Food and Drink, Veterinary Medicines and Residues (Amendment etc.) (EU Exit) Regulations 2019

Baroness Vere of Norbiton Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Food and Drink, Veterinary Medicines and Residues (Amendment etc.) (EU Exit) Regulations 2019.

Relevant document: 19th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

[Baroness Vere of Norbiton (Con)]

My Lords, most of this instrument corrects retained EU law on geographical indication—or GI—schemes. The remainder makes a small number of amendments relating to wine and spirit provisions and on veterinary medicines.

I turn first to the provisions on GIs. GI schemes provide legal protection from imitation for both local and traditional food and drink specialities. The purpose of the instrument is to enable the Government to administer and enforce GI schemes in the UK after exit. This will ensure that our GIs remain protected against imitation in the UK. Together with other legislation on GIs, it will ensure that the UK continues to comply with World Trade Organization obligations after exit, specifically the TRIPS agreement on intellectual property. Currently, we comply with the TRIPS agreement through our membership of the EU’s GI scheme. We will remain compliant with these obligations through this new domestic legislation, which makes provision for the protection of GI products within the UK and empowers the relevant agencies to enforce the rights granted to GI holders.

The instrument also provides a UK framework to administer and enforce GI schemes for agricultural products and foodstuffs, aromatised wines and spirit drink products throughout the UK. It will enable applicants from the UK and third countries to apply for UK GI protection, and it will allow the number of UK-recognised GIs to continue to grow following EU exit.

The UK Government are working with their global trading partners to transition EU free trade agreements and other sectoral agreements, and this includes commitments on the recognition and protection of UK GIs. In addition, the instrument will amend retained EU law on methods of analysis used to ensure that spirit drinks comply with the relevant rules. It also amends retained EU law concerning the documentation that must accompany the movement of wine and imported wine, the certification of wine, and the registers that must be kept by wine operators relating to the wines handled by them.

The Government launched a public consultation in October 2018 seeking stakeholders’ and the public’s views on our proposed new UK GI rules. Under EU rules, we are required to consult on amendments to food law. As we had to do this for wines and spirits sector standards, we also took the opportunity to consult on the wider GI aspects. We received 92 responses from a range of stakeholders, including the Scotch Whisky Association, the UK Protected Food Names Association and Quality Meat Scotland. Furthermore, the majority of respondents—68%—supported the Government’s proposals. This included our proposals to have a three-year implementation period for the new logos and our recommended appeals process using the First-tier Tribunal.

GIs are intellectual property and, as such, this is a reserved matter. The relevant powers currently exercised by the European Commission will therefore be transferred to the Secretary of State. We have worked with the devolved Administrations on the whole of this instrument and, where it concerns devolved matters, they have given consent.

I turn to the provisions on veterinary medicines. This is the second EU exit instrument covering veterinary medicines. The other instrument, the Veterinary Medicines and Animals and Animal Products (Examination of Residues and Maximum Residues Limits) (Amendment etc.) (EU Exit) Regulations 2019, has already been debated in and accepted by both Houses.

This instrument covers three areas. It transfers powers and functions to set maximum residue limits for veterinary medicines. It provides for veterinary medicines that have been approved by the European Medicines Agency to remain on the UK market. It also makes necessary consequential changes to the fees charged by the Veterinary Medicines Directorate, as set out in the Veterinary Medicines Regulations 2013.

MRLs are the maximum safe limit of a particular substance in produce from animals. These limits are used to establish withdrawal periods: the period that must elapse after the last administration of the medicine before produce from that animal may enter the food chain. A UK MRL-setting framework is necessary to ensure the safety of produce from food-producing animals. Veterinary medicines are devolved to Northern Ireland, so the power to set MRLs is shared between the UK Government and the Department of Agriculture, Environment and Rural Affairs. Defra will be able to act on a UK-wide basis with the consent of DAERA and the VMD will continue to act as the UK-wide regulator to ensure consistency.

This instrument brings across the existing MRL application fees from the EMA of £62,300 for a new MRL and £18,850 to amend an existing MRL. However, as stated in the EM, these fees will be reviewed as soon as possible. Until the data is available to underpin a more accurate cost base, the fees will be administratively reduced to better reflect the actual costs incurred as part of the assessment.

Medicines approved by the EMA account for a small percentage of all veterinary medicines in the UK—about 13%. However, they are often novel treatments and substances and it is highly important that these medicines remain on the UK market. This instrument provides for their conversion to UK national approvals, with no charge for the conversion. Pharmaceutical companies will not need to take any immediate action to enable them to continue to market their products in the UK.

Lastly, this instrument makes minor changes to the fees charged by the VMD for the functions it carries out. I must be clear; apart from bringing over the existing MRL fees I have set out above, these are minor corrections and no new fees are being introduced. The amendments proposed to Schedule 7 to the Veterinary Medicines Regulations 2013 are merely to correct deficiencies arising from us leaving the EU.

Although a formal public consultation has not been carried out, the Government have proactively engaged with the animal health industry to discuss how we can ensure that the regulatory regime continues to function effectively after exit day. My noble friend Lord Gardiner of Kimble has met the veterinary pharmaceutical industry association—the National Office of Animal Health—on a number of occasions as part of our extensive engagement. Officials from the Veterinary Medicines Directorate continue to hold regular meetings with key industry representatives. The industry has welcomed our proactive and continued engagement with it. NOAH expressed concerns that introducing a separate MRL-setting regime to the EU could increase burden and cost on the industry. The Government recognise that MRLs are key to facilitating trade in animal produce and will therefore look to align with international standards when setting them. To ensure a high level of protection for human health, MRLs must be based on sound science and data.

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[Baroness Byford (Con)]

My Lords, having listened to the contributions of colleagues in the Committee, perhaps I could raise and reinforce two points. One is the question of logos. I can hardly see Scottish Beef being very happy to become just UK beef, or Welsh Lamb becoming UK lamb. How will that be overcome, because that is clearly a big selling point for them? Can we have more explanation of how the logo system would work?

On the whole question of veterinary medicines, perhaps I could include the use of antibiotics, because that is crucial these days. We are coming to the question of zoonosis shortly, but it is worth addressing the use of antibiotics to the extent that it happens in some countries around the world, which does not happen over here. I seek clarification on those two points.

[Baroness Vere of Norbiton]

I thank my noble friend Lady Byford for her points, and the noble Baroness, Lady Bakewell, and the noble Lord, Lord Whitty, for their contributions. I take the criticism on the chin at the outset. I agree with noble Lords: there have been circumstances where the structuring of the SIs and the statutory instrument programme has not been ideal. This has been due to many different factors in the way the work happened; sometimes the EU changed legislation as these things were coming through.

In these examples, however, we are discussing certain elements of the retained EU law in isolation, away from other SIs which discuss the same thing. I can only apologise for that. I recognise that this has not been ideal. As one of the two Ministers taking these statutory instruments through, it is not ideal from our perspective either. As the noble Lord, Lord Whitty, said, maybe one day we will be able to smooth it out, soften the edges and ensure that people understand the context. Certainly, the technical guidance that the Government are issuing puts into better context and plain English the sorts of things that the industry needs to look out for as we transition to a no-deal or a deal-supported exit from the European Union.

I turn first to the topic of GIs, as this attracted the most comments today. The noble Lord, Lord Whitty, and I believe the noble Baroness, Lady Bakewell, talked about the recognition of UK GIs by the EU. We consider that protection of UK GIs in the EU should continue automatically after exit. They have been through the EU scrutiny process and have earned the right to their place on the EU’s registers. To remove the UK’s GIs from its registers, the EU would have to change its rules. If the UK GIs are removed from the EU registers, the Government will support UK GI-holders in reapplying for EU GI recognition.

The noble Lord, Lord Whitty, mentioned promotion of GIs after exit. He is right that we will be setting up a new system. The UK GIs that we have at the moment will roll over, but we hope there will be many more. We will support this, as we believe it is an opportunity to build significant consumer recognition of UK GIs in the places with which we trade significantly. We would promote them alongside wider UK Government promotional activity, such as the Food is GREAT campaign. We will also work closely with the devolved Administrations to co-ordinate future promotion of the GI schemes, recognising that some of the products are tied to a particular nation, rather than a particular locality. We will work with all scheme producers to raise consumer awareness in the UK, which is a very important market for these products, and in new markets abroad. We will also encourage new applicants, because we believe that is very important.

Turning to the application process and the cost of the new scheme, the basic application process is fairly straightforward. It is unlikely that the information required will be significantly different from that required by the EU. The application is formally submitted, the initial appraisal is completed, the devolved Administrations are asked to provide their scrutiny and external experts will be involved, as necessary. The application will be published and then the opposition procedure occurs, should there be any opposition. Finally, a recommendation is put to the Secretary of State and a decision is made on whether or not to award GI status to a product.

The department has the right expertise to assess applications. This expertise can be drawn from across the Defra group, and from academia and the private sector if necessary. This happens already, and it will continue under the UK scheme. We do not expect the costs of application to be different from what they are now; there will be no additional costs when compared to the current scheme, and so no new charges.

Turning to the appeals process, it is right that the Commission has a two-stage process, and it is only right that there is a right of appeal for producers who feel that their products should have been granted a GI. Therefore, we have proposed that the First-tier Tribunal is used. It is administered by Her Majesty’s Courts & Tribunals Service, and was set up to, among other things, handle appeals against administrative decisions made by government regulatory bodies. Appeals on GIs are therefore part of its core business. Defra will have an arrangement with the MoJ for the payment of money to cover the cost of these appeals.

The noble Lord, Lord Whitty, and the noble Baroness, Lady Bakewell, spoke about the current UK GI applications which are with the EU. We are pleased to have recently awarded the Vale of Clwyd Denbigh plum, and will continue to process applications to grow this number after exit. The EU is currently assessing 6 UK GI applications. Examples include Ayrshire early potatoes, Cambrian Mountains lamb and Broighter Gold rapeseed oil. If there is no deal, we would expect these applications to continue to be processed by the EU. However, if that does not happen, they will be processed under the new UK scheme. The new Article 52A of EU regulation 1151/2012 will apply to UK applications pending in the EU. They will be converted straight into UK applications, because Article 52A is in the legislation as Part 3 of Schedule 1 to the instrument.

While logos are mentioned in this SI, it is not the main logo SI. Because the setting up of the new system is not dependent upon a no-deal Brexit, it can be done over a period of time. The reason we have chosen three years—we did talk to the industry about it—is to minimise the costs to business, because the logo has to be agreed upon and then there is the transition from the current logo to the new logo; that will happen over that three-year period. There will be an opportunity for noble Lords to discuss this in much greater detail when the logo SI comes to your Lordships’ House. That may not be immediately—we all need a bit of a recess first; that would be wise. We are discussing it in this SI because there is an obligation to create a new logo, and the Government are very mindful of that. We have started talking to industry already, and we do not want all producers suddenly to have to change their logos at very short notice—that would not be cost effective. I have just been given a note saying that the three-year period, and the process by which we intend to do it, was supported in the public consultation that we carried out in October 2018. The process will continue in due course, and the three-year period will be available.

The noble Lord, Lord Whitty, talked about devolved logos, and my noble friend Lady Byford mentioned the issue of national products and their logos. These two things work in slightly different directions, because GIs are reserved as a form of intellectual property, and so the logo will be centrally managed. New logos will cover the whole of the UK, and we are working with them in the logo design process. We will come back to logos, and at that point we should discuss how we incorporate, because at some stage national brands will need to be incorporated into the broader system, particularly as many of them are such important exports.

I believe I have covered everything on GIs for the time being; I will check Hansard to make sure.

The issue of the MRL attracted slightly less attention, not because it is not important but because, I think, it is fairly straightforward. In my opening remarks, I talked about bringing over the EU fees for the MRL, but, within a few months of exit, the VMD will look at the actual cost of administrating this scheme, to makes sure we can charge the most appropriate amount. We expect the fees to come down, and we will do that as soon as we can.