International Trade Committee

Oral evidence: UK-EU trading relationship, HC 493

Wednesday 3 November 2021

Ordered by the House of Commons to be published on 3 November 2021.

Watch the meeting

Members present: Angus Brendan MacNeil (Chair); Mark Garnier; Paul Girvan; Tony Lloyd; Anthony Mangnall; Mark Menzies; Lloyd Russell-Moyle; Craig Williams; Martin Vickers.

Questions 179 -229

Witnesses

I: Robert Hardy, Director, EORI (UK) Limited; Sarah Laouadi, Head of International Policy, Logistics UK; Andrew Opie, Director of Food and Sustainability, British Retail Consortium; James Russell, Senior Vice President, British Veterinary Association.

Examination of witnesses

Witnesses: Robert Hardy; Sarah Laouadi, Andrew Opie and James Russell.

Q179              Chair: Welcome to the International Trade Committee evidence session on UK-EU trading relationships. We have four witnesses this morning, one joining us by Zoom link from Belgium and three here in the room with us. I will ask you all to introduce yourselves—name, rank and serial number—starting with Sarah, please.

Sarah Laouadi: Good morning. My name is Sarah Laouadi, and I am Head of International Policy at Logistics UK.

Chair: Thank you much for joining us. To my left as I look at it is James Russell—name rank and serial number.

James Russell: Good morning, James Russell, Senior Vice President at the British Veterinary Association—BVA—representing about 18,500 members across the United Kingdom.

Chair: Thank you for joining us as well. Robert.

Robert Hardy: Robert Hardy, Managing Director of the EORI group of companies, which is a customs intermediary representing about 50% of the volumes through the customs declaration service. I was formerly Freight Director at P&O Ferries and formerly ran the customs terminal at the port of Dover.

Chair: Thank you. Finally, Andrew.

Andrew Opie: Is it okay to remove masks?

Chair: Yes I think it would be easier. I was thinking that. When you are speaking definitely, yes.

Andrew Opie: Thank you, Chair, I just wanted to check that was okay. Morning, everyone, my name is Andrew Opie, I am Director of Food and Sustainability at the British Retail Consortium. We are the trade association representing retailers online, on the high street and all the major supermarkets.

Q180              Chair: Thank you all very much for coming here. Just as sort of an opener—to Andrew first—how has the Government's decision to further delay the phasing in of the imports regime for EU goods been received by your members or clients?

Andrew Opie: With quite a large sigh of relief, actually, Chair. Members will be very well aware of the supply chain problems that we have been facing since the economy restarted post covid earlier this year. We felt the opportunity to delay was good because we felt it would have added more stress to the supply chain into two basic areas.

We were concerned about the preparedness of all of our European suppliers to be able to meet the requirements to get the food imports in, and we also had some concerns about some of the UK port readiness to handle particularly physical checks when they were due to come in in January. We welcome the postponement, and we hope it will be used wisely to address those issues that I have made there. Finally, of course July is probably the best time of the year for the UK to be looking to introduce a major change in border imports of food because that is the part of the year when we import the fewest and the smallest volumes of food from the continent. We are much more reliant on food produced here.

Chair: Thank you, that is an interesting point. Sarah.

Sarah Laouadi: I would say the announcement was met with mixed feelings among our membership. There was indeed some relief in certain parts of the industry because of the scale of the challenge, but also because businesses were facing wider supply chain pressures in relation to the driver shortage, in relation to the pandemic, of course, and also because the situation of global maritime transport—ocean freight—is really worrying at present in terms of rates and in terms of capacity. So there was some relief considering all those parameters. However, those businesses that had invested time and energy to be ready for the previous deadlines felt that maybe they would not get the comparative advantage that they hoped they would have built compared to their less-ready competitors. There was also an element of loss of momentum that was perceived by the businesses that were really counting on the deadlines that had been previously announced, so mixed feelings.

Q181              Chair: Are you saying that some businesses were thinking that "Well, we are in a good position here. We might see some of our competitors go bust and put ourselves in a better position after these checks come in"?

Sarah Laouadi: Certainly the investments that they had made to be ready for the deadline was perceived as potentially something you could use to compete over other companies. All the preparations that have been made are not wasted, of course. Many of the action plans will be revived and triggered later on when the import requirements actually come in, but that said, it interfered with some decisions that had been optimised to take into account the entry into force of the new controls as they had been announced before they were postponed.

Q182              Chair: That is fascinating. Andrew, just returning to you, given your answer, I am almost tempted to think that, from your perspective, you would almost be quite glad if this delay was maybe not a year but decades. Are there any drawbacks to this being delayed or would you like to see the delay just continuing? Would it make it easier?

Andrew Opie: No, to Sarah's point, I think you do need to have a deadline, we have already postponed the border controls twice now. I think there is an element of ensuring the preparedness—particularly of European suppliers and member states—to support those exports. They know this deadline that is approaching is a real deadline, and therefore everybody does meet that preparedness. I think it also focuses minds in the UK around having those ports, particularly in Wales, but also maybe the channel ports, ready for the kind of food imports that we are likely to expect from July onwards.

I think the deadline is not a bad thing, the postponement was made for a good reason in that I do not think either the supply chain or the UK was 100% ready. Added on to the problems we were already facing with supply chain issues, I think the impact would have been felt on consumers if we were to see delays at ports. So we are not in favour of a delay forever. Our members and their suppliers have already invested millions getting ready for the changes that are coming and now we need to implement them and get going.

Chair: Mark Garnier will investigate a little further with James and Robert in a second, but in the meantime Anthony Mangnall wants to come in with a very short point.

Q183              Anthony Mangnall: A very quick one. You made a point about this extra time and whether or not it is been well used. Is it being well used? Do you feel confident that you are being engaged and that the Government is listening?

Andrew Opie: Yes, I have to say that engagement all the way through has actually been excellent from the Government, both through the food Department, DEFRA, but also more widely across Government. We have had very regular liaison with all of the Government experts, particularly in the food border controls, whether that is Food Standards Agency, DEFRA or the ports themselves, so I am confident that will happen. I think the areas where we have seen the two deficiencies include the physical facilities that are available at the ports, particularly the Welsh ports and possibly the channel ports, to stop lorries and hold them without that leading to disruption at the ports. That is one thing.

The second is the European supply chain. We have seen some countries who have maybe given less support to their European exporters than others, in terms of their readiness to give them the certificates and the support that they need to be able to send those foods. What I am hoping is we now use the intelligence that we have already gathered about where there are weaknesses—in either European suppliers or in member states—for our Government here to really push and work with them. We have been working with our supply chain through supply chain webinars, management, getting all the information out to our major suppliers in Europe, but we are still getting feedback that veterinary offices, for example, are not open 24/7 to allow for the kind of supply chain that we have operated for decades, frankly, to get food from Europe onto our shelves here.

Chair: Thank you very much. Mark Garnier, the floor is yours.

Q184              Mark Garnier: My question is directed to James and Robert. What is your assessment? How likely do you think it is that this regime is going to be changed again?

Robert Hardy: The can being further kicked down the road in other words?

Mark Garnier: Yes.

Robert Hardy: I think it is important to first highlight what this postponement means. It is only on SPS goods. The only can that is being slightly kicked down the road at the moment is the control on products of animal origin, phytosanitary and sanitary goods and so on, and even then not completely. There is still a requirement for a pre-notification on GB imports—there is an IPAFFS declaration that is required—but what is not required until July is the export health certificate from the European exporter and potentially a physical check at a border control post. What we have at the moment is the process still starts on 1 January, the importer has to do something, so GB has to do something to receive these types of goods, but the easement has meant that the European exporter—which, I think James will agree, is harder for us to educate—is relieved from the pressure of making it harder to export to GB. It means the exporter does not have so many barriers to supply GB, but GB has to do something in return by doing a pre-notification on an IPAFFS declaration.

It is an easement on probably the most complicated part, which is the export health certificate, but it does not mean it is a complete easement because there is still the pre-notification without export health certificate. If I was to see where we go next, I think if we have six months of an IPAFFS declaration with no supporting export health certificate, then we might find that there is a particular flow of goods where actually we do not really require an export health certificate, because we have built up a trusted trader regime now where we know and trust that exporter and his range of products is such. Rather you present a declaration and that decides whether or not an export health certificate is required. I could see that being a possibility.

Q185              Mark Garnier: It is unfathomably complicated, is it not?

Robert Hardy: SPS is, unfortunately, because it is health, is it not? It is the riskiest element really. There are other risky elements, but it is the most common and the most widespread, so it is a control that needs to be in place. Having the IPAFFS there—the pre-notification from 1 January—is still a good move. You are not going to go to prison if you do not have one, but it does start to get everybody used to the process that you have to inform the authorities that you are bringing these products in.

Q186              Mark Garnier: Are there any good reasons why it should be pushed further down the road?

Robert Hardy: The readiness of EU member states. They are very different. Certain member states will be very advanced. Germany, for example, is always very prepared on this. Some other member states may be a little bit further behind. It is not how ready we are; it is how ready the European exporter is. That is the difference between the next move.

Q187              Mark Garnier: James, I have given you the opportunity to gather your thoughts on this because obviously this is an area which really does affect you and your members. The same questions apply to you, do you think it is likely to be kicked down the road again, and do you think it would be worthwhile? Are there areas in which it should be?

James Russell: As Robert has set the tone on that, I would rather take the second part of that question on the impact of it potentially being kicked down the road again. In order to open on that, I will perhaps re-emphasise the role of my members of the veterinary profession in what we are doing here. I am delighted to hear that Andrew and his members have had good engagement with the Government over the application of these import controls and so on because, at the moment, the veterinary profession has not, and it is going to be our members at the forefront of this, signing the certificates allowing these goods to come into the country. I think that is a really important role both for public health and for food safety, but also actually for allowing our ongoing trade—allowing GB to continue to export—we need to know what is coming into the country and the safety of the food that is coming into the country.

At the moment we do not have that confidence. We do see a big need for this to come into force, really to protect our own farm species but also to protect that trade. I think there are a number of things. It is really easy to say, "Well, nothing has changed actually since 31 December in terms of the disease risk between us and continental Europe." But what has changed is that we no longer have a seat at that European surveillance network table. We are now relying really heavily on the personal relationships between the UK CVO and her devolved team and their European counterparts to share that information. Yes, we still sit around the table with the OIE on the international sort of disease risk. Christine, the UK CVO, reports to us that the information that she receives in terms of disease risk coming out of there is so much slower. It may be only 24 hours slower, but when we are talking about the spread of a disease that 24 hours can be really quite important.

In the absence of that surveillance network, we would argue that the risk has changed. At a time where we see African swine fever, for example, on the far side of continental Europe, I think we really need to understand where that is at and what the risk is to the UK.

Q188              Mark Garnier: Have you got the capacity for this? Presumably there is a huge amount of extra work as a result of this coming in. Amongst you all, can you cope with this?

James Russell: I will comment on capacity because it is something that we have spoken about on a number of occasions. We are really grateful for the Government having put in place the subsidised training for people to become OVs to be able to undertake the product export work that is necessary then to work with the import side as well. That has seen the number of vets who have taken that subsequent qualification to become an OV able to do the export work increase from 600 to around about 1,800 so we have seen that number increase. What we do know is that those people are not at 1,800 full-time equivalents doing that work day in, day out. The average amount of time that somebody might spend on this is 10% to 15% of their working time because they are otherwise actively engaged in other aspects of veterinary work.

We do have capacity concerns and we do see those becoming more acute as the import checks and the sort of grace period of movement to Northern Ireland—all of those things—come to an end, so we do see greater concerns about capacity. Our response to that is to say, "Well, we need to find ways of making sure that those vets' time can be used as efficiently and as effectively as possible." We are working very closely, both with the industry but also with our regulator and relevant Departments, to look at how we can use allied professionals to support the work of those vets. Ultimately, as I have just highlighted, for import work we need the veterinary understanding of the risk of things coming in. When it is food going out, we need to have that veterinary signature on it in order for the importer to be satisfied of what we are exporting to them.

We absolutely want to see the vets remain central to that but are working for how we can improve the efficiency and effectiveness of that. Is that through the digital assistance scheme? Is it through increased use of certification support officers and other allied professionals? We are concerned, but we are working very actively to find the solutions.

Q189              Mark Garnier: We have had a lot of stuff about the lack of lorry drivers, about butchers, about seasonal agricultural workers—might we possibly see headlines about the lack of vets?

James Russell: I think that is a distinct possibility. We know that in the year to the end of August 2019, which I am thinking of as our last normal year as it was unaffected by covid, we had registered 757 vets from the European Union. That was a number that had been increasing steadily over the preceding five years and represented some 50% of the people registered onto the Royal College of Veterinary Surgeons each year during that five-year period. That 757 in 2019 was 250 in 2021 so we are at less than a third of the vets coming into the country that we might expect.

Q190              Mark Garnier: And the other side of the transaction needs vets as well.

James Russell: Yes, absolutely. That is one of the things that we see as being a draw to keep people away from the UK market. We know that particularly the French and in the Netherlands they are ramping up the number of vets that they have got to be able to undertake these export checks to be able to export into the UK. So yes, lots of reasons for that reduction in numbers of people coming here.

Robert Hardy: Can I just make one quick point on that?

Q191              Chair: I would just like a point of clarity on the data. You said 750 vets. Are they still here, and is it 250 extra that have come in now, or is it 250 from the 750 that remain?

James Russell: Gosh. We do not have as good data on people leaving the country and the reason for that is that it is slightly patchier data. They do not tend to sign off the royal college register on the day that they leave the UK, so it is harder to get that. We hear of increased numbers of people leaving the United Kingdom, but that is anecdotal. The 250 is numbers who have joined the register between 1 January 2021 and the end of August, compared to that same period in 2019.

Chair: Got you, thank you.

Robert Hardy: Just a quick follow on from that really is that the capacity in the intermediary market is there, and the IPAFFS declaration will either be done by the trader or an intermediary on their behalf. Ironically, the easement for not having an export health certificate makes the IPAFFS declaration more difficult because of data. Some of the data that we require in terms of species and category would have come from the export health certificate. So as normal, when there is something that is simplified, it often creates a bit of a problem somewhere else and that is exactly what is happening with IPAFFS. We now have a kind of master data management problem now, where the logistics operator cannot give us enough information about the species of the product because he is not a trader. The export health certificate would have done but it is not there.

Chair: Fascinating. Two colleagues want to come in briefly. Anthony Mangnall and then Craig Williams.

Q192              Anthony Mangnall: Thank you for that. I represent South Devon and the most valuable fishing port in England is Brixham, so when you talk about EHCs it is obviously incredibly important for my fishermen. Just on these two things, where are we with the digitisation of forms and finding parity on both sides to be able to do this? The second thing is that there has been quite a lot of conversation about whether or not vets can do things virtually. I know that sounds utterly ludicrous, but is it the right answer? Is that going to happen?

James Russell: They are both very fair questions. In terms of where we are up to with digitalisation, we attend a weekly meeting with a group called the SPS Certification Working Group—a snappy title, I think you would agree. I was staggered to look around that table and recognise just the value that those food business operatives contribute to the UK economy. Those people are working very hard on what the digital assistance scheme can do so that they now receive briefings on a monthly basis, I think I am right in saying, from the digital assistance scheme team. If it is okay, I would like to go back and get some more information from them and we could perhaps submit a written answer to that part of what—

Anthony Mangnall: That would be hugely helpful, thank you.

James Russell: Your second question was about remote working. We are already in a situation where, due to some of the capacity constraints, we have a system of temporary registered OVs who are not members of the Royal College of Veterinary Surgeons and therefore cannot act as such, but they are qualified vets in their own country.

Anthony Mangnall: What does OVs stand for?

James Russell: Official veterinarians, which is a sort of bucket title for any vet who has undertaken further training to carry out work on behalf of Government. It ranges right from our small animal colleagues signing animal health certificates to take dogs on holiday through to TB testing and, in this case now, thinking about controls in abattoirs and then the export health certificates. On that controls in abattoirs point, we are now seeing people come in to the country with a slightly lower standard of English language, being able to work under a supervisory OV who is a full member of the royal college. What is really interesting is to begin to explore what does that supervision look like, how can that OV be satisfied that the work of the temporary registered OV allows them to finally put their signature on the certificate? My answer to that would be to say that our mind is very open to technological solutions which can help with that process. It really feeds into what I was alluding to earlier of trying to find innovative ways of making more efficient and effective use of that veterinary time.

Q193              Anthony Mangnall: Sorry, very briefly. There is some ability for industry, say the fishing sector or the farming sector, to be able to feed into offer suggestions as to what they might be able to do in these areas to improve the system?

James Russell: Our engagement with that is not great at the moment. That is not for want of trying on our part, but we would absolutely welcome being involved in those discussions.

Q194              Craig Williams: I just want to ask a quick supplementary question and then I will move on to the main business. James, I represent Montgomeryshire which is a large agricultural community, and I was taken by your risk answer because there is evermore chatter in Welshpool market, which is our biggest sheep meat market in the UK, about the unfairness and the level playing field. Obviously the risk checks exporting and the risk checks importing are very different. What is the chatter in your community about the fact that it is far easier to import into our country than the EU market?

James Russell: Thank you for asking that question, because I think we can point to things which go beyond the chatter now, looking at what has happened in the pig sector over the last few weeks and continues to be a threat to the pig sector. There are multiple reasons leading to that. The overburdening of our farms with pigmeat at the moment and the inability to get that slaughtered and processed, but one of the contributors to that is the challenge of exporting pigmeat and a lot of that is about carcass balance. It is about exporting the parts which are not necessarily regular contributors to plates in Great Britain. Compared to the ease of importing that pigmeat, we are seeing real concerns amongst our members and amongst our farming communities that that is already tipping the scales and making it harder for our farmers to continue to trade on a level playing field. We are seeing the impact of that. We know there are several thousand pigs who have been culled unnecessarily as a result of that and that is in addition to the concerns that people, quite rightly I think, have about disease risk.

Craig Williams: So that is another dimension of this, about bringing in our regime to protect our domestic market because we are being under-risked by the EU market. I will move on.

Chair: Thank you, a fascinating question there.

Q195              Craig Williams: Andrew, if I could move to you about how prepared your members, or clients, are or for the new timetable and what they have managed for the new phasing in and what they have been doing with this time. Sarah, perhaps you could come in after if you wanted?

Andrew Opie: As I said at the start, we have been working with the Government for years, frankly, because we were obviously working when we had the possibility of a no-deal Brexit and what that might mean in terms of border changes coming in immediately, right through to the preparations. I would say we have actually had very good engagement with the key food Departments and our members have been able to disseminate that information to their suppliers on what is going to be expected here and the requirements on them.

As I said earlier, I think there is still a gap that we have not been able to plug. We have been passing back intelligence to our food Departments here in terms of where the bulk of imports come from, particularly products of animal origin, because there is a lot of consolidation in the Benelux countries, for example, from across Europe before it comes into the UK, so where we are likely to see a lot of export health certificates, where we are likely to see a lot of pressure on local vets being able to sign those off. We are starting to get more confirmation that that particular issue is being resolved in those countries. We also know that our Government is talking to other European countries about how prepared their officials are to support exports to this country, and I am hoping that that time will be used here. Our other main concern, I guess, was around port disruption.

If you cast your minds back to when Dover had a problem two years ago, or was it 18 months ago now? It was in the run-up to Christmas anyway, when lorries were held this side of the channel and could not get back into France. That started to have a knock-on effect on supply chains so actually keeping the ports running, particularly the channel ports and potentially some of the Welsh ports where we are yet to see real detailed plans on how imports from Ireland will actually operate, is actually crucial to our 24/7 supply chain. Getting the ports to run effectively and efficiently, getting the people who are exporting into the UK to know what is demanded of them and being able to cope with that—that is where we are really focusing our time at the moment. What we are trying to do is say to the Government, "These are where we feel there are hotspots in the supply chain, where we are importing lots of product from." If you take Spain as an example—a major exporter of soft fruit and salad vegetables—we saw some issues initially there in terms of phytosanitary requirements and support, so we flagged those issues. We are hoping this time is used by both the UK and the EU to get ready, but we will certainly be reinforcing that through regular dialogue with our supply chain.

The one thing just to finish is, of course, major retailers do not import all of the food that ends up on our shelves. Much of it is done by third parties. It is brought in, it is processed and then it goes into the RDC before it goes to the stores, so we are reliant on our supply chain as much as we are on our direct suppliers for this.

Craig Williams: That is a perfect moment to bring Sarah.

Sarah Laouadi: Yes, thank you. I echo the point about the need for co-ordination across supply chains. This is possibly the most important readiness item on which more progress should be done. The other witnesses very eloquently explained why it is important that EU exporters and UK importers work together. I will add into this picture the role of transport providers who will play a critical role in operating the GVMS system at the beginning of next year. It is important to remember that 85% of the road transport companies that move goods through the short straits are actually hauliers registered in the EU, so their level of readiness will also be critical. That is an area where I believe we need to make more progress collectively.

When it comes to the broader supply chains, and importers and exporters in all sectors of the economy, I think there are some missing pieces of information about the future processes. For instance, in relation to the details of how the sanitary and phytosanitary checks will take place, the operating hours of the border control posts, the exact commodities that each border control posts will accept, because the designations have not been adopted yet, uncertainties about how the drivers will be notified that some of the goods that they carry in their truck have been selected for physical checks—all those missing pieces of information must be provided as soon as possible, with advance notice, so that businesses can adjust their operations.

There are remaining concerns about some processes and about how to maintain two different customs models—the production model and temporary storage one—and what it means when there is a last-minute event that prompts the transport operator to divert from the route that was originally planned. If the port to which the vehicle and goods are moving does not operate the same model as the one that was initially planned, then the whole supply chain must come together to adjust the formalities. Those are areas where more progress needs to be done, and I would again insist on the need for co-operation and the need for support from the Government in terms of providing the information with sufficient advance notice.

Q196              Tony Lloyd: James has already expressed some doubts about the flow of information from Government, etc. but can I ask Robert and James, how ready was the Government itself for the autumn roll-out of the imports regime?

Robert Hardy: I would say very ready. The autumn change was due to be just on SPS controls, really. The GB frontier import controls were not due to come in until January anyway so that has not been delayed. There were two things that were due to happen this year which was introduction of the export health certificate from EU and the IPAFFS declaration in GB. That has been partially delayed. DEFRA were on the webinar from the Border and Protocol Delivery Group. DEFRA had made the point four times that they were ready this time—they were not ready the previous time—but it was market conditions that forced the postponement.

There was actually a further easement which timed out on 1 October, which was an export declaration for empty containers. That went ahead. That slipped under the radar and it has worked perfectly fine. We have been doing thousands of these declarations. That easement has stopped, that process has now started, and there was not even a ripple so that went pretty well. That was down to HMRC’s planning, the software and their guidance through the system. So it was very good on that. I think the reasons for the postponement were purely down to the strain on the supply chain outside of customs and regulatory controls at the time.

James Russell: Having complained that we have not had great engagement from the Government, I am pleased to say that we have got our first meeting on this topic next week, so I might be better placed to comment after that. I think our concern at the moment is we recognise that APHA are going to be responsible for training these OV staff who are going to carry out these import inspections. That is point one. Ordinarily, that would happen just over two days in a year, so we are trying to understand whether there is going to be an increase in the capacity of that training to allow those vets to be ready to ready to go with that work.

Also there is the infrastructure required, because the documentary checks are one thing, but when we get into the position of needing to think about live animal checks, or even whole consignment checks, this is something that requires significant space and significant infrastructure at these border control posts. At the moment, we do not know where those facilities are intended to be and how well prepared they are. I think really we sort of wait with bated breath to find out an answer to your question, but at the moment we are still unsure.

Q197              Tony Lloyd: Following up on that side of things, particularly in terms of James' answer, do we have the right people with the right qualifications in the right place? I take note of your last comment about the uncertainty around the infrastructure. In the end, if there are infrastructure problems, can we identify where they are?

James Russell: I think we need to look at this on both sides of the import-export chain. On our side we have talked about the stretch on capacity of OVs, so we know that that is there, but we also are very hopeful that we will continue to meet all our obligations, as indeed we have done as a profession since the end of the transition period. To our knowledge, there is not a solitary consignment that has not gone out for want of a veterinary signature. By hook or by crook we have made it work.

There is then going to be the obligation on the European Union side to have those certificates signed, again by vets, to allow us to have something to inspect when those goods are imported. If I could point to France as an example, the situation of employment there for these OVs is different. They are employed through Government rather than through private contractor, and they work office hours, if I can put it that way: Monday to Friday, 9am till 5pm. The certificates that they are signing will have a maximum of a 24-hour lifespan on them so we are not going to be seeing any goods that require SPS checks on them coming into Great Britain on a Monday morning, for example, because there will not have been anybody to sign the certificate to actually do it.

I think there are a number of bits that need to be better understood including, to your point of making sure we have got the right people at the right place at the right time, understanding that it is not just about us saying, "Well, there is X number of consignments and therefore we need this number of people in this number of offices for this number of hours." It will come in ways that we need to be able to predict as well from the continent.

Robert Hardy: I think that is a really good point, James. The difficulty with the export health certificate is there are 27 member states and different approaches to export health certificates and opening hours and some are public sector, some are private sector, including with the border control posts and what have you. With the introduction of the IPAFFS from 1 January, maybe there is some room here to actually say that the onus is on the GB importer to declare that the goods are fit for human consumption and have got sufficient record coming in. Maybe the onus should not be on the exporter to say that the goods are able to come into the UK, but it should be the importer to prove that they are rather than the exporter. The difficulty is you are dealing with 27 member states and different approaches to things.

I think the introduction of the GB notification first and the EU export notification second is an interesting development and I am interested to see how that plays out over the first six months of next year and what level of data the health authorities can receive in the UK as to what level of comfort that gives them. And would they still require an export health certificate for all products if there was just an IPAFFS on some of them? I do not know the answer, but I think it needs exploring.

Q198              Tony Lloyd: If we were to have the situation that you say is more desirable—import checks rather than export checks coming in—would we have the capacity to do that at the moment?

Robert Hardy: It would not be on everything. The beauty of the EU supply chain flows is they are pretty repetitive. A truck full of Babybel cheese will be the same as truck full of Babybel cheese tomorrow. There are regular flows, and they are metronomic in the process. You could get into a private attestation routine and even then you do not have to examine every load if the seals are intact. If the seals are intact, there is just a seal check, so that becomes important, but that is easier to do with a solid-sided vehicle like a refrigerated trailer than it is with a soft sided vehicle which also carries food. But, yes, I think there are enough people in place. The flow is not particularly dangerous, but it is important to be able to identify what would be the dangerous elements and act on those. If the pre-notification is done correctly, I think that gives you enough intelligence to actually target better, and therefore you need less resource.

James Russell: It will not surprise you to know that I would come at that from a slightly different point of view because I would come at it from—

Tony Lloyd: I was going to ask you exactly the same.

James Russell: A disease risk perspective. I could talk about Babybel cheese, but if I could point to avian influenza, because that is something that is absolutely current. We are just seeing the first cases for this winter in Great Britain, and around those cases we are able to put a regionalised zone where movement of farmed birds is restricted. But that changes hugely and rapidly. We have a great surveillance network across the country, and I am sure the continent does as well, but we rely on the speed of that surveillance and the regionalisation of transport of livestock out of those areas to make sure that stuff coming into the country remains safe—not just for us, but for our farm species as well. So I think to say that a lorry load today is the same as a lorry load tomorrow may be true for gearboxes, but I would argue is not perhaps as applicable to products of animal origin.

Chair: I will indulge Anthony Mangnall for a moment again.

Q199              Anthony Mangnall: I am really interested in the point that you just made about making it on the importer to actually have that system check. Forgive me if this is totally off the mark, but where does the AEO come into that? Because presumably everything we are talking about streamlining how you can get food into and out of this country and make sure that public health and safety is still as important and sensible as that?

Robert Hardy: Currently AEO is not in the right place. The authorised economic operator trusted trader scheme is more on a sort of fiscal and data security angle and not particularly sector specific. That said, I think it should be sector specific. There should be AEO and BAR [41:13]. It should be, "I am a trusted trader for the pharmaceutical industry for the SPS goods." I think there should be a second level of AEO which becomes sector specific. That has definitely got legs. It is too broad at the moment.

Q200              Chair: Just before I move to Lloyd Russell-Moyle, James, you raised an interesting point. Brexit has given birth to an infinite rise in red tape. This much is obvious. It might be good for vets because there is an awful lot of demand and employment, perhaps, for vets. You may see it as a curse as well. You said something really interesting about the Monday to Friday and the French veterinary workers working through the Government. What does that mean for availability of product on shop shelves in certain parts of the week? From your experience, projecting forward, what could it mean for the consumer?

James Russell: There needs to be different planning about how some of these imports and exports take place. We already see that occurring with some of the people who I said we are working with through the SPS working group. We already see that they have changed the way that they plan some of their exports to simplify and to streamline it.

The current export health certificate system is set up quite brilliantly to be able to export an entire container full of lamb legs, because that requires a certificate. If you get into the idea of composite goods, so if we take a pizza which has got cheese on it, milk in it and meat on it and so on. We are talking then about multiple different certificates. You then make up that container load with not just a load of pizzas but a container that is going off to a shelf at Marks and Spencers or wherever and actually as well as the pizzas, they have got some lasagne, cheese, milk, and they have also got some batches of eggs and what have you. You can see that the complexity is increasing all the time.

So what we are already seeing is changes in behaviour of those exporters to not export some of those incredibly complex loads. I do not think it is difficult to imagine that there may be a similar situation with imports. It will take different ways of thinking about how we transport goods, because it will not be as seamless as it has been.

Chair: If this is required then perhaps there is extra difficulty and extra costs and could mean empty spaces on shelves—who knows? Lloyd Russell-Moyle, you have been waiting patiently, I apologise for indulging myself. 

Lloyd Russell-Moyle: As is your prerogative.

Chair: Thank you, you are going to go far on this Committee.

Q201              Lloyd Russell-Moyle: Carrying on from the questions that we have had, what can the Government do in this extra time that is available on the SPS regime to ensure the smooth phasing in of the new inputs regime next year? Or is it a case that you have done it all, it is just a bit of time for them to deliver it? Do they need to do anything else?

Robert Hardy: The introduction from January ’22 is first of all on imports generally with the switching on, if you like, of the GVMS system and also inventory linking at the ports, as Sarah mentioned, that are operating a temporary storage model—sorry to go a bit techie on you there but there are different processes. That has been turned on for SPS and everything else. I think the Government is in a good position with that. GVMS is something we have used from day one for the GB-NI flows. It is also something we are very familiar with. In Calais, Dublin and Rotterdam there are similar processes, and it looks a bit odd that there is not in the UK. So GVMS is for SPS and everything else, and it is there to actually provide a kind of tick box that you have done everything you already supposed to be doing anyway. It will also flush out the people who are not doing what they are supposed to be doing at the moment. So that is fine.

The SPS triggers will be in there as well so if you are doing a simplified frontier declaration, for example, or a full declaration, to say that I have my safe cheese on that trailer, then that is how the system gets notified of it. You do not put the SPS control into GVMS, you put the declaration containing the SPS control into the GVMS, and that then sends triggers to the border, to the agent, to the driver, "You must go here", and so on and so forth. So the Government is in a good position with GVMS. It was ready a few months ago. I am not sure it is completely hooked up at the back, but that does not matter too much from day one. It will gradually improve without seeing any material change to the use of the process. I like it. I think we are in a good state for next year when the GVMS comes in, everyone gets used to the process. There is IPAFFS, there are some controls, and then gradually the export health certificate—if we go down that route—rolls in six months later.

Q202              Lloyd Russell-Moyle: Has the Government given enough advice now? 

Robert Hardy: Yes. Taking Sarah's point though, it is normally the transporter that will do the GVMS declaration to create a GMR—a goods movement reference. Bearing in mind that the transporters are at 85% not based here—they are European-registered hauliers—that is creating some challenges for them but no more than the challenges they would have completing an SI Brexit declaration in Calais or PBN in Dublin so it is a process that they have got to overcome. The Government asked us where we could get the information for these transport operators, and we reminded them that the HGV levy was introduced a few years ago with a 98% compliance rate, where every haulier had to register and pay £10 a day to drive in the UK. All the foreign hauliers had to register. So that data is sitting in Department for Transport at the moment, and they have now started to action that because they had the best register anybody had of who the hauliers are coming into the UK. 

Lloyd Russell-Moyle: It is strange that you needed to remind them of that.

Robert Hardy: Well in fairness they can sometimes be a bit siloed. Sometimes you have to just introduce the siloes to each other.

Lloyd Russell-Moyle: A matchmaking service. James, what are your thoughts?

James Russell: We recognise that this pause gives a welcome breathing space to industry. Absolutely recognise that. But I think what we would like to see happen now is that we make sure we use that breathing space to make absolutely certain that we are prepared for what we know is coming. As we have already alluded to, at a time when veterinary capacity is stretched, we feel a little bit like the Grand Old Duke of York on this one. That we have marched our troops up the hill, only to tell them to turn around with 17 days’ notice before they thought they were going to start doing this work. That does make business planning quite challenging, so I think we want to have some certainty about where we are going, have some really good understanding of how many people we think we are going to need in position to undertake these checks, and also just to make sure that we know where this is going to happen—where these BCPs are going to require veterinary intervention.

Q203              Lloyd Russell-Moyle: Your view at the moment is that we do not know where these things are going to happen, and we do not have a rough idea of the numbers.

James Russell: As I say, we are feeling quite desperate about the lack of understanding that we have been given by the Government on this. Yes, we know what we are able to read elsewhere. We know that DEFRA are ramping up to employ 500 people, of which a number are OVs, specifically to look at import checks with £14 million-worth of investment. But that is about as much as we know and so we do have this—

Q204              Lloyd Russell-Moyle: So in the Government meeting you have coming up, those are the kinds of questions you need them to be answering. Is there a period by which at the very latest you would really need some of those details to be more concrete? I assume not the day before.

James Russell: Yes, in time to get those people in place. As we have already discussed, this is an additional qualification over and above our sort of veterinary undergraduate degree, so we have got to be able to get people trained and get people equipped and prepared for this.

Q205              Lloyd Russell-Moyle: How long does it take to train someone to get the additional qualifications?

James Russell: It is not massive, but it is about the availability of that training as well.

Q206              Lloyd Russell-Moyle: Is your view then that the Government have not proactively engaged with your organisation as well as they could have, or am I putting words in your mouth there?

James Russell: I think when it has come to some of the export checks, belatedly we have had great engagement and we have things like—it started off as a daily bird table meeting with DEFRA from 1 January together with the food business operatives but also the OVs who are undertaking that export work. That has now dropped down to weekly, but continues to identify challenge. We are very grateful for that level of engagement and involvement, but when it has come to this import side, we just have not seen the same. One of the reasons I am very grateful for the opportunity to be here this morning is that what we have tried really hard to do is to move outside of that siloed working that Robert refers, outside of DEFRA and to speak with other Departments in Government as well, principally DIT.

Lloyd Russell-Moyle: Andrew, do you have a response to any of those points?

Andrew Opie: No. As I said before, I think our engagement has been pretty good. We have been very happy with the engagement we have had driven by DEFRA but bringing in other Departments to talk to us as well. We have a regular catch-up with our colleagues in the food supply chain, representing the manufacturers and the farmers, with Ministers and Secretaries of State. So our engagement has been good. As we have said before, I think actually the problems are twofold: they are just whether we can get those lorry parts finished at the relevant ports to avoid port disruption and how well equipped European suppliers are, particularly from July when full export health certification is going to be required.

Lloyd Russell-Moyle: Sarah, how are you feeling in terms of the engagement and anything more that could be done?

Sarah Laouadi: We have had excellent engagement with the Government. We have worked with all relevant Departments—the Department for Transport, HMRC, DEFRA—and we are working at Cabinet Office level. The opportunities to raise issues, to highlight areas where more work is needed, are really plentiful. The Government has done great work as well in terms of reaching out to our EU stakeholders, and I can really guarantee you that the level of engagement there in joint meetings involving both UK and EU stakeholders and the level of work that is being done there is really impressive.

The challenge that we are now facing is that we are reaching the end of the preparedness journey and, as often happens, the most difficult issues are left for the end because the easy ones have been solved much quicker. So that is one challenge. The other one is that the amount of guidance available, the amount of information that stakeholders have to engage with is becoming really difficult to manage for any human beings really in any organisation. So an area where more work is required is the way in which the guidance is provided and presented to businesses. We have been calling for more consolidation, for guidance being presented in a more user-friendly way. We are already seeing the signs of those developments happening.

The haulier handbook that has been developed to present the information about the import controls in a way that makes sense for transport operators—present the information from their perspective—is a very good example. The “Check how to import or export goods” service is another example of providing the information in a consolidated way, even for traders who do not know where to start. It is semi-interactive. The users are being asked a couple of questions about their operations and then directed to the relevant pieces of guidance. So this is much welcomed, and we would be absolutely delighted if the Government could continue this trend and make sure that all the guidance that has been produced is as user friendly as that.

Obviously, it is important to maintain the different sources of information up to date. I believe that at this point in time the border operating model has not been updated yet, which can be confusing for newcomers who have not previously engaged very actively and may not be aware that the document that they can find online on gov.uk has been superseded by other announcements and documents. Overall, we see that there is progress. We are in a much better situation now than we were just before the end of the transition period, for instance. But again, I would like to highlight that the missing pieces of information are absolutely critical and those need to be provided as soon as possible.

Lloyd Russell-Moyle: I am afraid not updating websites and databases online is a bit of a plague in this country. We used to have it in the courts quite a lot where the laws were not updated and judges would not even know what laws had been passed, because Parliament had not updated things in time. It is not just you that suffers from some of this, it is something that we need to get on. What I have heard you say is that we have got a GVMS system that has brought some of the filling in of forms together, but we need to now bring some of the advice and guidelines together so that they are easily accessible in one place and consolidated. Hopefully that is something we can take away.

Robert Hardy: Can I just make one point there, Chair? 2021 has been all about the trader in terms of GB imports and how we can get the trader ready, the trader will select their intermediary, etc. 2022 is all about the truck. The trader doing his own thing is okay if he is the only trader on the truck and is a major problem if he is not the only trader on the truck. Suddenly you have a truck heading towards Calais with potentially 20 traders all doing their own thing, with 20 intermediaries, some of which do not work weekends, and that is problematic. Many transporters are saying, “If we are not clearing it, we are not carrying it”. Not because they are trying to exploit the revenue opportunity, but because they need to maintain the control, otherwise they are not going to get through the frontier.

Lloyd Russell-Moyle: What we do not want is 20 trucks separately having to do those journeys, not only from a climate perspective but also just from an economic point of view.

Robert Hardy: I think it is very important to know. I do not have the figure, because we have never really recorded it before, but of the traffic that comes in, the GB imports through say Dover or Eurotunnel, about 15% of those would be less than a full container load, so there would be multiple consignments on a trailer. Taking out fast parcels because that skews the figures uncontrollably, that might be an average of about eight consignments on a truck. There are more declarations in that category of vehicles than there are in the full-load categories, and that has got the potential to snarl everything up.

Q207              Lloyd Russell-Moyle: Does there need to be some special treatment for these split trucks or whatever you call them?

Robert Hardy: No, the transporter has got to take control. Taking Sarah’s point, it is very important to differentiate between a trader and a haulier. In the middle sits a freight forwarder, and the freight forwarder role exists in every case, it is just that the person performing that role will vary. In a full container or a full vehicle, it may be the trader who is assuming the freight forwarder function, and it is very rarely the haulier because the haulier tends to be the sort of taxi in the process, but somebody has got to be wearing the freight forwarder hat. If there are 20 consignments on the trailer heading towards Calais, you cannot have 20 freight forwarder hats; there can only be one per truck. The person organising, the consolidator, needs to put his foot down and say, “If you do not allow us to control it, we just cannot carry it.” There is a risk that of those 20, only 18 of them may appear on GVMS, and there is no way of knowing. One record is a good record.

Chair: It gives me great pleasure to bring in Craig Williams before another from Anthony Mangnall. Craig, do you want to come in briefly?

Q208              Craig Williams: Thank you, Chair. I was just interested in the groupage issue around that, especially around the agri-products, and I know that some kind of agri-hub in the Midlands has been alluded to where you could help with the groupage on that. I was wondering if you have heard of that particular idea. Just drawing you on to agri-products especially and around the groupage issue, we are just not doing it enough now and that is compounding the logistics nightmare.

Robert Hardy: I can go first and then you can correct me, James. Two things again, always there are two things. First of all, if it is just on the IPAFFS, it is kind of fine. In the first six months of next year, that would be okay. If there is a declaration, then there is an SPS declaration that creates the control. The difficulty has always been in the seals on groupage because it is not necessarily collected from one location. In broad terms, there is a full container load, there is a groupage collected from hub, and there is a part load or what refrigerated transport companies normally call a ‘milk round’. They are just collecting on wheels as they go. That creates a seal issue. That has been broken down into sealing pallets, and there were some trials with that, I believe, that were reasonably successful. Some seals were a bit too easy to tamper with, and then there was a super-seal on the vehicle after that.

That is about as far as it has got so far, but if you are collecting on wheels and you are constantly breaking the seal, you need to have pallet-based seals and a relationship tree between all of those seals, so the breaking of a seal is part of the process and not an indication of something going wrong.

James Russell: I would agree entirely and recognise that that is where a lot of the complexity lies for our members who are trying to do this. You can imagine, if you are being asked to put your professional name to the final signature that is the truck seal, you need to have some way of being able to identify that what you are signing to is supportable. The royal college are very strict on their principles of certification and not understanding what you are signing would certainly see you fall foul of them. We can end up in that situation, and I have heard of a situation where we are asking for trucks to be unloaded so that we can see the pallet seal right at the front. You can imagine with just-in-time delivery and the amount of time that that begins to take, that is a really challenging situation for all involved. I know it has led to a degree of conflict, so anything that can help us to find a system of making that work would be positively received.

Q209              Paul Girvan: On that very point, it is about the intransigence of some of the European customs officials—I will use that term—and I am looking at it from a Northern Ireland perspective because effectively everything that is coming into Northern Ireland is going through exactly the same process as has to happen between Calais and Dover. The difficulty that we have had is we had a refrigerated container arriving, and the poor lorry man had a lot of grief. The customs officer asked to see a specific item that was on a refrigerated container. He had to open the container and take out one of the boxes which happened to be one at the back. This official was employed from Dublin because they were working as part of the EU in Northern Ireland, and they are really punishing us for it. He took it all out, but by the time he put it all back in, the container temperature had dropped below a certain point and that whole container had to be scrapped. It was not be accepted by the firm that it was for—I am quite happy to say that it was for Iceland—but they refused to accept it as it had been tampered with.

I am just saying, in practice this is great if it is followed properly, but this is not what is happening on the ground. We find that poor hauliers are being punished by those officials that are making them do all the additional work—strip out a load to see one item that is supposedly on a list. We are having the same thing with veterinary things, and I know that that is another point, but it is exactly the same problem.

Robert Hardy: We have had the same thing in Calais. If it goes well, it sails through. If it goes wrong, it goes really wrong, to the point where it sometimes has to come back—not even try again, just come back. Taken that it was Iceland, I guess it was frozen and therefore the temperature degradation is going to be more. The temperature is not going to drop any faster, but the facilities to carry out that examination will not be frozen. They would be, at best, chilled. If that container is open for too long, even in a chilled environment, you are going to get a temperature rise in frozen.

Paul Girvan: It was not that. He effectively had to remove every crate from the container to get to the one that was right at the back because they demanded to see one item.

Robert Hardy: It would be interesting to know, on the background of a specific case like that, whether or not the container was sealed and the seal agreed all the way through the line.

Paul Girvan: It was. We sent details of this to Lord Frost because we felt it was something which should be highlighted with Europe in relation to how they were trying to impose such strict restrictions.

Robert Hardy: This is happening in Dublin rather than Belfast?

Paul Girvan: This happened in Larne.

Robert Hardy: With a DAERA official?

Q210              Paul Girvan: No, the DAERA official was not the problem. It was an EU official that was employed by Dublin who caused the problem. We have the name of the person involved, but the difficulty is that this is just causing major problems. I know that the protocol is one aspect, but it affects every port in the UK that has got a connection to Europe, and that is the point. If they are going to be that officious at one point, it is going to make it virtually impossible to have on-time deliveries, where you have to have a container at a certain delivery point by a certain time. You will never meet that with people who want to frustrate the process and that is exactly what is happening. We are being punished because we left the EU. They are punishing us because of it.

Robert Hardy: It is important to note that not every trader is treated that way. The difficulty is that you do not know which one might be and therefore, potentially they all are. That can be difficult.

On the whole, we found that Calais has been very good. Dublin was quite tough initially, because I think they were swamped with volume and therefore referring to the rulebook quite a lot, because they were not so familiar with that volume of business, where you could take a bit of a view, whereas Calais are more familiar with that. So there were more declarations in Dublin in January than there were in the whole of 2020. It was like they were working to rule and that was quite tough. Northern Ireland has been reasonably good, I have to say, but the facilities are not there today to carry out those kinds of examinations in an environment that will protect the temperature of the load. The EU want them there and I think there is some—

Paul Girvan: We are very much against wanting to put such things in place, because it actually weakens our position as part of the United Kingdom.

Robert Hardy: Exactly. I agree with you. The problem is you cannot have the control and not have the facility, otherwise you run the risk of that kind of—

Paul Girvan: We do not want the control either.

Robert Hardy: Sorry, we have gone all Northern Ireland there.

Q211              Anthony Mangnall: To Paul’s point, it was interesting to see the letter that was sent to the Commissioner last week by the French about punishing the British for Brexit, especially around the fishing industry. However we will move swiftly on.

Sarah and Andrew, I am going to ask because I am ignorant of the facts here. The TCA allowed for the TSCs to be set up. There are a number of TSCs that are there in which I believe there have been four meetings since the TCA was signed: the one on SPS, the one on customs, the one on goods and the one on technical barriers to trade. Sarah, could you start about what you know about the composition of the TSCs and the engagement that individual organisations are able to have with them?

Sarah Laouadi: Those joint bodies are meant to bring together both UK and EU officials to discuss the implementation of the TCA. It is about making sure that what has been negotiated works in practice. They are very useful to make sure that the rules that have been decided work well, but not necessarily a good channel to question the rules or try to improve them.

In terms of the engagement that goes into the preparation of these meetings, the TCA actually provides four mechanisms to include the views of stakeholders, industry, civil society, representatives of employers and employees, and NGOs. There are two main structures for that. A civil society forum that will meet once a year, and domestic advisory groups. There will be a UK domestic advisory group and an EU domestic advisory group. The EU has already selected the members of its advisory group and the UK is in the process of doing so. There was a consultation about the criteria that should be used to select the organisations.

What is very important in this regard is that the Government uses the domestic advisory group strategically by appointing members that bring the right range of expertise and that are representative of the different nations of the UK and the different interests at play. It is also critical that the meetings take place in advance of the meetings of the Trade Specialised Committee that you mentioned so that businesses have the opportunity to highlight the issues that should be discussed. I think there should be as much transparency as possible about the agendas of those meetings, with a possibility for stakeholders to frame the agendas to make the meetings of the Trade Specialised Committees as useful as possible.

Anthony Mangnall: Forgive me, I did not hear the second bit on UK domestic advisory groups. Did you say it was being set up or it has already been set up and also, how often does it meet?

Sarah Laouadi: It is in the process of being set up. There was a consultation run by the Government about the criteria that should be used to select the members, and there is an ongoing call for expression of interests as we speak, for organisations who are interested in joining this group to put forward their application.

Q212              Anthony Mangnall: It is interesting that so many of the issues that we have faced thus far have been quite quick to arise and not necessarily always forecast, as is so often the case. For the civil society forum to only meet once a year and for the UK domestic advisory groups to not even be set up, that is a bit of a problem. I know first hand that we have had a fight to try and do things around fishing and through the FSA around the SPS Committee around live bivalve molluscs, but it has been really tough to even get a discussion on the agenda in the first place. If those two structures are not in place or not meeting regularly to try and inform the meetings that are happening between UK and EU officials, that to me is a real cause for concern. Is it to your groups and to the people you discuss it with, Sarah?

Sarah Laouadi: To some extent, but I would like to highlight those official meetings in the structure of the TCA can be complemented with additional interactions. In relation to the very practical issues that we discussed just a few minutes ago, there are a number of informal meetings that take place between UK officials and officials from EU member states. I think that border industry facilitation committees have been set up with the five key EU countries—the five key entry points into the EU—not to discuss anything that could be perceived as political or consisting of a separate negotiation, but all the technical aspects about how the TCA is being implemented.

Those discussions are taking place already. However, it is important that the official structures of the TCA come into play to raise the level of attention that is being given to those issues and to make sure that there is momentum and political will to action everything that needs to be actioned to go beyond the small adjustments that can be made with good will at technical level and ensure that any structural inconsistencies that could be found between different chapters of the TCA. For instance, interactions that may not have been anticipated can be addressed with the right level of political attention and political will.

Q213              Anthony Mangnall: Thank you. I am going to bring in Andrew on this. What expectation do you have for the TSCs to have an impact on the upcoming changes on import regimes before they are phased in?

Andrew Opie: I agree, I do not need to go over what Sarah said, because she articulated it really well. We were engaged around the SPS discussions with our food supply chain partners, so we were able to see what was likely to be on the agenda and also received feedback from the call as well. A summary would be—I think as Sarah has intimated—that it was the first meeting, there was a discussion around some of the issues which are causing problems, but it did not get into the structural changes that we might want to see going forward, both in exports and in imports. Some of the drive may be more towards e-certification which the UK is looking to introduce for imports. For example, on a possible trusted trader scheme for supermarket-type transport across borders, which is not really set up for the SPS regime at the moment because we tend to transport lots of composite products as loads which are incredibly complex, I think it is early days with that.

To back up what Sarah said, there is a regular dialogue between ourselves and other colleagues within the food supply chain and over to both the Commission and individual member states as well which are very important in the way that the ports are run. We did see some inconsistencies across port operation in the early days for those members who did export into the EU. I would not want to think that everything is resting on the SPS as part of the TCA, because I do not think that is the objective. For us, the objective of that should be to look forward at how a proportionate risk-based system applies in the 21st century, rather than necessarily worrying about every issue that comes up.

To the point that you raised about what we would want to see, I think some of the things that are being suggested, provided they do work on time, such as e-certification, will make a slight difference in terms of the trade that we will see in the UK. The UK is being more progressive in the way it is approaching its imports and the exports that we are facing at the moment, and I hope that provides a signal that a good risk-based system can actually move further.

Our problem with the whole import-export system is that it is incredibly and overly bureaucratic. The need for a trailer to move with a certificate every time it comes from a regulated supply chain which we, alongside the Governments of those countries, inspect to ensure that food is safe whether it is produced in the UK or imported when it reaches the supermarket shelf is ridiculous, frankly. We should have regulated supply chains where the supply chain is audited to ensure that they are safe rather than relying on an outdated paperwork-type system which involves thousands of vets needing to sign off at various points in the supply chain. It is completely outdated and needs an overhaul. I think the UK is moving towards that system with imports, and it is then reviewing its import system going forward. I think that is to be welcomed and the EU probably needs to look at where the UK is going on this and see what it can adopt for exports from the UK at the same time.

Q214              Anthony Mangnall: From what you have just said, I understand that you do look at these TSCs as a constructive opportunity to improve the relationship and the opportunity to import and export. You are nodding your head on this, but when you came up to the SPS stuff, and I think this is probably relevant to all colleagues in here, who did you talk to on the SPS? Were you calling up DEFRA and saying, “You are going to be sending an official from DEFRA to go and have a bilat with the EU officials”, or were you talking to Lord Frost’s Department? How was it manifested?

Andrew Opie: It would have been primarily through DEFRA. Just to explain, there is a group that has been operating for three or four years which represents ourselves, NFU, FDF and the UK hospitality sector, which meets regularly with DEFRA, both Ministers and officials, fortnightly or weekly, depending on where we are. We have every opportunity to be able to raise this, and they feed everything back to us in terms of where their officials are operating on SPS. It is a very good dialogue between the two sides, and it does allow us to raise those issues, right down to the specifics on, for example, a particular port in France that may have problems in the early days. Individual companies were able to raise issues directly that they were having, and we know for a fact that those issues were raised with the French Government directly. I think that did lead to an improvement in the system as it went through as well.

As I have said right from the start, I think it has not been a problem for us in terms of engagement with the Government, or an opportunity to be able to raise the issues. The fundamental problem with the TCA is that the SPS is not fit for purpose for a modern supply chain that is well regulated and well audited. It still relies on a case that really we need to check everything because we cannot trust well-regulated supply chains to move food across borders, which we were doing for several decades before the border checks came in.

Q215              Anthony Mangnall: Thank you very much. Just going back to Sarah before I come on to James. What is your long-term view on these committees? Are they going to have a positive impact on the way in which the flow of goods goes between the EU and the UK?

Sarah Laouadi: They have the potential to have such a positive impact. They are part of the structure of almost all free trade agreements that are being negotiated these days. They are critical in making sure that the agreements are maintained, for instance, as each country amends its rules, its own legislation. This is absolutely critical in making sure that the agreement can function. I would say that the magnitude of the impact that the committees could have will also depend on the ability of both sides to overcome the initial difficulties that we have in this new trading relationship. I think as the relationship normalises, there will be more scope for the specialised committee to be more ambitious and deliver better outcomes to all the importers and exporters that use these trading rules and the end consumers that benefit from those movements of goods.

              Anthony Mangnall: If I may, just before James comes in, one of the points is you are all being very constructive in your suggestions as to how we can improve these things. The point of this Committee is to be constructive as to how we can overcome some of the difficulties and the problems we face in leaving the EU and how we can make it better with our European counterparts. It is particularly welcome to hear these points.

James Russell: I hope I have already alluded to the fact that we absolutely welcome any opportunity to think about how we are going to simplify certification procedures and digitisation and other approaches to that are certainly going to be really important.

I would draw attention to a couple of points though from a health and welfare point of view initially. One would be to say within the last 12 months, the internal surveillance network detected a notifiable disease coming in in live animals. That is an amazing role that the veterinary profession plays in trying to protect our livestock in the United Kingdom as a whole. We could point to many examples of that but within the last 12 months, we have seen that occur.

With regards to the question of whether each consignment needs to travel with certificates—it sounds, on the face of it, like a really straightforward solution—but I want to explore a little bit where we go with that. I am conscious that there is a discussion with New Zealand around the idea of whether we could have completely certificate-free trade. Let us just think of the lamb leg that comes in from New Zealand and is put into a pie alongside some GB-grown carrots and wheat and all the rest of it to make this pie, and GB labour to produce it, and then we wish to export it back to the European Union. The European Union will ask for some export declarations on that and, amongst that, will be the export declarations on the lamb. We can only do that if we have got understanding of what it was when it came in.

My concern with this is that we potentially end up in a situation where we solve our import challenges at the expense of making it more difficult for us to export as a country. Because it is not just that lamb pie being re-exported, it is the fact that it becomes really difficult to know which was that consignment of lamb that came in from New Zealand and how is it different from this which grew up on a Welsh hill, and where did they become mixed? Suddenly we have got some real challenges with a lot of our exports. I think we need to really explore these issues but also recognise where they may lead to unintended consequences.

Anthony Mangnall: Thank you very much. Back to you, Chair.

Chair: Thanks very much. I now turn to Mark Garnier.

Q216              Mark Garnier: Thank you. This is really to Andrew and Sarah. How much is this going to cost?

Sarah Laouadi: It is difficult to give you a blanket answer because the extra costs that each business will face will depend on their exact circumstances on how their supply chain is organised. What I can maybe do is to run through a number of cost items to illustrate the extra costs there that businesses are facing. I will start with everything related to customs formalities. It starts with procuring the right software to be able to interact with HMRC systems or with contracting a customs intermediary to submit customs declarations on your behalf. That obviously has a cost. Even if you outsource the submission of customs declarations, there is some work required internally and it has a cost in terms of man hours, to get the right data and transmit it to the supply chain partners, the intermediaries, that will complete some of the formalities on behalf of the company.

You also have the customs duties themselves for products that do not meet the requirements of the rules of origin and therefore do not qualify for zero tariffs. On top of that the cost of training for the staff to be able to understand and operate the new systems and processes. That is something that affects all types of goods; it is customs related.

If you move to product specific requirements, for instance, products that are subject to sanitary and phytosanitary checks, you have extra costs there. The cost of securing an export health certificate and, although the cost is not harmonised, it will be in the region of possibly £120 to £170 per certificate. You will remember from our earlier discussions in this Committee that there can be dozens of certificates required for a single truck load if we are talking about groupage. These costs add up.

You also have the cost of the actual physical checks that are taking place at the border control posts. If you look at what is happening on the EU side, there is a reference figure in the official control regulation that directs member states in how they calculate the exact fees. The reference number is about €55 per consignment of meat product or fish product. All of that adds up. Then, depending on how the supply chain is organised, how much exposure the company has to different risks and the nature of the relationship between supply chain partners, the costs can be distributed in different ways.

They can be passed on, in certain cases, to end consumers, if the company believes that the price elasticity means that consumer will continue buying their products even if there is a marginal increase in price. The exact impact would really depend on a variety of criteria, including the size of the consignments and how consolidated things are. I hope that this at least gives you an overview of all the items and area where costs are being added compared to how we traded during the transition period.

Q217              Mark Garnier: Within that, you talked about a couple of things, some of which are capital costs—buying software, for example. You have then got ongoing cash-flow costs which are training staff and having more people filling in forms. You may not be able to answer this question, and I would not want to press you for an answer, but could you roughly give a percentage indication of how much more it would cost for a shipment? It is a phenomenally complicated question because it rather depends on what type of product you are talking about. To the industry as a whole, would you be able to say the increased costs are up 5% or 10% or 50%—just a very, very ballpark figure, and I promise you we will not hold you to it.

Sarah Laouadi: I am afraid I do not have a reliable figure to give you right now, but that is something I can come back to the Committee with at a later time.

Q218              Mark Garnier: That would be really helpful because, at the end of the day, Andrew, someone is going to have to pay for this. Sarah suggested it would be the consumers. How is this going to be paid for?

Andrew Opie: It will, and Sarah gave a very thorough answer about all the issues that people face in charging, but if it all works well in administration— Remember we tend to import, into our supply chain at least, bulk products which are then processed here in the main, or they are bulk products that get sold directly. A lorry load of strawberries from Spain, or a bulk load of Irish beef primals which is minced here and then put in, are coming with one or two certificates maximum. The cost is pretty minimal in the scheme of things. The bigger concern for us is whether the system runs properly, because the bigger costs will be in delays at the ports or because a lorry is held for an inspection. That is the real cost that then starts to hit because you are then starting to lose shelf life; you are losing availability; and you are building up waste in the system as well.

Those are the issues that we are actually more concerned about than the simple costs for export health certification and the various other customs documentation, because in the scheme of things, it is a fraction of a percentage of a product which is probably going to end up on the shelves. It is more direct in something like the strawberries, because strawberries just get put in a punnet and then sold. There is not much added value that you do to them. Irish beef might be minced, it might be processed, or it might be put in a pie. The further down the supply chain you go, the less the impact of that cost of the imports is going to be.

Q219              Mark Garnier: On that point about inspecting freight as it comes through. Certainly when we were doing the pre-referendum inquiries, when I was on the Treasury Select Committee, we were looking at exactly this sort of stuff, there was talk about the fact that there were going to be minimal inspections. No more than about 3% of the products coming through is going to be inspected. Is that the case?

Andrew Opie: We understand that the UK is going to mirror the EU approach to physical checks of products coming in, which are much higher for some of the products of animal origin. James is much closer to this than me, but I think chicken is a high percentage of lorries that are physically stopped. The stoppage might be you stop and you check the seals, or it might be you stop and you park up, as Paul was saying, and you get into the consignment and you actually take it, so it depends. For us it is not the individual lorry, it is the port. The port needs to run 24/7, so the channel ports are really just an extension of the motorway into the EU for our supply chains. Any disruption, whether it is whatever lorry, not one in our supply chain, one in another one that comes in and is blocked and is holding up because people either do not have the correct paperwork, they are sending the wrong things over, which was possible in the early days. That is our bigger concern, and that is the unknown for us.

We do not know what the cost of this sort of disruption is going to be. So that is why it is so important everybody is ready from day one. It is also really important what approach the UK takes to inspections.

From the feedback we have had from our members, some of the European states took an extremely prescriptive approach to imports from day one. Things like ink not signed in the right colour meant things were held up, and other examples of this sort. Now we are told by our Government that they will not get involved in the excessive bureaucracy that we saw on the other side of the channel. There is some flex in the system for the Government to run the ports and the inspections in a way that encourages efficiency. We would encourage this because, however unwelcome it is, the costs are not in the administrated bureaucracy but in what it does to the supply chain.

Q220              Mark Garnier: Just a couple of points on that. Firstly, from what I understand about just-in-time supply chains, the margins are pretty slim, so if there are any extra costs they are going to get passed on to the consumer. Again, I definitely would not hold you to this, but it sounds to me like you are suggesting the order of magnitude is going to be in the region of 1% or 2%. Is that roughly it?

Andrew Opie: Yes, potentially. I have seen some studies on this as, I am sure, has the Committee. I think KPMG did one with the Dutch before Brexit happened, and I think there has also been a couple of other studies that have discussed 1% or 2%—single percentage-type costs—on a consignment and then what it might mean for food prices. What it means for food prices in this market, nobody would want to predict. Consumers are more price sensitive than they have probably ever been and therefore the opportunity to add price and cost on to them at the moment is extremely difficult. So I think that is going to be a very difficult discussion between retailers and suppliers at some point.

Q221              Mark Garnier: Are you hopeful that these sorts of problems will work their way through? There is going to be—

Andrew Opie: I am. The biggest thing I am hopeful about is that we are starting in July when we are not actually importing that much food in the really vulnerable category, which is the very short shelf-life products like salad, vegetables and soft fruits. Can we—the suppliers, the Government and the ports—learn the process in those early months so that, when we get into the real import season, which is October, November, December and into the new year, everybody is up to speed and the ports are operating as close to full capacity as possible? That is our hope: start in July; learn from the issues; make the amendments, both at the port level and with the suppliers; and everyone will be OK.

Mark Garnier: That is really helpful, thank you very much.

Chair: Martin Vickers.

Q222              Martin Vickers: Thank you, Chair. Perhaps we can build on the responses we have just heard. What ultimately matters are the consumers, of course, and their response to any change. Do you anticipate that next year they will notice significant changes to the importation of EU goods? Andrew first.

Andrew Opie: It depends on the ports. I do not want to keep saying that, but it does depend on the ports. If the ports do not operate effectively, you will see some impact, particularly if we have not resolved the problems we have got in the supply chain at the moment with labour shortages and other issues. The big problem we have at the moment is really late deliveries into distribution centres, which then affect the capacity of retailers to keep pace with consumer demand on the shelves. There is food in the system, as we all know; it is moving around, but it is just not moving effectively and efficiently for our supply chain.

Another complication is around the availability of products coming in through our own ports. Again—this is like a stuck record—July is probably the best time to do it, because we are much less reliant on imports at that time. I think probably only about a quarter of our soft fruit is imported at that stage; most of it is grown here, which is great. So if we had to pick a time when we would have less impact on consumers it would be July, without a doubt.

Martin Vickers: Since I represent the largest port in the country in Immingham, I would say, “Use Immingham more.” Sarah, do you have any thoughts on this?

Sarah Laouadi: From the consumer’s perspective, it is going to be difficult to distinguish between the impact of the new import controls and the impact of the other supply chain pressures that we are experiencing now. Andrew mentioned the driver shortage; that is a very important element. It was mentioned by the Government as one of the reasons why the import timetable was amended, because it was felt that it was not the right decision to introduce changes at the same time as companies were facing the driver shortage.

It is important that the Government do everything they can to alleviate this problem, for example, by taking a bolder stance on the short-term HGV visas that have been added to the visa scheme, and by delivering on the missing parking spaces and driver facilities that truck drivers need to do their job properly and to take their mandatory breaks. The industry is also doing its part at the same time by trying to promote new entrants into the profession. I believe that the consumer’s experience could be completely different, depending upon how quickly the driver shortage is solved, or reduced, and upon the evolution of the ocean freight situation, which at present is characterised by extremely high rates and capacity issues.

Again, the import checks will play a role and individual businesses will make decisions to adjust their operations. Businesses might decide to change suppliers, so consumers may see that their favourite products are no longer available in the same brand and they have to switch to something else. I do not think that we are headed towards a complete collapse of supply chains, where supermarket shelves would be visibly depleted. It is more about the cost impact and the interaction with the other supply chain challenges that businesses are facing at the moment.

Q223              Martin Vickers: Andrew, Sarah just mentioned there the cost impact. Do you anticipate that retailers will be able to offer the same variety of products and, even allowing for all the other inflationary pressures that are in the system, at a cost that the consumer is prepared to pay?

Andrew Opie: Yes, absolutely. We have been trading with the EU for decades and those supply chains are well established. I do not see anything changing in terms of the availability of products. There are some niche producers we have heard about, who perhaps have small volumes, who have decided to drop out of our supply chains. It is just not worth their while trying to equip themselves to sell here rather than the rest of the EU, but that is minor. In terms of our major imports, I do not see that changing at all. I do not even see it necessarily being affected that much by international trade deals because of the proximity and the long-established relationships we have got with the European suppliers.

Martin Vickers: On that optimistic note, Chair, I will hand back to you.

Chair: Thank you. I just note that Caesar uses the words, “All roads lead to Rome,” but now it seems that all ships and containers must lead to Immingham. Anthony Mangnall, do you want to come in briefly?

Q224              Anthony Mangnall: It is amazing we have got so far in this session without talking about Covid and the impact that it has had on the global supply chain, and we are talking right now about how things look in July. How much of an impact do you put on Covid versus our current agreement and the problems we have got with exporting and importing with the EU? What has been the bigger difficulty for you?

Andrew Opie: We are not coping with the imports at the moment and we have some members who have stores in the EU, but it is relatively light; we are really a UK-based organisation. Covid has been by far the biggest problem that we have faced—long running from early March last year right through to this time. There are added complexities. For example, you might have a food factory that is particularly affected by covid, resulting in you losing that as a point source within your supply chain. Being able to manage Covid, particularly in the early days of excessive consumer demand right through to trying to operate systems within the Covid restrictions, has been a massive problem for us. The supermarkets and suppliers have done an amazing job in ensuring everybody is fed and managing to keep all of the products available in the stores. In terms of the complexity of the issues and the unknowns that we faced in it, however, it has just been massive.

Q225              Chair: Just picking up from a point that Mark Garnier made—he mentioned the costs—I am interested in what you think is going to happen to international trade and volumes. One of the achievements of Brexit, as you probably know, is to give Ireland a trade surplus with the UK for the first time. Exports to the UK from Ireland are up 20% to 6.7 billion from 5.7 billion, but UK exports into Ireland are 32% down to 5.3 billion from 7.8 billion. The Central Statistics Office in Ireland put a large part of this down to the checks. So when checks come in on both sides, are we liable to see international trade falling even further, do you think?

Andrew Opie: Ireland is an exception, for us at least—others might want to come on other supply chains—due to the point I was making that our trade with Ireland tends to be lots of finished goods and composite products, which are incredibly complex and difficult to ship across any EU border. We know there has been range rationalisation, for example, so there has been increased sourcing from Ireland or the EU into Irish stores which are run by UK companies here. So that has definitely had an impact for us on the trade that we have had with Ireland in terms of the volume of products produced here in the UK and sent to Irish supermarkets.

Q226              Chair: What has happened to similar products, then, across the channel to the European continent? Are we seeing any decline in trade because of all the Brexit red tape that has been introduced?

Andrew Opie: A similar issue. Particularly with those complex composite products, if you can source them in the EU and you do not need to ship them over there, it is not a big issue. It is harder for some companies that trade on their Britishness, if that makes sense, in terms of the retail offer; it is much harder for them to move away from British sourcing because that is one of the issues behind their brand. But other companies will weigh up where their supply chain sits. You have got a choice, really; you face the bureaucracy and the potential delays and costs of going through export health certification, or you source more directly from countries and you do not face those problems. If you are operating in the EU continent you have a choice of 27 countries to pull on, all within the same system. It does not surprise me from a supermarket perspective because our trade, particularly with Ireland, does tend to be complex composite products.

Q227              Chair: Thank you. Can we turn now to Robert and James? What is your assessment of the likelihood of unintentional non-compliance once the new rules on imports are in place?

Robert Hardy: I will let James cover the SPS side of it. I think there is unintentional non-compliance today and it is hard to detect because there is no frontier process to have any kind of record of what came in. The likelihood of unintentional non-compliance next year is probably higher than it is today because there is a detection process. I am keeping away from SPS for a moment, but if a consignment comes into GB and is not declared today, tomorrow you would declare it and pretend nothing happened. After GVMS is put in place, you would have to make a particular type of declaration, when it is pretty obvious that you did not declare it at the right time. Whether that is seen as non-compliance is a matter for enforcement.

In terms of the SPS, the truck has only got on it what we tell you is on it. If somebody misses a document, with the greatest respect to the SPS controls, they have got one eye shut, because if somebody does not tell you that there is chicken on that truck, you do not know that there is chicken on that truck. That could happen. Would that be unintentional? Potentially, but certainly no more than today. If anything I think that it will be better than today because there are control mechanisms in there that do not exist today. As referred to the SPS, I will leave that to my learned colleague.

James Russell: Thanks, Robert. With regards to the SPS, I think we can just draw on what we knew happened this year in terms of export checks. On 1 January, we were seeing around 90% non-compliance in one way or another in terms of export certification. That ranged from the wrong document and no documentation at all, right through to the bits that Andrew alluded to of a green stamp and red ink rather than a red stamp and green ink. I think what we learnt very quickly was where we could find out which of those were just errors of interpretation—the red stamp and green ink, for example—and where there were problems with some of the forms not necessarily being intuitive as to which was the appropriate form to be using for different products. Also then, as a profession, we learnt very quickly where the errors were that were being made. There were people doing that for the first time as exporters, but also the importers were reading those documents for the first time. I think we can anticipate that happening again, to a certain extent. We can say that in terms of the red stamp and green ink issue, it is in our jurisdiction to decide how significantly we take that. We may argue that we will see less of those administrative non-compliances, I suppose.

I think the slightly greater challenge is to understand how we iron out any of the ongoing non-compliances. With the export work, I have already alluded to the initially daily and now weekly bird table meetings that allow us to interact directly with DEFRA, and for DEFRA to interact directly with the Commission, to explain to whichever port was still insisting that we needed to use a particular coloured pen, “No you do not, and the reason you do not is here—there is the legislation and this is how you need to apply it.” But if we are going to be then speaking to potentially 27 different European countries who are all applying their own ways of exporting into the UK, I think we need to understand what that channel of communication back is going to be to iron out those problems. I think we see them as overcome-able—if that is even a word and I am not mashing too hard—but we will need to work together to do so.

Q228              Chair: Thank you for that. Are we likely to see the UK continue to discriminate in favour of EU imports, even after the regime is phased in? That is probably for Robert to start with.

Robert Hardy: I think this is a really good question because the easy answer would be, “Yes, let’s just keep everything flowing nicely.”

Chair: Just because of the distance and the frequency of ferries and what have you.

Robert Hardy: Yes. I think the answer is what the UK needs to discriminate in favour of—I may say that is not true, because it is going to discount something else. The UK has to look at the type or the mode of transport and choose how to handle that mode of transport. For example, containers coming into Immingham could be handled completely differently to ro-ro traffic coming into Immingham. Ro-ro traffic coming into Dover with a ferry every 45 minutes needs to be handled a lot differently than containers coming from Shanghai that took six weeks to get here. The fact that the ro-ro traffic is more suited to the EU means that, indirectly, there may be more easement towards the EU traffic. I actually think the easement needs to be towards ro-ro traffic rather than a particular territory.

Chair: James, do you have anything to add?

James Russell: Just to reiterate how important biosecurity is to our ongoing international trade. At the moment we do not have a level playing field in terms of biosecurity checks. We recognise that there are weaknesses in terms of our biosecurity of imports and that is putting pressure on various areas of our production. While we continue to ask our farmers—our producers—to produce to the standards that we do, I think we have to be very wary that if we continue to provide that easement, it risks offshoring some of the lower welfare methods of production and carbon dioxide production, and importing disease. I think that is our concern: we would say, “We really need to make sure we do understand the biosecurity checks of goods coming in.”

Q229              Chair: I think from your answer that you have probably answered my next question, but are there any non-EU partners that should receive such favourable treatment? I am guessing Robert—

Robert Hardy: Anything with wheels.

Chair: I thought that that was what you would say.

Robert Hardy: So Switzerland and Turkey, for example.

Chair: Switzerland and Turkey, because it is a ro-ro approach to the boats and on containers.

Robert Hardy: Yes.

Chair: So that would be your yardstick. James, is there anything that you would say? Or are you just worried that we import disease full stop?

James Russell: I think we recognise that there is a fantastic opportunity to engage in discussions with all sorts of partners. New Zealand, again, would be the most obvious one, where animal health and welfare is at least equivalent across the two areas and exploring some ways of demonstrating both the equivalence and low risk to each other and enabling greater trade is absolutely fantastic. As I alluded to earlier, what that does to ongoing trade is the bit that I think we would need to understand a bit more.

Chair: Excellent. Thank you all very much for this morning. I think we have come to the end of our questions, unless anybody wants to raise anything else. We are very grateful to the four of you for taking the time to speak to us. We will call it quits then. There is probably much else we could delve into, but I think we have got enough to chew on for a while. So thank you all.