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Border Target Operating Model: Health Certificates and SMEs

Volume 743: debated on Friday 19 January 2024

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

The Government intend to introduce a charge of £40 a time to import things from the EU into the UK from April. That might come as a surprise to many businesses, because they do not know about it, and most of our constituents likely do not. I think that is because the Government are not even sure that they want to do it. Today, I hope to get some answers about the border operating model on behalf of all those who will pay the price if it actually happens—namely, the British public.

Brexit is the gift that keeps giving. Like contracting recurrent food poisoning, we think we have seen the worst of it only to feel that sick feeling in our stomach again. Pints of wine and blue passports cannot make up for the inflationary impact of this latest dose of extra paperwork and delay. For the avoidance of doubt, we have left the European Union. The Government cannot make Brexit work, and it is causing problems to millions of people every day. I am not standing here advocating that we ask to rejoin, either. Frankly, with all the problems we are facing for businesses and jobs because of it, we do not have time for such treaty negotiations.

This debate is about what this Government are doing now to manage our borders, and the very real consequences of their decisions for food security and the cost and nutrition of food. Currently, the UK imports around 46% of our food—we are self-sufficient for 54%. Our trade with other countries is the reason why we have food to eat and are not all just eating turnips and cabbages, delicious though those home-grown delicacies are. In 2021, we imported £10 billion-worth of fruit and vegetables from the EU, £6 billion-worth of drinks and the same amount of meat. The EU accounts for 90% of all the dairy, beef, egg and pork products coming to the UK, and nearly two thirds of all food and feed not of animal origin. Some 40% of that is from just four countries: the Netherlands, Ireland, Germany and France.

It is little wonder that Brexit has already hit our food prices and supply. Research from the Centre for Economic Performance at the London School of Economics shows that. We all saw the empty shelves and rationing, and businesses are clear that it is Brexit, not Ukraine and the energy crisis, that is pushing up the prices of production and causing all those problems.

That is all before we even get to the new import controls. It is a combination of higher transport costs, supply chain designs, customs complexity and reduced volumes. Whatever we do at the border will be critical to the nation’s capacity to eat more than porridge, given that oats are one of the few things for which we produce 100% of what we consume.

Let us not pretend that other countries can pick up the slack for us. Although the Government are negotiating free trade agreements with six other countries and have two agreed, these will not be able to replace the food we import from the EU. And if we care about animal welfare, we should want to work with the EU because it still has equivalent animal welfare standards, contrary to Australia and New Zealand, from which food can now be imported, tariff free, without any equivalence to our welfare standards. Frankly, geography matters, which is why adding more friction to the process will lead not only to shortages and delays but to inflation and costs for everyone.

Under this Tory hard Brexit, we left the EU customs union, the single market and the VAT area, and we have been threatening our own customs controls ever since. Understandably, businesses have been driven mad by the fact that those controls have been postponed five times. In the meantime, we have all been stuck with the bill at the checkouts.

The white elephants of Brexit stand empty at our expense, as the Government have spent more than £700 million on border facilities and jobs. Sevington in Kent cost £154 million, including £70 million on the border control post infrastructure alone, and £25 million has been spent on Portsmouth, £12 million on Holyhead and £3 million on North Weald. I am sure those communities would rather use the money for something else.

In theory, all of that will finally change this year. In just 12 days’ time, if businesses want to import pork, beef, reindeer, camel, frogs’ legs, cream, yoghurt, flour, beeswax—but not honey—or animal paws, they will need a health certificate. That all means finding a vet who will sign the health check.

Ministers have told me that more than half of the expected £330 million annual cost of the scheme to businesses will come from these certificates, but they have also said that it is not as bad as the more onerous tracking system they previously suggested, which would have cost businesses £520 million a year. Frankly, that is like me telling my kids that they should be grateful that I have let them keep the bell on their Lindt bunny because I was originally going to take that too, along with all the chocolate.

Health certificates are one thing, but the Government have also been consulting on introducing a charge to cover the cost of the scheme—the so-called common user charge. That is planned for April, just 100 days away. The consultation says the charge could be £43, but it might be less or more. It would be helpful for British businesses to know whether it is coming in at all in 100 days’ time, as well as knowing what the charge will be.

The charge is intended to apply to each consignment, whether it is one leg of lamb or a van full of reindeer and frogs’ legs. As 65% of lorries coming into this country carry multiple consignments, known as groupage, it is clear how expensive this way of applying the charge will be. The Government have therefore chosen to fund the new border by imposing fees directly on businesses that import. The pledge that Brexit would be a bonfire of regulation turned into a smouldering pile of paperwork that will kill imports for small businesses.

It does not have to be that way. A veterinary deal with Europe could remove the requirement for export health certificates. Joining the pan-European Mediterranean convention, which is wider than the EU and includes Israel and north African countries, would also help, as businesses could make use of the EU hubs where products from outside are often consolidated.

Frankly, even if businesses pay, there is no guarantee that they will get a service. The Government are planning to check just 30% of imports. Just when I thought it could not get any more complicated, in 286 days’ time they want to introduce safety and security declarations for all EU imports. These will be required even if the pallets coming in on a truck are empty. It relies on the single trade window process not being a total disaster, yet at present businesses have no idea whether the technology is working.

Of course, all of this is different for businesses trading from Northern Ireland. Those “not for EU” stickers, which will help to protect the border with the EU and Ireland, reflect the lunacy of all those people who tried to argue that technology could prevent trade barriers. In a situation where we are the smaller market, it is not hard to see that, when companies trading in multiple nations are faced with such policies, they will move away from doing business with us, focusing instead on less complicated markets. Between 1999 and 2000, the EU accounted for 50% to 55% of UK exports. By 2022, that had already fallen to 42%.

Traders in Belgium have already publicly said that they are not going to spend any more time trying to figure out what the Government are up to. They say that they have been marched up the hill too many times, only for the scheme to be delayed at the last minute. They say that they are willing to risk friction rather than the paperwork.

The Institute of Export and International Trade points out that more than 20 different measures on imports will come into force between the end of last September and the end of this year. The freight representatives point out that the lorry drivers need to go through the same entry and exit systems, and will be in the queues behind the schoolkids and the holidaymakers under- going checks. They will be stuck behind those school coaches, with all the knock-on effects for the picking up and transportation of imported consignments. The representatives say they estimate that would create around 70 miles of freight traffic, turning Dover into a literal lorry park. Little wonder that Nichola Mallon, Logistics UK’s head of trade policy, says that businesses have still not been given all of the detail and guidance they need to plan and prepare and that there is a high risk of delays, traffic congestion, higher prices and reduced choice for consumers.

We all understand the need for checks to stop things such as African swine flu, but given that this country has not even signed up to be part of the shared biosecurity alerts, it is clear that there are other things we could do to help tackle that. Those charged with running the service certainly have their doubts. Health inspectors at Dover have had a 70% cut to their funding to do any of the work to try to stop infections reaching our shores in the first place. Those in Dover would know about all this, because they are in the frontline. Goodness knows what is happening in the west coast ports, which are operating to a different timetable. That will open up further loopholes and complications with ports such as Holyhead, Pembroke and Fishguard, which are the land bridge to Ireland, also facing confusion.

I have a series of questions for the Minister, and I hope that she will take interventions when she responds so that we can get to the bottom of this. First and foremost, can the Minister actually confirm whether any checks will be made to lorries on our borders in 12 days’ time to see whether the goods in them have environmental health certificates? What work is her Government doing to ensure that there are enough vets in Europe to provide the certificates? Can she confirm whether they even exist?

If there are not going to be checks on lorries in 12 days’ time, as she has previously told businesses, when will the health certificate checks come in? What will happen to a lorry that does not have one? Can she confirm that the opening hours for the border control posts match the just-in-time supply chains, so that we do not see lorries of rotting foods sitting in our ports waiting to be checked? When will the common user charge be applied and what will it be? If it is common, it should be uniform, so can she tell businesses here and now whether it is happening and what it will be per consignment, or whether it will take account of groupage? The Government said in December that they would provide this information and businesses are still waiting.

Will the Minister confirm what the common user charge will cover? Is it in addition to all the other charges from the Port Health Authority and the Animal and Plant Health Agency, and does it cover customs fees? If the checks are not going to be made, when will they be made? What will she do about traffic management in Kent? Currently, there are 40 inspectors in the port of Dover. How many has her Department assessed are needed, and why are only 30% of them being checked, if this is about biosecurity? What will they do if a lorry goes to the wrong port, or tries to shop around? Does she expect different border control ports to charge the same fees for their services, or will they set their own? How will she stop those lorries from trying to game the system?

Can the Minister tell us about the status of the single trade window project, and whether Fujitsu is involved in its delivery at all? The Government have admitted that this will cause inflation, but they are trying to claim it is going to be just 0.2% over three years. In their response to me, they said that

“will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regimes”,

putting the pressure on business to pay for the Government’s scheme.

Will the Minister clarify what the variation might be if businesses do not do that, and what has been calculated into inflation, if they cannot get to grips with the Government’s new system? What impact is her Department predicting that the situation will have on food prices in that first year—not over three years, but in the first year? Why will this Government not come clean on the data sources they are using to make those calculations? What commercial confidentiality behind calculating inflation and the impact of the policies possibly trumps the public’s right to know how expensive it will be to put food on the table?

No doubt the Minister will say that an outbreak of foot and mouth disease would cost business more than this scheme, but will she set out the cost of the administration of this project, separately from the health checks that the Government have calculated? Can she clarify the timetable for the introduction of the west coast port charges and what the difference in the regime will be? Will she explain why the Government have not negotiated a veterinary deal? Are they even looking at the pan-Euro-Mediterranean convention to try to solve these problems without giving businesses all this extra paperwork? Above all, what is she doing to warn the public about the potential impact on their food supply and costs? Or is she prepared to say here and now, on the record, that there will be no delay in food provision, no shortages and no increase in prices?

Nobody wants to eat meat that has been sitting in the docks or beeswax that is off, even if it had a health certificate when it started its journey. Because of what is happening, the UK has already dropped from fourth in the World Bank logistics performance index to joint 19th. The main challenges result from border friction, which is contributing to the decline in just-in-time supply chains and efficient customs.

It does not take a rocket scientist to work out that this scheme will clearly make things harder for British business. No wonder it has been delayed five times. With so many people struggling with the cost of living crisis, surely the best thing is to think again. The scheme will make things harder for British business; at worst, it will be a nightmare. I ask the Minister: will she give people some relief and say that it is off again?

I thank the hon. Member for Walthamstow (Stella Creasy) for securing this important debate. As she will know, the upcoming implementation of the first phase—I stress that it is the first phase—of the border target operating model is a really important milestone for the UK and reflects a long period of intensive work across Government. I am pleased to have the opportunity to talk about what is in place and to address some of the issues that the hon. Lady raised, but I am sure she will accept that she had a very long list of questions. I will do my best to answer them, but if I do not cover them all, I will ensure that she gets some written answers. I hope that is acceptable.

Introducing biosecurity controls on imports is not optional. Now that we have moved away from the EU’s rigid biosecurity surveillance and reporting systems, we are responsible for protecting our own biosecurity from threats such as African swine fever, which is really serious for our pig industry, and Xylella, which would be terrible for our plant communities in this country. Such threats could devastate UK industries and cause significant damage to the environment, public health and the wider economy. The hon. Lady is absolutely right that geography matters; that is why we are taking the issue so seriously. We have to keep these threats out of our country.

Biosecurity controls are also essential to protect our exports and our international trading interests. Our trading partners want to be reassured that we maintain the highest biosecurity standards. We have the option to introduce additional controls if there are diseases that we really need to get a grip on. As I am sure the hon. Lady will know, we introduced some additional measures on swine fever back in 2022, which shows how importantly we take the issue.

The overall ambition of the border target operating model is to introduce robust, risk-based controls that protect biosecurity while reducing administrative and cost burdens for importers. Recognising that the introduction of these essential new controls could pose challenges for businesses, we developed the border target operating model in extensive consultation with industry, including many small and medium-sized enterprises, as I am sure the hon. Lady is aware. During that design phase, some 10,000 participants joined our many stake-holder events, we received 200 written responses to our invitation to comment through our online portal and we had over 650 detailed responses at focus sessions with food retailers and producers, the logistics sector and many others.

We have responded to the feedback that we received, as will be evident in the implementation of the first phase of the border target operating model from 31 January this year. For example, we have designed a new certification logistics pilot to support the movement of goods from hubs in the EU. We have provided further facilitation and guidance for importers using groupage models—the hon. Lady referred to groupage models, where a lorry delivers a whole lot of different models in one lorry—in terms of moving sanitary and phytosanitary goods into the UK, in order to make the system of certification more streamlined.

The phase approach implementation will allow businesses time to familiarise themselves with the new requirements before full implementation, on 30 April this year. The measures will make the process of complying with the sanitary and phytosanitary controls easier for a wide range of businesses, including SMEs. For example, the certification logistics pilot will allow certain businesses moving goods by groupage to use a single export health certificate from the point of origin through to the goods arrival in Great Britain. Amendments and simplification of export health certificates will mean individual certificates can now cover multiple types of animal products, which should help some of those groups such as dairy or cheeses.

Over the long term, as promised when we published the UK 2025 border strategy in 2020, the border target operating model will introduce a range of technological advances to ensure a fully 21st century border that facilitates UK trade. The development of the single trade window will make the process of importing to the UK simpler and more streamlined, enabling importers to meet their border obligations by submitting information only once.

To clarify, the single trade window will be coming in later. As I am sure the hon. Lady knows, the platform is being developed and His Majesty’s Revenue and Customs is working on that. Ultimately, the border target operating model achieves the lowest regulatory obligations for businesses, consistent with the need to protect biodiversity and public health, in addition to facilitation from better use of technology and data. That is achieved through a more proportionate approach to risk.

We have already removed import health controls for fruit and vegetables, such as citrus and mangos, which are either not produced commercially in the UK or present a negligible risk. The hon. Lady referred to vegetables; lots of vegetables have been looked at to come up with a simpler system. I have checked and if it is seen that a risk might arise to do with any of those commodities, such as vegetables in particular, we have a right to change that later .

For low-risk animal products, as a matter of routine we will require only electronic prenotification, which is already in place. Low risk plant produce, such as fruit and vegetables, with no specific disease or pest risk associated, will be removed from import health control requirement altogether. For example, cucumbers and gherkins are classed as low risk. On all high and medium risk goods, while we will retain health certification and physical inspection, more UK-specific targeted risk categorisation allows for lower inspection rates than under the EU model, while documentary-only checks will be performed remotely.

As a result, the additional costs to businesses associated with the new system—the BTOM—are substantially less than they would have been if we had extended the inherited EU model to all of our imports. Compared to the original import model that was scheduled to have been introduced in 2022, we believe that the new model will reduce costs to businesses by around £500 million per annum, by reducing the complexity and volume of paperwork associated with the importing.

I have time to refer quickly to a couple of questions.

The hon. Lady asked a whole range of questions, which I can skim through. Shall I do that first?

It might help if I clarified which particular questions, as I recognise that there are many there.

The hon. Lady mentioned that she has had a number of letters from and exchanges with Baroness Neville-Rolfe on the whole data issue. As has already been conveyed to her, it was decided that His Majesty’s Government would be unable to release the full inputs of the modelling that were included in the data because some of the sources are commercially sensitive, particularly in relation to other ports and so forth. I think she was probably going to ask me about that again.

In terms of food price inflation, initial analysis has indicated that the policies introduced would lead to an approximate increase in consumer food price inflation of less than 0.2% over a three-year period. We also have to consider the potential cost of a major disease outbreak, such as foot and mouth, which would have far more serious consequences. The 2001 foot and mouth disease outbreak cost about £12.8 billion in 2022 prices: £4.8 billion to the Government and £8 billion to the private sector. We have to look at all that. The Government’s modelling on the inflationary impact of the border target operating model has been undertaken through a peer-reviewed econometric model; there has been a huge amount of modelling. I hope that answers that question.

Can I be critical? We are talking about something that is potentially coming in in 12 days’ time. I recognise that I gave her a long list of questions because there is so much that comes from this policy. Let me give her three that we would really appreciate a direct answer on. First, what checks will be done in 12 days’ time at our border on the lorries? Will there be any checks at all on the health certificates? Secondly, what will the common user charge be in April, in 100 days’ time? What will businesses have to pay to import? Thirdly, will she say on the record, here and now, that there will be no impact on food pricing or food availability in the UK as a result of these policies—yes or no?

On the last question, I have given the hon. Lady the information on what our modelling highlighted about the potential approximate increase of food price inflation: less than 0.2% over a three-year period. In terms of checks on lorries at ports from January, health certificates will be needed on medium and high-risk goods. There will be a change in the pre-notification methodology, but not on introduction of the new requirement. A sample of remote documentary checks will be required on some medium-risk consignments. Obviously, we will still be educating and working with businesses about what they need to do and how to comply.

We will definitely write to the hon. Lady if there is any further information because the issue is very detailed, and it is hard to try to race through the answers here. I thank the hon. Lady for raising these issues. Obviously, this is a whole new regime for businesses to get used to. I think I have laid out that it is a much simpler system—more transparent and risk based—and that it was based on a great deal of consultation. I shall leave it there.

Can I just put on the record on behalf of British business—this is mad? We are talking about something that is happening in 12 days’ time. Trucks do not know whether they will need to provide a PDF of the check at the border. In 100 days’ time, there will allegedly be a charge, but nobody knows what that charge will be, so nobody can factor that into their costs, let alone—

I just want to put on the record that the common charge is not set yet. We have consulted on a rate and will be publishing the rate immediately. There will also be no checks on the border, and documentary checks—as I said, actually—will be remote. There is going to be no stopping of consignments.

So there we have it: in 12 days’ time, businesses will have to pay for these certificates, but they will not be asked to provide them, and in 100 days’ time they might have an extra cost but they do not know what it is—

Order. The Minister has sat down; I took it that she was giving way so I allowed the hon. Member for Walthamstow (Stella Creasy) to come in, but the Minister has now clearly sat down, so that is the end of the debate.

Question put and agreed to.

House adjourned.