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Official Controls (Fees and Charges) (Amendment) Regulations 2024

Volume 837: debated on Thursday 18 April 2024

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Official Controls (Fees and Charges) (Amendment) Regulations 2024.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

My Lords, I hope that it will be helpful to your Lordships if I speak to both the Official Controls (Fees and Charges) (Amendment) Regulations 2024 and the Plant Health (Fees) (England) and Official Controls (Frequency of Checks) (Amendment) Regulations 2024 given that they deliver legislation addressing fees for import controls on UK sanitary and phytosanitary goods under the border target operating model.

Turning first to the Official Controls (Fees and Charges) (Amendment) Regulations 2024, these regulations facilitate flexibility in the application of fees and charging requirements for official controls on sanitary and phytosanitary imports arriving in Great Britain. We have designed a global risk-based import model, BTOM, for sanitary and phytosanitary goods, which will deliver a streamlined approach which protects the public and plant and animal health, boosts our economic growth and minimises friction at the border. This instrument enables the necessary fees and charges for official controls, reflecting the new sanitary and phytosanitary border official controls regimes, as published in the border target operating model.

This instrument introduces flexibility on the composition of fees and charges for official controls while maintaining the requirement of cost recovery. This allows for more comprehensive cost recovery and enables the application of risk factors set out in the BTOM to the fees. This instrument changes the duty to charge to a power to charge by extending the circumstances in which charges may be reduced or waived. The implementation of the BTOM model is reliant on the flexible application of risk, the ongoing financial viability of competent authorities and the proportionate financial liability across stakeholders and operators. Changing the duty facilitates this desired flexibility.

This instrument enables a consistent charging model across any government-run border control post in Great Britain. This will be vital once border control post checks on EU imports are introduced to Wales and Scotland to support trade continuity in all our Administrations. Finally, this instrument enables fees and charges to be levied digitally and away from border control posts. Without this legislation, all sanitary and phytosanitary consignments entering Great Britain would be required to visit a border control post to make payments physically. This would be administratively and operationally unworkable, as it would require all consignments to attend a border control post, not just those selected for an inspection, adding time and burdens for hauliers.

Every effort has been made to ensure these fees and charges distribute costs fairly and proportionately for businesses of all sizes and across all sectors while enabling the Government to fulfil their cost recovery obligations. I am pleased to state that the devolved Administrations have given their consent for these regulations to extend across Great Britain. To summarise, this instrument facilitates the implementation of the border target operating model and is necessary to enable fees and charges to fund the new sanitary and phytosanitary border official controls regime.

Moving on to the second instrument, the Plant Health (Fees) (England) and Official Controls (Frequency of Checks) (Amendment) Regulations 2024, these regulations apply a requirement for risk-based import checks on medium-risk goods from the EU, Switzerland and Lichtenstein from 30 April 2024 as published in the border target operating model. This instrument ensures that certain imported goods are not within scope of this charge, including fruit and vegetables that are currently being treated as low-risk goods while risk assessments are being conducted. It also excludes goods entering Great Britain via a listed west coast port.

Changes are also being made to the fees legislation to reflect the risk-based level of identity, as well as physical and documentary checks on medium-risk goods, to ensure that the cost of plant health services are recovered. Fees are also updated for certain goods from non-EU countries to account for changes in the frequency of checks. Finally, two minor typographical errors regarding import checks are being corrected in the fees legislation.

Checks are currently carried out on high-risk consignments of plants, plant products and other objects imported into Great Britain from the EU, Switzerland and Liechtenstein. Checks are also being conducted on regulated goods imported from all other third countries, on a risk basis. GB plant health services carry out these checks and charge for these services accordingly to prevent the introduction and spread of organisms harmful to plants and plant products. This instrument therefore removes the temporary easement that applied after EU exit from import checks of medium-risk plants and plant products imported from the EU, Switzerland and Liechtenstein. These goods will become subject to risk-based checks and the associated fees.

I am pleased to state that the devolved Administrations have given their consent for these regulations to extend across Great Britain—except for Regulations 2 and 3, which relate to fees and apply to England only. Welsh and Scottish Government Ministers laid their equivalent fees legislation earlier this year.

In closing, these regulations ensure that checks are in place from 30 April 2024 to mitigate against any biosecurity risks from certain goods from the EU, Switzerland and Liechtenstein. I emphasise that protecting our biosecurity is of paramount importance. By facilitating the implementation of the border target operating model and enabling fees and charges for the relevant import controls, these instruments enhance the operation of the biosecurity regime of Great Britain.

I hope that noble Lords will support these measures and their objectives. I beg to move.

My Lords, I feel I should begin by declaring my fellowship, through the Industry and Parliament Trust, of the Horticultural Trades Association, which is the trade association for environmental horticulture. I am sure the Minister knows this but that is what used to be called ornamental horticulture. The Government have not always shown that they know what this refers to, so I make that clarification.

We are talking about a Brexit cost here. That is what is being inflicted. We have spent several years with people looking around and trying to find Brexit benefits but they have been extremely hard to find on the ground. This is a cost and is particularly likely to impact on small and medium-sized enterprises across Britain.

I would like to make a comment about the timing of this debate, on 18 April. These fees are coming in on 30 April and were announced two weeks ago. That is not a great deal of time for businesses to prepare for and understand what is happening, so I must express my concern.

This is even more crucial in the context of environmental horticulture. Now is the worst possible time for this massive change in the industry to happen. There are a few peak weeks for horticulture when people are planting their gardens in spring and looking forward to summer. This measure will hit the sector extremely hard at this moment. The seasonal peak may last for only a few weeks and this is happening in the middle of it. It would seem that it is too late to make any change to that but I hope the Government acknowledge—this is a question for the Minister—that the industry will be taking on a significant cost at this moment. They should be thinking about what kind of compensation and extra support it needs.

It greatly concerns garden centres, nurseries and other suppliers that there could be delays on 30 April and in the week or so afterwards. We have heard many reports of people importing woody plants, shrubs and perennials en masse beforehand. However, it is not possible to do that with bedding plants and many other smaller plants. What arrangements do the Government have in place to provide compensation should there be significant delays at border posts?

I also have to ask the Minister about what is happening at these border posts. Will the staff be adequately equipped and trained to understand what are often complex loads of lots of different plants? I take as a case study for this Joseph Rochford Gardens in Hertfordshire. Some 15% of its imports come from Italy as loads of plants of many different species and sizes. It is a very skilled job to unpack and repack a load of those plants, making sure that they are not damaged. Will staff be adequately equipped? Are the staff on these inspection posts direct employees or contractors? If they are contractors, how are those contracts going to be overseen?

Another area is of great concern to people in thinking about what is on our supermarket shelves, given the many pressures on food security at the moment. Most soft fruit plants—strawberries, raspberries, tomatoes and fruit trees—are imported by UK growers to produce much of the food that we produce here. It is estimated that this change will add £200 million in costs to the fresh produce sector overall. To put this in concrete terms—this is really quite compelling—100 million EU strawberry plants are imported each year, primarily from Holland, Belgium and Poland. Each load of strawberry plants is worth up to £100,000. The plants are grown to order. One truck being delayed, with one hold-up in the system, would not only mean a loss of £100,000-worth of plants; the grower would not be able to replace them. The grower could potentially end up with fields left vacant because there is no source for those plants.

I come back to the question of what compensation the Government are prepared to make if that situation should unfortunately arise. I stress that concerns about this have been expressed by British Apples and Pears, the British Tomato Growers’ Association and British Berry Growers. What consultation has the Minister had with those groups to make sure that they are at least as well informed as they can be? Will that be ongoing in the first days and weeks when this measure is implemented?

I conclude by acknowledging that there is huge concern about biosecurity. In the age of the climate emergency and globalisation, the risks of bacterial, fungal and vector-borne diseases are growing exponentially. This means that, ultimately, we have to think about reducing the flow and having many more nurseries. There is a huge commercial opportunity here to have this growing happening in the UK so that we do not have to move plants around. I hope that the Government are looking at that; anything the Minister can say on that will be helpful.

On the biosecurity point, I know that there is great concern. I have spoken to nursery owners. The British Tomato Growers’ Association said about the inspection points that we are introducing a significant point of infection. We have lorries being unloaded side by side. We hope that the plants are not being mixed but we all know that perfect things do not happen in warehouses—I worked in a warehouse many years ago—and there is a risk that the new inspection points could be a place where biosecurity is breached and diseases are spread. Again, there is a question around compensation.

Finally, my understanding—I stand to be corrected if I am wrong about this—is that the rates in the SIs we are debating now cover only the points of entry at Eurotunnel and the Port of Dover. Other commercial entry points—about 30 of them—are setting their own rates. Can the Minister tell me anything about what those rates will be? Are they paralleling these rates, in essence, or are they higher? Of course, it is very difficult for companies to move from one supply chain to another so what is the situation there, particularly for small and medium enterprises? I stress that supermarkets and big commercial companies will be able to pass on these costs but that is often not the case for small and medium-sized enterprises. This is of great concern to many sectors in that small and medium-sized business area.

My Lords, I thank the Minister for his introduction to these two statutory instruments. On the face of it, they seem fairly straightforward and relate to the border target operating model. The Secondary Legislation Scrutiny Committee has flagged that this is a matter of interest to the House.

The first instrument relates to sanitary and phytosanitary border controls—SPS. The second relates to SPS controls applying to imports of live animals, animal products, high-risk food and feed of non-animal origin, plants and plant products at the border. This second SI contains a large and potentially complex list of products; however, the instrument appears to deal only with plants and plant products. Also, the risk-based import checks on medium-risk goods applies to goods from some countries that are EU member states, as well as Liechtenstein and Switzerland. These countries’ goods that are not within scope include fruit and vegetables, which are currently treated as low risk.

I have some questions about these two instruments and wish to ask for some clarification. Paragraph 7.3 of the Explanatory Memorandum for the first instrument, on fees and charges, states:

“This instrument changes the duty to charge to a power to charge by extending the circumstances in which the CA”—

competent authority—

“may reduce charges or waive them altogether”.

The Minister has mentioned this already. I am concerned that, if the charge is waived, it could mean that the imported product would be cheaper than a homegrown or home-produced one, which would disadvantage our farmers and horticulturalists. Can the Minister provide reassurance on this issue?

The ability to waive charges also seems at odds with the second instrument, on official charges and frequency of checks. Paragraph 7.2 of its EM states:

“Changes are being made to the fees legislation to reflect the level of identity and physical checks determined in accordance with the 2022 Regulations … ensuring the full cost of services to conduct import checks are recovered from businesses using these services”.

Further on, the last sentence of paragraph 7.4 says:

“The existing fees legislation ensures that the cost of plant health services, including import inspections, is recovered via fees”.

Either the fees are to be charged on a cost-recovery basis or they can be reduced—or waived altogether. Perhaps one SI legislates for full cost recovery while the other allows for the waiving of fees and charges. Can the Minister give clarity on this issue?

Paragraph 7.4 of the first instrument’s EM states that

“not all consignments will … attend a BCP”—

a border control post. It also says that fees and charges can be levied digitally and away from the BCP. Some have raised concerns that this may not be safe and that consignments should be capable of being inspected at the BCP. The noble Baroness, Lady Bennett, also raised concerns about the security of plants. Can the Minister comment?

Consultation through targeted stakeholders ran for 10 weeks. The second instrument’s EM indicates:

“The respondents were generally supportive”.

I have read the letter from Defra, dated 24 February, on the consultation responses; I have also looked at the responses online. There were three. Two were from Scottish businesses that raised no concerns. The third was from the NFU; it highlighted its concern about the flat rate fee for plants for planting, which should be extended to include bulbs for planting, and the definition of the final user. Defra’s response to the NFU was that its concerns are outside the scope of the consultation as the instrument is for medium-risk goods while bulbs are high-risk goods. On this basis, we are told that the consultation response was “generally supportive”, which just goes to show that, with a bit of ingenuity, you can make a consultation give whatever response you want it to.

The Secondary Legislation Scrutiny Committee raised concerns about the common user charge, which is to be introduced later this year and does not require legislation. This means that there will be no parliamentary oversight of the charge, its impact and whether it will be draconian or not likely to actually cover the costs of implementation. Would the Minister care to comment on the introduction of this common user charge?

I am not opposed to these two SIs, but I am somewhat dismayed by the way in which they are being introduced and the lack of clarity over the implementation of the charges and fees. I look forward to the Minister’s clarification.

My Lords, looking first at the Official Controls (Fees and Charges) (Amendment) Regulations in front of us, previous speakers have clearly raised concerns about BTOM. I have also done so in the past; the Minister and I have discussed this in the Chamber previously. However, with this SI, we are particularly concerned about the potential impact on small businesses and the fact that the charges also need to be considered in the broader context of the increased charges, particularly for small businesses, since we left the EU. I am aware that the Government believe that there is not going to be any serious impact on small businesses but our concerns come from within that broader context, because we know that British importers have been paying further costs over the last few years since we moved to the new system of trade with the EU.

Around 30% of the food that we consume in the UK comes from the EU, so it is incredibly important that, when we bring in new systems, we avoid any confusion, chaos or delays. It would be useful to hear reassurances from the Minister on these issues because small businesses are particularly worried about this, as well as the increased costs. Once you start getting delays, as I am sure the Minister knows, they have a huge impact on perishable fresh produce. How confident is the Minister that this can go through smoothly?

The British Chambers of Commerce has complained to the Government about the lack of communication and information provided. How has the Minister’s department been working with businesses, particularly small businesses, on improving the communications and information that chambers of commerce have raised concerns about? What clarifications have been provided following the concerns raised?

The noble Baroness, Lady Bakewell, talked about the fact that this provides competent authorities with greater flexibility to determine fees and charges, and that this is now on a recovery basis. She asked some questions around that, but I just wondered if there are any precedents for recovery like this, with fees and charges being done on a cost-recovery basis. What are the precedents around that?

The other thing I was going to raise also applies, to a certain extent, to the plant health SI and is around the lack of consultation. I am aware that there is no statutory duty to consult on this issue but, considering the number of concerns that have been raised around BTOM and its rollout, including the very late announcement of the common user charge, I wonder whether the department might have followed a different process, with the benefit of hindsight. It could have done a bit more consultation with industry to avoid those concerns and late rollouts. In future, when looking at the different trade mechanisms that will need to come in, will it perhaps look more broadly at working with business at an earlier stage to avoid some of the, shall we say, glitches that have happened?

I agree with very much with what both noble Baronesses have said already on the draft plant health fees statutory instrument, so I will not go into great detail. The concerns of the Horticultural Trades Association have been clearly laid out: the impact of the volume of checks that will be required and whether that will lead to further delays. The importance of the horticultural sector to our economy needs greater recognition. It would be good if the Minister could give some indication to the Horticultural Trades Association on ornamental horticulture, plus vine horticulture, tomatoes, and others. We have seen gaps on our supermarkets shelves in recent years. It would be very good if our horticultural sector was better supported and encouraged.

One last thing: I have previously talked about the concerns about Dover not being listed as a relevant port and the checks being moved inland. When this SI was debated in the other place, Natalie Elphicke MP, who represents Dover as part of her constituency, said that she was extremely concerned that the regulations failed to list Dover as a relevant port. The Minister and others have explained what they think will happen and how it all will work, but she felt—and I agree—that there is still an unanswered question as to exactly why this decision was made, and the implications for the Port of Dover itself.

My Lords, again, I thank all noble Lords and—almost exclusively—Baronesses for their valuable contributions to this debate. I laid out the need for this SI in my opening remarks. I will try to address some of the questions and concerns that have been raised.

I will turn first to the issue of Dover, which the noble Baroness, Lady Hayman, raised. It is a really important point that has been conflated in multiple different ways, and is being used rather unhelpfully to demonstrate what is not happening. Before the introduction of the BTOM, the Government provided a level of financial and other support to Dover Port Health Authority to assist with checks at the Port of Dover for the narrow straits. That was a significant sum of money: £3.5 million a year, and quite a lot of additional bits and pieces.

At the time of developing the BTOM model, we looked very carefully at how it might work at the Port of Dover. We explored the Bastion Point option, which is also quite close to the Port of Dover but not actually there. We also looked very closely at Sevington, which, as we all know, is some 21 or 22 miles further up the road. The analysis and outcome of that very detailed process showed extremely clearly that it is impossible to have a border control post at Dover.

We could have gone with a combined Bastion Point and Sevington option, but if anybody has been to Bastion Point, they will know that it is in an industrial park just outside Dover and that the access is terrible. The confusion would be appalling and the cost to have a split facility would be much greater, so the decision was taken to take the whole border control post to Sevington.

I get questioned a lot that this does not make any sense, because Sevington is 22 miles away. How on earth can that be safe? This is where the conflation of different thoughts and ideas comes together, and it needs to be disentangled. Anybody importing several pigs in the back of a white van that have been slaughtered in Poland is not going to comply with our import controls. They are not going to sign up with an IPAFFS, get a veterinary certificate, register on the system and come into the Port of Dover, saying, “Here I am; do I go to Sevington or do I carry on?” as part of our risk-based model for all other products. These are illegal imports, which are dealt with by Border Force, not border control posts. We have been funding Border Force in the Dover Port Health Authority to deal with that issue, which is largely around African swine fever and pigs—the pork industry.

Border Force also deals with drugs, guns and a range of other things, so the Dover Port Health Authority has been supported financially to assist Border Force. We are now taking the new function of the risk-based border target operating model and moving it away from the Port of Dover, because it cannot be done there, given the logistics of large lorries having to be checked at the port. The whole thing would be clogged from end to end: it would simply not be possible. I accept that, if we were starting this entire process with a clean piece of paper and no infrastructure on the south coast of England, we would probably not do it this way. But, in the absence of being able to flatten Dover and build a border control post there, we really do not have many options.

I am very sympathetic to Natalie Elphicke’s issues at Dover. In all honesty, it has been a real challenge dealing with the port health authority and the council down there—they have been extraordinarily unco-operative and, in my opinion, have deliberately provided misinformation about the fact that we are reducing the £3.5 million to £1.5 million because we are taking that whole function away from them and asking them, with the residual £1.5 million, to provide a different level of support to the Border Force arrangements at Dover. These are very separate issues. I know it takes a while to get your head round them, and it does not sound very intuitive, but it is important to try to get those two bits and pieces disentangled.

I am very happy to take any other questions on Dover, Sevington and what we are doing down there as a separate issue; I will not clog up today’s debate any further on that.

I will start by addressing the general concerns expressed about consultation, particularly with the Horticultural Trades Association and others. There has been, as I think everybody will recognise, extensive consultation on this. It predates my time in office very considerably and, since I took up office at the end of last year, I forget how many conversations and meetings I have had with the HTA. The chairman of the HTA, James Barnes, is a friend of mine who rings me up pretty much daily on this issue. I am acutely aware that this issue is of concern to the association, but we have signalled that we would do this for a very long time. In fact, we have had several false starts, so this should not be any surprise to anybody.

Furthermore, I have been explicit in all of those consultations with the HTA and others that this is not nought to 60 in one go: we are not going from nothing to everything in one go. We are looking to phase in a way of improving biosecurity on goods coming into this country. We will take a pragmatic approach to that process and we are in control of the number of people we pull in for inspections. We will not pull in everybody for inspection on day 1, because this will obviously take a little time to bed in.

I have been down to Sevington, looked at the facilities there and spoken to the staff. I have looked at the training being given to them, which is a concern of the noble Baroness, Lady Bennett, who asked, “Who does this? Is it just a random person?” No, we have done a lot of training and a lot of work has gone into this. So we are ready for business at Sevington, which is the main short straits point. It really has been an extensive exercise in communications training. We have done a lot of recruitment and built a purpose-built facility at Sevington for this. I have been down there, and noble Lords are welcome to come down and have a look at it. It really is incredibly impressive. If they visited, I hope it would allay many of the concerns raised about possible cross-contamination or delays or issues that will go on in that space, because it will take a bit of bedding in. I am not saying it will be entirely smooth on day 1, but we have put an awful lot of effort into this.

Just to go back to conversations with the HTA, one of the things we put in place is a hotline with the team in Defra directly to the HTA and the NFU, for the week preceding 30 April and any amount of time thereafter until those concerns are allayed, to say, “Look, we know we’re going to get some teething problems here, so let’s get them fed in directly”, so that we have the process in place to unravel those difficulties and smooth them through. Absolutely the last thing the Government want to do is to create a delay to trade, which would cause all the sorts of issues that the noble Baroness, Lady Bennett, raised, which would then cause issues around compensation and all the rest of it. We do not want to go there. We want to manage the process and build it up slowly. We will definitely go through a bedding-in process here. We will not go from one end of the spectrum to the other in one go.

I hope that that general background allays some of those concerns. Again, I would be delighted to take any further questions. If anybody would like to, I suggest a visit to any of those facilities so that noble Lords can look for themselves.

I put my hands up on the common user charge: I totally accept that it is late in the day for letting these guys know. I have been in business—I ran a retail business for 15 years—and I cannot comprehend how the Government thought it would be a good idea to let these guys know just six weeks beforehand. It has happened; we cannot go backwards; it is there. In mitigation, it is within the consultation parameters that were set, and what was coming was pretty well signalled to everybody. We have put a cap on those charges to allay some of the fears that were rightly expressed by a lot of those organisations.

There were a number of comments from the noble Baroness, Lady Bakewell, on the charges, full cost recovery and the waiving of charges. What I have in my notes on the question of whether the SI removes the commitment of competent authorities to do cost recovery is that the answer is no. There is still a commitment to cost recovery. The existing provisions in the official control regulations also still specify that charges should not exceed costs. This remains untouched, so it is not a profit-making exercise.

To reference that back to the other questions on what happens at non-governmental border control posts, commercial operators elsewhere are free to set their charges where they want. They have obviously all been waiting to see what our common user charge is; they will want to align with that because, if they do not, people will simply choose not to go there. If they simply price themselves out of the market, that will not work. Our analysis of our own cost recovery process should be comparable to their own. I think that the charges are in the right place. They will also remain under review on a very regular basis, following the first tranche of information that we get.

I hope that that also answers the questions from the noble Baroness, Lady Bakewell, on the impact on smaller businesses. This is a flat charge across all businesses; it does not differentiate between large or small, but we hope that it is within the right range.

The noble Baroness, Lady Bennett, asked a number of questions around readiness for 30 April. I hope I addressed them in my earlier comments. Again, if there are any questions that she would like to ask on that or the staffing arrangements, I would be very happy to take them.

That covers all the questions that I have written down here, I think. If I have missed anybody’s questions, I will of course be delighted to write to them in future. I hope everybody shares my view that these instruments are absolutely necessary. As I have outlined, they facilitate the implementation of the border target operating model, which I think we have all agreed is a necessary biosecurity process, and are necessary to enable the relevant import controls and associated fees on imported sanitary and phytosanitary goods.

With that, I commend these instruments to the Committee.

Motion agreed.