Exiting the European Union (Agriculture)

George Eustice Excerpts

Wednesday 20th February 2019 Commons Chamber

[The Minister for Agriculture, Fisheries and Food (George Eustice)]

I beg to move,

That the draft Fertilisers and Ammonium Nitrate Material (Amendment) (EU Exit) Regulations 2019, which were laid before this House on 16 January, be approved.

This instrument makes amendments to domestic legislation and retained direct EU legislation that would otherwise not be operable after our exit from the European Union. It makes only those changes required to ensure a smooth exit from the European Union and does not change the definition or compositional requirements of fertilisers.

Fertilisers are essential yearly inputs for the UK agricultural, horticultural and amenity sectors. The UK is a net importer of fertiliser products, with only domestic production of potash, polyhalite, ammonium nitrate and lime contributing to the UK’s total fertiliser requirement. The legislation on fertilisers concerns the manufacturing and marketing of products. It provides for the definition, composition, labelling and packaging requirements for specific categories of fertilisers that are set out in lists. This legislation does not address the application or use of fertilisers. Such issues tend to be dealt with through separate provisions in measures such as the nitrates directive.

In 1975, the EU created its first set of legislation relating to fertilisers. However, the wide disparity in existing fertiliser rules between member states, and the bulky nature of these materials restricting cross-border trade, meant that it was not suitable to fully harmonise rules on all fertilisers throughout the EU. Instead, fertiliser rules were partially harmonised to begin to remove technical barriers to trade within the EU. The UK has therefore kept its existing domestic framework alongside the EU framework. The EU regulation sets out the requirements for so-called EC fertilisers, or previously EEC fertilisers, which can be sold freely across the European Union. Manufacturers can choose which framework to market their products under. This partial harmonisation remains in place today.

The current domestic framework for any material described as a fertiliser is the Fertiliser Regulations 1991. In the EU, the current framework is the EU regulation EC 2003/2003, which applies only to fertilisers labelled “EC fertiliser”. It was implemented in UK law by the EC Fertilisers Regulations 2006. In addition, ammonium nitrate fertilisers are controlled through safety regulations that apply to all ammonium nitrate in Great Britain.

This statutory instrument amends domestic legislation that is out of date and addresses the failures of retained EU law to operate effectively, along with other deficiencies arising from the UK’s withdrawal from the European Union. Part 2 of the instrument amends out of date references in the domestic legislation. For example, it omits references to “EC fertilisers” and “EEC fertilisers” to ensure clarity for users of the legislation.

In the case of EU legislation, part 3 of this instrument amends retained EU law to ensure that it will operate effectively after exit day. For example, references to member states and the Commission are amended to refer instead to UK authorities. A requirement on the language to be used on labels is also amended. It replicates the EU framework in UK law, replacing the “EC fertiliser” label with a new equivalent “UK fertiliser” label. The requirements will otherwise remain the same. The instrument also amends the EU framework to include a provision that preserves the ability of relevant bodies in the UK to continue to be able to take certain actions such as prescribing how specified fertilisers should be identified. Part 4 amends domestic legislation as a result of exit, ensuring continuity of supply by recognising the EC fertilisers label for a two-year transitional period after exit day. This will minimise burdens on businesses and authorities and enable suppliers to use up existing stocks, both of fertilisers and packaging. The amendments in the statutory instrument do not change the definition, compositional requirements, or labelling or packaging rules for fertilisers, whether they are marketed under the existing domestic framework—the 1991 regulations—or the EU framework.

Ammonium nitrate fertilisers are additionally covered by domestic safety regulations, since they can be misused as improvised explosives and pose safety risks if mishandled in manufacture, transport or storage. It is worth noting that part 4 of the instrument also amends the regulations surrounding ammonium nitrate fertilisers with high nitrogen content in Great Britain, to treat imports from EU member states the same as imports from other third countries in line with World Trade Organisation obligations.

Under the GB ammonium nitrate regulations, the rules for imports from the EU are different from those for imports from outside the EU. In the light of WTO rules, it would not be possible to retain these differences, so the instrument amends some aspects of the ammonium nitrate regulations, in particular the detonation resistance tests, to apply the more stringent of the two regimes to all imports after the end of the two-year transition period and to uphold current safety standards.

The definition of what constitutes a “batch” of ammonium nitrate differs depending on whether the import comes from the EU or elsewhere.

[Julian Sturdy (York Outer) (Con)]

This is a very important issue for the fertiliser industry. Could the Minister clarify whether this provision would give the opportunity to Ministers and the Department to charge fees to cover the costs of tests needed for official control measures?

[George Eustice]

My hon. Friend makes an important point. That is why the regulations were referred by the sifting Committee for debate. There is already a power in the existing regulations for authorities to make charges for that testing. All we sought to do in drafting was retain that ability. Broadly speaking, the testing we do here in the UK is run by the Health and Safety Executive at our facility in Buxton and it tends to be a commercial choice for the fertiliser companies whether to use that or to use an alternative at their own cost. There is not really a cost recovery mechanism that is deployed beyond that; it is simply based on research done by the companies. We have clarified and made a change to the drafting of the regulation to be clear that we simply seek to retain the existing abilities to charge rather than to create new ones.

Continuity of supply is ensured by a transitional period for imports from the EU, which provides 99% of imported ammonium nitrate to the UK. That allows the continuation of current rules on the time limit for detonation resistance tests and the ability to recognise EU laboratory test certificates. These arrangements give manufacturers time to prepare for compliance with the import rules post exit and reduce any burdens on UK laboratories immediately after exit.

The definition of what constitutes a “batch” of ammonium nitrate differs depending on whether the import comes from the EU or elsewhere. We have taken a view on that regarding when the quantity of material manufactured without alteration of composition or characteristics is longer than 92 days. We will therefore retain the EU definition of “batch”.

The instrument was previously presented to the sifting Committee on 1 November 2018 as one that should be subject to the negative procedure. As I explained to my hon. Friend the Member for York Outer (Julian Sturdy), the sifting Committee did not agree. It considered that the effect of one regulation was to allow Ministers to charge fees. In addition, it considered that the instrument conferred powers to legislate. It therefore recommended that this instrument be debated in Parliament. The instrument has been amended since it was presented to the sifting Committee to reflect certain recommendations in the Committee’s report. For example, the provisions that the Committee considered to confer powers to legislate have been redrafted to make it clear that they do not contain new legislative functions.

In general, fertiliser policy, as with other agriculture policy, is devolved. The devolved Administrations were closely engaged in developing these regulations, which apply to the same geographical area as the original legislation that they amend. All Administrations have agreed to maintain a single common framework for fertilisers labelled as UK fertilisers, while continuing their own domestic framework. That will make the marketing of fertilisers much clearer for industry, and is a good example of how well the four Administrations work together towards a common goal.

The instrument relates to the maintenance of existing regulatory standards, with no significant impacts or new administrative or economic burdens on business or other stakeholders. Although there was no statutory requirement to consult on the instrument, officials have held discussions with key stakeholders, including the fertiliser manufacturers’ representative body, which is the Agricultural Industries Confederation, and the farmers’ representative body—obviously, the National Farmers Union. Their main concerns have been addressed by allowing for a transitional period for existing rules and compliance with the amended rules.

In conclusion, the changes to the rules on ammonium nitrate have been developed in conjunction with the HSE and the Home Office, to ensure that safety and security elements are maintained. This package of measures is essential to ensure that retained EU law continues to operate effectively in the UK once we leave the EU. I commend the regulations to the House.

--- Later in debate ---

[George Eustice]

I now have even more points to try to address, and I will do so as comprehensively as I can.

First, I turn to the points made by the shadow Minister, the hon. Member for Stroud (Dr Drew). He raised a general point about the use of fertilisers, which is that we should be trying to encourage more sustainability, perhaps through the use of organic fertilisers. He will be aware from the discussions we have had in the Agriculture Public Bill Committee that we are looking, in clause 1, to be able to incentivise more environmentally sustainable farming, which could include, for instance, supporting the use of organic farmyard manures more than manufactured fertilisers. He should also recognise that increases in fuel costs have anyway had a major knock-on impact on the cost of fertilisers in recent decades, such that in the past 30 years or so fertiliser use in the UK has fallen by about 40% already. He pointed out that at the moment we import most of our ammonium nitrate, predominantly from the European Union; there is one manufacturer of ammonium nitrate here in the UK.

The hon. Gentleman asked about the impact on security—in particular, whether there is a risk that the material will get into the hands of terrorists. As I pointed out, we have gone for the more stringent detonating test regime, meaning that any consignment imported to the UK, whether from the European Union or a third country, would have to have had that detonation test within the previous 60 days. We are applying the more stringent set of rules that we have for third countries to all countries.

On the general issue of security, I also point out that in 2006 a fertiliser industry assurance scheme was set up between the Government and the Agricultural Industries Confederation, and it has since successfully created and monitored voluntary standards in the industry supply chain to ensure that ammonium nitrate fertiliser can be traced and does not end up in the wrong hands.

Although we have made changes to the GB regime for detonation testing and the ammonium nitrate regime, as I said in my opening comments Northern Ireland has its own specific rules in this area. The ammonium nitrate safety regulations apply to Great Britain. Owing to the past misuse of ammonium nitrate in making improvised explosive devices, Northern Ireland has its own controls under the Control of Explosives Precursors etc. Regulations (Northern Ireland) 2014 and, under existing rules, the Explosives (Northern Ireland) Order 1972. Those prevent any import, storage or use of ammonium nitrate fertilisers without a tier 1 explosives precursor licence from the Police Service of Northern Ireland. The situation in Northern Ireland is more thorough still, given the tragic history of which we are all aware.

The hon. Gentleman mentioned that we have not conducted an impact assessment. As the hon. Member for Edinburgh North and Leith (Deidre Brock) pointed out, that is because we are not seeking to make any substantive change to policy—indeed, the stated aim of all these EU exit SIs is, as far as we are able, to maintain the status quo from day one after we leave the European Union, to ensure that we have an operable law book. He also made a specific point about the technical note on page 5, which he claimed he could not download. I am reliably informed that, since he mentioned that, my officials have been online to double-check and successfully downloaded it. Perhaps the issue had more to do with the hon. Gentleman’s IT than with our system; nevertheless, I thank him for raising that so that we could at least double-check.

The hon. Gentleman also raised an important point about storage: what happens if material is stored beyond the two-year transition? We arrived at the two-year transition period for sale having consulted the industry. The industry generally thought it an appropriate period both to be able to market its existing stocks and to give it plenty of time to use up any residual fertiliser packaging and order new packaging.

[Julian Sturdy]

I draw Members’ attention to my declaration of interest. Would what the Minister has said apply to on-farm stock as well?

[George Eustice]

No. I was about to come to precisely that point, which was also made by the shadow Minister. If during the two-year transition period a farmer has bought products labelled under the previous EU regulations, he can then store them on farm. As I pointed out at the beginning, these are marketing regulations—pertaining to the sale of product, not storage or use after sale.

Finally, the hon. Members for Stroud and for Edinburgh North and Leith asked about the specific issue of tariffs on fertilisers. This is an issue that the Government are currently considering. As hon. Members may be aware, while farming representative groups such as the NFU would like to retain tariffs on some agricultural commodities, they are equally keen to have tariff rate suspensions on some fertiliser products. We are giving that consideration. It is important to note, however, that if we were to set a unilateral autonomous tariff rate quota or suspend tariffs on a unilateral basis, we would have to offer the same terms to all countries in the world, probably including Russia, notwithstanding the approach the European Union is currently taking.

[John Redwood (Wokingham) (Con)]

Can the Minister confirm that SNP Members were deliberately scare- mongering when they said that farmers would not be able to import any more after 29 March? Will he confirm that foreign suppliers are not cancelling contracts for after Brexit?

[George Eustice]

I can confirm that we do not envisage any problems at all with the importing of fertiliser, even in a no-deal scenario. That is predominantly because these products—

[David Linden (Glasgow East) (SNP)]

rose—

[George Eustice]

Let me conclude my point first and then the hon. Gentleman can decide whether I have answered the point adequately.

Fertilisers tend to come in bulk, predominantly through Harwich on container vessels where we envisage no issues with capacity. They tend not to come in on roll-on, roll-off ferries on the backs of lorries through Calais. It is right that there are some concerns about the potential impacts on the all-important Dover-Calais crossing, but they do not specifically affect fertilisers. We see no particular problems in ensuring that we can import the fertilisers we need for this year.

The hon. Lady asked why we cannot simply have an indefinite extension of the recognition of the EC fertiliser logo. The reason is that we have to treat all countries equally under WTO rules. Once we have left the European Union and become an independent country again, we will not be able to discriminate and give unfair privileges to the European Union in the way that she advocates.

The hon. Lady asked a specific question about what had changed in relation to detonation testing. The principal change on strengthening detonation testing is that it will apply to each consignment that comes into the European Union. Put simply, all that importers will need to demonstrate is that each consignment has been subject to a detonation test of a suitable standard within the previous 60 days. At the moment under EU derogations it is possible for that to run longer because they simply apply it to individual batches rather than consignments, so there will be a small change. In the longer term, once the transition has ended, those seeking to export their goods to the United Kingdom would need to have that detonation test done, probably by the Health and Safety Executive in Buxton. We have world-beating expertise in this area and that testing would be done effectively.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

In terms of scaremongering, was the Minister’s boss, the Environment Secretary, scaremongering yesterday when he said that in a no-deal situation he could not guarantee exports and imports would continue at our borders and that livestock exports from the UK would be subject to high tariffs? Was that scaremongering as well?

[George Eustice]

My right hon. Friend the Secretary of State was referring to the export of sheep. We all acknowledge—I acknowledge it, too—that border inspection posts would frustrate that trade and that tariffs imposed on sheepmeat exports would affect that trade. He was explicitly not talking about fertiliser imports. My right hon. Friend the Member for Wokingham (John Redwood) was making a very specific point about whether there would be any threats to the import of fertilisers. As most of that trade comes through Harwich, we do not anticipate any problems at all on those grounds.

In conclusion, we have highlighted a number of important areas in this statutory instrument. We have had a thorough debate, but, as I have been at pains to point out, it does not seek to introduce any new policy. In keeping with the spirit and requirements of the European Union (Withdrawal) Act 2018, it is simply about ensuring that retained EU law is operable on the day after exit. I therefore commend this statutory instrument to the House.

Question put and agreed to.