapid Alert system was mutually beneficial.

Conservative MP Peter Bone asked why collaboration should not continue. Mr Ainsworth said he could see no advantage to this. The only reason the UK would not have such access would be as a result of a wider failure to achieve an agreement, he said.

Nuclear

Next, the Chair asked Ms Hepworth if EDF had concerns about the future supply of nuclear fuel.

Replying, Ms Hepworth said this was a major concern arising from the decision to leave EURATOM, as the treaty provided for the movement of nuclear materials, components and information within the EU and with key third countries.

The existing nuclear fleet provided some 20% of UK electricity, and was reliant on EU imports. Thus, alternative arrangements would be needed when the UK left the EU.

Asked if future supply was a concern, she said the Government had given “very strong commitments” in this area, and would be seeking clarity in Brexit negotiations as soon as possible.

Asked who needed to agree to achieve this, Ms Hepworth said that the UK needed to negotiate an agreement with the EU to cover nuclear materials and components. EURATOM already had nuclear cooperation agreements with third countries, she noted. In the short term, transitional arrangements were needed to continue the status quo while a full cooperation agreement was put in place.

Asked about how EDF had approached the issue upon first learning of the Brexit decision, she said the company had made the case that it was best for the UK to remain within EURATOM.

Conservative MP Craig Mackinlay asked how Hungary was able to trade in nuclear materials with Russia. Ms Hepworth said that it was possible a third country could impose different requirements for this type of trade. She explained that fuel supply was determined by reactor type, and the UK’s existing nuclear reactors had established fuel supply routes. While change might be made, it would take years, she said.

Asked if EDF wanted an extended Brexit transition period for nuclear materials, Ms Hepworth said that it was “absolutely critical” to put a safeguards regime in place. She noted that the Office for Nuclear Regulation (ONR) had said a basic safeguards regime meeting international standards could be put in place by March 2019, though EURATOM standards could not be achieved by that point.

She called for a transition period to permit cooperation between the ONR and EURATOM until the new regime were put in place. Ultimately, approval of arrangements would be an issue for the negotiations, she added.

Labour MP Stephen Kinnock asked how long the Japanese and American bilateral agreements with EURATOM had taken to negotiate. Ms Hepworth was unsure, but believed it had taken longer than two years.

Transition Period

Mr Kinnock asked if the transition period would involve a continuation of the functions of EU agencies.

Responding, Mr Ainsworth said he felt the transition period would be of “considerable assistance” to the food industry. The FSA would not expect a significant change in its relationship with EFSA during this period, though its membership of the advisory forum was likely to end.

Ms Bennett mentioned that the European Chemicals Agency (ECHA) and its REACH programme were also of great importance for the aerospace industry, and continued membership would be important over the transition period.

Dr Hudson said that the negotiated outcome of Brexit would determine the significance of ongoing collaboration through the transition period. He did not want the existence of the transition period to delay a more definitive statement on the outcome.

Ms Hepworth said continued involvement with EURATOM through the transition period was important, but some other arrangements were also needed, so the UK could stand on its own feet “come what may” in 2019. Thus, EDF supported measures to create independent nuclear safeguards. Additionally, third party agreements would come out of commission, and thus bilateral agreements were needed with a number of other nations.

She raised concerns about the impact of delays in importing parts for current nuclear facilities or those under construction.

Brexit Impact

Conservative MP John Whittingdale asked whether Brexit uncertainty impacted EDF’s investment plans.

Ms Hepworth explained that trade relationships were essential to ensure access to components, and also expressed concern about access to construction workers. EDF was training and recruiting UK workers, but given the scale of projects like Hinkley Point C, it needed some foreign workers.

Mr Graham asked if Ms Hepworth could imagine a situation in which nuclear safeguarding issues were not resolved, given Franco-British collaboration in the industry. Ms Hepworth said that “assuming economic rationality prevails”, there should be strong incentives on all sides to find a solution.

She pointed to what she said was “full alignment” between the Government and the nuclear industry on what needed to be done, and highlighted progress on the implementation of domestic nuclear safeguarding arrangements.

Liberal Democrat MP Wera Hobhouse asked if the witnesses had assessed the cost of Brexit to their industries.

Replying, Mr Ainsworth said that the FSA had estimated that it would need more than an additional 50 people to deal with Brexit, plus related new staff at other agencies.

Dr Hudson said 90% of medicines on the market in the UK were nationally licensed, and much of the EMA’s work would thus be handled by the MHRA, as was currently mostly the case. Resource needs would depend on the nature of the final Brexit agreement, he said.

He added that new drugs on the UK market would henceforth need to come to the MHRA. He argued that the European Medicines Network had served all involved very well, and the UK had played a major role with significant influence. While collaboration was preferable, the UK had the capacity to meet its own needs, he concluded.

Ms Hepworth said that the ONR was recruiting new inspectors, and the UK would have to negotiate with the EU over whether it would buy EURATOM monitoring equipment currently in use in the UK. There would also be ongoing costs involved in running a nuclear safeguards regime via the ONR.

MHRA Appearance Before Select Committee On Brexit

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