Draft Official Controls (Fees and Charges) (Amendment) Regulations 2024 Draft Plant Health (Fees) (England) and Official Controls (Frequency of Checks) (Amendment) Regulations 2024

Natalie Elphicke Excerpts

Tuesday 16th April 2024 General Committees

[Mrs Natalie Elphicke (Dover) (Con)]

It is a great pleasure to serve under your chairmanship, Ms Rees. The two statutory instruments are part of the Government’s new border target operating model, which will manage import controls. Controls on the border are important, and it is important that dangerous and illegal meat and other products are seized at the border.

Evidence from the Dover port health team is that there has been an increase in the risks associated with the safety of food and drink, partly as a result of global food chain insecurity following Russia’s invasion of Ukraine, and partly because of poor slaughter, pesticide and goods transportation practices in some other countries that can lead to risks to human and animal health. Having the right risk-based checks in place is important to protect our country, our farmers and our food supply chains.

Despite the many hours over a great number of months that have been spent by informed and expert channel trade businesses; the Port of Dover; Dover Port Health Authority; the Kent and Medway business advisory board; food and drink organisations such as the Chilled Food Association; logistics businesses including Logistics UK; and myself, the Government have failed to listen to the representations made about the proposals. I believe those representations would make the border arrangements cheaper and stronger than those that have been proposed.

The statutory instruments risk creating a weaker new regulatory environment for decision making around fees and charges, and less control at the vital point of entry into our country. They must be viewed alongside another statutory instrument, which is currently subject to the negative procedure and therefore not open to debate, but which directly impacts the interpretation of the statutory instruments that we are considering. That other statutory instrument, which is still open for hon. Members to object to, as I have done—I encourage them to consider doing so—removes common-sense requirements that say that border checks should be done at the border.

The new arrangements under the Official Controls (Location of Border Control Posts) (England) Regulations 2024 allow the checking point for the border to be some distance from the point of entry at the border, with no obligation in the regulations to demonstrate, for example, how transit biosecurity risks will be managed if a checking facility is some way away, as the new regulations will allow.

That is directly relevant to the Committee, because the common user charge being imposed at the Dover border under the statutory instruments that we are considering is to pay for such a remote facility. The new border controls for Dover, to which the statutory instruments relate, will not be carried out at the point of entry in Dover, but in Ashford, some 22 miles away —basically the same distance as from Dover to France. As we have heard and as I will further explain, the basis for the calculation of the proposed costs and fees has caused considerable industry concern.

First, the draft Official Controls (Fees and Charges) (Amendment) Regulations 2024 amends EU regulation 2017/625, which relates to the calculation and enforcement of charges and fees on imported animals and animal feeds. Regulation 2(2)(a) removes the requirement under the current regulation for fees and charges to be collected and enforced at border control posts.

[Mr Perkins]

I am listening with great interest to what the hon. Lady says. Is it her contention that the instruments before us are necessary but do not go far enough, or is she suggesting that they will make things worse?

[Mrs Elphicke]

I am grateful for that question. As I said in my opening remarks, it is my view that the regulations are weaker than those currently in place and that the new environment, in the context of the entirety of the new border target operating model, is less strong in protecting our country. I will go on to explain the measures to which that applies.

As I said, regulation 2(2)(a) removes the requirement on fees and charges to be collected and enforced at border control posts. We heard from the Minister that the intention is that they will now be collected online. However, the regulation does not specify where or how the fees will be collected, or whether it will still be possible for the fees to be collected in person at the border as well as online. Given the overall lack of maturity in some of the digital border control posts, that is clearly of concern to some businesses.

Regulation 2(2)(b) then removes the need for a competent authority to be “objective and non-discriminatory” when determining the application of fees. It allows a competent authority to reduce or waive fees with regard to any consideration that it deems relevant. That has given rise to concerns that it could give undue power to a competent authority to change prices on goods that are entering the country. Some businesses may be arbitrarily favoured or punished with additional fees, which will disrupt trade and may discourage businesses from trading with the UK if they deem those fees to be arbitrary or unfair.

I am sure that the Minister will reassure me that that is not the intent of the regulations, but it is none the less a grave concern. It should be noted that the removal of the objective and non-discriminatory criteria risks anti-competitive behaviour in the channel trade. The authority to which the Government have decided to give checking powers is home to the international rail terminal stop for Eurotunnel, which Ashford has been negotiating to get reopened.

The Ashford stop—the new border control point—is considerably closer to Eurotunnel than the Port of Dover. Why does that matter? As the Dover Port Health Authority has set out repeatedly to the Government, the overwhelming majority of the goods expected to be checked—around 90% of them—will come in through Dover, compared with around 10% coming in through Eurotunnel. Yet the new border control point is a great distance from Dover and much closer to a much less significant point of entry. I would be grateful if the Minister could explain why the Government feel it necessary to give themselves powers to act in an arbitrary and discriminatory fashion, and why that change in regulation is required.

Regulation 3(a) will change the wording of article 81 of the existing EU regulation. This relates to the determination of costs. It changes the word “shall” to “may” and states that the costs may be determined on

“the costs of official controls and costs connected with official controls, including, but not limited to”,

and then sets out some features. That means that the previous criteria, which have been in place for some time, are now not binding, and a competent authority, which will not be the Dover Port Health Authority, can determine the charges to be placed on goods for whatever reason it decides. The SPS certification working group raised issues with that, alongside concerns about the common user charge being imposed through the regulations, as there has been no transparency on the cost basis for the new inspections.

The current EU regulation is explicit in what inspection charges can be costed. These are specified in article 81, including staff salaries, the cost of facilities and equipment, consumables and tools, services delegated to other bodies, the cost of training, the cost of travel, and costs associated with testing in labs. The statutory instrument turns those required and limiting criteria into simply guidelines, which means that they are not the only way that costings for inspections can be determined, and the competent authority can use whatever reason it likes—it would not be limited in the way it is now—in order to change and charge inspection costs.

That means that there may be differences in the charges for inspection. Ultimately, they will be more expensive than the current checks and processes. This has raised concerns, as has been mentioned, that prices will rise and supply chains could be disrupted, which may have an impact on the UK’s food supply. Considering that the UK imports more than 40% of its food, and, as I have underlined, the Port of Dover plays a very significant part in our trade with Europe, this statutory instrument has the potential to be quite significant to the UK’s food supply.

The anti-competitive potential for this approach has been highlighted in discussion with trade businesses and the Port of Dover over many months. I would like the Minister to comment on what the port and industry have had to say. They say that the level of the charge is eye-wateringly high at £29 for shipments of a single commodity, and up to £145 for multi-commodity shipments. That means groupage in terms of how the trade operates. What we have already seen over the last couple of years is a change in shipments in terms of groupage and non-groupage facilities. There is significant concern that the groupage costs and the multi-commodity shipment costs will particularly impact small and medium-sized enterprises, as we have heard. By contrast, the charge that the Dover Harbour Board would levy on a lorry for such purposes would be £19, so there is a significant multiple of the charges currently faced.

Then there is the legal limitation on DEFRA’s statutory power to recover costs. Over-recovery is unlawful. DEFRA therefore needs to be transparent about what the costs are. It is the view of industry that it is simply not credible that the cost of operating a lorry park and a few checks is seven times higher than the cost of operating checks at the eastern docks in Dover, which already have heavy machinery and multi-storey infrastructure. It should be remembered that the new cost that will be levied is not the whole cost that industry will bear because additional charges will also be levied for examination and other costs.

That is a matter that Logistics UK has drawn attention to, because it is concerned about the disparity and the risk of significant disruption in costs between Government-run facilities and commercially-run border control points. It has said in its most recent briefing this month that commercial ports have yet to make public their fee structures. Logistics UK is calling for commercial ports to get visibility of the import of products, animals, food and feed systems to know which loads contain SPS goods, which are eligible for checks and charges at border control points. Logistics UK is also concerned that differing charging structures for a national import controls process could lead to a diversion of trade and increased admissions.

As I represent the area of Dover and Deal, it is of grave concern if a consequence of the new changes would be any kind of diversion or disruption to what is the most successful operation in terms of cross-channel trade.

The risk of market distortion is being raised by the Port of Dover, by businesses and by the people most closely involved who have made representation after representation, which has not been listened to.

The concern also is that if there is a change in the routes of traffic coming into the UK, this will also be a mis-analysis in terms of the costs and preparations made by the Government. They are preparing something without, as we have already heard, having made the impact assessment, which is necessary in relation to these important changes.

Finally, the Government have already set the user charge without having any operations up and running at the new facility. By contrast, the facility at Dover is long established and there is a state-of-the-art plant health facility that has already been paid for by taxpayers. Instead of using that, the Government have guessed the amount of the charge in a situation where it is legally able only to pass on costs incurred. I am interested to hear from the Minister how the costs will be reviewed and what steps will be taken to ensure that there is transparency, which there has not been in the process to date, about how those costs are reached and also that businesses will not be charged more than the running costs that are required.

Before I leave the topic of the common user charge, I should just say that the Allianz Trade organisation has suggested that there will be a total of £2 billion in additional costs, so these changes are not small. It is important that what seem to be very small changes in the statutory instruments will potentially have a huge impact on the border.

It has been announced that the Ashford facility is intended to be the new border control facility. It is some 22 miles away and is a remote, non-proximate facility. With regard to the new official controls, the Government have said that they would prefer this new, untested health authority, local authority, in Ashford to be managing these critical new processes for the country. No full impact assessment has been made, and that is noted in the statutory instrument. It is my view that a full impact assessment should be made, given the scale of the estimated costs—£2 billion—and given the potential impact and given the risks that so many businesses have raised with the Government.

Taking into account all the measures of inspection and the other port costs, businesses such as those represented by the SPS certification working group are left unsure as to what the total costs might be and how they can properly plan for this change. It is very late in the day indeed, notwithstanding the fact that this change has been a long time coming, for the Government to begin to inform business about how this might operate.

Let me turn briefly to the other statutory instrument before us, the Plant Health (Fees) (England) and Official Controls (Frequency of Checks) (Amendment) Regulations 2024. These regulations fail to list Dover as a relevant port. Considering that 18 million tonnes of cargo—mostly from the EU—comes in through Dover, the failure to include Dover as a relevant port is simply not sensible. The freight liaison group has been clear that the statutory port health function, which legally and operationally rests with Dover Port Health Authority, should continue to operate in full.

I have outlined in brief some of the very serious concerns that have been raised with me and with Ministers over a long time, but which have not been fully addressed to date. As I am not permitted to be a formal member of this Committee today, I cannot, as I would choose to do, vote against these statutory instruments. However, I hope that other Members may take time to reflect, note the concerns raised and weigh the gravity of the subject matter, because it affects food safety, security, businesses and a vital trading pathway that benefits our entire country.