Brexit & Beyond Neswletter

4 October 2021

Welcome to the 4 October 2021 Brexit & Beyond newsletter

At the Assembly last week, issues including investment opportunities, loss of EU labour, and sign-off of PEACE PLUS funding were discussed. Junior Ministers in the Executive Office were questioned by MLAs at the Committee for the Executive Office. The Government has responded to the report from the Lords Sub-Committee on the Protocol. UK Brexit Minister Lord Frost has been speaking today on Brexit and the Protocol on Ireland/Northern Ireland. The EuropeanParliament will vote on the establishment of a EU-UK Parliamentary Partnership Assembly.

Brexit at the Assembly

Deputy First Minister Michelle O’Neill and junior Minister Declan Kearney were taking questions from Members in the Assembly on Monday 27 September. On investment opportunities in NI arising from the Protocol on Ireland/Northern Ireland, Kearney said, “The primary driver for investment here remains our skilled workforce, competitive cost base and the fact that government, academia and business collaborate to provide a platform for growth.” He went on to say, “The Department for the Economy, alongside Invest NI and InterTradeIreland, continues to engage with many sectors to clarify the terms of access to the different markets that are now available and to encourage and enable export growth that could help to drive our economic recovery.” He says he hopes to soon meet local business leaders to explore maximising the opportunities: “We have already seen reports from Invest NI that, latterly, up to 30 new prospective FDI investors were looking at the opportunities in the North that the landing zone of the protocol could provide to maximise opportunities to do with dual market access: the British market and the single European market.”

 Junior Minister Declan Kearney speaking in the Assembly | Source: NI Assembly

On issues relating to the Protocol, Kearney said, “The Joint Committee is the forum for how we can find solutions that implement the protocol flexibly. Our businesses, farmers and manufacturers must be allowed to use the opportunities presented by the protocol to create and protect jobs and to attract investment. Our business community now needs certainty and stability, and it needs and wants to get on with embracing the unique opportunity that the protocol provides.” Kearney was asked whether an impact assessment has been carried out on the loss of EU labour to the NI economy. Kearney said, “You are absolutely right to pinpoint that fault line. It is essential that we get to grips with the repercussions that we see.”

Kearney was also asked about future meetings of the North-South Ministerial Council and pointed out that the failure of these meetings to occur “place an immediate risk on €1 billion of EU PEACE PLUS funding, which is waiting to be signed off by the Executive and NSMC.” Finance Minister Conor Murphy was also asked about this: he confirmed that the £1 billion PEACE PLUS programme “requires approval from the Executive, the Irish Government, the North/South Ministerial Council (NSMC) and the EU Commission. It is planned that Executive and North/South Ministerial Council approval will be sought in October, before submission to the EU Commission. That would allow the SEUPB to open the programme for calls in early 2022.” Minister for Infrastructure Nichola Mallon (SDLP) has written to the UK and Irish Government asking them to intervene after a meeting of the NSMC on agriculture didn’t meet on Wednesday.

The issue of cross-border banking was also raised. Murphy noted that NI does not have a regulatory function for banks. At Question Time on Tuesday higher online transaction fees were highlighted by Ciara Ferguson (Sinn Féin): “PayPal is the latest company to announce a hike in online transaction fees, with similar increases from Visa and MasterCard due to come into effect within weeks. That will see huge increases in fees for EU card transactions, which has a particular impact here, given our reliance on North/South trade. It is yet another direct cost and consequence of Brexit.”

Junior Ministers at Committee for the Executive Office

Junior Ministers in the Executive Office Gary Middleton (DUP) and Declan Kearney (Sinn Féin) gave an update on EU Exit matters to the Committee for the Executive Office on Wednesday. Kearney said officials from the Executive Office (TEO) have been working with relevant departments to analyse the proposals both in the UK Government’s Command Paper and the EU’s non-papers on medicines and SPS issues. He said both sets of proposals from the UK and the EU “do not fully address the concerns of our citizens or our business community.” He said Department of Health officials have advised that the EU non-paper on medicines “does not outline the broad solution required to meet the needs of our industry and our patients: it lacks the flexibility to adapt to the way our medicine supply works and to ensure that there's equity of access with Britain to new treatments”.

The Joint Consultative Working Group met again on 14 September (attended by an official from TEO), and discussed further information-sharing between the UK and the EU. Since July information has been shared by the EU about a number of EU acts which amend or replace legislation in the Protocol and TEO has been ensuring relevant departments are advised of these. On 24 September a meeting of the Specialised Committee took place which also covered plans for future joint stakeholder engagement.

 Withdrawal Agreement governance structures

Kearney informed the Committee that following progress on Common Frameworks, the first group should be with the Infrastructure, Health, and Economy Committees this week, with the remainder expected towards the end of October. On the EU Settlement Scheme, Middleton said he and his counterparts in Scotland and Wales have asked Kevin Foster (Minister for Future Borders and Immigration in the Home Office) to ensure that the current digital only proof of status be supplemented with a form of physical proof.

The sign-off on PEACE PLUS funding programme by the North South Ministerial Council was raised again. Middleton said that first approval would be required from the Executive, Irish Government, the European Commission and that currently the draft programme was being discussed among departments. He added, “this is something that we are supportive of, we are not in the business of collapsing the institutions…we want to see these funds delivered to our communities.” Middleton said that they would attend Specialised and Joint Committee meetings as “we will use every opportunity to raise the concerns of Northern Ireland businesses.”

Middleton highlighted Brexit-related legislation coming to the Assembly, including legislative consent motions on the Environment Bill (which was debated recently), the Subsidy Control Bill,  and the Mutual Recognition of Professional Qualifications Bill. 44 Brexit-related Statutory Rules and 34 Statutory Instruments are to come to the Assembly, along with 26 Common Frameworks. [Read our pages on devolution and legislation for more information about these topics.]

UK Government’s view on the Protocol

On 29 September the Lords Protocol on Ireland/Northern Ireland Sub-Committee published the UK Government’s response to its introductory report of 29 July. The Government reiterates proposals and “alternative approaches” put forward in its Command Paper on the Protocol of 21 July, arguing “if the proposals published in the Command Paper were agreed they would satisfactorily address many of the report’s conclusions.”

The Government’s response - and the initial report -  is broad in scope, covering internal UK trade; agri-food checks; EU member states’ understanding of trading arrangements for Northern Ireland; the ‘democratic deficit’ and governance arrangements of the Protocol; the Government’s view on Article 16 safeguard measures; EU proposals on medicines and on guide dogs; the Government’s view on an SPS agreement; and the prospect of an EU office in Belfast.

On greater involvement for NI representatives, the Government states, “We do not believe that providing for Northern Ireland’s representation within the structures of the EU institutions is in any sense the right way forward…It would not in any way be reassuring to those concerned about their identity and Northern Ireland’s place within the UK if Northern Ireland were to be pulled further into the EU’s systems and processes.” Regarding the increase in North-South trade, the Government contends, “It simply does not make sense for Northern Ireland to gain the “benefit” of access to the EU market at the expense of access to the rest of its own market.”

This morning at the Conservative Party Conference, Lord Frost said the UK will soon send legal texts to the EU based on the Command Paper. He said it was “no use tinkering around the edges” and that “without an agreed solution soon, we will need to act, using the Article 16 safeguard mechanism, to address the impact the protocol is having on Northern Ireland.” The Institute for Government has a useful explainer and diagram on how Article 16 works in practice. Asked about Lord Frost’s comments, a European Commission spokesperson said that it does not comment on comments from its partners, and said it intends to come forward with solutions soon. They said there is a procedure set out in Article 16, in conjunction with Annex 7 of the Protocol. Frost was also speaking today at the Policy Exchange think tank. He expanded on his view on Article 16, saying, “We need a short intensive and good faith talks process to happen quite soon...we need to show we’ve tried everything”. He said that the Government would abide by the Article 16 process, adding, “It’s the right thing to act predictably.”

European Parliament engagement on Brexit

Tomorrow (Tuesday) the European Parliament will vote on setting-up a delegation to the EU-UK Parliament Assembly. There is a provision in the EU-UK Trade and Cooperation Agreement for the European Parliament and the UK Parliament to establish a Parliamentary Partnership Assembly (made up of members of the respective parliaments) to exchange views on the partnership. This new body would be able to make recommendations to the UK-EU Partnership Council which oversees the Trade and Cooperation Agreement.

Last week the Parliament’s Conference of Presidents met European Commission Vice-President Maroš Šefčovič to discuss the state of play, especially regarding the Protocol, and EU efforts on how to implement the Protocol more effectively.

 Maroš Šefčovič meeting with Members of the European Parliament | Source: © European Union 2021 - EP

Other news

• On Tuesday the leaders of four unionist parties in Northern Ireland (DUP, UUP, TUV, PUP) released a joint statement on their opposition to the Protocol, saying it “must be rejected and replaced by arrangements which fully respect Northern Ireland’s position as a constituent and integral part of the United Kingdom”. The accompanying explanatory note says “any agreement which fails to ensure a proportionate and equitable solution which respects the sovereignty of the United Kingdom and restores our unfettered place within the Internal Market, cannot command the support of the unionist community.”

• The Lords European Affairs Committee has published correspondence from the NI Department for the Economy on the UK-EEA/EFTA trade agreement. The Department states that “there remain considerable complexities around how Northern Ireland will fully benefit from UK FTAs including the FTA with Iceland, Liechtenstein and Norway, due to the Northern Ireland Protocol. In particular, as we move into implementation, UKG will need to consider impacts on transparency around WTO notifications and potential trade dispute risks arising from the potential inability to fully comply with FTA measures for NI, where these conflict with measures in the Protocol.”

• As of 1 October, EU citizens can no longer use their national IDs to travel to the UK and will need to use a passport. EU citizens who have applied to the EU Settlement Scheme can continue using their ID cards.

• The 2021 edition of The Journal of Cross Border Studies has been published. It includes essays on balancing regulation, devolution, and trade; the business community in Northern Ireland; and necessary political conditions for cooperation.

• Financial News reports that five candidates (all from outside government) of 76 remain in the running for the new position under Lord Frost as Brexit Opportunities Unit director. Frost has said, “The new Brexit Opportunities Unit will review and reshape rules and regulations to boost growth and drive forward innovation, working across government on policies to maximise new opportunities from Brexit as an independent nation.” Frost made a statement in the Lords recently on his plans for post-Brexit reform and opportunities.

This Week at the Assembly

• Monday 4 October, 3.45pm – Plenary - Private Members’ Motion: Bespoke Sanitary and Phytosanitary Standards Agreement
• Tuesday 5 October, 2pm – Plenary - Question Time: Agriculture, Environment and Rural Affairs
• Wednesday 6 October, 11.10am - Committee for Infrastructure - Joint Briefing from Logistics UK & Road Haulage Association - HGV Driver Issue

Catch up with the Committees

• 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