Animal By-Products and Animal Health (Miscellaneous Fees) (Scotland) Regulations 2023 [Draft]
Our second item of business is consideration of the draft Animal By-Products and Animal Health (Miscellaneous Fees) (Scotland) Regulations 2023. The instrument is subject to the affirmative procedure. I welcome back to the meeting Mairi Gougeon, the Cabinet Secretary for Rural Affairs, Land Reform and Islands, and her officials from the Scottish Government: Alastair Douglas, head of disease control branch, animal health and welfare division; and Keith White, solicitor.
I invite the cabinet secretary to make an opening statement.
Thank you, convener. I am happy to appear before the committee to discuss legislation that will introduce changes to the fees structure of the Animal and Plant Health Agency to uplift the fees for some statutory services that are delivered by that organisation on behalf of Scottish ministers and to deliver the Government policy of full cost recovery for those specified schemes.
The schemes covered by the instrument that the committee is considering cover animal by-products, salmonella control programmes, artificial breeding controls, checks on live animals at border control posts and the poultry health scheme for work carried out to allow producers to trade domestically and/or internationally.
Charges for those services also apply across the English and Welsh Administrations. The Welsh Government and the Department for the Environment, Food and Rural Affairs also have full cost recovery policies and also intend to introduce legislation to uplift fees for those statutory services.
The Animal Health (Miscellaneous Fees) (Amendment and Revocation) (Scotland) Order 2023 amends the Poultry Compartments (Fees) (Scotland) Order 2010 by revoking provisions that currently allow value added tax to be added to fees charged. His Majesty’s Revenue and Customs has indicated that statutory fees that can be performed only by the Animal and Plant Health Agency are out of scope for VAT and that no VAT is therefore due upon them.
No business and regulatory impact assessment has been prepared on this occasion, because the Animal and Plant Health Agency has already carried out engagement with the affected sectors to understand the impact of the planned changes to fees. The affected industry sectors are fully aware that the APHA has been moving to full cost recovery for most such charges and that no significant impact on business is anticipated.
I end my comments there and I am happy to answer questions from the committee.
I have some concerns about the charges. I understand that you are going for full cost recovery and that the charges have not been increased for some time for some time. Most charges are now going up by at least 25 per cent and some are doubling. Have you considered the impact that that will have on farmers and crofters?
There is a project board, which has been overseeing the full cost recovery. My officials will probably be able to tell you who is on that board, but I know that there are stakeholders from each of the Administrations on it.
Farmers and crofters have known that the policy is coming and, because of the engagement that has been undertaken by APHA, we do not expect a significant impact. We have been overcharging in some areas and undercharging in others, which is why the phasing in of increased charges is important. We will introduce a 50 per cent uplift this year and will increase that to 100 per cent full cost recovery next year. Phasing that in, rather than doing it in one fell swoop, is a way of recognising concerns about charges.
I am sure that I will be corrected if I am wrong, but I think that the only exception is in relation to work at border control posts, where there will be 100 per cent cost recovery this year.
Have any producers expressed concerns about that, or are they all reasonably relaxed because that is not a huge part of their business?
As far as I am aware, no concerns in relation to that have been expressed.
Any concerns are really just about the process. There is continuous dialogue with the Animal and Plant Health Agency about efficiencies and savings to streamline the processes.
The fees are calculated based on true costs. It is a bit of a coincidence, but this has coincided with acute inflation and there is no reference to inflation rates. Can you expand on how the fees were calculated?
The full methodology that APHA developed will be published on the gov.uk website. I do not have that to hand, but it can be shared with the committee in advance of publication so that there is transparency and to let members see how the methodology has changed.
Will that have any impact on, or implications for, the difference between domestic and international trade?
I do not have the answer to that question. I will have to take that one away.
As no other members have any questions, I invite the cabinet secretary to move motion S6M-08906.
Motion moved,
That the Rural Affairs and Islands Committee recommends that the Animal By-Products and Animal Health (Miscellaneous Fees) (Scotland) Regulations 2023 be approved.—[Mairi Gougeon]
Motion agreed to.
Is the committee content to delegate authority to me to sign off a report about our deliberations on the affirmative instrument?
Members indicated agreement.
That completes our consideration of the instrument.
Animal Health (Miscellaneous Fees) (Amendment and Revocation) (Scotland) Order 2023 (SSI 2023/143)
Our next agenda item is consideration of a negative instrument: the Animal Health (Miscellaneous Fees) (Amendment and Revocation) (Scotland) Order 2023. Does the committee agree to make no recommendations in relation to the instrument?
Members indicated agreement.
I suspend the meeting for a 10-minute comfort break.
10:50 Meeting suspended.