16
Examination of witnesses
Sandy Shepherd, Nigel Jenney and Jennifer Pheasey.
Q229 The Chair: Thank you for coming along this morning and giving evidence, especially you, Jennifer, as I know you came in at the last minute. As a starting question, could you introduce yourselves and your organisation? Could you also talk about the value of trade in ornamental plants and edible crops, as you see it?
Nigel Jenney: Good morning, everyone. I am the chief executive of the Fresh Produce Consortium, which represents the interests of about 650 businesses involved in the growing, production, packing and distribution of fresh fruit, vegetables, cut flowers and plants grown in the UK and internationally for UK consumption.
Moving on to the overview of the industry, it is quite complex. By value, it looks quite modest. If you look at farm gate values and import values, in total terms it is about £10 billion, but its real value, subsequent to adding further value, is about £25 billion, in cash terms at least. However, it is important to look at other aspects. From a production point of view, the UK produces about 3 million tonnes of fresh fruit and vegetables, and we import about 5 million tonnes, in very round figures.
On the dynamics of the supply chain, approximately a third is grown in the UK, a third in Europe, and a third in the rest of the world—to give you that, “Where does my food come from?”—which is about 100 countries worldwide. People often ask, “What is the UK level of self-sufficiency?” It is certainly very different for fruit versus vegetables, but if you put the whole lot together, in broad terms, 36% of our fresh produce comes from UK growers and the rest comes from other parts of world, as I have already explained.
From a cut flower point of view specifically, 80% of our cut flowers arrive from somewhere else in the world. Quite often, though, they arrive in the UK via Holland. I know you all visited Holland recently, and we can talk about that a bit later. It is a substantial business opportunity and there are substantial challenges, but we will perhaps move on.
Sandy Shepherd: We are from a different sector. I am from a company called Ball Colegrave. We are on the ornamental plant side of the business. At the heart of our company is plant breeding, so we are the creator of all these lovely flowers. It is nothing quite as exciting as your business, Nigel, but we create all the lovely flowers for the world. We are a global company. The parent company is in America. We create wonderful flowers throughout the world and produce the genetics, so we do not just produce the flowers but think about how the heck we make this a commercial product. We have places all around the world. We have a complex business not only to produce the products but to ship them across borders and ultimately have them end up with consumers.
At the UK level, we are a substantial market player. We have more than 50% of the annual market in the UK, but not quite so much in perennials and shrubs. Fifty per cent of all the hanging baskets and colourful plants in the garden start their route with us. We are a substantial player in the marketplace, with 2,000 UK customers. We deal with small, medium and large businesses as well as the mail order sector.
It is quite a complex business. To service it, we have high-tech production facilities in the UK, in Stratford-upon-Avon and Spalding in Lincolnshire. We also have full control of a 100%-owned business in Portugal. That is how we service the market. We produce about 50% of the goods ourselves, and 50% come from specialist producers mainly in Holland but also in France, Germany, Belgium, Denmark, et cetera. That is our set-up.
The important thing for us is that we are dealing with a very seasonal, weather-related business and a very perishable product. We supply young plug plants that are from 1 centimetre in diameter up to maybe 4 centimetres in diameter. If you are shipping these products across borders and there is any time delay in getting them to market, it is absolutely brutal on us. That has been the biggest change for us. We are as much a logistics company as a plant company in getting those products through the sector. You can imagine what we have been going through over the last couple of years with some of the changes. I do not want to feel sorry for myself, but it has certainly been very challenging. That is where we are on that.
We are all about speed. It is fast moving. It is quality. It is biosecurity. It is all these things combined together. We have been doing this since day one in the annual business. We know this business. We created much of this business. We are experts in this business. We are delighted to be able to come here and talk to you about it and some of the challenges. The business is sophisticated, high-tech and innovative. We bring these products to market from their source. It has been very challenging. We can help ourselves a lot if we just engage and listen a bit more.
Jennifer Pheasey: I am director of public affairs at the Horticultural Trades Association, the HTA. We have 1,500 members spread across the four nations of the United Kingdom, and they roughly fall into four categories: the growers, the retailers, the landscapers, and the manufacturers and suppliers in that space.
On the value of trade, we should first mention that in the sector many of our businesses have been globally trading for decades, if not longer. We are intrinsically international in our trading relationships. In 2022, the value of imported plant products was around £753 million, and the overall sector was valued at about £1.5 billion. Exports have been significantly impacted by Brexit. We are in the few tens of millions, and I am sure we will explore later some of the issues about why that is the case.
On trade with Northern Ireland in particular, we clearly did not capture that as a value because we were all one nation in a trading sense prior to leaving the EU. We know that it is an area where trade has been significantly reduced, if not decimated, for many businesses. We certainly hope that that could be built back and that we might be talking about a greater value of trade in that area should we be able to build on the Windsor Framework.
Value of trade should be looked at not just in terms of pounds and pence and the value of products moving across borders but in the international relationships with businesses like Ball Colegrave, which has an operation in Portugal, as already mentioned. We also see a great sharing of ideas, exchanges of insights, intelligence, developments and innovation in the industry. Those relationships are crucial to how we do our business.
Q230 Lord Carter of Coles: Good morning. Given the importance of this being an international trade and how things move across borders, I am keen to hear your views on the target operating model. Will it work? Will it work on time?
Nigel Jenney: Thank you very much for the question, and for the opportunity. Will it work? The Government are now in their second proposal on the TOM—the target operating model. They missed the first target, because the target was to respond to the industry about what it had to do by the end of last month. That has not materialised, and will not materialise for weeks, I assume. That puts huge pressure on the industry’s ability to prepare for the hard delivery dates the Government are currently suggesting. I might come back to that in more detail later.
As my colleagues and, hopefully, I have already suggested, we are operating in a sector that looks to deliver internationally highly perishable, highly sensitive products as quickly and efficiently as possible. Frankly, from my industry’s point of view, we believe that the current proposed strategy will fundamentally compromise our industry’s least-cost, highly efficient supply chain from Europe, without a doubt. That will have considerable impacts, and perhaps we can talk about those in a few minutes.
At the same time—I will be careful about the language I am about to use now—from Europe we use something called groupage, which I will explain in a few minutes. About 65% of every vehicle arriving from Europe for our sector has many different items for many different customers from many different suppliers. Do not assume that you can simply stop one vehicle and it will be a minor intrusion; it will affect many businesses on a very regular basis. At the same time, as we are highly efficient we often deliver directly to our UK customers. We do not manufacture widgets. We do not keep them in a UK warehouse for six months hoping someone will buy them. They are literally harvested, packed and delivered within hours, not days.
The TOM provides some huge challenges for our sector in compromising that just-in-time least cost to maintain both the quality and the cost of the products. We are extremely concerned that the current proposed government BCPs—border control points—are, frankly, highly inefficient. At the moment, I am being told that my vehicle is being chosen for an inspection today. It is probably an hour or so before my consignment is presented on the loading bay for inspection. Then it is up to four hours before an official makes the decision. On a practical basis, my lorry and my customers all have to wait for at least five hours, so I have absolutely no chance of delivering to my schedule, and, more importantly, my driver is out of UK driver hours. The costs rack up enormously on a substantial number of consignments.
You will see that the Government have now—proactively, I accept—put products into high, medium and low levels of risk. That is very sensible, but it does not take into account what I have just said about mixed vehicles or groupage vehicles. Imagine that we all go shopping to our favourite retailer and we all put in our baskets 30 or 40 different things. Imagine that all those products are in the same vehicle that arrives at the border tomorrow morning. One of those consignments is highly likely to get stopped and it probably is not mine. That does not just affect my consignment or my customers; it is all those consignments and all those customers. The impact on our industry is huge.
From our point of view, I can bluntly say that we will proactively, as we have for years, offer solutions to the current BCP model, which is to encourage control points. They are facilities that are managed by our industry and managed by our commercial partners. There is one fundamental difference between what a BCP does and what a control point does. A BCP adds, brutally, no value for my industry. It confirms that the goods are biosecure—I totally accept that—but if it moves to a commercial facility, the commercial business can add further value in the unloading of those goods, the inspection of them and perhaps the repacking and order picking of them, so it is not lost cost and it is not lost income. It is adding value for subsequent distribution. Many of those businesses work very different working hours.
Several years ago, we offered the Government the opportunity to use our industry’s facilities for the inspections. That option was not considered appropriate at that time. We also suggested that it would be appropriate to allow responsible businesses in the industry to be suitably trained and accredited to do the inspections. Do you want a few hundred official inspectors managing your border security, or do you want thousands of people managing it? The even better thing is that you do not have to pay them, because the industry pays for those people.
Sadly, that process, as much as we discussed it for some considerable time, will not be available. The 31 January date is the go-live date, so as an industry we will be forced to use either BCPs or control points but still wait for an official inspection by an official officer, which is so frustrating because we have had years to manage and plan the processes, yet everything is last minute. It appears to be poorly thought through, and ultimately the industry will pick up the pieces
It is not just the industry. One of the things we have said very publicly, and I will remind you of it again today, is that, sadly, we simply cannot absorb the costs that we envisage the industry having to incur. The costs will be passed on to hard-pressed consumers in what is a very difficult environment at the moment. We have no choice. Our margins simply do not allow us to do anything else.
At the same time—I am sorry to use some abbreviations—there is also a government consultation on the common user charge, or CUC, which is in essence a mandatory fee for use of the Port of Dover or the Channel Tunnel that will go towards the operational costs of the government-managed BCPs.
It is very difficult to calculate the absolute cost to industry. At the moment, the government advice is that it is somewhere between £23 and £43 per consignment. However—a note of caution—the industry’s interpretation of consignment, and that of the Food Standards Agency and APHA—the Animal and Plant Health Agency—is fundamentally different from what appears to be listed in the consultation. That £43 is not for a vehicle; it is for one part of a small consignment. If I am importing goods and have 40 or 50 different products on my customs declaration, it could be £20 or £40 for each line, so that vehicle could cost me £2,000.
We have requested clarification of that. Many in our sector are hard-working SMEs, and we have talked to huge numbers of our members and put a lot of time and effort into talking to the smaller businesses too, which may be small businesses in wholesale markets and elsewhere in the country. They are saying, “With these charges and fees, my business is simply not economical. You will drive me out of existence”.
Lord Carter of Coles: You are not very optimistic, are you?
Nigel Jenney: Sadly, I am not. In reality, it is a huge opportunity missed at this moment in time.
Lord Carter of Coles: Is that your view, Sandy?
Sandy Shepherd: Yes. I will be quite succinct. The BCP is misguided, a waste of time and has no added value for us. We can control things better, quicker and more efficiently. It is totally not thought through properly and not required.
Jennifer Pheasey: I absolutely echo what Nigel and Sandy said. I should have mentioned earlier that 96% of our growers import some sort of plant or plant product. They are SMEs. For them at the moment, having a control point, which is the alternative to a border control point in the future, is not an option. It is not accessible to them, nor are the easements that would be associated with that. At the moment, there are no easements for SMEs. Our plants for planting will all be in the high-risk category of the three categories that were mentioned earlier. They will be subject to all the full implications of the BCPs, and we have absolutely no idea what that might mean in time delays or any of the risks that have been mentioned already, let alone with groupage. We have estimated the cost implications to be around £42 million, and that is with no material gain or benefit to our businesses.
The changes are due to come in six months’ time, and we do not know the detail yet, as has been mentioned already. We have said very clearly that we need a delay in the introduction of BCPs to at least a year after we have the final TOM out there and once all the other things are readily available and accessible to us, including all the guidance and guidelines. It is absolutely crucial for us and the supply chains that we trade with internationally to have that time to prepare.
Lord Carter of Coles: Thank you for making the point so clearly.
Q231 Baroness Walmsley: We are now moving to CITES. For anybody online who does not know what that acronym stands for, it is the Convention on International Trade in Endangered Species of Wild Fauna and Flora. My question is for you, Jennifer. How effective are the CITES rules and what are the implications for horticultural businesses?
Jennifer Pheasey: Thank you. As you have mentioned already, CITES is an international agreement to which the UK is a signatory. It is clearly very important because it covers endangered species. Endangered species is a very broad category. It can be everything from alligators and elephants right down to things that you might not think would be covered in our sector, like cacti, orchids and some cyclamen—things that many people consider to be everyday plants that they like to purchase and enjoy.
The main challenge that we have with CITES is that it remains a paper-based system, with some small changes made only recently, in the last few weeks, to make it slightly digital. It is still a system that requires you to print and post, and in the UK it now has a 30-day permit application process, which clearly is not feasible when you are looking to move plants and products that have a shelf life. It is a system where we see quite antiquated and rather surprising things, such as wet stamping being required. A driver at a border has to get a physical wet stamp on a piece of paper. If they forget to do that, there is no retrospective application for them to be able to get a wet stamp. Those goods are then seized. So a consignment of, say, cyclamen could be seized that then has to be given away or destroyed, even though it is an endangered species.
There are lots of things in how the CITES system is being implemented in the UK that are not particularly fit for purpose in 2023. It comes with time delays that we do not see elsewhere. With resourcing and a concerted effort, we could see significant developments to digitalise the system in the UK and to change the legislation to address some of the issues that we have.
The UK also requires an import permit with its CITES applications, which is not necessary, so we think that is a step that could be removed. The impact has been that we have seen the ceasing of the importing of many of these goods, because people have been facing so many challenges. We have worked collaboratively with the CITES team in government to try to increase education in the industry to ensure that people know exactly what they have to do, but it feels like a fundamentally antiquated system that we could quite easily take action on to improve and make fit for purpose.
Baroness Walmsley: Why is an import permit not necessary? Would it not be necessary in order to limit the number of endangered species that are being brought in?
Jennifer Pheasey: It is an additional step that the UK requires. The CITES permit already has the information needed. All the information is provided already by the exporter as well.
Baroness Walmsley: It is not needed in other countries that are signatories to the convention.
Jennifer Pheasey: No.
Baroness Walmsley: It is a sort of gold-plating.
Jennifer Pheasey: Yes, indeed.
Baroness Walmsley: I see. Are there any comments from the other witnesses?
Sandy Shepherd: I am not affected by CITES.
Nigel Jenney: I totally support Jen’s position. It is a huge opportunity. It should not be that difficult to make some fast-track changes to some of these positions. It is very sad that, as we have mentioned, it can take 30 days to get the import certificate, and the phytosanitary certificate that I need to export is only valid for 14 days.
Baroness Walmsley: Right. Do you use a fax machine?
Q232 Lord Colgrain: Sandy, I will address my question to you first, if I may. Before I do, can you help me with one fact? We have been hearing about SMEs being most affected. You are a global business. How many people do you employ in the UK, and how many people do you employ globally?
Sandy Shepherd: In the UK, we have about 200 permanent and a lot of seasonal labour on top of that. Globally, it is many thousands.
Lord Colgrain: Thank you. My question relates to the evidence that we heard earlier today. How will the Government’s decision to ban peat impact imports and exports?
Sandy Shepherd: On the peat side, I speak to my global colleagues, and I researched them before I came here. They asked why the UK is doing this. If you look at Australia, South Africa and America, we seem to be standing alone in the rush to go to zero peat, whereas, as you know, most countries are reducing the amount of peat they are using very successfully. We have probably the best rates in most of the advanced world, if you like to call it that. We are doing a good job in reducing the amount of peat, absolutely.
Through the process of discussion, the Government are at least looking at some exceptions for certain crops; ericaceous crops were brought up earlier. As a commercial grower, we work with products that are being developed, and we are doing that now. We are successfully moving to 100% no peat on certain occasions and it is working. We are still struggling with the consistency of those products. Only last week, I found out we have had some crop failures. The consistency is not there. It is the speed that we are moving at that really concerns me. At the international level, speaking to my Dutch colleagues, is it really going to restrict the amount of goods that come into the UK? Certainly, the UK cannot replace that, so we will restrict the number of products that can be sold here. Those are the things that worry me. You spoke in the previous meeting about the consumer usage of peat and the lack of awareness among consumers using peat, and the lack of information for them to be successful.
For me, that is the scariest thing. We are losing a huge amount of untold business on that. I spoke about my business. Most of our business goes into a pot or a container with a growing medium, and consumers are failing, just failing, or not having very good success. It may not be total failure, but the plants have half as many flowers, and these are competent gardeners. We are moving at such pace. You spoke about the lack of control of what is in the bag. That is a huge issue, because consumers fail, blame themselves and just do not do it again, and we have lost them. I really worry about that. We talk about the inconsistency at grower level in the peat in the compost, but when you get to the consumer level with no standards, it is a very worrying time. At the grower level, the professional level, we can adapt and we are moving fast, but I worry greatly about standing alone and not getting a consistent approach.
Jennifer Pheasey: I very much echo what Sandy said and what was said in the earlier evidence session. We have made huge progress in peat reduction in the UK and are certainly well ahead of our European counterparts in that sense. We have done some recent survey work to understand what the impact would be, particularly around the intention of a 2026 professional ban, and we estimate a shortfall of 100 million plants following that ban. That could certainly not be met by any filling of the gaps there.
With imports, we see from talking to our European colleagues that they certainly would not be ready for 2026. The peat ban is a significant concern on top of the barriers to trade that we have already talked about. It certainly should not be looked at in isolation. One thing that is worth considering is the retail impact. Garden centres at the moment import about 87% of the house plants that they sell. House plants have become hugely popular in recent years. We know that the UK could not fill the gap that would be created if imports were no longer allowed as of 2026. What came through earlier is the requirement for time, as well as clarity, certainty and communication, not just for the domestic horticulture sector but for the international horticulture sector, on what the UK plans to do about peat.
Nigel Jenney: I support what my colleagues have already said. It is important that whatever timescale is delivered it mirrors constructively our international trading partners, otherwise it simply will not work.
Lord Colgrain: Thank you. That is very depressing.
Q233 Lord Sahota: My question is on biosecurity. What key biosecurity concerns are raised by the import and export of horticultural produce? Are we at threat of any of it when stuff comes in and out?
Jennifer Pheasey: Biosecurity is a top priority for the industry. It has been for many years, and it will continue to be so. Whenever you move any good across a border, particularly if it is a sanitary or phytosanitary good, it inherently has some sort of risk attached. As I have mentioned, our plants, planting trees and bulbs all fit in the high-risk category that the UK has at the moment. Any pest or disease that could come into the UK is a grave concern, because it can have environmental and economic impacts and it can devastate businesses. That is why we have a strict regime here with mitigation measures and regulation that is very much bought into by the industry.
It is probably worth noting that this week we have seen a case of oak processionary moth identified in Derbyshire, which is outside the current buffer zone. That is just one example and one to which there has been a very rapid response. Everybody is acutely aware of their requirements in that space. People often talk about Xylella, because that would pose a huge challenge to many businesses and have significant impacts on the environment.
In the biosecurity space, we would very much like to pursue with government a dialogue about compensation where there is no-fault destruction of products because of a pest or disease. That is an area where we think there could be an opportunity for us to work with government. The sector has significant expertise in that area. Something that is potentially not looked at and that we hope could be pursued further is the area of personal imports. We are not the only people moving things across borders. Things are being sold online, and there may be spurious sellers who are not necessarily operating in the biosecure way that we operate in. There is a lot that could be discussed. It is quite a broad question. Others may wish to come in.
Sandy Shepherd: It is probably the fundamental thing that we worry about in our business. It has been like that since day one. As I said, we have been in this industry since day one and we have led the industry. What we do every day is controlled and about looking at the controls that are in place, so we are the real experts. We work with the Government on anything that comes in. When there is an issue, we act as an industry to stop things happening even without the Government telling us. An example is downy mildew on impatiens, when the industry decided as a whole that it would not sell that product. We did not need the Government to tell us, because it is our business at the end of the day if any diseases and pests spread. We want to be right in the middle of any discussions on that and help.
We have full traceability in everything that we do. We did not really touch on that earlier. Traceability is everything to us. We know where everything has come from, which is vital. Any accreditation schemes have to keep traceability—where products have come from—in place, so that if there is a problem we can trace it back to where it started.
Nigel Jenney: I would support the Government’s position on high, medium and low risk on different products, but I would encourage a regular review of whether the products are in the appropriate category, either up or down. With plants, we all understand why on occasions it has to be the way it is, at the moment at least. From a fruit and veg and cut flower point of view, however, the Government’s statistics are very difficult to get hold of. We have to source most of them through freedom of information requests, so it would be really useful if there was an online portal to allow the industry to see not just the interceptions but the trading activity in further detail. The industry could then proactively choose alternative sources, but we cannot be proactively supportive if we do not know the information.
Going back to fruit, veg and cut flowers, in 2021 there were 103,000 consignments arriving in the UK from the rest of the world—not Europe, because we were not managing Europe in that respect at that time. There was less than a failure per week; the level of failure was something like 0.001% of the risk. So it is important that we keep that in context. Perhaps, even at that level of performance, there is an opportunity to consider reducing the level of official inspections further. The assured operator scheme would fundamentally support that.
You mentioned exports. As a sector for fresh produce, at least trading with Europe at the moment, we have several businesses that have been accredited with what is called the PHEAT system to do physical inspections, to allow the goods to require a phytosanitary certificate and to be exported to the EU. It is a great idea, but it needs to be improved radically because it takes far too long to get the phytosanitary certificate to allow those businesses to trade.
We are a dynamic industry. If the weather changes in one part of Europe versus the UK, we will look to fund that shortfall. At the moment, the UK industry has both hands tied behind its back. It simply cannot respond quickly enough. The industry can, but we cannot get the official documentation to allow us to trade quickly. At the same time, if you look at the European data, which we all do from time to time, the UK, from an export point of view in terms of the accuracy of phytosanitary certificates or other issues, is one of the worst-performing countries trading with Europe at the moment. As an industry, we have to get better, but, frankly, we need support and advice from government about what is going wrong, because some of these things are not in the industry’s control. This is official documentation that we are using to export.
The Earl of Arran: You may have already said it, but are you allowed to say which are the worst importing countries of diseased products?
Nigel Jenney: That is very complex, because at the moment the data is hard data. It is numbers of failures. It does not put that trading activity in the context of the thousands of tonnes of produce that we are talking about. You can see data for Bemisia, or whitefly, which you may see coming from Europe, but quite often those consignments may have been originally sourced not from Europe but from somewhere else in the world. As an organisation, we work actively with a considerable number of embassies and APHA, where there are issues, to encourage improvements. As an industry, we are being proactive in minimising those issues. I would not say that there is one particular source that is very poor, let us put it that way.
The Earl of Arran: I am not quite sure. Are you really saying that the Government’s proposed plans to control these pests and diseases more effectively will work?
Nigel Jenney: They may well manage biosecurity, but they will outprice our food availability at a cost that we can afford. As a sector, we fundamentally support the robust management of biosecurity. However, our proposals and solutions to improve biosecurity and to reduce the impact of cost on industry and, frankly, consumers are far more effective.
The Earl of Arran: Do you think the Government should think again on this?
Nigel Jenney: I would be delighted if we could influence them to do so.
Q234 Lord Curry of Kirkharle: Can you talk a bit more about the impact on supply chains of the measures that are currently in place or are being proposed? Do you feel that the Animal and Plant Health Agency is adequately resourced to fulfil its role?
Jennifer Pheasey: On what the proposed changes will mean, until they are implemented we will not really know their effectiveness. As I have said, we already take biosecurity very seriously and have significant experience as well as actions in place to uphold it. Our No. 1 ask of the Government has been that they pursue an SPS—sanitary and phytosanitary—agreement or some sort of plant health agreement with our largest trading bloc, the EU, and we would still very much support that as the absolute ambition for plant health.
On your point about APHA, we would always welcome more resourcing. We are absolutely realistic, given the current climate, but we would like to see resource across all the different areas where horticultural policy is being made. One of the key things under the new regime, as we have mentioned, is the high, medium and low risk. Nigel mentioned how that would be reviewed and that there might be future changes. For us at the moment, a single petunia has the same risk profile as a fully mature oak tree, which inherently does not make sense. There are opportunities to look at that, because clearly having the same amount of cost and administrative burden for those two products is not right. There could be opportunities to improve and make greater efficiencies in the supply chain while also absolutely upholding biosecurity.
Nigel Jenney: I support what you have just said. High, medium and low is easy to understand, even for me. The crazy thing is that if I do not understand what is in high, medium and low, it is very difficult to manage my business because, even if I am in the high category, that could be a 5%-level inspection or 100%. We are just not given clarity. We are way past the consultation process now. We are days from potential implementation, yet as a business I do not understand the detail of what it means for me, other than the headline principles.
Lord Curry of Kirkharle: Bearing in mind your earlier comments, are there likely to be mixed consignments of high, medium and low?
Nigel Jenney: Absolutely. That is a key point, and I will expand on it further, if I may. The simple answer is: why are you mixing high, medium and low? The reality, going back to my “go shopping” situation at your retailer, is that that is what we all do. A wholesaler wants a combination of different things to sell to their customer base. We are not in a situation where we can split high, medium and low. We will not have meat products in the vehicles, but if I want to go to my wholesaler and buy fruit and vegetables, some cut flowers and a plant, they are likely to be on the same vehicle, because economies of scale and the logistics force me to do nothing else, otherwise we will have thousands more empty vehicles travelling around the country, assuming we have the vehicles and the drivers.
The industry will do whatever it can to try to segregate wherever possible. I probably should have emphasised that earlier. We have talked about the values of trade and the volumes of trade, but it is also about where those products are sold. We should remember that we have unsung heroes throughout our industry in the wholesale sector. They represent over a third, in fresh produce terms, of annual sales, and they need something of everything every day. These are not things I can put in a warehouse and come back to next month. I have a few hours.
Lord Carter of Coles: What you say is really compelling. Why are they not listening? I get it, so why are the people in charge not getting it?
Nigel Jenney: Perhaps I have not been as convincing as I have with you.
Lord Carter of Coles: Gullible maybe. I do not know.
Nigel Jenney: I share your frustrations on that basis, because as an organisation and as an industry we have tried very hard for many years not to sit on the sidelines and say, “That won’t work”. We proactively offered solutions years ago; not in the last few months—years ago. We are really keen, for reasons I think we all understand, for this to be a success. I want the UK to have a world-leading border strategy. I want the UK to be a destination and exporter of choice. There is huge potential that we simply cannot engage, from an export point of view, because many of the continuity and new trade agreements that we have simply do not have the SPS measures agreed. Even if I am a very committed grower and desperately want to do things, that element of the official process is not in place.
The Chair: Do you envisage a systems crash when these come in?
Nigel Jenney: How do I put this? Historical implementation of government IT systems may be something we should reflect on.
Sandy Shepherd: We will end up going back to paper. Think of the number of times we have to get pieces of paper by not embracing digitalisation. We are dealing with tens of thousands of products. There is a real example of trying to export to Ireland. Bearing in mind that our goods are very perishable, we have to pick the order first and put them into trolleys. The inspector comes along to say it is okay, and then he communicates with York that the product is okay. Guess what? We cannot go up and collect it. We have to get it printed out at York and mailed down to us. We may get it the next day or the day after, and the goods are declining in quality every day. That is what is going on in this country. I am sorry, but it is just crazy.
Jennifer Pheasey: On Friday, the HMRC team decided, without communication, to change the commodity codes across a number of different areas. We suddenly had people saying, “Why is our stuff not moving? What’s going on?” There was a complete lack of communication on that. We are still trying to work through that and understand the new commodity codes and what we can do about it. That, it seems, could have very easily been averted.
Nigel Jenney: That was just one example. Even in this interim period with the new government IT systems, we have several very large customs clearance agents who manage the challenging border process for people who do not understand the detail. They are constantly calling and emailing us, saying, “The system’s failed again. You have to go back to a paper back-up”. That is the example that Jennifer has just explained.
There are duties on certain products from certain countries at certain times of the year. They change from month to month. As an industry, we are regularly having goods stopped at the border because the Government’s IT systems do not talk to each other. So you get, “That’s wrong. You’re wrong”, and it can often take two or three days to resolve. The goods continue to deteriorate, and you eventually find out from them that, “We’ve got the wrong duty. It wasn’t your fault”.
Q235 Baroness Jones of Whitchurch: You are half way to answering my question. I was trying to understand which government departments are the guilty parties in all this. The more I listen to you, the more it seems that there are a whole lot of different government departments. I would like to think that Defra at least understands the biosecurity rules and issues, but maybe that is not its responsibility at the border level. Is the Department for International Trade involved? Is it the Home Office? Who is running all these departments, and is that part of the problem?
Sandy Shepherd: It is a huge part of the problem. Another example is that we export seed throughout Europe and other parts of world and we are going to give up that business as it is impractical for us to do. The hard example is that the legislation did not change; we just got a new inspector. We worked with the old inspector to get everything in place so that we could export the goods, and we cracked it after a huge amount of IT resources, time and effort. Then the person left and we got a new inspector, who said, “No, you can’t do it like that”, but nothing had changed.
It is about understanding and documentation. If you look through this at who creates the problem, the way the legislation is written and interpreted is an unbelievable challenge for us in seed and in plants. It is the same with exporting to Ireland, whether it is the Irish Government or the UK Government. Our business has been decimated in Ireland and in Northern Ireland, and we are going to stop exporting seed. We need to get our heads around this. We need a different way of looking at how the legislation is put in place—the timings and the communications.
The other classic thing is that, when we ask for help, if they do not know, they say, “I refer you back to the website”. It is Catch-22. It goes on constantly: “Give us some help”, “What do you need to know? I refer you back to the website”. It is so frustrating. We are a big business dealing with thousands of customers and tens of thousands of products, and we just cannot go on like this, so we will probably give our export business to another part of the company. That is a net loss for the UK hugely. It is so frustrating. The seed business is a real example.
Lord Carter of Coles: You are part of a global company that, in your sector, deploys capital globally. Is this country investable for your parent company?
Sandy Shepherd: I was going to close on that. I will come to that now. We have been trying to build a nursery in the UK for the last five to 10 years. There are planning laws, infrastructure costs and land costs. I have moved that spend to Portugal. We can go there, we can create, we can get planning done and we can get going. These are just some of the things that go on. Even when trying to replace a part of the nursery, which is a 1.5-hectare block, I have to wait to go through a planning process. I am basically replacing it, but because it is above a hectare or whatever I have to wait another year. It so frustrating. Guess what? That money has now gone to Portugal. I cannot wait. We have to move quickly. We are in a fast-moving business. These are real, practical, live examples of what is going on.
Nigel Jenney: We talked about plants earlier and the lost opportunity of trading with Northern Ireland. From a fresh produce point of view, it is exactly the same. To put it in a practical context, a few years ago there were probably three or four ferries on a weekly basis going from Europe to Ireland. Now, there are almost 20. Most of our fresh produce is not transiting through the UK but going directly from Europe. From our point of view, we would encourage the legislative opportunity to trade again. However, we have to win back those customers.
The Earl of Arran: Brexit has not helped.
Sandy Shepherd: I do not like to mention that word.
Nigel Jenney: The application of some rules. Let us put it that way.
Baroness Jones of Whitchurch: Maybe this is one of the solutions. Jennifer, I think you have been involved in putting together the Plant Health Alliance’s plant healthy certification scheme. Will that help to cut through some of the red tape? Will it be a solution certainly for some of the biosecurity issues?
Jennifer Pheasey: It is too difficult to say how that will be able to address some of the red tape and challenges directly. Certainly, we very much support and direct our members to the scheme. There are other schemes, such as the OHAS scheme, that mirror that or are very similar to its principles. Even if people are not signed up to the plant healthy certification scheme, it does not mean that they are operating in a way that is not biosecure; it is just that the scheme is seen as the gold standard. We think that much more could be done to encourage more people to sign up to it and get greater adoption.
There are some barriers to SMEs being involved in that at the moment. It is important that we always think about the SMEs in this space. They have a huge amount to deal with in their businesses, as we have already discussed, and this comes at a cost. There are some things to work through, but there is absolutely an opportunity to explore how we can get more businesses to get the benefits from the certification schemes that are out there.
Q236 The Chair: Brilliant. Can I ask the final question, the magic wand question? If there was one thing that you wanted to get across to the Government, not the 27, what would it be?
Nigel Jenney: We have all demonstrated that we are very passionate and proactive, and we want to find solutions, but I am really concerned that the current Government’s position will compromise the UK’s food security and potentially compromise the availability of affordable food, which is such a shame, because surely that must be a fundamental responsibility for the Government. My headline ask is simply that they empower businesses to self-regulate and that they offer a cost-effective and dynamic border solution to support the SME sector. At the same time, whatever changes are about to occur in the future, please enact the border control strategy at the same time as you adopt control points and the assured operator approvals. Let us not have a trial; let us have real-world.
Sandy Shepherd: I agree with Nigel. I would add investment and really believing in the horticultural industry. We could be twice or three times the size with great employment. Companies like ours are desperate to invest, and we still want to invest in the UK, but it is very difficult for us. If anything, we will be half the size instead of two or three times the size if we keep going down this track. We can do it. We are a very professional industry. We have all the controls in place. We have built the market without any government help. Do not destroy us.
Nigel Jenney: I totally agree.
Jennifer Pheasey: I ask that the Government absolutely recognise horticulture and our expertise when they pursue any future changes to trade and biosecurity. Our No. 1 ask is always for an SPS agreement, or some sort of plant health agreement, to be sought with the EU, but we are cognisant that that is a tall ask. Failing that, delivering on what we have asked to be on the TOM, having the time to implement that, and, building on the Windsor Framework, working with industry constructively through a forum to do that would be on that list.
The Chair: Thank you for a most depressing summary and for only mentioning Brexit once.
Sandy Shepherd: I do not think it was us; it was your honourable colleague.
Nigel Jenney: I am not sure we did, actually.
The Chair: Every answer was wrapped up in it, but nobody actually mentioned it.
Lord Curry of Kirkharle: You have expressed concerns about government policy, particularly on import controls, and it would be helpful, if we do not have it already, if you could write down the detail of that and the potential solutions that you think would make a difference.
The Chair: Perhaps you could address those to the committee.
Nigel Jenney: I would be delighted to do that.
Sandy Shepherd: Yes, absolutely.
The Chair: Thank you very much for all your words.
