Brexit & Beyond Newsletter

28 September 2021

Welcome to the 28 September 2021 Brexit & Beyond newsletter

Discussions between the EU and UK on the Protocol continue, as the Specialised Committee met for the ninth time on Friday. The Subsidy Control Bill had its second reading in the House of Commons. Labour shortages, vet training, and the UK Environment Bill were discussed at the Assembly. The Home Office has released its latest figures on the EU Settlement Scheme.

Protocol: state of play

Europe ministers met at the General Affairs Council on 21 September where they assessed the state of play of EU-UK relations. European Commission Vice President Maroš Šefčovič briefed ministers, including on his recent visit to Northern Ireland. Ministers “highlighted the need to identify long-term, flexible and practical solutions to address the issues experienced by citizens and businesses in relation to the practical implementation of the protocol, while respecting the principles underpinning the protocol.”

UK Brexit Minister Lord Frost tweeted that “the Protocol is clearly having a continued negative effect on everyday life and business in Northern Ireland. The outstanding issues now need to be dealt with urgently. I and my team are in contact with the EU daily, but we need a full response to our July Command Paper soon.” Secretary of State Brandon Lewis and Lord Frost were in Northern Ireland for various engagements last week, including a visit to the Balmoral Show and meetings with businesses.

 Lord Frost visited Northern Ireland last week | Source: @DavidGHFrost on Twitter

Some journalists have reported that many EU member states no longer exclude the prospect of the UK triggering Article 16. RTÉ reports that the EU is likely to challenge such a move on legal grounds and could resort to imposing retaliatory tariffs under the EU-UK Trade and Cooperation Agreement. The European Commission doesn’t believe the conditions have been met to trigger Article 16 and is preparing various responses to this potential scenario, as well as working on new proposals on the Protocol. European Commissioner Mairead McGuinness told the BBC’s Andrew Marr that “threats are not helpful and Article 16 is used in very extreme circumstances.” She said, in her view, “the voice of Northern Ireland…has not been heard sufficiently, which was why the European Union listened carefully.” She said, “We are going to put forward concrete proposals having listened to people in Northern Ireland and I hope that UK Government and Lord Frost will believe with sincerity what we are saying.”

The Specialised Committee on the implementation of the Protocol on Ireland and Northern Ireland held its ninth meeting on 24 September. An official from the NI Executive attended. The UK Government statement says the UK updated the Committee on “the basis for operating the Protocol during the ‘standstill’, including the delivery of new IT systems, extensive support for UK businesses, and the completion of a new secure database for customs information sharing.”  The EU statement says it “recalled the need that all work [on real-time access to relevant databases] should be finalised by the end of the year” and “expressed its concerns regarding the lack of progress on Border Control Posts, as well as the issue of export declarations from Northern Ireland to Great Britain”.  The Committee took note of work in the Joint Consultative Working Group, and the Commission gave an update on how information on EU legislation, which falls under the scope of the Protocol, is shared.

View from the US

The Protocol was also discussed across the Atlantic while Boris Johnson was in the US for the UN General Assembly. Johnson met with President Biden in the White House, where Biden was asked about the Protocol on Ireland/Northern Ireland and its connection with a potential UK-US trade deal. He said, “I feel very strongly…We spent an enormous amount of time and effort in the United States. It was a major partisan effort, and I would not like to see – nor would many of my Republican colleagues – a change in the Irish accord.” The Prime Minister also met with Congressman Richard Neal who released a statement which said they discussed the UK proposal to revise the protocol. Neal shared his “strong belief that any agreement reached between the UK and the EU on the future of the Protocol must not undermine the integrity of the Good Friday Agreement nor threaten the institutions it created.” Boris Johnson assured him that “there would be no return to a hard border on the island of Ireland and that the UK government remains committed to the full implementation of the 1998 peace deal and the political stability it has brought to the region.”

Brexit matters at the Assembly

Minister for the Economy Gordon Lyons was in the Assembly last Monday to take questions from Members. He was asked about labour shortages in the food processing sector, which is especially impacting pig farms in Northern Ireland. Lyons said that this is ultimately an issue for the UK Government and said he has been in contact with the Home Office on the matter: “This is down to the Government and their immigration rules, and I hope that we can get to the point where those rules are changed so that we can have that flexible and agile immigration policy and, if the shortage is as a result of a lack of workers from outside the UK, that can be remedied”.

Minister Lyons taking questions from Members on Monday | Source: NI Assembly

Lyons was asked about discussions about a proposed veterinary school (Northern Ireland currently does not have a veterinary school). The Minister said that a steering group has been established by the Department for Agriculture, Environment and Rural Affairs (DAERA) on this. The shortage of vets in Northern Ireland has been highlighted for some time. Following the UK Government’s Command Paper on the Protocol, the British Veterinary Association stated, “There is a huge and legitimate concern about the lack of veterinary capacity to meet the requirements for moving products of animal origin from Great Britain to Northern Ireland once the grace period ends later this year.” Previously, the Minister for Agriculture, Environment and Rural Affairs Edwin Poots was asked about the costs of additional vets for border control sites at Northern Ireland's ports. In May he said that the resourcing deficit “is particularly marked for vets as only 14 of 29 posts are filled.”

The Assembly also debated the Legislative Consent Motion on the Environment Bill. Following the UK’s departure from the EU’s environmental governance arrangements, the Environment Bill aims to cover this governance gap, given that much UK environmental law comes from the EU. The Bill establishes the Office for Environmental Protection and makes provisions for DAERA to “issue guidance to the [OEP] in respect of its enforcement policy.” The OEP will provide independent oversight of environmental law in Northern Ireland.

Subsidy Control Bill

The Subsidy Control Bill was debated in the House of Commons on Wednesday. The Bill will establish a new UK framework for subsidies in place of the EU’s state aid rules. However, Article 10 of the Protocol on Ireland/Northern Ireland states that EU state aid rules apply to trade between Northern Ireland and the EU, which has implications both for subsidies both in Northern Ireland and the rest of the UK. Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng was challenged by MPs on this point and said that “it is clearly no longer necessary for Northern Ireland to be subject to the EU state aid regime, and that is precisely why we proposed a change to the Northern Ireland protocol in order to bring all subsidies within scope of the domestic regime.”

Sammy Wilson MP (DUP) argued that the conflicts between the two systems could be disadvantageous to Northern Ireland: “If a subsidy is made available to a firm in Scotland that could equally be looking at Northern Ireland, Scotland would have the advantage of saying that it is so important to Scotland and fits in with its objectives that it will give it a subsidy equal to 70%—that may even be accepted under the control regime in the rest of the United Kingdom. However, Northern Ireland would be excluded from seeking to attract that firm on the basis that the EU state aid rules say it cannot go over 50%.” He added that officials in the Department for the Economy in NI “have said—it is quite clear why—that they are finding it difficult to get information about how this scheme will work.”

Parliamentary Under-Secretary Paul Scully said, “I reiterate that the UK will continue to be a responsible trade partner that respects our international obligations” and continued the Government’s argument that “the robust subsidy regime that the Government proposes makes it clear that there is no need for EU state aid rules to continue to apply in Northern Ireland, and that all subsidies will be within the scope of the domestic regime.”

Citizens’ Rights

On 21 September the UK Home Office published statistics on applications made to the EU Settlement Scheme up to 30 June 2021. The scheme enables EU, EEA, and Swiss citizens who were resident in the UK before the end of the transition period to continue living in the UK. Over 6 million applications had been received, 2% of these (99,820) from Northern Ireland.

 Highest number of EU Settlement Scheme applications by Polish, Romanian and Italian nationals across local authorities in the UK | Source: UK Home Office

By 30 June 5.4 million applications had been concluded: 52% were granted settled status (where a person has lived in the UK for a continuous 5-year period), 43% were granted pre-settled status, and 4% had other outcomes i.e. were refused, withdrawn, or invalid. There were 88,700 concluded applications which were received from Northern Ireland. 60% of applications for Northern Ireland were granted settled status. The top five nationalities of applications received for Northern Ireland were Poland, Lithuania, Romania, Portugal and Bulgaria.

On 16 September the Citizens' Rights Specialised Committee met and the UK and European Commission released a joint statement. The EU reiterated concerns raised since August 2020 on the compatibility of the UK’s EU Settlement Scheme with the Withdrawal Agreement: it said it was “not giving legal clarity to EU citizens, who hold a new residence status, as to whether their rights are guaranteed by the Withdrawal Agreement or UK immigration law.” The UK also raised concerns regarding misapplication of the Withdrawal Agreement in several EU member states. They also discussed the fifth joint report on residence and agreed to meet again in December.

Other news

• The Specialised Committee on Sanitary and Phytosanitary Measures which oversees this area of the EU-UK Trade and Cooperation Agreement has met for the first time. On the agenda of the first meeting on 22 and 23 September were issues including: certificates for animals and animal products for import into Great Britain and the EU; import conditions and procedures; the state of play in relation to the introduction of SPS border controls and certification requirements for products entering Great Britain from the EU (the UK Government recently announced that these checks will be delayed); and SPS import conditions and procedures for certain items, such as live bivalve molluscs, seed potatoes and chilled meat.
• Professor David Phinnemore of Queen’s University has an interesting Twitter thread on the UK Government’s plans for regulatory reform in relation to the Protocol on Ireland/Northern Ireland. Their preliminary analysis shows more than half of the UK Government’s proposed reforms relate to EU acts which continue to apply in NI under the Protocol. Phinnemore recalls the UK Government’s commitment in 2019 to “ensure there would be no divergence in practice between the rules in Great Britain and NI covered by the Protocol.”
• The Office for the Internal Market (OIM) opened on 21 September. It calls on businesses to report any issues regarding trading across different parts of the UK via the digital reporting service. Governments from the four parts of the UK can seek advice from the OIM on the operation of the UK internal market. The first report on the State of the UK Internal Market is planned for Spring 2022. While the OIM will provide independent, non-binding advice to Governments across the UK on regulations or regulatory proposals which may impact the effective operation of the internal market, legislation and regulations which implement the Protocol on Ireland/Northern Ireland will fall outside of the scope of the OIM’s advice and work.

This Week at the Assembly

• Monday 27 September, 2 PM - Plenary: Question Time - The Executive Office
• Wednesday 29 September, 2 PM - Committee for The Executive Office, UK Exit from European Union - Oral Briefing from Junior Ministers
• Wednesday 29 September, 2.40 PM - Committee on Procedures - Legislative Consent Motions – Update

Catch up with the Committees

• Monday 20 September, 2pm - Plenary - Question Time: Economy
• Monday 20 September, 6pm - Plenary - Legislative Consent Motion: Environment Bill
• Wednesday 22 September, 12.20pm - Committee for the Economy - EU Exit legislation
• Wednesday 22 September, 3.30pm - Committee for The Executive Office - UK Approach to the Ireland/Northern Ireland Protocol - Written briefing by Assembly Research
• Thursday 23 September, 2pm - Committee for Justice - EU Exit legislation; EU Exit and Justice Related Issues – Update