Brexit & Beyond Newsletter
31 January 2022
Welcome to the 31 January 2022 Brexit & Beyond newsletter
Two years since the UK officially left the European Union, negotiations between the two sides continue, while Prime Minister Johnson has announced a new ‘Brexit Freedoms’ Bill. Ministers from the Executive Office and the Minister for the Economy took questions in the chamber last week on the role of the Executive and North South Ministerial Council in the governance of the Protocol, scrutiny of EU legislation, loss of EU funding, and the costs of the Protocol. Parliamentary committees heard evidence on the UK’s trade deals with Australia and New Zealand, and on Common Frameworks. The UK’s delegation to the EU-UK Parliamentary Partnership Assembly has been announced.
Operation of the Protocol
UK Foreign Secretary Liz Truss and European Commission Vice-President Maroš Šefčovič met in Brussels last Monday, 24 January, following another week of intensive talks between EU and UK officials on the Protocol on Ireland/Northern Ireland. They released a short joint statement, which said the meeting “took place in a constructive atmosphere”. The lead negotiators will meet again on Thursday and a meeting of the EU-UK Joint Committee will take place on 21 February. Šefčovič gave a statement to the press, saying, “if political goodwill is maintained, our discussions could lead to a timely agreement on durable solutions that would immediately and significantly help operators on the ground.” He emphasised that the EU needs safeguards to protect its single market: “The risks here – be it fiscal or in the area of public health and consumer protection – are not theoretical.” Šefčovič said he was “not in the business of setting artificial deadlines, but…will act with a sense of urgency.”
UK Foreign Secretary Liz Truss and European Commission Vice-President Maroš Šefčovič | Source: European Union
RTÉ reported last week that Šefčovič told European Affairs ministers that the meeting was “difficult” and that Truss had raised new issues, such as state aid, which the EU considers to be dealt with already in the Withdrawal Agreement and EU-UK trade deal. Truss visited Northern Ireland last week and gave an interview to the Belfast Telegraph. She said she was hopeful that the EU and UK would find a “sweet spot” in their negotiations. Truss said she wanted to make significant progress by 21 February but said, “going through all of the details about how to make things work better…takes time, it’s complex”. She added that it was important to secure the support of all communities in Northern Ireland.
Protection of the EU’s Single Market
On Friday, the Assembly library published a paper, deposited by the Department of Agriculture, Environment and Rural Affairs, on the European Commission’s audit of controls on animals and goods entering Northern Ireland, and on border control posts in NI. The review was carried out last summer. It concludes: “the system is not fit for purpose, does not comply with EU rules and cannot provide sufficient assurances that only compliant animals and goods are permitted to enter the EU SPS area through the designated border control posts in Northern Ireland.” It highlights that “the United Kingdom Government has failed to ensure that sufficient resources – human and structural – have been made available to the responsible competent authorities in Northern Ireland by the devolved administration in Northern Ireland, which, by virtue of the decisions it has taken on halting the recruitment of staff and stopping the development of border control post infrastructure, is impeding the full implementation of the Protocol.” The report makes eight recommendations to address the shortcomings it finds.
Questions in the Commons
Foreign Secretary Truss took questions in the Commons on Tuesday. She was asked about the Protocol and said, “We do need to make sure that we maintain the sovereignty and territorial integrity of the United Kingdom and that we fix this issue once and for all.” Asked about the possibility of a veterinary agreement with the EU, Truss said, “We are exploring all options that maintain the sovereignty and territorial integrity of the UK.”
Secretary of State for Northern Ireland Brandon Lewis was asked about trade between GB, NI, and the EU and engagement with businesses on the Protocol. He said, “[Businesses] are very clear: the Protocol in its current format is not working. It is not sustainable. The EU offer is not good enough. They are very clear about that. That is something we are determined to fix…if the protocol works in the way it was envisaged, it does create opportunities for Northern Ireland. The problem is that the EU’s requirements for implementation are failing Northern Ireland and we need to see that fixed.”
At Prime Minister’s Questions, Boris Johnson told the Commons that he “never thought” when they negotiated the Protocol, “that it would mean 200 businesses would stop supplying Northern Ireland, foods being blocked and Christmas cards being surcharged.” He said the EU is implementing the Protocol “in an insane and pettifogging way.” Today, the Prime Minister announced a ‘Brexit Freedoms’ Bill will be brought forward to mark the two year anniversary of “getting Brexit done”. The Bill would “end the special status of EU law and ensure that it can be more easily amended or removed.”
Brexit at the Assembly
At Question Time on Monday 24 January, deputy First Minister Michelle O’Neill (Sinn Féin) was asked if any proposals on the operation of the Protocol on Ireland/Northern Ireland have been raised via the North/South Ministerial Council (NSMC). Article 14 of the Protocol states that the Specialised Committee on Northern Ireland should “examine proposals concerning the implementation and application of this Protocol from the North-South Ministerial Council and North-South Implementation bodies set up under the 1998 Agreement”.
Withdrawal Agreement governance structure
O’Neill said that to-date no proposals had been raised to the Specialised Committee via the NSMC, but said they “keep that matter under review and will consider utilising article 14(b) to refer proposals to the Specialised Committee, should it be appropriate to do so.”
The deputy First Minister was asked about the legal obligations of the Executive in implementing checks required under the Protocol. The deputy First Minister told the Assembly, “It was the Executive collectively who agreed that the Department of Agriculture was the designated competent authority to perform the checks and controls on the Executive's behalf. It is Executive policy that we are legally obliged to fulfil our responsibilities under law in areas of the withdrawal agreement and the protocol that are within the Assembly's devolved competence. That includes performing checks and providing the associated infrastructure at local ports.” This question came amid reports that the Minister for Agriculture is seeking to halt checks at NI’s ports. UK Foreign Secretary Liz Truss told the Belfast Telegraph said this was “a matter for the NI Executive” to resolve.
Deputy First Minister Michelle O'Neill | Source: NI Assembly
Regarding ongoing negotiations between the EU and UK, O’Neill said, “I really hope that the momentum is built on, as we saw before Christmas on the issue of medicines. There was some forward movement on that. Let us be pragmatic. Let us be reasonable…We want to find a way forward within the framework of the protocol that allows all the issues to be ironed out. I believe in east-west trade and want that to continue. I have said that I want to see access to both markets.”
The deputy First Minister was asked what work the Executive Office is undertaking to secure representation from Northern Ireland during the development and approval of new EU legislation. O’Neill said she welcomed the EU’s proposals of 13 October 2021 for enhanced engagement with authorities and stakeholders but said, “further clarity is needed as to how proposed arrangements would fit into existing governance structures and the role of the Executive.” She said they had raised those concerns with former UK Brexit Minister David Frost and will do so again with Liz Truss. She added, “Information on the legislation in the protocol is exchanged via the joint consultative working group, which our officials attend. In addition, Departments here are afforded the opportunity to see and provide input into the British Government's explanatory memoranda process on EU legislative proposals.” She said NI’s input “needs to be at the right time, not at the end of a process. Our input needs to be up front so that we make a meaningful impact.”
Economy Minister Gordon Lyons (DUP) was asked about the cost of the Protocol to the NI economy. He said that it is “difficult to provide a complete analysis given that the protocol has not been fully implemented”, suggesting that when grace periods and mitigations come to an end, “things are likely to get much worse.” He pointed to Ulster University’s Dr Esmond Birnie’s estimate that trade friction with GB could cost the Northern Ireland economy around £900 million. Lyons said, “I have the evidence and the data from different businesses and organisations that are saying that it is increasing costs, which are passed on to all of our constituents.” He said that the Road Haulage Association has stated that “a 10% to 20% increase in [their] costs is directly attributable to the protocol.” Lyons emphasised, “It is about what is coming down the track, when we think of all the grace periods that will end and the mitigations that are due to end. Remember, too, that all this is being held together by a £500 million Trader Support Service that will go at the end of this year.”
Australia and New Zealand trade deals
The Commons Northern Ireland Affairs Committee held a session on the UK’s free trade agreements with Australia and New Zealand and their effect on NI. Ulster Farmers’ Union President Victor Chestnutt was among the witnesses and raised concerns that farmers could be “left in no man’s land” under the Protocol: “The protocol was sold to Northern Ireland as giving us the best of both worlds, but the fact is that our produce cannot be sold on an EU trade deal, so we are limited to UK trade deals. In the case of divergence [between NI and GB] our products will be a slightly different standard than those of the UK, does that freeze us out of the UK trade deals or leave us at production price disadvantage with the UK?” The Committee also heard from High Commissioners from Australia and New Zealand, who emphasised the benefits of the free trade agreements.
Ulster Farmers’ Union President Victor Chestnutt | Source: UK Parliament
On Thursday, the Committee for Agriculture, Environmental and Rural Affairs heard evidence from departmental officials on the impact of the trade deals with Australia and New Zealand. Officials told the Committee that while the Protocol would prevent products coming into NI under the trade deals, NI’s main market for beef is Great Britain. If more produce comes into GB from New Zealand and Australia, that creates competition for NI producers: “[the Protocol] doesn’t actually protect the market we are competing in”.
Loss of EU funding to Northern Ireland
In the Assembly on Monday, the deputy First Minister was asked about the loss of EU funding to Northern Ireland, in particular the European Social Fund. She said, “There is no doubt, whatever way you cut it, that the prospect of a net loss of £100 million of European funding will have a huge impact…not just on the groups and the work that they do on the ground but on the Executive's finances. Normally, the Executive had a say in what that money funded, and it was complementary to the work in the Departments. Now, as a direct result of the delivery of Brexit, a huge challenge faces so many groups out there.”
The Minister for the Economy Gordon Lyons (DUP) was asked about apprenticeships and the impact of the loss of EU funding on his Department’s budget. He said, “Less than one third of my Department’s pressures relate to key DFE services previously funded from the UK Government’s contribution to Europe. That funding has not gone, but will flow directly to Northern Ireland from the UK Government rather than through the European Union. The UK Government made a commitment that they would replace, at a minimum, the level of EU funding that flowed into Northern Ireland.” He said the Finance Minister “needs to ensure that funding to Northern Ireland from the UK Government meets the Executive's priorities. Until he does, some core DFE services, namely apprenticeships and grants for innovation, will remain unfunded.”
Minister for the Economy Gordon Lyons | Source: NI Assembly
On Wednesday, the Committee for the Economy took evidence from the Minister. Lyons told the Committee that the Finance Minister's department is responsible for leading NI's negotiations with the UK government on replacement funding and said, “these negotiations have to date resulted in additional funding for Northern Ireland being managed by Westminster, with no alignment to the Executive's priorities and that needs to change.” The Minister said he has engaged with the Secretary of State for Northern Ireland on this issue, and thinks that Brandon Lewis “understands the need to make sure that there is that control over the funds in such a way that it addresses our priorities.” Chair of the Committee Caoimhe Archibald (Sinn Féin) said, “We have no control over the Shared Prosperity Fund, we have no control over the administration, we've completely lost the ability to ensure that funds are being directed to where they're needed most”. She highlighted that previously EU structural funding was funnelled through the Executive. She said the current situation is “highly unsatisfactory”.
EU-UK Parliamentary Partnership Assembly
On 26 January 2022, the UK Prime Minister made a written statement naming the UK delegation to the new EU-UK Parliamentary Partnership Assembly under the Trade and Cooperation Agreement (TCA). The PPA is to act as a forum for the UK Parliament and the European Parliament to exchange views on the TCA. It is made up of 21 Members from the Commons (12 Conservative MPs, seven Labour and two from other parties), and 14 from the Lords. There are also 12 substitutes: eight from the Commons (five Conservatives, two Labour and one other) and four from the Lords. DUP MP Sir Jeffrey Donaldson is a full member, while Baroness Ritchie is a substitute.
Danny Jeyasingam, Deputy Director of the Devolution Team at the UK Department of Environment, Food and Rural Affairs, gave evidence to the Lords Common Frameworks Scrutiny Committee last Tuesday. Common Frameworks are being developed in policy areas which were previously governed by EU law and which intersect with devolved competence. The programme has been repeatedly delayed and governments have set out their intention for the process and scrutiny to be completed before the pre-election period in Northern Ireland, which begins in March. Jeyasingam told the committee that if the frameworks aren’t agreed by this time, there is a contingency plan and the frameworks would be operated (as is the case currently) on an interim basis. He said that if the Northern Ireland Executive didn’t return for a longer period, more detailed work would be required. He pointed out that work on Common Frameworks began in 2017 when the NI Executive was not meeting, and that while a large amount technical work between officials was undertaken, ultimately the frameworks depend on ministers being able to take decisions.
The Committee noted that the Scottish Government has already acted to ban single use plastics. Jeyasingam said this was the first formal request under provisions in the UK Internal Market Act for exclusions in Common Framework areas. He noted that this policy direction is shared by other governments in the UK and consultations are ongoing.
- The Lords Sub-Committee on the Protocol on Ireland/Northern Ireland has written to Foreign Secretary Liz Truss seeking the Government’s analysis of the EU’s proposals on medicines supply to Northern Ireland under the Protocol, and the extent to which they will resolve the issues which have arisen.
- The Commons European Scrutiny Committee has published the Government’s response to its report on the Brexit financial settlement and UK participation in EU programmes, including Horizon (the EU’s research and innovation programme).
- The Centre for Cross Border Studies has presented the results of its Quarterly Survey on the conditions for North-South and East-West Cooperation.
- The ninth meeting of the Specialised Committee on Citizens’ Rights took place on 24 January 2022. The Committee was established by the Withdrawal Agreement to monitor the implementation of the Citizens’ Rights part of the Withdrawal Agreement, which protects the rights of UK nationals in the EU and EU citizens in the UK. The EU and UK released a joint statement and the sixth Joint Report on Residence was published.
This Week at the Assembly
- Wednesday 2 February, 10.05AM - Committee for the Economy - Departmental Briefing on Common Frameworks: Late Payment Policy and Company Law
- Wednesday 2 February, 12.30PM - Committee for Infrastructure - Motor Insurance (Compulsory Insurance) Bill: Written Briefing
- Thursday 3 February, 10AM - Committee for Agriculture, Environment and Rural Affairs - Workforce Labour Issues: Oral Briefing from NI Pork and Bacon Forum; Radioactive Substances Framework: Draft Committee Position Paper
Catch up with Assembly Business
- Monday 24 January, 2PM – Plenary - Question Time - The Executive Office; Economy
- Wednesday 26 January, 12.10PM - Committee for Infrastructure - Scrutiny of Transport Common Frameworks -Written Briefing
- Thursday 27 January, 10.40AM - Committee for Agriculture, Environment and Rural Affairs - Impact of Trade Deals with Australia and New Zealand: Oral Briefing from DAERA