Crunch talks are being held between the Food Standards Agency and government this week as it seeks financial support for its work to implement the huge overhaul in regulation required by the EU reset.
The food safety watchdog yesterday said it was yet to see any additional funding pledges for its work to enact the new sanitary and phytosanitary (SPS) deal currently being negotiated with the EU – despite warnings, first reported by The Grocer in December, that it faced a looming funding crisis.
This week’s talks will see FSA bosses again argue the case that without the necessary financial backing, the major changes to food and animal welfare checks at the border, coupled with the wider overhaul to regulation, could descend into chaos.
The row over funding comes despite Defra calling earlier this month for business to “start getting ready now” for the new SPS deal, which is expected will come into force by mid-2027.
FSA CEO Katie Pettifer told the FSA board meeting in Weymouth this week that businesses were still facing great uncertainty over the changes, warning “there is going to be a very uncomfortable period where businesses will want to know more, and we won’t have the answers”.
The regulator’s chief scientific officer Ian Young added that securing funding for the FSA to carry out the required preparation was vital.
“We’ve got a compelling business case,” he said. “The team is in active conversations.”
Read more: EU reset deal: why the ‘SPS agreement’ needs a rebrand
FSA chairman Susan Jebb added additional funding was critical ahead of preparations for a transition to EU rules by October 2027, including addressing widespread ignorance among many smaller businesses about what the SPS agreement would entail.
She said many SMEs had no idea of the implications of ‘dynamic alignment’ with the EU under the proposals, echoing concerns to The Grocer from BRC director of food and sustainability Andrew Opie last week, that industry could “struggle to implement what’s needed to meet the [2027] deadline”.
Those fears have also been shared by the likes of the NFU and Food & Drink Federation, whose CEO Karen Betts this week told The Grocer that the changes required – after half a decade of regulatory divergence – were “even greater than when we came out of the EU”.
“It may look and smell like a trade agreement, but it actually isn’t – it’s a significant change to UK law and it will impact everyone in one way or another,” she argued, while questioning government claims the deal could lower food prices, at least in the short term.
“It will take some costs and friction out of the system. But in the immediate term, it’s going to require investment in terms of time and systems change.”
However, Jebb said the UK should not lose sight of the huge benefits of the SPS agreement, calling it a “tremendous opportunity for the UK” to recover from the damage caused by Brexit.
‘Opportunity to rebuild exports’
“The opportunity for us to rebuild exports to the EU, which have declined since Brexit, is one of the big opportunities in this,” said Jebb. “Let’s not lose sight of the reason for doing this.”
It comes as the Fresh Produce Consortium has hit out at the government’s work to prepare the food sector for the new SPS agreement, with CEO Nigel Jenney, again this week, taking aim at comments by Defra minister Baroness (Helene) Hayman earlier this month – that the deal would help “cut the post-Brexit red tape that is stifling British food and drink businesses”.
In a comment piece published in The Grocer on 10 March, Hayman claimed the deal would “deliver frictionless trade with our closest neighbour”.
Smaller businesses “stand to gain enormously”, she added.
However, her claims “read less like informed analysis and more like a polished sales pitch for a deal that still lacks the detail, honesty and sector understanding needed to justify the claims being made in its name”, Jenney said.
“We have carried the cost of Brexit disruption, shifting UK border models, repeated government delays, contradictory guidance and relentless policy uncertainty for years,” he pointed out. “So, when ministers and political supporters now present this latest UK-EU ‘reset’ as some kind of obvious win, they should expect robust scrutiny and not grateful applause.”
The government’s claims “do not stand up to the practical trading reality being imposed on our sector”, Jenney argued.
“Baroness Hayman repeats the assertion that this deal will slash red tape and cut costs. The obvious question is: for whom, exactly? Because for the fresh produce sector, the reality is very different.”
The outcome was instead likely to present “avoidable and unjustifiable additional costs imposed, not by Brussels, but by our own government – ultimately hitting already hard-pressed UK consumers”.
Jenney pointed to how the UK’s seasonal, non-EU fresh produce supplies would now be subjected to third-country SPS controls, in “a serious act of economic self-harm”.
“Our current post-Brexit, risk-based border regime is proven, proportionate and highly effective in protecting UK biosecurity,” he added.
“Yet we are now being steered towards a far more unnecessarily onerous, politically driven model – one that is not currently considered appropriate by the UK government’s own scientists, it’s SPS alignment for alignment’s sake.”
This risked triggering thousands of additional and “unnecessary border delays, considerably more inspections, more paperwork and port congestion – every added layer acting as a compounding financial penalty on trade”.
The result was “a textbook tax by stealth: not declared, but sharply felt, as official fees escalate and millions are funnelled into the Exchequer at the direct expense of UK businesses and, ultimately, the consumer”.
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