Considered in Grand Committee
My Lords, this instrument makes amendments to plant health fees established in the Plant Health etc. (Fees) (England) Regulations 2018 to ensure that there is no underrecovery or overrecovery of costs.
First, it ensures that the fees charged for plant health checks on regulated commodities imported into England from all third countries reflect the frequencies of those checks established under the new risk-targeted inspection scheme set out in the Official Controls (Plant Health) (Frequency of Checks) Regulations 2022, which will be laid in Parliament on 30 June and apply from July 2022. This approach to fees does not apply to a new flat rate fee, which this instrument also introduces and which I will discuss shortly.
It is our responsibility to protect biosecurity across plant and animal health and the wider ecosystem. To that end, plant health checks, encompassing documentary, identity and physical checks, are carried out on certain regulated consignments imported into England from third countries that may carry pests or diseases that could pose a risk to our biosecurity.
Currently, the highest-risk commodities are subject to 100% plant health checks. The level of identity and physical checks on other commodities is based on risk. The new risk-targeted inspection scheme will provide a risk-based method to determine the frequency of plant health checks, focusing specifically on risks to GB biosecurity. This scheme will apply equally to certain regulated imports from non-EU countries and from EU member states, Switzerland and Liechtenstein.
It is UK government policy to charge for many publicly provided goods and services. The standard approach is to set fees to recover the full costs of service delivery. This relieves the general taxpayer of costs so that they are borne by users who benefit from a service. This allows for a more equitable distribution of public resources and enables lower public expenditure and borrowing.
Charging for plant health services is consistent with the principle that businesses using these services should bear the costs of any measures to prevent harm that businesses might otherwise cause by their actions or non-actions, since most serious plant pests and diseases that arrive and spread in this country do so via commercial trade in plants and plant produce.
In line with the standard approach that the full cost of service delivery be recovered from businesses using these services, fees for physical and identity checks will reflect the frequencies established under the Official Controls (Plant Health) (Frequency of Checks) Regulations 2022. For commodities subject to reduced levels of physical and identity checks, a proportionally reduced fee is applied.
This statutory instrument applies to England only. The Scottish and Welsh Governments are following the same approach in terms of applying fees to recover the full costs of their respective inspections. The Scottish and Welsh Governments laid corresponding legislation on 20 May and 21 June respectively.
Secondly, this instrument provides for a flat rate fee on certain plants for plants imported to England from all third countries. The new risk-targeted inspection regime will see plants intended for final users subjected to lower frequencies of checks, compared with 100% frequencies for plants not intended for final users. This flat rate fee aims to prevent plants that have completed their production stage in a third country and are ready to be sold to consumers after import benefiting from a cost advantage over plants imported to complete their production in Great Britain, while maintaining full cost recovery. The policy for a flat rate fee was proposed following stakeholder concerns. The Welsh Government have laid a similar piece of legislation to implement the flat rate fee.
We have worked closely with industry bodies, including the Horticultural Trades Association and the National Farmers’ Union, on developing our approach to the flat rate fee. Following a consultation, it was decided that a new flat rate fee should be applied to plants for planting and cuttings. After feedback that a switch to a flat rate fee would significantly increase fees for importing bulbs and seeds for the final user, we have restricted the flat rate fee to commodities where there is a clear benefit to trade. This excludes bulbs and seeds from the proposed flat rate fee.
Thirdly, this instrument extends an exemption from the payment of fees for pre-export and export certification services where goods are moving from England to a business or private individual in Northern Ireland. This will continue to enable trade between England and Northern Ireland in line with the Government’s movement assistance scheme. The Welsh and Scottish Governments are extending these exemptions in a similar fashion.
Finally, an error is corrected to reinstate in the fees regulations a provision for fees for samples taken on imports, which was omitted by the Plant Health etc. (Fees) (England) (Amendment) Regulations 2021.
This instrument is necessary because it ensures that there is no over-recovery of fees charged for plant health checks on commodities imported from third countries and maintains the full cost recovery of plant health services. If this instrument is not made, it would lead to over-recovery of fees from businesses, which would mean that proposals agreed with stakeholders on a flat rate fee for certain categories of plants would not be implemented. I beg to move.
My Lords, I thank my noble friend for introducing the regulations before us. I broadly welcome them, but I have a number of questions.
Paragraph 12.1 of the Explanatory Memorandum states:
“The impact on business … is that these changes are estimated to save businesses c. £1.2m per annum due to lower levels of checks and subsequent impact on fees.”
Obviously, a lower level of fees will be pleasing for the industry, but I had not grasped that we are introducing a lower level of checks through this instrument.
One of the difficulties of this instrument, which my noble friend just introduced, was also set out in the Secondary Legislation Scrutiny Committee’s fifth report. As my noble friend stated at the outset, there will be a second statutory instrument at the end of June that will set out the regime. Why has the way in which the fees have been structured been separated from the regime? Why have we not had an opportunity to consider them both together? I would have thought that the regime was probably of most interest. When might we expect to see that statutory instrument, as today is already 28 June?
Am I right to assume that paragraph 28 talks about the inspection fees being corrected, as they are being reinstated, when samples of imported consignments are taken for lab testing to confirm the presence of certain plant pests? Can my noble friend elaborate on whether that is done on an ad hoc basis or responding to intelligence? Does it include such laboratories as FERA, which I had the honour to represent in North Yorkshire for the last five years I was in the other place?
Also, is this one of the instruments that appears on the famous dashboard that we heard about last week? Is it one of the 570 statutory instruments that is retained EU law or is it a stand-alone instrument? Will we come back to look at this in a different context? I welcome the opportunity to debate and approve the regulations this afternoon.
My Lords, I thank the Minister for his introduction and for the helpful briefing that he organised beforehand.
The Explanatory Memorandum makes it clear that the purpose of the regulations is to help reduce biosecurity risk and to protect the environment from the spread of harmful pests and diseases. Obviously, these are objectives that we can all aspire to, but I would like to explore in more detail whether the proposed changes will achieve that result.
The new fees structure set out in this SI is based on a new risk-targeted inspections scheme which is set out in a separate SI, the Official Controls (Plant Health) (Frequency of Checks) Regulations, which this SI says will apply from July 2022, and to which the Minister referred as well. However, that SI has not been published yet. When I queried this with the department, I was told that it would be published on 30 June, which happens to be a couple of days after this debate. The noble Baroness, Lady McIntosh, also raised this point. Where is the parliamentary scrutiny in this process? We are being asked to agree the fees without seeing the risk-based scheme in the first place.
The basis of the proposed changes was set out in a government consultation. In the Government’s response to the consultation, dated 31 March 2022, they concluded that imposing full checks on all categories of plants needed to be balanced with the impact on regulators and trade. In effect, it appears that this is a watering down of our biosecurity risk regime at a time when the threat of importing new plants and diseases with new and emerging pathogens is increasing.
I think it is fair to say that this is not a very reassuring SI in terms of the impact on biosecurity, and that the proposed changes were not greeted with unanimous support during the consultation. For example, the Government’s response to the consultation flags up that concerns were raised about the ability of the plant health risk group to respond quickly to new outbreaks. Obviously, there are different sorts of outbreak; some can be predictable, as can some disease threats, but some occur unusually and out of the blue. Is the plant health risk group really in a position to be able to judge and assess that risk, and to measure the right plants that are coming across our borders? There was a feeling that the inspection methods and technology applications were out of date and that we needed to modernise them. Concerns were also raised about the need for more transparency on the interception of pests and diseases and that, if a new pest or disease had been identified on UK shores, it needed to be shared more immediately.
These are all real challenges that Parliament has not yet had the chance to discuss, so I hope that the Minister can clarify why we have had such limited opportunity for parliamentary scrutiny on a very important issue that we have debated on a number of occasions in the past. Quite rightly, everyone has said that there is an acute need to take biosecurity more seriously.
Returning to this SI, first, it acknowledges that some commodities will be subject to reduced levels of physical and identity checks, leading to a lower fee being applied. However, nowhere does it really say that those at higher risk levels will have to pay a higher fee. I am interested to know how that will work in terms of our biosecurity protection.
Secondly, the SI sets out fees for checks on high-priority commodities from the EU and/or commodities from non-EU countries. It says that the full costs of service delivery will be recovered from businesses using these services, as the Minister said in his introduction. On the practicalities of this, do Defra and the Forestry Commission, for example, have a dedicated fund for paying the staff who carry out the plant health checks? Can we ensure that this is cost neutral on that basis? Does it pay for the inspectors at the ports and entry points, as well as the laboratory staff checking for these new invasive pests and diseases? What numbers of staff are covered by the payments? Are we confident that staffing levels are at full complement to provide this new risk-based service? I think I am right that it was not necessary to carry out these checks on EU plant imports when we were part of the EU, so is this an additional charge on imported plants which will be passed on to the consumer?
Thirdly, the fees set out in Schedule 1 show a very wide disparity. For example, it will cost £1.01 to physically check branches with foliage imported from the EU, compared with £156.69 to physically check seed potatoes from some third countries. Can the Minister explain why there is such a big difference in inspection costs?
The SI also provides for a temporary flat rate fee on imports intended for final users from the EU, as the Minister explained. The Explanatory Memorandum says that this is to prevent plants finished in the EU having
“a cost advantage over plants imported for finishing in Great Britain.”
It goes on to say that Defra has decided to restrict
“the flat rate … to … goods where there is a clear benefit to trade”.
Who makes the judgment on this “clear benefit to trade”? How long is the temporary flat rate fee intended to last? I look forward to the Minister’s response.
I am grateful to both noble Baronesses for their points. To continue to protect plant biosecurity while facilitating the trade and movement of plants and plant material, it is essential that consignments that could pose a risk be subject to risk-based inspections before entering Great Britain. As I described, this instrument will maintain the alignment of plant health inspection fees with UK government policy to recover the full costs of official checks to manage risks arising from commercial activity.
I will respond in a rather random way to both questioners—I hope the Committee will forgive me. First, my noble friend Lady McIntosh and the noble Baroness, Lady Jones, asked why the two SIs are being dealt with separately and why Parliament has not been given a chance to debate measures in the other SI before deciding on this one. The Official Controls (Plant Health) (Frequency of Checks) Regulations 2022 set out the methods used to calculate the frequencies on which the fees in this instrument are based. Those methods and the resulting frequencies of checks have been published via consultation.
Both SIs are scheduled to come into force on 22 July and require scheduling to ensure that they do so in an aligned fashion. The difference in scheduling of these SIs is due to the different type of parliamentary procedure that they should follow, determined by their parent Acts. The Official Controls (Plant Health) (Frequency of Checks) Regulations 2022 will be open to full parliamentary scrutiny, as per the negative procedure, following being laid on 30 June.
I reassure both noble Baronesses that we have raised the standards of biosecurity in this country since leaving the EU. We have put resources behind it, employing 150 more inspectors, and we are approaching it in a unified way, with Border Force improving our training at ports of entry. As the Committee knows, we are rolling out our BCPs in the coming months to make sure that we stop more high-risk plants at the border, rather than at point of delivery.
The noble Baroness, Lady Jones, asked about some fees and checks being reduced significantly and whether that means that we are somehow weakening biosecurity as we will not be inspecting so intensively. The new inspection arrangements are based on international standards for categorising commodities according to risk. This will allow the Animal and Plant Health Agency to focus on those commodities representing the highest potential risk, including trees and other woody plants to be grown outdoors, while reducing input on those products representing a low risk due to their intended use, such as houseplants and many fruits and vegetables for consumption. In this way, we will be targeting resources in the most effective way to protect GB biosecurity while avoiding unnecessary burdens and costs on businesses.
The noble Baroness asked who makes this decision. Experts make the decision, not me. Our Chief Plant Health Officer, who I speak to regularly and have spoken to today, and I have a monthly biosecurity meeting where we look at risks, but the risk is managed by people who understand its evidence base. Those are the basic criteria around which we make this decision. The plant health risk group meets monthly and continuously monitors new threats, taking account of the results of import inspections and other relevant information, such as scientific reports and developments in other countries. Inspection frequencies are one tool by which risks can be mitigated, and they will be kept under frequent review. However, it is already the case that the highest-risk plants and products, including trees and woody plants, will be inspected more intensively, and that we will keep our import requirements under continuous review to determine where they need to be strengthened in response to new or altered risks, as was the case in the recent pine processionary moth incident.
Going back to my noble friend Lady McIntosh, certain goods are subject to routine sampling and testing, such as seeds. In other cases, goods are sampled when an inspector sees something concerning during an official import inspection. A sample is taken to confirm the presence or absence of a controlled pest.
A question was asked about the large difference between some fees. It is a good point to make. The risk associated with specific commodities is the basis on which the fees are set. The highest-risk commodities are subject to 100% documentary, identity and physical checks and 100% of associated fees. Lower-risk goods are subject to lower frequencies of checks and therefore proportionately lower fees. Defra and its agencies are not alone in doing this. There is a protocol across Whitehall about charging for these activities. That protocol is set by the Treasury. We work closely with it to make sure that our rules for cost recovery are in accordance with those laid by the Government.
I should say at this point that the Government announced on 28 April that the remaining import controls on goods from the EU, Liechtenstein and Switzerland, including plants and plant products, will no longer be introduced this year. Instead, traders will continue to move their goods from the EU to GB as they do now. The rest of the controls which were planned for introduction on 1 July are no longer going ahead. This means that import checks of high-priority plants and plant products will not be moving to border control posts yet. Deregulated and notifiable produce and cut flowers will not be subject to import checks from July. Low-risk Article 73 goods will no longer require prenotification but will be assessed on a risk basis.
I have received inspiration in reply to a question about who makes the decision. This is agreed on the basis of consultation with stakeholders, as we have done with this SI, which has the support of the industry. That is really important to us.
There was also a question about the flat-rate fee. The fee will be in place until a fees review has taken place. That will involve a full review of all plant health fees, including the methodologies used to determine them. It is a multi-year process involving close work with stakeholders.
The other point I would make is on the disparity in funding for foliage versus physical checks, which the noble Baroness rightly raised. There is a serious risk to seed potatoes, which is why they are charged at a higher cost. Foliage—an apple, for example—is a simple product to assess. We want to make sure that we are doing it on the basis of risk but also in accordance with cross-government rules on charging.
As I have outlined, these regulations ensure that full cost recovery of plant health services is maintained and that the costs of inspecting imported plant health-controlled material are met by those businesses using Defra’s import inspection services. With that—
I thank the Minister for his reply, which was, as ever, very comprehensive. I just want to go back to the original point about the missing SI that is not here. The Minister said that it and this SI originally came from two pieces of legislation, which is why they ended up here in a different order, but there must be somebody in Defra who can apply a bit of common sense to that ordering. I do not wish to make too much heavy weather of it but I hope that a lesson is learned from this. The department needs to ensure that, whatever the originating piece of legislation, instruments come before Parliament in a sensible order so that we can deal with concurrent bits of legislation at the same time. I leave that thought with the Minister.
That thought is well made and will be reflected on. We want to make sure that we are doing this properly. As the noble Baroness says, the instruments come from two separate pieces of legislation. Which measures are affirmative or negative, in what is brought before us in this place, is an enigma wrapped in a mystery to me. However, there are wiser minds than mine that understand these things. I accept the point: we try to apply common sense in everything we do and make it easy for noble Lords to hold the Government to account, but we are bound here by two distinct pieces of legislation. I am hopeful that they will go on to the statute book and improve the regime, and be in place by the middle of next month.