Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Rogan) (UUP)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019
(5 years, 1 month ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019.
Relevant document: 19th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, these regulations group elements of six policy regimes: natural mineral waters, spirit drinks, food labelling, wines, genetically modified organisms and animal imports. The purpose of this statutory instrument is to make purely technical or operability corrections to ensure that these regimes continue to function as intended. These corrections deal with removing or amending references to EU directives, removing or amending EU references, converting EU procedures to UK procedures and transferring EU functions to the UK.
This instrument allows the recognition of existing natural mineral waters from the EU, Iceland and Norway to continue on a transitional provision for at least six months, thereby maintaining the status quo immediately before exit day. This instrument also provides power to the Secretary of State to withdraw recognition of existing EU natural mineral waters after a period of notice if the EU was not to reciprocate and recognise UK natural mineral waters. Of course, we hope that the EU will recognise our mineral waters in good faith, as indeed we are doing.
With the exception of the Secretary of State’s powers over recognition of natural mineral waters, this instrument makes no further substantive changes. Without this provision, existing natural mineral waters which obtained recognition in or by a member state in the EEA would not have the right to be legally sold in England, irrespective of the Secretary of State’s powers to regulate this field. That would lead to restricted consumer choice in the UK, where one in three bottles of natural mineral water are of EU origin, and changes to product prices due to market forces. We have therefore taken a pragmatic view on that matter, and it is necessary that we do so.
The statutory instrument will also ensure that we have a fully functioning scheme for spirit drinks’ geographical indications, allowing us to register and amend applications. This is particularly important for Scotch whisky, which in 2018 had a record £4.7 billion-worth of exports. Although these exports would not directly be put in jeopardy without this SI, the industry would lose the ability to amend the Scotch whisky technical file to better reflect industry practice. The technical file is the document which provides the technical specifications for products using the Scotch whisky GI name: for example, production process, geographical area, specific labelling rules and so forth. This SI amends the applicable regulation to transfer functions from the European Commission to the Secretary of State.
On food labelling, this SI transfers a series of legislative functions which are currently conferred upon the European Commission so that they will instead be exercisable here in the UK. Transferring the functions means that we can make important changes concerning how certain pieces of information can be presented to the consumer. These powers currently sit with the EU Commission and ensure that we would not require new primary legislation to, for example, update the list of allergens that must be labelled on prepacked food or change the way that nutritional values are presented.
The SI also transfers the power to make rules for the production processes used to make aromatised wines, as well as rules on methods of analysis and administrative and physical checks, and transfers powers on wine relating to GI applications from the EU to the Secretary of State. It allows us to update laws in relation to the production and analysis arrangements for aromatised wine by means of regulations. It will also enable us to consider applications for new wine GIs and deal with applications to amend and cancel wine GIs on the UK wines GI register. Without doing so, key aspects of our wine quality policy would become inoperative, which would put us in breach of the WTO provisions. It also rolls over the framework for how producers protect geographical indications for aromatised wines, as well as the mechanisms to control the production and use of those geographical indications.
For genetically modified organisms, the SI makes purely technical changes to keep legislation operable on exit. I emphasise that there are no policy changes. It makes operability changes to transfer existing powers from the EU to the Secretary of State, thereby allowing the Secretary of State to develop technical statutory guidance on sampling and testing for the presence of GMOs, to amend the threshold above which products must comply with traceability and labelling requirements, and to apply unique identifying codes to GMOs. This will ensure that we can continue to enforce the rigorous rules governing genetically modified organisms.
Finally, this SI amends animal health provisions. It makes operable provisions relating to the import of cattle semen, pig semen and horse semen, ova and embryos. These amendments are purely technical, and preserve the current regime for imports and for protecting the UK’s biosecurity. The SI also makes minor operability amendments to two other animal health provisions, one laying down a health certificate used to ensure the health status of certain imports of live animals and products of animal origin, and the other making provision for the appropriate UK authority to publish approved lists of border inspection posts relating to the movement of animals and animal products. In both cases, the amendments are minor and technical and do not introduce any new policy.
Defra has consulted the devolved Administrations on the amendments in this instrument and they have consented to its coming into force. The instrument concerns changes for the United Kingdom except as regards natural mineral waters—those apply only to England—and decisions on GMOs, which are a devolved matter for Wales, Scotland, and Northern Ireland. As the natural mineral waters amendments apply only to England, each devolved Administration would have to provide their own equivalent amendments to their respective natural mineral waters regulations. We expect the devolved Administrations to mirror the same policy position, but they have yet to lay their respective provisions in legislation.
Amendments made to Regulation (EC) No. 1830/2003 on the traceability and labelling of genetically modified organisms will apply to the UK. They respect that decisions on GMOs are a devolved matter.
The natural mineral water policy decisions were subject to a public consultation, which ran from 16 October to 13 November last year. Defra engaged all major stakeholders in the process throughout 2018, from individual companies to industry bodies. We have also written to the main stakeholders to explain the implications of the instrument.
These measures will ensure that the policy regimes for natural mineral waters, spirit drinks, food labelling, wine, aromatised wine, GMOs and animal imports remain able to operate. With the exception of natural mineral waters, where we have consulted extensively, this instrument makes technical or operability corrections ensuring that these regimes continue to function as intended. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome the regulations, and given my heritage—born in Edinburgh—find particularly pleasing those concerning Scotch whisky exports, which obviously boost trade for the whole country.
From my Question earlier this week, the Minister will be aware of my interest in traceability and labelling. Unfortunately, we did not have time to explore it then. I am grateful to him for setting out the thrust of the statutory instrument. He went to some length to explain that this instrument is technical in nature and makes no public policy changes, but he will be aware of the fact that the 19th report of Sub-Committee B of the Secondary Legislation Scrutiny Committee states very clearly that the regulations give rise to issues of public policy likely to be of interest to the House. Therefore I am grateful that we are having the opportunity to debate them today.
North Yorkshire is still smarting from the fact that Shepherds Purse Cheeses used to produce a very popular cheese called Yorkshire Feta, which, not being produced in Greece, fell foul of the GI, and so for a time was called Yorkshire Fettle. To my embarrassment, I am unsure how it is marketed now.
Can the Minister provide an assurance that we will continue to follow the Cocoa and Chocolate Products (England) Regulations 2003? I do not necessarily blame the Government for the volatility of the pound, but we have seen changes to the pound since the result of the referendum was known, and, over the last two weeks, increasingly volatility. This has huge implications for cocoa and chocolate products. The Minister will be aware, for example—without naming a producer, because other products are available—that we tend to introduce milk chocolate here with a lower cocoa content and a higher oil vegetable fat content. I am seeking an assurance that we will continue to be aligned with the European Union rules regarding cocoa and chocolate products, and in particular, their content, insofar as these regulations relate to that.
Baroness Byford (Con)
I thank the Minister for introducing the first of these amendments. I have two issues that I should like to follow up on. The first is about geographical indication. I see from the brief that the UK has some 86 product names already in being; it cites Scotch whisky, Welsh lamb and Cornish pasties. I would love to have had Stilton cheese and Melton Mowbray pork pies in there, coming as I do from the Leicestershire end. Can the Minister clarify that this will in no way restrict new products from becoming listed?
Secondly, I am grateful for what he said on the GMOs, and accept the importance of labelling. But again, looking to the future with the same rigour, I trust that new developments will not be precluded. Again, I should like some clarification, but I welcome this amendment.
Lord Trees (CB)
My Lords, I too thank the Minister for his characteristically clear explanation of this SI. I have just a few queries on which I should appreciate his assurance. First, under Part 4, Regulation (EC) No. 1830/2003 concerning genetically modified organisms, Article 4 refers to amending thresholds for release of GMOs into the environment.
Do the Government intend to alter thresholds? Under what circumstances might that be done? Who will ultimately decide what future thresholds will be? I certainly do not want to preclude novel developments; I agree with the noble Baroness, Lady Byford, on that.
Part 5 covers Commission decision 2009/821/EC, which refers to border inspection posts and TRACES, the Trade Control and Expert System, for notification of imports and so on. How many border inspection posts are there currently? Are there plans for any more? Can we be assured that the number is adequate to deal with any Brexit scenario?
Secondly, I understand that TRACES will be replaced by a British system. I believe it is called the Import of Products, Animals, Food and Feed System, with the natty acronym IPAFFS. When will that be operational? Will it be by 29 March?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I also thank the Minister for his introduction and for the time of his officials in the briefing. This SI was originally scheduled to be a negative instrument, but was upgraded to an affirmative instrument after Secondary Legislation Scrutiny Sub-Committee B had completed its sifting process. This was a wise decision, as some significant changes are covered in this SI—not least on natural mineral waters, but also on geographical indications and GMOs. It is all about environmental protection, food and intellectual property. The last, in particular, will have significant impacts in some areas of the UK.
As the Minister said, this is a transfer of functions and there will be mutual recognition between the UK and the EU from day one. However, unless I have misunderstood it, there will be a six-month transition period during which imported EU mineral waters will not be able to be labelled “mineral water” and recognised for sale in the UK. As the Minister said, these EU mineral waters represent approximately 30% of UK market sales. There will therefore be a gap in the market, which it is unlikely our own UK mineral water bottlers will be able to fill. Our own mineral waters are very specific to geographic areas—Highland Spring, Buxton and Glastonbury Chalice Well being three. My husband comes from Derbyshire, so my preference is for Buxton when I can get it. If the EU’s Volvic, Evian and Pellegrino mineral waters are not available, the UK consumer may find they are unable to buy an alternative as demand will outstrip the supply of our production.
At the end of the six-month transition period, an EU-based mineral water company can reapply for permission to import into the UK. It will be up to the Secretary of State to either withdraw or grant such permission. If I have understood it correctly, if any EU state recognises our UK mineral water, the Secretary of State cannot withdraw an EU water company’s permission. It will be up to his or her discretion. Is it likely that many EU mineral water companies may not bother to reapply? On the upside, if one of the EU countries recognises a UK-based mineral water, all 27 will have to do the same—so markets will be opened up. Likewise, if one of the devolved Administrations permits an EU mineral water company to import its products, the other three will also permit it to be imported.
I turn now to the question of geographical indication, or GIs, about which we have had some discussion. This is a wide classification including Scotch whisky, Irish whiskey, Cornish pasties, Wensleydale cheese and Camel Valley wines. These are extremely important to the economy of the areas that produce this fine food and drink. Paragraph 7.3 of the Explanatory Memorandum indicates that there will be no change to description and labelling. I look to the Minister to give reassurance that the status of iconic GIs will not be diminished but protected after we have left the EU.
The labelling of local produce is extremely important, especially to the farming community, where lamb and beef in particular command a high price if they come from certain breeds and areas of the country, such as salt-marsh Welsh lamb.
Food labelling is of particular interest to me as someone who reads all the labels of foods that contain more than one product. As a lifelong coeliac, I look out for wheat-based and gluten-containing products in everything. The current labelling system, whereby allergens are highlighted in bold, is extremely useful, as the allergens leap out at you and you do not have to read all the ingredients in depth. Often, there is a gluten-free, crossed-grain symbol on the front of the product; thus I can safely buy sausages from two well-known food retailers without having to refer to the small print on the back.
I am not alone in meticulously reading ingredient labels. I therefore ask the Minister to give his reassurance that there will be no watering down of the regulations once exit day has passed. As we all know, poor labelling has become a matter of life or death for some. A review of labelling will need to ensure more stringent regulations, not a watering down of existing ones.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for his introduction this afternoon and for the courtesy of meeting us beforehand. This SI covers a wide range of issues and has all the hallmarks of a hurried amalgamation of outstanding issues which have to be cleared before Brexit day. I hope that stakeholders and businesses with an interest in the content can find the relevant changes buried away in this SI, with its rather unenlightening title concerning intellectual property, which seems to cover a lot of sins that are not immediately obvious.
I also make the point that the amendments to Commission decision 2009/821/EC concerning border inspection posts, and those referring to health certificates, should have been dealt with as part of the earlier SI on the import and trade in animals and animal products. I am not sure why they have been tagged on here in this way.
Incidentally, on this subject, I am grateful to the Minister for writing a follow-up letter on the questions raised by my noble friend Lord Knight and others when we dealt with that more substantial SI a couple of weeks ago. I am aware the Government have today published technical information on imports between Northern Ireland and the Republic. However, in the case of animals crossing the border between Northern Ireland and the Republic—in other words, those being exported—the letter confirmed a rather alarming fact. Without a deal, all animals seeking to enter the EU—the Republic of Ireland—would have to do so via an EU border inspection post, with locations that are yet to be decided.
The Minister’s letter also confirmed that, while the Government continue to engage constructively with Ireland—as has been a common theme in debates on other SIs—there are in fact restrictions on the UK having bilateral discussions with EU member states. There is therefore only a limited amount of progress that can be made between the UK and the Republic of Ireland at this point. I do not want to dwell too much on this today as it is not the main subject of the SI, but it must be extremely unsatisfactory for farmers in Northern Ireland, who will face extreme restrictions on exporting to the south. I hope the Minister can provide reassurance to those farmers that urgent steps are being taken to make sure that the border inspection posts and all other means to ease exporting are put in place as soon as possible.
As the noble Baroness, Lady McIntosh, said, the SI before us was drawn to the special attention of the House by scrutiny Sub-Committee B. I agree with her: this raises important issues of public policy, particularly as it affects consumers’ rights and choice. I had not picked up the issue of chocolate but, now she has raised it, I too would like to know whether the price and availability of cocoa and chocolate will be affected—I certainly have great interest in the Minister’s answer.
As has been said, the SI sets out new regulations for accrediting natural mineral water. As the Explanatory Memorandum sets out, the amendments will maintain the existing recognition of mineral waters from the EU, Iceland and Norway, which would ensure market stability, continued trade and consumer choice. Given that we export and import mineral water to and from the EU, this is obviously a sensible provision, but the SI also seems to contain an open threat which I have not seen before in SIs dealing with traded goods. It says that if the Secretary of State finds that there is at least one UK mineral water that is not being recognised in any member state in the EU, then all accreditation for all EU mineral waters in the UK will cease, effectively forthwith. The effect of this would be that all EU mineral waters, including some very big brands that have been referred to, would not be able to be sold in the UK as natural mineral water. Is this negotiating tactic being adopted more widely? Is this the way we are going to do our future trade talks with the EU? Have the consequences been considered and discussed with UK mineral water exporters? I understand that they do not export as much as we import, but they would no doubt find that all their export opportunities to the EU would be cut off if we were to operate such a tit-for-tat approach. Is this a tactic with which they agree?
Has any consideration been given to the impact that this would have on consumer choice? We might all say that we should not import water, particularly not in plastic bottles, from the EU or anywhere else—the Minister has said before that London tap is a very fine brand and we should all drink that—but there is an issue about consumer choice. When we ask consumers, they all have their very strong preferences and preferred brands and it is important that we are clear about the consequences. Also, he said that this is a devolved issue. In fact, this provision is an England-only provision, so could we find that, for example, Evian water was available in Scotland and Wales but not in England? I think that he probably has an answer, but it is important that that is recorded so that we are clear on the legal position.
I turn to the protection of geographical indications of spirit drinks. The regulations transfer authority for registering geographical indication from the EU to the Secretary of State, as the Minister said. I think I am right in saying that there has been some sensitivity around these designations in the EU in the past. Certainly, the EU has been seen to be operating the rules in quite a stringent way, so it is not easy to get a geographical indication. That may be a good thing, but what type of objections to GI status would we be considering under the new regime? Will they be similarly stringent, in the way that the EU currently operates, or do we envisage relaxing the rules in some way? If we had different rules in the UK from those that would continue to be operated in the EU, could it have an effect on the export market of our drinks producers? If we were more relaxed about it and yet wanted to export Scotch whisky, could the EU say that, because we have not abided by the EU standards of GIs, we could no longer export to the EU?
There are obvious advantages to expanding our GIs, as the noble Baroness, Lady Bakewell, said—to celebrate regional and local provenance—and we all understand how advantageous that would be in many ways. What we do not want to do is to cut off our nose to spite our face and find that our exports are damaged in some way.
Lord Gardiner of Kimble
My Lords, I am most grateful for all the comments that have been made. I agree that they cover issues beyond the statutory instrument, which, as I said, enables regimes to be operable. The subject matters are very important. I can say immediately to my noble friend Lady McIntosh and the noble Baroness, Lady Jones of Whitchurch, that, yes, we will continue to follow the Cocoa and Chocolate Products (England) Regulations 2003. Of course, the whole proposal for beyond this afternoon’s debate is that we are not seeking, with these SIs coming through the withdrawal Act, to have any policy changes at all. We will continue with that.
On the question of geographical indications, on which a number of points were made, I entirely agree with my noble friend Lady Byford that, perhaps of the 86, Stilton was definitely most worthy of comment. However, I think that all of us, and beyond, recognise that we have some extraordinarily wonderful produce from all parts of the United Kingdom. We should celebrate them. I assure your Lordships that the GI schemes that will come into force in the UK on the day that we leave the EU will guarantee that UK GIs will remain fully protected in the UK. There is absolutely no question that suddenly these extraordinarily important products would have to share their centuries-old heritage with others.
The forthcoming GI legislation will also ensure that the UK continues to comply with these obligations as a member of the World Trade Organization, including under the TRIPS agreement on intellectual property. That is vital in empowering the UK to strike new trade deals with other countries, a number of which are due to come into force on exit day. Yes, we wish to cherish the GIs that we have, but we also see every merit—I am sure that this is the case around the world—in ensuring that there is scope for new produce to be a celebration of wherever it comes, as in this country.
A number of points were raised on GMOs. Although this is about operability, a number of your Lordships raised the issue more generally. An important point was made about the ability to make changes to allow the UK to keep pace with technological advances and labelling requirements in the international arena. It is important that we are in a position, through this SI and beyond, to ensure that we can attend to any necessary changes. The devolved Administrations may make their own amendments or, as we have often seen with these SIs—I think that this will continue—the Secretary of State may do so on DAs’ behalf with their agreement.
The noble Baroness, Lady Jones of Whitchurch, asked about expertise in this area, as did the noble Lord, Lord Trees, my noble friend Lady Byford and the noble Baroness, Lady Bakewell. The current situation is that the European Food Safety Authority issues an opinion on an application. For the UK, the EFSA opinion is considered by the Advisory Committee on Releases to the Environment. ACRE is a statutory body of experts providing independent scientific advice to UK Ministers on potential risk to the environment caused by any GMO.
To emphasise the importance of the scientists involved, I can report that ACRE comprises nine independent scientists with expertise in a range of disciplines, including ecology, microbiology, entomology, soil biology and biochemistry, plant pathology, genetics and plant biochemistry, medical microbiology and human infection, molecular biology, genomics and systems biology and synthetic biology. The Food Standards Agency considers the application in terms of safety as food and feed. ACRE’s advice informs the UK’s vote from the environmental perspective. That is how it has been, with that statutory body of experts.
Going forward, EFSA’s opinions are publicly available, so we will continue to have access to them, and ACRE will continue to advise the UK Government on the environmental aspects of applications made for, for example, any GM crop. The final decision will now be made, as I say, in the United Kingdom, but I emphasise that the Government place the greatest importance on environmental protection, all of it based on independent scientific expertise of the range that I outlined—I am sorry that it took a little time, but I wanted your Lordships to know that the range of expertise covers almost every area that could be interconnected with these matters.
The noble Lord, Lord Trees, raised the question of inspections. On imports from the EU, we have decided that the risk will not change on day one. There may not be reciprocity but we will not change our arrangements, because we do not believe that there are any new risks to UK biosecurity. The only additional inspections that we will have for imports will apply to live animals, animal products and high-risk food and feed not of animal origin that originates from a third country and travels through the EU before arriving in the UK. We are considering options to minimise regulatory duplication for transits entering the UK via the EU, and I confirm that there will be no change to the level of expertise required at UK BIPs. We are conscious of the flow of trade, but we need to base all our judgments on biosecurity risk as well. The Chief Veterinary Office, who constantly advises me and the Government on such matters, is absolutely clear that there is no risk.
The noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Trees, raised a number of other points. I absolutely understand the sensitivities of the Northern Ireland issue. I emphasise that we remain focused on securing a deal that will guarantee no hard border. We have always been clear that the unique social, political and economic circumstances of Northern Ireland must be reflected in any arrangements that could apply in a no-deal scenario. In the event of no deal, we will do everything possible to avoid a hard border between the north and the Republic and to uphold the Good Friday agreement. Therefore, today we confirm a unilateral approach to checks, processes and tariffs. That approach will of course be temporary, but if there is no deal we will not introduce any new checks or controls on goods crossing from Ireland to Northern Ireland, including any new customs declarations for goods.
I obviously hope very much that the same will be reflected by the EU and the Republic but, as I said during Questions earlier this week, a deal involves two parties. In making that pragmatic decision, we have behaved correctly. We have been told that there will not be reciprocity on natural mineral water, but we took the view that we would continue to accept it from the EU. Yes, that recognises consumer choice but it is important to recognise our pragmatic approach. There is absolutely no intention to see some trade war or dispute emerge. We are clear that the Secretary of State has the ability to withdraw recognition but, in practical terms, with this SI and beyond we have seen a collaborative approach between all home countries. That is the point rightly raised by the noble Baroness, Lady Jones of Whitchurch. After the guaranteed first six months of rolled-over recognition, all the home countries would need to agree—I hope that it will not be the case, but this is the provision—that there might be a time to give notice, as stated in the instrument, and how long that notice would be. Again, I say that the UK has been pragmatic and certainly does not seek anything other than a meaningful and strong relationship in this case, the drinking of natural mineral water. I absolutely endorse what the noble Baroness said: I find it curious how much water we import. Think of the imported water miles, when we have Buxton, Highland Spring and Welsh water—
Lord Gardiner of Kimble
And Harrogate Spring Water; I thank my noble friend. I do not say this to encourage a feeling that I am against EU produce, but I think that the British Government have taken a very pragmatic approach to an issue that I very much hope does not transpire and that we can find satisfactory arrangements.
On the points raised by the noble Baroness, Lady Bakewell, on trade, I very much hope that EU companies would consider applying, if that were to be the case. The Government support consumer choice; that is very important. I am mindful, however, of what I have said about London tap water and other wonderful waters from all parts of the United Kingdom. Looking at the noble Lord, Lord Beith, I think of some very fine water from Northumbria. Around our country, we have these great examples. On the issue of labelling, as we know, following the death of Natasha, the Secretary of State embarked on a consultation so that people can know much more about what is in made-up food. A lot is happening, thank goodness, voluntarily, but we are having this consultation because we take very seriously the need for consumers to have all the information they desire and need.
The instrument does not amend food labelling rules—it is not intended to; it is about temporary fixes to operability. On the issue of Northern Ireland borders, only a limited range of goods will need to enter the UK, including Northern Ireland, through a border inspection post. The purpose is to protect human, animal and plant health after we have left. In a no-deal scenario, animals and animal products from countries outside the EU would need to enter Northern Ireland through a UK border inspection post, as is the case now. We will always keep our biosecurity analysed for risk.
Clearly, we are also committed as a Government to continue discussions with the Commission and the Irish Government to jointly agree long-term measures to avoid a hard border, which we strongly desire to avoid, and to limit the impact on life on the island of Ireland, which is crucial.
There may be other key points. The noble Lord, Lord Trees, asked about BIP capacity. It is considered sufficient. There are 25 UK BIPS. The estimate is for an extra 8,000 checks at UK BIPS. Port health authorities—I have quizzed this myself—have confirmed that they can meet that extra demand with existing food inspectors. Ports are developing more capacity to deal with it. I know that work is in progress at Calais, at Coquelles. A lot of work is going on.
I am looking for other key points that I should answer. On the issue of consultation on food labelling, raised by the noble Baroness, Lady Jones, Defra has raised stakeholder awareness of the food labelling technical notices of last September and of the amending of food labelling laws consultation, which I mentioned. Defra Ministers have engaged many times with key stakeholders externally to the consultation.
The instrument is about technical operability, with the exception of natural mineral waters. All these areas are technical, so on the precise instrument, the answer is that it was not necessary. However, I would like to say—and perhaps will write to noble Lords about this—that there are many instances of ongoing engagement on spirit and drinks, food labelling, GMOs, animal imports and working with importers. There has also been, to date, engagement with 300 stakeholders covering 50 events. Therefore, beyond these statutory instruments, a very considerable amount of consultation and working with others has been undertaken.
This may be the last point. The noble Baroness, Lady Jones, raised a question about separate food labelling across the devolved Administrations. Clearly we have to respect the devolved arrangements and food labelling is devolved, but it is fair to say that all four parts of the kingdom are working together very closely to ensure that there is no disruption to the UK internal market in the event of a no-deal scenario, or indeed any scenario. I think that there is a recognition among all parts of the kingdom that the internal market within the UK is tremendously important and that we should work collaboratively. The evidence I have from all the SIs, on these matters and beyond, is that sense and pragmatism is prevailing.
I will study Hansard again, because there may be some points in the many questions I have sought to answer that noble Lords would like more detailed answers on.
Baroness Jones of Whitchurch
I am sorry to interrupt the Minister as he gathers his final thoughts, but it was remiss of me, since we strayed into the science of GMOs, not to have declared as interest as the chair of Rothamsted Centre for Research and Enterprise, part of Rothamsted Research, which does research into GMOs.
Baroness McIntosh of Pickering
I am a member of the All-Party Group on whisky and food, do receive hospitality, and had dinner with a chocolate company, which was not concerned by what we have discussed today.
Lord Trees
Perhaps by writing I could have an answer to the question on when the replacement for TRACES might be operational.
Lord Gardiner of Kimble
The successor to TRACES, IPAFFS, was launched on private beta on 14 February, for organisations with the greatest need. It will be operable for all third-country exports from the day we leave. We intend a separate system for imports from the EU, with IPAS coming into play in the summer, I think. I would not like to give a precise date, but obviously we want this working effectively, and I will write to the noble Lord—
The Deputy Chairman of Committees (Lord Rogan) (UUP)
My Lords, there is a Division in the Chamber. The Committee will adjourn for 10 minutes.
Lord Gardiner of Kimble
My Lords, I commend these regulations to the Committee.
Detergents (Amendment) (EU Exit) Regulations 2019
Baroness Vere of Norbiton
That the Grand Committee do consider the Detergents (Amendment) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
Baroness Vere of Norbiton (Con)
My Lords, the primary aim of this instrument and the Detergents (Safeguarding) (Amendment) (EU Exit) Regulations 2019 is to amend EU and domestic legislation on detergents to enable their continued operability. Both instruments amend the same EU detergents regulation and, given the close links, they are grouped for this debate. We have worked with the devolved Administrations on these instruments. The legislation amended by the draft Detergents (Amendment) (EU Exit) Regulations is a reserved matter. The draft Detergents (Safeguarding) (Amendment) (EU Exit) Regulations relate to devolved matters and the devolved Administrations have consented to that SI. These instruments make many amendments and I will highlight some of them. Noble Lords will not be surprised to learn that they are technical in nature.
The Detergents (Amendment) (EU Exit) Regulations 2019 will ensure the continuation of standards and requirements in relation to the placing on the market of detergents, while ensuring a high degree of protection of the environment and human health. These draft regulations remedy deficiencies that will arise in the retained EU detergents regulation and the implementing domestic regulation, so as to ensure that manufacturers placing detergents and surfactants for detergents on the market in the UK continue to meet all the requirements of the detergents regulation, including composition—this includes strict limits on the permitted level of phosphorous content—labelling, data sheets and testing. Restrictions or bans are imposed on surfactants on grounds of biodegradability.
Looking at the first SI in more detail, Part 2 of the Detergents (Amendment) (EU Exit) Regulations ensures that the domestic Detergents Regulations 2010 can continue to be enforced by the relevant authorities and that penalties for non-compliance remain in place. Part 3 amends the EU detergents regulation to remedy deficiencies including corrections to references which would have no practical application to the UK after EU exit. For example, Regulations 5 and 6 remove references to the free movement of detergents in the EU internal market and to the Union customs territory in articles 1 and 2 of the EU regulation. The detergents regulation cross-refers to a number of pieces of EU legislation, including the regulations on biocidal products, cosmetic products and classification, labelling and packaging, the REACH regulations and the good laboratory practice directive. This instrument amends many of these cross-references, ensuring they are up to date so that they will continue to work on exit day.
This instrument also sets out how the returning EU powers, including those on decision-making currently exercised by the European Commission, will return to the UK after EU exit. As the competent authority for detergents in the UK the Secretary of State will exercise those powers, taking expert advice as appropriate. In practice, the work of the competent authority will effectively continue to be undertaken by the Health and Safety Executive under an agency agreement with Defra. The HSE’s existing capability and capacity can be built upon to take on UK regulatory authority responsibility. However, additional requirements from this SI for the competent authority are minimal.
Relevant functions to be transferred to the Secretary of State include the power to consider granting a derogation for a product—regulations 8 and 9—and the power in regulation 10 to determine disputes about testing methods for a product. The derogation provision has been used only very rarely at EU level. In the case of disputes about testing methods, a manufacturer may appeal a decision by the Secretary of State to a court.
Member states are currently required to notify to the Commission the list of approved laboratories that are authorised to carry out the tests required by the regulation. Through regulation 11, provision is made so that tests required by this regulation may be carried out by approved laboratories and the Secretary of State must publish that list. In practice, the HSE will publish the list.
Regulation 12 amends Article 9 on the information to be provided by manufacturers. Article 9(3) requires that manufacturers placing detergent products on the market shall make available an ingredient data sheet and that member states may request that such a data sheet be made available to a specific public body to which the member state has assigned to the task of providing this information to medical personnel. This article is amended to specifically refer to the National Poisons Information Service or such other body to which the Secretary of State or the devolved Administrations may assign for this purpose. NPIS already undertakes this role across the UK.
The power of the Commission to adapt the annexes to the regulation in line with scientific and technical progress is transferred to the Secretary of State in regulation 16. The Secretary of State will be able to do so by making a statutory instrument.
I turn to the draft Detergents (Safeguarding) (Amendment) (EU Exit) Regulations 2019, which amends the safeguarding clause in article 15 of the detergents regulation. Currently, member states may take provisional measures in relation to those detergents which fully comply with the EU regulation but which nevertheless pose a risk to the safety of humans or animals or a risk to the environment. Member states intending to use the safeguard clause must immediately inform the Commission, documenting their reasons. Regulation 3 amends article 15 of the EU detergents regulation. The Secretary of State and the devolved Administrations —where the matter is devolved—will have the full powers currently held by the European Commission and member states to initiate urgent, temporary safeguarding action across the UK in relation to detergents. Although there was no statutory requirement to consult on this instrument, HSE officials have engaged with industry.
In March 2018, a round of one-to-one stakeholder meetings with trade associations was held in relation to chemicals legislation generally. The main TA with an interest in detergents and cleaning products is the UK Cleaning Products Industry Association, or UKCPI. No particular concerns were expressed at that time in relation to these detergents regulations.
The JCSI did not report any concerns with these instruments. The SLSC noted that,
“HSE’s responsibilities after EU exit will expand significantly as a result of these and other instruments; it will need to be resourced adequately to carry out its new functions”.
As I set out earlier, the Health and Safety Executive currently acts on behalf of the Secretary of State, who is the competent authority for detergents legislation, and any additional requirements from this SI are minimal.
The SLSC also asked Defra about the use of the safeguarding mechanism and whether the fact that the UK will no longer have access to the EU’s information-sharing systems will mean greater health or environmental risks. The department responded that while the UK would lose access to information sharing systems such as the EU’s rapid reporting and response system, or RAPEX, in practice the safeguarding mechanism was very rarely used—just twice since 2004—and the impact was therefore likely to be low. The UK will still have access to the publicly available information on RAPEX and to the new product safety database established by the Department for Business, Energy and Industrial Strategy. I beg to move.
Lord Addington (LD)
My Lords, I sympathise with Ministers who have to deal with so many similar- sounding regulations; when you pick them up and look at them you are not quite sure which one you are looking at—in this case there is a variation of one word between the two of them. When I came to look at them, I thought they sound reasonably sensible overall, but one or two things came out. The Minister has touched on them already, but I will ask her to expand a little.
The Minister said that this would be a minimal expansion for the Health and Safety Executive. What exactly does that mean in this context? Is it a large expansion or just occasional greater activity? We need to know whether the executive has that capacity and whether it can do this when it happens. The last sentence of the report of the Secondary Legislation Scrutiny Committee Sub-Committee B asks what will happen when it loses the EU’s reporting capacity and information exchange. The Government responded, “This happens only occasionally, so don’t worry”. You would expect, if the system is at all sensible, that anything to do with safeguarding will happen only very occasionally. If the system was so flawed that you needed to use it frequently, one would hope that you would change the entire system. We need to hear something about how we are going to do this. You are not regulating something that is happening all the time—this happens when something goes wrong. A very minor variation is coming in here. Ingredients which are normally used are normally safe; in this case something has gone wrong, or some threat happens. That is a genuine concern, because you are not dealing with the everyday.
I would like a little more information about how that is to work, and on why, for instance, the 90-day period was chosen as the length of time within which it is appropriate to take action. Can we have some more information on that just to put our minds at rest? It is nothing to do with the mechanical process, but about something that has gone wrong: therefore it has to be able to respond, and quickly, and only very occasionally—a gap of decades is quite possible here. Can we find out how that will work, and make sure that that capacity is there? At the moment, the statement, “It hasn’t happened very often so let’s not worry about it”, is worrying. It could be read in that way; perhaps that is too blunt a way of interpreting it, but I hope that we can have something to reassure us that this capacity is available. If it is never needed, that is great, but it should be there.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome the regulations and congratulate my noble friend on moving them. I echo the concern that was raised in the 18th report of the Secondary Legislation Scrutiny Committee Sub-Committee B: these echo my earlier remarks to the Minister, my noble friend Lord Henley, when he was talking about a similar statutory instrument a week or two ago, and I thank him for his letter. My noble friend Lord Gardiner was also kind enough to refer to comments about RASSF relating to food safety. I associate myself with comments from the Liberal Democrat Benches as well.
Baroness Jones of Whitchurch (Lab)
My Lords, first, I thank the Minister for her introduction and for arranging a very helpful briefing on this SI. We accept that these SIs are necessary to ensure the continued operability of the EU-related provisions post Brexit. However, we are keen to ensure that the transfer of powers to Ministers is not used as an excuse to weaken standards and processes. One way to ensure this is for the UK to keep pace with EU standards on this matter. These SIs also raise the recurring themes, which we have debated several times now, of the potential for significant environmental impacts and the need for effective environmental governance—I suspect that that will be a running theme today and on future SIs.
They also raise the recurring issues of resources: in this case for the HSE to carry out its new functions and for the scientific advice and guidance that will be necessary. Most importantly, we share the concern of the Secondary Legislation Scrutiny Committee that without access to the EU’s information-sharing systems there will be greater health or environmental risks. With this in mind, I have a few specific questions. First, as a general point, the instruments state that these provisions ensure that a high degree of protection for the environment and human and animal health can be maintained after Brexit. What does this mean in practice? Can the Minister guarantee that there will be the same level of protection that is offered now, given that some of the EU protections that have been available to us in the past will no longer be there?
In the additional information that Defra provided to the Secondary Legislation Scrutiny Committee, it was stated that in the event of a no-deal Brexit the UK would lose access to the EU’s information-sharing systems, such as the rapid reporting and response systems. If that is the case, is there any mechanism for the UK to be notified about unsafe products from the EU market that are already being developed there or already mirroring products that have already entered the UK market? Is there any other system for that notification to take place, or are we simply relying on the rapid reporting and response system? A lot of these projects will be used globally; therefore, reporting on any problems that occur will take place globally.
On the other side of the coin, how will EU member states and the European Commission be notified about unsafe products from the UK market which are not UK-specific but which have already entered the EU market? How do we intend to do that, when we do not have the formalised systems in place? Does the Minister accept the point which echoed around the Committee this afternoon, that if we do not have access to the EU’s information-sharing system, there is cause for concern that UK citizens will be less safe and less protected? What guarantees can we give that this will not be the case?
In addition, the instruments state that,
“biodegradability requirements will be transferred to the Secretary of State as the UK’s competent authority for detergents, and these functions will then be exercised by the Health and Safety Executive (HSE) after exit”.
I would like to probe biodegradability, because it is a matter that people value and hold dear. I want to be sure that, with the Minister having responsibility, biodegradability will not be downgraded as a consequence of other trade priorities and negotiations which are taking place. You might say it is the detergent version of chlorinated chicken. We want the trade deal, but if the price of the trade deal is that we lower our standards, can UK citizens be assured that our safety and protection level will not be downgraded?
The draft detergents amendment SI states that,
“there is an option for the HSE, acting as the competent authority for the Detergents Regulation under an Agency Agreement with the Secretary of State, to charge a fee for processing derogation applications for the use of industrial and institutional surfactants”.
What is the fee? How will the HSE enforce it? Will the fee be off-putting to businesses potentially wanting to trade in this country?
Several noble Lords referred to the report of the Secondary Legislation Scrutiny Committee on resources, which said that:
“HSE’s responsibilities after EU exit will expand significantly as a result of these and other instruments; it will need to be resourced adequately to carry out its new functions”.
That is very different from the Minister saying this afternoon that the additional requirements were minimal. Therefore, we need to find some way of bottoming this out. Is she saying that the Secondary Legislation Scrutiny Committee was wrong? It has obviously looked into this matter and says that it will need additional resources. It would be helpful if the Minister could clarify what the score is here. What additional funding has been provided to HSE to carry out these extra functions? How many extra staff does she envisage being hired to carry out these extra responsibilities?
The regulations also state that,
“the detergents Regulation cross-refers to a number of other pieces of EU legislation, including REACH Regulations”.
I know we are not going to debate this today but I want to put on record, in case there is any doubt, that we have serious concerns about the instrument relating to REACH regulations, and which we will deal with separately. Many of the concerns about REACH are also concerns that we have here about access to important information which the EU would normally have collated and shared with us, but which will no longer be available.
Paragraph 7.5 states that,
“the Secretary of State as the competent authority for detergents for the UK will exercise those powers, taking expert advice as appropriate”.
What does that mean about expert advice? Where will this advice come from? Is it just UK advice, or will the Secretary of State consult any other European agencies when formulating a policy on this? The issue of scientific and technical progress also comes up in relation to the technical annexes. Who will provide that scientific and technical progress when the update to the technical annexes takes place? How often is it envisaged that they will be updated? Who will be consulted about these updates before they are published?
I turn to the detergents safeguarding regulations. As has been said, the EM says:
“The safeguard clause may only be used on a case-by-case basis for a specific product, not for a class of product. The safeguard clause therefore cannot be used to introduce risk management measures of a general nature”.
Can the Minister confirm that that will indeed be done on a case-by-case basis and that there will not be any attempt to extend the use of this provision for a more general policy change? What safeguards do we have that it will be curtailed to a case-by-case basis?
Paragraph 2.5 of the Explanatory Memorandum states:
“Member States intending to use the safeguard clause must immediately inform the Commission and the other Member States, documenting the reasons for this decision”.
In that situation, will a devolved Administration who intend to initiate the safeguard have the same obligations to inform immediately all the devolved Administrations, the Secretary of State and the HSE, in the same way as member states currently do? What information sharing will there be within the UK to make sure that we are all aware of any safeguarding issues?
Paragraph 7.2 says:
“The Secretary of State and devolved administrations will be able to take urgent, temporary restrictive action in relation to a product through a safeguard clause”.
How will this process take place? How will this decision be made? Will there be consultation between Administrations? Will the HSE consult devolved Administrations? If Scotland decides to take action, does that mean that the decision will apply throughout the UK? It would be helpful if the Minister could say more about how that devolved responsibility will operate.
Finally on safeguarding, if there is a concern about a specific detergent, how will businesses be notified that their product is in some way being queried? If the products are already in the market, is there an arrangement for them to be recalled? What are the practicalities of detergents being identified as a risk to the health of humans or animals, and how will that be dealt with with the businesses concerned?
I have one last question, on the safeguarding measures not being imposed for more than 90 days. Why 90 days? If that product still poses a risk, can the measure be extended or rolled over, or do we have to revisit it from the start? What are the limitations on that 90 days? I look forward to the Minister’s response.
Baroness Vere of Norbiton
I thank all noble Lords for their contributions to the debate. It has been a measured debate and—thankfully—fairly on topic, which is always a relief. A number of noble Lords have raised some good questions, and I hope to be able to answer them. To the extent that I am not, I will certainly write.
However, I will address one issue straight up, which is about environmental protections post exit. The Government are very clear that we will not weaken environmental protections when we leave the EU. We will instead maintain, and even enhance, our already high environmental standards. The detergents SI will ensure the continuation of standards and requirements in relation to the placing on the market of detergents, while maintaining a high degree of protection for the environment and human health. I hope that as I go through the answers to the questions today, the Committee will feel this is indeed the case.
Lord Teverson (LD)
I am sorry to interrupt the Minister at this late stage but can I be clear about whether these detergents are subject to REACH regulations? Do they have to go through the REACH system as well? As she probably knows, for the majority of chemicals if more than 1 tonne is exported from or imported into the UK those chemicals are covered by REACH regulations, which lay down a large number of other provisions. Are those included or not? I am sorry if that is an unfair question. I do not need an immediate response.
Baroness Vere of Norbiton
It is a very interesting question. They are subject to the REACH regulations, which were mentioned by the noble Baroness, Lady Jones of Whitchurch. I note her concerns about those regulations. As I am sure she is aware, they will be debated in due course in your Lordships’ House and were already debated in the other place on 25 February. I have a little more information on that issue, but I want to put it into proper context so I will write to the noble Lord.
I return to biodegradability and whether it would be downgraded in future. Whether these detergents and surfactants hang around in the environment for a long time is a very important issue. It is clearly a bad thing because they play havoc with water tension and so on. The Government have set out a vision for a green Brexit, in which environmental standards will be not only maintained but enhanced. The biodegradability criteria in the detergents regulations are essential in avoiding these adverse impacts on the environment. We are obviously mindful that if these are not disposed of properly, they can cause foaming and degrade or assist the eutrophication of rivers, which I believe is not beneficial to organic life.
Trade agreements can cover a range of issues and although the UK will be able to negotiate its own trade deals in the event of no deal, focusing on growth areas for our economy, the UK Government continue to be committed to high environmental standards after EU exit and to maintaining a high degree of continuity with current climate goals, green policies and wider environmental targets. I reassure the noble Baroness that, as I mentioned earlier, any changes to the technical annexes will be done by statutory instrument, and will therefore come before your Lordships’ House. Those sorts of issues would be included within that.
A number of noble Lords touched on the resourcing of the HSE—I had fair wind that this might come up. This issue was noted by the SLSC, but I suspect that it probably got to the stage where it had seen the HSE a number of times and thought, “Hang on a minute, we probably want to do something”. For these instruments, the additional administrative requirement for the HSE is minimal. However, I will commit to trying to get an understanding across the piece about how many additional functions the HSE is being asked to take on, and confirm that it is satisfied with the resources it has. That is only fair, because this one is minimal. I completely understand that but the SLSC has made that point and it is worth following up on.
The issue of fees for the HSE is an interesting one. This is only for derogations, and there has been only one derogation across the EU. The fees for derogations are agreed; there was a consultation with the industry. I could go into great detail about these fees but they are designed to meet the costs of derogations; obviously, we do not expect those to happen very often. A derogation occurs where one is using a detergent for a specific purpose which does not fall within the regulations. It would be highly unlikely nowadays with the biodegradable detergents we have for them to be frequent at all.
I move on to the issue of experts. Noble Lords will be aware that the Health and Safety Executive is a world leader in the regulation of chemicals and will continue to be so following EU exit. It also has the necessary regulatory scientific and technical expertise in-house. However, The Government Chief Scientific Adviser’s Guidelines on the Use of Scientific and Engineering Advice in Policy Making of 2010 state that,
“advice from external sources should be sought whenever necessary”,
and we would of course do so. Sources of research and advice may include: the departments’ own experts and analysts; research and funding councils; expert advisory systems such as the Science Advisory Council and the scientific advisory committees, and research and non-departmental sources. We have a great tradition of science and research in this country, and I remain convinced that we would find the right group of experts for the right problem. As noble Lords will be aware these experts will be used to update the annexes, which will go through the usual process.
The noble Baroness, Lady Jones, touched on governance. We have been here a few times before—
Baroness Jones of Whitchurch
I was hoping the Minister would be able to update us.
Baroness Vere of Norbiton
I will not be able to accede to that wish today. I can go no further than we have been able to before with regard to the future of governance and the office for environmental protection, but I commit to the noble Baroness that we will update her as soon as we can.
Detergents (Safeguarding) (Amendment) (EU Exit) Regulations 2019
Baroness Vere of Norbiton
That the Grand Committee do consider the Detergents (Safeguarding) (Amendment) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
Organic Production and Control (Amendment) (EU Exit) Regulations 2019
Baroness Vere of Norbiton
That the Grand Committee do consider the Organic Production and Control (Amendment) (EU Exit) Regulations 2019.
Baroness Vere of Norbiton (Con)
My Lords, these instruments correct technical deficiencies in legislation relating to organic production to ensure operability on exit. The instruments introduce no new policy and preserve the current regime’s organic standards. The Government are strongly supportive of organic standards, many of which were developed in the UK and adopted by the EU. The UK has a world-recognised standard of food production and labelling which we wish to see maintained. We have grouped these instruments for discussion as they both relate to amendments to organic legislation.
Early indications from the sifting committees were that SIs laid as negative but with a connection to agriculture were being selected to be uplifted to affirmative. While the Organic Production and Control (Amendment) (EU Exit) Regulations 2019 were not specifically recommended for uplift by the sifting committees, we chose to voluntarily uplift this SI to reduce the risk of it running out of parliamentary time. The Organic Production (Control of Imports) (Amendment) (EU Exit) Regulations 2019 contain transfer of function provisions, and as such the affirmative procedure must apply.
These statutory instruments apply to the United Kingdom, and we have worked with the devolved Administrations on their development. The legislation amended by the Organic Production and Control (Amendment) (EU Exit) Regulations 2019 relates to devolved matters, and the devolved Administrations have consented to that SI. The Organic Production (Control of Imports) (Amendment) (EU Exit) Regulations 2019 are reserved. Officials have had very helpful discussions with their counterparts in the DAs, and we are working with them on all aspects of the organics regime to form an agreement on how we all work together going forward.
The Organic Production and Control (Amendment) (EU Exit) Regulations 2019 ensure that organic standards remain the same as now for organic operators within the UK by amending deficiencies in the retained EU legislation: for example, references to the UK as a member state. The certification and traceability of organic food and feed products will continue. This instrument sets out minor technical amendments and lays down a time-limited period during which the UK would not require additional border checks for organic products imported from the EU, the EEA and Switzerland.
The Organic Production (Control of Imports) (Amendment) (EU Exit) Regulations also amend deficiencies in the retained EU legislation but deal with reserved measures covering imports and trade in organic food, feed and vegetative propagating material or seeds for cultivation. The SI transfers powers from the Commission to the UK to recognise countries and control bodies that can operate for the purposes of export to the UK. It also sets out minor technical amendments and lays down a time limit for the recognition of organic products imported from the EU, the EEA and Switzerland.
The UK organics industry is currently regulated by EU law, which sets out standards for organic production. Regulations apply to the production of food, animal feed and livestock, including bees and farmed fish, and any food or feed products marketed as “organic”. They set out the requirements for organic production, processing, labelling and imports, as well as the inspection systems that must be in place to ensure the requirements are met. They stipulate that organic food must be inspected and certified within the scope of a tightly regulated framework and originate from businesses registered and approved by organic control bodies on the basis of a rigorous annual inspection. The regulations will now apply to imports at UK borders, rather than EU borders, and ensure the continued regulation and certification of organic products to the current standards applicable within the UK, and equivalent standards where these have been agreed with third countries.
In addition, to ensure we can maintain the status quo and allow UK organic importers to continue to access their goods and ingredients from Europe as now, we have added provisions which permit the UK, for a time-limited period until 31 December 2020, to recognise the EU, the EEA states and Switzerland as having an equivalent organic regulatory regime to the UK. During this period, the UK will also exempt the need for additional checks or paperwork for organic goods originating from these areas. This exemption does not apply to goods that are simply transiting through these territories. This will ensure the status quo remains immediately after exit.
These measures remain essential to ensure UK organic businesses can maintain their organic certification and thrive in this growing sector. These instruments will ensure operability and that the strict standards in place for organic production are maintained when we leave the EU.
Officials have engaged regularly with the United Kingdom organic certifiers group. Our decision to continue to recognise the EU, the EEA and Switzerland for a time-limited period has been welcomed by the group as providing certainty on imports for the immediate future. We continue to work closely with it on this and on the future implementation of the UK regulations. I beg to move.
Baroness Byford (Con)
My Lords, I thank my noble friend the Minister for introducing these two Motions. I am particularly pleased that there will be a smooth transfer into UK law. The organic sector is still considered a fairly small one, but a very important one. The UK sector brings in a good, healthy amount of money—£2.2 billion to the UK economy and exports worth some £200 million —so the continuation of this trade is hugely important. At this stage I declare my own family farming interest, but we are not organic. We produce very healthy, good food, but it is not purely organic.
The Explanatory Memorandum talks about there being some 6,000 operators. Many of those are small businesses. Those classified as “small” employ “up to 50 people”. That is actually quite a lot of people in an organic movement. I wondered what proportion of the smaller ones have, say, 10 or five employees. What went through my mind was: although this is not supposed to have any financial burdens, if you are a smaller business it obviously has greater implications for you and the organisation of what you have to do. I would be grateful for a response on that one. I am glad that, on the control of imports, it is clearly laid out. I smiled slightly when we had a 20-page list of individual categories, which shows how complex and varied the whole organic sector is.
I welcome the production and control amendment, because I hope it will give great certainty to organic producers. It takes up to three years to turn to become organic from having been, perhaps, commercial farmers. We have often said that farming is a long-term investment —clearly it is—but on the organic side it is more demanding, because there are certain things you can and cannot do during your term of transfer.
Baroness Byford
My Lords, returning to our discussions of these two instruments, I have just about covered everything that I wished to. I stressed the importance of the organic movement: we are now up to some 6,000 organic operators. That is worth a lot of money to farming and agriculture in the UK economy and, even more importantly, to the growth of our exports.
I am grateful for the smooth transition the Government have planned, and apart from my question on the definition of “small” and “very much smaller” businesses, I well realise that the Explanatory Memorandum indicates that there is no expected cost to them. However, I would be grateful to the Minister for clarification on that when she comes to respond.
Baroness Miller of Chilthorne Domer (LD)
My Lords, we warmly welcome these SIs, which are absolutely essential for the continuity of trade in organic products. We particularly welcome the fact that the Government recognise the voluntary uplift.
I declare an interest which makes me a little more passionate about the sector. I used to work for the Soil Association, albeit very many years ago. It was an interesting time to be there, as it was developing certification techniques with the EU. The sector has moved on a lot in the 25 years since.
By and large, the sector is very happy with these SIs, as are we; it did not have any concerns about them as they currently are. The sector is happy that they are being proposed and debated as a framework for certainty for organic producers and consumers.
As the noble Baroness, Lady Byford, said, it is a really vibrant market. The organics market in the UK is worth some £2.3 billion, of which 8% goes abroad, mainly to EU countries. The importance of the organic sector for the UK is that it has introduced consumers to many ideas about more sustainable agriculture. So apart from being worthy both in economic terms and as an employer, it has been a flagship, introducing ideas around sustainability, the importance of soil, issues around chemical inputs and so on. It really is a sector that deserves our full attention.
The Government have taken the necessary step to ensure the continuity of trade through this SI. If there is any concern, it is really that this is a period of certainty for only 21 months. As annexe 2 mentions, at the end of that period, things will become uncertain again. In farming, 21 months is as nothing. If you are trying to make investments or change your farming methods, or if you are in conversion, 21 months is an extremely short time. Both producers and UK certification bodies would like to move as soon as possible to a period of greater certainty; I hope that the department is working on that.
The question of how the regulation will be administered, controlled and, particularly, developed in the light of future changes and challenges is something that I hope the Minister can touch on in her reply. Undoubtedly, there will be challenges from developments within other organic regulations. It is a fairly fast-moving scene now, with different products being withdrawn or coming on to the market. Of course, if we start to enter into trade agreements with the US—heaven forbid, but it is possible—that will be a massive challenge. I hope the Minister can give us some certainty about how this is going to be developed.
For consumers, it is equally important that the certification is gold-plated. Organic products command a premium price, so it is essential that consumers, when paying that premium price, can absolutely rely on the origin processing methods of that produce. Otherwise, if any doubt enters that market, it would adversely affect all those who are engaged in genuine organic production.
It would be difficult this afternoon not to mention tariffs—I heard the Minister’s caveat, so I will mention it only briefly. That will be another massive pressure on producers. I gather that tariffs are about to be published or may have been published this afternoon. That is another huge pressure on producers that I hope we will have the chance to debate in your Lordships’ House in the very near future.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to the Minister for introducing these SIs this afternoon and for organising the helpful briefing beforehand. We accept that these SIs are necessary to maintain current standards regulating the UK’s growing organic sector. The continued availability of high-quality produce and sustainable food supplies, in which the organic sector plays a key role, is vital for our food industry and important for consumers. For example, the Soil Association reports that the UK organic sector grew by 5.8% in 2018, its eighth consecutive year of growth. As the EM makes clear, the industry is worth something like £2.2 billion to the UK economy. I very much take the point of the noble Baroness, Lady Byford, who quite rightly said that so many people in that sector work in small businesses and make a particular contribution to the economy in that regard. Obviously, it is important that their futures are protected.
The noble Baroness, Lady Miller, said she felt that the sector did not have any concerns about these SIs. I will come back to that, but the Minister will be aware that the industry is already reporting negative impacts caused by the ongoing uncertainty of Brexit. Confidence is being undermined and businesses are warning that the consecutive years of growth achieved by the UK organic sector could be at risk. Therefore, we are looking to this batch of organic-related SIs, and to what the Minister is able to say this afternoon, to reassure the market of continued access, which the sector deserves and requires.
With this in mind, I have some questions for the Minister, the first of which is on imports. The noble Baroness, Lady Miller, raised the issue of the 21-month deadline. Annexe 2 of the Explanatory Memorandum says:
“For a strictly time-limited period of 21 months we will exempt the need for additional checks or paperwork for organic goods being imported directly from the EU, the EEA states or Switzerland except those organic goods which do not originate from but are simply transiting through these territories”.
I would like to explore what that 21-month deadline means. Can the Minister give some clarity on that? Has that amount of time been chosen to line up with the transition period? If so, what would happen if the transition period was extended? Is it an absolute deadline whether there is a deal or no deal? Is it written in blood, so to speak? Perhaps she could clarify the status of that 21-month deadline so that we are all clear on that.
Secondly, on exports, as has been touched on, future export arrangements with the EU are a matter for future negotiations. But can the Minister give us an assurance that future access to the EU market for our strong UK organic exporters is indeed a priority for the Government? Can she explain why we are giving guarantees to organic imports while no such guarantees are in place for UK organic exports? There is an imbalance there, and perhaps the Minister can explain why that is the case.
The Government have given notice that, after 29 March, importers will no longer use the EU’s Trade Control and Expert System New Technology, or TRACES, to register consignments of organic produce but must use a manual UK organic import system while a digital system is being developed. Can the Minister give the Committee an update on the progress in building the UK’s own digital system? Will it be fully functional on exit day? What work is being done to ensure that UK industry and its international partners are aware and prepared for this change? What assurances can the Minister give that the temporary manual system, and eventually our own permanent IT system, will provide the same level of certainty over origin and movement of produce as we have at the moment?
Paragraph 12.3 of the Explanatory Memorandum, on control of imports, explains that there has not been an impact assessment but:
“There may be minimal familiarisation needed for businesses to set up to use the new import and export systems”.
Can the Minister say what “minimal” means in this instance? Is she assured that this rather minimal objective has been achieved, and will that give businesses the information and knowledge that they need to be able to operate under these new systems? In other words, is the Minister sure that the communication and training systems are in place, running fully and meeting their objectives?
On the ongoing issue of resources and expertise, annexe 2 to the Explanatory Memorandum on control of imports states:
“The UK will be able to accept applications from overseas control bodies to certify to the UK organic standards, and subsequently approve these bodies if the UK wishes”.
Currently, Defra has approved eight certification bodies: six in the UK and two in Ireland. Is any additional expertise or resource needed for the UK to consider and process other applications when we are basically on our own in this matter, rather than having the EU’s information scrutiny process to rely on as well? Are those eight certification bodies up to the job and resourced properly, and do we need other certification bodies?
On a small point, annexe 2 in both SIs explains that certain duties—in Articles 29 and 38 of the Council regulations—have been downgraded from “shall” to “may”. The notes explain that these duties have already been completed by the EU. Will the Minister provide more information on what these articles include and why the specific duties have been downgraded? What is the thinking behind that? If they have been fully completed by the EU, perhaps they are not needed at all and there should be no reference to “may”.
Baroness Vere of Norbiton
I thank all noble Lords for their contributions today and for giving up the time to meet me beforehand to share some of their thoughts about these SIs. I start by recognising the strength of feeling across the Committee today about the strength of the organic sector in the UK. This was touched upon by my noble friend Lady Byford, who noted that the sector is worth £2.2 billion. Our figures say £2.3 billion, but what is £100 million between friends? It is an incredibly important area of growth and we must make sure that it continues to be strong and a key sector in the future. She talked about the fact that many of these are smaller operators, often with five to 10 members of staff, if that, and they are a very important part of the UK organic regime. The control bodies certifying organic operators are on the ground and are in touch with these businesses. While they cannot coach these businesses, they can provide them with information—and that is precisely what they do. I reassure noble Lords that there are no expected costs relating to this SI for such producers.
I will come on to the minimal familiarisation slightly later, but really it is very small. Familiarisation is only for those involved in import and export; for the majority who are not involved in those areas, this SI will have no impact at all.
It is important to note that we envisage financial support for organic farmers. I look forward to working with my noble friend Lord Gardiner on the Agriculture Bill when it finally gets to your Lordships’ House; I am sure we will have some good debates on that one—but it is not with us just yet, so back to no-deal Defra SIs.
The noble Baroness, Lady Jones of Whitchurch, asked about the 21 months. I agree with her: I looked at it and wondered why on earth that particular date was chosen. It was chosen for a good reason. The current EU organic regulation is due to be replaced from 1 January 2021, so it was thought appropriate to limit the recognition of these products to 31 December 2020 as those dates are commensurate. That date also happens to be the end of the implementation period, but this is a no-deal SI, and there would be no implementation period. Obviously I cannot give clarity as to what will happen thereafter; that will be up to any number of factors. However, we already have a very good idea of what those new regulations will be in 2021. Over the 21-month period, the Government will look at those regulations and aim to give the sector as much clarity as soon as we can. We recognise that farming cycles are much longer than those in other industries.
On regulations being developed in the light of future changes, the UK has always been a leader in this sector and it is our intention that we will continue to be so. We have an opportunity to be at the forefront of developments; if we do not have a deal with the European Union, we can work as an independent sovereign state and make sure that we pull others with us as we increase organic standards. We will of course work very closely with those in the industry—without them there is no organic sector at all—to ensure that future changes work for the UK and for consumers.
The noble Baronesses, Lady Jones and Lady Miller, mentioned tariffs. The noble Baroness, Lady Miller, is quite right: there was an announcement on tariffs at 7 am; I listened to it as I was driving. I have not had the opportunity to go into that in great detail. I suggest she look at what was announced today; it concerned tariffs across all sorts of industrial sectors. Organic products are subject to the same tariffs regime as conventional non-organic products. There has been a bit of movement on tariffs, and the Government have tried to reach a balance between making sure that consumers and businesses are protected and reducing tariffs as much as we can within that framework. It is, however, very important to remember that this is a temporary tariff; the tariffs announced today will apply only for a 12-month period, during which we will undertake a full review such that we can adjust the tariffs going forward. If there is no deal, we will be talking about tariffs for a very long time—which will be fun.
I turn now to the issue of uncertainty. The noble Baroness, Lady Jones, is absolutely right. Within the powers we have, we have managed to create as much certainty around imports as we possibly can by providing this 21-month period, during which time the system will stay at is.
It is obviously not within our gift to tell the European Union exactly what to do for our exports. However, for UK products to be exported to the EU, organic control bodies will need to be authorised by the EU. There is no definite length of time that it would take for this process to happen. The Government are already in technical conversations with the EU about making sure that it happens as quickly as possible, so we are working hard on that. If there is no deal, this will obviously come to the fore. We recognise the concerns of the NFU and the Soil Association.
I will investigate the expedited process further—it is not something about which I have information—but we recognise the concerns that this is a consequence of Brexit, not of the SI before us. I am sure all noble Lords would agree that, in this case, it would be very good if we could get a deal to make sure that our exports continued in the smooth fashion that they would expect. However, the EU has equivalency arrangements with a number of non-EU countries. The UK is aiming to transition those over to mirror the current arrangements. Because our organic standards will be as high as the EU’s, we believe that it will be possible to transition them to improve the flow of exports to those nations.
I turn to the topic of choices; may I point out first that it is TRACES NT, not TRACES? TRACES NT is new technology for controlling the import of organic food and feed; TRACES is for controlling the import and export of live animals, so for the record they are different systems. Regarding assurances on the manual and subsequent digital import system which replaces TRACES NT, work has been carried out to establish the needs of all users for its electronic replacement. The interim manual system largely mirrors the system that was in place just 17 months—a year and a half—ago. Users who could use that manual system will be familiar with how this works, and we have carried out a trial to make sure that they are still able to use it. We have also refined the guidance for all users. We will communicate with and issue further guidance for the sector, including third parties involved in using this system.
Organic products en route from third countries or in transit to the UK before the UK leaves the EU will be accepted with an EU certificate of inspection. Products that leave a third country after the UK has left the EU will be required to have a UK certificate of inspection, rather than an EU one. Instructions on the introduction and use of the UK certificate will be issued shortly. This brings me to the point about minimal familiarisation, as mentioned by the noble Baroness. That process should be within recent institutional memory for many of the organisations that will need to use it.
An issue raised by the noble Baroness, Lady Miller, and I think by the noble Baroness, Lady Jones, was about the UK taking power to accept applications from third-country control bodies and to permit them to operate in the UK. They asked who would oversee these control bodies. The Commission currently has the power to recognise third countries as equivalent to the EU, and to recognise control bodies as able to operate in third countries for the purposes of the input of organic products to the EU. This power will of course be transferred to the Secretary of State. Officials are in the process of considering how they will process and consider any such application but, before the UK accepts any application from third countries or control bodies, rigorous checks will be carried out to ensure that the current high organic standards in the UK are maintained.
Concerning the additional resource challenges, the UK is taking back control of organic regulations and the powers currently held by the EU. UK organic control bodies should continue doing what they do to a world-class level. The Government are working closely with the organic control bodies to ensure that any additional burden that falls on the organic sector is properly managed so that there is no fall in standards or public confidence as a result.
Turning to some final questions, what are the consequences of downgrading the references from “shall” to “may”? When EU Regulation (EC) No. 834/ 2007 was originally drafted, a number of references referred to the Commission needing to create specific rules. These were subsequently laid down in implementing EU Regulation (EC) No. 889/2008 and EU Regulation (EC) No. 1235/2008. Therefore, there is no longer a need for the UK SI to require rules to be made in respect of these matters—they have already been made. However, these instruments retain the power for further detailed rules to be made if necessary. I might write on that one. I do have an example here, but I think it would be more helpful if I put that in a letter, so that all noble Lords can understand the difference between “shall” and “may” in that circumstance.
I wish to assure the noble Baroness, Lady Jones, about the consultation. Concerns were raised about many issues, but it was the view of the group that there were not significant concerns about this SI. The biggest concern obviously is to maintain frictionless trade with the EU and we will do everything we can to address that.
Finally, there was a question about the grace period. Labelling is not covered in this SI, so I do not have anything further on that. However, I assure the noble Baroness that organic products that are already on the market in the EU before 30 March will be able to be sold and go through the system, but any exported after 29 March will not be able to be sold as organic until we have other arrangements in place.
Organic Production (Control of Imports) (Amendment) (EU Exit) Regulations 2019
Baroness Vere of Norbiton
That the Grand Committee do consider the Organic Production (Control of Imports) (Amendment) (EU Exit) Regulations 2019.
Rural Development (Amendment) (EU Exit) Regulations 2019
(5 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Gardiner of Kimble
That the Grand Committee do consider the Rural Development (Amendment) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, it is appropriate that I declare my farming interests, as set out in the register. The matters in the four instruments are closely interrelated; I hope it will be helpful to your Lordships if I speak to all four together. These instruments amend retained EU law and domestic legislation to ensure that rural development payments and maritime and fisheries payments can still be made after exit day. These amendments will maintain the effectiveness and continuity of EU and domestic legislation that would otherwise be deficient following our exit.
These changes are necessary to enable rural development programmes, partially funded by the European Agricultural Fund for Rural Development, and the maritime and fisheries operational programme, partially funded by the European Maritime and Fisheries Fund, to continue operating effectively in the United Kingdom following exit, until their closure at the end of the 2014-2020 programming period. There will be an opportunity to consider the scheme-specific regulations for the European Maritime and Fisheries Fund at a later date, as these are made operable in the Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2019.
There are currently four rural development programmes operating in the UK, one in each Administration, providing funding for rural businesses, farmers, land managers and applicants living in a rural community with the intention of growing the rural economy, increasing productivity and improving the environment. The maritime and fisheries programme is UK-wide and promotes growth in the sector by providing funding for sustainable fisheries, marketing and processing and sustainable aquaculture, among other matters.
There are two European funds relevant to these instruments: the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. The former supports the delivery of rural development in the UK and is worth some £430 million per year over the programming period. The latter promotes a competitive, environmentally sustainable, economically viable and socially responsible fisheries and aquaculture sector, which is worth some £32 million per year. The UK Government have guaranteed that any projects funded from the 2014-2020 allocations from these funds will be funded for their full lifetime.
The changes made by these instruments are necessary to ensure that the Government guarantee can be honoured and payments can continue to be made to agreement holders using domestic funding in place of funding from the EU. They provide certainty to individuals and businesses currently receiving rural development and maritime and fisheries funding or considering applying for funding during the current 2014-2020 programming period.
The Rural Development (Amendment) (EU Exit) Regulations 2019 amend the EU regulation that provides the general rules and structures governing support for rural development, providing payments to be made to agreement holders and laying down rules on programming, networking, management, monitoring and evaluation.
The Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019 amend the implementing and delegated provisions made under the main rural development EU regulation and four implementing decisions approving the rural development programmes for each of the devolved authorities.
The European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019 amend the EU regulation that sets out the shared framework for all the European structural and investment funds, but only as far as applies to rural development and maritime and fisheries.
Finally, the European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 amend the supplementary provisions for European structural and investment funds for rural development and maritime and fisheries that are not dealt with elsewhere.
I emphasise that all these instruments remedy the deficiencies in the regulations to ensure that they continue to operate effectively when we leave. They do not introduce new policy, are technical in nature and preserve the current regime for supporting rural businesses, environmental land management and sustainable fisheries, among other matters. The amendments include omitting deficient references to the European Commission and member states and replacing them with references to either the UK or the relevant authority, as appropriate. The instruments also amend references to “Union law” throughout, so that the relevant EU regulations continue to operate effectively as part of national law. Provisions that are deficient because they are time-limited and under which the relevant actions have occurred have also been omitted, such as provisions relating to ex ante evaluations that have already been completed and provisions relating to prefinancing paid out when the programmes were initially set up. In addition, references to European institutions such as the European Investment Bank are also omitted.
One purpose of these modifications is to ensure continuity and clarity as to which public bodies have responsibilities towards the programmes. The obligations and discretions placed on member states will continue to be exercised after exit by relevant authorities in the UK. In this context, “relevant authority” means: the current managing authority of the maritime and fisheries operational programme, the Marine Management Organisation; the Secretary of State in relation to the Rural Development Programme for England; Scottish Ministers in relation to the Scottish Rural Development Programme; Welsh Ministers in relation to the Rural Development Programme for Wales; and the Department of Agriculture, Environment and Rural Affairs in relation to the Northern Ireland Rural Development Programme.
As noble Lords are well aware, agriculture and fisheries are devolved policy areas and are of special importance for all parts of the kingdom. We have worked closely with the devolved Administrations to produce these instruments; they place great importance on them and have given them their full support. I repeat that these statutory instruments are required for the continued operation of the rural development programmes and the maritime and fisheries programme. Without them, there would be no legal powers to make payments to fulfil the promises that these important programmes will continue. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend for bringing forward this little group of statutory instruments. I shall pursue what was raised in Sub-Committee B’s report—the 18th report from the Secondary Legislation Scrutiny Committee. The Sub-Committee has invited this Committee to probe for more financial information. I have a series of questions and I shall try not to repeat myself.
There will be schemes that have finished, and new schemes that will commence but end after a key date—that could be 2021-22. What advice are my noble friend and his department giving to those who may be in a position to enter a new scheme but are reluctant to do so, since they are not sure whether it will complete and what the funding will be for it? My understanding is that there are schemes that fall into that category, and concern has been raised.
Paragraph 7.5 of the Explanatory Memorandum to the rural development regulations says:
“On EU exit, the UK will seek reimbursement from the EU for all CAP payments made to beneficiaries up to 29 March 2019”.
On what basis? We are still members of the European Union, so I would just like to know what the legal basis is for that. It seems very odd, because we are committed to the EU schemes between 2014 and 2019. It says “up to”, so I just ask for clarification, because I do not understand what the legal basis is. It goes on to say:
“Thereafter, such funding will be provided by HM Treasury”.
I know this is of great interest to the farming press and the farming community generally. What is the budget from which those funds will be provided, going forward?
The paragraph goes on:
“The UK Government has guaranteed that any EAFRD projects, where funding has been agreed before the end of 2020, will be funded for their full lifetime”.
Again, it would be helpful to know where these funds are coming from. It continues:
“The guarantee also means that Defra and the devolved administrations can continue to sign new projects this year and during 2020”.
What will be the duration of those schemes? Again, where will the money come from? It goes on:
“In addition, the Government has pledged to continue to commit the same … total in funds for farm support until the end of this Parliament, expected in 2022”.
This has been exercising me for some time. The Government have consistently said that we are committed to paying money until the end of this Parliament, which is expected in 2022. It begs the question: if a general election—heaven forfend—is held before 2022, possibly this year, does that leave the door open for a newly elected Government to cease to pay those funds for those three years, from 2019 to 2022, particularly if there is a change of Government? It is just not clear and it gives us the opportunity to clarify that this afternoon.
Baroness Byford (Con)
My Lords, I follow my noble friend on her various questions; she touched on some of the things I wished to raise. The question of the timescale is hugely important because, in the past, some agricultural schemes have run for 10 years and some for seven years. The timescale that she has just referred to—between 2022 and 2027—is a span of only five years, so that ongoing question needs to be resolved.
We have talked about the question of active farmers and of who receives payments in the future in many of our discussions on agriculture. I particularly wonder whether that could, in the future, include youth projects and retirement projects, or whether that is outside the particular instruments that we are looking at. It may well be so and if I am told that it is, I will perhaps be happier than I am with it not being mentioned here.
My noble friend Lady McIntosh spoke about tenant farmers and graziers, or commoners, but if I am right, I would also raise the whole question of contractors with the Minister because so many farms—as indeed ours are—are now contracted out. It was easier in the past to always refer to tenant farmers, but I think one will find that there are many more contracted arrangements now between farmers.
I, too, would like to raise paragraphs 3 and 4 of the report from the Scrutiny Committee’s Sub-Committee B. These refer to the deficiencies but the Minister has covered many of them in his presentation. If there is anything he wants to add to it, it would be good for the Committee to hear that. Also, what is happening with the financial analysis that has taken place?
Returning to the European structural and investment funds regulations, page 3 of the Explanatory Memorandum refers to the,
“special interest to the Joint Committee”.
I understand that the House of Lords sifting committee did not think it was necessary to have a debate. However, the House of Commons recommended that we should, which is why we are debating it here. It would be interesting to know what it was unhappy about and what steps the Government have taken to rectify that, but overall, these instruments are obviously welcome. They are very technical, and allow systems to keep going as they are.
Moving to rural payments, we have talked about money being made available for rural development. Can the Minister say if that will also be defined as, for example, making it possible for groups of people to come together to enhance businesses and make that food chain shorter? That is not clear here. One of the big challenges that we face as a nation is how to contain the costs of producing food. The Minister, who is so knowledgeable on these things, knows very well the great advantage one has in fruit growing, or whatever it is, if there is a chain that links everything together. Money has been put aside in the past for that sort of work and I wonder whether that would fall within these regulations. It is not defined but it would be of great help.
Once we have accepted these instruments and moved on, perhaps there will be greater freedom for the UK to develop more ideas of its own as to how money could be used better to ensure that we produce food to our very high standards while reducing the chain. That way, the actual cost to the consumer could be contained in a better way than it perhaps has been in the past—it has been a bit fractioned in some areas. Pigs and poultry are not falling into that but there are some other areas, particularly horticulture, where the coming together of business would bring great benefits. However, having read through this, I am not clear whether that falls within the category of the thinking behind these regulations.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I will speak to the first two of these four statutory instruments that are being taken together. I thank the Minister and his officials for their very helpful briefing session on what is, as the noble Baroness, Lady Byford, has already indicated, a very complex subject.
The European agricultural fund for rural development provides rural development programmes which run under the multiannual financial framework. This SI allows funded programmes to run allegedly unhindered after exit date, until their natural end in 2020.
Annexe 2 of the Explanatory Memorandum lists the six legacy regulations affected by the SI, two more in which deficiencies will be remedied and four where the devolved Administrations have had programme amendments approved. This will ensure that structure fund programmes continue to run smoothly. As I understand it, these programmes will continue to report in the same way as previously but will report to the rural development programmes of England, Wales, Scotland and Northern Ireland, as the relevant devolved Administrations, instead of direct to the EU.
The aim of these SIs is to ensure operability of schemes and the continuity of investment in rural areas, which is the key element for me—it is really important. I wish to ask about the specifics of reporting mechanisms. The EU was very stringent on the information that was required by those who had received structure funds. Being involved with an organisation that had some of their money, I am aware of just how stringent it was. Can the Minister assure us that the UK will get good value for public money? This is especially necessary now that the Exchequer will pick up the funding instead of the EU.
As someone who comes from a rural community, I have a keen interest in the effect of these SIs. Last Friday I took part in a rural conference whose chief aim was to press the Government to produce a rural strategy. The Government have produced an Industrial Strategy which addresses the needs of urban communities and their economy. Now it is time to produce a strategy to address some of the huge disadvantages that rural communities face. These include lack of infrastructure, lack of transport, significantly less pupil funding, lack of affordable housing and poor access to services. I am concerned that the lifeline of rural development funding will be cut off by 2021, to be replaced by a nebulous undertaking that this will in future be covered by the Agriculture Bill.
The Agriculture Bill as published makes some significant changes to the way funding for farming and the environment would take place—as has already been said, public money for public good—but the Bill has become stuck in the Commons after Committee. I am concerned that a large gap in funding for rural areas is opening up before us. As the noble Lord has indicated, Sub-Committee B of the Secondary Legislation Scrutiny Committee estimates that the value of EU funds that will need to be replaced is between £400 million and £450 million a year of the European agricultural fund for rural development programmes for the remainder of the period to 2020. The loss of this investment will be keenly felt by many in deep rural areas.
Paragraph 7.3 of the Explanatory Memorandum states:
“After EU Exit, no new rural development programmes will need to be approved and from 2021 new agricultural and environmental schemes will be delivered under the Agricultural Bill”.
The Agriculture Bill will therefore need to be in place by 2021. It should have been in place by the 29th of this month, so that rural communities could plan ahead and have confidence that they were not going to suffer from a severe lack of resources. I know that the Minister understands these issues, but I am not sure the rest of the Government do.
Paragraph 12.1 of the Explanatory Memorandum, under “Impact”, states:
“Beneficiaries will continue to receive rural development funding as before EU exit”.
I am not confident that this will happen and am very concerned about the fate of rural communities.
Lord Teverson (LD)
My Lords, I first thank and apologise to the Minister for having missed his briefing on Monday; I was election monitoring in west Africa. I left central Guinea-Bissau at the right time and the journey all the way back to Gatwick Airport was perfect until I tried to get the Gatwick Express to Victoria, when it all went wrong and I missed the meeting.
For six years I had the great privilege of being a board member of the Marine Management Organisation, a Defra non-departmental public body. I have had an awful lot to do with structural funding over the years as an MEP, in other roles locally in the south-west and a little bit as part of the MMO. The EMFF recently has been one of the best-delivered structural funds. I am particularly thankful for the good work of the MMO’s finance director, Michelle Willis, under the direction of the chief executive, John Tuckett, who managed to deliver a programme of structural funding pretty well on time and of the right quality, which is unusual in this area.
I know the Minister always likes me to be positive, so I seriously congratulate the Government on one thing in particular—there will be others: in paragraph 6.7 of the Explanatory Memorandum, for the first time ever the Government have used the term “fishers” rather than “fishermen”. I have brought this up before, and the government response on why they used that word was that they consulted with the industry and that is the term it said it wanted to be used. There is something wrong in the way that that logic works. But congratulations on that. My sub-committee’s most recent report on the landing obligation, which I cannot go on to today, also used that terminology, because that is the way that participants in this industry are described in most other English-speaking countries. I hope that that will continue in future.
Lord Grantchester (Lab)
I thank the Minister for his explanation of the instruments before the Committee today and declare my interests as stated in the register as being in receipt of EU funds. As the Minister said, these statutory instruments are amendments to retained EU laws to allow the rural development programmes and others supported by a combination of UK and EU funding to continue to operate after EU exit for the remainder of the 2014-2020 programming period.
The Government have guaranteed that projects will be funded for their full lifetime, and have gone further by pledging to commit the same cash total in all funds for farm support, including the common agricultural policy, until the end of this Parliament, expected in 2022. All the SIs were originally negative instruments that the sifting committees of either or both Houses of Parliament have recommended be debated by Parliament.
Sub-Committee B of your Lordships’ Secondary Legislation Scrutiny Committee, in its ninth report, expressed disappointment at the uninformative nature of the Explanatory Memoranda that provided no explanation of the instruments’ discrete functions. On my analysis, the first two memoranda on rural development are the same, verbatim, except for the title. In its 18th report, the committee also commented that the provision of more financial information would have been useful to inform debate.
The second two instruments on EU structural funds are similar but more informative, providing some detail on the value of EU funds to be replaced. While it is recognised and appreciated that the Government have accepted the committee’s recommendations, why has so little information being provided in the Explanatory Memoranda?
Other than funding originating from the UK Government and several Commission roles being domesticated, will any significant changes result from the enactment of these SIs in a no-deal scenario? Although they appear largely technical, it is difficult to appreciate the amendments from the legal text.
I have some questions to clarify exactly what is happening here. First, these instruments transfer obligations or discretions from member states to relevant authorities, and these will be pertinent to each devolved Administration. I am sure the Minister will confirm that each devolved Administration—probably excepting Northern Ireland—has discussed and support the orders, and that each devolved Administration has consulted with the programme monitoring committee, which is composed of stakeholder representatives, including non- government organisations. Under the rural development regulations, no further details are disclosed. Under the structural investment fund regulations, there is further information that Defra has met the Rural Payment Agency’s industry partnership group, and these stake- holders are named.
Can the Minister clarify the extent of the consultation and the full extent of the consultees at devolved level? Have the commencement stakeholders named in the IPG UK list been consulted at devolved level—the Welsh, Scottish and Northern Ireland representatives of farmers, consultants and agents? Although consultation may have been impossible with the Northern Ireland Office, it would be useful to know that stakeholders had been consulted in that region.
Under regulations pertinent to the European maritime and fisheries fund, the EMFF, no details regarding stakeholders are given, other than that there was “targeted engagement”. Can the Minister clarify what “targeted engagement” amounts to and specify exactly which stakeholders were involved? These details would be most informative as noble Lords prepare for the Fisheries Bill, which is promised soon.
Secondly, at paragraph 2.6 it is explained that some regulations are being addressed separately by the Department for Business, Energy and Industrial Strategy. The split between departments leads to confusion. Can the Minister clarify whether the European structural and investment funds under paragraph 2.8 come under his department or BEIS?
Further, an explanation regarding the European Investment Bank, which the noble Lord, Lord Teverson, mentioned, and its relevance to these instruments would be helpful, as it is stated at paragraph 12.1 that the UK’s involvement in the EIB will cease on EU exit. The paragraph goes on to say that,
“domestic finance mechanisms would still be accessible”.
Like the noble Lord, Lord Teverson, I would be most grateful to understand what this refers to. What are these mechanisms, how will they operate in regard to these instruments, and who might those finance providers be?
Paragraph 7.5 of the Explanatory Memorandum for the structural funds instruments mentions that projects under both the European agricultural fund for rural development, the EAFRD, and the previously mentioned European maritime and fisheries fund,
“whose funding has been agreed before the end of 2020 will be funded for their full lifetime”.
How long will that be? I am a little confused that projects post leaving the EU, especially under a no-deal scenario, that have not yet been endorsed at EU level until 2020 will still be guaranteed by the Government—let us stick to the convenience for now that we will be leaving in March 2019. Can the Minister clarify the apparent contradiction? The noble Baroness, Lady McIntosh, also raised queries in this regard: whose budget will be responsible and in which circumstances?
I am grateful to the Minister for the consultations he has undertaken with all Benches on these SIs. They have been most helpful, as have his written replies to our previous questions on other SIs. I apologise that it was not possible for me to meet him this week, and that consequently I was not able to give him notice of my inquiries today. How does his department intend to manage agricultural and rural development support through these exit regulations, and no doubt CAP regulations to come next week, with full funding to 2022 and subsequently to the provisions of the Agriculture and Fisheries Bills? These support measures are indeed vital across the rural economy.
His department has included features of this landscape at paragraph 7.5 of the Explanatory Memorandum to the rural development regulations. This explains that the new RDP will cease, while,
“the same cash total in funds for farm support”,
including the common agricultural policy, no doubt, will continue,
“until the end of this Parliament”,
which is still expected to be 2022—even though the noble Baroness, Lady McIntosh, is quite entitled to reflect otherwise. The CAP is at a total funding of £3 billion per annum, and paragraph 7.7 is not entirely clear what the total or annual value of the funding of the EU commitment to scheme holders will be and for what duration. I would be most grateful if the noble Lord could give any further explanation beyond those given in his introduction. That only three lines on this are included in the financial implications is much to be regretted.
I am sure the Minister will also be aware of modulation, whereby deductions from payments under Pillar 1 are made and subsequently transferred to Pillar 2—rural development—and that these sums must be matched by the Government. Will the full administration of all these features still operate under the CAP towards rural development and be guaranteed by the Government? It looks as though there may be a gap before rural development is reinvigorated through the Agriculture Bill. Once again, the noble Lord, Lord Teverson, has drawn attention to the fact that there could well be nothing for fisheries.
I may be asking for far more than the Minister can possibly undertake under the regulations today, especially if he was to answer the pertinent questions from the noble Baronesses, Lady Byford and Lady McIntosh. However, I am sure that his full explanation will be greatly welcomed across the industry. With that, I am pleased to approve the instruments before the Grand Committee today.
Lord Gardiner of Kimble
My Lords, I am most grateful for what has been a valuable debate and consideration beyond what are, as we all know, the technical requirements behind why we need to do this. I fully appreciate that many of us have been waiting and wanting to get on with some primary legislation, but that is not in my gift, alas. If it is my privilege to do so, I look forward to taking part in discussions, in the Chamber and beyond, on how we take forward fishing and marine interests and agriculture, and the produce we create in our waters and on our land, which is so important for domestic production and for export.
These instruments ensure that the rural development programmes and the maritime and fisheries operational programmes continue to operate effectively. As I said, the rural development fund is worth some £430 million per year and the maritime and fisheries fund is worth some £32 million per year. I am sure that, at this point, the noble Lord, Lord Teverson, is thinking that that looks like a big gap. It was very generous of him to raise the fact that the fund has been a good custodian of other people’s money.
I will try to give as much detail on this as possible. The Government have guaranteed that any projects funded from the 2014 to 2020 allocations from these funds will be funded for their full lifetime. Whatever is agreed up to 2020, and if thereafter those projects are to be funded, that will be honoured. My noble friend Lady McIntosh opened by asking where the money is coming from. The Treasury allocates to departments. My advice to applicants is that Her Majesty’s Treasury funding is a guaranteed cover of all rural development projects entered into before the end of 2020 for their full lifetime. I encourage those who are minded to think strongly of that Treasury guarantee.
My noble friend raised another point. I have declared my farming interests, and we all would like as much certainty as possible. That is precisely why there is a promise to, as far as is possible—I use those words deliberately, and will seek to clarify that—guarantee the same level of funds until 2022. Some noble Lords will wish completely the reverse, but I have no idea whether this Parliament will go on until 2022, and, as we all know, no Parliament can bind its successors. But this is a promise to the rural community, while this Government are in office and have that responsibility, to honour the level of funds until the end of this Parliament. None of us here is in a position to know precisely when that Parliament may conclude.
My noble friend Lady McIntosh raised the legal basis for reimbursement and the date. It is because the EU is bound by the regulations while they apply to the UK as a member state. Any commitments that the UK has entered into prior to exit are commitments made from the EAFRD. That is the basis, and it was why that was the date in Article 50 and why precisely the Treasury guarantee kicks in for anything after the date of us leaving.
Several noble Lords raised the issue of the link to the Agriculture Bill, including my noble friend Lady McIntosh and the noble Baroness, Lady Bakewell. These SIs are made under the withdrawal Act; they allow us to correct deficiencies. The purpose of the Agriculture Bill, for which we are waiting, is obviously to provide the opportunity to redesign our approach to agricultural support, so that if we wish to we can amend retained EU law. Therefore, any amendments that we make are, yes, probably for the short term, and they will probably be to see how we might improve the current arrangements and give better experience to agreement holders.
Under Clause 1 of the Agriculture Bill, the Secretary of State may provide financial support for managing land or water in a way that protects or improves the environment. Of course, as we design our agriculture policy, we will look to see—and this is a point that I would like to put to my noble friend Lady Byford—how we can support bringing together groups who work together in the agricultural sector. Clearly, as we look at how we can enhance the environment and how we deal with landscape, it is with clusters and the concept of catchment areas. I think of Slowing the Flow at Pickering, in regard to my noble friend Lady McIntosh. All this is where working together in schemes is going to be very rewarding in terms of enhancing the environment and producing very good food as well in that context.
To my noble friend Lady Byford, I say that I am delighted that the House of Commons said that we should have a debate on this. My understanding is that future funding is important to rural and marine communities. I say to the noble Lord, Lord Teverson, that on 10 December 2018, the Government committed to providing £37.2 million of extra funding for the UK seafood sector for projects approved for 2019 and 2020 to boost the industry as we become an independent coastal state.
On the Agriculture Bill, rural growth, which includes the LEADER scheme, is currently included in the rural development programme and will continue under the government guarantee until the end of the programme period. Beyond that, the expectation is that rural growth initiatives will be supported through the UK’s shared prosperity fund, which is intended to deliver for all parts of the country. Wearing the rural-proofing element, which is a strong one, I say that Defra is working with the Ministry of Housing, Communities and Local Government to develop the ways in which it will support the rural economy.
Perhaps I can immediately say to the noble Baroness, Lady Bakewell, on the rural strategy that I was fortunate enough to give evidence with the Secretary of State, and he has said publicly that he was looking forward to the report of our Select Committee and that it might be an occasion to respond. I think he was generously saying, as noble Lords who were in that committee will have heard, that this was something that was raised. I know that he and I will be very much looking forward to the rural economy report whenever it comes out.
The noble Baroness, Lady Bakewell, asked for reassurances about reporting. I assure your Lordships that the level of rigour currently applied to ensure that the rural development programme achieves value for money and overall public benefit will continue. Inspections will still take place. Annual implementation reports will continue to be produced and approved programmes can continue to be evaluated administratively by relevant authorities. The National Audit Office will continue to be involved to maintain existing levels of scrutiny and good practice. We have put in place arrangements to ensure that the Commission’s functions are now taken up by each devolved authority or the programme monitoring committee, which is composed of representatives of environmental, rural and agricultural stakeholders, including non-government organisations.
The noble Lord, Lord Teverson, raised the question of EMFF and how new replacement work schemes will work. In the Fisheries Bill, we propose a power to replace, modernise and broaden the existing grant-making powers in the Fisheries Act 1981. This will provide greater flexibility and ensure that new grant schemes can deliver value for money. Fisheries are devolved and once we leave the EU and on the closure of the EMFF grant scheme, devolved Administrations have indicated that they would want to run their own grant schemes targeted on their national priorities.
The noble Lord asked about fishing support after 2020. The Government have committed to replace EMFF from 2021 across the UK for the next two years, as I said. It was announced that that extra EMFF will be available to UK-licensed vessels.
The European Investment Bank was raised by the noble Lords, Lord Grantchester and Lord Teverson. It currently has no involvement in UK rural development programmes or the maritime and fisheries programme. Treasury funding will still be accessible to those seeking it. The impact on agreement holds will therefore be negligible. I am bound to say that the loss of access to the EIB is a result of exit, not as a direct result of the instrument.
Lord Teverson
My Lords, may I say that my fishers friends in Mevagissey did not have the European Investment Bank highest on their priorities, but I am glad he clarified that.
Lord Gardiner of Kimble
I thank the noble Lord. I have dealt with the issue of further financial assistance.
The noble Lord, Lord Grantchester, raised areas where different Governments are engaged in regulating the same area. We are working closely with the Department for Business, Energy and Industrial Strategy in developing the instruments. The European rural development fund and the European social fund have domestic power to continue making payments following exit. This is not the case for the European agricultural fund for rural development or the European maritime and fisheries fund, which rely on the spending powers in the EU regulations. That shows the distinction. A different approach is therefore necessary to allow funds to continue operating under the Treasury guarantee.
The noble Lord also asked why the provisions do not apply to the European rural, development, social and cohesive funds. They are being addressed in a separate SI by the Department for Business, Energy and Industrial Strategy. That SI and others will be developed in your Lordships’ House on 14 March.
Lord Grantchester
I press the Minister to clarify that a little more. Is he therefore saying that it was the devolved Administrations’ responsibility to consult with their stakeholders rather than that of Defra, with its wider powers of consultation?
Lord Gardiner of Kimble
Defra has very good relations and dialogue with a number of rural and fisheries organisations across the devolved Administrations. It is right to say that there is sensitivity, if the responsibility is a devolved Administration’s, in that to appear to be overhauling that would not reflect well. It is a matter for the devolved Administrations, but clearly we wish to work collegiately.
Lord Grantchester
I ask the question only in terms of how it relates to how it is reported to us in explanatory memorandums, so we know that there has been full consultation in all the regions as well as on a UK-wide basis.
Lord Gardiner of Kimble
If I have any specific details, I will let the noble Lord know precisely. It may be helpful if I can glean some information on devolved consultations with stakeholders. I would say that when we have been engaged with key stakeholders, on fisheries, stakeholders we have been engaged with were supportive of the work being undertaken. On rural development, no concerns were raised by stakeholders, who expressed their appreciation of the work being undertaken.
I shall read Hansard, because my noble friend Lady Byford asked a number of points about youth and retirement projects, issues to do with contractors and other matters. All I would say is that the order is designed to continue with the arrangements that we have, but with the payment after we leave by our guarantee that we will fulfil the funding of any schemes that are applicable at the moment. Obviously, as my noble friend knows, this is not about future schemes, on which we will have all sorts of discussions. Whatever is appropriate now under these funds, people can apply for until the programme ends, and so forth. If there is anything further that I think would be helpful, I will inform your Lordships, but I recommend the instruments and I beg to move.
Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019
(5 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Gardiner of Kimble
That the Grand Committee do consider the Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019
(5 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Gardiner of Kimble
That the Grand Committee do consider the European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Gardiner of Kimble
That the Grand Committee do consider the European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019.