Brexit & Beyond Newsletter

8 September 2022

Welcome to the 8 September 2022 Brexit & Beyond newsletter

Liz Truss is the new Prime Minister. Yesterday she took part in her first session of Prime Minister’s Questions. The new Secretary of State for Northern Ireland Chris Heaton-Harris was also in the Commons to take questions, including on the Protocol on Ireland/Northern Ireland. The Government says it prefers a negotiated outcome with the EU to fix the issues surrounding the Protocol, but emphasised it will resort to legislation should this not be possible. Political parties in Northern Ireland, the EU, and the Irish Government have been reacting to the appointment of the new Prime Minister. The UK is required to respond to infringement proceedings from the EU in the coming weeks.

New Prime Minister

Liz Truss was elected leader of the Conservative Party on Monday and took office as Prime Minister on 6 September, after meeting the Queen. Truss received 81,326 votes in the Conservative leadership contest, her rival Rishi Sunak received 60,399 (57.4% to 42.6%). In her victory speech, the former Foreign Secretary thanked outgoing Prime Minister Boris Johnson, telling him, “you got Brexit done.” On Tuesday afternoon, Liz Truss gave her first address as Prime Minister outside 10 Downing Street, where she outlined her three priorities to “get Britain working”, deal with the energy crisis, and improve the NHS. She did not refer to Northern Ireland or the NI Protocol Bill in her first speeches.

Prime Minister Truss chairing her first Cabinet meeting | Source: Andrew Parsons / No 10 Downing Street

The PM’s new cabinet met for the first time on Wednesday. James Cleverly is the new Foreign Secretary, and will lead negotiations with the EU on the Protocol. Chris Heaton-Harris takes on the role of Secretary of State for Northern Ireland, while Steve Baker becomes Minister of State in the Northern Ireland Office. Nadhim Zahawi will cover Intergovernmental Relations as part of his portfolio.

Question Time

Yesterday, 7 September, the new Secretary of State for NI Chris Heaton-Harris answered several questions about the Protocol on Ireland/Northern Ireland in the Commons. He said he was committed to resolving the problems around the Protocol, “ideally through negotiation, but if not, through legislation”. The Minister said the Government is clear that the Protocol is a negotiation between the EU and UK. Then Minister of State in the Northern Ireland Office Conor Burns (who has since moved to the Department for International Trade), reiterated this point later, telling the Commons that the Government is committed to “fixing the challenges of the interpretation and implementation of the Protocol, and we believe that while we crack on with that, the parties should crack on with restoring devolved government in Northern Ireland.” However, the UK and EU have not negotiated since February.

Heaton-Harris said it is “abundantly clear” that the Protocol not working for all communities in NI. In his view, there is a “fairly obvious landing zone for the negotiations”, but repeated that the Government’s legislation would be used if there is not an agreed outcome. Burns says that he met with Maroš Šefčovič at the British-Irish Association conference on 2 September and is “convinced that if the appetite exists we can find a way to a negotiated solution.”

The new Secretary of State for Northern Ireland Chris Heaton-Harris | Source: UK Parliament

Prime Minister Truss told the Commons that, in order get the Executive back up and running, “we do need to fix the issues of the Northern Ireland Protocol”. She said she would work with all parties in NI to find a resolution and that the Protocol has “damaged the balance between communities”. Truss highlighted that a solution “does have to deliver all the things we set out in Northern Ireland Protocol Bill”. She said, “we cannot allow the situation to drift”, adding that her first priority is to protect the supremacy of Belfast/Good Friday Agreement.

The Secretary of State will travel to Northern Ireland today and meet with Sinn Féin and the DUP. He has said he will work with everyone in NI and will be urging the DUP to form the Executive.

Reaction from NI political parties

Reacting to the announcement of the new Prime Minister, Michelle O’Neill (Sinn Féin) called for “a change of policy and a change of tack from the British government.” She said Liz Truss should “end her sabre-rattling and reckless threats to break international law and get back to the table for talks with the EU to find solutions and give certainty to our businesses.” DUP Leader Sir Jeffrey Donaldson stated that he has requested an early meeting with the PM. He said this week marks one year since he “publicly warned the Government and Brussels that operating devolved government was incompatible with the Northern Ireland Protocol.” The DUP argues that the Protocol is “worsening the cost of living crisis for people here and that is why there needs to be immediate action in this area. Any serious discussion on the cost of living crisis cannot credibly ignore the impact of the Protocol.”

Alliance party leader Naomi Long said of Ms Truss, “Certainly, her comments during the leadership campaign do not inspire confidence, nor does her pursuit of the Protocol Bill.” However, she added, “she has a window of opportunity to put her stamp on the position. As such, she can make a positive impact on Northern Ireland by engaging in sensible discussions with the EU around the Protocol.” Ulster Unionist Party leader Doug Beattie said, “first and foremost the country urgently needs stability…We need the Executive restored in order to deal with all of the pressing issues affecting the people of Northern Ireland. Resolute plans to deal with the Protocol must be brought forward by the Government as it is contributing to a toxic atmosphere in Northern Ireland politics. We cannot afford to wait.” SDLP Leader Colum Eastwood remarked, “Sabre rattling with the European Union must give way to honest dialogue in the interests of all our people. And there must be a return to the politics of consensus through the restoration of devolved government. These will be early tests of the integrity of the new Prime Minister.” TUV leader Jim Allister contends that the new Government’s first challenge is “to take back sovereignty of this United Kingdom and end the ill-gotten sovereignty of the EU. It is up to them to restore Northern Ireland as a full and complete part of the UK.”

Reaction from the EU, Ireland, and the USA

Taoiseach Micheál Martin congratulated the new Prime Minister, saying, “I hope we can use the period ahead to prioritise EU-UK engagement, and to reach agreed outcomes on the issues around implementation of the Northern Ireland Protocol.” It has been reported that PM Truss plans an early visit to Dublin to meet the Taoiseach to “come to an understanding” on the future of the NI Protocol.

European Commission President Ursula Von der Leyen tweeted, “I look forward to a constructive relationship, in full respect of our agreements,” a reference to the UK’s unilateral action on the Protocol. Maroš Šefčovič, the EU’s chief Brexit negotiator, said, “A positive EU-UK relationship is of great strategic importance. I stand ready to work intensively and constructively with my new UK interlocutor to foster such a partnership, in full respect of our agreements.”

The EU will invite the new UK Prime Minister to a summit in October to establish a forum to advance security across the continent, the ‘European Political Community’. President of the European Council, Charles Michel said despite difficulties around the Protocol on Ireland/Northern Ireland, “in the broader perspective, there is no doubt that we are friends and that we need to continue to act together.”

The PM held a call with US President Joe Biden on Tuesday. A press release from her office states, “The Prime Minister and President discussed a range of domestic issues and agreed on the importance of protecting the Belfast (Good Friday) Agreement.” The press release from the White House adds, “They also discussed…the importance of reaching a negotiated agreement with the European Union on the Northern Ireland Protocol.”

The latest on the Protocol

Liz Truss, who most recently was Foreign Secretary, introduced the Northern Ireland Protocol Bill to Parliament in June 2022. The Bill would disapply core parts of the Protocol (part of the Withdrawal Agreement signed with the EU in 2020) relating to trade in goods, subsidy control, the role of the Court of Justice of the EU, plus allow changes to VAT. Ahead of the Bill’s introduction, Liz Truss told the UK Parliament that the Government had "worked tirelessly to [reach a negotiated outcome with the EU]”. She said, “I have had six months of negotiations with Vice-President Maroš Šefčovič, which follow a year of discussions undertaken by my predecessor” but went on to say “to respond to the very grave and serious situation in Northern Ireland, we are clear that there is a necessity to act to ensure that the institutions can be restored as soon as possible.” The Bill passed all its stages in the Commons before the summer, and scrutiny will continue in the Lords this autumn. European Commission Vice-President Vice-President Maroš Šefčovič responded to the Bill, saying, “There is no legal, nor political justification whatsoever for unilaterally changing an international agreement…this is illegal.” The Lords Sub-Committee on the Protocol on Ireland/Northern Ireland is conducting an inquiry into the Northern Ireland Protocol Bill and yesterday heard evidence from businesses in Northern Ireland, and from legal academics.

Steel tariffs

Another issue which has emerged again recently in relation to the Protocol is steel tariffs. Certain steel products moving from Great Britain into Northern Ireland face tariffs of 25% as a result of a change in the EU’s steel tariff rate quota in June, following the war in Ukraine. Trade expert Sam Lowe explains in detail.

Legal proceedings

Since the introduction of the NI Protocol Bill, the European Commission launched various infringement procedures against the UK for “not complying with significant parts of the Protocol on Ireland / Northern Ireland”. This is in addition to the infringement procedures previously launched in June 2022. On 15 August the UK was due to respond to the infringement proceedings of June but requested, and the EU agreed, an extension. The UK now has to respond to the infringement proceedings by 15 September (next Thursday) and 22 September. If not, the Commission says it stands ready to take further measures. According to Mujtaba Rahman, head of Eurasia Group’s Europe practice, the EU “wants to resist feeding the idea that it only moves under pressure” and sources tell him that while the Northern Ireland Protocol Bill remains on the table, flexibility from and negotiation with the EU is unlikely.  

Meanwhile, in the European Parliament last week, three committees (on trade, foreign affairs and constitutional affairs) held a joint meeting to discuss draft EU laws which could be used, should the UK continue with the Protocol Bill. Seán Kelly MEP, who is leading the proposal, said, “If there are breaches to the agreed trading conditions, with this Regulation the Commission will have the power to impose restrictions on trade, investment or other activities falling within the scope of the Withdrawal Agreement and the Trade and Cooperation Agreement.” David MacAllister, Chair of the Foreign Affairs Committee, said “the UK government has once again gone down the slope of unilateral action, [so] it is clear that the European Union needs mechanisms to protect our interests”. The Parliament will vote on this Bill in October.

The UK Government wrote to the European Commission on 16 August to initiate formal consultations on finalising the UK’s participation in EU science and research programmes, such as Horizon Europe. The EU has not signed off on the UK’s participation, linking it with the ongoing dispute over the Protocol arrangements for NI. The UK Government says, “more than 18 months later, the EU has still refused to finalise UK access, causing serious damage to research and development in both the UK and EU member states.” It has written to the European Commission “to launch dispute resolution proceedings and to encourage the EU to abide by their obligations in the deal.” The Government said that the UK is developing “bold and ambitious plans for domestic alternative arrangements should the EU continue its refusal to meet its commitments.”

British-Irish Association Conference

The British-Irish Association Conference was held on 2-4 September in Oxford. Then Secretary of State for Northern Ireland Shailesh Vara MP gave a speech. On the Protocol on Ireland/Northern Ireland, he said, “We are determined to fix those problems, through negotiation and agreement with the EU if at all possible.” He said the aim with the Northern Ireland Protocol Bill is “to put in place an insurance policy so that we can ensure we have a way of resolving the issues with the Protocol. Like all insurance policies, they are better if they’re not invoked but we must bring about a resolution.”

In his speech, European Commission Vice-President Maroš Šefčovič said that the EU’s proposals on the Protocol to facilitate trade have “never been seriously picked up” by his UK counterparts, adding “The UK has not even engaged in any meaningful discussions with us since February.” On the Northern Ireland Protocol Bill, Šefčovič said, “It is not for the UK government alone to change our bilateral agreement and modify the conditions under which goods can enter the EU's Single Market and reach our consumers. This is simply legally and politically inconceivable.”

European Commission Vice-President Maroš Šefčovič | Source: European Union

Taoiseach Micheál Martin said, “I sincerely believe that the EU would respond positively to a serious and genuine signal from the new British Prime Minister that their priority is to reach an agreed outcome on the issues around implementation of the Protocol.” He raised concerns about the UK Government’s legislation: “Concerned by what it means for the partnership approach we want to see between the EU and the UK; concerned by the wider message it sends about a rules-based international order; and, most of all, concerned because it is neither in the interests of the people of Northern Ireland nor what they want.”

Other news

• The first Trade and Cooperation Agreement Civil Society Forum will be held on 4 October in Brussels. The UK representation will have 60 active participants. Expressions of interest to participate can be made by 12 September. The agenda for the first meeting will include trade in goods, sustainability, energy cooperation and the ‘level playing field’.
• The Northern Ireland Statistics and Research Agency (NISRA) has published statistics on the volume and traffic at Northern Ireland’s main ports in the NI Ports Traffic Publication 2021. The total tonnage through Northern Ireland (NI) ports increased by 9% in 2021 compared to the previous year.
• The Supreme Court has rejected the Welsh Government’s application for permission to appeal the court ruling that its claim for judicial review of the UK Government’s Internal Market Act was premature. The Welsh Government says that the Internal Market Act, which was passed post-Brexit to prevent trade barriers within the UK, “is an unwarranted attack on devolution and the right of the Senedd to legislate without interference in areas devolved to Wales.”
• The UK Government has published data on GB-NI customs declarations for goods moving into NI from GB. Customs declarations are required under the Protocol.
• The European Committee of the Regions UK Contact Group met on 6 September. It discussed how local and regional authorities can support the work of the Parliamentary Partnership Assembly; EU-UK synergies to support the energy transition; the impact on regions and cities of the new trade and economic relations between the EU and UK; and the Protocol on Ireland/Northern Ireland. The UK Contact Group is a forum to continue dialogue and political partnership between the EU and UK local and regional authorities.