Horticultural Trades Association – Written Evidence (TIG0009)
1.1 The Horticultural Trades Association (HTA) is the representative body for the UK gardening and horticulture industry, representing garden retailers, plant and tree growers, domestic landscapers and manufacturers of garden products.
1.2 We welcome the opportunity to provide written evidence to the Committee on the trade in goods. have been one of the first products to implement full import inspections and fees, ahead of other similar products such as cut flowers and fruit and vegetables.
1.3 The industry is worth over £28bn to GDP, supports around 674,000 jobs and generates £6.3bn in tax revenues. It could be worth over £42bn with collaboration from the Government to help unlock policy barriers, such as the current trade restrictions we’re facing.[i]
1.4 It is a sector that makes a significant contribution to our environment, supplying the plants and trees that play a crucial role in tackling climate change and carbon reduction and aiding people’s mental health and wellbeing. The horticultural industry underpins almost half of the goals set out in the Government’s 25-year environment plan. 30m people currently garden, making it the country’s biggest hobby.[ii]
1.5 In the UK we produce some of the finest varieties and species of plants and trees in the world – such as the classics like oak trees and roses amongst many others. We want to increase UK production, currently worth £1.6bn, to make us more resilient as a nation, but we rely on imports for those plants and plant material. Importing of plants, trees and bulbs is worth over £510m to the UK horticultural sector and is a crucial part of the plant and tree supply chain.[iii] In the calendar year to the end of August 2021 97% of the total value of imports came from the EU with Rest of World (RoW) imports making up just 3%.[iv] 96% of British plant and tree growers rely on importing. Much of what we import is because our climate isn’t suited to producing here in the UK.[v]
1.6 Exporting plants, trees and bulbs to the European Union (EU) amounts to £80m.[vi] We want to substantially increase this to be part of the Government’s ‘green trade’ agenda and benefit from Brexit.
1. What have been the overall consequences to date of the implementation of the Trade and Cooperation Agreement and the end of the transition period for GB-EU trade in goods, in the UK’s first year outside the Single Market and Customs Union?
3.1 The TCA has contained a number of clauses relating to Sanitary and Phytosanitary (SPS) measures which have placed unnecessary restrictions on the trade in plants, trees and seeds.
3.2 Chapter 3 of the TCA includes aims to protect plant health, requires that the exporting Party’s products meet the SPS requirements of the importing Party and that the Party’s may impose charges or recover costs only where specific services are rendered, while ensuring that these measures are proportionate to the risks identified and not more trade restrictive than necessary to achieve the importing Party's appropriate level of protection.[x]
3.3 The HTA believe that, in the absence of an agreement with the EU for plant health, the restrictions and prohibitions placed by the EU on export of plants and plant products from GB are disproportionate and not technically justified under World Trade Organisation (WTO) rules as the EU have not carried out their due diligence on the level of risk posed. The UK have exempted the EU from the prohibitions for the same plants and plant products, and action that was not reciprocated.
3.4 Under the TCA the Government have introduced a new trading system for the importing of plants, trees and seeds. Last year, when the Border Operating Model was first published, plants were placed under the same category as weapons of mass destruction, torture equipment, explosives and arms, when they were included in the list of controlled goods by the UK Government for inspections by the 1 January 2021. Although the classification was removed following representations by the HTA, the disproportionate requirements for pre-notification and import inspections remain, and have been introduced well ahead of the same requirements for other similar products such as cut flowers and fruit and veg.
3.5 It is worth noting that the importation of plant material, from both the EU and outside of the EU, underpins the UK production industry. While there is significant ambition to increase production of plants in Great Britain, the industry will be reliant on the raw materials being imported to fulfil that ambition.
3.6 The extra layers of paperwork and red tape that have been introduced have been significant. To buy and sell plants from the EU into Great Britain it now takes a business 60 steps to get that plant across the border, when previously it was 27. These include such steps as a UK customer placing an order, generation of customs paperwork, entering transport details, arranging plant health inspections, making pre-notifications, lodging shipping information, filing plant health certificates, loading lorries, entering vehicle movement records onto Government systems and unloading the lorry for inspection when it gets to the UK.[xi] We believe this doesn’t add commensurate extra biosecurity to the system.
3.7 In advance of BCPs becoming operational the horticultural sector has had to register as Places of Destination (PODs). Inspections for plants and trees were introduced in January 2021 and take place at PODs. Fees for these inspections were suspended for EU imports for the first 6 months of 2021 and were introduced in June 2021. Businesses have felt the effects of those inspections operationally and the costs involved.
3.8 The industry has also had to introduce the Procedure for Electronic Application for Certificates from the Horticultural Marketing Inspectorate (PEACH) IT system for pre-notification of imports from the EU, which added extra costs and administrative burdens on businesses, particularly smaller businesses. The PEACH system is an aging system but was only used for importing plants and produce from the RoW and was done by a small number of businesses. However, 96% of British growers import, the vast majority comes from the EU, which means that those businesses now have to implement and use PEACH.
3.9 In the calendar year to end August 2021, 97% of import value came from the EU with just 3% coming from RoW. Of those EU imports, majority of the value imported came from the Netherlands (70%). Other countries included Belgium (9% of import value), Germany (7% of import value), Italy (5% of import value). Other countries such as Denmark, Ireland, France and Portugal made up around 2% of the value imported.[xii]
3.10 This has added significant costs and administrative burdens to businesses, particularly around people time. In some cases, businesses have had to create extra positions to deal with the administration, while others have had to re-purpose staff. This is making the industry less competitive and less efficient.
3.11 Import inspections alone are estimated to cost members £3.8m annually and labour costs would amount to £3.15million annually. The total of these two elements alone total £6.95 million to HTA members over a full year.[xiii]
3.12 The Import of products, animals, food and feed system (IPAFFS) IT system, which is being built by the Government, is being designed to replace the outdated PEACH system. However, the introduction of IPAFFS has already been delayed three times already following representation by the HTA as it is not yet fit for purpose for use by the industry. It was initially due to be introduced in January 2021. These delays cause significant uncertainty for our industry.
3.13 The HTA believes that the current level of red tape and bureaucracy is not necessary to meet the UK’s preferred level of SPS standards, and the technology that is being developed will not keep pace with future requirements for plant imports and exports, thereby curtailing the ability of the industry to grow.
a. What have been the key challenges of existing border controls for GB-EU trade in goods so far? To what extent have these challenges improved or worsened over the course of 2021, and how might they be mitigated further?
4.1 The result of the new SPS measures introduced under the TCA have added a cost to the trade in plants of between £25m-£30m with small businesses bearing the brunt. HTA research has shown that 78% of businesses claim a negative impact due to excessive import restrictions imposed by the UK Government after Brexit. The new trading arrangements are limiting product ranges and hitting customers’ pockets, adding over a pound to a £9.99 plant simply to cover admin.[xiv]
4.2 The situation is expected to get worse too with members reporting to the HTA that their Dutch suppliers, the world’s leading horticultural nation, are privately informing them that they are considering withdrawing from the UK market as they can no longer continue to trade in such restrictive circumstances.
4.3 The recent report by Oxford Economics/Foresight Factory illustrates that without Government collaboration on resolving the issues around importing and exporting, as well as other areas such as seasonal labour shortages, the UK plant production sector could contract by almost £100m by 2030. This not only means a total potential loss of £900m to the UK economy by 2030 but also a significant reduction in our nation’s capacity to produce the plants and trees needed to tackle climate change.[xv]
4.4 We believe that the current situation can be mitigated by:
2. Do you agree with the Government’s decision to delay further the introduction of certain checks and controls on imports of EU goods into GB? What are the advantages and disadvantages of this decision?
a. In your view, what were the key factors underpinning the decision to delay the introduction of import controls?
5.1 The HTA welcomes the decision to delay the introduction of checks at the border for plants until 1 July 2022.We believe that it was the right decision by Government as most BCPs were still not, ready to receive goods for checks. Businesses have not had adequate time to plan and there remains many unanswered questions for businesses when trying to forecast the cost and volume of trade for 2022.
5.2 The delay also gives the opportunity for technology and IT system to ‘catch up’ with the requirements of trade, although initial signs of success in this department are not encouraging. The import prenotification system, IPAFFS is still not released for wider industry testing, with news it will now not be available until end of January 2022, a year after it was due to be introduced. Also, key modules in that system that are of the highest important to the plant trade are yet to be robustly tested.
5.3 There has been no information released to date of how IT systems have been future proofed to enhance and compliment the Government’s 2025 Future Borders strategy. Nor is it clear how IPAFFS interreacts with Customs systems or with the Animal and Plant Health Agencies system for plant health inspections. The Government’s actions over the past year have been a series of last-minute changes and tactical solutions. Ornamental horticulture is one of very few sectors to have been working within restrictive conditions and there has been little recognition from government of the immense burden this has placed upon horticultural businesses.
3. What are the implications of continued ‘asymmetry’ between GB and EU border controls, for example on the competitiveness of GB businesses, on border security, and on customs revenue? Are these asymmetric arrangements sustainable?
6.1 The HTA believe that, in the absence of an agreement with the EU for plant health, the restrictions and prohibitions placed by the EU on export of plants and plant products from GB are disproportionate and not technically justified under WTO rules as the EU have not carried out their due diligence on the level of risk posed. The UK have exempted the EU from the prohibitions for the same plants and plant products, and action that was not reciprocated by the EU.
6.2 This disparity between the 2 regimes has resulted in asymmetry in the plant trade, restricting the ability of GB to export, while allowing EU-GB trade to continue – albeit in a complex, costly and burdensome manner.
a. What, if any, are the legal implications of delaying the introduction of import controls with respect to the UK’s international obligations, both under the TCA and as a member of the World Trade Organisation?
7.1 The HTA is not in a position to answer this question.
b. Have the UK authorities applied existing checks and controls consistently to imports from different EU Member States?
8.1 The HTA is not in a position to answer this question.
c. To what extent are businesses, ports, hauliers, the customs intermediary sector and other relevant groups ready for the introduction of full customs controls, and the expiry of other relevant grace periods, from 1 January 2022, and for additional SPS controls from 1 July 2022? Are there any particular challenges or concerns ahead of these deadlines? How do current levels of preparedness compare to previous preparedness for the end of the transition period on 31 December 2020?
9.1 There are a number of concerns that our members have ahead of the transition to using BCPs in July 2022. Issues around liability for goods which are damaged or rendered useless before, during and after the inspection process need clarification and attention. We have already met the operators of BCPs, but we remain concerned about their preparedness to handle the significant volume of plants and trees that are imported, as well as whether facilities will be available for ensuring that these perishable goods won’t be significantly delayed at the border. Plants that need to be temperature controlled, such as house plants and tropical plants, also need particular attention during the inspection process and we are yet to gain assurance that they will be treated with the required sensitivity.
9.2 Key to the success of border controls at BCPs is the publication of port fees. Currently our industry is trying to plan expected cost and admin increases for 2022, but without the knowledge of the level and methodology of charging of fees by commercial port operators, who are yet to release these fees, it is impossible to forecast costs. Plants are a product group that attract a very high level of inspections at BCPs, so this sector is likely to be hard hit by port fees. Government could help this process by releasing fees for Government owned and controlled facilities, such as at Sevington BCP, in order to at least start to give clarity.
9.3 In addition, the delay until 1 July 2022 should be used to ensure the correct systems are in place so that importers can access up to the minute real time transit data as consignments cross the border. Particularly important are in transit-systems for hauliers, for example on ferries, so that drivers can see at a glance if their consignment has been selected for a check rather than relying on complex communication chains where there is much room for error and miscommunication.
9.4 The whole issue of preparedness is difficult to ascertain. Without doubt, neither industry nor Government were properly prepared for 1 January 2021. This is borne out by the amount and frequency of interim support measures, last minute changes in policy (e.g. implementing a Place of Destination system for plant health import inspections) and moves in deadline dates.
4. Ahead of these changes, what is your assessment of the quality of existing Government communications, guidance, advice, funding and support for traders and ports? If there are any shortcomings, how should these be addressed?
10.1 We have consistently raised with Government the issues faced by importers of plants and trees with Government. While the engagement has been welcomed and there has been some limited understanding from Government of the position of the industry - such as an ongoing conversation on a review of inspection fees and the delay in the implementation of the IPAFFS IT system - the Government have consistently failed to act with urgency on resolving these issues, despite the HTA having raised them with the Government since June 2020.
a. Having made the decision to delay the introduction of certain checks, how should the Government best use this extra time?
11.1 As set out in our answer to question 1a., in the short term the Government should:
b. Do you have confidence that the Government’s revised timetable for the introduction of checks will be delivered on time?
12.1 The Government and BCP operators themselves are best placed to answer this question but we hope that the extra time will provide them with the opportunity to make them operational as they were highly unlikely to have been ready by October.
12.2 However, a high level of consternation is felt amongst the horticultural sector. The impression at this moment (October 2021) is that processes, facilities and systems will not be ready in time for 1 July and businesses will face extra burdens in an already anti-business trade climate.
5. Is disruption to trade flows or supply chains expected from the implementation of additional checks and controls from January and July 2022? If so, what form might any disruption take, and can it be mitigated by Government action?
13.1 We are concerned that the introduction of BCPs will place extra pressure on the plant supply 12.4 chain which is already under significant pressure, as set out in our answer to question 3c.
13.2 The horticultural sector has already experienced significant disruption after checks and controls for plants were introduced on 1 January 2021. Supply lines have significantly altered with consolidation of products becoming the norm on the EU side, in order to save costs and ease required certification and pre-notification requirements. However, another step change in checks, controls and new systems will only mean further disruption.
6. What, if any, is the relationship between the timetable for the introduction of new checks and controls and the current challenges facing supply chains due to labour shortages?
14.1 The relationship between the issues currently being experienced with the importing of plants and the labour shortages within the industry are linked.
14.2 Seasonal workers make up around one third of the total ornamental horticulture workforce numbers (currently c6,000 full time equivalents). A recent HTA Wages and Benchmarking Survey found that 68% of members reported shortages in labour recruitment, resulting in UK plant and tree growers being short of 1,200 full time equivalents (FTEs) annually.
14.3 We are calling for the Seasonal Workers Pilot (SWP) to continue in the short term and be extended to include the ornamental horticulture sector. Extending the length of time visas are valid – from 6 to 9 months - will help deliver this.
14.4 While the industry is doing all it can to increase the number of domestic labour significant barriers exist, such as access to sufficient numbers of workers in rural areas and barriers for small businesses to automation.
14.5 If the Government wants to see our domestic growing industry expand to reduce the number of imports, then it needs to properly support this ambition with a properly thought through plan on how to ensure that the industry has the skills and labour to meet this growth.
7. How would you assess the checks and controls that GB exports to the EU have faced since January 2021, such as Sanitary and Phytosanitary requirements, customs formalities, Rules of Origin, and VAT?
15.1 Increased costs and restrictions on the UK horticulture industry to export to the EU have led to a marked drop in the value of trade in the first six months of the year, demonstrating a missed opportunity for the sector to grow its contribution to UK ‘green trade’.
15.2 Research conducted by the HTA shows that exports of live plants and plant materials from the UK to the EU between January and June this year were valued at £9.7m, compared with £16m in the same period of 2019 – a decrease of 39%. Rest of the world sales have remained broadly static.
15.3 First-hand experiences of HTA members tell a story of businesses frustrated by problems transporting their plants, combined with the additional costs and complexity of inspections and necessary paperwork. These factors combined mean that it simply isn’t viable for many to trade with customers on the continent.
15.4 Millais Nurseries who had previously exported 5-10% of their production had redesigned their website prior to the 1 January 2021 to enable them to capitalise on this export market and grow that area of their business by 20%. However, the disproportionate inspection and freight charges now mean there is no point in attempting to send small orders to Europe because the costs make exports unviable.
15.5 To send even the smallest packet of sunflower seeds to customers in the EU, businesses now have to obtain a phytosanitary certificate to send them abroad. This costs a minimum of £50 to obtain a certificate, plus all the other costs of export, means that a £2 packet of seeds costs over £100 to send.
15.6 As this is not commercially viable, many companies have either stopped exporting small quantities, or send them over in bulk to the EU and then adding a distribution centre into the supply chain to handle getting the product direct to the customer. Although this adds cost to the individual item, it’s cheaper than sending it direct from GB.
a. What has been the impact of these checks and controls on British traders and hauliers?
16.1 Seiont Nurseries, located in North Wales, grow young plants including exports into the EU. In order to maintain their Irish market, they have been forced commercially to send their plants via Harwich on the east coast of England to then go to Rotterdam and from there on to the Republic of Ireland. They do this because there are no transport companies willing or able to take their plants straight to the Republic of Ireland. Previously plants went from their nursery direct to Holyhead port – 15 miles away - then straight into Ireland.
b. Have these controls on GB exports been applied fairly, proportionately and consistently across EU Member States?
17.1 HTA believe that the restrictions and prohibitions placed by the EU on export of from GB are disproportionate and not technically justified under WTO rules as the EU have not carried out their due diligence on the level of risk posed. The UK have exempted the EU from the prohibitions for the same plants and plant products, a that action that was not reciprocated. The list of plant species that are prohibited for export to the EU include oak trees, honeysuckle, apple trees, jasmine, cherry trees and acers (maples).
8. Are there any other concerns or issues relating to GB-EU goods trade, either to date or in the future, which you would like to highlight?
18.1 The HTA has no further comments.
HTA analysis of the current and previous plant health trading regimes for the import of plants from the EU.
PROCESS TO EXPORT PLANTS FROM THE EU & IMPORT NTO GB, post 1/1/2021
Orange fill indicates a new step post 1/1/2021
Organising products for PC inclusion
Product Information ERP RL right
Issue UK PP
Create Price list lines
Create Sales order
Receive shipment number
NPPO application -24h Phyto
Quality inspection (Internal)
Intermediate controls QC (internal)
Refresh of products for PC
Control of PC with Invoice
Inspection for PC by NPPO
Scan of PC
Prepare export document
Receiving MRN number
Final Transport planning
Information port of departure and arrival
Prepare collective invoice
Generate XML for UK Broker
Send Information to UK Broker
Pre launch PEACH application (-24H)
Pre launch Customs entry (-24h)
Send CHIEF entry number
Fill internal transport system
Printing packing slip
Printing Transport stickers
Printing export document
Bundling physical documents
Hand over Documents to driver
Notification Export Documentation
Scanning barcode export document
Arrival of transport at Stena terminal
Message from Portbase
Report departure of ferry to Customs
Information on control by APHA
Broker receives Unique Consignment Number
Oral declaration for trolleys
Broker (manually) update CHIEF
Control by UK Customs
Unloading at depot
Control by APHA at PoD
File Physical Phyto in administration
Stena creates and sends Export manifest in Portbase containing the export document
Customs systems to Create confirmation of exit.
29 October 2021
[i] Oxford Economics and Foresight Factory, ‘Growing a Green Economy: The importance of ornamental horticulture and landscaping to the UK’, Ornamental Horticulture Roundtable Group, September 2021. https://hta.org.uk/uploads/assets/a4e1bad2-866b-4623-aa33ef712689d52a/Industry-growth-report-OHRG.pdf
[iii] Horticulture statistics – 2020, Defra, https://www.gov.uk/government/statistics/latest-horticulture-statistics
[iv] HMRC Overseas trade statistics, Harmonised System Commodity Codes 0601 and 0602.
[v] HTA analysis based on a range of sources. June 2021. Data used for the estimate includes estimates of increased costs from retail and grower businesses extrapolated to the whole market, modelling of per-consignment costs on plant trading crossing the UK-EU border such as phytosanitary certificates, historical plant import values and anticipated price increase data from a HTA member survey of horticulture businesses.
[vi] Horticulture statistics – 2020, Defra.
[vii] HTA analysis based on a range of sources. June 2021.
[viii] HTA analysis of the current and previous plant health trading regimes. 2021. See Appendix 1.
[ix] HMRC Overseas trade statistics, Harmonised System Commodity Codes 0601 and 0602.
[x] Trade and Cooperation Agreement between the United Kingdom of Great Britain and Northern Ireland, of the one part, and the European Union and the European Atomic Energy Community, of the other part. 30th December 2020.
[xi] HTA analysis of the current and previous plant health trading regimes. 2021.
[xii] HMRC Overseas trade statistics, Harmonised System Commodity Codes 0601 and 0602.
[xiii] HTA analysis from a range of data sources. June 2021.
[xv] Oxford Economics and Foresight Factory, ‘Growing a Green Economy: The importance of ornamental horticulture and landscaping to the UK’, Ornamental Horticulture Roundtable Group, September 2021.