Brexit Brief Newsletter

September 2018

As the sunny days of summer are behind us, this Brexit Brief provides a roundup of the some of the developments over the summer period.

During July and August 2018 there were 4 rounds of negotiations between the UK and the EU.  The latest round took place 5-6 September 2018 and focused on remaining issues of the Withdrawal Agreement and the future relationship.

 

White Paper on the Future Relationship

The Government published its White Paper on the Future Relationship between the UK and the EU  on 12 July 2018.  It contains four key chapters – economic partnership; security; cooperation and institutional arrangements.

Some of the key proposals are:

  • Free trade area for goods with a common rule book for goods (only for those rules necessary for frictionless trade at the border).  This proposal is intended to protect jobs in firms with supply chains that crossed borders and deal with the Irish border issue.
  • Zero tariffs on manufactured and agri-food goods and no quota or rules of origin requirements for UK-EU goods.
  • Facilitated customs arrangement (FCA) – an entirely new customs arrangement which is essentially a combination of two previous proposals on customs.  It would take advantage of new technologies to make trade as frictionless as possible but it would still involve the UK collecting EU tariffs (taxes on imports) at UK borders on the EU's behalf.
  • UK would also apply its own tariff and pursue an independent trade policy for goods intended for consumption in the UK. In other words, it would still seek to strike its own trade deals around the world, even though it would be bound by EU rules and regulations.
  • Participation in some EU agencies - UK will seek active participation in (if not full membership of) the European Aviation Safety Agency, the European Chemicals Agency and the European Medicines Agency. The Government is keen to address business demands that they only need to go through one approval mechanism to access both markets in highly regulated parts of the economy. The EU has previously ruled out full UK membership of these agencies, and noted that it would have to accept the jurisdiction of the European Court of Justice if it were to sign up to their rules and regulations.
  • ‘New and fair balance of rights and responsibilities’ for services - financial and other services will no longer be able to take advantage of passporting, which gives them automatic access to other EU markets (5,500 UK financial firms currently have EU passporting rights). Government is seeking a more ambitious arrangement than the "equivalence' regime" that the EU has with most other third countries, arguing that the importance of the City of London to the EU's financial system means a more ambitious solution needs to be found.
  • End to free movement of people – new mobility arrangements
  • UK participation in some of the EU security agencies but on different terms
  • Cooperative accords in the fields of science and innovation; culture and education; international aid and development; defence research and capability; and space
  • A mechanism for annual negotiations on fishing opportunities and reciprocal access to fishing waters
  • New joint institutional arrangements to police future economic ties with arrangements taking the form of an Association Agreement

Giving evidence to the Commons Liaison Committee on 18 July, the Prime Minister acknowledged that the proposed post-Brexit trade and tariff arrangements were a "novel idea" that did not exist anywhere else in the world, adding that that did not matter, if they were the best arrangements for the UK.

Dominic Raab MP, Secretary of State for Exiting the European Union and Olly Robbins, Europe Adviser to the Prime Minister gave evidence to the House of Commons Exiting the EU Committee on 24 July 2018 to discuss the Government’s White Paper on the future relationship.

Committee Chair Hilary Benn MP raised the issue of the results of the mapping exercise on north-south cooperation;

Chair: ….your predecessor promised us in April that he would let us have the results of the Northern Ireland north-south co-operation mapping exercise. It is a very simple question: when are we going to get it?

Dominic Raab: I need to take a look at that. I don’t think that we are in a position to give it to you straight away, but hopefully shortly.

Chair: I think that is probably what he promised back in April, but we hope it is a shorter “shortly” this time than it was last time. Are there are any areas of that trade and cross-border activity that would not be covered by the common rulebook on goods and agri-food?

Dominic Raab: If I have understood the question correctly, it is about whether there are any aspects of—

Chair: Of cross-border activity, because this mapping has covered 130 to 140 areas.

Dominic Raab: I would need to check. I’m sorry.

 

Legislating for the Withdrawal Agreement

On 24 July the Government published its White Paper on Legislating for the Withdrawal Agreement between the UK and the EU.  The paper set out how the Government will implement in UK law the final Withdrawal Agreement reached with the EU.  The European Union (Withdrawal Agreement) Bill will be introduced when the EU-UK negotiations have concluded and Parliament has approved the terms of final deal.  The contents of the Bill will reflect the terms of the final Withdrawal Agreement.

 The White Paper confirms that the EU (Withdrawal Agreement) Bill will:

  • be the primary means by which the rights of EU citizens will be protected in UK law;
  • legislate for the time-limited implementation period; and
  • create a financial authority to manage the specific payments to be made under the financial settlement, with appropriate Parliamentary oversight

The White Paper states that EU rules and regulations will continue to apply in the UK during the implementation (or transition) period.  Therefore, some provisions of the EU (Withdrawal) Act 2018 recently agreed by Parliament will not now be needed until the end of the implementation period.  The EU (Withdrawal Agreement) Bill will amend the EU (Withdrawal) Act 2018 so that the conversion of EU law into ‘retained EU law’ and the domestication of historic Court of Justice of the EU case law can take place at the end of the implementation period.

The House of Commons Exiting the EU Committee published its report Parliamentary scrutiny and approval of the Withdrawal Agreement and negotiations on a future relationshipon 28 June 2018.  The Committee does not accept that the UK would leave the EU without a deal if the House of Commons were to refuse to approve the Withdrawal Agreement and the Political Declaration. The Committee views that the House would expect the Government to re-submit a motion for approval in circumstances following any renegotiation requested, or having considered any conditions put on approval, by the House. The Committee calls on the Government to provide for a second parliamentary vote in such circumstances.

Other recommendations of the Committee’s report include:

  • Parliament should have a minimum of five days to debate the draft Withdrawal Agreement and Political Declaration and the Business of the House Motion should make it possible for the Speaker to select a series of different amendments;
  • A limited extension to Article 50 may be required to prevent the UK leaving the EU in March 2019 without an agreement;
  • The Government should clarify how legal provision will be made for any backstop solution for Northern Ireland;
  • The Government should secure a simple mechanism in the Withdrawal Agreement for the extension of the transition period if there is insufficient time to finalise a legal text on the future partnership during the transition period;
  • The Government must ensure that Parliament is given a meaningful vote on the final text of the future UK-EU relationship.

 

EU View

European Commission chief Brexit negotiator Michel Barnier gave evidence on 17 July to the Lords EU Committee as part of its inquiry on scrutiny of the Brexit negotiations.  With regard to the border, Mr Barnier said:

“We are not asking for any new borders between Northern Ireland and the rest of the UK—never. All or parts of the backstop can be replaced by an agreement on the future EU-UK relationship that addresses this specific issue of the Northern Ireland/Ireland border. We all need to de-dramatise this backstop. Ultimately, we are talking only about technical controls on goods—no more, no less. The solution we have proposed is specific to the unique circumstances of Ireland and Northern Ireland, as the European Council and President Tusk have always made clear and as the UK itself has recognised…….

…… I reacted in an open and calm way to the Chequers document, the White Paper, but if we now start to see amendments blocking any possible solution, the United Kingdom Government risk getting closer to a no deal—I am trying to weigh my words carefully—and we will further our preparation for a hypothesis, an outcome, that I do not wish to see. Brexit is creating the problem in Ireland and Northern Ireland, nothing else. Those who want Brexit must find solutions to avoid instability and a return to a form of violence. Everyone must take their responsibilities. We will not accept the question of Ireland being carved out, isolated, in the negotiations, and we will not accept it being instrumentalised. It is a one-off solution, a unique solution, for a unique situation.

We made a proposal exceptionally to include Northern Ireland in our customs territory to avoid a hard border and to ask, as far as necessary, for a certain amount of regulatory alignment. We are prepared to work on that backstop, to amend it. I will do everything I can with my team to take the drama out of this—you are talking about technical controls. Many of these things already exist and are implemented in Northern Ireland for products that come from the rest of the United Kingdom into Northern Ireland. That is a practical, technical basis. It is not ideology; it should not be seen as threatening the unity of the United Kingdom or the constitutional order of your country, which we respect. That is the basis on which we are working, but it takes two to work on the subject properly; we cannot do it alone. I repeat: as negotiators for the European Union, we are very concerned. “

The European Commission has published over 60 notices on Brexit preparedness in specific sectors of the economy, including health and food safety; financial services; customs; transport; and company law, setting out legal and technical issues that Governments and companies need to take into account.

On 19 July, the European Commission published a communication on the ongoing work on the preparation for all outcomes of the United Kingdom's withdrawal from the European Union.  The text calls on Member States and private parties to step up preparations and follows a request by the European Council (Article 50) to intensify preparedness at all levels and for all outcomes.

On 3 August, Michael Barnier published an op-ed ‘An ambitious partnership with the UK after Brexit’  “The biggest risk caused by Brexit is on the island of Ireland. We need to make sure that Brexit does not create a hard border between Ireland and Northern Ireland, and that the Good Friday Agreement, which has brought peace and stability to Northern Ireland, will be protected. Today, the cooperation and exchanges between Ireland and Northern Ireland occur within the common framework of the EU. Since we will not know what the future relationship will bring by Autumn 2018, we need to have a "backstop" solution in the Withdrawal Agreement. The UK agrees with this, and both the EU and the UK have said that a better solution in the future relationship could replace the backstop. What the EU has proposed is that Northern Ireland remains in a common regulatory area for goods and customs with the rest of the EU. We are ready to improve the text of our proposal with the UK.”

Mr Barnier and Sabine Weyand, the deputy Chief Negotiator at the European Commission gave evidence at the Commons Exiting the EU Committee on 3 September 2018 on the progress of the Brexit negotiations.  Mr Barnier said that more than 80% of the Withdrawal Agreement has now been agreed and that progress that been made on issues such as protection of data and judicial and police cooperation.  With regards to the border he said;

“I am very concerned about Ireland. We need to find a solution that avoids the return of a hard border and that remains today the main obstacle on our road to an agreement between the British and ourselves. In the light of your Government’s decision to leave both the single market and the customs union, it is obvious that we need to find ways and means to set in place a number of checks on goods entering Ireland. Without any checks, that would be a breach in the single market and customs union. Without checks, we cannot guarantee the safety of goods entering into the European Union and circulating in it, and vice versa obviously for the British market, as far as you are concerned, because the external border of your market would be there now.

In the joint report of December and then in a letter from Theresa May in March, the British Government committed itself to respecting the integrity of the single market and the customs union and the place occupied therein by Ireland. On the ground, ladies and gentlemen, it is impossible—this is nothing new—to distinguish between customs checks and other regulatory checks. The two kinds of checks are intrinsically linked in the technical physical organisation of what happens when things are checked on that border for the single market. That is why the British solutions mooted, such as a temporary customs arrangement, which suggests such a distinction between customs checks and regulatory checks, would turn out to be impossible, technically speaking, for us to implement.”

 

Brexit, Farming and Environmental Policy

The House of Commons European Scrutiny Committee took evidence from Rt Hon Michael Gove MP, Secretary of State for Environment, Food and Rural on 18 July 2018 on the implications for fisheries, agriculture and environment policy of both the recent White Paper on the future relationship between the UK and the EU and of the draft Withdrawal Agreement.

The Northern Ireland Affairs Committee took evidence from George Eustice MP, Minister of State for Agriculture, Fisheries and Food as part of its inquiry into Brexit and agriculture in Northern Ireland

At the Royal Welsh Show on 26 July, the Prime Minister set out the Government’s plans for farming policy post Brexit.

 

Changes to Government Functions on Brexit

In a written statement to the House on 24 July, the Prime Minister announced changes to the division of functions between the Department for Exiting the European Union (DExEU) and the Cabinet Office.  The Prime Minister advised that DExEU would continue to lead on all of the Government’s preparations for Brexit: domestic preparations in both a deal and a no deal scenario, all of the necessary legislation, and preparations for the negotiations to implement the detail of the Future Framework.  The Prime Minister advised that she would lead the negotiations with the EU, with the Secretary of State for Exiting the European Union Dominic Raab deputising on her behalf.

 

Brexit and Devolution

The eleventh meeting of the Joint Ministerial Committee on European Negotiations was held on 5 July 2018.  Secretary of State for Northern Ireland, Rt Hon Karen Bradley MP was one of the ministers in attendance. 

The third meeting of the Ministerial Forum (European Negotiations) was held on 1 August 2018.  The principal agenda items were an update and discussion of the latest state of the EU negotiations, a discussion on measures to support open and fair competition between markets and the forward work programme for the forum. 

The House of Commons Public Administration and Constitutional Affairs Committee (PACAC) published its report on 'Devolution and Exiting the EU: Reconciling Differences and Building Strong Relationships’ on 31 July 2018. The Committee states that “leaving the EU will change the constitutional arrangements of the UK in relation to the devolution settlements: the devolution settlements were established in the context of EU membership and this masked many key constitutional questions and ambiguities that will now become more pressing. In recognition of the significance of devolution to the UK's constitutional arrangements, PACAC recommends the Government publish a 'Devolution Policy for the Union'”. 

 

Scottish Continuity Bill

The Supreme Court hearing on the UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill took place on 25 and 25 July 2018.  The Bill, commonly referred to as the Continuity Bill, was introduced by the Scottish Government following the refusal of the Scottish Parliament to give its consent to the EU (Withdrawal) Act in a dispute over how powers currently exercised from Brussels will be used after the UK leaves the EU. The Scottish Bill is designed to resolve any gaps in legislation in Scotland and would bring EU laws across onto the domestic statute book ahead of Brexit.  The Scottish Bill was referred to the Supreme Court in April 2018 by the UK Attorney General Jeremy Wright QC and the advocate general for Scotland Lord Keen seeking a ruling on whether the legislation is within devolved legislative powers.

Lord Keen argued that the Scottish Bill was incompatible with the EU (Withdrawal) Bill and said that there would be "dual and inconsistent regimes" of law in the UK, causing "confusion and uncertainty".

Scotland’s chief legal officer Lord Advocate James Wolffe QC, argued that the Continuity Bill should not be struck down because it does not cut across EU or UK laws and said it is “perfectly practical” for the Scottish Bill to prepare the statute book in anticipation of the UK leaving the EU.  He also stressed that the Scottish Bill was passed several months before the UK’s Withdrawal Bill became law, saying that “it was not intended to modify the UK Bill and could not do so”.  QC Michael Fordham, speaking for the Welsh counsel general and John Larkin QC, the attorney general for Northern Ireland, also supported Holyrood’s capacity to legislate on Brexit, insisting “the Scottish Parliament has done its work … The attribute of competence is something that belongs to the Scottish Parliament”.

A judgement is expected in autumn 2018.

 

‘No deal’ Brexit

On 23 August 2018, Secretary of State for Exiting the EU Dominic Raab gave a speech on the preparations the Government is making in the event of a no deal Brexit.  The speech coincided with the publication of the first tranche of technical notices about what to do in the event of a no deal Brexit.  The notices cover issues including applying for EU-funded programmes; farming; importing and exporting; state aid; studying in the UK or EU; and workplace rights.

These notices are aimed at businesses and citizens and the remainder of the 70 notices are to be published by the end of September 2018.

Mr Rabb said “We firmly believe it is in the interest of both the EU and the UK to strike a deal.  That remains the goal on both sides and we are confident that this will be achieved.  But it is the job of a responsible Government to prepare for all scenarios, including the unlikely event that we reach March 2019 without agreeing a deal. 

We recognise that in a ‘no deal’ scenario, business and citizens would need tie to prepared themselves.  These notices – and the significant ‘no deal’ preparations we have already carried out – assist this.  This does not reflect an increased likelihood of ‘no deal’. “ 

 

Deadline for Deal

EU leaders are due to gather in Salzburg on 19-20 September 2018 for an informal meeting which will also be attended by President of the European Council, Donald Tusk and President of the European Commission, Jean-Claude Juncker. 

The much discussed deadline for the EU and UK to reach a deal on the Withdrawal Agreement is the meeting of the European Council summit on 18 October 2018.  Whether this deadline is reached remains to be seen with some speculation that there is a possibility of an emergency EU summit in November to sign a deal.

Giving evidence to the House of Lords EU Select Committee on 29 August 2018, Dominic Raab MP, Secretary of State for Exiting the European Union said; “….we want to see some renewed energy as we enter the final phase of the negotiations, with the October Council and the possibility that matters might creep beyond that……

….. My starting point is the end point in March next year, when we will leave the EU, and I work back from there. You have rightly raised the question of the legislative framework that will be needed to implement any deal that we make. That is the real driver on the UK side, but you also referred quite rightly to the processes and procedures on the EU side. We are aiming for the October Council, but there is some leeway.”

 

Northern Ireland Assembly Brexit Resources

Details of parliamentary inquiries on a range of topics relating to Brexit are available on the Brexit Brief page on the Northern Ireland Assembly website.  The inquiries are grouped by theme and the list will be updated regularly.

The Brexit Brief page has also been updated to provide information and links to the latest publications on Brexit.

Assembly Research and Information Services has compiled a Brexit and Northern Ireland reading list which has recently been updated.

You can also follow the Northern Ireland Assembly Brexit Brief on Twitter @NIAEUMatters

 

Brexit Bills

The Government is introducing a suite of legislation to deal with Brexit.  A summary of the status of some of this legislation is below. A full list of Bills before Parliament is available here

  • Agriculture Bill – not yet introduced.  Consultation on Health and Harmony: the future for food, farming and the environment in a Green Brexit now closed
  • Animal Welfare (Sentencing and recognition of sentience) Bill – not yet introduced.  Consultation responses to draft Bill published August 2018
  • Fisheries Bill – not yet introduced. Consultation on Fisheries white paper: sustainable fisheries for future generations published 4 July 2018
  • Haulage permits & trailer registration Act – received Royal Assent 20 July 2018
  • Immigration Bill – not yet introduced.  White Paper expected autumn 2018
  • Nuclear Safeguards Act – received Royal Assent 26 June 2018
  • Sanctions and Anti-Money Laundering Bill – received Royal Assent 23 May 2018
  • Taxation (Cross Border) Trade Bill (commonly referred to as the Customs Bill) – awaiting Royal Assent
  • Trade Bill -  2nd reading scheduled for 11th September
  • EU (Withdrawal) Act – received Royal Assent 29 June 2018
  • EU (Withdrawal Agreement) Bill – not yet introduced