Agricultural Products, Food and Drink (Amendment) (EU Exit) Regulations 2020 Organic Production (Organic Indications) (Amendment) (EU Exit) Regulations 2020

Daniel Zeichner Excerpts

Monday 25th January 2021 General Committees

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Robertson. As ever, I thank the Minister for a full and comprehensive account of the latest pair of statutory instruments that we are discussing, which cover geographical indicators, wine and organics.

Let me start with the SI on agricultural products, which, as the Minister said, is already in effect. We understand why it is in effect: by the end of last year, urgent action was needed. The Prime Minister’s negotiating strategy, based on brinkmanship, determined that, and this weekend’s newspapers were full of the consequences. He said that there would be “no non-tariff barriers”, and the Minister will remember my fury on the day she briefed MPs, just after Christmas, at what I consider to be an outrageous misrepresentation. Everywhere we turn, we see businesses struggling with new rules and complexities. Although it is hard to imagine how much worse it could have been, it could have been even worse, so we understand why the legislation was needed urgently. In many cases, however, these are interim or bridging arrangements, as described in the explanatory memorandum. My fear is that there will be a lot of bridging in the months and years ahead, but we will deal with that as it comes.

The SIs relate to two areas where the Government published specific annexes in the trade and co-operation agreement with the EU: wine and organics. Some of my comments will relate to the interaction between those annexes and these SIs—not least the range of timescales in which things may happen, and the degree of uncertainty that that brings to everyone involved. In some cases there will be changes in a few months, as the Minister mentioned, but in the longest case it will be three years. Of course, there is always change in the world, but it is fair to say that in the last few decades, most businesses have operated in a fairly stable environment, which is what they tend to like. That is no longer the case. That is why it is so important that even if there is no certainty, there is transparency and clarity from the Government so that people have some idea of what to expect.

Geographical indicators are hugely important to our food businesses, and they are much prized. Indeed, reports suggest that they were one of the key areas in the negotiations with the EU. The Minister may wish to comment on whether the UK’s negotiating objectives were achieved. The lack of transparency throughout this entire process is illustrated by the fact that we rely on leaks and speculation, but today is an opportunity. Can we be told what the UK sought, and whether this is it? Personally, I rather doubt it.

Paragraph 7.3 of the explanatory memorandum suggests that the way out of the problem of running out of time and the complexity of ratification procedures in different countries is what would, in other walks of life, be described as “holding it together with some bits of string”. It is euphemistically described here as a “political commitment”. The Minister, as I have observed previously, knows the law well. I would be interested to get her view on what legal standing such political commitments confer, how any challenges might be dealt with and how long such bridging arrangements, supported by political commitments, will be in place. We may not get a clear answer, because I suspect no one knows.

Importantly, the instrument also deals with the rules on wine imports. I am sure the Minister has seen some of the stories in the media in recent days concerning the problems encountered by wine importers. There is a six-month transitional period before the rules in this instrument apply, so one could say that the troubles have only just begun. I am sure she will have seen the coverage of the problems faced by Daniel Lambert, which have been widely reported. He has speculated about the extra costs and what they might translate into. An extra £1 a bottle on a bottle of wine may not slip down well with some Government Members’ constituents, so there may be some explaining to do.

In my constituency, Hal Wilson, who runs the excellent Cambridge Wine Merchants, tells me that it has 19,000 bottles of red wine from Spain currently stuck in the system. I fear from past experience that the Secretary of State will tell us that this is an excellent opportunity for English wine growers, but I would gently say to the Government that it might be worth their while getting this sorted out. Like most people, I want my red wine in a glass, not a warehouse.

The Wine and Spirit Trade Association argues that 99.5% of the wine consumed in the UK is imported, and it therefore makes little sense to roll over EU-based legislation—in the WSTA’s view, the legislation was designed to act as a non-tariff barrier to protect EU wine producers—now that the transition period has ended. The WSTA makes a serious point, and I wonder whether the Minister could comment on it. It says that, even with the new simplified approach to wine import documentation for EU wine imports in the TCA, the requirement is still burdensome for producers and importers alike, while the requirement for the costly VI-1 form for non-EU wine remains.

The WSTA suggests removing the requirement completely. It also says that although the form offers self-certification, it still requires a customs stamp. If that were to be introduced electronically, it would need to be linked to the customs declaration service, and that would take a number of years to implement. Given that there were previously no certification requirements for EU wines coming into the UK, the WSTA argues that it makes no sense to introduce the requirement for a paper-based system when the ultimate goal is to replace it with an electronic system as soon as is practicable. The WSTA therefore recommends deferring the requirement to provide wine import documentation from the EU until the electronic system foreseen in “Trade in Wine”, article 3 of annex TBT-5 to the TCA, can be introduced.

That annex also says that within three years, there will be further discussion between the parties to facilitate trade in wine. In other words, there is absolutely no certainty for the future. Can the Minister tell us what the Government seek to achieve in those discussions? I would welcome her comments, because there is a theme emerging in all our discussions of these detailed statutory instruments. Here we are discussing the law, but in the real world, the practical implementation and the systems are causing the problems. As the Executive, the Government are particularly responsible for the latter.

The interim nature of the arrangements for wine is mirrored in the provisions for organics in the statutory instruments that we are debating. Welcome as they are, many of the timeframes are short. It is just six months before certificates of inspection for imports will be required. The second instrument, on organics, raises a number of questions. Paragraph 2.4 of the explanatory memorandum refers to rules for a UK organic logo “when developed”. As the Minister said, we have looked at the designs previously, but perhaps we can be told when that is likely to happen, and why there are delays.

OF&G Organic certifies more than half the UK organic land, and Roger Kerr, its chief executive officer, tells me that the securing of an organic equivalence within the free trade agreement was welcome. However, this is only for a limited period of time, and unless both the EU and UK recognise the other party as equivalent at the end of the current arrangement, it will fall away, leaving UK operators denied access to the European market. He says:

“This is only 36 months away and leaves UK organic businesses in a position that they will be unable to secure long term supply contracts due to the on-going uncertainty. The delays around securing the FTA and the uncertainty with whether there would be an organic equivalency agreement within that, has already had a negative impact on UK operators through the loss of hard won markets.”

The Minister will remember we discussed that point in an SI debate before Christmas, when that recognition was still in doubt.

I am afraid the problems go further still, as Roger explains. He says:

“The FTA also does not make provision for the ‘selling on’ of unprocessed products that are imported into the UK. For example at the moment organic soya imported into Hull cannot be subsequently shipped to NI under the current terms of the FTA, leaving NI organic livestock producers potentially without the correct balanced rations for their animals. Import/export businesses which currently import products from Europe and then consolidate loads for export again are no longer able to do this. Specialist food manufacturers who have their products packed by specialist packers in Europe and then import the finished product back into the UK for distribution to their customers cannot export these products to their European customers. This will have significant impacts across the UK organic supply chain and needs to be resolved as soon as possible.”

We recognise the importance of having arrangements in place on GIs, on wine and on organics, so we will not oppose these statutory instruments. However, we believe that in too many cases, they are just bridging measures. With so many businesses struggling at the moment, there are many questions to be answered, and I hope that the Minister will be able to provide some answers.