Draft Animal By-Products, Pet Passport and Animal Health (Fees) (England) (Amendment) Regulations 2023

(Limited Text - Ministerial Extracts only)

Tuesday 6th June 2023 General Committees

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)]

I beg to move,

That the Committee has consider the draft Animal By-Products, Pet Passport and Animal Health (Fees) (England) (Amendment) Regulations 2023.

The draft regulations, which were laid before the House on 18 April, will make amendments to the Animal Health (Miscellaneous Fees) (England) Regulations 2018 and the Animal By-Products and Pet Passports Fees (England) Regulations 2018 to ensure that there is no under-recovery or over-recovery of costs. The amendments do not contain any changes to policy—only the fees that the Animal and Plant Health Agency can collect on behalf of the Secretary of State.

The fees are designed to fund APHA’s frontline statutory animal health services for safeguarding animal health and supporting our domestic and international trade, which are: consignments inspection and licensing of facilities involved in the trade of livestock semen, eggs and embryos; inspection and licensing of facilities involved in the handling of animal by-products not destined for human consumption; inspection of live animals and certain high-risk products arriving from third countries at our border control posts; surveillance of commercial poultry flocks and licensing of private laboratories carrying out tests under our national salmonella control programme; and registration and approval of premises intended to export breeding poultry from Great Britain. The proposed amendments also include the removal of the fees regime for pet passports, as pet passports are no longer issued in Great Britain.

Following public consultation, new fees for those services were last introduced in 2018, with a commitment to businesses that fees would be reviewed biennially. The agency’s focus of effort and resources on EU exit work and covid meant that the reviews were halted and consequently the fees have not been refreshed. As a result, full cost recovery is not being achieved and the schemes are operating at a deficit of between £0.4 million and £0.5 million per year. That shortfall is being funded by the public purse.

New fee schedules to deliver full cost recovery have now been developed. No additional margins or profits have been included, and my counterparts in His Majesty’s Treasury have approved the approach taken. The average increase in fees to achieve full cost recovery would be 51%. Given the substantive cost increases for some fees, we are proposing to continue the approach agreed in the 2018 regulations and apply phased increases over two years, with 50% of the fee uplift delivered in July 2023 and full cost recovery delivered from July 2024.

The exception to that is border control post services and some other small-value activities, where we are proposing to increase fees and achieve full cost recovery from July this year. The uplift in border control post fees from 2023 will help us to avoid operational conflicts with changes that may follow the review of the new borders and boundaries fees process. Delaying the uplift further would only increase the gulf between cost and recovery, and the impact of the changes would be even greater because of the impact of compounding factors such as inflation.

APHA has continued to engage with business users and associations on service performance and fees following the 2018 revision, and those businesses are aware of the proposed new fee schedules. We are not aware of any negative responses to the fee changes, and engagement inquiries have been focused solely on service performance. The statutory instrument applies to England only. The Scottish and Welsh Governments are following a similar approach and have introduced corresponding legislation. I commend the draft regulations to the Committee.

--- Later in debate ---

[Trudy Harrison]

I understand that any cost to business at this time is difficult, but I reiterate the need to do this now. Leaving it any later would clearly add further costs to the public purse. The fees have not been uplifted for five years—four years for ABP—so the gap between costs and income have been a burden to taxpayers. The longer fees are left unchanged, the more the gap will increase.

As I said, APHA is spreading the increase over two years. That is absolutely in response to the overall 51% increase. The instrument will maintain the alignment of animal health inspection fees with UK Government policy to recover the full costs of official checks. That is essential, and will become more expensive if we do not manage the work that APHA does effectively arising from commercial activities.

As I outlined, the draft regulations ensure that UK Government policy for full cost recovery for our animal health services is maintained and that the costs of providing those services are met solely by the businesses using the services. In answer to the hon. Gentleman’s question about when they will next be reviewed, we will endeavour to get back to the trajectory of reviewing biennially—that is, every two years. I fully commend the draft regulations to the Committee.

Question put and agreed to.