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While the Seafood Disruption Support Scheme helped to compensate some SME seafood businesses for the...

Recommendation
While the Seafood Disruption Support Scheme helped to compensate some SME seafood businesses for the teething problems they faced in January, it did not offer compensation to businesses who had incurred costs preparing for the new trading environment with the EU. The arbitrary £100,000 cap on claims also meant that some larger businesses are still faced with losses. We welcome the Seafood Response Fund as a better way of supporting seafood exporters with the initial costs incurred from adjusting to the new trading regime. Both schemes demonstrate Defra’s commendable engagement with the seafood sector. The Government should take a flexible stance on the size of the £23 million funding envelope, and the cap on individual payments, once it has analysed the applications received in order to ensure that seafood exporters receive the necessary support to overcome the teething issues 32 Seafood and meat exports to the EU from the new trading arrangements with the EU. Defra should create similar schemes to support meat exporters during the initial period of the new trading arrangements with the EU.
Paragraph Reference
41
Government Response
Acknowledged
HM Government Acknowledged
We are pleased that the committee recognises the steps taken by the Government to engage with and support the fishing sector. We have now delivered millions of pounds to support thousands of seafood businesses across the UK, reflecting the Government’s willingness to engage with the sector, work at pace, and the extensive promotion of support by Defra and the Marine Management Organisation (MMO). The SDSS was the first scheme to open to applications across the UK as a result of EU exit disruption, this scheme was launched in early February and was aimed at supporting businesses who had suffered a verifiable loss during the movement of goods to the single market. The scheme was designed in close consultation with several stakeholders. Support was targeted at SMEs, who are typically less financially resilient and so less able overcome export issues compared to larger organisations. The scheme also utilised a payment cap of £100,000. No business that received support under the scheme was close to breaching the £100,000 cap so it does not appear that this acted as a barrier to support. The SDSS targeted payments at actual losses but did not directly fund businesses to prepare for the new trading environment with the EU. This is because the scheme was designed to help businesses overcome the unexpected disruptions associated with COVID-19 and export challenges and sought not to put firms that had incurred preparation costs to avoid losses at a disadvantage. These requirements were put in place to ensure that the fund was able to support all qualifying businesses and represented value for money for the taxpayer. Longer-term schemes such as the Fisheries and Seafood Scheme in England can offer support for business planning and diversification The scheme received relatively low uptake with only 30 applications being successful across the UK. Following further engagement at a pre-planned review point in mid-February, we understood that the reason for this low uptake was that a large majority of businesses had suspended exporting activities to avoid disruption and therefore could not demonstrate a verifiable loss as required by the scheme. Recognising that many businesses had decided to suspend export activities during this period we acted quickly, and promptly launched the Seafood Response Fund (SRF). This ensured that catching and aquaculture businesses who were also reporting disruption, due to hospitality closures and reduced volume of exports, could continue to operate. Defra has been constantly monitoring the impact of COVID-19 and exporting difficulties on the sector. The level of funding committed, which was set at £23 million, was determined through thorough analysis of the support needed by the sector and has proven sufficient to deliver both schemes. 8 Fourth Special Report of Session 2021–22 term. At the Spending Review we committed £32.7 million to enable each nation of the UK to deliver its own funding scheme to support the seafood sector, as well as funding data collection and control and enforcement activities. The scheme for England—the Fisheries and Seafood Scheme—opened for applications on 6 April. This scheme will support long- term sustainable growth, help seafood businesses recover from the impacts of COVID-19, and take advantage of new trading conditions and flourish outside the EU. With respect to the Committee’s suggestion that Defra could consider creating similar schemes for meat exporters, we appreciate that the meat sector has been affected by a combination of regulatory complexity, loss of markets, and COVID-19 outbreaks. Defra has continued to engage with the meat processing industry through regular and established working relationships. Through these channels we have provided opportunity for the meat processing industry to flag problems as they have arisen in the early months of 2021. Defra officials have made themselves readily available throughout, in order to work with UK traders, EU port officials, and colleagues in Other Government Departments to rapidly unblock issues, ensure that there is feedback from Member States, and keep trade flowing. Defra and the Devolved Administrations have also established the UK Agriculture Market Monitoring Group (UKAMMG). Through this, we monitor all key agricultural commodities, including the impact of measures introduced for the import and export of commodities. The UKAMMG analyses and reviews market data and identifies when Ministers should be informed of developments. Defra and the Devolved Administrations have been closely monitoring the livestock sectors through this group and will continue to do so as further milestones are reached for import checks and easements come to an end. On the basis of current market conditions, we do not consider support schemes for meat exporters are needed but this will be kept under regular review.
Timeline
Recommendation age 5.1 yrs
Report published 29 Apr 2021