My Lords, I am grateful to the Minister for introducing these SIs this afternoon and for organising the helpful briefing beforehand. We accept that these SIs are necessary to maintain current standards regulating the UK’s growing organic sector. The continued availability of high-quality produce and sustainable food supplies, in which the organic sector plays a key role, is vital for our food industry and important for consumers. For example, the Soil Association reports that the UK organic sector grew by 5.8% in 2018, its eighth consecutive year of growth. As the EM makes clear, the industry is worth something like £2.2 billion to the UK economy. I very much take the point of the noble Baroness, Lady Byford, who quite rightly said that so many
people in that sector work in small businesses and make a particular contribution to the economy in that regard. Obviously, it is important that their futures are protected.
The noble Baroness, Lady Miller, said she felt that the sector did not have any concerns about these SIs. I will come back to that, but the Minister will be aware that the industry is already reporting negative impacts caused by the ongoing uncertainty of Brexit. Confidence is being undermined and businesses are warning that the consecutive years of growth achieved by the UK organic sector could be at risk. Therefore, we are looking to this batch of organic-related SIs, and to what the Minister is able to say this afternoon, to reassure the market of continued access, which the sector deserves and requires.
With this in mind, I have some questions for the Minister, the first of which is on imports. The noble Baroness, Lady Miller, raised the issue of the 21-month deadline. Annexe 2 of the Explanatory Memorandum says:
“For a strictly time-limited period of 21 months we will exempt the need for additional checks or paperwork for organic goods being imported directly from the EU, the EEA states or Switzerland except those organic goods which do not originate from but are simply transiting through these territories”.
I would like to explore what that 21-month deadline means. Can the Minister give some clarity on that? Has that amount of time been chosen to line up with the transition period? If so, what would happen if the transition period was extended? Is it an absolute deadline whether there is a deal or no deal? Is it written in blood, so to speak? Perhaps she could clarify the status of that 21-month deadline so that we are all clear on that.
Secondly, on exports, as has been touched on, future export arrangements with the EU are a matter for future negotiations. But can the Minister give us an assurance that future access to the EU market for our strong UK organic exporters is indeed a priority for the Government? Can she explain why we are giving guarantees to organic imports while no such guarantees are in place for UK organic exports? There is an imbalance there, and perhaps the Minister can explain why that is the case.
The Government have given notice that, after 29 March, importers will no longer use the EU’s Trade Control and Expert System New Technology, or TRACES, to register consignments of organic produce but must use a manual UK organic import system while a digital system is being developed. Can the Minister give the Committee an update on the progress in building the UK’s own digital system? Will it be fully functional on exit day? What work is being done to ensure that UK industry and its international partners are aware and prepared for this change? What assurances can the Minister give that the temporary manual system, and eventually our own permanent IT system, will provide the same level of certainty over origin and movement of produce as we have at the moment?
Paragraph 12.3 of the Explanatory Memorandum, on control of imports, explains that there has not been an impact assessment but:
“There may be minimal familiarisation needed for businesses to set up to use the new import and export systems”.
Can the Minister say what “minimal” means in this instance? Is she assured that this rather minimal objective has been achieved, and will that give businesses the information and knowledge that they need to be able to operate under these new systems? In other words, is the Minister sure that the communication and training systems are in place, running fully and meeting their objectives?
On the ongoing issue of resources and expertise, annexe 2 to the Explanatory Memorandum on control of imports states:
“The UK will be able to accept applications from overseas control bodies to certify to the UK organic standards, and subsequently approve these bodies if the UK wishes”.
Currently, Defra has approved eight certification bodies: six in the UK and two in Ireland. Is any additional expertise or resource needed for the UK to consider and process other applications when we are basically on our own in this matter, rather than having the EU’s information scrutiny process to rely on as well? Are those eight certification bodies up to the job and resourced properly, and do we need other certification bodies?
On a small point, annexe 2 in both SIs explains that certain duties—in Articles 29 and 38 of the Council regulations—have been downgraded from “shall” to “may”. The notes explain that these duties have already been completed by the EU. Will the Minister provide more information on what these articles include and why the specific duties have been downgraded? What is the thinking behind that? If they have been fully completed by the EU, perhaps they are not needed at all and there should be no reference to “may”.
6 pm
On consultation, paragraph 10.2 in both EMs—they are word for word, so someone has done a great cut-and-paste job there, unless I have got that wrong—states that the department has,
“worked with the United Kingdom Organic Certifiers Group”,
on this legislation, but does not say whether that group was in agreement with the proposals. The noble Baroness, Lady Miller, said she thought they were, but I would like clarification on this. Were any concerns raised by the group concerning these SIs? If so, have they now been adequately addressed?
Finally, I turn to the urgent consequences that would arise in the event of a no-deal exit. The Minister will be aware of the serious concerns raised by the industry. In the past couple of days, the NFU issued a press release, and the Soil Association recently published an open letter to the Secretary of State for Defra in which it raised concerns that the Brexit impasse has put growth at risk, caused uncertainty for suppliers and supply chains, and,
“risks harming the long-term prospects for more sustainable agriculture in the UK”.
If the UK does not achieve equivalence with the EU in a no-deal scenario—mutual recognition of one another’s organic standards—the EU market will be closed to UK organic certified produce from 29 March. What progress have the Government made in agreeing equivalence with the EU in the case of no deal? If the UK becomes a third country, UK organic control
bodies will need to apply to the European Commission for recognition, and these applications can take up to nine months. The control bodies are not able to make an application until the UK becomes a third country. Defra has said it is negotiating the possibility of an expedited application process in the event of no deal: it would be very helpful if the Minister could give the Committee an update on these negotiations, because a lot of jobs rely on their outcome.
In the event of no deal, the labelling of organic produce becomes something of a minefield, as the Government have themselves acknowledged in a technical note they published last month. What kind of grace period will companies be guaranteed to use existing stock before they make the necessary changes? Have the Government done an impact assessment on the cost to industry of the uncertainty over whether they have to overhaul their entire packaging and labelling provision in the event of no deal? I know that these are broader issues, but the Minister will understand the real anxiety that this prospect is causing to the organic sector. I hope she will be able to put on record some words of reassurance that these issues are being urgently addressed so that our very strong UK organic sector can be protected. I look forward to her response.