The Committee consisted of the following Members:
Chair: Stewart Hosie
Caulfield, Maria (Lewes) (Con)
Harris, Rebecca (Castle Point) (Con)
Jones, Fay (Brecon and Radnorshire) (Con)
Lloyd, Tony (Rochdale) (Lab)
McDonnell, John (Hayes and Harlington) (Lab)
Mak, Alan (Havant) (Con)
† Morden, Jessica (Newport East) (Lab)
† Morris, James (Lord Commissioner of Her Majesty's Treasury)
Osamor, Kate (Edmonton) (Lab/Co-op)
† Prentis, Victoria (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
† Pursglove, Tom (Corby) (Con)
Rutley, David (Macclesfield) (Con)
Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)
Throup, Maggie (Erewash) (Con)
† Tomlinson, Michael (Mid Dorset and North Poole) (Con)
Trickett, Jon (Hemsworth) (Lab)
† Zeichner, Daniel (Cambridge) (Lab)
Yohanna Sallberg, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 118(3):
Blake, Olivia (Sheffield, Hallam) (Lab)
First Delegated Legislation Committee
Monday 17 May 2021
[Stewart Hosie in the Chair]
Draft Plant Health etc. (Fees) (England) (Amendment) Regulations 2021
Before we begin, can I remind Members to observe social distancing and to sit only in the places which are clearly marked? I also remind Members that Mr Speaker has stated that masks should be worn in Committee unless you are speaking. Hansard colleagues would be most grateful if Members sent their speaking notes to email@example.com.
I beg to move,
That the Committee has considered the draft Plant Health etc. (Fees) (England) (Amendment) Regulations 2021.
With this it will be convenient to discuss the draft Plant Health etc. (Miscellaneous Fees) (Amendment) (England) Regulations 2021.
It is a great pleasure to serve under your chairmanship, Mr Hosie. The two statutory instruments make amendments to fees for plant health services. The draft Plant Health etc. (Fees) (England) (Amendment) Regulations 2021 amend the Plant Health etc. (Fees) (England) Regulations 2018 to extend the current regime of charging for plant health import checks to apply also to checks carried out on consignments from EU member states, Switzerland and Liechtenstein.
It is normal Government policy to charge for many publicly provided goods and services. The standard approach is to set fees to recover the full costs of delivery, which ensures that businesses bear the costs of any measures to prevent harm that they might otherwise cause by their actions or non-actions. We should remember that most serious plant pests and diseases that arrive and spread in this country do so via the commercial trade in plants and plant produce.
The Government have worked closely with individual operators and industry bodies including the Horticultural Trades Association, the Fresh Produce Consortium and the National Farmers Union on developing our approach to dealing with imports from the EU. To give businesses time to adjust to the new arrangements, the fees for documentary, identity and physical checks on higher risk goods and for documentary checks on other goods will not be applied until June, even though checks have been carried out since 1 January. Fees for identity and physical checks on the remaining regulated goods from EU member states, Switzerland and Liechtenstein will be applied from March 2022.
Under the 2018 regulations, there is a single combined fee for a documentary and an identity check, reflecting the fact that both were previously carried out on 100% of consignments. The frequency of the identity check is now linked to that of the physical check. A commodity subject to 50% physical checks will now get 50% identity checks, so it is appropriate that we should lower the associated fee. The draft regulations separate the identity check fee from the documentary check and amend the fee to avoid over-recovery.
I am afraid that we had to rectify a minor technical drafting point in the draft regulations, which was discovered by the Department for Environment, Food and Rural Affairs after they were laid before Parliament. There is a correction slip that ensures that the published version does not contain the minor drafting point. The instrument we are looking at is therefore entirely accurate. The draft regulations apply to England only. The Scottish and Welsh Governments are following the same phased approach for inspecting EU consignments and applying fees to recover the costs of those inspections.
The draft Plant Health etc. (Miscellaneous Fees) (Amendment) (England) Regulations 2021 amend the Plant Health (Fees) (Forestry) (England and Scotland) Regulations 2015 as well as the 2018 regulations. The two sets of regulations set fees for the pre-export and export certification services required to comply with third country entry requirements relating to plant health controlled material. All businesses that use those services are charged a fee to recover the cost of delivery. The Northern Ireland protocol means that Northern Ireland remains in the EU plant health regime, so all movements of regulated plants between Great Britain and Northern Ireland must meet EU third country requirements, including being accompanied by a phytosanitary certificate. If the related fees were not amended, they would apply to movements of regulated plants between England and NI, so the amendments provide an exemption from the payment of fees for pre-export and export certification services for goods moving from England to NI.
The regulations apply to England only. Scotland has made parallel legislation and Wales plans to do so. The amendments introduced by the instrument do not include any policy changes. The instrument ensures that the current policy for intra-UK trade is maintained and that services for phytosanitary certification should not be an additional financial burden to businesses when moving goods within the UK internal market. I commend both sets of regulations to the Committee.
It is a pleasure to serve with you in the Chair, Mr Hosie.
Here we are again, this time with two statutory instruments. I note that one has already been discussed by the Lords, who spent some 45 minutes debating it. I suspect we will be quicker, but there are some important questions to ask. As ever, the substance has been explained carefully and eloquently by the Minister, and the Committee will be reassured to hear that we will not oppose the regulations. We do have questions however.
I start by drawing attention to the strong comments from the Secondary Legislation Scrutiny Committee, on which, if memory serves me correctly, the Minister has served. The members of that Committee are not an incendiary group under normal circumstances, but they say in point 41 of their report:
“It is disappointing, however, that the Department did not provide some analysis of the expected financial impact, given that the businesses affected did not have to pay these fees in the past, and that the Department found it necessary to phase in the fees to give businesses time to adjust. We regard this as poor legislative practice and note that DEFRA has previously not provided financial information when this would have assisted Parliamentary scrutiny: both the Agriculture and Fisheries Bills were introduced into Parliament without Impact Assessments.”
“Poor legislative practice” is a definite yellow card offence for DEFRA in my view.
More importantly—this is the serious point—what will be the actual additional cost to industry, and inevitably to consumers? I am grateful to the Horticultural Trades Association for its advice. I was told that the industry is worth more than £24 billion in GDP, supports more than 568,000 jobs, and raises around £5 billion in tax revenue for the Exchequer each year. The HTA was very diplomatic in its representations, saying that it was
“disappointed that the Government have not carried out an impact assessment on the implications of fees on our sector”.
The HTA estimates that the costs run into the thousands and request that the introduction of import inspection fees for ornamental horticulture be delayed until 1 January 2022. I would be grateful for the Minister’s view on that and, more particularly, the Department’s assessment of the costs, if any assessment has been made. If it has, what is it? If, as I suspect, none has been made, that is definitely a second yellow card as far as I am concerned.
If the horticultural sector has an issue, so do those at the Agricultural Industries Confederation, to whom I am again grateful for their advice. The AIC represents the agri-supply industry, which has a farmgate value of over £8 billion. It is concerned that fees will apply per consignment—the same cost for a truck load or a single bag—which could disproportionately affect decisions on small sales and the flexibility of choice. The confederation notes that most imported seed comes from the EU and that
“the seed industry has had to take on new costs following EU exit”,
and it highlights a number of non-tariff barriers. I hope the Minister will bring those comments to the Prime Minister’s attention, because he memorably claimed that, as a consequence of his agreement, there were no non-tariff barriers. He was completely wrong of course. The AIC says that
“non-tariff barriers include a generally increased cost of haulage due to haulier concerns over potential delays”
“exporting GB seed now requires a phytosanitary certificate, an Orange International Certificate, and to be International Seed Testing Association sampled; seed exported from the EU into GB requires the same”.
The Prime Minister may live in a fantasy world where none of this exists, but our businesses do not, so can we have a proper assessment of the costs?
Of course, there are potential benefits. Biosecurity matters to us all. As my noble Friend Baroness Hayman pointed out in the Lords, the Royal Horticultural Society tells us that UK imports of live plants have increased by 71% since 1999, so there may well be advantages in having extra checks—although is an accidental by-product of our changed relationship. What work has the Department has done to assess the best level for checks to be made, as well as the relative costs and benefits? Who knows, for instance, whether moving material from Oxfordshire to Cambridgeshire has attendant risks? They do some strange things down in Oxfordshire. Is Holland to Kent riskier than Cornwall to northern Scotland? Does anyone know? I suspect not, but we now have additional checks, which is probably good, but we also have extra costs, and no one seems to have assessed the relative benefits.
Baroness Hayman also asked what the Government are doing to increase public awareness of the plant health and biosecurity risks. I would appreciate the Minister’s view on that. My noble Friend also queried the capacity of ports to carry out inspections, and I echo that query. We have discussed border control posts before; what assessment has been made of capacity and what additional resources have been provided to ensure effective and timely delivery of the new checks?
I noted that in the debate in the Lords, Baroness Gardner noted that Amateur Gardening has stopped attaching free seed packets to its magazines that head over the Irish sea. She said that continuing the practice would cost £1 million in the necessary health checks and certification, which is astonishing. Will the Minister confirm whether that is the case? In his reply to the debate in the Lords, the Minister spoke of
“a UK plant health post-transition period operational readiness board”,—[Official Report, House of Lords, 15 April 2021; Vol. 811, c. GC221.]
which is said to meet weekly. Will the Minister tell us more about that? How will all this work with the devolved Administrations? Who is involved? Does the board issue minutes? The Minister clearly leads an exciting life, and we would like to know more.
Let me turn to the second instrument, which deals with the complexities introduced by the Northern Ireland protocol. Again, we do not oppose it, because we do not want unnecessary obstacles placed on the movement of materials within the UK. We recognise that without those changes there would be additional costs to businesses carrying out trade within the UK, but it does prompt a question, because that material will presumably come from the EU into GB via NI, bypassing the checks we already discussed. That makes it clear that none of this is about biosecurity. Will the Minister confirm that?
In conclusion, we all want strong biosecurity, but there is inevitably a trade-off between how often, when and where checks are made, and the costs incurred. The measures are not driven by those considerations; they are driven entirely by the need to sort out the mess created by the Government’s inadequate and rushed agreement on our relationship with the EU. Horticulturalists, readers of Amateur Gardening and the agri-supply industry are all being left to pick up costs.
I do lead an exciting life, never more so than when on the JCSI, which I have enjoyed serving on for many years. I am pleased to be able to answer the hon. Gentleman’s points. I refer him, politely, to the schedules to the statutory instrument, which set out the fees for individual categories of commodities, and will give him a pretty good idea of where those fees will be placed.
We continue to provide support to help businesses. We ran an extensive communications campaign, provided one-to-one support to the largest traders, hosted webinars for thousands of small businesses and provided £84 million to expand the customs intermediary market before bringing forward these SIs. We have listened to the concerns of industry to ensure that the new requirements are practical and proportionate, as well as risk-based. The import controls on plant health EU-regulated goods are being phased in over 14 months from 1 January this year, in order to minimise disruption wherever we can.
I am sure we have all read the schedules in detail. As fascinating as they are, they do not come to a conclusion about the overall cost. There may be an indication of the individual licensing costs, but we need to know how much is done to get any sense of the overall cost to industry.
I will come on to that in due course. Briefly, I reassure the hon. Gentleman, while I am on the subject, that we carried out extensive consultation and work with industry before bringing in these fees; we discussed a great deal with the trade and had a formal consultation throughout 2020. The British Society of Plant Breeders and the Agricultural Industries Confederation, which he mentioned, were both fully involved with this.
Information on fees was published on gov.uk and the plant health portal in December last year, and DEFRA emailed all businesses that we had contact details for through our arm’s-length body, the Animal and Plant Health Agency. That was followed up in March this year with a more detailed breakdown of the new fees, which was also added to the portal.
On the impact assessment, the answer is simply that the result of the European Union (Withdrawal) Act 2019 was of course that we left the single market, and the amendments in the draft instruments reflect that change. They arose as a direct consequence of the terms of the 2019 Act and do not in themselves reflect any change in plant health policy. We have therefore not felt it necessary to provide an impact assessment formally. However, we carried extensive consultation with industry, as I think was proper, during the course of last year to prepare for the draft instruments.
Physical inspections of high-priority plants and plant products will move from places of destination to border control posts from 1 January next year. Physical inspections of lower risk plants and plant products will start from March next year. We are doing and have done a great deal of work to get ready for January 2022. We will identify any ports or authorities with residual concerns and ensure that any response is pragmatic, tested and can be operationalised. On the hon. Gentleman’s concerns about biosecurity, we acknowledge the difficulties facing those who export regulated goods to the EU or move them to NI, and we will continue to engage with the European Commission to ensure that we develop helpful, practical arrangements that take into account biosecurity to contain the threat.
As I described, the draft instruments make necessary amendments to our fees and charging regime and ensure that trade between England and NI is not subject to additional costs. I therefore commend both instruments to the Committee.
Question put and agreed to.
DRAFT PLANT HEALTH ETC. (MISCELLANEOUS FEES) (AMENDMENT) (ENGLAND) REGULATIONS 2021
That the Committee has considered the draft Plant Health etc. (Miscellaneous Fees) (Amendment) (England) Regulations 2021.