Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down, and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
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Animal Welfare and Invasive Non-native Species (Amendment etc.) (EU Exit) Regulations 2020
(4 years ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Animal Welfare and Invasive Non-native Species (Amendment etc.) (EU Exit) Regulations 2020.
Relevant document: 33rd Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, this instrument amends earlier EU exit regulations relating to three areas: animal welfare, leghold traps and pelt imports, and invasive non-native species. These amendments ensure that EU retained law continues to remain effective and operable from the end of the transition period and in accordance with the Northern Ireland protocol. This instrument amends the regulations relating to the welfare of animals during transport, at control posts and at slaughter, and ensures that they remain operable in line with the Northern Ireland protocol.
This instrument will end recognition in Great Britain of transporter authorisations, driver and attendant certificates of competence, vehicle approvals and journey logs issued by an EU member state. From the end of the transition period, EU transporters will need to apply to a competent authority for these documents to be able to continue to transport animals in and through Great Britain. This will allow for greater enforcement, create a level playing field and ensure that GB transporters are not commercially disadvantaged. Transport documents issued in Northern Ireland will continue to be accepted for use in Great Britain. Additionally, it ensures that we meet obligations under the UK-Ireland common travel area by making provision for training carried out in the Republic of Ireland to be recognised as equivalent to that of Great Britain for the purposes of granting a driver or attendant certificate of competence in Great Britain.
This instrument makes amendments to regulations protecting animals at slaughter and will ensure that slaughterers’ certificates of competence issued in any part of the UK will continue to be recognised across Great Britain. Without these amendments, EU transporters could continue to remove animals into and through the UK, but we would lack the ability to take enforcement action if they breached the welfare in transport rules. The ability to suspend or revoke a certificate of competence or a transporter authorisation, following an animal welfare incident, until that transporter has been retrained is, we believe, an important enforcement mechanism. Live animal movements should be carefully planned and based on predicted journey times; for long journeys these must be approved by the competent authority, as any delay can result in significant animal welfare issues. The amendment will ensure that from the start of the year, EU transporters will need to apply to the GB competent authority to gain approval of their planned journeys.
Existing exit instruments made operability amendments to the retained EU leghold trap regulation. The regulation prohibits the use of leghold traps and the import of pelts and manufactured goods from certain wild animal species. The proposed amendments in this instrument make the retained EU legislation compatible with the requirements of the Northern Ireland protocol and ensure that imports of pelts and pelt products from the EU will be treated in the same way as imports from any other third country. It will continue to prohibit the use of leghold traps in Great Britain and to ensure that only pelts sourced from captive-bred animals or from approved countries which abide by humane trapping standards are imported. This will maintain the high standards and existing controls that are currently in place around pelt imports.
Finally, this instrument amends retained EU exit regulations relating to invasive species. Again, these are technical amendments to ensure the proper working of retained EU law and domestic legislation for regulating the prevention and management of the introduction and spread of invasive non-native species. These changes implement the Northern Ireland protocol and make minor changes to improve enforcement and ensure the effective implementation of emergency measures under domestic legislation.
The amendments make provision for the devolved Administrations to be consulted appropriately over species listing and decisions in reserved matters. Changes also allow traders in Northern Ireland to continue to use already established rules on the sale of commercial stocks after a species has been listed. The amendments ensure that specimens do not have to be transported to England or Wales if seized at the UK border. This allows border officials in Northern Ireland and Scotland to send seized animals to local facilities instead of having to send them to England or Wales. They also make a minor change relating to civil sanctions to bring clarity to the procedure and appeal rights for non-compliance penalties served following breach of an enforcement undertaking.
Further, these changes allow for temporary emergency restrictions on previously unlisted species to be introduced and enforced promptly. These amendments ensure that the Northern Ireland protocol is upheld and, in line with current government policy, that we can enforce our high animal welfare standards and protect the United Kingdom’s biosecurity. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome very much the opportunity to discuss the regulations before us today. I have a number of comments to make and questions to ask.
Obviously, it is important to keep invasive and non-invasive species under review. What is the general rule? For example, does the department keep under regular review brent geese, grey squirrels and badgers, given all the damage they do?
On the implications for protecting animals at the time of slaughter, the fact that many small abattoirs were closed some 20 years ago is a matter of regret. Does the department intend to keep this under review, and what chance is there of small abattoirs being brought back, which would be very welcome in rural areas?
The number of vets is a cause for concern, particularly given that fewer are coming from the European Union and those who are here may decide to leave. Presumably, it takes approximately six years to train a vet. Does my noble friend share my concern about the number of vets who will be available at the point of slaughter from 1 January, and what specific measures will be taken? I welcome the increase in the number of vets going through university at the moment, but there may be an immediate shortage, so what steps are the Government taking to ensure that that will be addressed from 1 January?
In the event of a no deal or even a minimal deal—what we are apparently calling the “Australia deal”—there may be delays at ports, which would potentially lead to a short-term animal welfare issue. How will this be monitored at ports, in particular Kent and Holyhead, and how will this be addressed from 1 January? A limited number of animals will be transported live, but how will this be addressed in the event of delays, especially in hot weather later next year?
The 33rd report of the Secondary Legislation Scrutiny Committee, which has been extremely useful in preparing for today, quotes Defra as saying:
“Although EU and GB standards will remain aligned at the end of the transition period, we have ambitions to strengthen the welfare in transport standards in the near future. We want to ensure that going forward EU transporters who move live animals into Great Britain adhere to our standards.”
I am sure that anybody wishing to import will do so, but more especially when exporting as well. Will my noble friend give a commitment today that the Government will absolutely respect the World Trade Organization rules in this regard and ensure—albeit at a minimum—that live trade, such as, for example, lambs to France for the season in spring, will continue?
I am concerned, particularly given the announcement that George Eustice is making or has made today, that the livestock farming industry is not being as well looked after by this Government as it has been in the past. I think that the live trade in animals is something like one in six. In 1992, when this became an issue, I boarded a ferry to see how these animals were being transported, and I was hugely impressed by the length that the transporters and hauliers went to to ensure that the lambs were enjoying the best conditions possible—and I was certainly persuaded that they enjoyed better conditions than those that we similarly enjoyed at the time on cross-channel ferries.
In relation to pelts and the import of pelt products, I understand that there is currently still a ban on mink and fur from Denmark, because of the Covid regulations there. This is a source of deep concern to me, being half Danish. Is this something that the Government are keeping under review—not just from Denmark but from other areas that are affected by the cross-contamination of the Covid virus in mink? When will this ban be reviewed and what are the implications for the fur trade?
In the 33rd report by the Secondary Legislation Scrutiny Committee, Defra is further quoted as saying that the process to apply for the documents to which my noble friend referred will not change. Is it a new charge that is referred to in paragraph 40, where it states that TAs and journey logs are currently issued free of charge, COCs cost around £360 per certificate including training, while vehicle approval costs around £200 per vehicle? Has there been an impact assessment? Was a consultation held, and were the results of the consultation published? What will be the average cost per transporter, and will the Government keep this under review? I will, obviously, continue to take an interest in this, but I welcome the opportunity to discuss these points today.
Lord Walney (Non-Afl)
It is a pleasure to follow the excellent and apposite questions from the noble Baroness. I will add a few questions of my own, and give the Minister the chance in his summation to update us on various issues, many of which I think have been around since the Brexit vote, and certainly since the initial version of the regulations were passed. To my mind, issues in a number of areas remain uncertain.
First, beyond the bald legal changes in the regulations being amended today, is there yet agreement on how they will be made to work across all four countries of the UK without the co-ordinating function of the European Commission? How has that been working over recent months?
I noted that the Minister said in the debate on 22 January last year, when the regulations were initially laid:
“We are proposing that the programme board on non-native species takes over the role of the committee, while the GB non-native risk analysis panel will take on the role of the scientific forum”.—[Official Report, 22/1/19; col. 675]
Has this now been established, and will the Minister update the Committee today on those arrangements?
Secondly, how in practice will the UK continue to co-operate with the European Union on invasive non-native species surveillance and management? This question has been asked in parallel in many different parts of regulation, way beyond the environmental sphere. It is obviously of critical importance. The Minister has stressed throughout this process that there will be close co-operation, as we would expect. However, the effectiveness will be in how these measures work out in practice.
In the world before Brexit, the European Union was central to the Government’s biosecurity strategy. The perusal of the 2014 strategy, as it was laid out, begs a number of questions now about how that close co-operation will work. For example, the EU regulations specified particular requirements for inspections of controlled trades. Do the regulations require that those same regulations are to be followed post Brexit? Is that the Government’s intention, if there is no legal requirement to do that?
Are there now plans for the routine checks of plants and plant material that would previously have been prohibited under the single market rules? If so, what has been set out to do that and what level of resource would be required?
For many years, the European Union plant health regime has applied the risk-based categorisation of material from outside the EU: prohibited, controlled and uncontrolled. Post January, how will the UK regime have regard to that—or is it doing so now? Does it expect to lean on the research done by the European Union? Does it have its own separate analysis? When the regulations were scrutinised last year, the question was raised of whether the UK would have formal access to that analysis and intelligence. At the time, the Minister’s response, understandably, was “Wait and see”. Can he give us an update? How will the plant passport system work post January?
Finally, I want to ask about the prospect of an increased commitment on invasive species that have long been on these islands. When various Ministers, past and present, were selling the biosecurity benefits of Brexit, they talked about it being an opportunity to increase biosecurity levels. I want to bring the Minister back to an issue that was mentioned by the noble Baroness, Lady McIntosh: the grey squirrel. Is this not an opportunity for firmer government support for communities such as those in Cumbria that seek increased support to deal with the grey squirrel, which, in our area and other areas of the UK, continues to endanger livelihoods and the sustainability of the native red squirrel.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I thank the Minister for outlining this statutory instrument, which clearly is necessary. Like the noble Baroness, Lady McIntosh of Pickering, I thank the Secondary Legislation Scrutiny Committee for clearly outlining some of the issues arising from it. I will try not to ask the same questions that the noble Baroness asked, but I will address some of the same issues, perhaps sometimes from a different perspective.
I will start with transport. Obviously, there is some concern that a changeover will happen rapidly, in one day. The noble Baroness talked about what might happen in the coming months, particularly from 1 January. Has any consideration been given to asking for a moratorium or even providing a regulatory limit, given that there clearly is a risk of real problems in the early days and weeks, in order to ensure that animals do not get trapped in enormously long queues? Will there be provision to ensure that animal transports with possible welfare issues can be shuffled through those queues, so that the animals do not remain in what could be very cold conditions for an inappropriately long time?
Turning to EU transporters having to apply for all the paperwork listed in the statutory instrument, does the Minister know how many vehicles are likely to be affected? How many that can already apply have already done so? I am thinking of situations that could arise from a shortage of vehicles and new people coming into the industry without the experience that operators might have built up over many years. Have the Government considered whether there are any extra training needs, in order to ensure that there are skilled, experienced people with the right equipment and knowledge to ensure that animals are transported, where necessary, safely?
I also want to address the issue of mink and Covid-19, which the noble Baroness, Lady McIntosh, raised, although I am definitely coming from a different perspective. I consider mink farming to be a disastrous and, as we now know, dangerous practice; it would be very good if no more mink pelts came into the UK—or, indeed, farmed animal pelts of any kind, perhaps. However, given the risk of zoonoses such as Covid-19, what continuing monitoring will the Government bring in to make sure that the risk of transmission of both animal and human disease through pelts is adequately addressed?
I also want to address some broader issues. As others have already noted, the Secondary Legislation Scrutiny Committee was told that the Government have ambitions to strengthen welfare and transport standards in the near future. I note that during both the Brexit referendum campaign and the 2019 general election, Boris Johnson, among many others, suggested that, for some people, a reason for leaving a European Union with very little in the way of a level playing field would be a ban on live animal exports. How is that ban coming along, and what are the Government’s plans?
I note the general desire expressed by the Government to strengthen animal welfare provisions; however, some deeply disturbing events are taking place. In the Peak District in recent weeks, mountain hares have been slaughtered and used in stink pits to trap other animals. The Sheffield and Rotherham Wildlife Trust, among many others, has been campaigning to end the use of stink pits. Scotland plans to increase the protections for mountain hares. Can the Minister tell me now or at some future point whether the Government are looking at the situation of mountain hares and stink pits? Are there any plans to change the current situation?
The statutory instrument refers to leg-hold traps. We are one of only five countries in Europe in which snares are legal. There are slightly different rules and interpretations in Wales, Scotland and England, but this is of course an area of grave concern to many people. The League Against Cruel Sports calculated, based on the Government’s own research, that 1.7 million animals a year are killed in these traps. Although the Wildlife and Countryside Act 1981 states that they should be set only for rabbits and foxes, given that so many other animals are regularly caught in them—I am thinking of particularly horrific film footage of a badger, and the reports we hear about domestic pets regularly being caught in, injured by and sometimes even killed by such snares—are the Government taking this opportunity, in reconsidering animal welfare, to look at the whole issue of snares and to consider joining most of the countries of Europe in banning them?
I am aware that I have asked lots of questions and I understand that it might not be possible to get answers to all of them today, but I would appreciate answers at some point.
Lord Greaves (LD) [V]
My Lords, this statutory instrument contains a series of very technical measures, which in many ways are simply a continuation of the present position in relation to all these issues: animal welfare, the movement in import and export of livestock, and the whole question of invasive animal and plant species. The Minister very kindly offered the opposition parties a briefing on these matters, which unfortunately I could not get to in the end, but I thank him for it anyway. I hope that I did not miss anything desperate.
It is a pleasure to take part in my first debate with the noble Lord, Lord Walney, who is waving at me. He is very welcome, in the sense that he is another Member of your Lordships’ House from the north-west of England, which for many people is far away. We may be few and far between, but any addition to the ranks is extremely valuable and helpful, and I very much welcome him to the House.
The noble Baroness, Lady Bennett, talked about animal welfare in a number of ways. The questions that she asked were relevant, and I look forward to the Minister’s answers. Today we are having the launch of new measures in relation to farming and land management that come from the Agriculture Bill, which we recently spent a lot of time debating in this House. We passed a Bill that allows the Government to do all kinds of things, some of them extremely welcome in terms of improving the contribution of farming and land management to the natural environment, biodiversity, carbon reduction and the continued supply of good, wholesome food in this country—and, we hope, the increase in all that.
What I have seen so far of today’s launch does not take us much further than saying that it is full of all kinds of good things, which we will look forward to when we see more of the details—and, no doubt, lots of statutory instruments such as this one. In terms of animal welfare, can the Minister confirm that those parts of the Agriculture Act that refer to improved animal husbandry and welfare on farms as well as improved biodiversity and support for native wildlife and animal species, such as the red squirrel that the noble Lord, Lord Walney, mentioned, will still be a government priority?
More important than the question of movement when it comes to alien plant species—although it is very important indeed that checks are kept at least as good as they are now, and preferably improved—is the management of alien species once they have set foot and taken hold on a large scale in this country. Earlier this year, the Government gave their response to a consultation on alien plant species and on a number of the most important ones growing in the wild. Can the Minister give us an update in relation to what is happening to the consultation and the Government’s response, as well as to efforts to eradicate these entirely unhelpful species that exist?
While we are on this, I cannot avoid mentioning Japanese knotweed, which was not on the list and which has been around for rather a long time. For the last few years, the Government have promised us all sorts of magic solutions to this, but we do not seem to have got them yet. Can the Minister update us on what is happening about that?
On the whole question of alien species, there are long-standing nuisances such as grey squirrels, which many people love and delight in having in their area—there is a lot of education to be done in large areas of England if we are going to move to replacing grey squirrels with the red squirrels that they replaced, not just in places where they are still hanging on, such as the Lake District. It would be very helpful if we could have a House of Lords debate on these matters as soon as possible, because major issues of management need discussing now that, as the Minister might perhaps say, we have “taken back control” of what we do about them. As the noble Lord, Lord Walney, said, this is about co-ordination of action across the United Kingdom. The Scottish Highlands is an area where red squirrels can still be seen; I have seen them in the Highlands, as well as in the Lake District. That co-ordination across the United Kingdom is very important, as is the level of resources that go into this work. Again, as the noble Lord said, that is something that needs serious attention.
As always, I was interested in what the noble Baroness, Lady McIntosh of Pickering, had to say—in this case, about small abattoirs and vets. I remember when we had a small abattoir in our town; it was a damned nuisance because the blood ran across the back street. Now we have the biggest abattoir in the north of England, which is a rather different matter. But getting back to small abattoirs, if it is in any way possible, particularly in the more remote rural parts of this country, is an important issue.
All the issues raised are interesting and important. Most of them are probably not specifically and technically related to what the statutory instrument actually says, but I look forward to the Minister’s reply on all of them.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for introducing this SI this afternoon and for organising the very helpful briefing beforehand, which I was able to attend. We have heard some interesting contributions and a number of questions, and I look forward to hearing what the Minister has to say. It is clear that the changes in the proposed SI are necessary in the three different areas that it covers— namely, to secure the continuation of an effective regime for animal welfare in transport, slaughter and other areas; to continue the ban on leg-hold traps and the import of pelts obtained by that method; and to ensure that the strict protections placed against invasive non-native species are maintained. It also, importantly, provides continuity to business in these areas after the end of the transition period. I understand that reciprocal arrangements are being discussed with the Republic of Ireland but have not yet been finalised, so I would be grateful if the Minister could keep us informed on progress in this area.
We welcome the overall purpose of these regulations, which is to uphold these high standards in different areas of animal welfare and associated trade policy and apply the rules to EU countries in the same way as to other third countries. The noble Baroness, Lady Bennett, covered the area of animal welfare in great detail, so I shall not repeat her questions. However, I have a number of questions for the Minister, and I would be grateful for his clarification. A number of noble Lords mentioned the importance of getting the transport arrangements right. The Minister mentioned that one of the main changes is that of transporters having to apply for documentation from a competent authority in Great Britain rather than the EU. How and in what way is that being communicated to interested parties?
It is inevitable, as with any new system when it is introduced, that there will be teething problems. Is there any form of discretion that can be exercised if a transport arrives at a port without the relevant paperwork? If not, have the Government considered what kind of delay this is likely to cause, at what potential cost, and how those teething problems can be resolved?
Looking at the Explanatory Memorandum, I see that paragraph 10.2 talks about the consultation, and consultation outcomes. It states that Her Majesty’s Government have engaged with industry representatives on the recognition of EU journey logs and other certificates and authorisations that are required. Will the Minister outline the nature and timing of this engagement, and can we have an assurance from him that interested parties will be properly consulted ahead of any future policy changes?
On invasive non-native species, I will first say that it was interesting to hear the noble Lord, Lord Walney, and the noble Lord, Lord Greaves, talk about the red squirrel population. It is very important to support that. I am fortunate enough to have red squirrels visiting my garden and it is very important that we do not lose this precious species. On the other hand, I am not so fortunate in that I regularly battle with Himalayan balsam, which we also have growing extensively along the riverbanks on our land. I welcome the strengthening of these regulations so that emergency measures can be applied in order to add new species, and also the fact that the regulations have been approached in a co-ordinated manner across Great Britain. It is important that we control these invasive species as much as possible and that there is both contingency planning and the ability for a rapid response when required.
I will draw attention also to a couple of paragraphs of the Explanatory Memorandum. First, paragraph 2.24 says that changes to enforcement legislation will
“enable enforcement officers to use discretion when transferring seized specimens to appropriate facilities”.
Will the Minister provide further detail on what this discretion is likely to entail? The Minister also drew our attention to the proposal that items seized in Scotland would be allowed to be transported to a Scottish rather than English facility. Is this the full extent of the change, or will it be extended beyond that?
I think I will end there. We have a lot of questions for the Minister to answer, so I would be very grateful for his consideration of these matters and await his response with interest.
Lord Gardiner of Kimble (Con)
My Lords, I am most grateful to all noble Lords for contributing to this debate. We have gone quite wide, but all the topics have been fascinating. I will start by saying that these regulations do not amend any current animal welfare standards. What they do is make operability changes to ensure that the EU law that we have will work appropriately at the end of the transition period.
A number of key points were raised. The noble Baroness, Lady Hayman, raised the issue of transporters. This is very important. We have undertaken a significant amount of work to provide information to GB transporters to ensure that they are ready for the end of the transition period: for example, on the new requirements for transporter authorisation, certificates of competence, vehicle approval certification and journey logs. We have reminded them of these responsibilities, including the need to plan their journeys carefully to check that their proposed route is available and to ensure that they have contingency plans in place in the event of any delays. We have published a full list of updates on GOV.UK, as well as providing direct communication and a comprehensive Q&A document to all authorised transporters.
We have also disseminated information about the changes to our counterparts in the EU and have actively encouraged them to share it with their own transporters. Feedback received through APHA and through our stakeholder meetings and webinars has confirmed that both GB and EU transporters are aware of the new requirements and are preparing for the end of the transition period. We are aware, for instance, that GB drivers are already approaching EU member states to apply for certificates of competence.
I turn to inspections. APHA conducts inspections at ports on a risk and intelligence basis. If a transporter arrives at the port and welfare issues are identified, action will be taken by APHA to protect the welfare of the animals concerned. Appropriate regulatory and enforcement action could be taken. This may include, for example, a suspension of transporter authorisation or certificate of competence. I have some further information on that but obviously, we will want to keep all these matters under scrutiny because, clearly, what we want is a vibrant, smooth-running border and the continuance of trade. The noble Baroness, Lady Hayman, asked about changes. Obviously, we will want to consult because, in the end, this will have the success and the dynamic we all want only if there is that collaboration.
I turn to a number of the points that have been made. My noble friend Lady McIntosh—and, I think, all noble Lords—raised the issue of invasive species, including the grey squirrel and the wonderful red squirrel. The grey squirrel is on the list of species under the Invasive Alien Species (Enforcement and Permitting) Order 2019 and we no longer allow the release of grey squirrels from animal rescue centres. We are working closely with the UK Squirrel Accord and APHA on the fertility and control of grey squirrels, and I can tell noble Lords that this is an area on which I place great importance. Not only have we got the red squirrel to protect; we want to plant more trees and we want nature recovery, and the grey squirrel is a very bad invasive species for everything we want relating to trees.
On the discretion of enforcement officers regarding invasive non-native species, I say to the noble Baroness, Lady Hayman, that these amendments ensure that when border officials in Northern Ireland and Scotland seize animals at the UK border, common sense can prevail and they can send them to local facilities rather than to England and Wales.
A number of other points were made. I say to the noble Baroness, Lady Bennett, that we have issued comprehensive advice to all authorised transporters. The number of movements of live animals in January is usually quite low, and we believe that the impact will not be too great. APHA has recruited extra staff to process the additional applications for UK-based transporters. I say also to my noble friend Lady McIntosh that we will prioritise day-old chicks, but other live animals departing from the UK for the EU at the end of the transition period will be required to enter the EU via a border control post designed to deal with them. Transporters have a legal duty to ensure the welfare of animals in their care and should have in place contingency plans to ensure animal welfare even if there is disruption.
An important point was made about vets. I am working with vets from within the UK and also EU nationals, who play such a dramatically important part in the veterinary profession of this country. The Government are working with veterinary organisations to ensure that there is sufficient veterinary resource available to fulfil all duties.
On the point raised by the noble Lord, Lord Greaves, officials from both Defra and the FSA are working with the Sustainable Food Trust on the issues facing small abattoirs and what scope may exist to reduce regulatory burdens. In the end, it is imperative that we have high standards, whether for small or large operators, and we must ensure in all that we do that the safety of food is always paramount.
On the issue of rules on invasive species, a comprehensive review of this list is undertaken every six years. I should say that brent geese overwinter in the UK and therefore are on the native species list—and all of us have spoken at length about the grey squirrel.
Continuing EU collaboration on the issue of invasive species is absolutely essential. We have retained the regulation in our laws, so our stringent prohibition will remain the same. We will continue to remain a contracting party to the Berne convention and will work closely with counterpart jurisdictions. I have attended on a number of occasions the British-Irish Council and of course the island of Ireland is a single epidemiological unit. Therefore, it is absolutely essential that we work on that.
On the issue of live exports, I say to both the noble Baroness, Lady Bennett, and my noble friend Lady McIntosh that it is absolutely clear that we have a commitment to end excessively long journeys for slaughter and fattening, and we intend to consult on both our manifesto pledge and other more general welfare-in-transport improvements by the end of this year. So we will be fulfilling our manifesto pledge.
Going back to vehicles, approximately 2,000 are approved for the transport of live animals on long journeys in Great Britain. On snares, current legislation provides strong protection for threatened species and the welfare of trapped animals. Those committing an offence can face an unlimited fine or a custodial sentence. The onus is on trap operators to operate within the law and ensure that their activities do not harm protected species or cause unnecessary suffering.
My noble friend Lady McIntosh and the noble Baroness, Lady Bennett, raised the issue of mink. I am in constant touch with the Chief Veterinary Officer about this. Clearly, zoonosis is a very live issue at the moment, but always will be. We are keeping a close eye on the Danish situation and other countries where mink farming is undertaken.
Although I wish that there was an unlimited treasure chest to deal with invasive species, our efforts to tackle them are being considered as part of our business planning following the spending review settlement. I should also say to the noble Baroness, Lady Hayman, that the common travel area agreement places obligations on the UK and the Republic of Ireland to ensure that their nationals have a right to settle and work in both territories. The UK intends to honour its obligations.
Time is short, and I was asked more questions than I could answer in double the time, so I will write to noble Lords on some of the other issues. However, let me say to the noble Lord, Lord Walney, that quite a lot of the plant issues he raised may come up next week, but obviously, there will be checks on plants and plant material; it is very important that we keep our country biosecure. I am interested in how we can enhance biosecurity and continue trade in a sensible manner.
I will look at the other matters raised by noble Lords. In the meantime, I commend these technical and operable regulations to the Committee.
Arrangement of Business
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering, except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
The microphone system for physical participants has changed. Microphones will no longer be turned on at all times in order to reduce the noise for remote participants. When it is your turn to speak, please press the button on the microphone stand. Once you have done that, wait for the green flashing light to turn red before you begin to speak. The process for unmuting and muting for remote participants remains the same.
Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020.
Relevant document: 33rd Report from the Secondary Legislation Scrutiny Committee
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I hope it will be useful to your Lordships if I speak to both the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 and the Food (Amendment) (EU Exit) Regulations 2020 as both relate to food and drink policy.
The first set of regulations contains necessary amendments to EU agri-food, spirit drinks, wine and aromatised wine regulations so that they can function in domestic law. These primarily concern geographical indication—or GI—schemes, a form of intellectual property for food and drink products, but also extend to wine and spirit drinks sector standards.
I first want to address the impact of the Northern Ireland protocol. For the duration of the protocol, the EU GI framework will apply in Northern Ireland. As such, most of this instrument has the territorial extent of Great Britain. However, as these schemes will be administered and regulated by the UK Government, they will be referred to as “UK GI schemes”. Geographical indications are a form of intellectual property protection for the names of food, drink and agricultural products with qualities attributable to the place they are produced or the traditional methods by which they are made. Examples are Scotch whisky, Welsh lamb and Melton Mowbray pork pies. Most of the amendments made by this instrument are to the retained EU regulations that govern GI schemes. They collectively convert the four EU GI schemes into a legal framework for GI schemes in Great Britain.
The framework will allow applications for GI protection to be made to the Secretary of State by UK and international applicants. It will allow them to be scrutinised and consulted on, and for the Secretary of State to take decisions on awarding new GIs. In doing so we will condense what was a two-stage, member state to Commission application process into a single, streamlined domestic process. This means that decisions on protections for our food and drink products are made here in the UK and not in Brussels. Once awarded GI status, a product name is then added to the relevant public GI register established by this instrument. This means that GI protection formally takes effect in Great Britain, protecting the GI against misuse of its name. From 1 January, all existing UK GIs and EU GIs will be on our registers. These will be joined by international GI products protected through our trade agreements. The rules collectively ensure that the UK meets its WTO obligations under the TRIPS Agreement—the agreement on Trade-Related Aspects of Intellectual Property Rights.
Turning to GI logos, this instrument removes the requirement for EU GI logos to be used by British producers and establishes the new domestic logos. To avoid burdening producers, we are introducing a three-year period before logo use becomes mandatory on relevant British products. Other amendments to ensure the smooth operation of our GI schemes include new procedures enabling appeals to be made to a First-tier Tribunal; allowing Northern Ireland applications directly to the UK schemes without first requiring protection under the EU schemes; ensuring that UK applications to the EU that are undetermined at the end of the transition period transfer to the UK schemes; preserving the existing relationship between GIs and trade marks in determining if a trade mark can be granted; and ensuring the intellectual property protection of wine “traditional terms” such as “reserva”’ and “grand cru”.
The instrument also includes a much smaller number of non-GI amendments to the EU wine and spirit drinks sector rules. These include the definition, composition and labelling of spirit drinks; and the use of wine labelling terms, experimental winemaking practices, accompanying documents and the registers that must be maintained by wine operators. Finally, the instrument amends the domestic legislation which enables enforcement of the regulations. It makes separate amendments for Great Britain and to Northern Ireland to take account of the different regulations that will apply in each territory from 2021.
The devolved Administrations have given their consent to this instrument. Although the GI provisions are reserved, as intellectual property, Defra has built up a strong working relationship with the devolved Administrations on the GI schemes. Their interest in, and the value they can add to, the new schemes’ operations is recognised. Beyond the legislation, a working level arrangement has been agreed which sets out how the four nations will work together on the new GI schemes. In particular, the devolved Administrations will have a role in appraising new scheme applications and addressing scheme operations, and promotion and international trade. These rules collectively ensure that we have not only a fully functional GI framework, but one that enables and encourages our international reputation for quality food and drink to grow.
The Food (Amendment) (EU Exit) Regulations 2020 concern natural mineral waters and food information to consumers. Their main purpose is to place food information to consumers and natural mineral waters rules on a legal footing that accounts for the Northern Ireland protocol. They also make some minor technical amendments to retained direct EU legislation and domestic regulations to ensure the operability of this legislation at the end of the transition period. They do not bring a substantive change in policy.
Turning to natural mineral waters, the current legislation does not differentiate between EU retained law as applicable in England and EU regulations as applicable in Northern Ireland. These amendments are being made to reflect the position of Northern Ireland under the protocol. Also, previous EU exit legislation was laid to ensure the protection of the internal UK market by providing mutual recognition clauses with Northern Ireland, Wales and Scotland. This SI will amend those mutual recognition clauses to narrow their effect.
On food information to consumers, retained EU regulations assure a high level of consumer protection in relation to food information, so that consumers are not misled about their food, can make informed food choices and can use food safely. Previous EU exit legislation made amendments to make the retained food information legislation operable in the context of the UK no longer being an EU member state. This SI amends that legislation to ensure that it applies in a way that meets the conditions of the NI protocol.
Both instruments have received devolved administration consent and, as I have outlined, the regulations will ensure that the relevant rules operate effectively in domestic law. I beg to move.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, I thank my noble friend for setting out the draft regulations so clearly. They are important, concerning as they do geographical indications and their protection, such as, as the Minister set out, Welsh lamb, Scotch whisky and Melton Mowbray pork pies. I have enjoyed them all in my time, and many other items governed by the regulations: cheeses, meats, wines and so on. They are clearly important both within the UK and in the broader EU.
The regulations are significant in terms of the protection that will be offered within Great Britain by the new system. As I understand it, and I think the Minister backed this up, Northern Ireland will be governed by the Northern Ireland protocol and will effectively still be treated as an EU member state, so is being treated in much the same way as it has been in the past. The new regulations will apply in the rest of the UK—in other words, in Great Britain.
The Minister referred to a simplified, streamlined procedure with one stage for domestic purposes after the end of the transition period—in other words, from 1 January next year. Can she confirm, because having read the regulations I am still not absolutely clear, that the new system falls into place immediately after the transition period ends? If that is the case, and there is an application for a new protection—a new geographical indication—early in the new year, I can see that our domestic procedure will be clear, but what will happen in the broader EU context? The Minister referred to existing EU geographical indications being recognised here, and I think she also said that our existing indications will be represented over there. Will that be true of new ones? I welcome that, if it is the case, but if there is a freezing of the current position and it does not apply to new ones, for how long are we assured that the existing position will be protected? Is that dependent on an agreement between now and the end of the transition period? Otherwise, what happens to existing protections? Will they apply for all time? That is very important for our market, and presumably for EU markets over here. So that needs to be cleared up by the Minister, and I would welcome her dealing with that point.
I welcome the tenor of the regulations. The Minister set out that the devolved Administrations have been involved closely in the process. That is to be welcomed. It has not always been the case, but they have been closely involved here, as indeed they should be. Geographical indications matter to all parts of the country, and if the whole country is working together as one on this, that is very much to be welcomed.
I do not think the Minister touched on this specifically, but I also welcome the fact that there seems to be a common-sense approach to using existing labels with existing logos, and so on, until they are exhausted or until the end of the 21-month breathing space. That sounds very sensible.
So I very much welcome the tenor of what we are seeking to do here, but I am concerned about what happens with regard to new geographical indications. I am also concerned about whether we have lasting protection within the EU for GB indications and vice versa. Those are my two real concerns, and I should be very grateful if my noble friend could deal with them when she comes to reply.
Lord Naseby (Con)
My Lords, I start with the report on instruments of interest by the Secondary Legislation Scrutiny Committee. Page 10 considers them in three paragraphs. I will home in on wines—I declare an interest: I have a small vineyard of my own of 100 vines—and spirits. On spirits, there are at the moment something over 100 different gins in the UK, and more are threatened. That is my first point. My second is that the English wine industry, viticulture, is growing very fast at the moment and there are new entrants all the time, which is very encouraging. Is the Minister confident that within the changes we are looking at today, new entrants can be fully briefed, will be welcome and will not be held up by the transitional changes to GI standards?
My second question concerns paragraph 34 of the Secondary Legislation Scrutiny Committee’s 33rd report. It says that this secondary legislation
“will enable the UK to meet its obligations under the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights.”
However, as I understand it, Northern Ireland is using the protocol, so am I right in thinking that Northern Ireland is in the same boat, so to speak, as it is part of the UK but is somehow or other still stuck in the protocol? I am not entirely clear on how that works.
Thirdly, paragraph 35 of the same report says that, when the committee met, Defra confirmed—indeed, was confident—that total reciprocation
“was ‘the expectation and will be the default position’ at the end of the TP”.
Is that the situation at the moment?
Turning to the explanatory side of the Food and Feed Hygiene and Safety (Miscellaneous Amendments) (EU Exit) Regulations, am I right in thinking that if there is no deal—this is in paragraph 2.2 of the Explanatory Memorandum—we will, in a sense, have to have another lot of SIs? That seems an important question to me.
Paragraph 2.5 of the same Explanatory Memorandum, headed “What will it do now?”, says:
“A number of individual changes are made to retained EU law … The changes are detailed at paragraph 7 and will enable retained EU law to be operable after EU Exit and provide a smooth transition for affected businesses. The changes introduced do not affect the essence of the legislation but ensure that it remains operable after exit.”
Is that mirrored in the Northern Ireland protocol?
Moving on, my noble friend asked about the 21-month period. My reading of paragraph 7.13 is that it starts on 1 January 2021. I, too, would like confirmation of that.
Paragraph 7.16 talks about the Crown dependencies. What is the situation with the overseas territories? The two often go in parallel. I declare an interest in that a member of my family works in one of the overseas territories, although he is not in food or anything like that. As the two often go in tandem, I wonder what the position is now that we have highlighted the Crown dependencies.
In paragraph 7.17, reference is made to Japan. We recently signed a new trade agreement with Japan, so am I to understand that the points made in paragraph 7.17 were covered in the trade agreement, or did not need to be; or are we not too sure whether they are in the trade agreement or not? That seems of some importance.
When we came to the consultation under point 10, there clearly were a number of issues raised, it says, although the number of respondents was not too great. I imagine that the trade associations were all consulted. Again, can my noble friend the Minister confirm that the new trade body for English wine producers was consulted? If not, can we please make sure that it is in future?
It is not clear from paragraph 10.2 of the food and feed hygiene and safety Explanatory Memorandum what the issues were over which there was difficulty. There clearly must have been some because it says that there were “mixed comments”; that suggests that there were obviously some problems somewhere. It would be nice to know what they were.
Paragraph 12.2 talks about staffing. It says:
“It is estimated that one officer in each of these authorities … will need to undertake this task.”
It seems to me that the first things we should learn in life, as I am sure we do, is that people get ill—especially when we are in the middle of a pandemic—and have vacations. Presumably the one-person equivalent needs to be available in each local authority, which, in effect, means that there has to be two. That covers the Trading Standards officers, presumably. Here it also mentions the “Port Health Officer”.
Lastly, paragraph 13.2 is very important because, in the current market—I used to be involved in the food industry—there are a host of small, new microbusinesses being set up. The creativity of the British nation in lockdown has mainly been in the area of food and developing new food products in particular. I just hope that, when there is this
“high ratio of small and micro food businesses in the UK”,
somehow or other, Defra takes a particularly focused look at how it can make sure that these businesses are fully briefed on the changes that are coming.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Naseby, particularly because, in his celebration of new, small, independent producers of wines and spirits, he gave me the opportunity to note that Yorkshire has what is billed as its first single-malt whisky distillery—the Spirit of Yorkshire distillery—and that a number of new, small, independent businesses are creating interesting gins in Yorkshire. It is clearly important that these local businesses are able to flourish.
I thank the Minister for clearly outlining these regulations. I warn the noble Baroness, Lady McIntosh of Pickering, since we have swapped places in the speakers’ list compared with the previous set of Sis, that I am planning to be quite brief and not take up my full seven minutes.
I want chiefly to concentrate on the agricultural products regulations—particularly the geographical indicators element, focusing, as I began, on the importance of small, local, independent producers. We want to see so much more food production and small-scale manufacturing in the UK. It is interesting that most of the examples that people have cited come from meat, dairy and alcohol; given that so many parts of the UK have brilliant conditions for growing fruit and vegetables, it would be nice to see much more celebration of—and encouragement of the celebration of—those products.
I join other noble Lords in asking what attempts will be made to promote this idea of geographical indicators and to promote the new system, which, we are told, and hope, will be simpler for people to access. We must make sure that it is indeed accessible by very small-scale local producers, who may be producing some exciting and, indeed, healthy new things—and, of course, who face such high levels of multinational competition, given the nature of our current food system, that they really need support to stand up against that.
I join the noble Lord, Lord Bourne of Aberystwyth, in celebrating the fact that working-level agreements have been agreed with the devolved Administrations. I really think that we can hope to see such an approach take hold across government much more broadly.
Finally, I want to comment on the second set of regulations that we are considering. On natural mineral waters, I suspect that I would be accused of venturing too far from the topic if I asked questions about the bottle deposit scheme, so I will not do that. However, I will note that this whole area of industry needs an enormous amount of work in terms of its environmental impact, particularly its unnecessary environmental impact. We are a very long way from any kind of circular economy set-up; of course, we have perfectly good, healthy tap water across the UK so this is an area where I hope we will see a lot more action from the Government very soon.
Baroness McIntosh of Pickering (Con)
I am delighted to follow the noble Baroness, Lady Bennett. I congratulate the Minister, my noble friend Lady Bloomfield, on her clear and comprehensive introduction of these two very complicated statutory instruments.
I acknowledge the importance of this field of GI foods, which is the subject of the first, rather large, instrument in this regard. Scotch whisky is I believe our greatest export, not just of food and drink but perhaps of any manufactured good. It is interesting to note that Scotch whisky, Scottish salmon, chocolate and cheese are the top four exports.
It is of note that, while our exports to non-EU countries have increased, they have not yet reached the volume or value of our exports in the last 10 years to the EU 27 countries. The figures for exports of food and drink in 2010 were £4.9 billion to the EU and £2.4 billion to non-EU countries. In 2019 they were £5.9 billion to EU 27 countries and £3.8 billion to non-EU countries. Therefore, Scottish salmon in particular is very important indeed. When I was the MP for a North Yorkshire seat, I had a little campaign to try to get GI for Yorkshire pudding—but it was very difficult to prove that it was actually geographic when it was made.
I will ask some questions. What will be the costs of what was recognised in the Commons essentially as a “policy change” that
“lays the framework for setting up our new … GI system”?—[Official Report, Commons, Delegated Legislation Committee, 25/11/20; col. 6.]
Does my noble friend have any idea of what the cost to businesses will be? Where are we on the internal digital infrastructure necessary to administer all this, and does she expect that it will be in place by 1 January?
Baroness McIntosh of Pickering (Con)
On the question of costs, I understand that two processes will apply to producers who wish to sell both in the Great Britain market as well as in the European Union market. So what chance is there is that the two processes will be aligned, when that might be, and what will be the specific cost to producers of having to make two applications? As we will now have tribunal inquiry proceedings, do the Government envisage that there will be a run of clarifications required in this regard? Has there previously been such a procedure or are the Government introducing this for the first time?
I am slightly confused by the different transitional schemes. I welcome the fact there is a three-year transitional scheme for labelling, whereas there is only a six-month scheme in the second regulation for transition into the processes required under that one, and an 18-month transitional scheme is required for either logos or labelling. So it is a three-year period for domestic logos, a different one for labelling and a different one again in the third regulation. If I am confused, perhaps my noble friend might imagine that some of the producers might be equally confused.
I am slightly concerned that there is only an “expectation” of reciprocity. This was raised by my noble friend Lord Naseby and set out in the excellent 33rd report of the Secondary Legislation Scrutiny Committee, for which I am very grateful. Surely it must be something more than an expectation only of reciprocity, and should we not know by now whether there will be reciprocity even in the event of no deal? Like others, I would be extremely pleased to know the implications for the instrument before us today of a deal or no deal.
I welcome the two sets of regulations overall. I congratulate the department on putting together the extensive proposals in the first set, on agricultural products, food and drink—a massive piece of work. I would appreciate greater clarity on where we are running two processes. Where are we on the costs and on reciprocity? What are the potential burdens imposed under the two proposals? The noble Lord, Lord Naseby, asked about a consultation, but has an impact assessment been provided in the preparations?
This is an extremely important area of food production, one at which Great Britain excels in terms of exports of salmon, chocolate, cheese and other products. I wish my noble friend a fair wind but look forward to her replies to the questions I have raised, for which I thank her in advance.
Baroness Parminter (LD) [V]
My Lords, our Benches are content with these two statutory instruments and I thank the Minister and her civil servants for the meeting she arranged to brief us in advance.
As other noble Lords have said, these are important statutory instruments because geographical indication schemes are important to our food and drink industry, particularly our exports. My understanding is that the schemes represent around one quarter of all UK food and drink exports by value, which is approximately £6 billion in export value each year—a significant part of our food industry. Equally, getting these statutory instruments right is about guaranteeing the authenticity of the regulations and the trading of foods, providing reassurances for shoppers and protecting British producers from imitations.
Like the noble Lord, Lord Naseby, and the noble Baroness, Lady McIntosh of Pickering, I am interested to hear what the Minister has to say about reciprocity and no deal. My understanding is that if there is no deal, we have no guarantee that UK GIs will be recognised, and companies will be subject to third-country status. That will amount to a lot of extra time for businesses large and small, because they will need to apply first to the UK scheme and then to the EU scheme, or vice versa in the case of Northern Ireland. Many businesses have spent many years developing their applications and securing their protections. We therefore need to get this sorted as soon as we can to ensure that those products can be retained on the shelves and we do not have to take them off-shelf because the packaging is no longer approved, and to allow those businesses to get back exporting as soon as possible.
There are also issues around the implementation of the Northern Ireland protocol, in that Northern Ireland products with protections of geographical and traditional names will remain under the rules of the EU scheme. My understanding is that seven Irish products are currently granted protected geographical status under EU law, which means they will equally be obliged to maintain the EU logo, with its visual links to the flag of the European Union. That will apply to three all-Ireland spirits—Irish whiskey, Irish cream and Irish poteen. However, four exclusively Northern Ireland food products will be required to carry on using the logo, with its visual links to the flag of the European Union: Comber new potatoes—I apologise in advance if my pronunciation is wrong—Lough Neagh eels and pollan, and Armagh bramley apples.
The noble Lord, Lord Bourne of Aberystwyth, and the noble Baroness, Lady McIntosh of Pickering, mentioned the issue of geographical indications being reserved matters. Clearly, there are sensitivities over our sense of place and identity and its visual representations. I am therefore grateful to the Minister for taking the time to spell out the close links and discussions with the devolved Administrations, which will continue throughout the scheme. I hope that will also include a review of the scheme.
The noble Baroness, Lady McIntosh, mentioned the extra burdens on and costs for business. I am keen to hear what the Minister has to say about that. Will she also say a few words about the estimated time the new approvals will take for businesses? I appreciate that there will now be one stage, as opposed to two, so I hope that the time between applying for and completing verification will be shorter. Is there a future time frame for businesses that wish to receive verification?
Finally, in addressing an issue that has not been touched on by others, I am keen to say something fresh about the budget implications for Defra. As the noble Baroness, Lady McIntosh, said, there is no impact assessment for this scheme because of the limited implications for business. However, this will be a significant area of spend for the department in terms of processing and verifying applications, maintaining the register, appeals, enforcement and communication—an issue raised by the noble Baroness, Lady Bennett. I appreciate that other departments are involved, especially HMRC with verifications and other departments with communications, but Defra will still need a significant amount. I understand that Defra asked for extra money in the departmental spending review to facilitate running these new schemes. Does the Minister know whether the requested extra money was approved?
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for introducing the SIs this afternoon and for organising the helpful briefing beforehand. I also thank noble Lords for their contributions. I was particularly interested to hear about the vineyard of the noble Lord, Lord Naseby. The Minister has clearly explained the amendments to EU legislation—the previously made exit SIs—needed to address the Northern Ireland protocol and fix any deficiencies in retained EU law.
The issues regarding Northern Ireland and the implications for trade with the Republic of Ireland are clearly complex. I would welcome an update on cross-border arrangements from the Minister. The regulations are complex but important, so we need to get them right. The noble Baroness, Lady Parminter, spoke of the economic importance to our country of protected goods. We on these Benches support what the Government are doing by bringing in these regulations, but as noble Lords may expect, we have a few questions.
I turn to cost, which was mentioned by the noble Baroness, Lady McIntosh of Pickering. I understand that the regulations are not expected to have any significant financial implications, but there are likely to be some for industry and producers, particularly the specialist food producers and those with protected designations. What is the Government’s assessment of these extra costs and what costs are likely when applying for new geographical indicator status or when appealing to the First-tier Tribunal?
On the Food (Amendment) (EU Exit) Regulations 2020, it would be very helpful to understand more about the change outlined in paragraphs 2.8 and 2.9 of the Explanatory Memorandum in relation to mutual recognition clauses on permitting the sale of natural mineral waters. England is going to make its own decisions about whether EU EEA waters for sale in Scotland, Wales and Northern Ireland can also be sold here. Is that likely to be an essentially automatic process, or will specific criteria be applied? While it is important for consumers to have confidence in the products that they buy, we have a concern that we could end up unnecessarily double-checking or even triple-checking products that have already been certified in other jurisdictions.
On the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020, Labour has had questions over the status and future of GIs all the way back to the referendum. While having greater certainty is to be welcomed, it would have been helpful to have got to this stage much earlier in the Brexit process. Enabling new British protection of GIs is a welcome step, and the noble Lord, Lord Bourne, mentioned the importance of protections for new and existing GIs. But, as with lots of aspects of our future trade relationship with the EU, that only gets us so far, and we hope that a deal, if one is achieved, will include ongoing mutual recognition of GIs, as other noble Lords have mentioned. Is that the department’s aim? If it cannot be achieved, what is the likely impact on British producers that export products to the EU?
The SI also removes the requirement for EU GI logos to be on relevant product labels. If the UK and EU agree ongoing reciprocal arrangements, will this need to be revisited in future? In the Explanatory Memorandum, the wording in paragraph 2.14 speaks of removing the obligation to display an EU logo. This suggests that producers can choose to maintain it if they wish. Can the Minister confirm whether that is the case? Also, many different logos are used on food these days. I am aware that the Government have had extensive consultation with industry and consumers regarding the use of the new logo, which I applaud, but logos can become very confusing for consumers. So what resource is being put into educating the public on what the new logo means?
Paragraph 7.6 of the Explanatory Memorandum outlines the new appeals process, which allows an applicant for GI status to take their case to a First-tier Tribunal. Again, this has been subject to consultation, which we welcome, but we would be interested to know what information came out of that consultation. For example, did it give the department sufficient information to be able to estimate how many applications are likely to be made every year or how many appeals are likely to need to be heard? These may seem minor questions, but they have consequences for government in terms of the cost of legal representation.
I have one final point more generally about SIs. It is good to see some consolidation of previous SIs into the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 in front of us today. However, we have heard so many SIs covering similar areas, some of them revisiting or building on previous amendments, so we have inevitably ended up with some inconsistencies. So I end by putting out a plea for greater consistency in future. I await the Minister’s response with interest.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank all noble Lords who have contributed to the debate. There were a large number of questions, and in the 10 minutes allotted I shall try to get through as many as I can. If I leave anybody out, we will have a good look at Hansard and I shall write with any other answers.
To prepare for the UK no longer operating under EU law, it is essential that we have the right legislation in place to administer the domestic GI scheme and to ensure that natural mineral waters and food labelling are appropriately regulated. I recognise the time pressures and constraints that we have been operating under. We are coming to these at a rather later stage in the process than would have been ideal, but I am confident that these SIs have been drafted to make the new system work.
A number of noble Lords asked whether there would be ongoing mutual recognition between UK and EU GIs. My noble friends Lord Naseby and Lord Bourne, and others, asked that. For existing GIs, as registered under the EU schemes by 31 December, there will be continued recognition on both sides. That is, existing UK GIs will remain on the EU’s registers and existing EU GIs will be added to the UK’s GI registers. The situation regarding future GIs after the end of the transition period will be clear once trade negotiations with the EU have been completed. I am sure that that will come as no surprise to noble Lords. Producers in Northern Ireland will, of course, be able to apply directly to the EU schemes, as before.
The noble Lord, Lord Bourne, asked about World Trade Organization rules. This SI will provide the legal framework in England, Scotland and Wales to administer and enforce the GI schemes, also ensuring that the UK meets WTO trade-related aspects of intellectual property rights, or TRIPS, agreement obligations. In Northern Ireland, the UK will meet TRIPS obligations through the EU GI schemes.
My noble friend Lord Naseby asked about territorial extent. The EU GI rules do not apply in UK overseas territories, so these are treated by the rules as third countries. If they would like their products to be protected in the UK, they would need to apply to the UK scheme, like other producer groups. My noble friend also asked about the Northern Ireland protocol, as did the noble Baroness, Lady Parminter. Yes, retained EU law amended by this instrument is listed in Annexe 2 of the protocol, which means that Northern Ireland will continue to follow the unamended EU GI rules for the duration of the protocol. The territorial extent of retained EU law amended by the instrument and the GI schemes is, therefore, Great Britain and not the UK.
My noble friend Lord Naseby also asked whether anything had been done to minimise the extent to which Northern Ireland is treated differently. Yes, indeed, steps were taken to ensure this, given the UK Government’s Command Paper, The UK’s Approach to the Northern Ireland Protocol. This instrument allows Northern Ireland GI applicants to apply directly to the UK schemes without first needing protection under the EU schemes, which provide protection in Northern Ireland. We have also ensured that the new GI logos refer to UK protection, in the expectation that the protocol is a temporary arrangement.
I was asked by a number of noble Lords whether Defra had the right level of expertise and staffing. Yes, indeed, Defra will build on its existing experience of handling GI applications to provide a robust and transparent service to applicants. A team is already in place and dedicated to dealing with new applications from both the UK and overseas, with significant levels of preparatory work having taken place.
On the consultation and stakeholder engagement, Defra ran a public consultation in autumn 2018, which sought views on elements of new UK GI schemes, and on wider wine and spirit standards carried forward via this instrument. Beyond this we have undertaken targeted stakeholder engagement in 2019 and 2020 on the new GI scheme logos and handling appeals. This involved devolved Administrations, GI producers and trade bodies. Specific engagement on the replacement of the 2019 EU spirit drinks regulation, which this SI amends, has also taken place, primarily with the Scotch Whisky Association and the Wines and Spirit Trade Association. This SI was shared with selected stakeholders through the virtual reading room.
I was asked by the noble Baroness, Lady Hayman, and the noble Lord, Lord Naseby, about how the public will be educated about the new logos and what the schemes mean. The Government are developing a promotional strategy which will include raising awareness of the UK GI schemes and products among consumers, retailers and hospitality. We have recently published research that will help us to understand how to better promote GIs to consumers and to support promotional campaigns.
I note the interest of the noble Baroness, Lady Bennett, in bottle deposit schemes, which is now on the record, but it does extend rather beyond this SI. She also asked about the environmental impacts of natural mineral water and the bottled water industry. The industry is making great strides to meet its obligations and the Government are working hard to ensure that the UK meets its environmental obligations.
I was asked by nearly all noble Lords about the cost of the new GI schemes, both for the Government and for business. We expect the cost to government of domestic applications to be in line with those to date, because this is not a new function. However, there will be modest extra costs for considering applications from third countries. But at this stage, of course, demand is very difficult to gauge. On communications, we will use existing channels as far as possible, working closely with the Department for International Trade and the Food is GREAT campaign to promote UK GIs internationally. We will also work collaboratively with producers, trade bodies and the retail sector where possible.
On the costs to business, there will be no fee for applying to the UK GI schemes or to submit an appeal under the First-tier Tribunal. GI producers will continue to bear any costs associated with the verification of their products, as they do under the current EU GI schemes. There will be no additional fees for verification. The cost to GI producers to adopt the new UK GI logos will be negligible. This is based on an analysis that a three-year adoption period will reduce the cost burden to businesses by around 95% compared with an immediate-change requirement.
I was asked by my noble friend Lady McIntosh and the noble Baroness, Lady Hayman, about the costs for adopting the new logos. I have answered that question.
My noble friend Lady McIntosh asked whether Defra had completed the necessary steps to introduce the new scheme. The short answer is, yes: the key components are this legislation, the GI registers, new logos and scheme guidance. All have been completed or are comfortably on schedule to be ready by 1 January 2021. Significant attention has also been given to mapping and testing the new processes, for example for new applications, by the staff who will be administering the schemes. This is in the final stages of being completed, to be ready for 1 January.
No debate on an SI would be complete without my noble friend Lady McIntosh asking about an impact assessment. I hate to disappoint her on this occasion, but an impact assessment was not needed. The purpose of the instrument is to maintain existing regulatory standards and therefore there is expected to be minimal impact on business. Changes that did have an impact, such as the adoption of new logos, do not meet the minimum threshold for an impact assessment.
My noble friend also asked about how a First-tier Tribunal was decided on as the body to hear GI appeals and how many appeals we could expect. The First-tier Tribunal was proposed in public consultation as being suitable to hear GI appeals. The majority of respondents supported the proposal. We expect very few appeals to arise. As well as the rate of GI applications generally being modest, the registration process already allows objections to the registration of a new GI to be raised before the Secretary of State makes a decision. This is intended to resolve disagreements within the normal application process, so First-tier Tribunals would be the exception. There will be no charge for making an appeal and the Government—through Defra—will pay the cost of hearing each case, which is estimated to be about £3,000.
My noble friend Lady McIntosh also asked about the timescales for GI logo labelling. As I have said, this was agreed through public consultation. Lastly, the EU logo can continue to be used on GB products, but it will no longer be a requirement to do so. This provides producer choice, recognising that the GI was awarded under the EU processes, and the EU logo may carry more weight in the EU marketplace. The rules on using both the EU and UK logos have been communicated to GI producers, retailers and enforcement bodies. There is also written guidance to support this. For Northern Ireland agri-food GIs that are protected under the EU regime, it will be mandatory to use the EU logo.
I hope that noble Lords fully understand the need for these regulations. As I have outlined, they ensure that existing regimes for geographical indications, natural mineral waters and food labelling will continue to operate effectively from the end of the transition period. If there are any further questions that I have not answered, I will do so in writing. I commend these instruments to the Committee.
Food (Amendment) (EU Exit) Regulations 2020
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Food (Amendment) (EU Exit) Regulations 2020.
Arrangement of Business
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the room to wear a face covering except when seated at their desk, to speak sitting down, and to wipe down their desk, chair and any other surfaces they may touch. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
The microphone system for physical participants has changed. Your microphones will no longer be turned on at all times, in order to reduce the noise for remote participants. When it is your turn to speak, please press the button on the microphone stand. Once you have done that, wait for the green flashing light to turn red before you begin speaking. The process for unmuting and muting for remote participants remains the same. The time limit is one hour.
European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020
(4 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, the Government have already undertaken extensive work to provide for a functioning domestic statute book by 31 December. Ahead of our exit from the EU on 31 January, the Government made a significant amount of exit-related legislation, including more than 630 statutory instruments. The Government continue to deliver the secondary legislation required to ensure a functioning statute book at the end of the transition period, so we are able to seize the opportunities of being an independent sovereign nation.
This instrument is a clear example of that. It makes various consequential amendments and repeals in respect of retained EU law, relevant separation agreement law and other EU-derived domestic legislation. I will explain this in further detail in a moment, but in short, it is highly technical and does not implement any new policy. It will ensure that the UK statute book works coherently and effectively following the end of the transition period.
The instrument was laid by my right honourable friend the Chancellor of the Duchy of Lancaster in exercise of temporary powers provided for in the EU withdrawal Act 2018 and the EU withdrawal agreement Act 2020. These powers allow Ministers to make provisions that they consider appropriate in consequence of those Acts. These are standard consequential powers that are commonplace in legislation. Such powers are inherently limited, their main expected use being for matters of a technical nature. This instrument is no exception.
The Government have already made several exit-related consequential statutory instruments in recent years, which were needed as a result of the European Union (Withdrawal) Act 2018. However, since those instruments were made, we have left the EU with a deal—the withdrawal agreement—and entered the transition period. The statutory instrument we are discussing today includes provisions required as a result of the withdrawal agreement and the legislation that implemented it: the European Union (Withdrawal Agreement) Act 2020.
The main changes arising from the European Union (Withdrawal Agreement) Act 2020 are: it introduces the transition period and delays the commencement of exit-related statutory instruments until the implementation period completion day; it provides that retained EU law comes into effect on IP completion day instead of exit day; and it establishes relevant separation agreement law. In the light of the introduction of relevant separation agreement law, the instrument clarifies how references in UK legislation to EU instruments are to be interpreted after IP completion day. This includes how references to EU instruments that form part of relevant separation agreement law should be read.
The amendments made to the 2018 Act by the implementation of the withdrawal agreement mean that it is possible for EU instruments to form part of retained EU law for some purposes and have effect as relevant separation agreement law for other purposes. This means that after IP completion day, references to EU instruments in domestic legislation can have a dual meaning. This instrument makes interpretation provisions to remove uncertainty about which version of an EU instrument applies: the retained version or the version applied by the withdrawal agreement. This ensures that the correct interpretation of the EU instrument applies following the end of the transition period and removes room for confusion or uncertainty.
At this point, I draw your Lordships’ attention to the fact that, although the negative procedure could have been used for making this instrument under the consequential powers, we are following the affirmative procedure. This is to provide the opportunity for parliamentary debate.
To make these interpretive provisions, the instrument makes minor technical amendments to primary legislation, including the 2018 Act, the Interpretation Act 1978 and the latter’s devolved equivalents: the Legislation (Wales) Act 2019, the Interpretation Act (Northern Ireland) 1954 and the Interpretation and Legislation Reform (Scotland) Act 2010. Although the Government are not required to seek consent from, or consult with, the devolved Administrations on the provisions included in this instrument, there was extensive engagement at official level prior to the laying of this instrument to make sure that it worked effectively for the devolved legislatures. I note our gratitude to the devolved Administrations for their constructive collaboration on both this instrument and the wider body of readiness secondary legislation that is needed by the end of the year.
The instrument also makes technical repeals to redundant provisions within primary legislation arising from the European Union (Withdrawal) Act 2018, primarily due to the fact that it repealed the European Communities Act 1972. The 2018 Act provided for the repeal of the amended provisions of the 1972 Act, but not the amending provisions that lie behind them. As a consequence of those repeals, the amending provisions are redundant. Without these regulations, this legislation would continue to sit meaninglessly on our statute book; repealing it ensures that the statute book remains clear and effective.
As well as repealing redundant legislation, this instrument also makes consequential amendments to the European Union (Withdrawal) Act 2018 (Consequential Modifications and Repeals and Revocations) (EU Exit) Regulations 2019 to reflect the fact that they come into effect on IP completion day rather than exit day, and ensure that they operate effectively in the light of this.
I hope that noble Lords therefore agree that these draft regulations perform a small but worthwhile role in our preparations for the end of the transition period and demonstrate the Government’s commitment to ensuring certainty and clarity in the UK’s statute book. I beg to move.
Baroness McIntosh of Pickering (Con)
I want to take this opportunity to thank my noble friend for introducing the regulations before us and for the fact that they follow the affirmative procedure, enabling us to have a small debate on them.
In its 31st report, the Secondary Legislation Scrutiny Committee devoted just one paragraph to these regulations:
“This is an important technical instrument, necessary to ensure that the statute book operates correctly after Implementation Day.”
It concludes:
“The instrument provides a general gloss to ensure that the correct interpretation of any EU instrument applies. Cabinet Office states that statutory instruments being prepared by other departments in order to implement the Withdrawal Agreement, including the Northern Ireland Protocol, are relying on these glosses.”
I am somewhat confused as to what “gloss” means. To me, if you put a gloss on something, it potentially puts a spin on it. I could not find in the document that this was a term my noble friend’s department used—probably for a very good reason. I would be interested to know what gloss he puts on that interpretation in the report.
Obviously, we discussed these issues at some length during the passage of the two Acts to which my noble friend referred, and the instrument today helpfully sets out the sources of retained European law. One is missing, namely case law from the European Court of Justice, presumably up to the end of January this year but potentially up to the end of December this year. It is not clear to what extent we will have any regard to EU case law as agreed by the European Court of Justice. Obviously, we will not refer cases, because the Government have been very clear about that in the past. However, there may well be an expectation among some companies that feel that they are affected by this statutory instrument that they would have the right to rely on that case law in a UK court. I would be interested to know whether that is true in my noble friend’s view when he comes to sum up.
Another category of EU law on which I questioned my noble friend and his colleagues during the passage of those two Acts, and which particularly interests me, relates to the environment and agriculture generally, where these instruments of EU law were agreed but were not implemented by the end of 31 January 2020. To be honest, I do not have a clue whether they are ambulatory or non-ambulatory, but I would be very interested to know what decisions have been taken in regard to the applications of those instruments, whether they will be applicable to citizens and companies in this country and whether they can rely on them going forward.
Paragraph 2.8 of the Explanatory Memorandum, on page 2, helpfully says:
“The interpretation legislation amended by this instrument is not EU law; it is domestic legislation, which is being updated in consequence of”
the two Acts to which my noble friend referred, as he said. Paragraph 6.4 on page 4 sets out retained EU law without, as I say, including what I would consider to be EU law, namely the case law that has been decided during the course of this year. Paragraph 6.7 on page 4 states that the two Acts
“provide temporary powers to make provisions that Ministers consider appropriate in consequence of those Acts.”
In that regard, does my noble friend expect to come back at a future date to repeal other provisions of EU law, if he and his department intend to keep this under review? Paragraph 7.4 states:
“Where there is a dual meaning, the interpretive provision applicable to references to EU legislation that have effect as relevant separation agreement law will apply to the extent that the EU legislation takes effect as relevant separation agreement law.”
Paragraph 7.5 continues:
“These interpretive provisions are needed to ensure that the legislative framework for the Withdrawal Agreement and the Protocol on Ireland and Northern Ireland operates effectively.”
Paragraph 7.7 states that Regulation 3 makes amendments to the European Union (Withdrawal) Act 2018
“to provide how existing ambulatory references to EU instruments that will have effect as relevant separation agreement law are to be interpreted after IP Completion Day. Ambulatory references are references to EU instruments that automatically update when the EU instrument is updated.”
I do not intend to use the full time that has been generously allocated to me, but I will end on a general question. With all interpretations of EU law that is now deemed to be retained EU law for UK purposes, in the event of a disagreement, who will interpret the provisions? Will it be the Minister’s department that is the ultimate arbiter, or will recourse to the courts be required? I understand that, probably still, one potential niggle that might be delaying the conclusion of a deal with the EU 27 this week—perhaps he could comment on this—is what the dispute resolution mechanism will be. Is there any update in that regard?
With those few words, I welcome this opportunity to consider the instrument that the Minister was kind enough to set out this afternoon.
The Deputy Chairman of Committees (Lord Lexden) (Con)
The noble Lord, Lord Bhatia, is having technical difficulties. In the circumstances, we will move on to the noble Lord, Lord Thomas of Gresford.
Lord Thomas of Gresford (LD) [V]
In 32 days’ time, the whole body of law concerning our relationship with the European Union, developed over 48 years, will disappear, and we shall be entering new legal territory. Retained European law will be added to our domestic law—a whole body emanating from the directives and regulations that we have hitherto followed through our membership of the European Union. This was the effect of the European Union (Withdrawal) Act 2018. As I understand it, if we wish in future to depart from or change anything in retained EU law, we will do it by the normal processes of Westminster legislation. Ambulatory provisions in European regulations, which provided for an automatic update in accordance with changes in European law, will cease.
All that was difficult enough, but understandable. However, as a result of the withdrawal agreement that was finally concluded earlier this year, the European Union (Withdrawal Agreement) Act 2020 was taken through Parliament. One purpose of that Act was to replace references to exit day with “IP completion day”; the changes made by the 2018 Act were, therefore, pushed back from exit day—the day when we left the European Union, at the end of last January—to 1 January next.
Another purpose of the 2020 Act was to fulfil the promise made in the Conservative 2019 manifesto that all British courts, down to and including magistrates’ courts, could throw off the burden of EU case law and principles, as interpreted by the European Court of Justice. The thinking behind that was not to promote the clarity and stability of our domestic law: it was, as I said in Grand Committee last week, the expression of the Conservative Party’s allergy to the European Court of Justice—an itch which has to be scratched.
As the 2020 Act required, there was extensive consultation of 73 bodies, encompassing the whole legal and judicial community. The manifesto commitment had by this time been watered down to a proposal that only the courts at Court of Appeal level should be able to depart from the precedents set in Europe. Only 20% of the consultees were in favour of this proposal, as we discussed last week; 80% were either wholly against it or did not support it. The Minister will no doubt be interested to hear that the noble and learned Lord, the Advocate-General for Scotland, in introducing the rejected proposals last week, nevertheless told us that we could be reassured by the fact that consultation had taken place. He did not actually mention the result of the consultation. Well, there is no such problem here, as there has been not the slightest consultation over these regulations—yet they, too, are supposed to introduce sweetness and light.
Unfortunately, the 2020 Act introduced the new concept of the “relevant separation agreement law”, which provides that any question as to the validity, meaning or effect of any “relevant separation agreement law” is to be decided in accordance with the withdrawal agreement and the like agreements and is to be consistent with various articles of the withdrawal agreement—and not just the current articles that are in issue, because the definition of “relevant separation agreement law” is widened by a final coda saying
“as that body of law is added to or otherwise modified by or under this Act or by other domestic law from time to time”.
Any lawyer trying to advise a business client as to his position with regard to, say, contractual or intellectual property rights already has a difficult task. Any individual embarking on litigation to sort out a dispute faces extensive legal costs and untold worry.
However, that is not the end under these regulations. Paragraph 6.6 of the Explanatory Memorandum tells us that the provisions of the European Union (Withdrawal) Act and the amendments made to that Act by the 2020 Act
“mean that it is possible for EU instruments to form part of retained EU law for some purposes and have effect as relevant separation agreement law for other purposes. This means that after IP Completion Day”—
in 32 days’ time—
“references to EU instruments in domestic legislation can have a dual meaning. For example, referring to the original version of the EU instrument that has effect as relevant separation agreement law for some purposes and referring to the domesticated version of the EU instrument that forms part of RDEUL for other purposes.”
So, in these regulations we are now importing into our domestic law retained EU law as amended by relevant separation agreement law, and any future amendment of it, as interpreted in the articles of the withdrawal agreements—and references to EU instruments in domestic law can have a dual meaning. Incidentally, the Northern Ireland protocol is part of the withdrawal agreement and is already under fire, with power to make regulations to break the law included in the UKIM Bill as drafted. We will have to see how that turns out.
For the sake of the sanity of the Court of Appeal and the Supreme Court, will the Minister kindly tell us how this dual meaning is supposed to take effect? What exactly are the separate dual meanings and for what purposes will one meaning be applicable in relevant separation agreement law and one in the domesticated version that is to form part of the retained domestic EU law? I cannot think of any legislation with a dual meaning for the same wording in the same provision which is to be interpreted differently in different legal contexts. I am willing to be enlightened.
I cannot expect the Minister to sort out this mess at the Dispatch Box, but I would be grateful if a memorandum could be prepared and published to make the position clear for lawyers advising their clients and judges seeking to interpret already complicated provisions of law. In any sensible legislative body, this instrument would be withdrawn and reformulated. Unhappily, so ineffective and weak are the procedures of the United Kingdom Parliament in scrutinising secondary legislation—as we are supposed to be doing now—that this instrument will go through in its present form. God help those who have to interpret it.
The Deputy Chairman of Committees (Lord Lexden) (Con)
I call again the noble Lord, Lord Bhatia, in the hope that we shall be able to hear him this time.
Lord Bhatia (Non-Afl) [V]
My Lords, this SI has been prepared by the Cabinet Office. Its purpose is to ensure that the UK statute book works correctly and effectively following the end of the transition period. The UK left the EU on 21 January 2020, following which the supremacy of EU law over UK law came to an end. The EUWA has achieved this legal severance through the repeal of the ECA on exit day. The withdrawal agreement agreed between the UK and the EU came into force on exit day.
The withdrawal agreement aims to ensure the UK’s orderly withdrawal from the EU. The EUWA has implemented the withdrawal agreement and provides the vehicle for the Government to give effect to the EEA EFTA separation agreement and the Swiss citizens’ rights agreement. The UK and the EU agreed in the withdrawal agreement that the UK’s exit from the EU would be followed by a time-limited transition period. That period started on exit day and ends on 31 December 2020.
Although the ECA was repealed on exit day, certain parts of it are to be kept in force by the EUWA, and EU law continues to apply during the transition period under the terms set out in the withdrawal agreement. This SI makes various consequential amendments and repeals in respect of retained EU law and the relevant separation agreement, laws and other EU-derived domestic legislation. This ensures that the UK statute book will operate effectively and coherently in relation to EU-derived domestic legislation and removes from the statute book domestic legislation that has been made redundant as a result of the EUWA.
Finally, this SI does not apply to activities undertaken by small businesses. Can the Minister give some estimate of the cost of this SI?
Baroness Hayter of Kentish Town (Lab)
My Lords, this has been an interesting debate on a somewhat technical range of issues. I am not going to pretend that I understand all of them, but a particularly interesting one was raised by the noble Baroness, Lady McIntosh, concerning the word “gloss”. I have seen the word used in the explanatory notes to a number of other orders and I assumed that it was a legal term. However, if the noble Baroness, who is legally trained, does not know the answer, it clearly is not in common legal use. As the Minister has now had time to find out about it, perhaps he could enlighten us.
Part of all this work arises from the completely misplaced idea that a system of law-making that we have had for almost half a century can suddenly be replaced by a domestic equivalent, with none of the time, debate, consultation and thought which normally goes into it. In fact, the Minister himself gave it away when he said that we have already had 650 SIs. In a sense, what we are doing is concertinaing into a couple of years what took almost 50 years to develop across the EU.
This also arises in part from the Government’s early denial that any implementation period would be needed. It was the Labour Party that first said we would need something like that, and to begin with there was resistance. I am grateful that the Government understood at the time that a period of adjustment was needed. The problem I have with “implementation”—or “IP completion date”, as it now is—is that it is still the wrong term. We are not implementing anything because we do not have a deal yet. We are actually still at the end of leaving: we are not implementing new rules because we do not know what the new arrangement is yet. It may be a question of semantics, but the word “implementation” is a bit odd and “transition” would be better. We are a month away from the end of the transition and we still have to sort out, as this provision is, the end of the withdrawal legislation.
As we have heard, this SI incorporates retained direct EU legislation or the relevant separation agreements into the Interpretation Act 1978 and its equivalent in the devolved Authorities. As the Minister said, it amends the Interpretation and Legislative Reform (Scotland) Act 2010, the Interpretation Act (Northern Ireland) 1954 and the Legislation (Wales) Act 2019. I think the Minister said that each of the devolved Authorities was “fully engaged” in the preparation of the regulations. He did not say whether they were content with them. Will he confirm that they were not only involved but happy that we are proceeding with the regulations today?
I am sure that the answer is yes, but will he also let us know whether the Law Society—
Baroness Hayter of Kentish Town (Lab)
My Lords, I am sure that the answer to this question is yes, but can the Minister confirm that, in addition to the devolved authorities, organisations such as the Law Society and the Bar Council, and European law specialists in particular, have been consulted in the preparation of these regulations?
There is also the issue of using secondary legislation to amend primary legislation: not just the Interpretation Act 1978 but also parts of the European Union (Withdrawal) Act 2018. This is the issue the noble Lord, Lord Thomas, raised, in a way. Can the Minister outline what assessment has been made of the effect on accountability and scrutiny of amending the withdrawal agreement by statutory instrument? Is he really content that that is a good way to proceed? I think he knows all the sensitives in the House about secondary legislation, so he will understand the question.
The Minister will also know of the concerns, touched on by the noble Lord, Lord Thomas, within and beyond the legal sector about the uncertainty that clients, lawyers and courts will face after January. One example is that, without the Lugano framework, we will revert to the national laws of each individual country to decide which court has jurisdiction over a legal issue and whether a judgment will be enforced. This is obviously key in family, bankruptcy, companies and transport law, and no doubt much more besides. Can the Minister update the Committee—if not now, perhaps he will write—on this and similar issues that the legal profession and its clients will face from January? In particular, can he update us on the Lugano framework? I have rather lost track of where we are on signing up to that; an update would be useful.
Just from looking at these regulations, it seems that the complexity of statutory instruments such as this will increase legal uncertainty. Perhaps the Minister could provide some assurance that, even if I do not understand every technical word, every lawyer in the land will.
Lord True (Con)
Well, my Lords, I am loath to speak for any lawyer, let alone every lawyer in the land. I hope this SI proves to be the clarifying instrument that we hope it is.
I was asked a number of questions, not all of which, as was gracefully conceded, may be answerable on the spot. Regarding the last question, about the Lugano framework, I am certainly not advised on that currently and will have to respond.
On the question of “gloss”, it is a term used frequently by parliamentary counsel meaning “a modification to how legislation is read”. In terms of the gloss as used in the report referred to, the interpretive glosses provided by this instrument provide general interpretive rules for how cross-references to EU instruments should be read. This means that interpretive provision does not need to be provided in other legislation because it is already provided by these glosses and so ensures consistency.
I was asked whether the SI has financial implications. It does not.
I was asked about the consequence of importing EU retained law into domestic law. As a result of the introduction of relevant separation agreement law, interpretive provision needs to be made so that it is clear how references to EU instruments that form part of relevant separation agreement law are to be read. Essentially, references to EU instruments that form part of relevant separation agreement law are to be read as they are applied by the withdrawal agreement. Interpretive provision for retained EU law has already been provided. This SI makes amendments to these provisions to ensure that the interpretive provisions for relevant separation agreement law and retained EU law work together. I hope that that answers the question asked by the noble Lord, Lord Thomas of Gresford. If not, I will ask my officials to see whether any further information needs to be added.
I was asked about consultation. Obviously, I said in my opening speech that it is an accepted principle in terms of these consequential amendments that it is possible for secondary legislation to amend primary legislation in a number of confined technical cases such as this. I do not have the full details on consultation with all the devolved Administrations although I am assured that they took place.
Obviously, the European Union (Withdrawal) Act 2018 gives the United Kingdom Government the power to make statutory changes to correct deficiencies in the statute book that arise as a result of the UK leaving the EU. Ministers can use those powers in relation to devolved matters but have committed not to do so normally without the agreement of the relevant DAs. These commitments do not extend to all powers in the EUWA and the withdrawal agreement Act. There are the specific powers that I have just referred to, under which secondary legislation can be made in devolved areas without consent from or consulting with DA Ministers where those changes are technical in nature.
However, in relation, for example, to the case of Wales and in fact more generally, I understand that legal officials in my department consulted with the devolved authorities’ lawyers and their respective parliamentary counsel throughout the drafting process. Initial correspondence was sent on 6 August, with the first draft of the statutory instruments shared on 19 August, and the final draft of the SI takes into account the devolved authorities’ comments and drafting suggestions. Policy officials shared details of the statutory instrument on 25 September, with a final draft of the SI and Explanatory Memorandum shared on 30 September. Therefore that process of engagement has gone on for some time.
I was asked—although this is slightly wide of the statutory instrument—about the current state of negotiations. Intensive negotiations with the EU are ongoing this week. They have resumed in person, and intensive negotiations are taking place in person in London as well as virtually via Webex. The teams are continuing to work very hard and are committed to meeting on a daily basis.
The familiar difficult issues remain. Although there has been some progress across many areas, wide divergences remain on fisheries and the level playing field. We will not abandon our core principles to reach a deal. While an agreement is preferable, we are prepared to leave on Australia-style terms if we cannot find suitable compromises. Either way, as the Prime Minister has made clear, people and businesses must prepare for the changes coming on 31 December, most of which will happen whether there is a deal or not. Obviously, this SI is part of the preparations for the transition.
I was asked about recourse to the courts in the event of any disagreements in relation to EU law and who is arbiter. At the end of the transition period, it is true that there may be a number of cases related to infringements that have not yet been resolved. Infringements arising during the transition period may be brought before the CJEU for up to four years following the end of the transition period.
I was asked whether we would return in future to repeal further legislation under the EU withdrawal legislation. It is an optimistic statement to have to make, and I shall be guarded in making it. I simply say to your Lordships and advise that we are confident, currently, that all critical legislation will be in force by the end of the transition period, ensuring that the statute book is functional.
A couple of other points were made by my noble friend Lady McIntosh of Pickering. I believe that I picked up most of her points; if not, we will look and see whether we can make good. Governments always like to try to make good, hence this statutory instrument before your Lordships.
I shall reply outside on the Lugano framework, as I have undertaken. I am not going to follow further down the line of political remarks. It is true that the Government, as the noble Lord, Lord Thomas of Gresford, said, do not care for the idea of a lasting role for the European Court of Justice, which was confirmed by the British people in both the referendum and the election. Here we are dealing with important, practical and technical legislation, and I am grateful for all the extreme interest in the matter and will endeavour to ensure that any unanswered questions are answered.
With that, I hope that this instrument can be approved so that we can ensure that the statute book works coherently and effectively following the end of the transition period.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
The microphone system for physical participants has changed. Your microphones will no longer be turned on at all times, in order to reduce the noise for remote participants. When it is your turn to speak, please press the button on the microphone stand. Once you have done that, wait for the green flashing light to turn red before you begin speaking. The process for unmuting and muting for remote participants remains the same. The time limit for the following debate is one hour.
Definition of Qualifying Northern Ireland Goods (EU Exit) Regulations 2020
(4 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, the statutory instrument that we are discussing concerns the establishment of a definition of “qualifying Northern Ireland goods”, or QNIGs, as it says here in brackets; people come up with an acronym for everything these days. That definition is established for the purposes of delivering unfettered access for Northern Ireland goods moving to the rest of the UK market from the end of the transition period. The statutory instrument should be seen in its wider context of this Government’s clear commitment to deliver unfettered access for Northern Ireland goods to the rest of the UK market, and to guarantee this in legislation by the end of this year. This commitment was made in both the 2019 Conservative manifesto and the New Decade, New Approach deal, which restored power-sharing in Northern Ireland. This instrument is fundamental to delivering on that commitment.
Unfettered access is based on several fundamental tenets: first, that there will be no customs and regulatory checks and processes for qualifying Northern Ireland goods moving from Northern Ireland to Great Britain; secondly, that there will be no additional authorisations or approvals required for placing those goods on the market in the rest of the UK; and, finally, that those goods can continue to be sold throughout the UK market.
We intend for the United Kingdom Internal Market Bill to put the building blocks in place for unfettered access for the long term. The measures that we propose in that Bill will enshrine in primary legislation that qualifying Northern Ireland goods will benefit from mutual recognition—enabling goods to continue to be placed on the whole UK market, even where the protocol applies different rules in Northern Ireland—and prohibit new checks and controls as goods move from Northern Ireland to the rest of the United Kingdom.
These are significant and robust protections. They will be subject only to the most limited possible exceptions, such as to ensure that the UK can comply with its international obligations, for example regarding endangered species movements. Although this House regrettably removed those important protections in its consideration of the Bill in Committee, the Government will ensure that these measures are reinserted to provide the certainty that the Northern Ireland Executive and Northern Ireland businesses have called for.
All these elements flow from there being a definition in law of what are the qualifying Northern Ireland goods that benefit from unfettered access. This is the purpose of this statutory instrument.
It is important to be clear that the policy of unfettered access will be given effect in two phases. The first phase is focused on avoiding disruption and maintaining continuity for the first half of next year, in line with the broader approach that we are taking for GB-EU movements. That is what this instrument is concerned with. In order to avoid any disruption, it takes a necessarily broad-based approach, outlining that goods will qualify where they are in free circulation in Northern Ireland, on the basis that they are not under customs supervision—excepting any supervision arising from the good being taken out of Northern Ireland or the EU—and where they are a good that has undergone processing operations in Northern Ireland under the inward processing procedure and incorporates inputs only from Great Britain, or was in free circulation in Northern Ireland.
Those are some quite technical descriptions, but in practice they will mean no change to how Northern Ireland businesses move goods directly to the rest of the UK from 1 January 2021 compared with now. This is an important first step to make sure that Northern Ireland traders can continue to move their goods in an unfettered way from the end of the transition period, meeting the Government’s clear commitment under the New Decade, New Approach deal. Although this first phase will be comparatively brief, it is none the less important to guard against the possibility that its provisions are abused. That is why the phase one approach will be accompanied by anti-avoidance measures to be contained in legislation to be brought forward by colleagues in the Treasury in due course to enable us to take action in those cases.
That will be the first phase of the regime. We recognise that this is only a bridge to the more durable and permanent arrangements in phase two, which will focus the benefits of unfettered access solely and exclusively on Northern Ireland businesses. This will ensure that they have a competitive advantage over other traders on the island of Ireland and will ensure that goods moving from Ireland or the EU are subject to full third-country checks and controls. That regime, which will take effect in the course of 2021, is being finalised at pace, working with Northern Ireland business and the Northern Ireland Executive. We are also working with the devolved Administrations more broadly on its operational implications. We will provide further details on the specific approach and its timing as soon as possible. In the meantime, we consider that it is right to proceed in a pragmatic way that maintains continuity for business, which our phased approach would do. Should both Houses approve this instrument, it will enable us to bring forward clear guidance for businesses to ensure that they are ready for the end of the transition period.
I would again like to assure Members of the Committee that this instrument is part of our clear and unequivocal commitment to unfettered access, ensuring that businesses can continue to trade as they do now and protecting Northern Ireland’s place in the UK internal market. Those are and will remain our overriding priorities as we take forward the important work here in the weeks ahead. I commend the regulations to the Committee.
Lord Hain (Lab) [V]
My Lords, I thank the Minister for his explanation of these regulations and his customary professionalism and courtesy, although I am afraid that he rather glossed over, in the inimitable way of Ministers during this chaotic last stage of the Brexit saga, many of the things involved. Although he reaffirmed the UK Government’s promise of unfettered access into Great Britain for Northern Ireland goods, the question arises: what exactly are Northern Ireland goods?
The UK Government needed to define what are those Northern Ireland goods that qualify for unfettered access, but this has not been straightforward, given that some goods leaving Northern Ireland for Great Britain are the product of a complex process of production that includes components from elsewhere, especially in the Republic of Ireland. The picture is especially complicated for agri-food. For example, if a pig was born in the Republic of Ireland, slaughtered in Northern Ireland, processed into sausage in the Republic of Ireland and packaged in Northern Ireland, is that a Northern Ireland or a Republic of Ireland sausage?
As I understand it, the Government have taken all sorts of advice from businesses, but it became complicated, because it is so different for different industries and sectors. For instance, some have no contact with the Republic of Ireland and, therefore, the European Union, while others are fully integrated with both. If a good is defined as a Northern Ireland good but has very little contact with Northern Ireland—for example, it is just packaged there—there is a risk that Northern Ireland could become a back door into Great Britain, especially in a no-deal scenario, to avoid tariffs. That would undermine genuinely local Northern Ireland goods.
The Government did not have time fully to address the complexity of all this, so I am afraid that the statutory instrument is just a sticking plaster for phase 1, as they are calling it, and as the Minister virtually said. We are told to expect much more detail, as he said, and nuance in phase 2, which we are all promised will come next year. The problem is that the sticking plaster prioritises flow over control; that is to say, it basically defines everything in free circulation or moving around Northern Ireland as a Northern Ireland good. That could potentially include Irish and EU goods. The upside is that it avoids the need for new checks and procedures to distinguish between Northern Ireland and other goods leaving Northern Ireland for Great Britain come 1 January. The downside is that, especially if there is no deal, although conceivably even if there is a thin deal, it shares an advantage given to Northern Ireland goods, which is unfettered access into Great Britain, with those from outside Northern Ireland. Again, that is particularly bad in the event of no deal, given that Northern Ireland goods should not face tariffs on entry to Great Britain but Republic of Ireland goods would.
In other words, this is all a real dog’s breakfast, but one with potentially costly and important consequences for Northern Ireland’s economy and businesses, and another case of how Northern Ireland always seems to end up second best over the Government’s hard Brexit dogmatism.
Lord Dodds of Duncairn (DUP)
My Lords, as the Minister said in his opening remarks, this regulation is designed to guarantee unfettered access for Northern Ireland goods into Great Britain. I welcome what Her Majesty’s Government have said about guaranteeing those commitments in legislation. As the Minister pointed out, it is in the New Decade, New Approach document, which was agreed by all the parties in Northern Ireland; they all signed up to that document. It was also in the December 2017 joint European Union- United Kingdom document, which at paragraph 50 said:
“In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.”
That paragraph was inserted after my party negotiated with Theresa May during that fateful week. We were always conscious of the need to ensure that protection was in place.
It is always a delight to follow the noble Lord, Lord Hain. He knows a lot about Northern Ireland, and he talked about a dog’s breakfast. Part of the problem that we are facing with Northern Ireland goods and trade with the rest of the United Kingdom is because some people prioritised trade with the Irish Republic and European Union above the biggest market of Great Britain. By far and away the biggest market for Northern Ireland is trade from Great Britain to Northern Ireland and from Northern Ireland to Great Britain. At the time when we were pointing out all those problems over the past couple of years, people did not seem to regard those issues; instead, they talked about all sorts of invented issues about problems north-south, when Simon Coveney, the Foreign Minister, Michel Barnier, and everyone else, including all the parties in Northern Ireland, guaranteed that there would never be any checks on trade north-south, in any circumstances. That is something that the Foreign Minister of the Irish Republic said just the other day.
I will bring the Minister on to a couple of questions that I have about this approach. As he said, this is phase 1 of the issue of how we grapple with defining what is a Northern Ireland good for the purposes of unfettered access. When exactly will we have the longer-term definition? We were told that it would be at some point during the course of 2021, but can the Minister be more precise about that? Can he also undertake that these issues will be sorted out for Northern Ireland at the same time as they are for general UK-EU trade? There is that aspect to it as well—the movement of goods between the European Union and the rest of the United Kingdom. Our view must be that it should all be done at the one time.
On the current or phase 1 definition, under these regulations, how will the Government ensure that Northern Ireland products move through ports in the Irish Republic to Great Britain? Some 20% of our trade with Great Britain goes through the Irish Republic. That needs to be clarified. The agri-food sector has been mentioned, and it is a very important part of our economy. There is concern among producers in Northern Ireland in that sector that this very wide definition, albeit temporary, could lead to goods from the Republic of Ireland being moved through Northern Ireland to Great Britain, which would potentially create great problems in terms of reputational damage for the Northern Ireland agri-food industry.
That brings us on to the issue of anti-avoidance measures, which the Minister mentioned and which are very important. We are told that they will be produced, I think he said, “in due course”. However, we are now almost at the end of 2020. The new definition for unfettered access for qualifying goods comes in on 1 January and we have yet to see the anti-avoidance measures. We were promised that this would be in place before the end of December. We need to see those very soon so that we can examine them and ensure that only Northern Ireland goods benefit from unfettered access. As has been said, it would be entirely wrong if, along with the other disadvantages that Northern Ireland may now face as a result of the protocol, this advantage of unfettered access was extended to competitors in the Irish Republic or elsewhere in the European Union, who would be only too willing to take advantage. The anti-avoidance measures must be effective, they must work, and the Government must ensure that proper enforcement measures are in place. I would like to know what mechanisms HMRC will have in place to find out who is trying to benefit and what steps and powers it will have.
Clear guidance then needs to be given to Northern Ireland businesses so that they are clear about what products qualify and there is no ambiguity. There needs to be clear messaging to producers in the rest of the United Kingdom about the right of unfettered access for goods coming from Northern Ireland. I have already heard of competitors of businesses in Northern Ireland, in the agri-food sector in particular, lobbying people in Great Britain to warn them off Northern Ireland produce, saying, “This could be contaminated with produce coming from outside and it may not be lawful”. There needs to be clear guidance from the Government in Great Britain on this as well. Clear guidance also needs to be given to Irish businesses to the effect that if there is an attempt to use Northern Ireland as some kind of back-door mechanism to the Great Britain market, that will lead to severe consequences and action will be taken, as opposed to one line in the Finance Act setting out how that is unlawful but without any means of enforcing it.
The idea behind these regulations is welcome in principle, but there are questions that need to be answered about goods going through Irish Republic ports that will also benefit from unfettered access, and questions about the anti-avoidance measures. We are now very late in the day in seeing them, and I would welcome more detail being spelled out on when they will come and how effective they will be at policing these regulations.
Baroness Ritchie of Downpatrick (Non-Afl)
My Lords, I thank the Minister for the explanation of these stage one, stop-gap regulations. From my perspective, I support unfettered access for businesses from Northern Ireland to Britain. I also do not want any borders, whether in the Irish Sea or in the island of Ireland, because they would act as impediments to business and the free flow of people and would have—shall we say?—the capacity to undermine our very delicate political relationships and infrastructure. We must be careful about that.
I see the regulations in the context of a Brexit I did not want to happen, but it is here. It creates barriers and impediments to political, economic and social development at a time when businesses are having to deal with the difficulties and challenges presented by Covid. They need assistance and a streamlined system that does not involve any extra costs or burdens, either administrative or financial, when they are transporting goods to Britain, either via Northern Ireland ports or from ports in the Republic of Ireland. Like the noble Lord, Lord Dodds, I would like the situation of Northern Ireland products and produce imported or exported to Britain via ports in the Republic of Ireland to be clarified.
Notwithstanding all that, there are several questions I would like to ask the Minister about the complexity of these regulations. The Minister and the Explanatory Memorandum indicate that further legislation will be produced in this area and that this is simply a temporary, stop-gap measure. He referred to the regulations, which will last about six months, as avoiding disruption. What will be the nature of the new regulations and when are they likely to be brought to the House for discussion and affirmation? There are suggestions that this legislation is a bridge to a longer-lasting regime— something that the Secretary of State said in the other place. What is that longer-lasting regime? What will be the content, nature and scope of that legislation?
Suggestions have also been made that work is ongoing with the devolved Administrations—I think the Minister referred to that. What is the nature of that work? What discussions have taken place with the Northern Ireland Executive and specific Ministers dealing with economy, finance and the First and Deputy First Ministers? Has the Minister for Infrastructure been involved in such discussions, as having responsibility for transportation? If so, what was the outcome of those discussions, or have they mainly been at official level? Is the Northern Ireland Executive expected to bring forward subsequent legislation in relation to this issue?
I come to the thorny issue of agri-foods, already mentioned by the noble Lords, Lord Hain and Lord Dodds. How will standards of agri-food products emanating from Northern Ireland be dealt with, as they will still have to comply with EU standards? Will there be costs and administrative burdens involved? If they are unfettered, surely there should be no costs.
I come to the issue of processing, the matter raised by the noble Lord, Lord Hain. What are Northern Ireland processed goods? Can the Minister provide us with a definition? The dairy industry is largely all-island in Ireland. If milk is produced in the Republic of Ireland and processed in Northern Ireland for cheese and other dairy products, does the definition of qualifying Northern Ireland goods apply to such products, in the light of the protocol and agri-food requirements? In fact, the dairy industry is largely owned by companies based and headquartered in the Republic of Ireland.
Penny Mordaunt said in the other place that these regulations were
“no more than a stopgap to a longer lasting regime”—[Official Report, Commons, Delegated Legislation Committee, 10/11/20; col. 7.]
which would be accompanied by further anti-avoidance measures that would be introduced in a timely manner. What is the nature of those anti-avoidance measures? Will they deal with the issues of competition and tax?
Like the noble Lord, Lord Dodds, I would like to know what the role of HMRC is in such transactions. Can the Minister provide an update on the UK-EU discussions that are seeking to find solutions to or flexibilities over the types of goods that can come into Northern Ireland from Britain for supermarkets? I appreciate that that is not in the remit of these regulations but the Minister will recall that this matter bedevils suppliers in Northern Ireland, particularly supermarkets. Perhaps this issue would be better dealt with at the supermarket level rather than by the JMC, but it would be good to have an update because the agri-food industry and our general retail businesses require certainty and it is only a few weeks until the end of the transition period.
Baroness Hoey (Non-Afl)
My Lords, I thank the Minister for his helpful explanation of the SI. It seems that we get a new SI on Northern Ireland practically every day, appearing in its design to take into account the withdrawal agreement and the protocol. I must remind noble Lords that nobody in Northern Ireland consented to the protocol, which was written with the aim of stopping any kind of trade border between part of the United Kingdom and the Republic of Ireland and putting in instead a trade border between one part of the United Kingdom and another, in the Irish Sea.
Words almost fail me sometimes as to how, given that the referendum vote was that the UK as a whole should leave the European Union, our Government allowed themselves to be taken in by an Irish nationalist lobby—and others—who used and distorted the Belfast agreement as their weapon to get their way on this. However, I accept that, now that some of the ramifications of the protocol are clear, the Government are trying to alleviate some of the major problems as much as they can. The internal market Bill is a step forward, of course; it is a pity that your Lordships, perhaps reluctantly, removed some of the clauses that absolutely would have ensured unfettered access for business in Northern Ireland.
This statutory instrument seeking to define qualifying Northern Ireland goods needs to be seen in the context of that internal market Bill. I very much agree with a number of the questions already asked by noble Lords and look forward to the answers, but can I ask the Minister a few simple ones? Indeed, he will probably think that they are very simple. Can he define again the limited exceptions for very high-risk goods? Who will decide what is a high risk? What other international obligations, apart from the much-mentioned movement of endangered species, are covered?
Repeated assurance has been given. I quote Command Paper 226:
“Trade going from Northern Ireland to the rest of the UK: this should take place as it does now. There should be no additional process or paperwork and there will be no restrictions on Northern Ireland goods arriving in the rest of the UK”.
However, it is now clear that companies in Northern Ireland will need to complete new paperwork and comply with new reporting requirements, which will increase costs and represents a significant departure from how companies trade at the moment.
Can the Minister say how long he thinks a lorry has to wait at Larne at the moment before it can get on board to go to Scotland and how long he estimates it will take after 1 January? Why are we building such expensive structures at Larne and other ports if, as has been said, there is to be little paperwork and new burdens to take on? While of course much of the extra burden on business will be covered by government money that has been allocated, it is taxpayers’ money, the people’s money. People who voted to leave the EU did not expect their money to be spent on trying to keep part of the United Kingdom in the EU, leaving in name only.
Under the protocol, the VAT rules of the EU will still apply. For example, if the UK Government decide, as many of us would like them to, to reduce passenger duty, can the Minister assure me that no one can stop that being applied in Northern Ireland? Finally, the command paper says that the UK’s approach to the Northern Ireland protocol is a consensual and pragmatic one. Does the Minister believe that the European Union has taken a consensual and pragmatic approach? If he does not think so, does he agree that it is absolutely crucial that those clauses that were taken out of the UK Internal Market Bill by your Lordships’ House are brought back by the other place and put back in?
Baroness Suttie (LD) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Hoey. I was one of her constituents in Kennington for many years. We may not see eye to eye politically, but she always speaks with great conviction.
As other noble Lords have said, the commitment to delivering unfettered access was included in the New Decade, New Approach agreement and in that context from these virtual Benches we can give qualified support to this statutory instrument. There remain, however, as many other noble Lords have also indicated, a number of areas of concern. Today is the last day of November. In exactly one month’s time, the transition period will come to an end. On 1 January, it is clearly vital that businesses can continue to function, but the lack of clarity at this stage does little to provide us with a sense of confidence. It is also frustrating that so many of these decisions are coming so late in the day that there is an inevitable feel of “mend and make do” rather than a measured and thorough consideration of the issues involved.
In debating this SI, we already know that it will be replaced by more detailed proposals next year and by additional orders before the end of this year. In his speech, the Minister confirmed that unfettered access will be given effect in two phases. This SI represents the first phase and is the political equivalent, as the noble Lord, Lord Hain, said, of a sticking plaster. It is to ensure that continuity is maintained and disruption avoided at the beginning of next year. As a result of this approach, many questions remain unanswered, as other noble Lords have indicated this evening.
For example, one area of concern is that of processed goods coming from Northern Ireland which have components originating from outside the region. Can the Minister confirm whether this approach to qualifying goods will have wider implications for the UK’s approach to rules of origin with the rest of the world? As the noble Lord, Lord Hain, spelled out so clearly, it remains unclear how non-qualifying goods will be determined and how they will be distinguished as they move from Northern Ireland to Great Britain. Can the Minister say what will be the operating model for this process? What mechanisms will be put in place to distinguish between Northern Ireland goods and goods from the rest of the EU, including from the Republic of Ireland?
The House of Lords EU Committee has also raised concerns that Northern Ireland could become a “back door” for EU products entering the UK market without checks. Can the Minister say how they intend to prevent this from happening in reality? The Minister will know there is particular concern in the food and drink sector that cheaper or non-authentic versions of quality products may be able to reach the UK market in this way. In the debate in the House of Commons, Penny Mordaunt stated that anti-avoidance measures will be
“introduced in a timely manner”,—[Official Report, Commons, Delegated Legislation Committee, 10/11/20; col. 7.]
but declined to give a more detailed timetable. Perhaps I may therefore repeat the question put by the noble Lord, Lord Dodds of Duncairn, on the anti-avoidance measures. Given, as I have said, that tomorrow will be the first day of December and the deadline for the end of the transition period is fast approaching, can the Minister shed further light on when these anti-avoidance measures are likely to be introduced?
Baroness Hayter of Kentish Town (Lab)
My Lords, I also thank the Minister for introducing this SI. There are a couple of issues I would like to raise, although we will support it when it goes through the House.
First, there is that funny thing that this SI relates to the internal market Bill, which, as the Minister knows better than most, has yet to complete its passage through the House. Indeed, looking at the post-Report version of the Bill, which is some 51 pages long, compared with the original 57, it is far from being a ready-cooked product. However, I have to say to at least three noble Lords in the Committee that I have every reason to believe that, if the original clauses are reimposed in the Commons, they will promptly be taken out again by your Lordships’ House.
Be that as it may, as the noble Lord, Lord Dodds, and the noble Baroness, Lady Suttie, said, we have been told that the anti-avoidance measures which are to accompany this are due to arrive here “in due course”, but we do not know when that will be. Brandon Lewis said that they would
“be in place by the end of the year”,
which gives us just a month to get them done, although for some of us that includes Christmas. It is fairly obvious that, if anything that happens to be in Northern Ireland—other than things subject to customs controls—can enter freely into GB, the temptation to use the no-checks entry points as a back door will be attractive to some, either on competition or quality issues, or perhaps for worse reasons. That would be especially worrying if it was a way of avoiding tariffs. I know that the National Crime Agency has warned about the risk, alongside the Police Service of Northern Ireland. That is especially important in the light of another point I wanted to make, which has been mentioned by other noble Lords.
The definition which this order seeks to capture is not only temporary but unclear. The Government say that they will come up with a more refined definition in due course, but there is no explanation of why they have been unable to do so, and it is very hard to imagine how they will enforce something that is so temporary. My noble friend Lord Hain set out some examples of where the definition is grossly inadequate, and I think that few of us will forget his little pig, born in the Republic of Ireland, slaughtered in Northern Ireland, made into sausages in the Republic and packaged in Northern Ireland. I look forward to the Minister’s answer as to whether, tasty as it may be, it is a Northern Ireland or a Republic of Ireland sausage.
Fourthly—and the Minister will know of our concerns in this matter—to say that everything on sale in Northern Ireland can be sold anywhere and everywhere in GB risks undermining the devolution settlements, which in certain areas allow for and indeed welcome divergence. If higher-emission vehicles, plastic bags, peat pots or single-use plastic forks can be sold in Belfast, the Minister is telling us they must be sold in Bangor, even if the Welsh Government have decided to the contrary. We remain committed to using the common frameworks mechanism for sorting out these issues. Can the Minister explain whether this order would trump anything decided by the common frameworks process?
I also ask the Minister what assessment the Government have made of the risks of counterfeit—or, as has been mentioned, lower standard goods—being placed on the market in Great Britain, possibly at considerable consumer detriment, if they only have to be placed in the market and not even actually sold and therefore checked in Northern Ireland. Given that the Government seem to have prioritised flow over control, in the words of my noble friend Lord Hain, this risk is real. I assume that our trading standards inspectors could do nothing if goods arrived legally but unchecked in Great Britain.
We know that Northern Ireland businesses are already concerned about the January deadline, with representatives from retail, manufacturing and farming saying that they will simply not be ready for the new Irish sea border and need a further transition period. Manufacturing NI has called for a grace period in which the UK and EU could “provide comfort” that goods could keep moving. The Northern Ireland Retail Consortium said that business was being given only six weeks to implement changes which would normally take two years, and it needs some sort of phase-in period. That is even more the case with the lack of clarity in the definition included in this order and, as we have said, the lack of any indication of anti-avoidance measures.
Can the Minister outline his response to how such businesses feel about this order and detail the involvement of the devolved Administrations with its preparation, given the concerns that I have that it would undermine the devolved settlements, forcing anything sold in Belfast to be sold in Wales, say, despite its laws to the contrary? Perhaps he could supply that timetable for the anti-avoidance measure, which the Northern Ireland Secretary said would be done by the end of this year.
Lord True (Con)
The fundamental response to the noble Baroness is that Northern Ireland by the will of its people is an integral part of the United Kingdom of Great Britain and Northern Ireland. Therefore it behoves the United Kingdom Government to secure that position, and we will seek to do so. I would be surprised if the other devolved Administrations actually wished or intended to place obstacles in the way of the movement of goods from Northern Ireland. I would be astonished to think that that would be the political intent or desire of any Government within these islands.
I repeat that this regulation, as the noble Baroness and several other noble Lords have alluded to, and as I said in my opening speech, is part of a programme or set of measures that includes the UKIM Bill. I know what the noble Baroness said—that, if the UKIM Bill returned, attempting to provide a guarantee of unfettered access, she would advise your Lordships simply not to discuss it again but to throw it out. In my humble submission, it is not part of the role of the revising Chamber, which your Lordships’ House is, to simply throw things out that are sent to us by the elected House without even considering them or considering detailed amendments in Committee. To do it once is bad, but to do it again on something as important as unfettered access would be strange.
I was asked a number of questions. We got straight into sausages, which seemed very much a subject of concern. I remember the first time I ever went to Londonderry-Derry, so long ago that Doherty’s sausages were all the rage in those days, and I enjoyed them. I had long experience at university of sausages made in Northern Ireland. To answer the question on definition, which is what this statutory instrument is about, in this first phase, any good such as a sausage in free circulation in Northern Ireland will qualify. We are working closely with Northern Ireland traders and the Executive, as I said, on the second phase definition. That will focus the benefits of unfettered access specifically on NI traders.
I do not know how to stop this phone ringing, but if noble Lords can bear the sound, I will continue. The first-phase approach provides certainty for businesses at the end of the year, which is what they have been asking for.
On circumvention, we are bringing forward anti-avoidance provisions that will deter traders from routing their goods via Northern Ireland to GB. I will come back to this point, which was raised by a number of noble Lords.
I turn to goods that are simply packaged in Northern Ireland, when the product is from the EU. Again, this definition is about providing certainty to NI traders and guaranteeing unfettered access to their largest and most important market at the end of this year. So, in the first phase, these goods will qualify—but we are, as we have discussed, working on the second-phase approach, to be introduced in 2021, which will focus the benefits of unfettered access on Northern Ireland businesses. The noble Lord, Lord Dodds, asked when we will have that further definition. I can say to him that it will be brought forward “very early in 2021”; that is what I am advised.
I was asked whether I could confirm that the approach we have taken is intended to align with the broader phased approach to the EU-GB border. Again, I hope that this will be the case, but I have not had any firm advice on that. The new anti-avoidance measures will come this year via a finance Bill that will be brought forward in the coming weeks.
I turn to enforcement and accept what a number of noble Lords have said: that goods will move. Enforcement mechanisms will be behind-the-border compliance and monitoring, which will in no way disrupt NI-GB trade.
The point about goods routed via the Republic of Ireland to GB from Northern Ireland was made by the noble Lord, Lord Dodds, and others, including the noble Baroness, Lady Ritchie. We do recognise that the priority remains having a regime in place that focuses its benefits on Northern Ireland traders and ensures that they enjoy those benefits, however they move their goods, whether directly or via the Republic. So, from 1 January, we will ensure that tariffs will not be due on qualifying goods moving via Ireland. Anyone can move qualifying Northern Ireland goods from Northern Ireland via the Irish Republic to Great Britain without needing to pay customs duties on entry to Great Britain, and goods will not need to be moved under transit for this to be the case. I should note that of course, it is not for the UK Government to say what processes the Irish Government should choose to apply in those circumstances.
I was asked about engagement with the Northern Ireland Executive. We have engaged extensively, including at First Minister and Deputy First Minister level, and they are supportive and understanding of the phased approach. There have also been extensive discussions at official level, and via ministerial engagements such as in JMC (EN) and the quad talks, led by my right honourable friend the Paymaster General.
I was asked how in the agri-food area “Northern Ireland processors” would be defined and what would happen when a GB business moved, say, a carcass from Great Britain to Northern Ireland for deboning and processing under customs supervision, therefore not needing to comply with full import formalities on entry into Northern Ireland, before being returned to Great Britain to be placed on the market there. The product will not be in free circulation in Northern Ireland, so it would not meet the definition in Section 3(1)(a)—but it would clearly be a good that should benefit from unfettered access protections. That is why the second limb of the qualifying Northern Ireland goods definition ensures that these goods are able to return to Great Britain, enjoying unfettered access during that movement.
I was asked about the role of HMRC, which will administer the anti-avoidance provisions and compliance regime, along with Border Force, as the authorities with responsibility in that space. As I have said, this will not involve disruption to NI-GB trade but will be entirely behind-the-border compliance activities. No new infrastructure is required in Northern Ireland to administer unfettered access or the qualifying regime.
I was asked more than once by noble Lords why we are phasing. The first-phase definition, as I sought to explain in my opening remarks, is focused on minimising disruption on 1 January: that is what Northern Ireland traders have asked for. As I have said, the second-phase definition will be brought forward early in 2021 and will focus on the benefits of unfettered access for Northern Ireland traders, in line with their expectations.
The Government have acknowledged, and I have acknowledged, that the process is taking a good time, and noble Lords will know—this has been referred to in our discussion—that negotiations and contacts are still taking place this week in the Joint Committee. We all fervently hope that those discussions will have issue soon, but, clearly, we are seeking to keep Northern Ireland traders and the Northern Ireland Executive alongside, so far as we can.
I repeat the fundamental point that I began with: the undertaking for unfettered access was given by Her Majesty’s Government. It is subscribed to by the European Union, as the noble Lord, Lord Dodds, said, and it is enshrined in the New Decade, New Approach document. Surely, we should all agree. I have heard agreement in this debate on the principle of unfettered access, so I look forward—hopefully—to all noble Lords present lending their support to that commitment in the UKIM Bill when it returns. I commend these regulations.