Considered in Grand Committee
My Lords, these regulations group elements of four policy regimes: spirit drinks; wines; genetically modified organisms; and agricultural direct payments. The purpose of this statutory instrument is to make purely technical or operability corrections ensuring that these regimes continue to function as intended. These corrections deal with removing or amending references, converting EU procedures to UK procedures and transferring EU functions to the UK. The four policy regimes are dealt with together in a single instrument for the convenience of both Houses. I will cover each in turn.
First, this instrument makes operable the regulation and protection of, and methodology for analysis of, spirit drinks once we exit the EU. The amendments specify protection for the UK’s geographical indications, and this instrument will make the necessary operability amendments to ensure ongoing protection of the US spirit drinks Bourbon whiskey and Tennessee whiskey, following the signing of the UK-US spirit drinks agreement in January. This instrument will also prevent EU 27 spirit drink geographical indications being automatically recognised as protected in the UK after leaving the EU.
With respect to wines, this instrument will amend EU retained law to make it operable from the day of exit. The amendments will allow us to continue to apply or enforce provisions relating to detailed wine-making practices, including the blending and analysis of wine. The absence of these amendments would undermine consumer confidence in wines, damage our trade in and production of wines and impact on the significant contribution the sector makes to the UK economy.
The amendments for spirits, together with those for wine, are part of establishing geographical indication schemes in the UK. These amendments are a component of the wider suite of Defra legislation on geographical indications, including the Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019, debated on 13 March and approved on 19 March, and the Food and Drink, Veterinary Medicines and Residues (Amendment etc.) (EU Exit) Regulations 2019, debated on 20 March and approved on 21 March.
On genetically modified organisms, the SI makes purely technical changes to keep the retained EU legislation operable on exit from the EU. The amendments will allow us to continue to regulate and enforce the applications process for consent to market genetically modified organisms in the UK. It will also allow us to continue to regulate the export of genetically modified organisms, both those which originate in the UK and those which are merely passing through the UK. It also seeks to correct minor errors in exit statutory instruments which have already been laid.
Finally, on direct payments, this instrument will make minor technical amendments to roll over currently existing provisions in retained EU law relating to: environmentally sensitive permanent grassland; buffer strips, field margins and strips of eligible hectares along forest edges without production; the ratio of permanent grassland; and criteria for ecological focus areas. No policy change is made by these corrections. They address drafting errors in two of Defra’s EU exit statutory instruments relating to direct payments. I apologise to noble Lords for this oversight. The earlier instruments were laid at a time when Defra was preparing a large amount of EU exit secondary legislation, but Defra has sought to rectify the errors at the earliest opportunity.
In seeking only to allow the policy regimes to continue to function as intended, this instrument generates no new enforcement bodies and there is no significant impact expected on the existing enforcement regime.
It is worth noting that this statutory instrument was originally laid under the negative procedure. However, the Lords Secondary Legislation Scrutiny Committee recommended that the regulations be made under the affirmative procedure. The suite of legislation on geographical indications under the EU withdrawal Act confers new duties on the Secretary of State. This is in consequence of the Secretary of State taking on functions from the European Commission as a result of withdrawal. However, it is not this instrument that confers new legislative duties; for example, for spirits drinks it was the Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019, which we debated earlier this month. This instrument confers only administrative functions to the Secretary of State from the European Commission. The Minister at the time the Committee made the recommendation to change this SI to an affirmative instrument, George Eustice, agreed that this instrument should be made subject to the affirmative procedure, and it is a pleasure for me to speak to it before your Lordships today.
Defra has consulted with the devolved Administrations on the amendments contained in this instrument, and they have been consented to. For genetically modified organisms, decisions to release or market GMOs are a devolved matter in Wales and Scotland and a transferred matter in Northern Ireland. However, there are no GM products in the approval pipeline for release in the UK and none is expected in the foreseeable future.
We have engaged extensively and listened to stakeholders’ views on all these policy areas. We have consulted on the issue of geographical indications, which cover both wines and spirit drinks, and continue to stay close to our key stakeholders in those sectors. No consultation was undertaken for direct payments, because the changes are entirely technical and intended to ensure current provisions continue to be available after EU exit.
On GMOs, a technical notice and, more recently, further guidance was published. The changes are entirely technical and intended to ensure currently available provisions continue to be available after exit. This SI makes minor corrections to earlier GMO-specific SIs, on which Defra engaged with parties with an interest in GMOs.
An impact assessment has not been prepared for this instrument, as its purpose is to maintain existing regulatory standards and there is expected to be minimal impact on business. I beg to move.
My Lords, I thank my noble friend for introducing these amendments, which are technical and will allow a smooth transition when we leave the EU. As she said, they are technical changes that affect certain aspects. I have a couple of things to raise, and I should declare an interest since our farm receives environmental payments—she referred to grassland, buffers and ecological areas that are included in this SI for which we receive payments.
My question concerns the fact that, as she referred to, the Select Committee selected this for the affirmative procedure. She said that this was not really necessary and that it was due to something that had happened earlier. Was that known before this SI was produced in the way it is? Otherwise, it seems unusual to have it included as an affirmative instrument, although I accept what she said.
I also want to ask her whether there will be changes to any other statutory instruments coming through. It is getting more and more confusing for those of us looking at them to look at something that happened a week or two ago and try to compare it with what is happening now. I hope she is able to tell me that this will be the last of this set of statutory instruments that we shall look at.
So my two questions are: why was it included in this SI if that decision had not been reached before? Will there be some consolidation of any further SIs coming through? That would make life much easier for all of us.
My Lords, I thank the Minister for her introduction to this SI and for her time, and that of the officials, in the briefing last week. This is something of a catch-all statutory instrument, clearing up elements omitted from the previous SIs we have debated on: geographical indications for wines and spirits; minor amendments to GMOs, veterinary medicines and residues; and common agricultural policy direct payments to farmers. Tomorrow, we will debate more SIs related to agriculture. I will not make the obvious comment about the efficacy of debating them all on the same day. I have great sympathy and support for the comments made by the noble Baroness, Lady Byford. Hopefully, this will be the final SI in the process of tidying up those elements missed out of previous legislation.
There is also relevance to the devolved Administrations: Regulations 9 and 11 apply only to England and Wales, and 10 and 13 to Northern Ireland. I have only a few comments to make, as most of the issues have already been debated at length.
Regulation 3(21)(i) makes amendments in Annexe II of the EU regulation,
“in the section headed ‘Other spirit drinks’”,
where there are references to “Rum-Verschnitt” and “Slivovice”. All this is very interesting, but I cannot see its relevance. I do not know an awful lot about Rum-Verschnitt, but I know that Slivovice is produced in the Balkans, in Bosnia, and I would like to know why these two spirits should get a specific mention. Perhaps the Minister could say.
On page 12, in Regulation 5, we come to the crux of the matter. As the Minister has said, this relates to Tennessee whiskey and bourbon, currently imported from the United States. It also covers spirits produced in Mexico, tequila and mescal, which will be added to the list along with Tennessee whiskey and bourbon. I am pleased that this SI will make it possible for these spirits to continue to be freely available in the UK. While I am not personally a bourbon drinker, my husband—whose relatives all live in the Deep South in the USA—is, and I would not want him to have difficulty getting hold of his favourite tipple.
Such is the nature of this wide-ranging SI that it covers Irish cream and Somerset cider brandy—I have read it, and that is what it says. I had better look in my drinks cupboard to see what I have and whether I will readily be able to purchase further supplies in future. It would have been extremely helpful if the Explanatory Memorandum had listed the drinks covered in annexe III, referred to in the SI.
As the Minister said, the Secondary Legislation Scrutiny Committee felt that the regulations went beyond what is required to maintain the operability of the law after EU exit by conferring a new duty on the Secretary of State in respect of GIs which,
“could have a considerable commercial and economic impact”.
I agree with this statement and remain concerned that many of the catch-all SIs that cover such a wider range of topics may have implications for many regional producers.
Defra has indicated that it will bring forward guidance. The Minister has told us that this will be published before exit day and will be on the Defra website from exit day. I hope this guidance has been written and has taken account of the various permutations currently under discussion in the other place. There could be serious implications for some of our most revered wines, spirits and produce if the guidance is not clear and readily available.
My Lords, may I add my thanks to the Minister and to her team of officials who met us last week to go through the issues contained in this SI? It was helpful. It may have shortened what I was going to say; it may not have done.
I start with a question about GMOs. The Minister has explained that certain corrections have had to be made to legislation that had already been passed, and that this is a bit of a tidying-up procedure. We accept this, because we know that there has been pressure to produce a lot of these SIs very quickly.
I suppose it is necessary to ask the Minister about impact assessments. These SIs—I am talking about GMOs in particular now—will surely add some existing burden to UK authorities as well as to the devolved Administrations. In Northern Ireland, I assume that the decisions will be made by civil servants, as there is nobody else to make them. Is this right? It does not seem satisfactory but, in the absence of a functioning Administration, the whole situation in Northern Ireland is not satisfactory. I presume this is all that can be done.
Can I ask one specific question? If in future we wanted to tighten up the regulations about GMOs, would it be straightforward? Would there be any implications for trade with the EU? I assume that the reverse would not apply. I hope we would not want to liberalise our regulations but, if we did, it would run counter to EU practices.
I turn to the question of direct payments. I have some sympathy with the Minister here. For a time, I was a junior Minister in Northern Ireland and agriculture was one of my responsibilities. I will not bore the Committee with anecdotes about Agriculture Council meetings in Brussels, amusing as some of them were. Although it is not quite on the same subject, I will say that we consistently had tremendous support from the Irish Government. Whenever an issue came before the Agriculture Council—and there were many—the Irish Government went out of their way to be supportive of the British Government. I should like this to be on the record. I presume that the corrections that had to take place were as a result of oversights. We will move on from there.
Finally, I turn to the question of wines and spirits. In the briefing with the Minister, we spent a little time talking about tequila and mescal. These are two alcoholic drinks which I have never touched. I did my best to find some tequila before today’s Committee, but I failed. I wonder if the Minister would care to buy me a tequila at some time in the future—or allow me to buy one for her. We are talking about retained EU legislation on wine and spirits. I understand that the issue is about the geographical origin of products. We have been talking about Tennessee whiskey and bourbon. I understand that the Mexican drinks will come on the scene at some point in future when further negotiations have taken place. So we are going ahead with some of these drinks and the others will presumably follow.
My understanding is that geographical indications are used to identify a product whose quality, reputation or other characteristics are linked to its geographical origin. This will now be the responsibility of the Secretary of State, having previously been an EU responsibility. I assume that the question of geographical indication will cover many products in addition to those covered by this SI—this is a fairly common thing. It is right and proper that we should continue to co-operate with the EU and retain as many of the existing EU regulations as possible in practice.
I am not quite clear why these regulations would replace the current annexe with a shorter list. I hope I have this right. I understand that only UK spirit drink GIs would be automatically protected in UK law after exit. In contrast, UK GIs for spirit drinks will continue to be recognised by the EU as third-country GIs after exit, including in a no-deal scenario. I am not quite clear if I have understood that, and maybe the Minister will be able to clarify it.
The questions are: how prepared are we to operate our own GI systems? Can the Minister assure the Committee that the department will have the necessary staff and resources, and of course the expertise, to run the new system? The Government have stated that Defra will publish guidance on how to apply to the UK GI scheme in March 2019, which is this month, so can the Minister give an update on the completion of that guidance? Lastly, what consultation has the department undertaken with the devolved authorities over the design and implementation of the new UK GI scheme?
I thank all noble Lords for their contributions to what has turned out to be a short debate. I expected it to be fairly short, but some very valuable questions have been raised so I will be very pleased to answer as many as I can. If there is more that I can add then I will certainly write.
I turn first to the comments made by my noble friend Lady Byford. It is always a pleasure to have her in the Committee to make sure that we are doing things correctly, and she certainly does that. She referred to the issue of the Select Committee and the instrument being made affirmative. Without wishing to detract at all from the valuable work done by the Select Committee, it is the case that the functions being transferred across in this SI are administrative functions, not legislative. There was a potential slight misunderstanding about exactly which powers were coming across. Other legislative functions have come across in other SIs but not in this one. However, we took the decision that this gives us as a Government the opportunity to explain the position, so we decided that we would accept the Select Committee’s decision to make it affirmative, although there was always the opportunity for us to have gone back and explain that. We felt, “Why not make sure that everyone is completely happy?”, so we decided to stand in front of your Lordships today and explain that these are administrative functions, while those legislative functions came across in other SIs that were affirmative anyway and have already been discussed by the Committee.
My noble friend also asked whether there were further statutory instruments to come. There are a few but not as many as there were, so that is a bonus. Nearly all of them have now been scheduled for debate, so we have a good idea of what is left. Obviously, we are consolidating where possible to ensure that we do not have too many debates. It is vital to ensure that our legislation is up to date for exit day, whenever that comes. We can certainly say that we are in the end game now; we are at the end of the process and we should have everything in place very soon. As my noble friend will know, there are more coming tomorrow, so I hope she will join us then.
I thank the Minister for that. The difficulty is that sometimes some people are present in the debates, such as the one that we are having now, who have not had the advantage of hearing the earlier debates that we have had, which makes it quite difficult for all of us—myself included—to pick up on some of them. I am grateful for her clarification. I am well aware that we have quite a lot more to come, but my hope is that they will be complete in themselves so we do not have to go over ground that we have already covered, which I think has been the frustrating bit with some of these instruments.
I completely accept that comment. I recognise that this is sometimes very difficult because we are dealing with the same issues for different products in different SIs. Certainly, the instruments that will be under discussion tomorrow are much more wholesome and complete.
I turn to some of the comments from the noble Baroness, Lady Bakewell, who also made the point, which I will take on the chin, about the efficacy of debating all these separately. As I have said before, that issue is always to be balanced with the danger of having too many issues in one place; we all know of the famous BEIS SI that was over 500 pages long. I recognise that there is a balance to be struck, and both noble Baronesses have made some very good points.
The noble Baroness, Lady Bakewell, and the noble Lord, Lord Dubs, noted the guidance on the new GI scheme. We published an updated technical notice on 5 February 2019, which offers GI stakeholders guidance for continued planning in the event of no deal. Further guidance will be available on the day of exit, but we are not going to publish further guidance ahead of that to avoid the confusion of there being too much guidance. The February guidance is still current, and we will publish further guidance on exit. However, we are alerting stakeholders that this guidance is on the way and that they should prepare to notice it when it arrives.
Turning to the US whiskey and Mexican spirits agreement, which is very important, noble Lords will appreciate that that is rolling over the deal between the US and Mexico and the EU. We were able to roll over the US element, so those spirits are protected in this country. It has not been possible to roll over the Mexican element, but we are engaging with the Mexican Government and we expect it to be rolled over very soon, so I will happily buy the noble Lord, Lord Dubs, a tequila in due course—just one!
More generally, it is worth recapping the situation about GIs when we leave the EU, because they are important. UK products which are recognised as EU GIs are on the register in the EU and should continue to have that protection automatically after exit. The only way in which they would not have that protection is if the EU changes its rules. It is worth remembering that many products from third countries are on the EU list of GI products, so UK products in the EU will have that protection. The Government have not yet announced a decision on how non-UK GIs being sold into the UK will be treated if the UK leaves the European Union without a deal in place. The UK is not obliged to protect EU GIs after exit, but EU GI holders will be able to apply for recognition in the market after exit.
That leads into the point made by the noble Lord, Lord Dubs, about whether we are ready for this. Yes, we are. We have thought about and put into place our own UK GI process. We are very clear about what the procedures will be. The double process in the EU will become a single process here in terms of the submission of the application and looking for people to comment on the application. We are adding a second separate level of protection in that applicants will be able to go to the First-tier Tribunal if they disagree with the Secretary of State’s decision. So there will still be a two-stage process, but it will be slightly different from the one in the EU. We believe we have the expertise in Defra to do it, so we will welcome applications to the new system.
I thought I was going to be a little side-swiped by the question on “Rum-Verschnitt” and “Slivovice”, but I think I have an answer. I do not know whether it will make any sense to the noble Baroness, Lady Bakewell, but I hope it will. These amendments apply only in the UK and the text does not make sense in a UK context, so we are revoking the words—these are operability amendments getting rid of unnecessary text. If I can find out any more or make that make any more sense, I will drop the noble Baroness a note.
I was asked about Annexe III and why the full list of GIs is not in the Explanatory Memorandum. The only US spirits we included were Tennessee whiskey and bourbon. This enacts the roll-over agreement, which is why the full list is different from what was expected.
The noble Lord, Lord Dubs, mentioned GM crops. This is an important issue. We will continue to take a science-based approach on approving GM products and will agree to the planting of GM crops only if it is clear that people and the environment will not be harmed. As I mentioned, no GM crops are grown in the UK and we do not foresee any approvals coming down the track at this stage. Again, it is also worth re-emphasising in situations like this how closely we work with the devolved Administrations on all devolved matters to ensure that there is as little divergence as possible. Too much divergence does not appear to be in people’s interests. For the time being, we are setting up frameworks to make sure that, where possible, everybody has the same arrangements.
I just want to comment on the Minister’s assurance that we will not see the introduction of any genetically modified crops in this country that have an impact on the environment and human health. I hope that this will be borne in mind by the Government when they read the terms published by the Americans for future trade agreements with this country.
Obviously, such issues will have an impact on our future trade agreements. I reiterate what I just said about our ambitions for GM crops. We will look at the science; that is the most important thing.
I believe that I have answered all the questions. If I can add anything else later by letter, I certainly will.