Brexit & Beyond newsletter

20 February 2023

Welcome to the 20 February 2023 Brexit & Beyond newsletter

While the Prime Minister is saying that work continues, media widely report that a deal on the Protocol on Ireland/Northern Ireland could be announced this week. The Prime Minister visited Northern Ireland at the end of last week and met with political parties. The PM met the European Commission President; and the Foreign Secretary met the Commission Vice-President. The Retained EU Law Bill had its second reading in the Lords. The Supreme Court ruled that the Protocol on Ireland/Northern Ireland is lawful.

 

A flurry of diplomacy

This week’s Brexit newsletter could soon be out of date, with multiple reports that a deal on the Protocol on Ireland/Northern Ireland is to be announced imminently. The official line is that negotiations continue and a deal is not done. While tomorrow (Tuesday 21) had been mooted as the day for the announcement, reports suggest a deal may only be announced later in the week. There is no guarantee that there will be a deal and the UK Government could decide to proceed with the Northern Ireland Protocol Bill (to unilaterally change the Protocol).

Prime Minister in Northern Ireland

At short notice, Prime Minister Rishi Sunak flew to Northern Ireland on Thursday (16 February) for meetings with Northern Ireland’s five main political parties on the Protocol on Ireland/Northern Ireland. A Number 10 spokesperson said the visit by the PM was part of the “engagement process” to “ensure any solution fixes the practical problems on the ground, meets our overarching objectives and safeguards Northern Ireland’s place in the UK’s internal market.”

Following the meetings on Friday morning, Alliance leader Naomi Long said, “things are gradually moving in the direction of a potential deal, but we are not over the line yet…there is some heavy lifting still to be done.” SDLP leader Colum Eastwood said “detail [from the PM on a potential deal] was scant” but he was “optimistic” about the prospects for a deal. Eastwood said nothing should be done which damages the “huge opportunity” for NI’s economy from the Protocol, adding, “we think he [the PM] understands that”. Ulster Unionist Party leader Doug Beattie said, "I don't leave here knowing much more than I did when I went in, but certainly the Prime Minister was enthusiastic, engaged and positive." Sinn Féin President Mary Lou McDonald said it “seems to us that it’s very much game on”.

DUP leader Sir Jeffrey Donaldson met the PM on Thursday evening as well as Friday morning. He told the media, “clearly this is a big moment”. They haven’t seen the final text of an agreement and said there are “still some areas where further work is required”. Donaldson said he had been clear with the PM that the party’s seven tests remain the basis for judging an agreement, and he wants the EU to “stretch itself to recognise the concerns of unionists.” (DUP press statement) In an interview with Italian newspaper La Repubblica on 16 February, DUP peer Nigel Dodds said a deal under which EU law continues to apply in Northern Ireland will be unacceptable to the party.

Sunak said his conversations in Northern Ireland were “positive”. He stated, “The tests I've set myself is that we protect Northern Ireland's place in our internal market, that we protect the Belfast Agreement and that we resolve the practical issues that the Protocol is causing families and businesses in Northern Ireland and crucially, that we address the democratic deficit."

 

EU-UK meetings

The Prime Minister met European Commission President Ursula von der Leyen at the Munich Security Conference on Saturday (18 February). According to their joint statement, they had a “positive discussion” about the talks on the Protocol and agreed “there had been very good progress to find solutions. Intensive work in the coming days is still needed at official and ministerial levels.”

 Prime Minister Rishi Sunak meeting the President of the European Commission Ursula von der Leyen at the Munich Security Conference

Prime Minister Rishi Sunak meeting the President of the European Commission Ursula von der Leyen at the Munich Security Conference | Source:  Simon Walker / No 10 Downing Street

UK Foreign Minister James Cleverly and European Commission Vice-President Maroš Šefčovič met in Brussels on Friday. Cleverly tweeted, “We discussed the work ongoing between the UK and EU to find a solution on the NI Protocol. Intensive work continues.” Šefčovič tweeted, “Constructive engagement. Good progress. The shared objective clear: joint solutions, responding to the everyday concerns of people in NI. Hard work continues.” Following this, a special restricted meeting of EU ambassadors took place. According to reports, Šefčovič put EU member states on alert for a possible deal, but no timeline was given. He assured them that the European Court of Justice would remain the ultimate arbiter of EU single market law in the event of a dispute.

A diplomat told Tony Connelly that the EU and UK were looking at ways for voices from Northern Ireland to be “heard better” regarding the implementation of the Protocol. Tánaiste Micheál Martin, speaking today in Brussels, said he was aware of concerns about the democratic deficit in the Protocol, saying, “Within the joint committees there are mechanisms there that can be developed to facilitate inputs.” The BBC reports that one plan to address the democratic deficit could include a variation of the petition of concern for the NI Assembly to signal an objection to new EU rules applying under the Protocol.

 

Is a deal almost done?

Media have reported on the possible content and announcement date for a deal. The Guardian reported that a deal could be struck this week, writing this would include a “fudge” on the role of the European Court of Justice, giving input for NI courts on relevant disputes on devolved matters; and a “carve-out” for retailers with no customs checks on their imports. The Telegraph reports that this week is “pencilled in” for the announcement of the deal, noting the role of the ECJ is “likely to be presented differently by the EU and UK”; that the UK will play up the role of NI’s own judges and that “new language stressing that the ECJ will only be used as a court of last resort is expected in a joint EU-UK statement”. The paper notes PM Rishi Sunak has been “heavily involved” in the process. Politics Home reported that the Government is finalising a command paper for Lords and MPs explaining the agreement, as well as a briefing which includes how the agreement meets the DUP’s seven tests. The DUP said on Wednesday 15 February that it will be the final arbiters of whether any deal meets its tests and is emphasising the constitutional implications of EU law applying to Northern Ireland.

Tánaiste Micheál Martin has said there is a "distance to go yet" before a deal is sealed. Media note that the Northern Ireland Protocol Bill – currently stalled in its passage through the House of Lords – is expected to be dropped once a deal is negotiated. The official line from Downing Street has been that negotiations continue. Sunak stated emphatically on Saturday, “there isn’t a deal…we are by no means done.” Meanwhile, former Prime Minister Boris Johnson has warned Sunak that dropping the Northern Ireland Protocol Bill would be a “great mistake”. There are reports that the PM could face opposition to the deal from both leave-supporting Conservative MPs and the DUP.

The Northern Ireland Business Brexit Working Group, a consortium of 14 industry bodies across Northern Ireland’s business community, has welcomed the reports of progress on a deal and called for engagement with local stakeholders. “This needs to happen, as we repeatedly say, to ensure that a workable deal is done with Northern Ireland and not to Northern Ireland,” it states. It calls for the EU and UK to get a deal with gives NI a voice on EU and UK laws impacting on NI trade; and for “mechanisms to ensure Northern Ireland is supported and protected with the long term challenges of regulatory divergence. “

 

EU law and divergence

Research Fellow at Queen’s University Belfast Dr Lisa Claire Whitten has published an article on the changes in EU law applying in NI in the first two years of the operation of the Protocol. There has been little change in the first two years, reflecting the slow pace of the EU legislative process and the relative stability of EU law on trade in goods. However, Whitten notes, “as the UK increasingly diverges from what was EU law, and is currently retained EU law, the implications of Northern Ireland’s dynamic regulatory alignment can be expected to become more evident and more significant in respect to policy development and implementation.”

CBAM

The Carbon Border Adjustment Mechanism (CBAM), a carbon tax on imported goods, may apply to NI under the Protocol. On 9 February, the European Parliament Environment Committee voted to approve the proposed CBAM. The Parliament is expected to vote on it in plenary session in April, and the EU Council would like to see it concluded by 10 May. The CBAM is set to enter into force in its transitional phase on 1 October 2023. Experts have told the Lords European Affairs Committee that a CBAM could work “extremely badly” for transmitting electricity from Great Britain to Northern Ireland and would constitute "a significant regulatory barrier for companies in NI wishing to trade with the Republic of Ireland.” The Commons Business, Energy and Industrial Strategy Committee has received a response from the Government about the EU’s Emissions Trading System and CBAM.

Tracking divergence

The Lords Sub-Committee on the Protocol received a response from the Europe Minister, who states that the Foreign Office does not intend to log divergence relating to the Protocol: “given we had already been informed by the EU by June 2022 of over 4,000 adopted measures within the scope of the Protocol, in addition to the 2,400 pieces of Retained EU Law logged as part of the dashboard, this would represent too large an undertaking for the department”. The Committee previously urged the Government to keep such a log of regulatory divergence and has written to the minister again, stating “the practical consequences of regulatory divergence will become ever more complex as both the EU and the UK bring forward further legislation. As a matter of transparency, we believe that such a log of all cases of regulatory divergence arising from UK and EU legislation since the Protocol came into force is essential.”

 

Supreme Court delivers judgement on the Protocol

On 8 February, the Supreme Court ruled that the Protocol on Ireland/Northern Ireland is lawful, dismissing a case brought by a group of unionist politicians, including TUV leader Jim Allister, UUP MLA Steve Aiken, and former DUP leader Arlene Foster. (Full judgement,  press summary) The appellants argued the Protocol is incompatible with the Acts of Union and the Northern Ireland Act. The Court found that Article VI of the Acts of Union (which states that His Majesty's subjects of Great Britain and Ireland shall…be on the same footing…in respect of trade) is modified by the Protocol via the European Union (Withdrawal) Act 2018 and that the relevant part of the NI Act (on its constitutional status) “relates only to the right to determine whether Northern Ireland remains part of the UK or joins a united Ireland.”

Northern Ireland political parties had mixed reactions to the judgement. Sinn Féin MLA Declan Kearney welcomed it, saying “it is time to move forward politically.” SDLP MLA Matthew O’Toole also welcomed the judgement as providing “important clarity on the lawful status of the Northern Ireland Protocol…as a matter of international and domestic UK law.” Alliance MP Stephen Farry called the ruling “not surprising in the slightest” and said “Northern Ireland was always going to require some special arrangements in the context of a hard Brexit.”

DUP leader Sir Jeffrey Donaldson said that a solution to the Protocol “was never going to be found in the courts, but the cases have served to highlight some of the reasons why unionists have uniformly rejected the Protocol.” UUP MLA Steve Aiken said, “that the Supreme Court recognises that the Protocol suspends a part of the Act of Union should be a matter of considerable concern for all those who believe in our Union, whether they be in Northern Ireland, England, Scotland or Wales.” TUV leader Jim Allister said the judgement “does not in the least affect [the Protocol’s] political unacceptability, nor its dire constitutional consequences.” He added, “If anything, the Supreme Court ruling must embolden the political campaign against the Protocol, because that is now the critical arena of challenge.”

 

Retained EU Law Bill

The Retained EU Law (REUL) Bill had its second reading in the Lords on 6 February (Hansard part one, Hansard part two). Amendment papers can be viewed on the Bill page. The debate covered issues which have previously been raised by numerous interest groups, politicians, and legal commentators. These include the wide-ranging powers which would be given to ministers under the Bill and the adequacy of parliamentary oversight of the process - Lord Hannay said, “You might think it is an odd interpretation of taking back control”. The Bill’s potential negative impact on workers’ rights and environmental protection, and the tight timetable for amendment, replacement or repeal of REUL was also discussed. Members also considered two motions of regret against the Bill. Both raised concerns about the powers it would hand to Ministers, the timetable for repealing laws, and the uncertainty it could create.

 Second reading of the Retained EU Law Bill in the House of Lords

Second reading of the Retained EU Law Bill in the House of Lords | Source: UK Parliament

The UK Government has created four new departments. The new Department for Business and Trade, headed by Minister Kemi Badenoch, will oversee the Retained EU Law Bill. The Scottish Cabinet Secretary for Constitution, External Affairs and Culture Angus Robertson has written to the Minister about the Bill. In the Scottish Government’s view, it should be withdrawn. The Scottish Parliament’s Constitution, Europe, External Affairs and Culture Committee has published a report on the Legislative Consent Memorandum for the Bill. It believes that the Scottish Parliament “should have the opportunity to effectively scrutinise the exercise of all legislative powers within devolved competence.” The report states, “The Bill in its current form neither protects nor promotes that principle; nor does it encourage confidence when it comes to the potential impacts on policy areas as crucial and wide ranging as food standards, animal health, safeguarding the environment, consumer protection, business practice, and employment.”

The Lords Protocol on Ireland/Northern Ireland Sub-Committee has written to the Government requesting clarity about the Retained EU Law Bill in relation to Northern Ireland and the Protocol. The Common Frameworks Scrutiny Committee has published responses from the Government (DLUHC response, DEFRA response), which include information about the Government’s approach to REUL within the frameworks. More on Common Frameworks.

 

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