Brexit & Beyond Newsletter

16 March 2022

Welcome to the 16 March 2022 Brexit & Beyond newsletter

The Specialised Committee on the Protocol on Ireland/Northern Ireland met last week. The Committee for Infrastructure heard evidence from the freight and haulage sector on the impact of Brexit and other issues. Discussions around the operation of the Protocol, its impact on business, SPS arrangements, and wider UK-EU relations continue. The Court of Appeal in Belfast has dismissed a challenge to the Protocol on Ireland/Northern Ireland. Committees continue to scrutinise Common Frameworks.

Operation of the Protocol

A meeting of the Specialised Committee on the implementation of the Protocol on Ireland and Northern Ireland took place on 8 March 2022. You can find out more about the Specialised Committee and find information about previous meetings on our website. Representatives from the Northern Ireland Executive attended as part of the UK delegation. The Committee took stock of progress to address issues around the Protocol. A joint statement from the UK and EU reads, “Both Parties underlined their ongoing determination to ensure that outstanding issues in the context of the Protocol are addressed, and durable solutions are found as soon as possible for the benefit of people and businesses in Northern Ireland. The EU and the UK also took stock of the work of the Joint Consultative Working Group. In addition, the EU and the UK reiterated the importance of further engagement with business groups, civil society and other stakeholders in Northern Ireland and committed to further joint engagements.”

UK Trade and Business Commission report

The cross-party and cross-industry UK Trade and Business Commission (UKTBC) has published its annual report which makes 21 recommendations to improve cooperation and trade between the UK and EU. These include a comprehensive EU-UK Veterinary Agreement, a long-term plan to improve UK-EU trade and relations, more flexible visa rules, and increased scrutiny of new trade deals. The UKTBC has also written to Foreign Secretary Liz Truss and European Commission Vice President Maroš Šefčovič urging them to put “local businesses at the heart of making the Northern Ireland Protocol work”. The Commission recommends the following:

• formalised, regular, tripartite meetings between EU, UK, and Northern Ireland business to address and resolve operational issues;
• modelling proposed solutions with industry, to ensure they can deliver without imposing costs so great as to reduce consumer choice or threaten business viability;
• full discussions of proposed divergence between UK and EU regulations to enable both sides to understand the likely implications for Northern Ireland

SPS (sanitary and phytosanitary) arrangements

In a written question, the NI Minister of Agriculture, Environment and Rural Affairs was asked for an update on discussions on a veterinary agreement between the UK and the EU. The Minister said a common EU-UK SPS area “could assist in facilitating trade in live animals and agri-food products, which would be welcome; however, it would not address the entirety of the new rules associated with implementation of the Northern Ireland Protocol.” He said, “Responsibility on any future alignment of the United Kingdom with the European Union’s SPS rules, as well as the negotiation of any veterinary agreement between the United Kingdom and the European Union, rests solely with the United Kingdom Government.”

Secretary of State for Northern Ireland Brandon Lewis took questions on the Protocol on Ireland/Northern Ireland in the Commons on Wednesday 9 March. He was asked about the possibility of the UK and EU reaching a veterinary and SPS agreement. The Minister said that the UK has put forward proposals “such as the green channel proposals, which can deal with east-west customs and…SPS burdens” and said this is an area where he wants to “see flexibility from the EU”.

Ongoing EU-UK talks

Shadow Secretary of State for Northern Ireland Peter Kyle asked the Minister to “bring discussions out of the shadows and start making statements to the House” on the EU-UK negotiations on the Protocol. Brandon Lewis said, “it is right and appropriate that we have the space to have those private negotiations with the EU”. He went on to say, “There is a point at which there is a judgment call for the UK Government to make on whether those negotiations are able to progress in a way that gives us confidence that we can get to a positive resolution.” The Telegraph reports that Foreign Secretary Liz Truss has written to the Prime Minister to set out plans to hold off triggering Article 16, instead proposing to boost trade between GB and NI with tax breaks and a “unilateral green lane” for goods moving GB-NI.

Medicines

The EU Council has agreed on the mandate for the proposed directive and regulation to ensure continued supply of medicines to Northern Ireland. An agreement will now need to be reached with the European Parliament so that the Directive can enter into force as soon as possible. More about the European Commission’s proposal can be read here. The Commons European Scrutiny Committee has written to the Minister of State for Health Edward Argar about the proposals, asking the Government to clarify that “there remains a risk that the same medicines are not available in both GB and NI in the event that EU and GB regulators take different views.” The Committee also asks the Minister whether the Government accepts that the proposal places constraints on the UK’s regulatory autonomy, suggesting that, “the UK will need to be mindful of EU law when exercising regulatory autonomy in this area and will need to recognise that it may need to adapt policy to maintain equivalence.”

Issues facing the logistics sector

On 9 March, the Assembly’s Committee for Infrastructure was updated on issues facing the freight and haulage sectors. Seamus Leheny of Logistics UK told the Committee that a key issue affecting the industry is labour shortages: across the UK there has been a decrease of around 44,000 HGV drivers, in Northern Ireland they estimate there is a shortage of around 1500-2500 drivers.

Seamus Leheny of Logistics UK | Source: NI Assembly

Leheny said industry representatives have met with EU and UK negotiators recently: “They know what mitigations need to be put in place: we've outlined that the grace periods are what is holding things and keeping supply chains moving”. Leheny argued for the UK Trusted Trader Scheme to be expanded and simplified: “We would like to say that the basis of all freight going to Northern Ireland is deemed not at risk of going to the [EU] single market and that ‘at risk’ is the exception, and we believe we've made a good case to the EU on this.” Nick McCullough of Manfreight said that the grace periods have helped but said, “We can't see the risk…we've developed a solution that will trace that product from start to finish. So for us it's about saying here is the solution, there is no risk, can we put this to bed?” Fiona Derry of Derry Refrigerated Transport said she would like to think there is a technical solution and emphasised that there has to be a level of trust for goods moving GB-NI. She said, “If hauliers and the industry come together with departments, then the solution can be found.”

Leheny explained to the Committee that there is no reimbursement scheme yet for business-to-business supplementary declarations: there is some confusion between the EU and UK about whether that would be classed as state aid. “Some businesses have been really stung on this: they're paying out hundreds of thousands of pounds and they're waiting for that money to come back to them,” he said. Further issues raised at the session included freight traffic levels at ports, customs requirements for parcels, additional customs costs, fuel costs which are passed on to consumers, the difference in fuel duty between Northern Ireland and the Republic of Ireland, and the mutual recognition of qualifications for transport managers post-Brexit.

Sub-Committee session on Protocol

The Lords Protocol on Ireland/Northern Ireland Sub-Committee held a session on 9 March with business representatives as part of its follow-up inquiry on the impact of the Protocol. Executive Director of the Northern Ireland Meat Exporters Association Conall Donnelly pointed out that the long-term impact of trade policy change following Brexit hasn’t yet been seen. He highlighted the “major challenge” of divergence, pointing out the tension between the UK wanting regulatory autonomy and wanting to protect its Internal Market, while NI is caught up in EU divergence. In his view, some form of SPS agreement is going to be required. He said, “At the very least some consideration should be given to managing divergence, which doesn’t even seem to be on the radar at the moment”. He suggested the that there should be an impact assessment for Northern Ireland or the internal market when any regulatory change for goods standards is planned.

Sarah Hards of AM Logistics emphasised that the regulations around SPS goods are proving to be a “massive challenge”. Even with the grace periods currently in place, she said, it is an “awful lot of work and puts customers off sending those goods” into NI. She called for the UK Trusted Trader Scheme to be expanded.

Donnelly raised the EU’s non-papers on engagement with NI stakeholders. He said they have observed that talking to the EU and UK independently, each side takes different things away from conversation, and it would make more sense to have joint meetings. Both Hards and Donnelly referred to the uncertainty caused by Brexit: Hards said they need confidence in what is going to happen in the next six months. She said political uncertainty around the Protocol “makes everyone uneasy”: this includes suppliers in GB, and anyone who would want to invest in NI. Donnelly said that if businesses have economic certainty, they will invest.

Other issues discussed at the session included customs declarations and additional paperwork, tariff rate quotas (TRQs) for third countries which NI cannot currently access, higher costs associated with the new post-Brexit arrangements, and the importance of the continuation of the Trader Support Service (TSS).

Common Frameworks

The NI Assembly Research and Information Service gave a briefing to the Committee for Agriculture, Environment and Rural Affairs on 10 March. Researchers drew the Committee’s attention to issues around potential divergence, the UK’s proposed Brexit Freedoms Bill and review of retained EU law, Frameworks’ interaction with the Protocol, cross-border divergence, parliamentary scrutiny, and stakeholder engagement. The Scottish Parliament Information Centre has published a blog on Common Frameworks and the importance of parliamentary scrutiny.

The Lords Common Frameworks Scrutiny Committee held an evidence session on the Frameworks programme on 8 March.  Jess Sargeant of the Institute for Government told the Committee that she expected the frameworks to have more policy content. Ruth Chambers of the Green Alliance said she felt the programme “raises more questions than it provides answers,” arguing that clarity is needed on the interface with the UK Internal Market Act, and the suitability of inter-ministerial structures to make progress on these issues. In relation to the Protocol on Ireland/Northern Ireland, Sargeant said the arrangements are “quite sensible”: “there is a very clear process to ensure that that legal reality, as it stands at the moment, should consider the Protocol….also allowing the Northern Ireland Executive to raise concerns about divergence that might be created by the Protocol and giving them a clear mechanism through the dispute resolution procedure to challenge where they think it has not adequately been considered.”

Jess Sargeant from the Institute for Government | Source: UK Parliament

Other news

• On Monday 14 March, the Court of Appeal in Belfast dismissed a challenge to the Protocol on Ireland/Northern Ireland. The summary of the judgement can be read here. It states “The Acts of Union are not repealed and the same footing clause in Article VI must be read subject to the NI Protocol…There is no conflict with section 1(1) of the Northern Ireland Act 1998 as the constitutional status of NI within the United Kingdom has not changed and cannot change other than by virtue of the mechanism provided by section 1(1) of the NI Act 1998 by way of democratic consent.” The group of unionist politicians who pursued the case intend to take it to the Supreme Court.
• The Lords European Affairs  Committee recently wrote to the UK Foreign Secretary Liz Truss about the UK’s participation in the Horizon Europe Programme , highlighting the argument that both the UK and EU have been treating association to Horizon Europe as a “bargaining chip” in the context of wider political disputes, particularly the negotiations over the Protocol.
• The Lords Protocol on Ireland/Northern Ireland Sub-Committee has written to Lord Callanan, Minister in the Department for Business, Energy and Industrial Strategy, about the Subsidy Control Bill. The Committee asks for the Government’s assessment of the impact on Northern Ireland (in particular in relation to attracting Foreign Direct Investment) and on the UK internal market if some subsidies cannot benefit from the greater flexibilities in the future UK regime. The High Court has dismissed British Sugar's claim for judicial review against the autonomous tariff quota (ATQ) to Tate & Lyle. It claimed the ATQ was unlawful state aid in breach of Article 10(1) of the Northern Ireland Protocol.
• The Commons European Scrutiny Committee has extended the deadline for submissions to its inquiry on retained EU law until 18 April.
• The UK Government has agreed to a formal exchange of letters on the procedures to be followed for scrutiny of trade agreements.
• The House of Commons Library has published a research briefing on the Northern Ireland Protocol: Implementation, grace periods and EU-UK discussions (2021-22).

This Week at the Assembly

• Monday 14 March, 4.15PM – Plenary - Motion: Report on the Inquiry into Legislative Consent Motions
• Wednesday 16 March, 10.30AM - Committee for Agriculture, Environment and Rural Affairs - Organic Production Common Framework - Stakeholder Oral Evidence Session
• Wednesday 16 March, 10.30AM - Committee for Infrastructure – Road Haulage Association - Update on issues facing the freight/haulage sector
• Wednesday 16 March, 12.30AM - Committee for Economy - EU Exit legislation
• Wednesday 16 March, 2PM - Committee for The Executive Office - Oral Briefing from NI Assembly EU Affairs Manager

Catch up with Assembly Business

• Monday 7 March, 1.45PM – Plenary - Final Stage: Motor Vehicles (Compulsory Insurance) Bill (NIA Bill 53/17-22)
• Wednesday 9 March, 10.10AM - Committee for Infrastructure - EU Exit legislation - SL1 The Railways (Safety Management) (Amendment) (EU Exit) Regulations (Northern Ireland) 2022; Logistics UK - Update on issues facing the freight/haulage sector
• Thursday 10 March, 12PM - Committee for Agriculture, Environment and Rural Affairs - Common Frameworks - Oral Briefing from RaISe; Draft Position Papers on Common Frameworks
• Thursday 10 March, 2PM - Committee for Justice - Update on EU Exit and Justice-related issues: written paper