1.The Committee has asked the Department for Environment, Food and Rural Affairs for a memorandum on the following points in relation to the above SIs:
Summarise the objections made to the proposed fee increases in the consultation responses referred to in paragraph 8 of the Explanatory Memorandum and, in particular – (a) identify whether any consultees asserted that the new fees are above reasonable cost recovery rates; and (b) explain whether the new fees include a significant element of cross-subsidisation and, if so, identify the vires for that.
2.The proposals outlined in the consultation on changes to fees for statutory plant health services provided by the Animal and Plant Health Agency in England and Wales stemmed from a fundamental review of the methodology for calculating the cost of providing these services and the associated fee structures, which the Department initiated in 2015. The review was in response to, and supported by stakeholders on the government-business taskforces for these services. Set up in 2012, the purpose of these taskforces is to help the Department develop more efficient plant health services with simple and transparent charges.
3.The review’s aims were to:
4.With regard to the changes to the fee structures covered by the Plant Health (Export Certification) (England) (Amendment) Order 2018 (S.I. 2018/286), there was a negative response overall to the proposals outlined in the consultation. That response was not unexpected, given the proposed increase in fees was to correct a significant under-recovery of the costs of providing export certification services.
5.Several exporters questioned the timing of the fee changes, given the current uncertainties around the UK’s exit from the EU and what they saw as the inconsistency of increasing fees and costs to exporters at the same time as encouraging UK exports. The Department decided to press ahead with implementation so that it could fix the under-recovery of costs – any delay in moving to full-cost recovery for these services would require funding to be found from other plant health activities to bridge the gap, with negative implications for the publicly- funded work on surveillance and eradication.
6.Respondents were also critical of the proposal for a new fee for the laboratory testing of export samples, particularly consignments of seeds, where the testing requirements specified by the importing country are more stringent than for routine export-related laboratory testing. Whilst the Department intends charging for this bespoke seed testing in the future, it concluded that it needs to do further work on how the fees are structured and so implementation of those fees has been postponed until we have better data on costs from 2017/18.
7.The new fees are set to recover the eligible costs of providing export certification services, which is consistent with the principles in the Treasury’s Managing Public Money. No consultees asserted that the new fees are above reasonable cost recovery rates. The new fees do not include a significant element of cross-subsidisation.
8.The Plant Health etc. (Fees) (England) Regulations 2018 (S.I. 2018/289) prescribes fees for the following statutory services:
There was a very limited response to the consultation from businesses using import inspection services. The main trade body, which represents 900 large-scale importers, supported the changes. Another trade body, which represents mainly small or micro businesses felt that fees should take account of risk factors associated with larger, high-risk consignments. Although the Department has no wish to adversely affect such trade, from a biosecurity perspective the risk of introducing harmful organisms is not mitigated by the size of the business or the volume of material imported. The type of commodity imported and its origin are the key risk factors.
9.On seed potato certification, the limited responses the Department received were generally negative, particularly around the proposed fees for dealing with paper-based applications and for the issue of labels. The Department did not expect this negative response as the October 2016 meeting of the Industry Taskforce was largely supportive of the proposals and this sector had been supportive of simplifying the fees. The Department decided to proceed as proposed in the consultation, including with regard to the proposed charges for labels and paper-based applications, as the new fees are more aligned with the costs of the services provided to individual customers. A couple of respondents said they preferred the charging arrangements in place in Scotland but fees there are not set to recover full-cost and label charges are in fact cheaper in England for bulk consignments.
10.On plant passporting services, there was a negative response overall, which was not unexpected, given the proposed increase in fees to correct the previous significant under-recovery of the costs of providing plant passporting services over many years. Similar comments to those made by some exporters around the timing of the fee changes given the current uncertainties around the UK’s exit from the EU were also made by some businesses using plant passporting services.
11.The remaining three services had very few responses, which were either supportive or uncontroversial.
12.The new fees are set to recover the eligible costs of providing export certification services which is consistent with the principles in the Treasury’s Managing Public Money. No consultees asserted that the new fees are above reasonable cost recovery rates. The new fees do not include a significant element of cross-subsidisation.
Department for Environment, Food and Rural Affairs
24 April 2018
Published: 4 May 2018