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Exiting the European Union (Agriculture)

Volume 654: debated on Wednesday 20 February 2019

[Relevant document: Eighth Report of the European Statutory Instruments Committee, HC 1699.]

I beg to move,

That the draft Fertilisers and Ammonium Nitrate Material (Amendment) (EU Exit) Regulations 2019, which were laid before this House on 16 January, be approved.

This instrument makes amendments to domestic legislation and retained direct EU legislation that would otherwise not be operable after our exit from the European Union. It makes only those changes required to ensure a smooth exit from the European Union and does not change the definition or compositional requirements of fertilisers.

Fertilisers are essential yearly inputs for the UK agricultural, horticultural and amenity sectors. The UK is a net importer of fertiliser products, with only domestic production of potash, polyhalite, ammonium nitrate and lime contributing to the UK’s total fertiliser requirement. The legislation on fertilisers concerns the manufacturing and marketing of products. It provides for the definition, composition, labelling and packaging requirements for specific categories of fertilisers that are set out in lists. This legislation does not address the application or use of fertilisers. Such issues tend to be dealt with through separate provisions in measures such as the nitrates directive.

In 1975, the EU created its first set of legislation relating to fertilisers. However, the wide disparity in existing fertiliser rules between member states, and the bulky nature of these materials restricting cross-border trade, meant that it was not suitable to fully harmonise rules on all fertilisers throughout the EU. Instead, fertiliser rules were partially harmonised to begin to remove technical barriers to trade within the EU. The UK has therefore kept its existing domestic framework alongside the EU framework. The EU regulation sets out the requirements for so-called EC fertilisers, or previously EEC fertilisers, which can be sold freely across the European Union. Manufacturers can choose which framework to market their products under. This partial harmonisation remains in place today.

The current domestic framework for any material described as a fertiliser is the Fertiliser Regulations 1991. In the EU, the current framework is the EU regulation EC 2003/2003, which applies only to fertilisers labelled “EC fertiliser”. It was implemented in UK law by the EC Fertilisers Regulations 2006. In addition, ammonium nitrate fertilisers are controlled through safety regulations that apply to all ammonium nitrate in Great Britain.

This statutory instrument amends domestic legislation that is out of date and addresses the failures of retained EU law to operate effectively, along with other deficiencies arising from the UK’s withdrawal from the European Union. Part 2 of the instrument amends out of date references in the domestic legislation. For example, it omits references to “EC fertilisers” and “EEC fertilisers” to ensure clarity for users of the legislation.

In the case of EU legislation, part 3 of this instrument amends retained EU law to ensure that it will operate effectively after exit day. For example, references to member states and the Commission are amended to refer instead to UK authorities. A requirement on the language to be used on labels is also amended. It replicates the EU framework in UK law, replacing the “EC fertiliser” label with a new equivalent “UK fertiliser” label. The requirements will otherwise remain the same. The instrument also amends the EU framework to include a provision that preserves the ability of relevant bodies in the UK to continue to be able to take certain actions such as prescribing how specified fertilisers should be identified. Part 4 amends domestic legislation as a result of exit, ensuring continuity of supply by recognising the EC fertilisers label for a two-year transitional period after exit day. This will minimise burdens on businesses and authorities and enable suppliers to use up existing stocks, both of fertilisers and packaging. The amendments in the statutory instrument do not change the definition, compositional requirements, or labelling or packaging rules for fertilisers, whether they are marketed under the existing domestic framework—the 1991 regulations—or the EU framework.

Ammonium nitrate fertilisers are additionally covered by domestic safety regulations, since they can be misused as improvised explosives and pose safety risks if mishandled in manufacture, transport or storage. It is worth noting that part 4 of the instrument also amends the regulations surrounding ammonium nitrate fertilisers with high nitrogen content in Great Britain, to treat imports from EU member states the same as imports from other third countries in line with World Trade Organisation obligations.

Under the GB ammonium nitrate regulations, the rules for imports from the EU are different from those for imports from outside the EU. In the light of WTO rules, it would not be possible to retain these differences, so the instrument amends some aspects of the ammonium nitrate regulations, in particular the detonation resistance tests, to apply the more stringent of the two regimes to all imports after the end of the two-year transition period and to uphold current safety standards.

The definition of what constitutes a “batch” of ammonium nitrate differs depending on whether the import comes from the EU or elsewhere.

This is a very important issue for the fertiliser industry. Could the Minister clarify whether this provision would give the opportunity to Ministers and the Department to charge fees to cover the costs of tests needed for official control measures?

My hon. Friend makes an important point. That is why the regulations were referred by the sifting Committee for debate. There is already a power in the existing regulations for authorities to make charges for that testing. All we sought to do in drafting was retain that ability. Broadly speaking, the testing we do here in the UK is run by the Health and Safety Executive at our facility in Buxton and it tends to be a commercial choice for the fertiliser companies whether to use that or to use an alternative at their own cost. There is not really a cost recovery mechanism that is deployed beyond that; it is simply based on research done by the companies. We have clarified and made a change to the drafting of the regulation to be clear that we simply seek to retain the existing abilities to charge rather than to create new ones.

Continuity of supply is ensured by a transitional period for imports from the EU, which provides 99% of imported ammonium nitrate to the UK. That allows the continuation of current rules on the time limit for detonation resistance tests and the ability to recognise EU laboratory test certificates. These arrangements give manufacturers time to prepare for compliance with the import rules post exit and reduce any burdens on UK laboratories immediately after exit.

The definition of what constitutes a “batch” of ammonium nitrate differs depending on whether the import comes from the EU or elsewhere. We have taken a view on that regarding when the quantity of material manufactured without alteration of composition or characteristics is longer than 92 days. We will therefore retain the EU definition of “batch”.

The instrument was previously presented to the sifting Committee on 1 November 2018 as one that should be subject to the negative procedure. As I explained to my hon. Friend the Member for York Outer (Julian Sturdy), the sifting Committee did not agree. It considered that the effect of one regulation was to allow Ministers to charge fees. In addition, it considered that the instrument conferred powers to legislate. It therefore recommended that this instrument be debated in Parliament. The instrument has been amended since it was presented to the sifting Committee to reflect certain recommendations in the Committee’s report. For example, the provisions that the Committee considered to confer powers to legislate have been redrafted to make it clear that they do not contain new legislative functions.

In general, fertiliser policy, as with other agriculture policy, is devolved. The devolved Administrations were closely engaged in developing these regulations, which apply to the same geographical area as the original legislation that they amend. All Administrations have agreed to maintain a single common framework for fertilisers labelled as UK fertilisers, while continuing their own domestic framework. That will make the marketing of fertilisers much clearer for industry, and is a good example of how well the four Administrations work together towards a common goal.

The instrument relates to the maintenance of existing regulatory standards, with no significant impacts or new administrative or economic burdens on business or other stakeholders. Although there was no statutory requirement to consult on the instrument, officials have held discussions with key stakeholders, including the fertiliser manufacturers’ representative body, which is the Agricultural Industries Confederation, and the farmers’ representative body—obviously, the National Farmers Union. Their main concerns have been addressed by allowing for a transitional period for existing rules and compliance with the amended rules.

In conclusion, the changes to the rules on ammonium nitrate have been developed in conjunction with the HSE and the Home Office, to ensure that safety and security elements are maintained. This package of measures is essential to ensure that retained EU law continues to operate effectively in the UK once we leave the EU. I commend the regulations to the House.

I am delighted to take part in this statutory instrument debate and welcome the Minister to his place. A couple of weeks ago I thought, when we got Committee Room 14, that we could not get a bigger audience to listen to these statutory instrument debates. How little did I know that we would end up in the main Chamber? I will sound the usual caveat that the Opposition do not think this is the way to scrutinise secondary legislation. Some of it is very important, and it is being rushed through at the speed of light. With the best will in the world, it is very difficult to scrutinise, and we are obliged to rely on the capability of the civil service to ensure that the exercise they are doing, which is largely a cut-and-paste job, is right; otherwise, mistakes will be made, which we will only learn about in due course.

The Minister was right to say that the process became an affirmative procedure at the request of the House of Commons sifting Committee, and the hon. Member for York Outer (Julian Sturdy) was right to point out that one reason for that was that there is a cost implication, because DEFRA has the ability to charge fees for the costs of tests. The other two reasons were that the instrument confers powers to legislate, changing the functions of the UK as a member state to functions of UK public authorities—presumably a reference to the Health and Safety Executive—and that these amendments had an impact on the safety regulations governing the import of ammonium nitrate materials from outside the EU.

The instrument before us is not a contentious piece of legislation, but it is important because ammonium nitrate, for those who know, is explosive. My own port of Sharpness, which imports fertilisers, including ammonium nitrate, was regularly policed in the days of the IRA because of what could happen to that ammonium nitrate. So we cannot but do our best to ensure that the instrument is as foolproof as possible.

I have a number of questions for the Minister. We do not intend to oppose the instrument, but it is important that we get it right. Clearly, fertilisers are crucial to agriculture, but they are also controversial. If the Agriculture Bill does return to the Floor of the House, amendments will be tabled on Report on the relationship to the Government’s environmental strategy, which is about using fewer fertilisers, and on looking at agri-ecology as an alternative way of producing our food supply. So this is quite a controversial area to the extent that there are those who would say that we should reduce, if not remove, fertilisers and find other ways to grow our food.

This instrument provides for the definition, composition, labelling and packaging of fertilisers, and given that the UK imports the vast majority of its fertiliser, we are dependent on those who wish to export it to us. That will be a substantial change, if and when we leave the EU, because we may choose to import from different parts of the world, and we must ensure that we are completely clear on the safeguards and that the regulatory regime is fit for purpose.

At the moment—I am not sure whether the Minister said this—businesses can choose whether to use the current UK regulatory regime for fertilisers or one that is available from the EU. It will be interesting to know what the Minister thinks about potential changes, and the implied costs. Again, we make our usual criticism that there is no regulatory impact assessment. It is only fair and reasonable to ask what the cost implications are. Yesterday, I managed to take part in a debate with the Department of Health and Social Care on pharmaceuticals, and it provided a regulatory impact assessment. The Department for Environment, Food and Rural Affairs does not seem to be very good at producing such assessments. Its argument is always that there are no explicit cost implications. That is easy to say, but it would be much easier for us to make a judgment if we could look at that and investigate it.

The explanatory memorandum—this may be my inability to access IT—refers to a technical note on page five, but I cannot download that note. It would be useful to know what it contains, but I may be able to obtain it in a different format. It is important that that is made available to those who need to know, whether they are in the business or whether they wish to scrutinise what we are up to.

As I have said, I have a series of questions for the Minister, as always, to keep him on his toes and make sure that we know what we are doing. The Nature Friendly Farming Network raises the case of those who have stored fertilisers that have been labelled under the EU system. What is the status of those fertilisers after the two years are up? Should they be destroyed? Can people continue to use them? Do the fertilisers have to be re-regulated? What is likely to be the situation? As we know, many farm products are stored for years, if not decades, so it is important to know the timeframe for existing products. Will the Minister say something about that, as people want certainty about it, and they need to know exactly what the implications are.

The Nature Friendly Farming Network says that the rules for imports from the EU are different from those for imports outside the EU. Presumably, we need a standard trade agreement, otherwise we will have a differentiated trade in fertilisers. What will the Minister do to ensure that that is the case, so that there is consistency?

The Agriculture and Horticulture Development Board does not have any particular bones of contention, but it is important that we listen to what it says, especially on the environmental effects of non-organic fertilisers. It would be a retrograde step to move away from the progressive approaches to which we have signed up as part of our membership of the EU. What are the Government doing to make sure that there is not a race to the bottom if we look for cheaper, non-organic substitutes, which would lead to all sorts of problems if they got into the water supply. At the very least, they would be likely to damage soil quality, which we discussed at great length when we considered the Agriculture Bill and which features heavily in the Government’s draft Environment (Principles and Governance) Bill.

The principal concern of the Agricultural Industries Confederation is about certainty, which is not there because of the current Brexit situation. It would be interesting to know what discussions the Minister has had with the AIC. If we crash out and have to adopt WTO tariffs, that will have a major impact on the industry because of its reliance on imports. What analysis have the Government made of the impact on the industry and on farmers in general?

Likewise, the National Farmers Union is clear that it needs continuity and an uninterrupted supply of fertilisers. It is worried about the cost implications if we cannot continue to source our fertilisers. I believe that most come from Spain and some come from elsewhere in the EU. That is important.

The Landworkers Alliance states that the agrochemicals, antibiotics and nitrate fertilisers used in intensive farming have a negative effect. What is being done to ensure, as I said earlier, that there is no race to the bottom and that we pay more than just lip service in our commitment to the environment? That is also important.

Although the Soil Association has no specific reason to doubt the Government’s intention for the faithful transposition of measures into UK law, it is concerned about the environmental objectives of the regulations, which are not necessarily spelled out as clearly as they could be. When the Minister sums up, it is important that he says something positive about that.

In conclusion, farmers need fertilisers. They need certainty about access and supply. On agroecology, we need to understand that, as the world moves forward, we will need fewer of them, but we will also need to ensure that they are good quality and, I hope, organic and that people are able to eat good, wholesome food. The one drawback from lack of access to fertilisers is that we could end up with an overabundance of phosphates and nitrates, which will have an impact on the food that we eat and the human food chain. It is important, therefore, that the Government commit to no diminution of standards. We have regularly heard them say that, but we have yet to see it in legislation, and there is no better place to put it than the Agriculture Bill. I hope that the Minister is listening and that the Government will ensure that they do not just talk about the issue but carry it through in the Bill so that our soils are replete and our farming can guarantee wholesome food, which is what we all want.

The natural modesty of the hon. Gentleman has prevented him from announcing to the House and for the edification of those observing our proceedings that in speaking from his party’s Front Bench he does so not as David Drew but as Dr David Drew, blessed with a doctorate in rural economy. That is something that should be known to the world. I call Minister George Eustice.

I do beg the hon. Lady’s pardon. There was a change of personnel on the Scottish National party Front Bench. Although we very much look forward to what the Minister has to say, it will not be before we have heard from Deidre Brock.

Here we are once again creating legislation to replicate legislation that the dastardly EU has imposed upon us. EU legislation is so oppressive that we have to pass the same legislation to free ourselves of the tyranny of EU red tape—taking back control to change nothing.

We should take a moment, however, to consider the imports of products used by the agricultural industries and how logjam at entry points may well affect that process, no matter how many lorries park on old airfields. The UK imports about 70% of fertilisers, very little potash but half the ammonium nitrate and all of the phosphorus used. They cannot be stockpiled because there is no significant additional capacity, and ammonium nitrate in particular needs storage that minimises the risk of explosion. The lorries need to keep running, the ports need to keep functioning and the imports need to be frictionless, or there will be little in the way of harvest bounties, and that is before we get on to imported seed, plant protection products and animal feed. If the ports get choked with border checks and UK red tape, it will not matter what these regulations say, because food production on these islands will suffer.

I welcome the two-year transitional period, but I can see no reason why the acceptance that the EU regulations work cannot be extended indefinitely. Let the fertilisers be sold as they are now, and indeed the plant protection products, seed and the animal feed. We trust the EU, don’t we? I also welcome the requirement for Ministers to get the approval of the devolved Administrations before making regulations about fertilisers. That seems a very sensible way forward and a path that other Departments could consider following. The various Administrations offer wisdom that should be welcomed, and we trust the Scottish Government, don’t we?

I do have concerns about the regime to control the quality of the products available, particularly when I consider that Ministers will face the temptation of reducing the tariffs on Russian products, particularly ammonium nitrate. The anti-dumping duties that the EU imposes on Russian ammonium nitrate will disappear unless they are replicated by the regulations, and the implications that will have for the quality of imports is certainly worth considering carefully. It will be an issue that gets snarled up in any future trade negotiations both with the EU and with Russia.

I would like to believe the Government will ensure quality and resist the temptation to cut tariffs and duties, but I would have liked to believe there was actually a plan for the Brexit negotiations, or at least some impact assessments that looked at what is actually happening. I have certainly been sorely let down on that. I would be grateful for the Minister’s view when he responds. Further to the fact that the Minister mentioned that more stringent regulations will now be applied to ammonium nitrate from the EU, in line with those currently applied to countries outwith the EU, what added costs might result from those extra regulations?

This is one of hundreds of statutory instruments that the Department for Environment, Food and Rural Affairs —despite the best efforts, I am sure, of its civil servants—is lagging behind on. The National Audit Office report on DEFRA’s readiness for Brexit was scathing in its assessment, to the point that I think we have to regard it as an impossible task for DEFRA to get ready.

I wish there was a way of ensuring that the products farmers need to produce food will get to them, but the sudden shutting off of the supplies that they need looks set to become a reality, whatever secondary legislation is passed here. A better decision by far would be to extend article 50 and see whether things could be reconsidered. I am tempted by the thought—the hopeful possibility—that we could pass this legislation and guarantee supply, but I know that is not realistic. I have many concerns about the import regime to follow and the corralling of powers in Ministers’ hands.

It is disappointing to say the least that this is the best on offer. It is disappointing that a Government who claimed so much was possible is content with this. I really hope that that failure does not come back to haunt us all.

I now have even more points to try to address, and I will do so as comprehensively as I can.

First, I turn to the points made by the shadow Minister, the hon. Member for Stroud (Dr Drew). He raised a general point about the use of fertilisers, which is that we should be trying to encourage more sustainability, perhaps through the use of organic fertilisers. He will be aware from the discussions we have had in the Agriculture Public Bill Committee that we are looking, in clause 1, to be able to incentivise more environmentally sustainable farming, which could include, for instance, supporting the use of organic farmyard manures more than manufactured fertilisers. He should also recognise that increases in fuel costs have anyway had a major knock-on impact on the cost of fertilisers in recent decades, such that in the past 30 years or so fertiliser use in the UK has fallen by about 40% already. He pointed out that at the moment we import most of our ammonium nitrate, predominantly from the European Union; there is one manufacturer of ammonium nitrate here in the UK.

The hon. Gentleman asked about the impact on security—in particular, whether there is a risk that the material will get into the hands of terrorists. As I pointed out, we have gone for the more stringent detonating test regime, meaning that any consignment imported to the UK, whether from the European Union or a third country, would have to have had that detonation test within the previous 60 days. We are applying the more stringent set of rules that we have for third countries to all countries.

On the general issue of security, I also point out that in 2006 a fertiliser industry assurance scheme was set up between the Government and the Agricultural Industries Confederation, and it has since successfully created and monitored voluntary standards in the industry supply chain to ensure that ammonium nitrate fertiliser can be traced and does not end up in the wrong hands.

Although we have made changes to the GB regime for detonation testing and the ammonium nitrate regime, as I said in my opening comments Northern Ireland has its own specific rules in this area. The ammonium nitrate safety regulations apply to Great Britain. Owing to the past misuse of ammonium nitrate in making improvised explosive devices, Northern Ireland has its own controls under the Control of Explosives Precursors etc. Regulations (Northern Ireland) 2014 and, under existing rules, the Explosives (Northern Ireland) Order 1972. Those prevent any import, storage or use of ammonium nitrate fertilisers without a tier 1 explosives precursor licence from the Police Service of Northern Ireland. The situation in Northern Ireland is more thorough still, given the tragic history of which we are all aware.

The hon. Gentleman mentioned that we have not conducted an impact assessment. As the hon. Member for Edinburgh North and Leith (Deidre Brock) pointed out, that is because we are not seeking to make any substantive change to policy—indeed, the stated aim of all these EU exit SIs is, as far as we are able, to maintain the status quo from day one after we leave the European Union, to ensure that we have an operable law book. He also made a specific point about the technical note on page 5, which he claimed he could not download. I am reliably informed that, since he mentioned that, my officials have been online to double-check and successfully downloaded it. Perhaps the issue had more to do with the hon. Gentleman’s IT than with our system; nevertheless, I thank him for raising that so that we could at least double-check.

The hon. Gentleman also raised an important point about storage: what happens if material is stored beyond the two-year transition? We arrived at the two-year transition period for sale having consulted the industry. The industry generally thought it an appropriate period both to be able to market its existing stocks and to give it plenty of time to use up any residual fertiliser packaging and order new packaging.

I draw Members’ attention to my declaration of interest. Would what the Minister has said apply to on-farm stock as well?

No. I was about to come to precisely that point, which was also made by the shadow Minister. If during the two-year transition period a farmer has bought products labelled under the previous EU regulations, he can then store them on farm. As I pointed out at the beginning, these are marketing regulations—pertaining to the sale of product, not storage or use after sale.

Finally, the hon. Members for Stroud and for Edinburgh North and Leith asked about the specific issue of tariffs on fertilisers. This is an issue that the Government are currently considering. As hon. Members may be aware, while farming representative groups such as the NFU would like to retain tariffs on some agricultural commodities, they are equally keen to have tariff rate suspensions on some fertiliser products. We are giving that consideration. It is important to note, however, that if we were to set a unilateral autonomous tariff rate quota or suspend tariffs on a unilateral basis, we would have to offer the same terms to all countries in the world, probably including Russia, notwithstanding the approach the European Union is currently taking.

Can the Minister confirm that SNP Members were deliberately scare- mongering when they said that farmers would not be able to import any more after 29 March? Will he confirm that foreign suppliers are not cancelling contracts for after Brexit?

I can confirm that we do not envisage any problems at all with the importing of fertiliser, even in a no-deal scenario. That is predominantly because these products—

Let me conclude my point first and then the hon. Gentleman can decide whether I have answered the point adequately.

Fertilisers tend to come in bulk, predominantly through Harwich on container vessels where we envisage no issues with capacity. They tend not to come in on roll-on, roll-off ferries on the backs of lorries through Calais. It is right that there are some concerns about the potential impacts on the all-important Dover-Calais crossing, but they do not specifically affect fertilisers. We see no particular problems in ensuring that we can import the fertilisers we need for this year.

The hon. Lady asked why we cannot simply have an indefinite extension of the recognition of the EC fertiliser logo. The reason is that we have to treat all countries equally under WTO rules. Once we have left the European Union and become an independent country again, we will not be able to discriminate and give unfair privileges to the European Union in the way that she advocates.

The hon. Lady asked a specific question about what had changed in relation to detonation testing. The principal change on strengthening detonation testing is that it will apply to each consignment that comes into the European Union. Put simply, all that importers will need to demonstrate is that each consignment has been subject to a detonation test of a suitable standard within the previous 60 days. At the moment under EU derogations it is possible for that to run longer because they simply apply it to individual batches rather than consignments, so there will be a small change. In the longer term, once the transition has ended, those seeking to export their goods to the United Kingdom would need to have that detonation test done, probably by the Health and Safety Executive in Buxton. We have world-beating expertise in this area and that testing would be done effectively.

In terms of scaremongering, was the Minister’s boss, the Environment Secretary, scaremongering yesterday when he said that in a no-deal situation he could not guarantee exports and imports would continue at our borders and that livestock exports from the UK would be subject to high tariffs? Was that scaremongering as well?

My right hon. Friend the Secretary of State was referring to the export of sheep. We all acknowledge—I acknowledge it, too—that border inspection posts would frustrate that trade and that tariffs imposed on sheepmeat exports would affect that trade. He was explicitly not talking about fertiliser imports. My right hon. Friend the Member for Wokingham (John Redwood) was making a very specific point about whether there would be any threats to the import of fertilisers. As most of that trade comes through Harwich, we do not anticipate any problems at all on those grounds.

In conclusion, we have highlighted a number of important areas in this statutory instrument. We have had a thorough debate, but, as I have been at pains to point out, it does not seek to introduce any new policy. In keeping with the spirit and requirements of the European Union (Withdrawal) Act 2018, it is simply about ensuring that retained EU law is operable on the day after exit. I therefore commend this statutory instrument to the House.

Question put and agreed to.