I thank all noble Lords for their contributions today and for giving up the time to meet me beforehand to share some of their thoughts about these SIs. I start by recognising the strength of feeling across the Committee today about the strength of the organic sector in the UK. This was touched upon by my noble friend Lady Byford, who noted that the sector is worth £2.2 billion. Our figures say £2.3 billion, but what is £100 million between friends? It is an incredibly important area of growth and we must make sure that it continues to be strong and a key sector in the future. She talked about the fact that many of these are smaller operators, often with five to 10 members of staff, if that, and they are a very important part of the UK organic regime. The control bodies certifying organic operators are on the ground and are in touch with these businesses. While they cannot coach these businesses, they can provide them with information—and that is precisely what they do. I reassure noble Lords that there are no expected costs relating to this SI for such producers.
I will come on to the minimal familiarisation slightly later, but really it is very small. Familiarisation is only for those involved in import and export; for the majority who are not involved in those areas, this SI will have no impact at all.
It is important to note that we envisage financial support for organic farmers. I look forward to working with my noble friend Lord Gardiner on the Agriculture Bill when it finally gets to your Lordships’ House; I am sure we will have some good debates on that one—but it is not with us just yet, so back to no-deal Defra SIs.
The noble Baroness, Lady Jones of Whitchurch, asked about the 21 months. I agree with her: I looked at it and wondered why on earth that particular date was chosen. It was chosen for a good reason. The current EU organic regulation is due to be replaced from 1 January 2021, so it was thought appropriate to
limit the recognition of these products to 31 December 2020 as those dates are commensurate. That date also happens to be the end of the implementation period, but this is a no-deal SI, and there would be no implementation period. Obviously I cannot give clarity as to what will happen thereafter; that will be up to any number of factors. However, we already have a very good idea of what those new regulations will be in 2021. Over the 21-month period, the Government will look at those regulations and aim to give the sector as much clarity as soon as we can. We recognise that farming cycles are much longer than those in other industries.
On regulations being developed in the light of future changes, the UK has always been a leader in this sector and it is our intention that we will continue to be so. We have an opportunity to be at the forefront of developments; if we do not have a deal with the European Union, we can work as an independent sovereign state and make sure that we pull others with us as we increase organic standards. We will of course work very closely with those in the industry—without them there is no organic sector at all—to ensure that future changes work for the UK and for consumers.
The noble Baronesses, Lady Jones and Lady Miller, mentioned tariffs. The noble Baroness, Lady Miller, is quite right: there was an announcement on tariffs at 7 am; I listened to it as I was driving. I have not had the opportunity to go into that in great detail. I suggest she look at what was announced today; it concerned tariffs across all sorts of industrial sectors. Organic products are subject to the same tariffs regime as conventional non-organic products. There has been a bit of movement on tariffs, and the Government have tried to reach a balance between making sure that consumers and businesses are protected and reducing tariffs as much as we can within that framework. It is, however, very important to remember that this is a temporary tariff; the tariffs announced today will apply only for a 12-month period, during which we will undertake a full review such that we can adjust the tariffs going forward. If there is no deal, we will be talking about tariffs for a very long time—which will be fun.
I turn now to the issue of uncertainty. The noble Baroness, Lady Jones, is absolutely right. Within the powers we have, we have managed to create as much certainty around imports as we possibly can by providing this 21-month period, during which time the system will stay at is.
It is obviously not within our gift to tell the European Union exactly what to do for our exports. However, for UK products to be exported to the EU, organic control bodies will need to be authorised by the EU. There is no definite length of time that it would take for this process to happen. The Government are already in technical conversations with the EU about making sure that it happens as quickly as possible, so we are working hard on that. If there is no deal, this will obviously come to the fore. We recognise the concerns of the NFU and the Soil Association.
I will investigate the expedited process further—it is not something about which I have information—but we recognise the concerns that this is a consequence of Brexit, not of the SI before us. I am sure all noble
Lords would agree that, in this case, it would be very good if we could get a deal to make sure that our exports continued in the smooth fashion that they would expect. However, the EU has equivalency arrangements with a number of non-EU countries. The UK is aiming to transition those over to mirror the current arrangements. Because our organic standards will be as high as the EU’s, we believe that it will be possible to transition them to improve the flow of exports to those nations.
I turn to the topic of choices; may I point out first that it is TRACES NT, not TRACES? TRACES NT is new technology for controlling the import of organic food and feed; TRACES is for controlling the import and export of live animals, so for the record they are different systems. Regarding assurances on the manual and subsequent digital import system which replaces TRACES NT, work has been carried out to establish the needs of all users for its electronic replacement. The interim manual system largely mirrors the system that was in place just 17 months—a year and a half—ago. Users who could use that manual system will be familiar with how this works, and we have carried out a trial to make sure that they are still able to use it. We have also refined the guidance for all users. We will communicate with and issue further guidance for the sector, including third parties involved in using this system.
Organic products en route from third countries or in transit to the UK before the UK leaves the EU will be accepted with an EU certificate of inspection. Products that leave a third country after the UK has left the EU will be required to have a UK certificate of inspection, rather than an EU one. Instructions on the introduction and use of the UK certificate will be issued shortly. This brings me to the point about minimal familiarisation, as mentioned by the noble Baroness. That process should be within recent institutional memory for many of the organisations that will need to use it.
An issue raised by the noble Baroness, Lady Miller, and I think by the noble Baroness, Lady Jones, was about the UK taking power to accept applications from third-country control bodies and to permit them to operate in the UK. They asked who would oversee these control bodies. The Commission currently has the power to recognise third countries as equivalent to the EU, and to recognise control bodies as able to operate in third countries for the purposes of the input of organic products to the EU. This power will of course be transferred to the Secretary of State. Officials are in the process of considering how they will process and consider any such application but, before the UK accepts any application from third countries or control bodies, rigorous checks will be carried out to ensure that the current high organic standards in the UK are maintained.
Concerning the additional resource challenges, the UK is taking back control of organic regulations and the powers currently held by the EU. UK organic control bodies should continue doing what they do to a world-class level. The Government are working closely with the organic control bodies to ensure that any additional burden that falls on the organic sector is properly managed so that there is no fall in standards or public confidence as a result.
Turning to some final questions, what are the consequences of downgrading the references from “shall” to “may”? When EU Regulation (EC) No. 834/ 2007 was originally drafted, a number of references referred to the Commission needing to create specific rules. These were subsequently laid down in implementing EU Regulation (EC) No. 889/2008 and EU Regulation (EC) No. 1235/2008. Therefore, there is no longer a need for the UK SI to require rules to be made in respect of these matters—they have already been made. However, these instruments retain the power for further detailed rules to be made if necessary. I might write on that one. I do have an example here, but I think it would be more helpful if I put that in a letter, so that all noble Lords can understand the difference between “shall” and “may” in that circumstance.
I wish to assure the noble Baroness, Lady Jones, about the consultation. Concerns were raised about many issues, but it was the view of the group that there were not significant concerns about this SI. The biggest concern obviously is to maintain frictionless trade with the EU and we will do everything we can to address that.
Finally, there was a question about the grace period. Labelling is not covered in this SI, so I do not have anything further on that. However, I assure the noble Baroness that organic products that are already on the market in the EU before 30 March will be able to be sold and go through the system, but any exported after 29 March will not be able to be sold as organic until we have other arrangements in place.