My Lords, I, too, begin by thanking the Minister and his officials for taking the time to meet me and the noble Baroness, Lady Bakewell, to go through these amending regulations in advance. It was very helpful. I also thank him for clearly explaining the purpose of the detailed statutory instrument that we are looking at. As he explained, these regulations will ensure that the United Kingdom meets its legal obligations to implement the provisions in Annexe 15 to the trade and co-operation agreement, which deals with the trade in, and of, wine. Specifically, they will amend rules concerning lot marking and the import and export certification arrangements for wine products, as well as putting in place the transitional marketing arrangements, which are important.
However, I will concentrate on the removal of VI-1 certificates. As we have heard, the instrument proposes changes to ensure that wines from the EU and other third countries imported into GB will not require a certificate and analysis report any more. Defra has said that VI-1 certificates
“serve no purpose to business or the consumer, and simply add unnecessary costs to the trade in wine.”
After considering options for the future of wine certification, the Government announced on 25 July their intention to remove the requirement for VI-1
certificates on all imported wine into Great Britain, as the statutory instrument before us is intended to do. We have heard that this measure is also likely to reduce costs for our wine importers while increasing the global attractiveness and competitiveness of the UK as a hub for the wine trade. We understand that this change has been much welcomed by the wine industry, which estimates that it will save it around £100 million every year, so we also support this statutory instrument and welcome the changes it brings in.
We would also like to acknowledge the work of the Wine and Spirit Trade Association, mentioned by the Minister, in pressing the Government to alter their previous position. Noble Lords may remember that that was initially just to roll over the European Union rules and regulations on wine imports. It is very welcome that the Government have listened to the industry and brought in these changes.
Leaving the EU made a significant difference because the EU’s rationale for bringing in an import document—effectively, a technical barrier to trade—was, in reality, to protect its own wine industry. Whatever our views on our departure from the European Union, for us, as a net importer of wine, it made little sense to maintain the rules designed to disadvantage our imports. While I pay tribute to the UK’s many excellent wine producers, we import more than 99% of the wine that we consume in this country, and around half of those imports are from the EU.
Again, it is good that, following industry engagement, the UK Government initially introduced a much-welcomed grace period for VI-1 forms for all wine imported from EU countries, meaning that the forms have never actually been required for EU wine imported into the UK. That is why we now support the Government’s intention to remove this documentation from 1 January next year.
Having said all that, we have a few questions and concerns that I want to draw to the Minister’s attention. First, there is the impact on Northern Ireland, as raised by the noble Baroness, Lady Bakewell of Hardington Mandeville. As we heard, the SI does not extend to Northern Ireland, given the operation of the Northern Ireland protocol and the ongoing UK-EU negotiations on it. Paragraph 7.8 of the Explanatory Memorandum, which the noble Baroness mentioned, says that relevant provisions will be brought forward
“once those negotiations have been concluded.”
Does this mean that the Government have no intention to trigger Article 16? If that is the case, why have the Government given the impression that they might actually do so?
The Explanatory Memorandum continues:
“In the meantime, we do not anticipate this will have any significant effect”—
as the noble Baroness, Lady Bakewell of Hardington Mandeville, stressed—
“on trade in wine between Great Britain and Northern Ireland.”
To me, this is all a bit unsatisfactory and unlikely. Can the Minister tell us how that conclusion was reached? What discussions took place with the Northern Ireland Executive before that conclusion was reached? What engagement was there with colleagues in the Irish Government in Dublin? As the noble Baroness said
when talking about the implications for Northern Ireland, clarification in this area would be extremely helpful.
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I am also aware that the Government held a three-week consultation on the proposals before us. In response to this consultation, a particular concern was raised by the Alcohol Health Alliance UK, or AHA, on the likelihood that removal of import certification would reduce the cost of alcohol. It is worried that this could increase alcohol harm, noting that the price of alcohol is closely linked to harm: the more affordable it is, the more alcohol is consumed, and therefore the more harm is caused, as was also raised by the noble Baroness, Lady Bakewell.
The AHA referenced the UK Health Security Agency evidence review that encourages the reduction of alcohol affordability. The AHA has urged the department to commit to producing an impact assessment on how the removal of the VI-1 certificates will affect alcohol harm and its associated costs. Does the Minister acknowledge those concerns, what discussions has his department had with the AHA to address them and are there any plans to produce the requested impact assessment?
Transitions to trading arrangements have not always been easy following Brexit, and Covid-19 has been hard on many businesses, so I end by saying that it is good that the Government have listened to the concerns of the wine industry in bringing forward this SI, which we strongly support. I also hope that the Minister is looking forward, as am I, to safely enjoying a few glasses of wine at Christmas.