Twenty Second Report
Instruments drawn to the special attention of the House:
Private Storage Aid for Pigmeat (England) Regulations 2021
Date Laid: 15 November 2021
Parliamentary procedure: Negative
This instrument establishes a temporary Private Storage Aid (PSA) scheme in England to enable meat processors to store slaughtered pigs for up to six months, so that they can be processed later. This is part of a package of measures to support the pig industry in response to ongoing market disruption, caused by a combination of factors, including a shortage of butchers and a loss of export markets in China due to the pandemic. The new PSA scheme aims to reduce the number of pigs that are held back on farms due to reduced processing capacity and that may have to be culled. The Department for Environment, Food and Rural Affairs estimates that up to 14,000 pigs may have been culled on farms to date because of the shortage of workers in slaughterhouses, leading to concerns about animal welfare.
1.The instrument is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.
2.These Regulations have been laid by the Department for Environment, Food and Rural Affairs (Defra) with an Explanatory Memorandum (EM). The instrument establishes a temporary Private Storage Aid (PSA) scheme in England to enable meat processors to store slaughtered pigs for up to six months, so that they can be preserved and processed later. This is part of a package of measures to support the pig industry in response to ongoing market disruption.
Context
3.Defra says that an increasing number of pigs are being held back on farms due to reduced processing capacity, as a result of a combination of factors, including the impact of the pandemic, which has particularly disrupted exports of pork to China following the de-listing of three UK pork processing plants, an interruption of CO2 supplies and a temporary shortage of labour, specifically skilled butchers in pig processing plants.
4.This backlog is expected to grow without intervention. This instrument aims to reduce the number of pigs which may have to be culled, thereby avoiding animal welfare issues and loss of income for farmers. (Pigs culled on farm are not allowed to enter the food chain and farmers would not be compensated for culling.) Defra told us that while it does not collect data on the number of pigs culled on farms, based on its engagement with the sector, it estimates that “as of 22 November, between 9,000 and 14,000 pigs may have been culled on farms as a result of the shortage of workers in slaughterhouses”.
5.The Government announced a package of measures on 14 October 2021 to support the pig industry during the ongoing market disruption.1 The package includes the PSA scheme taken forward by this instrument, as well as a scheme to provide 800 temporary visas for overseas butchers to work in the UK for up to six months.2 The visa scheme opened to applications on 1 November and is in addition to the Skilled Work Route under which foreign butchers have been eligible to apply to come to the UK since January 2021 as part of the points-based immigration system. Asked about the number of temporary visas issued to date, the Department told us that it was unable to provide a figure but that “the response from industry to date has been positive”. The support package also includes a Slaughter Incentive Payment Scheme (SIPS)3 to encourage increased throughput of pigs from farm through to slaughter and processing. In addition, Defra says that the Government and the Agriculture and Horticulture Development Board (AHDB) are working to identify new export markets for pork, particularly lightly processed pork.
6.Defra made a declaration of exceptional market conditions in the pigmeat sector under section 20 of the Agriculture Act 2020 on 11 November 2021, justifying the provision of financial assistance through the PSA scheme.4
How the new PSA scheme will work
7.The PSA scheme will contribute to the cost of storing pig meat, with the aim of encouraging processors to increase throughput, by providing storage as an option if there is no immediate market outlet. Applications under the PSA scheme may be made in the period 16 November 2021 to 22 February 2022 and payments will be made to operators when the pigmeat is removed from storage.
8.The instrument sets out specific parameters for the administration of the new scheme, including in relation to the eligibility of products (certain minimally butchered and de-boned pork products) and operators (operators must be established and registered for VAT purposes in the UK), the minimum contract size, the rate of aid for payments and the storage periods (between 60 and 180 days). Defra is confident that there is sufficient cold storage capacity to accommodate this scheme during the period it will operate. The new PSA scheme will apply to England only. Scotland launched a similar scheme on 9 November.5
Longer-term
9.As the PSA scheme will close in February 2022, we asked the Department about its longer-term plans to deal with the shortages of butchers. Defra responded that:
“For the longer term, Defra is working closely with the pork industry to support efforts on the recruitment and retention of domestic workers for the processing sector.
The Government expects the pork processing industry to provide better training offers, career options and wage increases, in order to ensure that the sector draws on the large domestic labour pool in the UK. The Government is also encouraging investment in automation technology.
To support these efforts, Defra is working with industry and the Department for Work and Pensions (DWP) to raise awareness of career opportunities within the food and farming sectors among UK workers. All food and farming businesses are encouraged to advertise roles through the Find A Job website, where they can upload and manage their vacancies. DWP does not charge for this service, and it is available across the United Kingdom.
The Government expects to commission the Migration Advisory Committee (MAC) to review the Shortage Occupation List again in 2022. The Home Office will set out the exact timing in due course. The MAC will issue a public call for evidence when they carry out their review, and we encourage interested stakeholders to respond.”
Impact
10.The EM states that there will be no impact on the public sector. We asked the Department how much financial support it expects to pay through the PSA scheme. Defra told us that:
“We have estimated that the scheme will cost a maximum of £2.1 million if just the 60 day-storage period is utilised and £4.1 million if only the 180-day storage period is utilised. The likelihood is that storage periods will vary between these two periods and that the total expenditure under the scheme will be somewhere between these figures.”
11.The estimates provided by the Department put the new PSA scheme into a helpful financial context. We would have expected to see this type of information in the EM. The Department should ensure that when future instruments have financial implications, the relevant EM provides at least some basic financial information to assist Parliament in its understanding and scrutiny of the instrument.
1 Department for Transport, ‘Government set to bolster supply chains by extending cabotage rights’ (14 October 2021): https://www.gov.uk/government/news/government-set-to-bolster-supply-chains-by-extending-cabotage-rights [accessed 26 November 2021].
2 Home Office, Statement of Changes in Immigration Rules (1 November 2021): https://www.gov.uk/government/publications/statement-of-changes-to-the-immigration-rules-hc-803-1-november-2021 [accessed 26 November 2021].
3 Rural Payments Agency, ‘Slaughter Incentive Payment Scheme (SIPS)’, (15 November 2021): https://www.gov.uk/guidance/slaughter-incentive-payment-scheme-sips [accessed 26 November 2021].
4 Defra, Declaration under the Agriculture Act 2020: exceptional market conditions in the pigmeat sector (11 November 2021): https://www.gov.uk/government/publications/pigmeat-declaration-relating-to-exceptional-market-conditions-in-the-pigmeat-sector/declaration-under-the-agriculture-act-2020-exceptional-market-conditions-in-the-pigmeat-sector [accessed 26 November 2021].
5 Scottish Government, Private Storage Aid Scheme (9 November 2021): https://www.ruralpayments.org/topics/all-schemes/private-storage-aid-scheme/ [accessed 25 November 2021].