Brexit & Beyond newsletter

7 May 2024

Welcome to the 7 May 2024 Brexit & Beyond newsletter

Last week, the Assembly debated and voted on an ‘applicability motion’ on whether an EU law on organic pet food should apply in Northern Ireland. The Minister for the Economy took questions from MLAs. The Democratic Scrutiny Committee decided to hold its first inquiry on an EU law on geographical indications for wine, spirit drinks and agricultural products. The House of Lords Sub-Committee on the Windsor Framework has raised concerns about the future supply of veterinary medicines to Northern Ireland. A Scottish Parliament Committee heard evidence on the Windsor Framework from business representatives. On 30 April, the UK Government introduced new post-Brexit border controls on food and agricultural imports from the EU.

 

Plenary business

Applicability motion on organic pet food

On Monday 29 April, the Assembly debated Regulation (EU) 2023/2419 on the labelling of organic pet food. Before the UK can agree with the EU in the Joint Committee that a new EU law should apply in NI, the Assembly must indicate cross-community support for the new law to be added to the Windsor Framework by passing an applicability motion. Read more about applicability motions and how new EU laws may apply in NI.

The deputy First Minister and First Minister jointly tabled the applicability motion. Under the regulation, to be labelled organic, pet food will need to be produced with at least 95% organic agricultural ingredients, rather than 100%. The First Minister Michelle O’Neill said if the regulation was not adopted, “we expect the impact on trade to be negative from the perspective both of internal trade and of trade between us and the EU. There is a risk that local businesses trading with the EU could be placed at a disadvantage relative to businesses in the South, which would automatically be able to take advantage of the greater flexibility provided by this EU law when marketing their products across the EU.”

 

 First Minister Michelle O’Neill

First Minister Michelle O’Neill

Philip McGuigan (Sinn Féin), Chair of the Windsor Framework Democratic Scrutiny Committee, outlined the work of the committee in scrutinising the regulation. Matthew O’Toole (SDLP) stated, “Given that there does not appear to be any downside for any future producers — there are no producers of organic pet food here currently — there seems to be no good reason for us to not agree to the new law applying to Northern Ireland.”

David Brooks (DUP) told the chamber his party “will not use the mechanism on every piece of forthcoming legislation, but with reference to the impact of relevant legislation on the people of Northern Ireland. This piece of legislation brings us into line with UK rules. To vote it down would be punitive and fruitless.” Eóin Tennyson (Alliance) said, “If we are to take full advantage of the opportunities before us, we owe it to our business community to offer the maturity, certainty and stability that it so desires. In that vein, I support the motion, and, at the outset, I welcome the fact that the First and deputy First Ministers have managed to jointly table the motion on this occasion.”

Steve Aiken (UUP) said the First Minister and deputy First Minister “need to look closely at how we resource what we are doing. We need to ensure that our office in Brussels is ready to interact as legislation comes through. We also need to make sure that we have sufficiently well-trained staff supporting the Northern Ireland Executive and the Democratic Scrutiny Committee who understand the legislation and the rules as they come through.” Jim Allister (TUV) stated, “The motion amounts to an acknowledgement of and assent to the fact that, on what is patently a devolved issue — namely how we prepare animal foods — only the EU can now make those laws for us. The Assembly cannot legislate on the issue…We have been told that there are "no downsides". Sorry, but there is a huge constitutional downside.”

Deputy First Minister Little-Pengelly concluded the debate, saying, “In my view, the cop-out thing to do on the issue would be to vote against the motion, to leave it to others to make those decisions with the Assembly having no say and no role. Personally speaking and with regard to my party's position, that is exactly why we fought for and secured new mechanisms to give this place a meaningful say on matters that impact the people of Northern Ireland.” The motion was agreed with cross-community support.

Questions to the Minister for the Economy

The Minister for the Economy Conor Murphy was asked about Intertrade UK. In the Safeguarding the Union Command Paper, the UK Government said this body would be established in early 2024, under the auspices of the East-West Council, to promote trade within the UK. Minister Murphy states that the responsibility for establishing Intertrade UK sits with the Department for Levelling Up, Housing and Communities and it is in the planning stage. He told MLAs, “We do not have a function in its actual operation...It is about having a service to inform businesses that wish to do business over here how they can go about doing that.” He discussed this with Michael Gove, the Secretary of State for Levelling Up at the recent East-West Council.

Minister for the Economy Conor Murphy taking questions in the chamber 

Minister for the Economy Conor Murphy taking questions in the chamber

Regarding the Shared Prosperity Fund and concerns about the end of the current funding round, Minister Murphy noted that much funding for community and voluntary sector organisations came directly from EU funding. He stated, “The funding was not replaced, despite the Government's promises. We have moved from a process where the Executive had funding that could be used through the Department for the Economy, which knew the groups that did that work and could support them, to one where those groups are in a competition-based approach that is run directly by Whitehall. The outcome of that has been haphazard.” The Minister said he raised the issue with Michael Gove at the East-West Council, and “they [the UK Government] appear to be moving more to the line that the Executive will have some input into the process”.

North/South Ministerial Council

On Tuesday 30 April, the First Minister made a statement on the plenary meeting of the North/South Ministerial Council, which took place on 8 April. This was the first plenary meeting since July 2021.

 

Democratic Scrutiny Committee

At its meeting on 2 May, the Windsor Framework Democratic Scrutiny Committee considered EU Regulation 2024/1143 on geographical indications for wine, spirit drinks and agricultural products and decided to hold an inquiry. The committee considered an impact assessment from the Department from Agriculture, Environment and Rural Affairs which states, “As this is a reserved matter, and the responsibility of UK Government, DAERA has not undertaken a full assessment of impact.” Chair of the Committee Philip McGuigan recalled that the Democratic Scrutiny Regulations make that clear that the committee, in making its decision to hold an inquiry or not, must have regard to whether it appears likely that the replacement EU act “would have a significant impact specific to everyday life of communities in Northern Ireland in a way that is liable to persist”. He said, “This is information that we need to support us in our decision-making. The response from the Department isn't what is expected.”

Northern Ireland currently has four GIs: Lough Neagh Pollan, Lough Neagh Eels, New Season Comber Potatoes and Armagh Bramley Apples; and four all-Ireland GIs: Irish Cream (liqueur), Irish Poteen, Irish Whiskey and Irish Grass Fed Beef (EU Scheme only). A 2017 study by the European Commission found that the sales value of PGI meat products was on average 1.2 times the sales value for comparable standard products without a GI label. A UK Government Explanatory Memorandum (which is being updated) states, “Whilst the proposal will largely harmonise the legislative framework governing GIs as they apply in NI, meaning most of the provisions for agri-food, wine and spirit GIs will be in a single regulation, the changes are moderate, largely a like-for-like of the current legislation.”

Next week, the Committee will hear evidence on the regulation from departmental officials. The Committee has launched a public consultation and wants to hear from representatives of business and civil society affected by the EU act. The survey closes on 13 May.

 

Veterinary medicines

The House of Lords Sub-Committee on the Windsor Framework has written to NI Office Minister Steve Baker raising serious concerns about the future supply of veterinary medicines to Northern Ireland. The committee has conducted an inquiry looking at the potential consequences if the EU Veterinary Medicinal Products Regulation takes effect in Northern Ireland at the end of December 2025, when the grace period is due to end. The committee visited Northern Ireland earlier this year and heard from academics, veterinary professionals, farming representatives, business organisations and the Government.

Witnesses have highlighted two main issues with the application of the EU regulation in Northern Ireland: this will require the registered address of the Marketing Authorisation Holder (MAH) to be within the EU or Northern Ireland (and the address must be displayed on the packaging). Veterinary medicines moving from GB to NI would require additional batch-testing. Witnesses are concerned about the additional costs this would entail for producers, and that this could affect the economic viability of supplying the small Northern Ireland market. Estimates suggest over 30% of veterinary medicines may be discontinued for Northern Ireland under the rules. The committee is highlighting the link between animal and human health. Serious concerns have been raised about the potential consequences for public health in Northern Ireland and on the island of Ireland, if access to certain veterinary medicines is lost. Lord Jay of Ewelme, Chair of the Sub-Committee, said, “We are stressing the need for a positive and swift outcome within what is a tight timescale complicated by upcoming elections in the EU and UK.”

 

Constitution, Europe, External Affairs and Culture Committee

On 2 May, the Scottish Parliament Constitution, Europe, External Affairs and Culture Committee heard evidence about how the Windsor Framework is working, as part of its ongoing inquiry into the review of the EU-UK Trade and Cooperation Agreement (TCA). A review of the TCA is due to start in May 2026.

Nichola Mallon, Head of Trade and Devolved Policy at Logistics UK said that following the implementation of the NI Retail Movement Scheme, tensions are beginning to emerge as “the legal text…meets the real world”. She explained the operation of complex just-in-time supply chains, the knock-on implications of delays and that on occasion, “there can be genuine human error”. The organisation wants to see a trust-based and pragmatic approach. She noted the UK statutory instrument, the Windsor Framework (Implementation) Regulations 2024, passing operational responsibility for certain elements of the Framework from the NI Department of Agriculture, Environment and Rural Affairs (DAERA) to the UK Department for Environment, Food and Rural Affairs (DEFRA). She said they are “waiting to see how the responsibilities and relationships work out on the ground.” Mallon highlighted the impact of ‘not for EU’ labelling, saying its application at a UK-wide level “will present a number of challenges” for businesses in GB importing and exporting to the EU.

Stuart Anderson, Head of Public Affairs at the Northern Ireland Chamber of Commerce and Industry, said supply chains “have continued to work extremely hard against deadlines that were incredibly challenging last summer”. He highlighted challenges for carriers, who are “at the front end of the movement of goods, in particular those red-lane goods for which there is very little change.” He also noted positive impacts: “there are those who have found that the stability and certainty has brought real opportunity.” An agri-food firm has relocated its manufacturing presence from GB to NI “because of the barrier-free trade with Europe”. Anderson called for clearer guidance and said while there has been an increase in applications to the UK Internal Market Scheme, it can be “quite bureaucratic”. He highlighted managing divergence as an ongoing issue, noting the EU’s CBAM (which could potentially apply in Northern Ireland) and the UK plans for a CBAM (which differ slightly different in scope and application).

Stephen Kelly, Chief Executive of Manufacturing Northern Ireland, said that as part of dual market access, not having border checks on goods at Cairnryan (as set out in the Safeguarding the Union Command Paper) is “really important”. However, he said, they don’t want a scenario where Irish businesses driving through NI have the same benefit: “Dual market access is meant to be for Northern Ireland only; it is not meant to be for Irish businesses. We have a dilemma in that, by necessity, we need to have open, unfettered access into Scotland and the rest of the UK marketplace, but, at the same time, we require some control so that it is not a back door to enable our competitors elsewhere on this island to drive past us into that marketplace”. He said, “It is unclear what that will look like in practice in the long term.” He noted that the agri-food sector welcomed some control - the Windsor Framework (UK Internal Market and Unfettered Access) Regulations 2024 amended the Definition of Qualifying Northern Ireland Goods (EU Exit) Regulations 2020 for the food and feed sector to ensure that unfettered access benefits Northern Ireland traders only.

Anderson told the Committee that Invest NI now actively exploring what dual market access means for each sector, but he said dual market access is “not a panacea” and the opportunities are “unique to certain sectors”. For example, there are no benefits to businesses that operate in only GB-NI supply chains and manufacturing.

Anderson stated that “both sides are committed to the [Windsor Framework] agreement” but called for an “evolutionary” approach which allows review to take place. He gave the example of the carve-out for commercial processing where turnover is under £2 million. He said, “Over time, inflation alone will render that redundant.” He said the EU-UK Joint Committee needs to be “moving in a space that is solutions focused, that goes beyond the black-letter text.” He said, “One of the biggest flaws in the process of agreeing the original Protocol and the TCA was the failure of both sides to understand how the two documents interacted with each other.”

 

Post-Brexit border controls

On 30 April, the UK Government introduced documentary checks and physical and identity checks for medium-risk animal products, plant and plant products imported to Great Britain from the EU. These checks will apply to imports from Ireland at a later date.

The House of Commons debated the introduction of the new checks on goods on 29 April. Labour MP Stella Creasy noted they had been delayed by the Government five times. She said, “The costs to business, which we know will be passed on to consumers, are horrendous and chaotic, and the charges were confirmed only on 18 April.” Minister of State in the Department for Environment, Food and Rural Affairs (Defra) Sir Mark Spencer said the costs are “reasonable”: for low-risk products, £10 per product, limited to a maximum of five products per common health entry document. The Government calculated that over three years the controls will lead to an additional 0.2% on food inflation.

DUP MP Sammy Wilson asked, “Can the Minister give an assurance that, should [the Ireland-NI-GB] route be used either by Republic of Ireland producers or other EU producers, he will not be installing checks on Northern Ireland to GB trade, which is so important to the Northern Ireland food industry and economy?” Mark Spencer said, “There is currently no timescale for the introduction of the way in which we will monitor and work with those who are moving goods across from that part of the United Kingdom. We want to ensure that that does not become a back-door route, and we will continue to have conversations with the authorities in that part of the world.” He said he couldn’t give a date for the introduction of controls at Welsh ports at this stage, but said, “we are in detailed conversations—particularly with those at the port of Holyhead.” Senedd Research has published an article on controls at Welsh ports. The Welsh Government states, “It is difficult to see how physical checks can be implemented before Spring 2025”.

On 2 May, the House of Lords also debated the new checks on EU food and agricultural imports.

The UK Government is legislating “to preserve and sharpen the benefits of unfettered market access for qualifying Northern Ireland goods” by applying sanitary and phytosanitary (SPS) controls to non-qualifying goods entering GB from NI, through the Movement of Goods (Northern Ireland to Great Britain) (Animals, Feed and Food, Plant Health etc.) (Transitory Provision and Miscellaneous Amendments) Regulations 2024 (‘the 2024 regulations’).

 

Other news

 The Speaker Edwin Poots and Taoiseach Simon Harris entering Parliament Buildings

The Speaker Edwin Poots and Taoiseach Simon Harris entering Parliament Buildings