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Grand Committee

Volume 796: debated on Wednesday 27 February 2019

Grand Committee

Wednesday 27 February 2019

Arrangement of Business


International Waste Shipments (Amendment) (EU Exit) Regulations 2019

Considered in Grand Committee

Moved by

That the Grand Committee do consider the International Waste Shipments (Amendment) (EU Exit) Regulations 2019.

Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

My Lords, the primary aim of this instrument is to amend EU and domestic legislation on waste shipments to enable their continued operability. The technical changes contained in this instrument will eliminate the risk that UK regulators would be unable to prosecute for, or prevent, illegal shipments of waste. They also provide legal clarity, certainty and reassurance for UK businesses involved in waste shipments. The legislation is this area is reserved, but this instrument has been the subject of extensive consultation with the devolved Administrations, who are content.

This instrument makes many adjustments, and I will highlight some of them. Noble Lords will not be surprised to learn that they are fairly technical in nature.

Part 2 corrects outdated references to the “Department of the Environment” in Northern Ireland to its new name, the “Department of Agriculture, Environment and Rural Affairs”.

Regulations 14 and 15 omit references to “Community Regulation”. Regulations 16, 17, 42 and 43 omit provisions in the domestic legislation relating to EU bodies, historic transitional provisions and previous revocations, which are all now redundant.

Regulations 18 to 25 make provision for the UK Plan for Shipments of Waste, dated May 2012, to continue to have effect and to be changed in the future.

Regulations 26 to 41 make technical changes to the offence provisions in the domestic regulations. These changes preserve the scope of existing offences and ensure that no new offences are created.

Part 4 removes references to the relevant retained EU law in Annexe XX to the European Economic Area agreement. The references are no longer needed because the retained EU legislation on waste shipments has been amended so that it sets out all of the rules which govern shipments to or from EFTA countries.

Regulations 46, 47, 50, 63 and 105 to 108 amend the scope of retained EU law to make it clear that it applies to waste shipments to, from or through the UK; they also correct definitions and out-of-date references to EU legislation.

Regulation 48 amends definitions and make technical changes to ensure that references to competent authorities and references to the 2008 waste framework directive, which appear throughout the retained EU legislation, will continue to be effective.

Regulations 52 and 53 make technical changes that preserve the existing powers of the regulators to object to notifiable waste shipments for disposal or recovery. The draft instrument substitutes references to principles in the EU’s waste framework directive with Basel convention obligations to have adequate disposal facilities and to minimise the movements of hazardous wastes and to ensure that shipments of wastes are only allowed if the state of export does not have the facilities to dispose of the wastes in question in an environmentally sound manner. The changes also ensure that regulators can continue to object to proposed shipments where the destination operates to lower environmental standards than those in the UK.

Regulation 69 omits Article 33 of the EU regulation, as this requires member states to set up systems for internal waste movements consistent with the system used between member states. Given that the UK has a system for internal waste movements, these provisions are considered redundant.

Regulation 91 makes a number of amendments to enforcement provisions. The provisions of Article 50 have already been implemented in the UK and so some of these provisions are redundant and can be omitted. The changes made preserve the requirement for a national inspection plan.

In addition, Regulation 91, and Regulations 92, 94 and 96 make changes that preserve obligations to report to the secretariat of the Basel convention, publish information and omits obligations to designate competent authorities and provide information to the European Commission.

Regulation 95 makes technical changes that maintain a power for the Secretary of State to designate places where waste entering or leaving the United Kingdom will be controlled.

Although there was no statutory requirement to consult on this instrument, Defra officials have engaged with industry and NGO representatives. The Explanatory Memorandum refers to,

“a large face-to-face event”.

In fact, there have been two large events and a number of one-on-one meetings with industry representatives to explain this instrument’s approach. No substantive comments or issues were raised, and questions received related to clarification on how the existing processes will function after the UK leaves the EU.

The Committee will be aware that the Secondary Legislation Scrutiny Committee raised concerns about the UK’s ability to continue exporting hazardous and other notifiable waste to the EU in a no-deal scenario. On the basis of those concerns, the committee recommended that this instrument should be subject to the affirmative resolution procedure. It highlighted a transitional issue with the validity under EU law of approvals to ship notified wastes where those approvals extend beyond the date of the UK’s withdrawal from the EU. The Committee will be pleased to hear that this issue has now been largely resolved.

Should the UK leave the EU without a deal, the UK regulators have obtained agreement from their EU counterparts that 98% of the approvals to ship notifiable waste to the EU can continue in their current form. No new applications will be required to allow the export of these wastes, and there will be no additional administrative costs associated with the approvals process. Spain is the only member state still to provide a response to 11 approvals. Defra officials have met with officials from the Spanish ministry of environment. Given that these shipments have previously been approved, there is agreement on both sides that it is important to avoid unnecessary duplication.

These adjustments represent no changes of policy. While there was no statutory duty to conduct an impact assessment, in developing these instruments we have sought to ensure the minimum disruption to businesses involved in the shipment of waste through retaining existing law. I beg to move.

My Lords, I thank my noble friend for setting out the background to this instrument, which I welcome. I would like to ask a couple of questions.

The Minister referred to a national plan being in place. Has anyone voiced concerns about this plan? Are they entirely happy with it? At what date will that national plan kick in?

I think that my noble friend has addressed the concerns raised by Sub-Committee B of the Secondary Legislation Scrutiny Committee, but there was a scenario referred to whereby 556 UK approvals to export notified waste to the EU, with an associated tonnage of just under 25 million tonnes, might be caused to fall into an abyss. Can my noble friend put my mind at rest that the situations in paragraphs 3.6 and 3.7 on page 3 of the Explanatory Memorandum have been resolved?

My Lords, I would also like to thank the Minister very much for participating in a meeting—I only managed to get to the very end of it, but the invitation was there. I also congratulate her on making what seems like a mundane statutory instrument really exciting through the enthusiasm of her reading.

However, this is an exciting issue, and it is a global issue. This whole market has fundamentally changed since the beginning of last year—almost a year ago—when China refused imports of what it called low-grade plastic, anything below about 99.7% pure plastic recyclate. Since then, that tide of waste from the developed world to the developing world has now been stopped by Thailand temporarily, as well as by Vietnam and Malaysia. We had the irony of President Trump blaming Asia for the litter that was washing up on the west coast of America, when of course most of it had already been exported from developing countries, particularly the United States, to east Asia. I will come back to this theme at the very end, but I want to put this SI in the context of an important issue and a quickly changing world.

Perhaps I could go through a few questions about the SI itself. I understand from it that we are, obviously, already members of the OECD and tied by those regulations and agreements, but are also we signed up not just as a member state of the EU but as a member in our own right to the Basel convention, which covers this area, so that we do not have to have a treaty change for that?

I was interested that the Minister mentioned Spain and, as I understand it from her, we have got to a stage where we are agreeing to agree but have not actually agreed. I understand also that the SI’s territorial limitations are to the United Kingdom. Does the Minister have any information about the relationship between Gibraltar and mainland Spain regarding its waste disposal? I think that the overseas territory—that is its status—relies very much on Spain for that as well. I do not know whether that is included as part of the negotiations going on at the moment.

I note the Minister’s remarks on consultation, but I would be interested to understand whether waste contractors and waste exporters have now been sent precise instructions on what they have to do.

I found the actual form on page 33 of the SI rather quaint. It read a little like one of those forms you get when you go to the United States, which says, “Have you indulged in terrorist activities recently?”, as if you are going to casually tick that for yes. I was quite surprised to see such a 1950s-style document here, but perhaps it is all computerised. I would be interested to understand that from the Minister.

I want to be clear on another area which affects all these things. As we know, Defra is the department that has suffered more cuts under our fiscal regime than pretty well any other department, outside that for local government—the MHCLG, as it is now. Does the Environment Agency have the capacity to take on any additional responsibilities in this area, particularly given the rise in waste crime that there has been? Frankly, I suspect that the amount of waste crime internally in the UK is absolutely dwarfed by the amount of potential exported material that should not be exported. Despite saying that we should not export waste to countries that have lower environmental standards than us, I see no track record of that whatever.

I come back to the fundamental point I made at the beginning. I read through the resources and waste strategy published by Defra at the end of last year. Chapter 6 of that is entitled “Global Britain: international leadership”, and I could not see anywhere in it a wish to stop this trade in waste, so that we would clean up our own backyard and no longer send that waste to other parts of the world. The greatest thing about this SI ought to be that it should become absolutely redundant within five to 10 years.

My Lords, I join in thanking the Minister and her officials for a useful and helpful discussion yesterday. It was probably intended to answer questions to shorten this debate, but unfortunately it gave me more things to think about after the discussion, so it may not have achieved its end. However, I appreciate the trouble the Minister and her officials went to to answer questions and to brief us.

I appreciate this SI is based on the Basel convention, which is not an EU convention, and therefore it is quite right that we should conform to it. I also hope that the bulk of what we are talking about will be proved unnecessary if we do not crash out of the EU, as some people fear. I am not sure whether yesterday’s discussions in the House of Commons have made that easier, but that is not for debate today. I understand that something has to be done, even if we leave the EU on the basis that the Government are suggesting, as some elements of this will have to be carried over eventually, but that is not for today.

There is obvious concern about Spain and Gibraltar but not because there may not be a simple answer. I read in the papers that the Spanish Government are concerned about Gibraltar and may be using this and other measures to bring pressure to bear on our Government about the future of Gibraltar. The danger is that this may drag on beyond the exit date—although we now probably have three months longer—but what happens if the Gibraltar and Spain issue is not resolved by the time we leave the EU? How many businesses will be affected? What is the position there? The House of Lords Secondary Legislation Scrutiny Committee was,

“concerned that any refusal by a competent authority to treat an existing approval as valid could have an impact on the UK’s ability to export notified wastes”.

If we cannot reach an agreement with Spain in time, we would presumably have to have new agreements with other countries to get rid of the waste there, or are we stuck with it? What is going to happen?

I have a few more questions beyond Spain and Gibraltar. Do the Government expect an additional workload for the UK’s competent authorities—the Environment Agency, the Scottish Environment Protection Agency, the Northern Ireland Environment Agency and Natural Resources Wales—as a result of Brexit? What will be the cost to taxpayers of any additional workload?

The Secondary Legislation Scrutiny Committee recommended that the instrument should be upgraded,

“to the affirmative procedure so that the House may consider any potential impact on UK manufacturers”.

Can the Minister tell us a little more about what impact there might be on British manufacturers? Is there an impact assessment somewhere, or do the Government feel one is not necessary?

Paragraph 6.4 of the Explanatory Memorandum, which is perhaps easier to understand than the main document—that is not surprising—states:

“Provisions …. on waste shipments, which transfer legislative powers from the European Commission to the Secretary of State, are included in a separate cross-cutting transfer of legislative functions instrument relating to the environment”.

Is that a different statutory instrument? If so, which is it, when will it be published and how does it relate to the SI we are discussing now?

Paragraph 7.4 states that, in the event of no deal,

“UK exporters will need to familiarise themselves with the customs guidelines the EU has laid down for imports of waste from outside the EU”.

What have the Government done to publicise these guidelines to UK exporters? What is the cost to UK exporters if we leave the EU without a deal?

Paragraph 7.6 states that the instrument is:

“Amending references to the EU and EU institutions and administrative processes to UK equivalents”.

What are the UK equivalents? What is the cost to the UK taxpayer for this additional workload? Will the UK equivalent institutions need to take on new members of staff to handle the administrative processes? How many new members of staff have already been hired to deal with this?

Paragraph 7.8 states:

“A number of amendments … on waste shipments are not included in this instrument but will instead be contained within a separate cross-cutting statutory instrument relating to the environment”.

Which SI is that? Is it the one I asked about earlier? Has it already been published? If no, when will it be?

Paragraph 10.2 states:

“Government informally engaged stakeholders at a large face-to-face event … No substantive comments or issues were raised”.

What stakeholders did the Government engage with? What were their concerns?

Finally, I am not trying to pull a fast one, but page 29 of the instrument refers to Article 55 under the heading “Designation of frontier crossing points”. I must ask about Northern Ireland; the Minister is nodding. Is any waste going back and forth between Northern Ireland and the Republic? If so, what are the implications of this designation on the wider discussions concerning an open border between the United Kingdom and the Republic? I should have given the Minister some warning about the last point; she will not have been expecting it, but I thought I should make it anyway.

I thank noble Lords for their contributions, especially the noble Lord, Lord Dubs, whose approach to this SI has been particularly forensic—I hope that he will do many more. I will address some of the issues raised today. A number of questions were asked that go into slightly more detail beyond the nugget of legislation that noble Lords are looking at today. I will therefore probably write a letter in addition to what I say today, particularly on the border crossing issue, which goes far beyond the scope of our considerations. I hope that I can answer noble Lords’ questions and put their minds at rest.

My noble friend Lady McIntosh mentioned the UK plan. I assure her that there are no concerns about the UK plan; it has been in place since 2012 and will continue.

Furthermore, my noble friend referred to the 556 approvals. She is quite right: when this instrument was laid, it looked like we had a mountain to climb in getting this waste approved and out of the country. I am pleased to say that this is an example of us working really well with our EU counterparts, who recognise the same as us that the shipment of this type of waste is hugely beneficial on both sides. It is an economic arrangement and makes sure that we get our waste treated in the right place, particularly where we do not have the capacity to do it ourselves.

The noble Lord, Lord Teverson, mentioned the trade in waste, both with China and more generally. If we lived in a perfect world, we would be able to dispose of and treat waste in our own nations, and that would continue for ever. However, some waste has a greater economic value to other countries or they have greater facilities to process that specific sort of waste, so I cannot see a future, at least in the short term, where we will ban all waste exports, because we simply cannot deal with some waste ourselves. However, we want to promote UK-based recycling and export less waste to be processed abroad. We are looking at a suite of measures, such as increasing the monitoring of international waste shipments and charging higher fees to improve compliance. We set out all these ideas in the recent resources and waste strategy, as the noble Lord will know, and we will publish more detailed plans soon.

The instrument retains the prohibition on the export of waste for disposal to countries outside the EU or the European Free Trade Association. The export of hazardous or household waste for recovery to countries outside the OECD is prohibited. Where we export waste destined for recycling to countries such as China—there will be other examples—that are better able to cope with this sort of waste, they will have specified which wastes they are willing to import and the procedures that UK exporters must follow are very well set out.

Do we have officials who check what happens to this stuff once we have exported it outside the EU and EFTA? Do we follow the supply chain and check what happens to it?

I would not want to confirm that 100%, but I hope very much that that is the case. I will investigate exactly what happens in the supply chain in order to find out whether we know exactly what happens at the other end. I think that all noble Lords will find that interesting; I know that I certainly would.

Turning to the Basel convention, I can confirm that we are members in our own right and that in fact we play a leading role within the convention in the way that it moves forward. We ensure that we get the best environmental outcomes from that particular organisation. That will remain the case and noble Lords should be reassured in that regard.

On Gibraltar, we are working closely with the Government of Gibraltar to support their EU exit preparations on waste shipments. Where the UK has 11 approvals outstanding, Gibraltar currently has 45 consents to ship waste to Spain which extend beyond exit day, and these will require reapproval by the Spanish authorities. It is a transitional issue for approvals to ship waste which have already been consented to. The EU legislation provides a framework for where consent has yet to be granted. Gibraltar is covered by the UK’s ratification of the Basel convention and our membership of the OECD, so there is no legal impediment to Gibraltar continuing to ship waste to Spain after our departure from the EU. If no agreement is reached within the next short period of time, what will happen is that Gibraltar would put forward new applications which will be submitted from 30 March onwards. Again, there is no legal impediment to those applications being agreed to. There will be a slight break in the continuity of service, but we do not think that it would be for very long. The Environment Agency has spoken to the affected exporters and contingency plans are being made.

I turn now to consultation, an issue which was raised by the noble Lord, Lord Teverson. This is a technical instrument and, if I may coin a phrase, nothing has changed. Much of what happens already will continue to happen. Organisations will get their approvals. There will be two countries working together, and the waste will go from A to B. However, it is important that we make sure that everyone is aware of the plans we have in place. As I explained earlier, we have held events where we talked to the stakeholders involved in this area. The conversations were focused strongly on contingency planning and encouraging them to make sure that they are ready for Brexit, if it is a no-deal Brexit, on 29 March. We have issued a technical notice on the continuity of waste shipments which was published on 14 October.

A number of questions were asked about costs and resourcing. I would like to reassure noble Lords that much of this will not change. The amount of enforcement which has to happen will stay the same, and the number of applications which have to be submitted to a certain office in a certain place will also remain as it is. We do not foresee any significant changes in costs or additional resources being required as a result of us leaving the EU without a deal. The systems are already in place, and we are confident that they will continue.

I would like to respond to some of the questions put by the noble Lord, Lord Dubs. He mentioned the sister—or brother—legislation, which has been mentioned. This is happening with some of the no-deal SIs, in particular Defra SIs. Some of the cross-cutting SIs are picking up various issues from other SIs and putting them into one because they sit more comfortably with each other. The SI we are talking about is the Environment and Wildlife (Legislative Functions) (EU Exit) Regulations 2019. These regulations were approved by the House of Lords on 12 February and the instrument was then passed by the House of Commons on 14 February. That piece of legislation has gone through and, once this instrument has gone through, the two will combine together and the SI will be made.

Turning now to the imports of waste from Ireland and the impact on the Irish border— which again I will try to answer as much as possible—we have in the past agreed to allow imports of hazardous waste to the UK for specialist disposal, for example, by high-temperature incineration. This has been at the request of the Irish Government, and these imports have been agreed on the basis that suitable disposal facilities are not available in Ireland. This is the same for many countries when they work together on these transactions. When the UK leaves the EU, such import of waste for disposal from EU member states will be prohibited under EU law. If EU member states wish to continue to export waste to the UK for disposal—that is, from Ireland to Northern Ireland—it will be for the EU to amend its legislation to make this possible. So it will not be possible in the future. In 2017, the UK imported 12,973 tonnes of waste from Ireland. Of this, 7,978 tonnes of hazardous waste was imported to England for HTI.

I shall probably stop at this point on the Northern Ireland-Irish border issue. I can see myself getting into hot water around it, and it would be sensible for us to give a considered response on this specific issue.

However, in general terms, I hope noble Lords will agree that the SI does what it says on the tin and keeps as much the same as possible. We hope it will not be needed in the future, but if it is, we know that the international transfer of waste will happen in an orderly fashion. I commend the Motion to the Committee.

Motion agreed.

Veterinary Medicines and Animals and Animal Products (Examination of Residues and Maximum Residue Limits) (Amendment etc.) (EU Exit) Regulations 2019

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Veterinary Medicines and Animals and Animal Products (Examination of Residues and Maximum Residue Limits) (Amendment etc.) (EU Exit) Regulations 2019.

Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

My Lords, veterinary medicines are tightly regulated here in the United Kingdom and in Europe. They are essential for the treatment of animals and ensuring animal welfare but can also present a risk to human health and the environment. If misused, they can affect human health directly or may enter the natural environment, causing long-lasting damage. The UK’s existing Veterinary Medicines Regulations 2013 set out the requirements on the manufacture, authorisation, supply, possession and administration of veterinary medicines in the UK.

Separately, the surveillance of residues from veterinary medicines in animal produce is an important safeguard to provide assurance that any meat, eggs or milk consumed is free from harmful residues of medicines used in animals. The Animals and Animal Products (Examination for Residues and Maximum Residue Limits) (England and Scotland) Regulations 2015 provide for a surveillance programme for residues in England and Scotland. These regulations adopt the level of permissible residues set by the EU and also prohibit the use of certain substances as growth promoters. As residues surveillance is a devolved matter, there is equivalent secondary legislation covering Wales and Northern Ireland.

The Government share the British public’s high regard for animal welfare and the need for safe and effective veterinary medicines. These regulations address technical deficiencies in our veterinary medicines legislation to ensure that it continues to operate effectively when we leave. They will ensure that the legal framework continues to provide an effective regime for the regulation of veterinary medicines through which we can safeguard the well-being of our animals. The instrument does not diminish the high standards in the established veterinary medicines and residues surveillance regimes. I emphasise that the amendments in this instrument are to ensure operability and that the high safety standards we have in place will continue. I particularly emphasise, given the reference in the Explanatory Memorandum to some concerns, that these regulations—I repeat this on the record—are for nothing other than to retain the high safety standards that we all desire and must have in this country.

The UK’s regulator, the Veterinary Medicines Directorate, is already established as one of the leading regulators in Europe for veterinary medicines and will continue to lead on the international stage. The current legislation is designed to work in the context of EU membership. Some elements will therefore not work sensibly in a national context. Part 3 of this instrument amends the existing national legislation. For example, the mutual recognition provisions for medicine approvals between member states are no longer relevant. Similarly, approvals of generic marketing authorisations rely on the sharing of information between member states, and cannot continue to operate in the same way. Minor corrections are also made to the text to address references concerning EU membership which are no longer accurate or appropriate.

The instrument introduces a change in relation to the location of holders of marketing authorisations for veterinary medicines, which is needed as a consequence of leaving. Marketing authorisation holders must be established in the UK. As set out in the Explanatory Memorandum, this may result in a small increase in cost to those marketing authorisation holders currently based outside the United Kingdom. This is necessary to ensure that there are appropriate regulatory controls to ensure full compliance with UK law and standards, and that all marketing authorisation holders are treated equally. It is vital that marketing authorisation holders can be held accountable for their products, and these regulations provide for that.

Part 4 of the regulations sets out the necessary amendments to retained EU regulations. Regulation 470/09 sets out how maximum residue limits for substances used as veterinary medicines are set. MRLs are the maximum safe limit of a particular substance in produce from animals. These limits are used to establish withdrawal periods—the period that must elapse after the last administration of a medicine before produce from that animal may enter the food chain.

The Government have proactively engaged with the animal health industry to ensure that the regulatory regime continues to function effectively after exit day. I have met the veterinary pharmaceutical industry association, the National Office of Animal Health, on a number of occasions as part of our extensive engagement. Officials from the Veterinary Medicines Directorate continue to hold regular meetings with key industry representatives. Industry has welcomed our proactive and continued engagement with them. We have also worked comprehensively with the devolved Administrations on this instrument where it relates to devolved matters, and they have given their consent to this instrument being made on a UK-wide basis.

The Government are committed to ensuring continued levels of protection for human and animal health, as well as making it straightforward for businesses to put products on the market; and ensuring UK businesses and individuals can continue to access a range of veterinary medicines. This instrument will help to maintain the established veterinary medicines and residues surveillance regimes, and ensure that an effective regulatory framework for veterinary medicines is in place. It remedies deficiencies in the law to enable that operability and I beg to move.

My Lords, I thank the Minister for his explicit and clear explanation of these regulations. I have very little quibble with them, but just a few points. As he emphasised, a significant change is to require the holders of market authorisations to be registered in the UK. This will impose a small burden. About £100 was estimated in the Explanatory Memorandum, which seems extremely reasonable and justified, because this measure is required to bring the market authorisation holders under UK legal jurisdiction. That is clearly extremely important to protect animal health and public safety.

The monitoring of residues, to which the Minister referred, is extremely important. As he mentioned, it is devolved. Can he tell us which processes are, or will be, in place between the devolved authorities in the UK to ensure that we maintain consistent levels and standards, so as not unduly to interfere with internal trade within the UK? I was going to ask the Minister about the concerns raised by your Lordships’ Secondary Legislation Scrutiny Committee in relation to the lowering of standards, but I accept his assurance that those concerns are unfounded.

Finally, I make a plea to the Minister, which I am sure he will fully understand. These regulations will significantly increase workload for the regulatory departments in our pharmaceutical companies, which form an important industry in the UK. I ask him to ensure that at least some degree of understanding and flexibility applies to the government agencies responsible for interacting with those companies. All in all, however, this is a very satisfactory SI.

I congratulate my noble friend the Minister on introducing this SI. I am not a vet but an associate fellow of the British Veterinary Association, and I am grateful for the briefing it has given me for today’s purposes. I want to press the Minister on the question of the potential cost. Historic and current approvals will obviously remain in place, but can he put my mind at rest on what the future cost will be? Can he also assure the Committee that the SI before us this afternoon will not potentially raise a barrier to trade?

In particular, I understand that the previous harmonisation and mutual recognition of products will not necessarily go forward. It is good that we are being nice about products coming this way, but will the Minister ensure that those going the other way will be equally assured? I understand that reciprocity will not be guaranteed in the event of no deal. I do not disapprove of the SI; I understand the absolute need for it, and welcome it. But what is happening to ensure reciprocity going forward?

Can my noble friend also give a hint to the Committee—this could be in the SI; I might have missed it—of what the cost would be of placing a veterinary product from the UK across the EU? That would be most helpful to know, as I understand that there will potentially be additional costs going forward. Could this lead to some companies, which might otherwise have chosen to establish themselves in the UK, choosing not to do so? This is one of the concerns that was expressed by the Secondary Legislation Scrutiny Committee Sub-Committee A, as it could mean a reduction in the number of veterinary medicines being available after exit. I assume this is something that the SI deals with. There are two sides to the coin. One is that a new product is going to cost more to be placed in another EU member state, or potentially an EEA country, even in spite of this. The flip side is that a company that may have wished to place itself in the UK may have second thoughts about doing so. Will this cover the situation if there is no deal, as the statutory instrument before us will presumably replace what would have been a transition period?

My Lords, as a tenderfoot in no-deal SIs, I seem to have landed on my feet in a comparatively soft zone. No one I have received briefing from thinks that this, unto itself, is a bad thing. That seems to be the general consensus. Although there are going to be small rising costs—and as we have just heard, there is always the danger that we will be going into a world that is not as good for trade as Europe as it was before—that probably comes with the territory. We will have to accept that, if this SI comes into being; that is the reality of what we have here.

My only question is—and the briefest of thumbnail sketches is all I would require—what would be the alternative? Some idea about what might be happening or what might be the other way might put in context whether this is necessary at the moment. Most of the time, everybody says it is good, but if we do not do this, what else would be available? We had a brief look at the briefing meeting which the noble Lord very kindly arranged. A little hint at what else is available might let us stare a little closer into this pool of reality that comes with these documents.

My Lords, I declare an interest as I have horses. One issue of particular concern relates to the deletion of the requirement to retest horses entering the UK for disease when initial test results are inconclusive. The omission of this requirement suggests diseased horses will potentially be allowed to enter the UK without adequate care or protection for other animals and human health after the UK leaves the EU. Does this mean that we—

May I help the noble Baroness? I have a slight feeling that this might be in tune with the next SI, on the animal products and arrangements, rather than veterinary medicines, but I may have got that wrong.

My Lords, I thank the Minister for his introduction to this SI and his helpful briefing beforehand and all noble Lords who have spoken. As the EM set out, this is an important issue for animal welfare, the safety of treated animals, the people handling the medicines, consumers and the environment. It is important that we get the regulation of veterinary medicines right for the future. We know, for example, that the overuse of antibiotics in animals is contributing to a developing public health crisis, as resistance and immunity to their impact becomes more widespread. It is very important that we are able to continue to harness the best and latest scientific advice to control the use of veterinary medicines.

The EM also made it clear that a partner SI will set the future maximum residue limits. Unfortunately we do not have before us today. We have debated why that happens on many occasions, and I will not repeat those arguments.

Both the Lords and Commons Scrutiny Committees recommended that this SI should be upgraded from a negative to an affirmative procedure. They did so for two reasons, which I would like to explore in more detail. First, they had concerns about the new requirement on holders of marketing authorisations for veterinary medicines to be based in the UK. The Minister has already explained in a little detail why this is necessary. The Explanatory Memorandum states that 90 companies would have to establish a UK base. Can the Minister say whether we have concerns about the quality of any authorisations currently being carried out by these 90 companies? The cost of registering a UK base seems insignificant, but, as the noble Baroness, Lady McIntosh, and others have said, the Scrutiny Committees were concerned that some of the companies would not simply bother to register and would therefore not be able to authorise EU veterinary products being imported to the UK. Can the Minister explain the consequences for animal health if this were to happen? Could there be a shortage of products? Has any risk assessment been carried out to ensure that this will not be the case?

Can the Minister also respond to concerns that if we banned products from EU companies that did not have a base in the UK, the EU could retaliate and ban UK-authorised products in the EU? Can he clarify whether products authorised by UK marketing companies will still be valid in the EU after exit? This is particularly concerning given that mutual batch testing would cease after Brexit. This would mean that additional checks for veterinary medicines manufactured in the UK and exported to the EU would have to apply. Is any dialogue taking place to ensure that these trade issues are resolved? Has an assessment of the risks to UK research and business been carried out?

The EM gives the reason for requiring a UK base as being to facilitate enforcement, as the Minister said. It goes on to say:

“The ability to prosecute a holder in appropriate circumstances is an important deterrent to bad practice”.

Can the Minister explain what these bad practice risks are? Which UK agency would prosecute the companies if bad practice continued to exist? Have there been any prosecutions in recent memory? I am trying to get to the bottom of where that concern really lies.

The Scrutiny Committee also raised concerns about the potential lowering of safety standards in respect of certain amendments. Clearly this is a scenario we would want to avoid at all costs. The SI appears to retain many of the standards currently in operation within the EU. Can the Minister confirm that we will comply with EU regulatory standards or standards at least as stringent as those currently in place?

We will no longer have the checks and balances on standards which the EU offers. Responsibility for some decisions will now be delegated to the Secretary of State. For example, under Paragraph 22, the veterinary medicines regulations are amended to say that before placing an immunological product on the market, written approval must be sought from the Secretary of State. Can the Minister clarify which agency or department will be authorised to give this approval and what scientific evidence will be required?

With regard to applications for new or amended residue limits, page 9 refers to an appropriate authority producing an assessment report with a risk assessment. In this case the appropriate authority is again defined as the Secretary of State, so will he, in effect, be making a recommendation to himself? Can the Minister clarify how the responsibilities will be defined so that there is a separate assessment and decision-making function?

There are several references to exporting countries having,

“equivalent medicines regulation standards to those of the United Kingdom”.

Can the Minister clarify who will determine whether those standards are equivalent?

For the avoidance of doubt, can the Minister state categorically that there is nothing in this SI that would enable the USA to start exporting hormone-injected beef to the UK? He will know that this is a matter of great concern to the British public. I look forward to his response.

I am most grateful to all noble Lords for their contributions. We will consider another SI which is yet to clear JCSI. I want to put on record that I am fully seized of the point that statutory instruments should be grouped together wherever possible, appropriate and helpful to your Lordships in scrutinising regulations.

Although I mentioned it in my opening remarks deliberately, I emphasise again that this SI is absolutely about continuing existing high standards for veterinary medicines and ensuring that UK businesses and individuals can continue to access as wide a range of veterinary medicines as possible. I specifically reassure the noble Baroness, Lady Jones of Whitchurch, that there is no way that this statutory instrument can do anything to unpick the existing ban on hormone growth promoters, as it is already in UK law. I repeat emphatically that this is not the purpose or intent of these regulations.

A number of your Lordships mentioned the requirement for marketing authorisation holders to be established in the UK, which will result in a small additional cost—there are references to £100 and a further annual fee of £40. We believe it is necessary to ensure the safety and effectiveness of UK medicines and that all companies can be held accountable for the medicines they market. We have endeavoured to make this process as simple and robust as possible. The cost of establishing a UK presence is small compared with the overall cost of developing a medicine and bringing it to market. We do not believe that companies will be discouraged from bringing their products to the UK market. All new companies wishing to market products in the UK may continue to manufacture medicines in Europe and elsewhere, but as a company they must be established here in the UK.

The noble Lord, Lord Addington, is right that we considered alternatives when preparing this in order to provide the same assurance that the products in question are safe and effective. Final manufacturing and product surveillance assurance processes would have been required to take place in the UK under that alternative. That would mean moving manufacturing processes and staff and would certainly have resulted in significant increases in costs to industry. This is why we chose the option that we believe provides the necessary assurances that we would require with the least impact on and cost to business. As the noble Lord, Lord Trees, said, it is a reasonable and proportionate response to what these instruments intended.

My noble friend Lady McIntosh raised the issue of UK companies wishing to market products in the EU. At this stage, the European Medicines Agency has been clear on its expectations. Marketing authorisation holders, final manufacturing certification and post-authorisation surveillance must all be located in the EU. As I have said, our approach has been somewhat different. We have intentionally intended to be pragmatic. We think that is the right way forward. On whether there will be any changes in the arrangements, this is the position as we understand it at the moment. I think this is an area where continuing collaboration is important.

I profoundly agree with the noble Baroness, Lady Jones of Whitchurch, about the imperative of reducing the use of antibiotics in livestock. We must reduce it in humans too. In livestock, there has been a 40% reduction already. We need to go further for all the reasons we understand about animal and human resistance.

On working with industry, there has been considerable engagement with NOAH and the Veterinary Pharmacy Association, and officials from the Veterinary Medicines Directorate are having continuous meetings with key industry representatives. As I have said, industry representatives have said to me that they welcome this continued and proactive engagement.

In response to the noble Baroness, Lady Jones of Whitchurch, I have had no indication from the industry that companies have decided not to continue marketing products in the UK. Indeed, we are a nation with considerable livestock and animal interests as animal lovers. The UK animal medicines market is worth in excess of £645 million per annum. The additional costs which will result from this regulation have been acknowledged by many of those I have spoken to as being very small compared with the extremely high costs of developing and marketing veterinary medicines. The whole point of this statutory instrument is to ensure that this country has the appropriate medicines we need to look after animals.

Bad practice was another point raised by the noble Baroness, Lady Jones of Whitchurch. Broadly speaking, it means operating outside the scope of the regulatory regime. In this context, that would include failing to report adverse reactions to the VMD or changing a product specification without going through the necessary regulatory approvals. I have not been made aware of any examples of such practices, but if I do hear of any, I will write to the noble Baroness and send a copy to all noble Lords who have spoken in the debate. This is an important feature of the necessary regulatory approvals. We should ensure at every turn that if there are adverse reactions or if there is a change in a product specification, the VMD must be informed.

My noble friend Lady McIntosh asked about the cost of placing products in the EU. As I understand it, the reality is that costs will vary across member states. Due to the complexities of the products, member states are able to set their own fees depending on the number of countries involved and the costs incurred by the individual assessment authorities. I cannot give precise figures to assist my noble friend but, again, if I have any further detail, I will be in contact.

This is about bringing these matters back into the national context and ensuring that there is confidence that it is done robustly. The noble Baroness, Lady Jones of Whitchurch, asked about the scrutiny arrangements of Ministers. The Veterinary Medicines Directorate is the UK’s competent authority for veterinary medicines and authorises medicines on behalf of the Secretary of State. There is an established statutory appeal mechanism set out in the Veterinary Medicines Regulations 2013 for anyone who is aggrieved about a decision made under those regulations. This instrument does nothing to reduce or diminish those protections. Regulation 28 of the 2013 regulations provides for an appeal to be made to the Veterinary Products Committee while Regulation 29 provides for an appeal to a person appointed by the Secretary of State to hear the appeal. Once these routes of appeal have been exhausted, the applicant may bring forward judicial review proceedings in respect of the Secretary of State’s final decision.

It is important to emphasise that the VMD is recognised across the EU as having considerable experience and a very strong scientific standing. It is acknowledged across Europe as one of the best-performing national EU regulators. It already undertakes a substantial amount of scientific assessment work, the majority of which takes place at national level, so there is a high degree of continuity. Indeed, the VMD has an excellent reputation not only within Europe, but internationally based on the strength of its scientific and regulatory expertise. The industry across the EU uses VMD as one of the lead agencies because of its reputation for excellence.

On scientific expertise and advice, it is important for me to express that in the national context, we will be well protected. VMD already has considerable expertise, but it also has access to independent advice and can draw on the expertise of the UK’s Veterinary Products Committee. The committee’s membership includes academics with expertise in ecotoxicology, toxicology, the fate of veterinary medicines in the environment and residues in food. In other words, we believe that considerable expertise is already available to us.

The noble Lord, Lord Trees, mentioned consistency. VMD co-ordinates on a UK-wide basis and meets all DAs yearly to set the annual residues control plan to ensure consistency. More generally on all these matters, in the framework and understanding in respecting the devolved arrangements, the common link and common standards, particularly in areas such, as this are well understood by the devolved Administrations. As I said, their engagement was very much alive on this instrument.

My noble friend Lady McIntosh asked about authorisation costs. In the UK, the costs will remain the same. The noble Baroness, Lady Jones of Whitchurch, mentioned product quality. There are no specific concerns about any of the products from holders currently based outside the UK but, clearly, we need to ensure robust assessment to keep animal and human health safe.

Other points were made. On our arrangements and approach, which I described to the noble Lord, Lord Addington, I say to my noble friend Lady McIntosh that we do not wish there to be any barriers to trade. We wish to collaborate and work to ensure that animal medicines are available in this country. In working with NOAH and industry, everyone is seized of the importance of this issue. I will study Hansard because I want to respond to the noble Baroness, Lady Jones, with specific details on mutual batch-testing.

In our arrangements with the EU, we all want a deal that reflects the importance of collaboration. That is precisely because in this country, we have expertise that the Europeans wish to use and we in turn wish to work with them. This is a strong area in which we wish to work collaboratively.

My specific concern is about whether we have told the EU that we plan to bring in UK-based registration. Is there a danger of some kind of tit-for-tat? What negotiations are taking place with the EU to make sure that it does not retaliate in some way? We all want a good ongoing relationship, but this SI raises specific questions about the consequences.

I am most grateful to the noble Baroness. The EU knows about our arrangements. The way in which we have set out the market authorisation holders could not be a stronger signal to our European friends that we have found what we think is an appropriate way of ensuring that we have the protections we believe we need. We are not being draconian or difficult; we believe that it is important to have an international trade in good animal medicines. That is what we seek. For those reasons, I will look at Hansard for any other points to address. In the meantime, I commend the regulations to the Committee.

Motion agreed.

Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019

Considered in Grand Committee

4.55 pm

Moved by

That the Grand Committee do consider the Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019.

Relevant document: 15th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

My Lords, I shall speak also to the instrument grouped with these regulations—the Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019—as I think it will be helpful to noble Lords, given the close connection between the two.

The Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019 amend provisions related to imports, and transit through the EU, of: live animals, including horses; animal products, including meat; reproductive material used for animal breeding, such as semen, ova and embryos; and the non-commercial movement of pet animals.

This instrument importantly ensures operability of our main English animal trade instrument, the Trade in Animals and Related Products Regulations 2011. This is key legislation for the import of these commodities into England that establishes a system for trade in live animals and genetic material with other EU member states and imports of animals and animal products from outside the European Union.

This instrument also ensures the operability of two related instruments that regulate the non-commercial movement of pet animals into Great Britain and ensure protection against the introduction of rabies: the Non-Commercial Movement of Pet Animals Order 2011 and the Rabies (Importation of Dogs, Cats and Other Mammals) Order 1974. The Non-Commercial Movement of Pet Animals Order 2011 enforces in Great Britain the EU pet travel scheme, which sets out rules for identification, vaccination and documentary requirements for pets entering member states from other member states or third countries, and the rabies order sets out requirements for quarantine when a pet is not compliant with these rules, in order to protect our biosecurity and prevent the introduction of rabies.

I emphasise that this instrument makes purely technical changes to EU-derived domestic legislation about animal trade to ensure that it continues to operate effectively. It does not introduce new policy and preserves the current regime for protecting the UK’s biosecurity. This instrument applies only to imports and does not legislate for export of animals and animal products from the United Kingdom to the EU. The amendments in this instrument will allow all these laws to continue to work after exit, by, for instance, removing redundant references to EU bodies, functions or legislation and replacing them with domestic equivalents. It will also amend phrases that would no longer be correct, such as changing “legislation of the European Union” to “retained EU law”.

Different parts of this instrument have different territorial extent and application, and the devolved Administrations were closely engaged in its development. Part 2 applies to Great Britain, whereas Part 3 applies to England only. The devolved Administrations are tabling their own versions of the amendments in Part 3, which will generally reflect the approach taken in England.

Without this legislation, there would be considerable disruption to the UK’s import system and a lack of clarity for industry and non-commercial pet travel.

The Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019 again amend provisions related to imports, and transit through the EU, of: live animals; animal products, including meat; genetic material used for animal breeding, such as semen, ova and embryos; and the non-commercial movement of pet animals. The instrument makes purely technical changes to directly applicable EU regulations and decisions. It does not introduce new policy and preserves the current regime for protecting the UK’s biosecurity.

This instrument makes technical amendments to ensure continued operability of: 14 EU instruments concerning imports of live animals and reproductive products; 17 concerning imports of animal products intended for human consumption; four that lay down protective measures against the introduction of particular diseases; four that cover the EU pet travel scheme; and seven that relate more generally to the import regime for animals and animal products. This instrument also contains similar technical amendments to references to powers to charge fees found in two domestic instruments.

The amendments ensure the continuation of veterinary controls and other import conditions which safeguard animal and public health. They allow for authorisation of businesses to continue, and for the maintenance of health certification and transport requirements, and allow appropriate actions to be taken in case of reported non-compliance or disease outbreaks in other countries. Furthermore, they provide for the continuation of the existing health and documentary requirements for the non-commercial movement of pets into the UK under the EU pet travel scheme.

In addition, the amendments transfer certain powers and functions from the European Commission to the respective Ministers in the UK. The amendments give Ministers the power, formerly reserved by the Commission, to take appropriate action in relation to trade restrictions resulting from disease outbreaks abroad. Regulation 3 and Schedule 1 lay the foundations for the appropriate Minister and the Northern Ireland Office to amend lists of third countries approved as having equivalent official disease controls for continuing trade with the UK in live animals and animal products, and thus to refuse trade or impose more stringent conditions on countries that pose a biosecurity risk.

Regarding the EU pet travel scheme, the amendments are required in order to ensure that safe pet travel without quarantine can continue into the UK. If these amendments were not made, EU pet passports for pet animals travelling from the EU would no longer be valid in the UK, which would clearly cause disruption. The UK’s ongoing application to become a listed third country for the purposes of pet travel between the UK and EU member states is also dependent on maintaining EU minimum health standards.

This instrument applies to the whole of the UK; the devolved Administrations were closely engaged in its development and have given their consent.

Defra has carried out extensive engagement with stakeholders on animal trade and pet travel more generally. Concerning importers of animals and animal products, the department has engaged with over 300 stakeholders to date, covering 50 events. All border inspection posts and all known impacted trade associations have been consulted. Defra will continue this engagement with importers over the coming weeks to ensure they understand the changes that will come into effect.

In relation to the equine sector, Defra has engaged with key stakeholders, including the British Horseracing Authority, World Horse Welfare, the British Equine Veterinary Association and Weatherbys, throughout work on EU exit. The equine sector is content with the proposed approach for imports.

In relation to pet travel, Defra has engaged with key stakeholders, including carrier and industry groups, the British Veterinary Association, the Royal College of Veterinary Surgeons, the Kennel Club, Guide Dogs UK and Dogs for Good. The pet travel sector is also content with the proposed approach.

Additionally, on the subject of this legislation Defra has engaged with various major stakeholders—the Food and Drink Federation, the International Meat Trade Association and the NFU—who raised no concerns with Defra’s approach.

The trade in animals and animal products that do not constitute a risk to human or animal health is clearly of significant importance to the UK’s food security and economy. These technical amendments are essential for the continuation of the UK’s current trade and import regime and for minimum disruption to pet travel. They will also ensure that our strict biosecurity controls with regards to animal trade are maintained at their current levels when we leave. I beg to move.

My Lords, I welcome these two sets of regulations, one of which is clearly more substantive than the other. I would note that the value of exports of animals and animal products is currently running at £6.7 billion, so this is not an insignificant trade. I have some questions for my noble friend.

Concern has been expressed by the British Veterinary Association and others—this is also mentioned by Sub-Committee B of the House of Lords Secondary Legislation Scrutiny Committee—that there could be a hurdle. My first question is this: if we pass this statutory instrument today, will it take immediate effect, thus ensuring that there will not be any form of hiccup? I have read that it could take six months for Britain to be listed as a third country. Does this statutory instrument prevent any hiatus occurring? I hope that my noble friend can reassure the Committee today that our exports will continue. It has been put in terms that the UK may not be permitted to make the application to become a third country until after 11 pm on 29 March—if that deadline is upheld. The briefing from the BVA goes on to state that the process can take several months, while according to the National Farmers’ Union, Defra itself has indicated that the process could take up to six months. It would be reassuring to know that that is not the case.

My noble friend will be aware of my concern especially about racehorses. He mentioned that the statutory instruments before the Committee relate to imports. That begs the question: what is the position as regards exports? We have the tripartite agreement which relates to racehorses, presumably covering racing, breeding and so on. What is the position as regards exports under this instrument? Are we going to have a separate SI to cover that aspect, or have I missed something here? Can my noble friend assure me that our racehorses will be able to go to Ireland and France to compete in races on 30 March and beyond?

I turn to passports for pets. What reciprocal arrangements are in place? Again, my noble friend has reassured the Committee adequately on the position of dogs and other animals coming into this country, but if someone wishes to take their pet to an EU country on 30 March, will that still be the case? Where are we as regards reciprocal arrangements for pet passports?

I would like to put down a marker. I know that my noble friend and the department are coming under great pressure to ban the trade in live animals. I would like to be first out of the stalls—to use a racing analogy—that we do not want to see an end to the trade in live animals. I presume that these two statutory instruments should put my mind at rest in that regard.

In introducing the two sets of regulations, in particular as regards the plethora of regulations that they are amending, my noble friend has said that we want to ensure the safety of food and animal products coming into this country. What progress has been made on our remaining within the European Food Safety Authority and signing up to the rapid alert system for food and feed scheme? My noble friend will be aware of my interest since I followed the “horsegate” scenario in 2013 very closely. Obviously, we want to make sure that there is no possibility of that arising again after March this year.

With those comments, I thank my noble friend once again for introducing these two important sets of regulations.

My Lords, I had not intended to visit the Grand Committee on these SIs today because, as the Minister said, there are no major policy changes. I declare an interest—it is not an interest, really—because I am a member of sifting committee B, helping the world go by with statutory instruments.

We published a brief note on these two SIs in our 15th report and I wish to raise a couple of points which I did not know about until earlier this morning. It is not without significance that the medicine SI we debated earlier and this SI started life as negative instruments from Defra, which did not want them debated. That was the view and that is what it is all about. These two SIs were upgraded following the sifting process.

Defra has about 10% of the instruments we have seen and recommended for sifting. It has agreed all the recommendations—I am not complaining about that—but I wish to address a point which was raised with me this morning by Friends of the Earth. While I have been sitting in the Room, I have realised that exchanges have taken place between Defra and Secondary Legislation Scrutiny Committee officials. I want to put on record that Friends of the Earth have sent a note about several matters, including incoherent amendments and drafting errors.

In relation to the Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019, the Friends of the Earth note states:

“Regulation 50 … amends the Commission Regulation 2018/659. Regulation 50(13) of the 2019 Regulations omits Article 12(2) of the 2018 Commission Regulation which requires that when checks on live horses coming into the UK return inconclusive, they should be subject to a definitive testing for African Horse Sickness and a list of other diseases listed in Article 11(1) which is retained”.

To cut a long story short, Article 12(2) is omitted and not replaced and there is no mention of it in the Explanatory Memorandum. Is this the case?

While the lawyers from Defra were not available earlier today, I understand that the policy lead believes it has fully copied across into the SI the provision from the EU regulation that requires that when checks on live horses coming into the UK return inconclusive they need to be retested. That is the point I want the Minister put on the record. There should be no weakening of testing arrangements, but if Defra has not copied across something then it will be somewhere else. I found this enormously complicated instrument as I tried to go through the aspects raised by Friends of the Earth.

I shall not go through the details of what Friends of the Earth has said—I am quite happy—and I presume it has sent a copy of the note to the Minister. However, there are references to changes in regulations which do not exist. Regulations 7, 26 and 32 all refer to amendments and points which do not exist; they modify something which does not exist. I am quite happy to leave the note for the Minister and his officials. I do not want to go over issues that would not be suitable here.

The central issue is that some people have looked at this and thought, “Hang on a minute, we have not fully copied across but policy lead thinks we have”. I thought it worth while to raise the point because, if it gets out there, you cannot pull it back if it is wrong. If it can be satisfactorily dealt with here, it would be for everyone’s convenience.

My Lords, I apologise for my bungle on the previous regulations. These SIs merge into each other well.

An issue of particular concern which has been referred to—I am going to speak to it again—relates to the deletion of the requirement to retest horses entering the UK for disease when initial test results are inconclusive. Omitting this requirement suggests that diseased horses could potentially be allowed to enter the UK without adequate care or protection. This could apply to other animals and humans after the UK leaves the EU. I declare an interest: I have a pony stud, have exported ponies and am waiting for some to be imported.

There are many different infections. Does this mean that we are downgrading standards? This is one of the fears that many people have about leaving the EU. I hope that the Minister will look at this and do something to make it safer for horses entering the UK.

As the Minister said, this is a very large instrument, and, as the noble Lord, Lord Rooker, said, particularly complex and pretty hard reading. I am grateful to the noble Lord for his explanation. I did not have that briefing. The matter is quite significant and I hope it might be addressed.

I will say a few words about the pet travel scheme and one or two other things. I understand that additional rabies controls will be required for the movement of domestic pets, particularly dogs. There will not only be vaccination but post-vaccination blood testing for dogs leaving this country to confirm satisfactory antibody responses. Can the Minister confirm that this will apply to all imported dogs coming to Britain, including those originating in the EU 27 and coming to the UK for the first time, as well as travelling dogs leaving here and going to continental Europe for short periods? In other words, is there reciprocity in that respect?

Also, can the Minister confirm that travelling dogs will require a veterinary health check and an export health certificate before travel? That would impose cost burdens on the owners and substantial workforce burdens. If travelling dogs require export health certificates, are Her Majesty’s Government satisfied that there are sufficient designated official veterinarians based in small animal practices to carry this out with hundreds of thousands of dogs potentially moving out of and back to Britain? There are currently a number of countries outwith the EU included in the pet travel scheme. What rabies measures will we require from those countries post-Brexit? Will dogs imported to the UK from those countries require vaccination and testing as required for movement between the UK and continental Europe?

There is one matter not included here—it is not fair to include it—but there are concerns about the importation of ticks and tick-borne disease. I urge that we take every opportunity to impose controls to minimise the risk of ticks being imported when dogs come back to Britain. I hope that Defra will consider and legislate for this at some stage in the future.

This SI refers to the non-commercial movement of dogs. What plans are there, if any, to transfer the regulations on commercial movement of dogs covered by the Balai directive? Will that be dealt with in a different SI?

I have a couple of small final points. Commission Decision 2001/812/EC refers to the expertise of personnel required at border inspection ports. Can the Minister assure us that there will be no change at all in the level of expertise—the numbers as well as the quality—of personnel required at border inspection posts?

Lastly, there are several references in the SI to the “EU Exit Day 1” project, which will affect movements of dogs, which is being worked on by Defra. Can the Minister outline what that project will address?

My Lords, given the plethora of issues raised by colleagues around the Committee, I am just going to focus on one additional matter that has not been raised either here or in the Commons. It relates to the welcome introduction from the Minister, who made it clear that this is a technical statutory instrument; my disappointment is that it is not more substantial. My question, which I will expand on a bit, is: if the Government are really serious about banning circuses with wild animals, why did they not take the opportunity in this statutory instrument to ban the importation of circuses that do just that?

The Minister made it clear—and the EM made it absolutely clear—that we are not under any legal obligation to adhere to the EU rules for trade following exit. This is a unilateral decision. The Secondary Legislation Scrutiny Committee also made it clear that it hoped that this Committee would scrutinise the department’s choice of unilateral recognition of current import arrangements. As other Members have made clear, our own animals may not be able to be exported if we are not accepted as a third country, and even if we are accepted as a third country, it may take some time. The noble Baroness, Lady McIntosh of Pickering, has heard six months; newspapers at the weekend suggested nine months. There could be a considerable time lag and administrative burden on pet owners and commercial exporters of equines and dogs, and yet we are unilaterally saying that anybody who has a circus with wild animals can happily bring them in.

The Minister made clear in his opening remarks that this is all about making it easy for business to trade with the UK post Brexit. However, we know that circuses with wild animals are cruel. The majority of the population oppose them; in Defra’s own recent consultation on the matter, 95% of the consultees said they wanted them banned; and Scotland and Wales have banned such circuses. I appreciate that this statutory instrument is only about circuses with wild animals coming into the country, and to be fair, none has done so in the past few years. However, acts and trainers may move around, and resident UK circuses can bring them in. The somewhat inappropriately named Great British Circus brought in some elephants just a few years back. That is elephants, lions, tigers and bears cooped up in small mobile cages, travelling around Europe, coming with the consent of this SI to the UK.

The Secretary of State, Michael Gove, has said that he will ban circuses with wild animals:

“as soon as parliamentary time allows”.

My question, therefore, is: why was this SI not looked at as a possible vehicle? On page 19, Regulation 18 sets out quite clearly the conditions that have to be met by circuses bringing animals into the United Kingdom. Paragraph 3(b), which Regulation 18 inserts into Article 4 of the EU regulation, requires:

“a register of animals in the circus in accordance with the model laid down in Annex I”.

I have looked at Annex I, which is a one-page document, and in box 2.4 you have to identify the “Species” that you are bringing in. I am no lawyer, but a little asterisk about not allowing wild animals might have been something that the Government could at least have thought about.

The Minister will say, I suspect, that any such amendment goes beyond what is required to maintain the operation of the law after EU exit. However, the Government have made changes in other statutory instruments. The Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2019 proposed removing,

“unnecessary legal burdens on industry”.

So, we can take out burdens on industry but we cannot protect animal welfare. Will the Minister tell us whether Defra discussed the potential for using this statutory instrument to halt the importation of circuses with wild animals? Specifically, did it take any legal advice before it laid the instrument to achieve just that?

Unless there are overwhelming legal reasons why this has not happened, we will be forced to believe that, when the Government have to choose between supporting trade and supporting animal welfare, we know where they will go. It gives us little confidence that, in future deals, animal welfare, which we all hold so dear, will be upheld.

My Lords, in harmony with our commitment on the Labour Front Bench to recycling, I am speaking for my party in a guest slot. These regulations are complex and somewhat impenetrable—I think I drew the short straw—so I am afraid they raise many questions, some of which may be related to, but not directly affected by, these regulations. I hope the Minister will forgive me for that. Personally, I very much support the points just made by the noble Baroness, Lady Parminter, on circus animals.

According to figures that I have seen, products of animal origin and live animals imported to the UK are valued at over £19.3 billion each year. Of this, 80%—about £15 billion, which is twice the amount suggested by the noble Baroness, Lady McIntosh—comes from trade with the EU. This covers an area of huge significance to our agricultural economy and the economy as a whole; given its effects, it also risks a further nudge for the nation in the direction of veganism should the trade be too much disrupted.

As we have heard, the UK will be treated by the EU as a third country if we leave without a deal. The SLSC recommended that the SIs be subject to the affirmative procedure, and I welcome the Government’s decision to accept this recommendation.

Without listed status, no exports to the EU can take place. Defra’s no-deal technical notice confirmed that,

“The EU would require the UK to be a listed third country”,

and it could not,

“be certain of the EU response or its timing”,

for an application. Without this,

“no exports … could take place”.

Can the Minister tell us what the usual timeframes are for dealing with third country applications? As we have heard, there are concerns that this could take up to nine months.

In order to be prepared for all possible outcomes, we understand that the UK submitted its application for listing as a third country in November. Can the Minister assure the Committee that the UK’s application will be granted? Have the Government formally requested that the UK’s application be expedited? Is the Minister 100% confident that, in the event that we leave the EU on 29 March with no deal, the approval for the export of live animals and animal products will have been granted in time for day one? If not 100% confident, what level of confidence does he have, and how will that change if there is a delay—to, say, June—for a no-deal exit?

The NFU says it has been told informally that, although Britain is in complete regulatory alignment with the EU, if there is no deal the same health checks that countries such as China and the US undergo will apply to UK suppliers. This would mean that 6,000 meat processing plants that export to the EU would have to undergo individual audits by British authorities. These would be checked by EU officials and then put to a standing veterinary committee for approval, a process that the NFU has calculated will take six months, “at a conservative reading”. These checks will also be conducted on any other companies supplying food and drink to the EU, including those exporting bottled water, honey, jam, dairy and other fresh foods. Does the Minister agree with this projection by the National Farmers’ Union? What is his assessment of the impact on the viability of food and drink businesses in the UK in the short and long term if that is the case?

I turn now to model certificates. Paragraph 7.2 of the Explanatory Memorandum states that the instrument,

“has provision to allow existing forms of model certificates to continue to be used for transitional purposes for such period as is published by the appropriate authority”.

I would love it if the Minister could expand a little on this. Is it dependent on the transition period following a deal, or can this also apply in the event of no deal? The use of the word “transitional” is quite confusing in that respect.

Then there are border checks. Under EU law, all animal and agri-food, including animal feed and plant produce, has to go through health checks. However, the necessary border inspection posts do not exist at, for example, Calais. This is because those checks have not been needed for anyone trading within the single market. The nearest border inspection posts are in Zeebrugge and Rotterdam, which have historically acted as the gateway for non-EU traffic, or Liverpool on the route to Ireland. Does the Minister envisage placing UK officers in Rotterdam, or will we reply on post-import checks within the UK?

A no-deal Brexit will require more work from vets to meet increased demands for the certification needed for the export of animals and animal products and for pet travel. In addition, exiting from EU surveillance systems and uncertainty around access to medicines could have negative impacts on animal health and welfare further down the line, requiring yet more veterinary capacity. The Public Accounts Committee has warned:

“In a no-deal scenario there is a risk of UK exports of animals and animal products being delayed at borders because of a shortage of vets”.

That committee also found that the department is cavalier about there being enough suitably qualified staff to take on this work. What help are the Government providing vets—this echoes the point made by the noble Lord, Lord Trees—in the event of a no-deal scenario to prepare for increased demand for export health certificates for animals and animal products? Does the Minister share my concern that a no-deal Brexit will exacerbate the current shortages in the veterinary profession and create significant risks for trade, animal health and welfare, and food safety?

Further, in the event of a no-deal scenario, what help is going to be provided to prepare for increased demand for export health certificates? What will be done to safeguard animal welfare in the scenario of live animals being stuck in trucks for long periods as they wait to go through ports and border inspection posts? Do we have to depend on the failing Secretary of State for Transport’s use of disused airfields for queuing freight including, for example, provision for livestock grazing?

The department has created a new role, that of the certification support officer, to provide administrative support for official vets so that they can more easily process the new export health certificates. The main concern of the British Veterinary Association is about who will do some of the checking and that they have the required level of skills. Can the Minister assure the Committee that the veterinary professional will remain as the provider of oversight and reassurance for the whole process of this trade?

I turn to the question of border inspection posts. From my research, it appears that there are none in Wales and the only facilities in Northern Ireland are in Belfast. Is my understanding correct that, if I am a farmer on the Northern Ireland border who wants to take livestock across the border to the Republic, once I have the export certification, and assuming my hauliers have successfully applied for and received their international driving licence, I then have to take my animals to Belfast airport for inspection before driving them back to cross into the Republic of Ireland. Is that right? How much cost will that add? Will the border inspection posts have the capacity for this? Is the Minister making any efforts to expand the number of border inspection posts to ease this burden on farmers?

In respect of hygiene and health, I too have seen the Friends of the Earth briefing. The only point that I will pick up on is one that has not been mentioned already. Regulation 26 provides that, in Part 2 of Annexe I,

“in the section headed ‘Notes’, omit the general notes and additional notes for day old chicks”.

One of the notes under this heading requires that chicks not destined for the EU or with lower quality health should not be transported together. This is not replaced, which will allow for chicks of a lesser quality of health and thus more susceptible to disease and infection to be transported alongside those that meet the health standards of the UK and, as such, possibly subjecting healthy chicks to disease. Why is this change being made? I also share the concerns raised by my noble friend Lord Rooker and the noble Baroness, Lady Masham, in respect of Regulation 50.

I turn now to trade deals. Although the UK is under no legal obligation to adhere to EU rules for trade following EU exit, failure to do so could result in the UK being unable to trade in animals and their products with EU member states and third countries. We therefore welcome these regulations which seek to maintain current standards, legislation and arrangements relating to such trade on the day the UK leaves the EU. Food safety and harmonisation will also have a lot to do with who we sign free trade deals with. There is significant public concern about the implications of a US trade deal for the quality and standard of British food, given the routine use of chemicals and antibiotics used in food production to promote faster growth. Washing chicken in chlorine and feeding growth hormones to beef are both legal in the US but currently banned in the EU. Will maintaining the existing important regime prevent chlorine-washed chicken and hormone-treated beef from being imported to the UK? The World Health Organization is concerned that overuse of antibiotics in farming is a major contributor to antibiotic resistance worldwide. Can the Minister advise whether the regulations will prevent antibiotic-farmed produce, banned in the EU, from being imported? If so, will the Minister commit to preserving these standards when making future trade deals?

There is also the matter of cost. Leaving the EU without a deal would cause considerable disruption to the UK’s import system, which would be likely to lead to additional costs for importers and stakeholders. Furthermore, the Minister has advised that these instruments make technical amendments to maintain the existing standards and no impact is anticipated. However, paragraph 6.1 of the Explanatory Memorandum says that these regulations include,

“amendments to the domestic powers to recover fees in relation to activity relating to imports of animals and animal products from the EU”.

Does the Minister accept that there may well be additional requirements and costs to stakeholders, and will he commit to a public consultation on any fee increases allowed by these regulations?

I have a few concerns around science, innovation and research. The main concern around the impact of Brexit on science and innovation is about the supply of essential resources to conduct biomedical research and development here in the UK. Animals are used in biomedical and veterinary research to advance scientific understanding, to develop solutions to medical problems to protect the safety of people, animals and the environment and as models to study disease. Critical to the continuing success of our highly significant life sciences centre will be the timely and efficient transport, import to and export from the UK of purpose-bred research animals; biological samples—such as blood, tissues, organs, embryos—from these; medical and pharmaceutical supplies; and supplies of specialised animal feed and research diets for that sector.

In a no-deal scenario, exports of biological samples would require compliance with customs formalities and export health certificates for each individual shipment and for all animal species. As a third party to the EU, the UK will need to negotiate each certificate’s content separately with each member state. When the UK leaves the EU, the efficient supply of animals and animal-derived products should be maintained without delays to ensure continued support of the sector, to protect the welfare of animals and to retain the integrity of any consignment being transported.

However, many stakeholders remain concerned about the UK’s capacity to cope with the demand for export health certificates and CITES permits. The National Office of Animal Health has specifically raised concern that the replacement for the EU trade control and export system, IPAFFS, referred to in the Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019, will not be fully functional on day one of a no-deal scenario, with stakeholders unsure how to use the system. Is the Minister confident that the required IT systems will be up and running? Assuming that this is being developed using modern techniques, is it currently being user tested? How long is the beta phase likely to last? What discussions have taken place with stakeholders to prepare them to use the new system? Has the department prepared and published user guidance? If not, when will it? The no-deal guidance published last week states:

“Businesses importing animals and animal products from within the EU will need to use a separate interim system until the summer”.

Can the Minister elaborate? How many businesses will be affected?

I have a couple more points to make. On the pet travel scheme, the Explanatory Memorandum advises that the amendments are required to ensure that safe pet travel without quarantine can continue in the UK. We have heard how important and significant that is. Can the Minister update the Committee on the UK’s ongoing application to become a listed third country for the purposes of pet travel between the UK and the EU?

Finally, regarding the Friends of the Earth briefing, I also noted the incoherent amendments referred to by my noble friend Lord Rooker. There was also an issue around penalties: Regulation 43 requires Article 42 of the EU regulation to be omitted. This places a duty on the Commission to assign penalties for failure to comply with these regulations. Without an appropriate body to replace the Commission’s role, I fear failure to comply with this regulation could go without penalty.

I look forward to the Minister’s reply on that issue and to my questions, of which there were far too many.

My Lords, I rather feel that we have gone into interesting territory on a number of the subjects that, in the end, go back to the parent regulations when we are dealing with technical amendments. However, I will endeavour to answer as many of the important points made as I can.

I start with an explanation for the noble Lord, Lord Rooker, and the noble Baroness, Lady Masham. My understanding—I may need a stewards’ inquiry on this—is that Article 12(2) was omitted because it refers to samples being sent to the relevant European Union reference laboratory but after exit day, in a no-deal scenario, the UK would have no formal access to check test results at that laboratory. The paragraph is therefore otiose. However, I emphasise that there will be no lowering of standards in checks on horses imported into the UK, so there will be no greater risk of horse disease. I have not seen the Friends of the Earth briefing but all the instruments have been checked by two specialist drafting lawyers in addition to our own. I will take a copy of the briefing, either from the noble Lord or any other noble Lord with a copy, back to the department. In truth, I find the statutory instruments pretty impenetrable without a Keeling schedule, and the Explanatory Memorandum gets me out of trouble. I will look into this issue. I want to take this opportunity to reassure the noble Baroness, Lady Masham, that we have absolutely no intention of allowing a diminution in standards. The omission is because we would not be in a position to refer to an EU reference laboratory in that instance.

A number of noble Lords mentioned listing. I discussed these matters with the Chief Veterinary Officer only two days ago. The Commission’s recent contingency action plan states:

“On the basis of the EU veterinary legislation, the Commission will—if justified—swiftly ‘listʼ the United Kingdom, if all applicable conditions are fulfilled, so as to allow the entry of live animals and animal products from the United Kingdom into the European Union”.

Following the UK’s application, there have been technical discussions. We are working with the Commission to process our application quickly. Obviously, I cannot give any assurances on that point. I am not in charge of the Commission on this matter—I wish I were—but I raised it with the Chief Veterinary Officer, who has been in communication and is working on it.

My noble friend Lady McIntosh mentioned pet listing. If she will forgive me, I will write to her on exports, given the huge number of replies I must give on instruments relating to imports. I understand the import/export point, but a lot of the detail on exports is not in the department’s gift. It will be a matter for negotiations and arrangements, but I have set out our proportionate views on how we in this country, where we will have responsibility, will deal with animals and imports coming in from the EU.

On pet listing, the department has submitted its application to allow the UK to become a Part 1-listed third country under Annexe II of the EU pet travel regulations and is currently in technical discussions with the European Commission. Obviously, it will be for the Commission to consider our application. Clearly, if we become a Part 1-listed country, there will be very little change to current pet travel arrangements.

In the event of an unlisting, pets would continue to be able to travel from the UK to the EU, but the requirements for documents and health checks would differ, depending on what category of third country the UK is treated as under the EU pet travel scheme. If we were to leave without a deal and were treated as unlisted, pet owners travelling from the UK to the EU would have to obtain a health certificate for their pet which would need to be issued by an official veterinarian no more than 10 days before travel. Considerable work has been done with the veterinary profession. Some months ago—it was some time last year—a lot of discussion took place with the profession, because there would need to be, for example, appropriate and adequate immune responses to rabies vaccinations. That shows why we are working as strongly as we can to get the listing, but it is not in my gift or the Government’s gift to agree these things. All that I can assure your Lordships on is that the Chief Veterinary Officer, in whom I have the greatest confidence, and her team are working extremely effectively and collaboratively because our working relationship with EU member states and the Commission on disease and such things is very strong.

The noble Baroness, Lady Parminter, asked why we did not deal with wild animals in circuses at this juncture. I am advised that it is because what we are doing here is through the mechanism of the EU withdrawal Act, which does not give scope for doing what the noble Baroness and the noble Lord, Lord Knight of Weymouth, would wish. It is not within scope, so I suspect that we would have been ultra vires of the Act. As the noble Baroness said, since the licensing regulations were introduced no travelling circuses based outside the UK have applied for a licence to tour. This is unfinished business. The department very much hopes that the Private Member’s Bill of the Member for Copeland will have a successful passage—it is currently in the other place—as this matter needs to be attended to.

The noble Lord, Lord Trees, asked about dogs coming in from third countries. These instruments make no policy changes, so the requirements for dogs entering the UK from third countries will not change. On ticks, as the Biosecurity Minister I am always thinking about ways to heighten our biosecurity in the future. However, the Government have no immediate plans to change the pet travel requirements in the short term. For entry into the UK, the current pet travel health requirements will continue to apply. Looking to the future, it may be open to us to look at new opportunities to manage pet travel arrangements and to think more strongly about whether, given that we do not have some diseases that occur in other parts of the EU, we should think about more robust controls on disease, which obviously is important for animal welfare.

A point was made about reciprocity. The Government took the decision not to impose any additional import requirements on movements from the EU. That decision was taken because we did not believe that the biosecurity risk to the UK would change in such a way for us to feel that we should change them on day one. We also think it important to ensure that there is a flow of goods at the border. We already have our existing controls in place, so these instruments do nothing more than to maintain the status quo.

I was asked whether the commercial movements of dogs and others under the Balai directive are still covered. Commercial movements are covered by the Trade in Animals and Related Products Regulations 2011, which are amended by a domestic statutory instrument. I think I had better unclutter that for the noble Lord because it did not flow frightfully will. Regarding disease and import requirements, APHA at Weybridge will undertake the testing on UK exports, and its equivalents in other member states will do the testing before arrival in the UK.

The noble Lord, Lord Knight, made a number of points. I start by saying emphatically—I hear this point every time and will say this for as long as I need to—that we will not compromise food safety in pursuit of a trade agreement. Maintaining safety and public confidence in the food we eat is of the highest priority and any future trade deal must work for UK farmers, businesses and consumers. Any new products wishing to enter the UK market must comply with our rigorous legislation and standards. If any food safety rules change after we leave or any new food products come on to the market, we will apply our usual rigorous risk assessment to ensure that consumers remain protected. On chlorine and hormoned beef, we will continue with all the arrangements we have as a member of the EU; they will continue when we leave the EU. I am delighted to put that on record, I think for probably the tenth time—it may be more—but it is important that I should do so.

The noble Lord, Lord Knight, was absolutely right to raise the veterinary profession, as did the noble Lord, Lord Trees. A lot of work has been done with the veterinary profession, and the department has had very strong and collaborative discussions with the BVA and the royal college. Certification support officers were mentioned. Those officers are there to assist with the paperwork for export health certification. They will be fully responsible to the qualified official veterinary surgeon, who will be the only person that can sign off the certificate. This is designed to enable the vet to get on with their job, given their qualifications. It is entirely pragmatic and no noble Lord should see it as a ruse to suggest either that we are lowering standards or that we want to reduce the number of vets—absolutely not. This is about what we think would be a proportionate way of managing. Indeed, there have been very considerable discussions with the veterinary profession about training and the continuing work that needs to be done to keep our country safe.

The noble Lord, Lord Knight, also referred to BIPs. Consignments originating in the EU will not initially be required to enter the UK through a border inspection post. For this reason, we do not anticipate a significant increase in demand for BIPs at UK ports receiving ferries coming from the EU. This is based on our assessment that, as there were requirements within the EU for food safety and so forth when we were a member, this is a sensible and pragmatic approach.

Before the Minister moves off border inspection posts, can he comment on the role of BIPS in terms of exports, whether we have sufficient capacity and whether the scenario I painted in respect of Northern Ireland is accurate?

On the particular points about exports, my understanding is that, from the point of view of port authorities and others such as port health authorities, the ports feel that they have sufficient resources to handle imports and exports. However, I think it would be helpful, particularly given my noble friend Lady McIntosh’s points about exports and imports, if after this debate I produced one page on imports and one on exports as to how the geography looked.

On the noble Lord’s question about import notification systems, with us no longer being part of EU TRACES, the noble Lord is right that we will introduce our own system for import notifications and controls: the Import of Products, Animals, Food and Feed System. IPAFFS will allow importers, or agents acting on their behalf, to create an import notification and legal declaration of consignments bound for the UK before arrival. The notifications will be received by the port health authorities, which can then recall checks on the system. IPAFFS is being released in phases, with testing already under way, and will be available for those importing from outside the EU from day one.

However, as the noble Lord has said, UK importers importing from the EU will need to use a separate electronic process until the summer of this year. My note here says, “Why the delay?”, so I should say that the highest-risk goods such as live animals, germplasm and certain animal by-products currently require an ITAHC validated by an official vet in the EU member country on TRACES. The UK is then notified of the movement and required health assurances to follow risk-based post-import checks. To ensure certainty for businesses, and to ensure IPAFFS’ delivery for non-EU imports from day one, Defra has decided to remove EU imports from the system until the full functionality is available in the summer. As a result, UK importers importing from the EU will need to use separate electronic system processes, as I have said.

Detailed guidance is to be published very shortly. This process is expected to involve importers downloading forms from GOV.UK and emailing them to the APHA to process ahead of any import arriving in the UK. The rules on the documentation required for travel are unchanged. The APHA will continue to arrange post-import checks on high-risk consignments and sample checks on low-risk consignments, as it currently does. In other words, the same arrangements on checking would continue. I sense that the noble Lord has another question.

I am terribly grateful. I understand that there is a need for the new system to be fully functional—I guess, to be able to have the right integration with TRACES. The question then is: if it is just an interim system, is it already in existence? Is it being tested? Can we have some assurance that it will work smoothly? The new one is not fully functional yet there is some magical interim solution that is going to work, which seems a little odd to me.

Again, the best thing I can do is to ensure that I get this absolutely right. We are undertaking this in the phase I described to ensure that importers know which system they should use and have a guarantee that the system works. The system we are bringing in—IPAFFS—is being tested and is working. Dialogue and engagement with importers is under way. We thought it pragmatic to ensure a straightforward interim system for importers from the EU, until I can give your Lordships an absolute assurance that IPAFFS will work for the full range of them. Most importantly, this ensures that the level of checks will not change, so high-risk consignments will benefit from the clarity of checks and low-risk consignments will face the same arrangements.

It will be pulled off GOV.UK and sent to the APHA, in the same way as it would be checked in arrangements from the EU where the EU standards will be the same as ours from day one.

My noble friend Lady McIntosh mentioned EFSA. Obviously, these decisions will relate to negotiations. The FSA undertakes robust risk assessment and provides evidence-based risk management advice and recommendations for future food and feed safety issues. The FSA has built its capacity for risk assessment and risk management. The independent scientific advisory committees are being strengthened by recruiting new experts to establish three expert groups. The FSA has already expanded its access to scientific experts providing advice and other scientific services to inform our work. However, again, it is not in my gift to talk about EFSA. It is a matter for negotiations at a later stage.

Following what the Minister said in reply to the question from the noble Baroness, Lady McIntosh, I suggest that he had better have a better answer when he comes to deal with the food regulations next week. The noble Baroness asked about RASFF, the rapid alert system for food and feed, but the Minister has not addressed it. We understand that there is still no agreement on whether we can participate in it. The only countries allowed to participate are EU members and EEA members. We need an answer on that. Every day, 10 alerts are issued around Europe—3,800 a year—but we will not be part of that system. The Minister will be asked about that when he comes to deal with the food regulations next week, whereas on this instrument he can easily say that it is slightly outside the scope of the regulations.

While I am on my feet, I know that the Minister has not finished but I am waiting for an answer to the question about farmers needing to take their animals to the central Belfast airport before they can reach the border. I have not heard an answer to that yet.

My Lords—[Interruption.] Do I need to look at that? This is very novel for me. The Government continue to negotiate full access to the rapid alert system as it will be mutually beneficial for the EU and the UK. I am rather looking forward to an Oral Question from the noble Baroness, Lady McIntosh, on the matter too so noble Lords will get all the bites of the cherry.

The noble Lord, Lord Knight, referred to Northern Ireland. Although it is desirable for the four nations of the UK to co-operate in respect in powers returning from the EU, the SIs do not extend across the entire UK. The UK Government will co-operate with the devolved Administrations so that, for example, powers can be exercised concurrently and collaboratively where appropriate. Continuing close co-operation between the UK Government and the devolved Administrations remains essential to ensuring that an exit works for all parts of the kingdom. These instruments involve joint decision making. We are working with other administrations to agree the detail of the process for delivering joint decision making, as set out in the SI.

I will come back quickly to the tripartite agreement but I have not finished with all the questions asked by the noble Lord, Lord Knight. There is no current intention to increase fees for import checks. I can assure your Lordships that the normal consultation procedures with affected sectors would apply if they were to be increased.

We still have not got an answer about Northern Ireland. It is a really specific question. The Minister’s point about co-operation with devolved Administrations is fine, but my understanding is that things are not going that well over there at the moment. What is the position with regard to animals? Are they having to go to an airport and back again? Can we have some clarity on that point?

That is an interesting Box note. I think the most important thing is to say that I will write to your Lordships in respect of all those matters. As I have said, this particular SI is absolutely not about exports, but I have ended up answering a lot of questions about them. If I was going to start to get tetchy, I would say, “This instrument is about imports, my Lords”. If one wants to spend five hours talking about the whole architecture, we will lose the thread of having proper briefings and discussions on matters so that I can give your Lordships proper answers. I am not a magician. I do not know all the answers about exports at this stage. Noble Lords will get them when I am in that position, and I will write to them on those matters.

Regarding the tripartite agreement, all these matters are for negotiation. We understand fully that this has worked very well for the UK, Ireland and France, and have issued technical notices on equine movements. It is clear that the UK would no longer have access to the tripartite agreement if we were to leave with no deal. The equine sector, with which we have worked extremely strongly, understands the position. Technical notices have been circulated and are widely put across in the equine sector. I will ensure that that element of the points is put in the note that I will send—as I said, it will include exports, although those are way out of scope with the technical instrument about operability on imports before your Lordships this afternoon.

Motion agreed.

Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Import of and Trade in Animals and Animal Products (Amendment etc.) (EU Exit) Regulations 2019.

Relevant document: 15th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

Motion agreed.

Waste (Miscellaneous Amendments) (EU Exit) Regulations 2019

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Waste (Miscellaneous Amendments) (EU Exit) Regulations 2019.

My Lords, the Government take the issue of waste and resource efficiency very seriously and place real importance on this area. We always have in mind the need for strong policies to enhance and promote the circular economy and encourage actions to reduce, reuse and recycle. This instrument being presented before your Lordships makes technical changes to ensure the operability of waste-related legislation after exit. These technical and legal amendments will maintain the effectiveness and continuity of UK legislation that would otherwise be left partially inoperable following our exit from the EU. We wish to ensure that the law will continue to function as it does today. It will preserve the current regime, ensuring protection and maintaining improvement in the environment.

I can assure noble Lords that these adjustments represent no changes of policy, nor will they have an impact on businesses or the public, or indeed put any additional burden on or require any working practice changes for the Environment Agency or other UK enforcement bodies. Our recently announced resources and waste strategy sets out how we will preserve our stock of material resources by minimising waste, promoting resource efficiency and moving towards a circular economy. At the same time, we will minimise the damage caused to our natural environment by reducing and managing waste safely and carefully, and by tackling waste crime. It combines actions we will now take with firm commitments for the coming years and gives a clear longer-term policy direction in line with our 25-year environment plan.

The instrument makes technical amendments to three waste-related Acts of Parliament: the Control of Pollution (Amendment) Act 1989, Part II of the Environmental Protection Act 1990, and the Waste and Emissions Trading Act 2003. It also amends 14 related EU regulations and decisions to ensure operability. The general changes in this instrument include amending references to the European Union, EU institutions and EU administrative processes to UK equivalents, and updating legal references to refer to relevant UK legislation. The instrument introduces modifications into the Acts of Parliament and retained direct EU legislation relating to waste, so that references to EU directives continue to function after exit day as they function before exit day.

One purpose of these modifications is to ensure continuity as to which public bodies exercise certain functions. Those obligations and discretions placed on member states under the directives will continue to be exercised after exit by the same appropriate authorities, appropriate agencies and/or local authorities before exit. In this context, “appropriate authority” means the Secretary of State in relation to England and each of the devolved Administrations in relation to their respective parts of the United Kingdom. “Appropriate agency” means the Environment Agency in relation to England and the relevant environment agency or body in the other parts of the United Kingdom.

The main amendments made to these EU regulations by this instrument are therefore to insert new provisions which set out modifications to the way in which references to EU directives in the EU regulations are to be read on and after exit day. Additionally, technical operability amendments are made to account for the fact that we are no longer a member state. The UK will no longer be allowed to authorise participation in the EU’s Eco-Management and Audit Scheme, known as EMAS.

In the United Kingdom, verification will be through a conformity assessment body accredited by the United Kingdom Accreditation Service. In the meantime, verifiers can still apply to be accredited EMAS verifiers through other member states offering the service. Defra made all the businesses and organisations directly impacted aware of this prior to legislation being laid.

Under the waste framework directive, there is a target to recycle 50% of UK household waste by 2020. As part of the technical amendments made by Regulation 21 of this instrument, we have made changes to ensure that the Secretary of State publishes a report called the “progress report” on whether this target has been met in respect of England. This progress report must be published by the Secretary of State before 1 January 2022. This instrument does not create an obligation on the devolved Administrations to publish such a report and it will be for each country to address these matters.

The instrument also revokes directly applicable EU legislation relating to waste. Some of this legislation is being revoked because it is redundant in a domestic context. For example, Commission Decisions 97/622/EC and 2009/851/EC set the format of questionnaires that EU member states complete and return to the European Commission every three years in relation to the implementation of EU directives on packaging waste and waste batteries respectively.

Some of the directly applicable EU legislation is being revoked because its requirements are already embedded in UK legislation. For example, Commission Decision 2003/138/EC covers material and component coding standards for end-of-life vehicles, and another, Commission Decision 2002/151/EC, relates to minimum standards for the certificate of destruction for those vehicles. In both cases, the requirements of these decisions are already set out fully in the End-of-Life Vehicles Regulations 2003.

We have worked very closely with the devolved Administrations on this instrument and, where it relates to devolved matters, they have given their full support and consent. These regulations will help to ensure that our waste management legislation continues to operate as intended, and as before, following EU exit. I beg to move.

My Lords, first, I declare my interests as a member of a local authority and a vice-president of the LGA. I thank the Minister for his comprehensive opening remarks and for his time and that of the Defra officials in the very useful briefing sessions held ahead of these SIs being debated. This SI, as indicated by its title, is something of a catch-all on the waste front, covering a number of waste issues from scrap metal to hazardous waste, batteries and accumulators, glass cullet, as well as landfill. I have a number of minor points to raise.

In paragraph 2.2 of the Explanatory Memorandum there is reference to the criteria for determining when certain of the materials that I have just mentioned would cease to be waste and to calculations of the efficiency of recycling processes. I would be grateful if the Minister could say what is meant by the,

“efficiency of the recycling processes”.

A number of EU Commission decisions on waste are revoked, and the Minister has just broadly referred to that. They include Decision 76/431/EEC, which concerns the setting up of a committee on waste management. This is referred to on page 2 of the Explanatory Memorandum and in the main SI on page 62. Can the Minister explain why there is no mention of a replacement committee on waste management? Is there no longer any need for this committee?

The Minister referred to Decision 2003/138/EC establishing component and material coding standards for vehicles, which is being revoked along with Decision 2005/293/EC on the reuse/recovery and reuse/recycling targets on end-of-life vehicles on the basis that they are already enshrined in UK law. I just wonder why they need to be mentioned if they are already enshrined in UK law.

The powers under directive 2008/98/EC, which were in place before exit day, will transfer after exit day to,

“the appropriate authority, appropriate agency or local authority”.

After exit day, the European Eco-Management and Audit Scheme, EMAS, will no longer have status and registrations will become invalid, although those wishing to can register under EMAS Global. The Government are proposing to make alternative provision for references to the certification of environment management standards by retaining a reference to a conformity assessment body. Transitional provisions will ensure that certifications granted to quality management systems will continue to be recognised as valid. Can the Minister say what these transitional provisions will be and when they will come into operation?

I am concerned about the mechanism for publishing and monitoring targets on waste. The Secretary of State is required to produce a progress report on the UK’s target to recycle 50% of household waste by 2020. However, this does not have to be published until 1 January 2020 and is not a requirement for the devolved Administrations, which the Minister has already referred to. Given the public’s concern about the level of waste, especially plastic waste, would it be better to bring this date forward so that action can be taken to ensure that the targets are met and adhered to?

This SI empowers the Environment Agency and equivalent bodies in other areas, including local authorities, to deal with decisions relating to landfilling of waste and waste from extractive industries, as well as waste criteria for metals, glass and so on. There is, however, no mention of additional resources being allocated to allow these agencies and bodies to take on these powers. Could the Minister say whether there are any plans to provide sufficient resources for this work to be carried out effectively and efficiently?

Finally, reference is made to the reclassification of some hazardous waste products in 1357/2014. The list in Annex III—I am very grateful to officials for providing this—which is referred to in the SI, contains some extremely toxic materials, including explosives, flammable liquids, irritants and carcinogenic materials. This is potentially extremely concerning and could have implications for public safety. Could the Minister give a little more detail on how this might be implemented?

My Lords, I thank the Minister for his introduction to this SI and his helpful prior briefing; I also thank the noble Baroness, Lady Bakewell, for her contribution.

As the Minister described, this SI contains a series of amendments to different aspects of the waste management system required to be in place by exit day. In the main, we are content with the proposals, which appear to replicate closely the current arrangements with the EU. These are regulations from which the UK has benefitted in the past and it is important that these standards are upheld.

However, I want to make a couple of points about the drafting, then I have some questions. On the drafting of the SI, although this is a very lengthy document, I found both the SI and the Explanatory Memorandum very clear and I commend those that drafted them. In particular, I welcome the inclusion in the SI of a very clear definition of who is the appropriate authority and appropriate agency in each case. The Minister will know that we have raised this issue time and again, but in this document, it is spelled out; indeed, the document goes further. Where there is a more generic reference, it is qualified by the phrase,

“the appropriate authority, appropriate agency or local authority which, immediately before exit day, was responsible for the United Kingdom’s compliance with that obligation”.

I commend that wording and I believe that this phrase could be used more widely in other SIs to avoid ambiguity. There is learning for us all in that.

I now have a few questions. Along with the noble Baroness, Lady Bakewell, I would be grateful if the Minister could clarify the arrangements for external verification, reference to which is made several times in the document. For example, on page 22, the amendment to Article 5(7) uses an EU regulation to define a “conformity assessment body”. Do the Government intend to retain that EU definition and accreditation in the longer term? Is that how we will operate—namely, that we will not have our own UK definition and we will stick with the EU definition?

Paragraph 7(c) adds that other accreditation can be solved through the EMAS scheme, which has been referred to. However, this seems to be slightly at odds with the wording on page 4 of the Explanatory Memorandum, which states that references to EMAS “will be omitted” and that any registration would have to be through EMAS Global. Can the Minister clarify that wording? What is the difference between EMAS and EMAS Global? Does EMAS Global have the same authority and impact as EMAS and are the same resources available to provide the required verification?

I refer now to the reporting on the UK target to recycle 50% of household waste by 2020. As the noble Baroness, Lady Bakewell, said, this is an issue of great public interest, particularly as we seem to be heading towards missing that very important target. This was a requirement to report to the EU, which has been replaced by one called the “progress report” to be published,

“in a manner that the Secretary of State considers appropriate”,

before 2022. I am grateful to Richard Gregson, the Defra lawyer, for sending me the existing wording to compare with the new wording. The original wording refers to an “implementation report” that should demonstrate compliance with the targets to the Commission. This is to be replaced by a progress report, which it appears the Secretary of State will publish to himself with no penalty for inaction.

Let us compare this to what would happen if we remained in the EU. I am advised that if a member state is found guilty of failing to meet targets in a directive, an EU penalty formula would be applied—in this case, a maximum fine of around €700,000 each day if we do not meet the target in 2020 and continue not to meet it for a significant period. It does not need too much imagination to see how that threat would concentrate the minds of those responsible for the targets in Defra. Moreover, it once again puts into stark relief the need for an independent watchdog that can hold the Government to account and issue fines that will deliver real compliance with these important environmental objectives.

I am very unhappy with the wording of this SI as it stands. It seems to represent a considerable watering down of the current provision and I would contend that it goes further and represents a policy change as the 50% target now becomes advisory rather than compulsory. This is of course compounded by the fact, as we have heard, that the targets will apply to England only with no obligation on the devolved nations to report. I ask the Minister to look at this wording again to bring it more in line with the expectation of implementation as set out in the original wording and to put on record that the interim watchdog, the details of which we still await although the clock is ticking, will have equivalent powers to issue fines similar to those currently in operation in the EU.

Finally, on a small point of detail, there is a provision on extractive mining which covers the definition and the dangers therein. However, paragraph 5(c) of new Article 2B on page 16 of the SI includes a reference to,

“Article 2 of Council Directive 2009/158/EC on animal health conditions”,

relating to trade with the EU and third countries in “poultry and hatching eggs”. I struggle to see the connection between poultry and hatching eggs and extractive mining. I would be grateful if the Minister could explain that connection and why this provision appears not only in the paragraph that I have referred to but in several others. I am curious to hear the answer to that, but I look forward more seriously to his substantive response on the issue of waste targets.

My Lords, I first thank the noble Baroness, Lady Jones of Whitchurch, for her generous remarks on the drafting of the statutory instrument and Explanatory Memorandum. I am the first to say that I always go to the Explanatory Memorandum and hope that I can then somehow figure out the statutory instrument—so many regulations can be most complicated. I will pass the noble Baroness’s remarks back as a template; they are on the dot.

I re-emphasise from the start that these regulations make only technical changes that maintain continuity. They will not: make any changes to policy; lead to any change in operational delivery; impose additional costs on businesses, individuals or public organisations; or result in any additional environmental impacts, compared with the legislation being amended or replaced.

The noble Baroness, Lady Bakewell, made an important reference to the efficiency of recycling processes under paragraph 2.2 of the Explanatory Memorandum. Regulation 493/2012 sets out a method of calculating recycling efficiency in relation to waste batteries and accumulators. The calculation method is set out in Annexe I to that regulation. It provides a standard approach for all recyclers of waste batteries so that, in any given case, it can be confirmed whether recycling processes have met the minimum efficiency standards set out in Annexe III to Directive 2006/66/EC. I am sorry to be technical again, but I wanted to make that response.

The noble Baroness, Lady Bakewell, also asked about revocations in relation to the end-of-life vehicles directive. The three EU decisions relating to that directive, referenced in the Schedule to the instrument, are to be revoked instead of being retained and amended. Commission decision 2001/753/EC sets out a questionnaire for member states to report on the implementation of the end-of-life vehicles directive. Following exit, the requirements of this decision would be redundant. The requirements of the two Commission decisions on end-of-life vehicles which relate to minimum requirements for the certificate of destruction, and component and coding standards, are already implemented in UK law. This has been done through Regulation 29 in Schedule 3 and Regulation 15 in Schedule 2 respectively to the End-of-Life Vehicles Regulations 2003. Accordingly, these two decisions are to be revoked as their requirements are already embedded in domestic legislation.

I very much agree with the noble Baroness about plastic waste. Clearly, a huge amount is going on in both the public and private sector to reduce the use of plastic, in relation to the resources and waste strategy as well as what we look to retailers to do, but clearly there is much more to be done. I will endeavour to explain the references to the reporting progress requirement, which the noble Baroness, Lady Jones of Whitchurch, emphasised. As has been said, Article 5 of Commission decision 2011/753/EU, as amended by this instrument, requires the Secretary of State to publish a progress report before 1 January 2022. Following exit, it would not be appropriate to publish a report on the implementation of EU obligations.

This amendment commits the Government to publish a report on progress towards the attainment of the 50% target set out in law for England and the devolved Administrations. The format of this report is to be determined, but it would set out whether England has attained the target and any other necessary information on progress in relation to these targets. On the question of progress or implementation, my understanding is that it is all related to it being set out as before: a report on the implementation of an EU obligation would no longer be an obligation when we are no longer a member. The noble Baroness should not interpret removing “implementation” and putting in “progress”—

I am sorry to intervene but on this important subject of reports on recycling, particularly of plastic waste, which my noble friend will remember that I am very interested in, he seems to be saying that this is about implementing an EU obligation which we will no longer have. I thought that the principle of these regulations, which I fully support, was to bring into UK law equivalent provisions to those that exist in EU law. Therefore, it would be helpful if he could tell us—either now or in writing—what the plan is for reporting on the recycling of plastic and other waste in the UK once these regulations come in, because I am worried that there might be a gap. I think that is what the noble Baroness was saying earlier.

Perhaps I might add to that. One cannot have it both ways, as the Minister is trying to do here, because the new wording says that in the progress report for 2020, the Secretary of State shall demonstrate,

“compliance with the targets set in article 11(2)”

of directive 2008. It makes reference to that directive, so it is either a progress report or an implementation report. Either way, it is referring to the directive, and I would contend—as with the noble Baroness’s helpful intervention—that an implementation report puts slightly more teeth into it than a progress report.

The noble Baroness is absolutely right. It is in reference to Article 11(2) of the waste framework directive, which is still referred to in domestic legislation with the modifications that have been made in this instrument. The 50% household waste recycling target is already part of our statute. I understand what she says: she thinks that “implementation” is stronger than “progress”. But because it is already in statute, it is still going to have to deal with whatever references are contained in Article 11(2). There will still be the same requirements of that directive in setting out whether the target has been attained and any other relevant information.

The noble Baroness referred to the environment Bill, which clearly everyone is waiting for. Everyone will be waiting for the new independent body—the office of environmental protection, with its powers to review and take action in relation to the attainment of this target. We will definitely need to attend to those points.

I also have some references, which I have mentioned before. It is understood that with the environment Bill not being on the statute book until sometime in the second Session, while I am not in a position today to talk about the form of that body, the Government have made it absolutely clear that there will be no governance gap. If there were any issues between the day of exit and the day of that office having legal authority, it would be in a position to act on it with full authority. Clearly, the body needs to have a legal entity but, in the meantime, interim arrangements will be announced should there be a governance gap. Obviously we are seeking a deal. I think noble Lords realise that everyone wants a deal, meaning that there would not be a governance gap, but if there is a need to ensure that these matters are attended to, announcements would be made.

Perhaps I should not quibble about the word, but I had better use it again and refer to the “progress” report. We will publish, as we do, yearly statistics setting out the UK and devolved Administrations’ progress towards meeting the 50% recycling target. We need to do it.

I am afraid that I did not realise my noble friend Lady Neville-Rolfe has been here since the beginning of the debate. I am sorry. I would have expected her to say something before. These statutory instruments are absolutely to do with operability. We will need to attend to a range of areas through the resources and waste strategy and the clean growth strategy. As I said, work is going on in the public and private sectors to ensure that we move quickly to a circular economy so that we are less wasteful as human beings.

On efficiencies and transitional provision for EMAS, EMAS Global is the European Commission’s answer to allowing non-member states to enter and place goods on the market in accordance with the management standards set out in EMAS. Those are the arrangements as I understand them.

The noble Baroness, Lady Jones, mentioned the wording “appropriate authority”. This wording has been used more frequently in exit SIs where modifications have been made to EU directives. By their nature, directives often place obligations on a number of different authorities, and we need to maintain that effect. In other EU regulations, decisions are placed more firmly on a finite set of authorities and bodies. In those cases, EU exit legislation will refer specifically to the authority in question.

On poultry and the connection between extractive waste and animal health, given the reference in Regulation 9, I should say to the noble Baroness, Lady Jones, that the reference to EU poultry legislation relates to modifications to the industrial emissions directive which is further down the page. The connection between the two is that the industrial emissions directive applies to pollution arising from industrial activities. One of those activities, which is described further at 6.6 of Annexe 1 of the industrial emissions directive, is the intensive rearing of poultry and pigs. I hope that explains how that appears on that page.

The noble Baroness, Lady Bakewell, raised hazardous waste. Annexe 3 of the waste framework directive sets out the definition of waste which can be classed as hazardous. The statutory instrument makes provision in law to allow reference to Annexe 3—I am sorry, I will have to set that out more clearly—in delivering what waste can be considered hazardous. I have an awful feeling that my official must have been a doctor in another life—prescriptions for chemists are always interesting. I should declare that I have three godchildren who are doctors.

As to who and what are the verifiers that will replace the EU bodies, in the case of end of waste, UK-based conformity assessment bodies—CABs—can take on the role of verifier to assess whether producers and suppliers have the appropriate management systems in place. We are confident they have sufficient expertise because the option to verify a management system through a UK-based CAB already exists and is currently used by producers and suppliers. Previously, this could be done through either a UK-based CAB or an accredited EU-based body, referred to in the statutory instrument as “any other environmental verifier”. The SI will remove this second option so that, after exit day, verification will be done only through a UK body.

Three verifiers are accredited by the UK Accreditation Service—UKAS. These independently verify that the environmental management system—EMS—and the environmental statements prepared by organisations applying to be registered with the EU eco-management audit system meet the conditions for being part of the scheme. For example, for an EMS to meet the requirements of the ISO 14001, internal audits will be undertaken, including checks on legal compliance, environmental performance improvements and environmental statements. Arrangements are in place, but I will look at whether any further details would be helpful.

I want to respond on one further issue. We are not weakening our environmental protection. We will maintain, and wish to enhance, our already high environmental standards. The EU withdrawal Act will ensure existing EU environmental law continues to have effect in UK law. We are absolutely clear that this is a technical instrument to ensure that the law is operable. In every case, there is no change to policy or to the environmental standards already in place. We have a lot of work to do on enhancing the environment, and the reduction of waste and moving to a circular economy is a clear component of that. We want to ensure that this country is in a better state than when we inherited it. It is important we make sure that this operability SI is successful.

Unless I missed it, the Minister did not refer to the committee on waste management. I am very concerned about what, if anything, will replace it.

Motion agreed.

Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019.

My Lords, this instrument corrects deficiencies in retained EU law so that the UK can continue controlling the use of ozone-depleting substances and fluorinated greenhouse gases—F-gases—following our exit from the EU.

Almost all uses of ozone-depleting substances, such as chlorofluorocarbons, have been phased out under the United Nations Montreal Protocol. EU legislation implements the United Nations Montreal Protocol agreement by restricting ozone-depleting chemicals to certain limited uses where there are no viable alternatives, such as fire extinguishers on aircraft. Usage is kept below the very low levels permitted by the Montreal Protocol by restricting sales to certain registered companies and by applying quota limits on how much each can sell and use. The legislation also requires all imports and exports to be licensed in order to help monitor global compliance.

F-gases replaced ozone-depleting substances for many uses, including refrigerants, aerosol propellants and other industrial processes. These gases do not damage the ozone layer, but they are still powerful greenhouse gases. EU legislation from 2014 requires a 79% cut in the use of F-gases by 2030. Following our lead, a global agreement came into force this year, amending the Montreal Protocol to phase them down internationally over the next 30 years. Most of the provisions in retained EU law can operate in the UK without amendment. However, crucial elements of these EU regulations would not function without this instrument.

Most importantly, the restriction on the amount of F-gas which can be sold is currently achieved through quota limits placed on importers and producers. These quotas are currently allocated by the European Commission directly to individual businesses that are producing and importing. These regulations transfer quota allocation powers to the Secretary of State and the devolved Administrations. This means establishing UK quota systems which are separate from the EU’s systems. Instead of an importer or producer of F-gases getting a single quota from the Commission limiting how much they sell in the EU28 market, they would get two quotas, one from the Commission for sales on the EU27 market and one from the Environment Agency for sales on the UK market. UK companies will be able to continue exporting F-gases to the EU as long as they establish an office in the EU or appoint a company to represent them. In order to determine the level of UK quotas and ensure that UK supply remains on track to achieve a 79% cut in 2030, all companies supplying the UK were asked to provide independently audited data on how much they placed on the UK market between 2015 and 2017. This period was after the EU quota restrictions were already in place, meaning that the total UK supply will remain within the existing phase-down limits.

The current EU process assigns quotas to individual companies for placing F-gases on the EU28 market rather than to member states for their domestic consumption. This makes it difficult to identify exactly how much gas is supplied to the UK, as some EU-based companies use some of their quota to supply the UK, and some UK companies use theirs to supply customers in the EU. This mismatch between the location of the quota allocation and the place where gas is used means that there is a risk that in splitting the quota system, we no longer get our current share of supply, as some EU companies may choose not to supply the UK in the future. These regulations therefore include a power to adjust companies’ quotas if we find that the overall UK supply of F-gases is below the level it would have been had we not left the EU. This power would be used only where there was evidence of a supply shortfall and where there was a high probability of a significant impact on critical sectors. The power would not be used to increase supply beyond where it would have been had we remained in the EU.

Regarding the specific changes made by this instrument, I would like to highlight a few of the more noteworthy. Regulations 4, 5 and 25 in Part 2, and Regulations 37, 38 and 56 in Part 3 facilitate the transfer of functions to the Secretary of State and the Environment Agency with respect to England, and to devolved authorities with respect to Wales, Scotland and Northern Ireland.

Regulations 7 and 9 reduce the maximum limits for the use of certain ozone-depleting substances to reflect the lower usage in the UK relative to the EU. This is done pro rata based on the population of the UK relative to that of the EU. Regulation 43 enables training certificates issued in EU member states to continue to be recognised in the UK to ensure that EU-trained technicians can continue to work here. Regulation 48 requires the authorities in one part of the UK to consult the authorities in other parts before establishing their own F-gas quota system.

I should now like to bring noble Lords up to date on progress since the Explanatory Memorandum was published. I am delighted to say that on 11 February, the IT system needed to administer UK quotas went live. So far, more than 100 businesses have already registered, including two-thirds of the main suppliers, ensuring that they can continue operating in the UK. On 12 February, a power was approved by your Lordships’ House through the Environment (Amendment etc.) (EU Exit) Regulations 2019 for regulators to charge businesses a fee to cover the cost of operating a UK system. This is in line with the long-established principle that the polluter rather than the taxpayer should pick up the cost of regulating. Although there was no formal duty to consult, Defra officials have engaged with businesses and environmental groups throughout the process. The clear message has been that we should not vary the F-gas phase-down schedule: neither slowing down nor speeding up. We published guidance for businesses in August, December and earlier this month on how the UK system would work, helping them to prepare for exit.

The requirements of the EU systems will remain very largely unchanged, so the direct impact of this instrument on businesses is small. Defra has assessed that there will be an additional administrative cost for those companies which have to deal with two quota systems—the UK and the remaining EU—rather than one in the future. This is estimated at about £60,000 per year in aggregate for the 50 or 60 UK companies affected. The Environment Agency will administer the quota and reporting systems and the agency has secured the additional staff needed.

Enforcement arrangements will remain the same as they are under EU regulations, with the Environment Agency and devolved Administration regulators undertaking the same sort of activity as they do at present. We do not expect enforcement costs to increase significantly as the number of companies being regulated will be similar.

Dialogue has continued with the devolved Administrations and I am pleased to say that all have agreed to this instrument. For our exit day preparations, they have also agreed that they will remain part of a single UK-wide system, in particular for the purpose of allocating quotas. That means that, immediately after exit, the Environment Agency will allocate quotas for the whole UK market. Discussions are also progressing well on the longer term governance arrangements for the operation of the system and the joint decision-making process, although this does not need to be in place from day one. Should an Administration wish to diverge from a UK-wide approach in the future, they will need to consult the other Administrations to ensure that preparations on both sides can be made.

I end by pointing out that the legislative powers being returned to the UK from the Commission will be exercised in almost all cases by regulation, enabling significantly greater scrutiny by your Lordships’ House than has previously been the case. I beg to move.

My Lords, I thank the noble Baroness for introducing the instrument and congratulate Defra on having gone live with the system and being much more successful than the Department for Transport with its ferries—hypothetical as they were.

This is a serious subject, so I will not make light of it. We are delighted that the statutory instrument will maintain the continuity of the ambitious targets that are necessary. In researching this, I reminded myself how much more warming fluorinated gasses are than CO2: 23,000 times. The Minister said that it is more powerful. I had to check the figure several times because it seems very large, but they are extremely powerful substances. Ozone-depleting substances were one of the first things on which the world got together and decided to act—very successfully, it seemed.

However, in researching this I also came across a disturbing fact discovered by the University of Bristol, which is that some 40,000 tonnes of carbon tetrachloride are still being emitted, although not by anywhere that Defra is responsible for because it seems to be in the Shandong province of China. However, maybe the FCO would like to take that up, because although the EU and the UK are doing their bit, it seems that China is still emitting 40,000 tonnes of this extremely damaging chemical. You can use it in the production of chlorine, but again, that is a staggering figure. The noble Baroness told us about the continuing search for less damaging alternatives; I think the protocol also agrees that we should allow equipment to continue for its useful life so that we are not replacing things unnecessarily but that at the end of its life, we should go for something that involves a less damaging gas.

I want to ask about a couple of things in the regulations. The noble Baroness kindly explained the UK quota system, which will be UK-wide, and the Environment Agency will negotiate that with the devolved Administrations. However, what happens in the event that the devolved Administrations disagree about how much quota they get? Does she foresee that that will be an issue? The noble Baroness also mentioned that EU-certified technicians will be able to continue to work in the UK, but will it work the other way round—will UK-certified technicians be able to work in the EU? I understand that access to the EU quotas will require an office being set up in the EU to negotiate them and administrate that process. It would be useful to know whether that exchange of technical personnel will be reciprocal, and to know about the quotas. However, other than that, I hope that by 2030, we will have achieved our targets and perhaps even done better than that and moved past them. It concerns me that, according to the University of Bristol study, other areas of the world continue to emit such vast amounts of something that is so damaging to the atmosphere.

I join the noble Baroness in congratulating Defra, both on this regulation and on the very clear Explanatory Memorandum. I know from the useful briefing Defra gave me last summer that it was getting ahead very well with the EU exit regulations, and it is good to see them coming through.

I also wanted to look backwards. In the early 1980s, I was a junior civil servant in what is now Defra, and responsible for research and development in a small way. I went to an interdepartmental meeting to discuss various proposed cuts, one of which was to the British Antarctic Survey. I remember arguing, contrary to my brief, that we should continue to support the survey because I believed in fundamental research and that sometimes you did not just do research near to the final product. Of course, later in my career, history showed that the survey was very important. That is a story I like to tell to youngsters in schools because it shows the importance of R&D.

I was pleased that the Minister described the work Defra had done to look at the impact on business of this regulation. I have just one point of clarification. She mentioned that 100 businesses were being regulated and then said that the estimate was that the cost—I think of the extra administrative system that we have had to bring in because of the transfer—would be £60,000 in aggregate for 50 to 60 companies. I could not understand the difference between the 100 companies that seemed to be affected by the proposal and the cost figure, which, if that is the only cost, seems modest for this important area.

I thank the Minister for her introduction to the order before the Committee and for undertaking prior discussions with her team. As she said, this order, while not specifically made to cover the scenario where the UK leaves the EU without a deal, nevertheless makes provision for a no-deal exit with the repatriation of authorising authorities and regulators. It also corrects a series of deficiencies in retained EU law on ozone-depleting substances under Part 2 and fluorinated greenhouse gases under Part 3. The order therefore maintains the 79% cut on a UK basis, as for example in F-gases between 2015 and 2030, as the Minister stated, by steadily reducing quotas for companies that operate in this field. The order maintains that it will continue.

Although many of the changes introduced through this order on the transfer of powers currently exercised in Europe to the UK are technical in nature, other minor noteworthy changes could be construed as shifts in policy. Labour certainly does not challenge the order and will approve it today.

Although the order was laid in December and subsequently relaid on 6 February following exchanges with the Joint Committee on Statutory Instruments, I understand that it is essentially the same document. The order has not been flagged by your Lordships’ Secondary Legislation Scrutiny Committee, but it is worth recognising that progress has been made in several areas in which there have been concerns and to which the Minister drew attention. However, there are a few questions around these outcomes, which I will highlight for the Minister.

It is good to note that the UK Government and the devolved Administrations have agreed to the repatriation on the basis of a single UK-wide quota. This quota, following dialogue with the relevant companies on how much they place in the UK market, will be set at 12%, roughly aligned with the size of the UK’s population relative to the EU. That the UK’s usage aligns in this way is certainly interesting. Under paragraph 2.8 of the draft Explanatory Memorandum, it is agreed between the Government and the devolved Administrations that, should an Administration wish to diverge from the protocol in the future, they must consult the others before doing so. Have the Government consulted the Commission on whether the EU has also agreed to the 12% and on whether, should the UK in the future wish to diverge in any way from the process agreed in the 1987 Montreal Protocol, it will consult with the EU and others before undertaking any divergence?

Paragraph 6.2 of the Explanatory Memorandum states that the Environment Act 1995 will be amended to include a charging regime under the authority of the Environment Agency on a UK-wide basis. I certainly join others in saying that good progress is being made, with this having happened, but I note that these changes are on a cost recovery basis. Can the Minister confirm, because it was in some divergence to the £60,000 figure she gave in her introductory remarks, that the total amount costed in the other place was estimated at £500,000 per annum for the administrative costs? I understand that the Government have put this out to consultation regarding cost recovery, so I have a few questions for the Minister regarding the scope of that consultation.

Paragraph 6.2 also states that the EU allocation mechanisms for quotas and the format for company reports will not be replicated in the UK, as different IT systems will be established here. I understand that this IT system has also been completed, and I congratulate the Government on that achievement as well; while not wishing to appear churlish, let us hope that it will continue to operate successfully under stress.

Returning to costs and charters, I understand that this set-up cost has been financed through the Government. The Minister in the other place, Dr Coffey, stated:

“Future charges will be for the overall regulation system”.—[Official Report, Commons, Eighth Delegated Legislation Committee, 26/2/19; col. 8.]

Will the Minister clarify what that means for cost recovery? Will there be an element of repayment of capital included in running cost recovery of fees from operating companies? That is, will companies ultimately be charged for this set-up cost?

The Government will also continue paying into the Montreal Protocol assistance fund to help developing nations across the world move to less harmful gases. Can the Minister confirm whether industry will be re-charged any of these contributions? It would be good to understand whether the Government have included either of these potential costs as possible cost recovery items out for consultation.

The final concern in this regard is about impact assessment. While the Government are satisfied that the cost is de minimis, as the Minister explained, have they assessed whether the new charges could impact on companies’ costs in a way that will affect whether they continue to operate in the UK? Several companies operate across the UK and in the EU, and their quotas will come from both in future. Are the Government satisfied that any disruption will not detrimentally impact on these companies continuing in the UK in such a way that the Government may have to use their new powers of increasing quotas to make up for a closure of any company’s shortfall to maintain the UK in a steady state? In their dialogue with companies when undertaking these regulations, can the Government confirm that companies operating across borders are generally satisfied with the outcome? One element behind this question on reciprocity—mentioned by the noble Baroness, Lady Miller—is whether UK trading certificates and authorisations will be accepted in the EU after exit in the same way, replicating the recognition of EU certificates in the UK.

I am sure that all contributors to this order will agree that these regulations are vital to the safeguarding of the environment across the world. Can the Minister confirm that, despite abiding by the increasing quota restrictions since 2015, these have been effective in reducing emissions? That is, are they working as envisaged, without loopholes appearing such as displacements on to other gases not specified in the protocols?

While these regulations appear technical, they will certainly be important to companies operating in the UK and the EU, especially given the lack of coherent data on how they may be reapportioned in individual quotas. Can the Minister confirm that, through the Government’s discussions, all the operators essentially agree with the regulations and their individual outcomes, and that any potential disputes can be reconciled via due process through the Environment Agency?

I thank all noble Lords who took part in what has turned out to be a very interesting and I hope fairly straightforward debate. I have the answers to nearly all of the questions, which is always an added bonus.

I would like to thank the noble Baroness, Lady Miller, for her congratulations on getting the system up and running. We will take congratulations where we can get them. I was very interested by her observations on the wider environment in relation to ozone depleting substances, F-gases. I have a few responses to the questions that she raised. The UK and other parties raised their serious concerns about carbon tetrachloride in China at the Montreal Protocol meeting last year. China has agreed to take enforcement action. We will continue to monitor the situation and make representations in that area.

The noble Baroness also mentioned an F-gas being 23 times more powerful than carbon dioxide. That is true: there is an F-gas—there are many different types of F-gas—that is 23 times more powerful, called SF6. But this one is rarely used and accounts for less than 3% of F-gas emissions for the UK. It is the HFC emissions that account for 95% of UK F-gas emissions. As the noble Baroness pointed out, many other gases can now be used in various pieces of equipment to the same effect and industries are certainly moving over to those.

I turn now to the detail of the regulations. Going back to the noble Baroness’s point about the devolved Administration, a point that was also raised by the noble Lord, Lord Grantchester, the important thing here, as I mentioned in my opening remarks, is that initially we have this agreement with the devolved Administrations. The Environment Agency will allocate quotas for the whole of the UK. There will basically be one bucket of quota. It will be handed out to individual companies which will then be able to trade their F-gases within a single UK market; it will not be country specific. In the longer term, we need to make sure that that system is very solid, so there will be governance arrangements and joint decision-making. We do not expect there to be divergence in the future, but there may well be. However, the devolved Administrations will not be allowed to diverge without consulting all the other nations in order to make sure that we do not go over the total target, which of course is set for the UK as a whole.

I move on to the certified technicians. This is quite an interesting one, and I certainly had not realised this: there are around 47,000 technicians certified by UK bodies, which is quite a number of individuals. We do not hold figures on how many technicians are working in the UK with EU certificates but, based on the proportion of EU certificates leaving the UK, it could be around 2,000-3,000 people. The point here is that this is clearly a very skilled job, but it also seems to be quite local because it is a practical job in terms of maintaining the pipework, the cylinders and the places where these things are used. At this moment, we cannot guarantee that the EU will accept UK training certificates. We very much hope that we will reach a deal such that it will do so in future. We have made a very open and generous offer to accept the EU training certificates.

I turn to the comments made by my noble friend Lady Neville-Rolfe. There was slight confusion or perhaps misunderstanding about the different types of cost that will be incurred with this process. The 50 to 60 businesses are those that most engage with the system. These are the bigger companies that may need to engage in the UK and may have F-gas quotas. There will be many other companies interested in far less and which might have just a tiny quota for some ODSs. The cost to the business of engaging with the system therefore varies enormously, but in aggregate we expect it to be less than £60,000. However, in the interests of transparency I note that some charges may well go back to the suppliers of these gases on the basis that the polluter rather than the taxpayer should pay. The additional cost of the system that the Environment Agency will face is estimated to be around £500,000 per year. If the agency chooses to recover the cost through charging fees, we estimate that it would be spread among 800-1,000 companies right across the UK, the EU and the rest of the world which might need to use the UK system at some stage. This will all be subject to consultation, which has not yet started. The actual cost to each company will vary depending on the extent to which it uses the system. It is not in place at the moment. For the time being, the costs are being met out of funds received for no-deal preparation work.

I turn to some comments made by the noble Lord, Lord Grantchester, on the 12.4%—I presume he was referring to the ODS quota value. The data for how much ODS is used in the UK is not readily available as the amount is very small and this information has not been aggregated at a UK level—it is available only at an EU level. The use of ODS is very small and is probably not worth the time and effort to try to figure it out. Following the global phase-out, it is utterly disproportionate to try to quantify the amount of ODS sold and then compare that to the amount sold in the EU. What will we gain as the phase-down has already happened?

I am not as concerned about that side of things, but on F-gas we have to make sure that we are comfortable. Overestimating how much we use is unlikely; it is more the case that we will underestimate because we have asked all these companies how much they supply to the UK market. They have all sent us their numbers, but it could be that a company has not sent its numbers because it has decided that it will not continue in this market. That is what we have to be concerned about. We will watch that to make sure that we get the right amount of F-gas into the country.

We have been talking to the EU while we have been splitting the quotas, but on divergence from the EU with respect to issues relating to the Montreal protocol, we will, as with all of these issues, be speaking to all of the major partners in the world. We take a very serious leadership role in this.

I return to a question asked by the noble Lord about what happens if a company ceases to trade and so that quota no longer comes into the market. We would have a bucket of quota which can be reallocated to people. It is essential that we make sure that we have the correct supply, but it is also essential to make sure that the phase-down happens within the limits that we are expecting over the coming years, so should a company no longer trade, that quota would be able to be allocated to a separate company.

What has been the impact and has this reduced emissions? It has. We know that the regulations took a little time to come into place—I accept that that was when the EU regulations were put into place. Now that they are in place, the amount of gas being placed on the market is already 37% below 2015 levels, so the EU regulations are having a significant effect. What noble Lords are being asked to approve today is for those EU regulations to be copied over and for some small changes to be made to make sure that they continue to work in the UK and that we too can continue to reduce our usage of F-gases and monitor the very small use of ODSs.

I thank my noble friend for her clarification on the costs. I had one thought: if the Environment Agency was to decide to recover the administrative costs, would it be possible for it to look at charging smaller companies a smaller amount of money? This was done in relation to the changes on data and was very well received. I do not ask for a commitment, but I make that proposal.

I was ready to jump up before the Committee was asked to agree the Motion, but I will sit down while the Minister answers the noble Baroness and I will then rise again.

I thank my noble friend for that comment—I was going to say that anyway. That would be part of the consultation process with the Environment Agency. It seems like a very good idea, but it should at least assess whether that is a viable option.

I apologise for intervening perhaps a little too early on other Members. While paying great regard to the Minister, who has answered all the points most succinctly and very well, I wanted to get a feel for the impact on these regulations and the discussions Defra has had with the various companies. Has the Minister got a sense, or not, that they are going to cause disruption for companies operating in this field, albeit that they then buy and sell the quota in terms of moving in and out of different countries? I understand that happens already, but is there a sense of disruption to industry causing them some dismay, in bringing the regulations back into the UK?

I apologise to the noble Lord; he asked about that and I forgot to answer. The department has contacted every single supplier across the EU in this process, so we have a strong feeling of where the industry is coming from. We have spoken to key business, industry and environmental representatives as well. For example, the Federation of Environmental Trade Associations is an umbrella trade body representing refrigeration and air conditioning manufacturers and suppliers. We have spoken to the British Refrigeration Association, the air conditioning and refrigeration board and Mexichem, the biggest producer of F-gases in the UK. While there will certainly be some change, I have tried to highlight that the change will not be significant. If a company trades in the UK and the rest of the EU, it will have to apply for two different buckets of quota, but apart from that, much of the system will stay the same.

Motion agreed.

Committee adjourned at 7.26 pm.