Brexit & Beyond Newsletter

21 September 2022

Welcome to the 21 September 2022 Brexit & Beyond newsletter

Prime Minister Liz Truss is in New York for a meeting of the UN General Assembly and is also holding bilateral talks with EU, US, and French leaders, which will include discussions on the Protocol on Ireland/Northern Ireland. The UK has responded to legal action from the EU, and says it will continue its unilateral action on the Protocol’s implementation. The new Secretary of State for Northern Ireland has been meeting with party leaders in NI. MLAs attended a roundtable event with Members of the European Parliament. The Lords Sub-Committee on the Protocol heard evidence on the Northern Ireland Protocol Bill.


EU-UK relations

Today, Prime Minister Truss will meet with European Commission President Ursula von der Leyen and US President Joe Biden, while attending the UN General Assembly in New York. Yesterday she met French President Emmanuel Macron, but they did not discuss the Protocol on Ireland/Northern Ireland. The Prime Minister’s spokesperson stated the issue hadn’t been avoided because it was too politically difficult, saying “We want to resolve this with the EU and this is not an issue which can necessarily be resolved by one single EU country.” Commentators have emphasised the importance of the meeting between Truss and von der Leyen, as the first indication of how Truss will approach the Protocol issue in her new role as PM. Ireland’s Europe Minister Thomas Byrne said yesterday that it is a “good moment” for a reset of EU-UK relations. Truss has said she will not allow the matter to “drift”. US national security adviser, Jake Sullivan, said on Tuesday that the US President would encourage the UK and EU to reach a deal and would discuss the matter “in some detail” with Truss. On Sunday morning, Truss met with Taoiseach Micheál Martin, who was in London to attend the Queen’s funeral. Reports suggest that “both sides agreed there was an opportunity to reset the relationship between the UK and Ireland, fuelling hopes that talks with the EU will resume within weeks.”

 Prime Minister Liz Truss in New York

Prime Minister Liz Truss in New York | Source: Andrew Parsons / No 10 Downing Street


UK responds to legal action

On 15 September, the UK Government formally responded to the EU’s legal action over alleged breaches of the Protocol on Ireland/Northern Ireland. In a letter, the UK says it will maintain the status quo and continue with existing ‘grace periods’ i.e. not implement further checks on agri-food entering Northern Ireland from Great Britain, as required under the Protocol. This has been the UK’s position since September 2021, when then Brexit Minister Lord Frost said extending the grace periods indefinitely was “to provide space for potential further discussions, and to give certainty and stability to businesses while any such discussions proceed”. Tomorrow, 22 September, is another deadline for the UK to respond to additional infringement proceedings launched by the Commission in July.

The European Commission confirmed it had received the letter and said it will “analyse the reply before deciding on next steps.” It has previously stated it “stands ready to take further measures”. This could include referring the case to the European Court of Justice (ECJ). RTÉ reports that next steps will depend on whether PM Truss presses on with the NI Protocol Bill, which would disapply core parts of the Protocol. However, it will not rush the case to the ECJ. Tony Connelly reports that Commission President von der Leyen has said she would tell Truss that the “EU would not renegotiate the Protocol and that the solution would have to be found within its framework.” Yet EU sources says the EU could go further than its October proposals if the UK does engage: “if the British are open to resuming negotiations in good faith, and trying to come to a solution-based on the package of last October, but with the Commission indicating they were prepared to go further, then we may be in business." Last week Ireland’s Foreign Minister Simon Coveney said he has “some cautious optimism that we will see, in a few weeks time, the opening of an honest effort to try to settle some of these issues…that does require compromise on the UK side as well as the EU side.”

NI Protocol Bill

The Guardian reports that PM Truss may face a rebellion on the Northern Ireland Protocol Bill in the House of Lords. The Bill, which passed its stages in the Commons in July, would disapply core parts of the Protocol relating to trade in goods, subsidy control, the role of the Court of Justice of the EU, plus allow changes to VAT. It also contains clauses which state, “A Minister of the Crown may, by regulations, make any provision which the Minister considers appropriate in connection with any provision of the Northern Ireland Protocol.” Around 50 Conservative, Labour and cross-party peers are to meet this morning “to discuss how to amend or halt the proposed legislation”. There is concern not only about the parts of the Bill which would disapply the Protocol, but the new powers which would be conferred on ministers. One peer said, “What is happening here is parliament is going to give a carte blanche to any minister to do whatever they want to do without any explanation, including breaking international law.” The Bill is expected to be debated in the Lords in the second week in October at the earliest.

EU position on the Protocol

In an interview with the Financial Times on 12 September, European Commission Vice-President Maroš Šefčovič said under EU proposals for the Protocol, the GB-NI trade border would be “invisible”, on the condition that the UK provides the EU with real-time data on movement of goods. He said physical checks could be reduced to a “couple of lorries a day”. Šefčovič said he was “encouraged” by new PM Truss’ statement in Parliament that she wants a negotiated settlement on the Protocol. He said he was working with the US to bring potential investors to Northern Ireland next year to show the advantages of the Protocol. On the issue of a possible 25% tariff on some steel products being imported from GB to NI, Šefčovič said, “It could be resolved very, very quickly if we get the input from our UK counterparts.”

The EU General Affairs Council met yesterday in Brussels and was briefed by Vice-President Šefčovič. A statement from the Council includes comments on the Protocol: “Ministers reaffirmed their support to the European Commission's approach. They reiterated in particular the EU’s readiness to constructively discuss a negotiated solution within the Protocol to the practical difficulties in implementing it on the ground.” Šefčovič told media in Brussels that he is "ready to work in an open, constructive, and intensive way with [his] new UK interlocutor, Foreign Secretary James Cleverly, in order to find practical solutions to the issues that matter most to the people of Northern Ireland". He said, “In fact, the 25th anniversary of the Good Friday Belfast Agreement will soon be marked. I'm convinced that while appreciating the achievements of the past 20 years in terms of peace in Northern Ireland, we could and should make the next 25 years about peace and prosperity, working jointly to encourage investments from the UK, the EU and the US and beyond."

View from business

Stephen Kelly, Chief Executive of Manufacturing NI said the comments on movement of goods from Vice-President Šefčovič were “helpful”, but in some way restating the EU’s position. He said, “There seems to be a pattern now emerging of the EU and the UK potentially taking a step back from conflict on this. That is to be welcomed…we need to get to the position where both sides think a conversation is possible and worthwhile.” However, he warned that the EU’s proposals alone are not enough to ease the administrative burden the Protocol places on NI businesses, which is “the biggest challenge for many manufacturers in Northern Ireland.”

Meanwhile, the Northern Ireland Statistics & Research Agency (Nisra) has published statistics for Q2 2022, showing that food and drink firms’ output increased by 13.9% compared to the previous year. Ulster Bank chief economist Richard Ramsey says that “the impact of the NI Protocol [is] arguably behind the surge in NI food and beverage output.”

US trade deal

Prime Minister Truss said on Monday that she “doesn’t expect negotiations on a trade deal with the United States to start in the short to medium term.” A free trade agreement with the US has been linked to the dispute over the Protocol. Joe Biden's Press Secretary recently stated, “There is a no formal linkage on trade talks between the US and the UK and the Northern Ireland Protocol, as we have said, but efforts to undo the Northern Ireland Protocol would not create a conducive environment.”

Horizon Europe

The UK has requested a meeting of the specialised committee on EU programmes, established under the Trade and Cooperation Agreement (TCA), to discuss the UK’s participation in Horizon Europe, the EU’s research and innovation programme. This is set to take place tomorrow. The UK Government says that the EU has “politicised scientific cooperation by inappropriately linking UK participation in EU Programmes, and the Northern Ireland Protocol.”


NI Secretary of State meets NI political parties

Yesterday, 20 September, the new Northern Ireland Secretary of State Chris Heaton-Harris spoke with Alliance party leader Naomi Long and UUP leader Doug Beattie. The Minister will meet SDLP leader Colum Eastwood tomorrow. Heaton-Harris told the media he can see a “landing zone” to resolve the issues around the Protocol on Ireland/Northern Ireland. He said it wasn’t an “idle threat” and that the legislation states he must call an election on 28 October, if the Executive isn’t functioning.

 New Northern Ireland Secretary of State Chris Heaton-Harris

New Northern Ireland Secretary of State Chris Heaton-Harris | Source: UK Parliament

Following the meeting, Doug Beattie said, “I got a sense that the sad circumstances of the last number of days has created a degree of goodwill and there is going to be new impetus put into negotiations between the UK and the EU in regards to the Northern Ireland Protocol, and a change in language I think. Northern Ireland cannot be treated differently from the rest of the United Kingdom, but having no executive is incredibly difficult.”

On 8 September, Heaton-Harris met with the DUP and Sinn Féin on his first visit to Northern Ireland as Secretary of State. Mr Heaton-Harris said, “I am looking forward to delivering enough pressure so we can get the Executive up and running, solve the problems of the protocol, and some of the more useful domestic things I can do to help people here in their everyday lives.” Sinn Féin’s Michelle O’Neill said she told Heaton-Harris that “the Protocol is here to stay. We need an agreed way forward. We do not need more unilateral action.” Leader of the DUP Sir Jeffrey Donaldson said he does not feel under pressure to reengage with Stormont. He said, “decisive action needs to be taken to address those problems so that the political institutions can be restored here.” He stated that a "change of stance by the European Union" was required, adding, "When they talk about respecting the Belfast Agreement, that means, in article 1 of that agreement, respecting Northern Ireland's place in the United Kingdom - because that's what the people of Northern Ireland support."


MLAs attend roundtable event with European Parliament

On 8 September in Brussels, an event organised by Renew Europe Fianna Fáil MEP Barry Andrews brought together Members of the European Parliament (MEPs) and Members of the Legislative Assembly (MLAs) in Northern Ireland. Andrews has been calling for a formal structure for NI views to be heard in the EU, and has said until this is in place, Renew Europe will fund such gatherings. The NI Executive Office in Brussels addressed the meeting, amongst others.

Members of the European Parliament and Members of the Legislative Assembly attending the event in Brussels

Members of the European Parliament and Members of the Legislative Assembly attending the event in Brussels | Source: @BrusselsNI / Twitter


Former Taoiseach Bertie Ahern told the parliamentarians that a solution on the Protocol is “not rocket science”.  Ahern said the concerns of the DUP about the ‘Irish Sea border’ are “valid” but added that it was unfair to expect the EU not to protect its single market. He argued, “It’s a fairly clear-cut issue: how can we get records of the movement of goods in a technological way, that satisfies everybody, without it becoming that it’s a ‘border’. And what items do they [the EU] need records of — that’s what the issue is.” He said there should be no or minimal checks for goods moving within the UK, and for other goods, “there probably has to be checks…I agree with the position that those should be done in some technological fashion.” He expressed concern that Northern Ireland could be caught up in other UK-EU disputes, like financial regulation. He said, “I don’t want Northern Ireland to be part of the blame game.”


Lords Sub-Committee take evidence on UKG’s Protocol Bill

On 7 September, the Lords Protocol on Ireland/Northern Ireland Sub-committee heard evidence from businesses and academics as part its new inquiry into the Northern Ireland Protocol Bill. The Bill would disapply core parts of the Protocol relating to trade in goods, subsidy control, the role of the Court of Justice of the EU, plus allow changes to VAT. Michael Hanley, Chief Executive of Lakeland Dairies, one of Ireland’s largest milk processors, said the Protocol is “working seamlessly”. He explained the all-island economy for dairy and and dairy processing. He pointed out that InterTradeIreland’s all-island business monitor shows that companies which export cross-border are growing at twice the rate of those which do not. Hanley contended that the dual regulatory regime proposed in the Bill, whereby companies could comply with either EU or UK regulations, will not work in primary processing: he explained that there are major issues with certification.

Peter Summerton, Managing Director of McCulla Ireland, said the Protocol as it stands is "fundamentally flawed". Roger Pollen, Head of the Federation of Small Businesses (FSB) Northern Ireland commented that there are a lot of useful suggestions in the NI Protocol Bill, but he favours a negotiated solution, saying, “anything unilateral is open to challenge.” Summerton expressed concerns about the ‘green lane’. A form of ‘express lane’ for certain goods has been proposed by both the UK and EU. Summerton said the ‘green lane’ is “becoming discoloured” and that the proposed trusted trader scheme which would qualify businesses to make use of the green lane, is “becoming more and more onerous and is becoming much less like moving goods from Birmingham to Glasgow." Asked whether there was sufficient flexibility from the EU, Pollen said, the current situation “suggests that no-one is being sufficiently flexibility”.

Professor Mark Elliott of Cambridge University told the Committee that while the Bill tries to address practical economic and political difficulties, it seems there is an “incompatibility” between the Bill and the UK’s international law obligations in the EU-UK Withdrawal Agreement. Professor Alan Boyle of University of Edinburgh asserted that the Bill can be justified in terms of Article 16 of the Protocol, and “then it cannot be a violation of the Protocol [and Withdrawal Agreement].” He said the Government would have a “very strong case” if their defence of the Bill was in Article 16 and the restoration of power sharing in NI.


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