Brexit & Beyond newsletter

28 March 2023

Welcome to the 28 March 2023 Brexit & Beyond newsletter

The EU-UK Withdrawal Agreement Joint Committee met on Friday and formally adopted the Windsor Framework. The EU-UK Partnership Council also met on Friday to discuss the Trade and Cooperation Agreement. The EU General Affairs Council approved the Windsor Framework. The House of Commons debated and voted on the Stormont Brake. UK Parliamentary committees heard evidence on the Framework. The Office for the Internal Market has published its first reports.

 

EU-UK Joint Committee approves the Windsor Framework

The EU-UK Withdrawal Agreement Joint Committee met in London on Friday 24 March, its first meeting since February 2022. It adopted a decision on arrangements for the movement of goods, the Stormont Brake, and VAT and excise, as set out in the Windsor Framework. The decision and recommendations entered into force on 25 March, and the Framework will be applied in a gradual way. Various other recommendations, joint declarations, and unilateral declarations clarify how the Framework will work in practice. EU legislation on SPS measures, medicines, and Tariff Rate Quotas is being considered by the European Parliament and EU Council.

Co-chairs of the Joint Committee, European Commission Vice-President Maroš Šefčovič and UK Foreign Secretary James Cleverly gave a joint statement, saying the new arrangements “address, in a definitive manner, the challenges in the operation of the Protocol”. The EU and UK “agreed to work together intensively and faithfully to implement all elements of the Windsor Framework” and “reaffirmed their intent to use all available mechanisms in the Framework to address and jointly resolve any relevant future issues that may emerge.”

 UK Foreign Secretary James Cleverly and Vice-President of the European Commission Maroš Šefčovič

UK Foreign Secretary James Cleverly and Vice-President of the European Commission Maroš Šefčovič | Source: Rory Arnold / No 10 Downing Street

The Partnership Council, which oversees the EU-UK Trade and Cooperation Agreement also met and discussed cooperation on energy, trade, and security. The Retained EU Law Bill was also discussed. The European Commission published a report on the Trade and Cooperation Agreement on 15 March.

On Tuesday, the EU General Affairs Council approved the main elements of the Windsor Framework, paving the way for the EU and UK agreement in the Joint Committee. Jessika Roswall, Minister for EU Affairs of Sweden, which currently holds the rotating Presidency of the EU Council, said the agreement “should allow the EU and the UK to open a new chapter…The member states stand united behind the European Commission in their support for the agreed solutions and look forward to their swift implementation in good faith.”

 

UK Parliament votes on the Stormont Brake

On Wednesday 22 March, the House of Commons debated a motion on the Stormont Brake. The Statutory Instrument (SI) on the Brake was published. It contains provisions for a new NI Assembly committee, the ‘Windsor Framework Democratic Scrutiny Committee’, to examine new and replacement EU acts.  The SI also sets out the process for 30 MLAs to notify the UK Government that they wish to pull the Brake. In addition, the SI provides for consideration of new EU acts by the NI Assembly, through a debate on an ‘applicability motion’, which would need to be passed with cross-community support.

Secretary of State for Northern Ireland Chris Heaton-Harris told the Commons that the Stormont Brake “addresses the democratic deficit, restores the balance of the Belfast/Good Friday Agreement, and ends the prospect of dynamic alignment.” He quoted one of Michel Barnier’s former advisers, saying the Brake “does amount to a clear veto possibility for the UK government, directive-by-directive, at the behest of a minority in the Northern Ireland Assembly.” Heaton-Harris said, “I think that people who know what they are talking about understand that this is a very, very good deal.” He called the threshold for invoking ‘exceptional circumstances’ (under which the Government could accept an amended or new EU law without cross-community support in the Assembly) “unbelievably high”.

 Secretary of State for Northern Ireland Chris Heaton-Harris speaking in the Commons

Secretary of State for Northern Ireland Chris Heaton-Harris speaking in the Commons | Source: UK Parliament

Stephen Farry (Alliance) said he was treating the vote as a recognition of the wider package in the Framework and voted for it. He highlighted that the new committee in the Assembly “will require a lot of resources, as will the necessity of engaging with Brussels on the development of new law from first principles.”

DUP leader Sir Jeffrey Donaldson said the party’s fundamental problem with the Protocol is “the continued application of EU law in Northern Ireland…regardless of whether those goods are being sold in the United Kingdom or to the European Union.” He suggested the NI Protocol Bill’s dual regulatory regime would be a better solution. This matter was also raised at Question Time on Wednesday, where Steve Baker, Minster in the NI Office, said dual regulation was not what businesses in NI want. Donaldson also highlighted the prospect of divergence if the UK decides to change its rules and noted the Stormont Brake does not apply to existing EU laws. Donaldson said the application of EU law should not impede NI’s ability to trade with the rest of the UK, saying “until that is resolved, I cannot give the Government a commitment to restore the political institutions.” Ahead of the vote, the DUP issued a statement saying it would vote against the SI, “whilst continuing to seek clarification, change and re-working.”

Colum Eastwood, leader of the SDLP, told the Commons, “We do not like the Stormont Brake…it damages and clouds the investor proposition; it has no specific role for the human rights or equality commissions; and the brake can be pulled before the committee can even finish its work on scrutiny.” He voted for the motion as a vote on the whole Framework, emphasising the opportunity of dual market access.

515 MPs voted for the motion, while 29 voted against. The Alliance Party and SDLP voted in favour, the DUP against.

The UUP issued a statement on 21 March on the Framework. Party leader Doug Beattie said it is “a stepping stone” on necessary changes to the Protocol. He remarked that there are opportunities around “dual market access, business support and the promise of foreign direct investment”. He said the Stormont Brake offers Northern Ireland politicians “a unique say in EU laws that may affect this part of the UK due to our access to the single market. But important points of legal and technical clarification still remain outstanding. That EU law should not affect those who trade purely between Great Britain and Northern Ireland but is necessary to allow businesses such as the dairy industry to operate into the EU single market unhindered.” He highlighted outstanding issues around VAT and state aid rules, provision of veterinary medicines to NI and a lack of clarity in relation to the red and green lane system.

The House of Lords will debate the draft regulations on the Windsor Framework tomorrow afternoon.

Tony Connelly tweets about the European Commission’s assessment of the published Statutory Instrument. The Irish News has published the results of a survey on the Windsor Framework.

Secretary of State for Northern Ireland Chris Heaton-Harris was in Hillsborough on Thursday to meet with local parties. He told the media, “That deal is done. There is no renegotiating of that deal…I will always talk to every single member of Northern Irish political parties but the time for negotiation on the Windsor Framework is over."

Following the EU-UK agreement on the Framework in the Joint Committee, Sinn Féin Vice-President Michelle O’Neill said “Now is the time to move forward. The negotiation is over, and the deal is done. We have a big opportunity to strengthen our economy and create good jobs by seizing the competitive advantage that unique access to the EU and British markets offers us.”

 

Scrutiny of the Windsor Framework

The Secretary of State for Northern Ireland Chris Heaton-Harris gave evidence to the European Scrutiny Committee on Tuesday 21 March. Gavin Robinson (DUP) questioned the Minister about UK divergence. Brendan Threlfall, Acting Director General of the Cabinet Office, told the committee that the Prime Minister has committed to restoring clauses to the UK Internal Market Act on Northern Ireland businesses’ access to the UK market, regardless of divergence. He also highlighted the Government’s intention to strengthen the role of the Office for the Internal Market to monitor the risks of divergence.

Asked about the Government’s claim that about less than 3% of EU rules still apply under the Framework, Chris Heaton-Harris said “what this deal does is disapply hundreds of pages of EU law as they apply to Northern Ireland at this point. It is something like 67 different EU laws.” He added, “it generally is not as simple as having one list, because some rules are disapplied for the green lane in support of internal UK trade, and some rules apply to the red lane, but it is clear in the text that there are swathes of areas where EU rules do not apply to internal UK trade.”

The Secretary of State submitted further evidence to the committee in writing, including on VAT and excise, state aid, and the role of the Court of Justice of the EU.

 

Lords Sub-Committee begins inquiry on the Framework

The Lords Sub-Committee on the Protocol on Ireland/Northern Ireland began its inquiry into the Windsor Framework on Wednesday in a wide-ranging evidence session with legal and policy experts. Anton Spisak of the Tony Blair Institute for Global Change raised some concerns about the political dimension of the agreement, saying, “There is a significant risk that the Stormont brake will create the potential for future disputes, and that it might, in some circumstances, encourage hostility towards the EU and be tested in ways that are not currently envisaged under the current arrangement.” Jess Sargeant of the Institute for Government said the Brake should be seen “as an opportunity for Northern Ireland to raise concerns”, adding that it “creates a very strong incentive for both the UK and the EU to come to a mutual agreement, rather than get to that cliff-edge point where nobody really knows exactly what would happen.” Dr Andrew McCormick, Former Director General of International Relations at Northern Ireland Executive, said that, in the worst case scenario, “if the consequence of that [cross-community] vote is to put our participation in the EU single market at risk, the world’s most exciting economic zone becomes an issue that could be overturned by a minority.”

James Webber of Shearman and Sterling confirmed that there is no change to the provisions in Article 10 of the Protocol on state aid. He explained that the UK’s Subsidy Control Act and EU state aid rules both apply in the UK and emphasised the difficulties around this. Spisak said he was surprised that Article 10 wasn’t amended, given the UK now has its own domestic subsidy control regime.

Sargeant said she was “surprised that the EU would move this far” regarding the new arrangements for agri-food retail trade. Spisak said the EU “has been able to take a more proportionate and risk-based approach to any kind of controls and requirements that are necessary for movement of goods.” McCormick said of the agri-food scheme, “It has been oversold in too simple a way, but, looked at in detail, it stands as better than anything else I have ever seen in this context.” A senior European Commission official has told a European Parliament committee that the arrangements for retail food consignments moving from GB to NI won’t be fully operational before the inspection facilities at NI ports have been finished and audited, Tony Connelly reports.

 

Office for the Internal Market reports

The Office for the Internal Market (OIM) has published its first annual and periodic reports on the UK Internal Market. After Brexit, significant powers returned to the UK Government and governments in Northern Ireland, Scotland, and Wales, which has increased the possibility of regulatory divergence.

The periodic report assesses the market access principles (MAPs) in the Internal Market Act (the principles of mutual recognition and non-discrimination). It finds that there has been “little new regulatory difference between UK nations” and states that “low awareness of the MAPs among businesses and the absence of related case law suggests that businesses have not needed to rely on the MAPs to support intra-UK trade.” However, it notes that the application of the MAPs remains untested, and so it is “too soon to assess whether improvements are necessary.” The report reflects comments from devolved nations: the Scottish Government considered there to be “potential for the MAPs to constrain devolved policymaking in many areas”. The NI Department for Agriculture Environment and Rural Affairs (DAERA) noted that the MAPs do not apply to certain goods moving from GB-NI under the Protocol, an issue which “could become more significant in the future.”

The annual report highlights that businesses were “largely unaware of the potential for regulatory differences between UK nations to arise.” The report also refers to the UK Government’s Retained EU Law Bill, noting, “If the Bill is enacted in its current form and governments take different approaches in areas of devolved competence, this may lead to an increase in regulatory differences between the four nations of the UK.” The OIM has also published a ‘Data Strategy Roadmap’.

 

UK Travel Authorisation System and tourism

The Taoiseach Leo Varadkar has voiced concerns about the impact of the UK Government’s Electronic Travel Authorisation (ETA) system on tourism. The NI Tourism Alliance (NITA) has said that implications of the ETA include legal jeopardy for tourists who may be unaware of the requirements, and reputational damage for the tourism industry. Joanne Stuart, CEO of the NITA, writes that it is “hugely disappointing” that there isn’t an exemption in the ETA scheme for tourists from the Republic of Ireland, “given the engagement that took place to try and mitigate against the catastrophic impact this will have on our sector and on international visitors to Ireland.” This matter was raised by Stephen Farry (Alliance MP) in the Commons. Minister in the NI Office Steve Baker said, “The Government’s position is that we are determined to make sure that tourists understand that they will need to comply with UK immigration requirements to visit the UK, and that means that they will need that travel authorisation to go to Northern Ireland. I am aware of the concerns of tourism authorities north and south, and indeed the concerns of the Irish Government. We continue to take those seriously as we talk with the Home Office.” The Lords Sub-Committee on the Protocol has written to the Government seeking clarity on the ETA scheme, and highlighting the impact on tourism. Meanwhile the EU’s Entry/Exit System (EES) and European Travel Information and Authorisation System (ETIAS) was discussed in the Lords.

 

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