20

European Affairs Committee 

Corrected oral evidence: Dynamic alignment

Tuesday 19 May 2026

11 am

Watch the meeting 

Members present: Lord Stirrup (The Chair); Baroness Ashton of Upholland; Lord Barrow; Lord Brennan of Canton; Lord Elliott of Mickle Fell; Lord Jackson of Peterborough; Lord Moynihan of Chelsea; Baroness Smith of Newnham; Lord Tugendhat.

Evidence Session No. 6              Heard in Public              Questions 53 - 63

Witnesses

I: Tom Bradshaw, President, National Farmers' Union; John Powell, Chief Executive, British Meat Processors Association; Richard Ballantyne, Chief Executive, British Ports Association.

USE OF THE TRANSCRIPT

1. This is an uncorrected transcript of evidence taken in public and webcast on www.parliamentlive.tv.
2. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk of the Committee.
3. Members and witnesses are asked to send corrections to the Clerk of the Committee within 14 days of receipt.

19

Examination of witnesses

Tom Bradshaw, John Powell and Richard Ballantyne.

Q53            The Chair: Good morning, and welcome to this public evidence session of the House of Lords European Affairs Select Committee, where we are looking into the issue of dynamic alignment. Today we are focusing on the sanitary and phytosanitary arrangements that are being negotiated, which of course is an important context for the principle and practice of dynamic alignment. We are delighted to welcome as our witnesses Tom Bradshaw, president of the National Farmers’ Union of England and Wales, John Powell, chief executive of the British Meat Processors Association, and Richard Ballantyne, chief executive of the British Ports Association.

This is a public evidence session. A transcript will be produced and a draft sent to each of you to review for any errors and omissions that you wish to correct. The microphones are live throughout. We hope to get the evidence session concluded in 60 minutes but, with three witnesses and the questions that we have, that means the questions and the answers should be as succinct as possible, please, so that we can cover all the ground; I would be very grateful. Please do not all feel obliged to answer the same question—by all means just say “I agree”—but if you have more to add then of course please do.

I will get us started with the first question, a general one to kick off with. What difference do you think the prospective sanitary and phytosanitary agreement would make to your members and your constituency in practical terms compared to the current situation? What would change and what would not? Could you give us an idea of the scale of that change and how important or big it would be for each of you?

Richard Ballantyne: Good morning. Thank you for this opportunity, everyone. I will save the propaganda about how essential ports are to the economy because I am sure you all know that, but I can send submissions with all the jobs, the trade and all the things we do in the port sector. In an island nation, we are right at the frontier. As you can imagine, particularly with our borders facing the European Union, this has been quite a process we have been through as a sector.

To answer your question in fairly brief terms, there is a difference between the expected arrangements at our frontiers and what is actually happening today. My colleagues will have views that are probably similar but maybe slightly more interested in some of the things I will say about this. At the start of our journey in departing the EU, the ports industry was instructed by the UK Government and other authorities to prepare borders infrastructure that would be in line with certain standards—designated and so on. We prepared that in good faith. Some of it was funded with government funding, which we appreciated at the time. However, those arrangements, while they are supposedly in place now, are probably not being enforced in the way that we would have expected them to be at the beginning of this journey. Effectively, those SPS controls at our frontiers are taking place but in a perhaps more pragmatic and light-touch way. There are still costs associated with that, and my colleagues will no doubt have interests from their side of things regarding their stakeholders and so on, but if we move away now from what we have at the moment, that could actually be quite straightforward operationally for frontiers and borders—a relatively easy transition where we would move away from having those facilities and processes undertaken at them. However, that rather ignores the amount of blood, sweat, tears and finance that has gone into preparing those facilities and the opportunity to recover cost to run those facilities at the moment.

I think a lot of the traders and the partners we have in the port sector—the shipping industry, the freight and logistics industry and others—will see this as a very good thing, as we do. We are not political, but breaking down barriers with our nearest trading partner is positive and a good move. We do not want things stopped at the frontier at all; rather, we want trade facilitation. However, there is a big question mark for us about what we need to provide in terms of infrastructure and designated points of entry. And is there going to be a compensation regime from the Government to finance either modifications or indeed the bulldozing of a lot of those facilities if they are not needed at all?

The final point I will make —although I am happy to take further questions on this with other colleagues—is about ports that are not Europe-facing but face the rest of the world. Our understanding is that the expectation from the EU is that we as a country will need to make sure that those borders are extra secure and will perhaps go back to a previous regime, increasing the amount of government activity, checks and controls at some of those deep-sea-facing ports and so on. We need to be clear that, as well as breaking down barriers and controls being a good move, there will be implications for others bringing goods in from non-EU sources.

John Powell: Thank you for the invitation to give evidence this morning. I will briefly touch upon some context on trade in relation to the export health certificates that are required to accompany every export to the EU at the moment, and the costs that the companies currently have to incur. Then I will move on to answer your basic question, which is: what is the difference that this agreement will make?

For us, the agreement is vital. Over the last six years, trade in beef exports has fallen over 20%, our sheepmeat exports are down 15% and our pork exports are down about one-third. The export health certificates mean that we face an incredible burden. I thought you might like to see a copy of an export health certificate. This is not the one-page cross-country certificate you may have had at school. I have one here: it is 10 pages long containing 36 signatures and 36 stamps. This particular consignment was rejected at the border by the French, not because of any food safety concerns but because one of the lines in French was crossed out and the English version had a different cross-out under the next line. That was an administrative burden that cost tens of thousands of pounds to that particular company.

To give you an idea of how many of these EHCs there have been are, so far, in the first quarter of this year, 52,500 export health certificates have been produced. Every form needs to be signed by a vet. That means 105,000 certifier hours, equivalent to 51.8 full-time certifiers, and it has cost over £10.5 million so far this year. Since December 2020, 1.45 million of these EHCs have been produced. That is equivalent to 1,500 certifier years and has cost nearly £300 million, a cost that the companies have incurred.

That is just the documentation. You then have to move the products from the UK to the EU. Andersen has produced a report estimating that the cost per each consignment is £2,500 to £3,000, so that has cost us over £50 million a year over the last six years, with, in addition, £500[1] in additional haulage costs and approximately £2 million a year per individual company to staff the team that needs to organise both the certificates and the transport of the goods. That is a summary of the current situation.

What would change? First, the removal of documentation would immediately result in a massive reduction in costs. It would remove the stress of workers in the companies, because at the moment they are constantly concerned: have they not crossed out the right line on the EHC, or have they missed a signature or a stamp from a vet? Some of these consignments can cost tens of thousands of pounds if they are sent back or destroyed, as is sometimes the case.

Our UK business reputation would be enhanced. At the moment, it is not possible to guarantee that you can deliver a contractual obligation on time. It would mean that we were more competitive in Europe because we would not be bearing these costs any more. It would mean that we could compete fairly with our European counterparts. It would also mean that businesses that have been sucking up the costs to date could divert staff resources that have been utilised in completing the forms and arranging the haulage and put them into other jobs, enabling the company to develop. It would also mean that those companies could use the savings to invest in new technology, for capital investment in new jobs and in adding value to their businesses, not just in raising margins.

This is an important point to make: the one thing that will not change is that when you trade with any country or trading bloc you are obliged to meet their legislative framework, whether that is the EU, America, Australia or wherever. We will have to meet the EU’s requirements at the moment irrespective of having documentation or not. That would not change, but without the bureaucracy the cost savings would be significant.

Tom Bradshaw: I agree about the increased costs that John has talked about. When we reflect on what has happened, we see that demand for agrifood products has dropped around 30% in total volume since 2019. Obviously there have been global crises and there has been a reduction in production in some areas but, as a general figure, that reduction in demand reduces the opportunity for our members to get the best value for the product that they are producing, so that is not a great starting point.

However, very few of our members are direct exporters or importers, so a lot of the extra burden is up the supply chain and quite abstract from the farm level, so how much benefit will our members see directly? Initially, it is likely to be very low unless you are a horticultural business that is directly importing plant material, where there will be immediate benefits. They are concerned about border control points becoming infection points rather than inspection points, so if we can reduce the inspection on imported material then that will help. They are still bringing those plants into biosecure environments, but  they will want to do the inspections at  their own facilities, rather than at the border control points.

Still, because these changes are very distant for a lot of our members, they will not see the immediate benefits. That is where I think we need to bring in a bit of jeopardy. We have taken advantage of regulatory autonomy in some areas, particularly around plant protection products, gene editing and the TB vaccine work, which is continuing now. We are not worried about the TB vaccine trial, but we are concerned about whether we will be able to deploy that vaccine in the future, because at the moment the EU will not let that vaccine be deployed, and that is something that we have to make sure we look at properly through negotiation.

We have to make sure that we have the correct transition arrangements for plant protection products. Reports have been circulated suggesting that a hard stop could cost £800 million, so the correct transitional arrangements through an agreement are absolutely essential. For something like gene editing, for us to be genuinely world-leading, we have to be able to carry on doing the research and development in that area and move forward, rather than being hamstrung by letting the EU put the handbrake on us. Part of the negotiation needs to be to challenge the EU: where we have taken advantage of regulatory autonomy, why is their system not keeping up with ours when it comes to approving new products or letting gene editing be approved? Why should we put the handbrake on the UK rather than giving us the correct transition arrangements until they catch up with where we are today? That is really important. The balance for our members is that if they see those products removed immediately then that is where they will feel the pain, and they will not necessarily see the benefits that have been talked about by the BMPA.

Q54            Lord Jackson of Peterborough: Before I ask my question, Mr Powell, you talked about bureaucracy and paperwork. Have you as an organisation lobbied the European Commission on this?

John Powell: Right back at the start, yes, but, to be honest, it is a requirement for trade to any country. You are required to provide confirmation that the standards of the exporting country are being met and that any particular requirements have been addressed at the domestic level. Export health certificates are a normal part of trade with third countries. The challenge for us now will be moving from what effectively means a third country with the EU back to dynamic alignment and that free trade, which will bring us the benefits of removing those normal requirements for trade.

Lord Jackson of Peterborough: You have not recently lobbied the EU on this?

John Powell: No, because it is part of the normal system for exports. We have certainly talked to them when we have problems with exports at the border, but at the moment they have full control over what they allow in and what they do not.

Q55            Baroness Smith of Newnham: I have a quick follow-up question. When the UK was still part of the EU, were you part of a transnational European lobby group, and are there still ways into that? I can see that direct lobbying of the Commission could be difficult, but do we as the UK and you as an association still have links?

John Powell: We do. We are part of two European associations—I am actually off to a meeting with one of them this afternoon—and we work closely with them, while we will be meeting members of the European Commission in the next couple of days. So yes, we have the opportunity to talk to them, and we lobby on the SPS agreement as well, which is a benefit to all of Europe as well, not just us.

Q56            Lord Jackson of Peterborough: To go back to my question, what do the three of you see as the main risks arising from an SPS agreement? Are there any terms or conditions that would cause you to argue against concluding an agreement and, if so, what would they be? I think Mr  Bradshaw has already made half the case on this question, but what are the risks and downsides? What is the red line for you on the efficacy of the SPS affecting your sector?

Richard Ballantyne: You made a good point in the previous question. There are a lot of bureaucratic requirements that our international traders would face in bringing things into the UK. It is not just a case of saying, “Let’s sign up to the European system”, and so on. This is an opportunity to lessen the barriers with one of our biggest trading partners. We would love to reduce burdens, bringing things in and trading with others as well, but that is quite a complicated process, using and getting involved in international committees and changing rules. That is a big process, but it is a good thing to look at.

To come back to your point about red flags and so on, broadly—although it is easy for me to say this—it could be relatively straightforward, but there is a danger. I have just been at a meeting with Defra, and I am glad to say that it is on to this in its communications plan. We have to make sure that this host of traders, a lot of which are small businesses, are familiar with what this will mean for them. I probably have a more of a focus on imports, so how do we communicate with a lot of our European partners that the changes are coming? Unlike the process that we went through five or six years ago, we are talking about reducing requirements largely, notwithstanding some of my colleagues’ points about technical briefing points, and it is much more straightforward to deal with. The risks are not as much as the reverse, and so on.

Sorry to get the scratched record out again, but my real issue is about what we need at the frontier. Do we need designated points of entry that are approved by the EU as well as the UK Government, or do we need nothing? Do we need infrastructure to check things? I think we know the way we are going but we do not have that full clarity yet.

John Powell: I shall answer your question briefly. There are two main risks for us: first, if there is a delay to concluding an agreement, we would want it to be concluded as quickly as possible. Secondly, the agreement may not be as comprehensive as perhaps has been set out. I do not expect it not to be comprehensive but there is a risk that we suddenly find constraints, and Tom has already referred to some of the issues. In terms of whether there are circumstances that may make us not want to see an agreement concluded, absolutely not. We would like to see an agreement in place as quickly as possible. There may well be post-implementation changes, and I am sure we will come later to the transition period itself, which will be an important part of how well and smoothly we move from the current system to the new SPS post-agreement situation. There will be challenges that I am sure will come up on different issues but the benefits to us in concluding an agreement far outweigh any challenges that we may need to confront post agreement, implementation and delivery.

Lord Jackson of Peterborough:​ That is an interesting answer because you are inferring with the word “comprehensive” that there are no carve-outs. The NFU is looking at carve-outs for the SPS, potentially. On one end of the spectrum, people will want no carve-outs to protect the integrity of the single market. Perhaps the NFU, without putting words in its mouth, is closer to the other end, whereby it is saying that because of British exceptionalism, we will need some carve-outs. Are you saying that you do not want carve-outs?

​John Powell:​ No. It is a good question. I hope the second part of my answer will clarify that. In terms of “comprehensive”, we would like to cover all products, all the current system, and be as broad as possible. If the British Government can also negotiate some good carve-outs, that would be excellent. We do not have any objections to that. Tom has made good points about some of the benefits where we have been able to diverge and where we should challenge the Commission. I am sure that is what the Government will be doing in negotiations. From our perspective, we do not want suddenly to find that some documents or checks at the border might still be required. We want as free a trade as possible, as quickly as possible.

Tom Bradshaw:​ Perhaps I may add a couple of points. We have to be careful. The term “British exceptionalism” is quite provocative. We are no longer aligned, and we have taken advantage of regulatory autonomy. If we are not careful, this will turn into a political hot potato, which is simply the hokey-cokey and is no good for anybody. That is what collectively we need to try to mitigate. There is also a real risk to the underlying assumption that economic growth will immediately return. It will take a lot of effort to rebuild those EU markets. Just because they are our closest partner does not mean that there is empty space there waiting for British product. It is being filled from other sources and we have to win that market back, not make an assumption that it is just waiting for us. It will take time.

I am also concerned about the Government setting an end point for negotiation. We have seen the previous Government doing that with Australia and it ended disastrously for our sector. We have not set a timeline. We want a fair arrangement that recognises where there has been divergence and makes sure we have the carve-outs and transition arrangements, but we also have concerns around avian influenza and how there are disease control zones within the EU that at the moment are very different to our disease control zones. Avian influenza this year has been a devastating infection for our poultry sector. We have to make sure we can control it properly and be able to move product in and out of those disease control zones. That cannot be done post agreement. That has to be done as part of the negotiation. Any assumption that the EU will let us do these things post agreement is very naive. We have to make sure that we are not just in a hurry to get this done and we must get it right. If getting it right takes extra time, that is where we are positioned.

Q57            ​Lord Tugendhat:​ It sounds to me a practical assessment of the situation. The three of you have answered questions about the costs and benefits of SPS for your sectors. What is your view of the various assessments that have been made of the economic and GDP impacts of an SPS agreement, including by the Government—looking at it from a UK perspective rather than your own individual perspectives?

​John Powell: I am not an economist, first of all. Various figures have been bandied about regarding the benefits to the country in terms of GDP. I have seen figures such as 0.5% to 2% or 3%. From the figures I gave earlier, there will be a direct economic benefit certainly to the meat sector. As I said, our exports are down considerably. Yes, Tom is right. We will have to fight to get those markets back but we believe that we have great products produced to high-welfare and environmental standards, and that we can compete fairly without those extra costs that we currently carry. With the reduction—or one hopes the removal—of all the costs, they can be diverted into enhancing our competitiveness, improving the range of products we sell and our ability to access those markets.

I repeat that, so far in the past few years, nearly £300 million has been spent on producing the export health certificates. There has been £250 million of additional export-related costs to the meat industry, and around £10 million a year to companies in staffing just to meet these requirements. I do not know what the final impact will be on GDP but it will be a positive impact.

Richard Ballantyne:​ Broadly, I would agree. Unless I have missed it, there has not been a specific impact assessment on the port sector, but the wider economic points that colleagues make well mean that we hopefully would see an uptick in the amount of activity that you get in trade. Ports are a barometer of the economy. If we are busy, we are importing more and sometimes exporting more. Hopefully, that leads to an increase in what we do. There is one little thing I should say as a sort of pre-warning. Ports have all this infrastructure, and the conventional thing that ports do with infrastructure is charge their user shipping companies to develop that infrastructure or modify it and so on. If we need to amend, remove or completely bulldozer certain infrastructure, there will be a cost implication, which we as a sector will pass on to our customers, the shipping industry. It will then pass it on to the hauliers, logistics companies and so on. There is that to get through. Potentially it is not a huge sum but it is still an extra cost we would have to manage. Broadly, the logistics industry, the shipping industry and even the port sector see this as a very positive development.

​Tom Bradshaw:​ We believe there are economic opportunities but we do not have detailed GDP analysis. Some 68% of our agrifood exports go to the EU, and we import 69% of our agrifood from the EU. Reducing the friction will be beneficial, with the caveats that have already been made.

Q58            ​Lord Barrow:​ You have talked about what we might see in terms of exports into the EU. Do you have any expectations with regard to imports from the EU into this country? Is there a change or not?

​Tom Bradshaw:​ One of our biggest concerns has been that we have never imposed the same level of friction that the EU have imposed the other way in checks to make sure that the product meets all of our requirements. The EU immediately implemented the inspection regime. We have the friction going into the EU, but that is not there coming in this way. That is why the benefit should be greater in our increase in imports or reduction in cost going into the EU, because it has implemented the full inspection regime.

​Lord Barrow:​ Even so, this is just a question about whether it can make a difference, because I recognise that picture.

​Richard Ballantyne:​ I will just follow up by using a particular example: the land bridge. Regarding trade that goes via GB to the Republic and Northern Ireland et cetera, we had seen alternative services—direct sailings from places like Rotterdam, Antwerp and France and so on, around to southern Ireland particularly. That bypasses a lot of the goods transported across England and Wales. Some of that has resettled, but if you look at trade stats you will find Welsh traffic with Ireland is definitely lower than pre-Brexit.

We would expect a bit of a move back towards that. Fishing is a good one to look at. About 80% of the fish that we land into the UK is exported; the vast majority of that is into the European Union, or was into the European Union. It should be easier without these controls to export directly in, so the attraction of fishing vessels landing directly into European ports means that you can start to come back—you would hope—to landing more catches into Britain. That means that not only would it be good for my sector, the port sector—it will also be good for local processing, facilities and maritime services in and around those coastal areas that survive on fishing. It is a net positive, or so we hope.

Q59            Baroness Ashton of Upholland: I make a small comment, which is that, having been vice-president of the Commission, I want to pay tribute to all the work that you did when we were a member. The influence and impact of what the UK was able to do on some of the issues that you are raising now, from vaccinations through to genetic modification, were a big part of it. Having done the trade role, I was especially conscious of that, so I pay tribute to you and refer to my sorrow at the tragedy of what then happened.

You have talked a bit about the transition that needs to be done properly. Mr Bradshaw, you made it very clear, and I agree with this, that we should not set deadlines that force the negotiation to reach a conclusion that may be detrimental. As you described it, that is what happened with Australia—and I can think of other examples—in other areas, where that is the case.

Could you break down a little bit what practical and legal steps need to take place so that we have a sense that these are the things that really need to be thought about? You have covered some of it, but it would be good to look at it from both a legal and a practical sense before this is up and running. What needs to happen, and what needs to have been done properly before we can get to that point? This is the worst question in the world, but how long do you think it would take? I know it is a piece of string.

Tom Bradshaw: It all depends on the implementation date, does it not? I understand the political will to move quickly, but I think that you have heard very quickly from me that that should not be at all costs—we have to make sure that the deal is the right one, and setting that deadline is not helpful. For us, rather necessarily, the legal aspect is the Bill that will have to go through, which is part of the legal process, and we all know that that could happen very quickly if there was political will for it. But it is about how we maintain influence, or make sure that we have it in the EU, making sure that we have our technical experts, our scientists, and diplomats ready, and that we are really resourcing those committees. There is already regulation in development that will have an impact, particularly around animal welfare in transport. It is about how we are going to influence that agenda, and more widely.

We still have our Brussels office, and at the time there were a lot of questions about whether we should or should not—but at this moment in time we are incredibly thankful that we have our role within COPA-COGECA and our Brussels office. But making sure that we have that influence in those technical committees in the EU is absolutely pivotal, because otherwise we will just be a silent voice and will have to take whatever comes our way.

The other bit is about making sure that we have an established and effective consultative mechanism in Parliament. How is that scrutiny going to work, and how will they consult stakeholders to feed into those discussions? Parliament should be able to maintain scrutiny over this. It should not be a one-off that we scrutinise the SPS agreement and then, after that, everything is taken as a given and assumed to be okay.

The Chair: We will come back to the specifics of parliamentary scrutiny in a follow-up question.

John Powell: Very simply, I shall address the two key issues, the legislation and the transition period. On the legislation, clearly there will need to be a Bill putting the agreement through Parliament—but at the working level most of the legislation that we are required to comply with, as I mentioned earlier, we already do, because the need to export the majority of our goods to Europe means that we have to comply to be able to export to them. So we do pretty much still have dynamic alignment, with some exceptions, as Tom says, and on a working level it should be fairly simple—but, clearly, it will be important that the big Bill that will be required goes through fairly quickly.

In terms of the transition, Tom is right: we do not want an agreement at any cost. Let us be clear on that—we want a comprehensive agreement, and we want it to be beneficial to us so we can reduce the friction that currently prevents us from fully trading and imposes costs. It is very difficult to comment at the moment, until we actually know the full scope of what the agreement will be; until we really get that, it is very difficult to say whether it should be a quick or a longer transition. My preference at the moment would be for a relatively short one. What we do not want to see is the need to still send export health certificates and find that all the vets have moved on to other jobs, because they know that they are coming to an end at a certain period of time.

There are some issues on labelling and use of health marking that we will need to clarify, and we will need to make changes in businesses to be able to comply with those post agreement. There could well be some flexibility; it may be that transition is not just one date—it may be, if the Government could do it, that they look at a range of transition dates that may apply to different components of the agreement. We should look at as many flexibilities as we can to achieve the end goal of what we want—free and fair trading with less friction.

Tom Bradshaw: Can I just give a practical example? A chemical in a plant protection product that is in our chemical store already, which does not get used in May because the weather changes, will still be in the store next May. It may not be registered in the EU. If it is used on that crop next May, that crop could be sold right the way through to July 2028. That is a practical example, based on if there was an implementation date today. It is two years hence. Those are the considerations that need to be taken, because otherwise we are almost looking backwards rather than at a forward facing transition period.

Baroness Ashton of Upholland: Just to interrupt you for a second, does Defra understand all that? Presumably it does.

Tom Bradshaw: I think Defra understands it.

Richard Ballantyne: It is probably less relevant for us as a sector, but you make some very good points, colleagues, on what happens two or three years down the line when the European Union wants to change things. How does it consult with us? That is something that we have been very mindful of.

On SPS, we have fewer direct concerns and issues. Moving away from that, although this is perhaps not the theme of today’s session, to emissions trading and other instruments, we have a lot of concerns with the maritime community on which we are not really being thought of properly but as an outsider. On SPS, we are a bit calmer at the moment, but mindful of what colleagues are saying.

Q60            Lord Brennan of Canton: Before I move on to my allocated question, can I follow up on something you mentioned about the investment that you have made as a sector since we left the European Union? Can you put a figure on that investment? You also mentioned the cost of deconstructing that investment, to put it that way. Could any of that be repurposed for the rest-of-the-world-facing end of the business?

Richard Ballantyne: Thanks, that is a point that I would like to get across. The Government put money in as well, but the ports industry itself has put around £120 million into infrastructure and management of that infrastructure. Those facilities were designed, built and ready to go, and they have not really been utilised; they have had minimal use, some more than others, depending on what products are moving through them.

The way you recover the costs as an operator of those facilities is to levy a charge on importers. There are different ways in which to collect that, according to different routes, and some of my colleagues’ members will be paying charges; some will not like paying those charges, which makes their business less competitive. With others, it will be on a paper use basis: some ports thought that they would be able to resource and manage those facilities using those charges, which they have not, so they have been hit with that. The collated costs, as well as the infrastructure, have been about £120 million or so.

On your second part of the question about repurposing, these are quite niche facilities. This committee will have a lot on its agenda, but if you ever want to go and look at borders and ports, by all means get in touch—we can facilitate those visits. If you are into these kinds of buildings, they are world-leading. They are very impressive in what they do, in keeping environmentally secure areas. But the use is quite amazing: you will go and see these things, and they will not look as if they have had any use whatever. They are clean but very niche and designed for a particular purpose. Now, there may be some unusual things like the storage of products that may need to be chilled but, given their bespoke design, they are probably going to have to be completely flattened or have substantial modification, which is very costly.

Lord Brennan of Canton:​ I visited a port when I was a Consumer Affairs Minister and it is a fascinating thing to see. I want to ask you about the capacity of Government to deal with all this, and not just the UK Government but the devolved Administrations. To what extent do the Government have the resources, processes and institutions in place to make dynamic alignment work in this area, including with respect to your input as businesses into the Government’s approach to this? Also, previous to coming into this House, I was the chief adviser to the First Minister in Wales. Are there particular devolved issues that we ought to be aware of as a committee?

​Tom Bradshaw:​ One of the immediate devolved issues is something like gene editing, which at the moment is in England only. They have not allowed it in the devolved nations. That is one of the areas where devolution is going to have an important role. Making sure that the devolved countries have a fair and reasonable input on this is essential. However, we have lost a lot of the parliamentary scrutiny committees that used to be in place.

​Lord Brennan of Canton:​ I think my colleagues are going to ask about Parliament. I am asking about Government in particular, government capacity et cetera.

Tom Bradshaw: I worry about the capacity within Defra. It has been incredibly engaged in this process and I am not for one moment trying to say that it has not been because we have had great access into Defra as regards the SPS arrangements. The challenge comes in that we know that, when leaving the EU, the department most impacted was Defra. Rejoining the EU is going to be no different. We are not rejoining but SPS is going to be no different. There is still going to be a big burden for the teams within Defra, which means that it takes away from the other things going on within the department. There is a question about whether the department has the capacity to deal with all the regulatory alignment that will need to take place and how that is going to be implemented. That would be a watch-out within the department.

​Lord Brennan of Canton:​ Mr Powell, you have a Welsh surname. Are there any particular devolved issues?

John Powell:​ First of all, just for full disclosure, I should declare that seven weeks ago, before I started this job, I was head of the agriculture sectors teams in Defra. I was dealing with some of these things on a day-to-day basis. The first thing is that an SPS agreement will ultimately remove some of the need for some of the resources that the Government currently have to put in to manage this whole trade with the EU. Trade is a reserved issue, of course, but, as Tom has pointed out, agriculture as a policy is devolved. Therefore, devolved Governments are free to implement an agricultural policy that can differ from those of other member states[2]. The direct question though is about resources. I would hope that there would be a reduction of resources but in the short term they have to be maintained. I mentioned the problem with vets and signing off EHCs.

​Lord Brennan of Canton: Is that what has been planned inside the Government, a reduction in resources when you were recently there—without breaking the Official Secrets Act?

​John Powell:​ Obviously, I cannot comment on any discussions I may have had.

​Lord Brennan of Canton:​ It sounds like that is what you are suggesting.

​John Powell:​ What I ask is that the Government ensure that any transition is properly resourced and beyond. I was going to support the point Tom made earlier. Clearly, in the longer term, this is where we want to see resources diverted. I understand that there are some 500 people currently working on an SPS agreement in Defra but, in the longer term, there are going to be more resource commitments. If we go back to pre-Brexit days, a number of times I used to be in Brussels on various management committees and Council working group meetings. They are still going to exist and we are going to need to ensure that we have resources to influence at the earliest possible stage those proposals under development. to ensure that we are not put at a competitive disadvantage whereby we get a great SPS agreement and win the battle but then end up losing the war.

We need to ensure that Defra is putting in place resources to ensure the ongoing negotiations in the longer term, regarding new changes to regulations and the like. I am also hopeful that we will have the opportunity to influence positively some of the future way in which the Commission sees its agreements and things like simplifying some of the control systems currently working in abattoirs. We do not use any new technology. There is opportunity for us to work with the European Union and reduce across the whole of our system[3]. Lastly, we also need to look at border posts in the longer term. It might be better to think about moving the border post back into Dover, rather than requiring third-country people to still have to drive inland to be checked.

​Lord Brennan of Canton:​ Mr Ballantyne, do you agree with that last point?

​Richard Ballantyne:​ Can I come back to that? I can reflect on it. Capacity is not our number one concern. There need to be suitably resourced communication strategies, which I am confident Defra are on to at the moment. Getting the message down to the frontiers themselves—the government agents at the border, the staff that facilitate the controls and checks, as well as the users of those borders—is a challenge but we are confident that Defra are on to it. In general, this is not just an SPS point; resourcing for borders is not as high as it should be across the UK. Border Force itself has been squeezed. We are seeing lots of requests from Border Force officers and parts of the Border Force for infrastructure at ports not related to SPS—everything from car parking spaces to picnic benches and all manner of things that help people work at borders, which we did not used to get. This is not a political point, but we have had cuts to government services over the last generation that have led to those agencies needing more from the private sector, which we as businesses sometimes resent having to pay for, because we see that as a role for the Government and so on. HMRC and Border Force are where there could be a bit more focus. I am more confident about Defra.

On your point on alignment, I will not get too involved in localised issues, but I understand that it is the expectation. You also have different views of health agencies in that region. If we get full local government reorganisation, which we expect to see in Kent, you will see both authorities come together. I should imagine that is less of a political issue locally. The expectation is that you would have less of a need for something like Sevington. Notwithstanding some customs requirements and activities that go on, we will be moving back those activities to the frontier. A ro-ro operation is where you get roll-on roll-off goods being driven on and off. That is where the implication of queues and congestion is particularly heightened because we are used to goods flowing in and out. Having more controls at the frontier in ro-ro operations is always something we should be mindful of. But as we are moving towards fewer controls, we think that should be manageable.

​Lord Brennan of Canton:​ You mentioned earlier the impact on Welsh traffic in ports. If the Government proceed with this, what impact will it have on Welsh ports?

Richard Ballantyne:​ Potentially, if you see the island of Ireland as one economic bloc—without getting too political here—and if you are exporting products to Ireland and have a relatively easier route going through the north because you do not have as many controls, although admittedly there are some, then if you have a choice, you are probably going to divert traffic away from Pembroke, Fishguard and Holyhead and through ports like Liverpool and the Scottish ports. If you move back to a system whereby the controls are broadly the same, you would expect potentially more traffic going through Welsh ports. Again, given that point I made earlier around those direct sailings from the continent to the Republic of Ireland, you would lessen the effectiveness and need for that and make it more cost effective to use the land bridge across GB. We would see that as a net positive.

Q61            ​Baroness Brown of Silvertown:​ On the parliamentary scrutiny question, what role should Parliament play in the SPS?

​​John Powell:​ I have four requests. First, Parliament should support the Government’s aim of achieving the widest-ranging agreement as possible with the EU to remove all the current friction that we experience and the costs that we incur. Secondly, it should support the need for a sensible transition period. We would like that to be short but, as I said earlier, that could be flexible depending on what the final agreement is. Thirdly, it should support the Government in getting the agreement through the required parliamentary steps as quickly as possible. Finally, again touching on the point that Tom alluded to earlier, it is also important post any SPS agreement to make sure the necessary frameworks are in place to ensure the necessary structures and resources to engage with the European Commission at the earliest possible stage on the longer-term changes to the acquis. That should also ensure a transparent process for engaging with industry, Parliament and the wider economy at the earliest possible stage so that we can input our technical knowledge and commercial experience into those negotiations. There should also be established some rigid formal parliamentary scrutiny structures to make sure that the new emerging legislation can be looked at and assessed by Parliament as appropriate and in line with our previous objectives regarding reduced friction.

Baroness Brown of Silvertown: Given that you were there before, which ones worked and which would you like to see redeveloped?

John Powell: I believe you are referring to my Defra days so I have to be careful what I say here.

Baroness Brown of Silvertown: Which processes worked and which would you like to see re-established? Is that not a fair question?

John Powell: I am afraid it might be quite difficult for me to answer as a very recent ex-Defra employee. I will say that back in pre-Brexit days when we were a member state, there were very established mechanisms that all member states contributed to. The Commission proposed legislation and member states were able to contribute, argue, change and propose, and eventually there was a system they went through for adoption. We would not be part of that same process now in the future, so we are talking about a different process. We need to make sure that there is a process that gives us as a country the opportunity to engage as early as possible, that we have a say in shaping legislation and that our voices are heard. Industry must also have a say in feeding the Government with good advice on what is technically possible to deliver in that new legislation.

The short answer, which hopefully does not compromise my previous position, is that we are now in a very different situation. We are no longer a member state and it will be a post-SPS agreement framework, but it must work for both parties. It must allow us to engage, it must be transparent and it must ensure that parliamentary scrutiny plays a part in that.

Tom Bradshaw: I shall run through a few different points. We need to make sure that there is an effective consultative mechanism with stakeholders, industry and the devolved Governments as we feed into future EU legislative proposals. We have to make sure that the UK and devolved Parliaments are able to influence how the UK engages with the EU in future around that legislative proposal. There must be an arbitration mechanism between the EU and the UK because there will be areas where there is disagreement in future. We have to make sure that that process is in place.

The final point is that there has to be a sovereign backstop. This is about SPS, and Parliament has to have a role if something is proposed that in the end Parliament is not happy with because it is a step too far and there is genuine disagreement for genuine reasons. We need to maintain that sovereign right, although there will be significant repercussions, in the event that something is proposed within the EU that the UK finds completely unacceptable, otherwise we will be conceding sovereignty without getting anything back.

Richard Ballantyne: I broadly agree with most of the comments there. To pick a particular example, we need to ensure that there is mutual recognition. While we are aligning with EU rules—and historically we are pretty close to a lot of those anyway—we have to make sure that they respect and honour what we do here. I am talking particularly about frontiers. There is an expectation, as I said earlier, that we might see an increase in activity at non-Europe-facing UK ports and that European officials may want to come and inspect those facilities to make sure they are content. We need to make sure that they really do respect our borders. We have good rules in place. It is understandable that they may want to verify things, but they should be not doing that on an annual or more frequent. Once should be good enough. We do not want to be overridden with officials coming around to check that things are safe and honoured here.

There are other points. If things need to be changed in future, we need a suitable mechanism that we as stakeholders can feed into. That would be very helpful.

Lastly—this is not really your remit so it does not directly answer your question—do not scrutinise the Government too hard if they are talking about resourcing in terms of money for infrastructure, please. I know you have to keep the Government true to what they spend on modifications and so on, but we have an ongoing case where we are requesting compensation for our infrastructure. It would be understandable that you want the Government to be efficient in what they do, but we would not like that to be completely ruled out.

Baroness Brown of Silvertown: I hear you.

Q62            The Chair: We have a couple of minutes left, and we have a few follow-ups to tie up some loose ends. First, we had a brief discussion about potential showstoppers but I do not think we really got a clear view. Let us suppose the Government cannot negotiate a carve-out for genetic modification—or precision breeding, or whatever the latest phrase is—and for the particular pesticides that are being employed at the moment. Suppose that the EU says, “No, you just have to comply absolutely with our current rules”. Is that a showstopper for farmers, for example?

Tom Bradshaw: We would be looking at the cumulative impact in different areas. I am not willing to set red lines because I know that other people, when they are in those negotiations, would immediately be thinking about those red lines and how close they could get to them without necessarily going over them. We are looking at the cumulative benefit versus the cumulative impact.

The Chair: That is great and it makes perfect sense, but are you being consulted by the people who are negotiating those red lines so that the judgment you are reaching on the balance of cost and benefit is being taken into account in the negotiation?

Tom Bradshaw: I am expecting to have a meeting very shortly with someone who is significantly involved.

The Chair: Good. Bearing in mind that this is an inquiry into dynamic alignment—what we have been discussing today is largely the context for that, but dynamic alignment is the process—even if the rules are agreed in advance, the carve-outs and all the rest of it, rules will change, and dynamic alignment means that we will have to change along with them. You have already said you want there to be some sort of sovereign capability to say no. That is going to be rather difficult and could potentially be a really significant moment, but are you content that you have the necessary consultation mechanisms with the Government in the process of dynamic alignment so that you can say to them, “Look, this is emerging in Brussels as a change in the rules and it will be awful for us”?

John Powell: I come back to the point I made earlier. For the meat sector, for exports, we are required at the moment to have dynamic alignment with the EU if we are trading with it, so we are currently aligned. The point that Tom and I have both made is that post the agreement, when, as we know they will, the proposed legislation changes come out, we have to make sure that our Government have a framework in place that enables them to consult with us to ensure that we can feed in, negotiate and make our case. I do not go quite as far as Tom on the sovereignty issue because we will always need to trade with the EU—

The Chair: That is very clear and very helpful.

John Powell: —but we do not yet know the full scope of the agreement, so it is hard to know what is in and what might be out. That is difficult and, as Tom said, there could potentially be a cumulative effect, but overall in my sector, particularly given the costs that we will save, the trade opportunities that will potentially be open to us far outweigh at the moment any potential negatives.

Richard Ballantyne: I will add that we in our sector are confident that the mechanisms are in place. Defra is obviously the strong focus here, and we have definitely seen an increase in its communication activity and engagement with us. Through the Brexit process, we had the Cabinet Office leading with a more overarching strategy, but that has been wound down so now with each of the individual departments—whether it is customs-related through HMRC, borders through the Home Office or Defra leading on SPS—there is much more access. We have been involved in various things like Star Chamber consideration sessions, looking at detail, so we are confident there. I would also say that the Department for Business and Trade has really stepped up, and there are lots of forums feeding in. Whether they can get an agreed view from stakeholders is a difficult question, and the art of stakeholder management from the Government will be tested there.

The Chair: We are out of time, but Lord Moynihan has a very brief question.

Q63            Lord Moynihan of Chelsea: I have noticed that throughout this session a difference—a split—was emerging. Mr Powell, who focuses on exports, particularly into the EU, is calling for as wide as possible an agreement. That is very understandable, and he was quite clear about the benefits that we would get from that. Mr Bradshaw was mostly saying, “But what about that huge part of the farming economy that doesn’t export? They’re all going to have to make changes”. In particular, he focused in on gene editing where we are calling for a sovereign backstop, but I think, as the Chairman made clear, that is for the birds, matey. There will be no sovereign backstop. There may be a carve-out—we all hope so, but no backstop. We heard that the costs would decline for the exporters, but what will happen to the costs for all the farmers all over the UK? Going to what Mr Ballantyne said from the importing perspective, what will happen to the cost of all those importing goods from the rest of the world, who will have to pay—he said—more for the facilities they are going to have to build, and will also have to impose all sorts of rules upon those rest-of-the-world organisations that are exporting into the UK? So there seemed to be a big split. We heard about the cost benefit but not much about the cost deficit to all those other parts of the economy.

The Chair: Thirty seconds, please, and perhaps we can explore this issue again later.

Tom Bradshaw: The sovereign backstop is really important because we are not rejoining the EU. What future negotiation is there if we have given everything up at this stage, if future Governments want to take this further? We have organic regulations that at the moment are not aligned. We may end up having to adopt EU rules on antimicrobial resistance, but we need to make sure we do not align in that area; we are world-leading in reducing our antibiotic use, but there is a danger that we cannot use anything prophylactically if antimicrobials come within scope. I have also talked about Plant Protection Productss. There are many areas of legitimate concern here that could increase the cost burden at farm level in producing the product.

The Chair: You have given us helpful written evidence on that, for which I am very grateful.

John Powell: All livestock reared in this country for food has to go through one of the processes. The more we can trade and the more we can take from our domestic producers, the more that will hopefully safeguard the longer-term domestic industry. Food security depends not just on export but on imports. The carcass balance—the bits that the consumer does not eat—requires us to trade those bits to keep livestock prices high. So there are benefits to imports and exports. At the moment, though, we are still required to make some of those farm adjustments to meet the dynamic alignment[4] in order to export, but that will change and merge, and we need to make sure that the structures work in future so that we do not find ourselves in a problem situation.

Richard Ballantyne: On import costs for non-EU-facing ports and their users, to manage expectations here, I am not suggesting that that will be astronomical. The paperwork will remain the same. The examples that we had from Mr Powell earlier will remain the same for those traders, irrespective of whether it is pooled for inspection. There may be more increased inspections, but that is manageable. We have the facilities for it, and we are talking about moderate extra costs—hopefully not anything to get too excited about.

The Chair: We have run a few minutes over. I am grateful for you allowing that because we covered some very important points there at the end. I am enormously grateful to all of you gentlemen for coming along and giving us your time today. It has been enormously valuable and we are most grateful to you. With that, I suspend the public session.