Brexit & Beyond Newsletter

24 October 2022

Welcome to the 24 October 2022 Brexit & Beyond newsletter

The House of Lords Sub-Committee on the Protocol on Ireland/Northern Ireland visited Belfast and Newry last week to hear from businesses, politicians and civil society. Lords will begin detailed scrutiny of the Northern Ireland Protocol Bill at committee stage on Tuesday, while the Retained EU Law Bill will have its second reading in the Commons. The Northern Ireland Affairs Committee heard evidence from the Secretary of State for Northern Ireland Chris Heaton-Harris, and from Minister of State at the Department for International Trade Greg Hands.

 

Lords Sub-Committee on the Protocol visits Northern Ireland

The House of Lords Sub-Committee on the Protocol visited Northern Ireland on Thursday and Friday. Peers heard evidence from businesses in Newry and Belfast as part of the committee’s inquiry into the Northern Ireland Protocol Bill. The Committee also met with representatives from civil society and the five main political parties. Committee chair Lord Jay was on BBC Sunday Politics and said they had heard “divided views” on the impact of the Protocol. He said some businesses, especially those focused on East-West trade, are worried and suffering under the Protocol, even with its derogations (for example, hauliers). Other businesses trading mainly North-South see the Protocol as advantageous, given the access to the EU single market it provides. Written evidence on the NI Protocol Bill can be submitted to the committee by 3 November.

 Lord Jay, Chair of the Sub-Committee on the Protocol

Lord Jay, Chair of the Sub-Committee on the Protocol | Source: UK Parliament

 

Lords scrutinise the NI Protocol Bill

The House of Lords will examine the Northern Ireland Protocol Bill in detail at the first day of committee stage on Tuesday. The Guardian reports comments from shadow minister Jenny Chapman, who argues, “The government must not squander the opportunity of its negotiations with the EU. With hard work and compromise on all sides, a deal is achievable to end this damaging, self-inflicted standoff, and scrap this reckless legislation.” Labour peers will “put the government on notice that the Bill will not proceed to the next stage until a variety of conditions are met”, including to give negotiations a chance to end the impasse before any legislation is passed. Labour will introduce a motion of regret, and ask the Government to publish an impact assessment and indicative regulations which may be laid under the Bill. Amendments can be viewed on the NI Protocol Bill webpage.

 

NI Secretary of State on the Protocol talks

On Tuesday 18 October, the Northern Ireland Secretary of State Chris Heaton-Harris gave evidence to the Commons Northern Ireland Affairs Committee. He was emphatic that there will be an election in Northern Ireland if the Executive is not restored, saying “That is what the law requires me to do and that is what I will be doing…I discussed it with my Cabinet colleagues this morning.” His view is that negotiations with the EU would continue in this case. (The EU and UK ceased formal negotiations in February, in the lead up to the Assembly elections in May.) Pivotal think tank has published a briefing on governance arrangements in NI after 28 October, when ‘caretaker’ ministers will no longer be in post.

Secretary of State for Northern Ireland Chris Heaton-Harris giving evidence to the NI Affairs Committee

Secretary of State for Northern Ireland Chris Heaton-Harris giving evidence to the NI Affairs Committee | Source: UK Parliament

Heaton-Harris did not give much detail on the ongoing talks between the EU and UK. He said, “The thing that everybody needs to understand is that these are quite complicated on all sides…There are conversations about what a landing zone could look like for those talks”. He added that while the ‘mood music’ has changed, it does not mean that the talks are not quite tough. He said they were talking place “in very good faith”, with a positive agenda. Heaton-Harris said Foreign Minister James Cleverly and European Commission Vice-President Maroš Šefčovič have regular catch-ups. The pair held a phone call on Monday to take stock of the technical talks on the Protocol.

Speaking on Sophy Ridge on Sunday on 23 October about the Conservative party leadership contest, Northern Ireland Office Minister Steve Baker said, “Whoever wins this contest, the only policy that can be successfully carried through on Northern Ireland is the one that we have, and everyone should understand that… in the end, we’ve got to end the jurisdiction of EU law in Northern Ireland.”

On 20 October, Heaton-Harris made a statement on the UK Government’s delivery on the commitments in the New Decade, New Approach agreement, which restored the NI Executive in January 2020. Among the commitments, he notes that the government has “passed the Internal Market Act 2020”, “ensured that Northern Ireland can access the trade deals the UK is striking across the world; [and] invited representatives of the Northern Ireland Executive to all meetings of the UK-EU Joint and Specialised Committees.”

 

Northern Ireland and International Trade

Minister of State at the Department for International Trade Greg Hands gave evidence to the NI Affairs Committee on Wednesday. In March this year, the Department for International Trade opened a hub in Northern Ireland. Hands said this was “to boost exports…Northern Ireland businesses should have equivalent access to and knowledge of DIT’s export services as the rest of the United Kingdom…[and] to increase Northern Ireland’s voice in trade policy discussions, free trade agreements.” The Belfast hub is to be expanded and will be staffed with 75 people.

Hands was asked about how the Protocol impacts on Northern Ireland’s engagement in UK free trade agreements (FTAs). Hands said, “Our negotiation partners are very much aware of and very interested in the Northern Ireland Protocol…Nobody really wants to see it as anything that is going to prevent an agreement being done, but, clearly, our trade partners need to understand the Protocol…we have not found it to be in any way an obstacle to getting a deal done.” Amanda Brooks, Director-General of Trade Negotiations at the Department for International Trade, explained that “as long as the Protocol is in force nothing in the FTA precludes the UK from taking the measures it needs to take under the Protocol” i.e. if something is agreed in an FTA which cannot be applied to Northern Ireland because of the Protocol, the Protocol obligations would supersede the FTA.

Regarding the 25% tariff which is being charged on some movements of steel between GB and NI, Brooks said, “further action [is] now underway by colleagues…to try to address the issue, because we are very well aware of the UK business concerns of this.” Manufacturing NI tweeted on Thursday that the EU decision on steel tariffs “gave zero consideration to NI”.

 

Concerns about the Retained EU Law Bill

The Retained EU Law Bill is to be read for a second time on Tuesday 25 October in the Commons. Last Wednesday, a Westminster Hall debate was held on the impact of retained EU law on the Scottish devolution settlement. Brendan O’Hara (SNP) said the Retained EU Law Bill, “taken in conjunction with the United Kingdom Internal Market Act 2020, will fundamentally undermine and alter the devolution settlement by giving primacy to UK law in areas that are wholly devolved, such as environmental health, food standards and animal welfare.”

The Brexit and Environment network of experts has published a paper on the ‘known unknowns’ of the Retained EU Law Bill in Northern Ireland. It states that the Bill “raises profound questions for the future of environmental policy in the UK, with clear risks of regulatory gaps”. It considers the interaction of the Bill with the Protocol, and with the NI Protocol Bill. It also highlights that many areas of North-South cooperation are underpinned by Retained EU law. The experts say the Bill will create a “huge bureaucratic demand” on NI departments, Assembly committees and external stakeholders, and is concerned about the time and capacity of officials and politicians to carry out scrutiny and the legislative processes.

Environmental organisations have written to Minister Jacob Rees-Mogg, calling on him to withdraw the Bill. They write, “We are extremely concerned that the Retained EU Law Bill threatens the UK Government’s ambitions...We are also concerned that thousands of pieces of vital legislation could face repeal by the end of December 2023, not because they are “bad” but solely because they are derived from the EU.” Legal experts have raised further concerns about the Bill, including the Bill’s implications for workers’ rights and the environment. Eleonor Duhs, a former government lawyer who worked on the concept of retained EU law, said, “At a time when civil service resource is falling, the task of rewriting this vast body of law in a few short months appears impossible. Errors, omissions and gaps in the law are inevitable.” A report from the UK in a Changing Europe says the Bill would leave very little time to design new legislation to replace EU laws which expire: “The risk is poorly designed new legislation and gaps on the UK statute book where laws expire before they are replaced.”

 

EU-UK Divergence

The UK in a Changing Europe think tank has published a fifth edition of its divergence tracker of EU and UK rules. Regarding Northern Ireland, the report highlights the issue of tariffs on certain steel goods moving GB-NI. It notes challenges for the Single Electricity Market on the island of Ireland, should UK and EU electricity regulations diverge significantly. Joël Reland analyses the findings of the report, writing, “There appears to be a renewed commitment to solving the Northern Ireland Protocol conundrum, and if government is serious about that it needs to be mindful that avoiding swathes of small, technical divergences from EU regulation is an important aspect of managing the border.”

The European Commission has adopted its Work Programme for 2023. It contains 43 new policy initiatives on its ‘headline ambitions’. The Commission will now begin discussions with the European Parliament and EU Council to establish a list of joint legislative priorities. The work programme is important in the context of the Protocol on Ireland/Northern Ireland: under its terms, new EU legislation may be applicable in Northern Ireland and could increase divergence between Great Britain and Northern Ireland.

The Commons European Scrutiny Committee has published its eight report of this session. The Committee assesses EU documents, including in relation to the Protocol, and possible implications for divergence between GB and NI. The latest report considers the implications of EU rules on seed potatoes (which are currently banned from export from GB to NI), proposals on Fluorinated Greenhouse Gases, reform of the EU customs union and EU single customs window, and EU rules on minimum VAT Rates. The Committee has published a report on its revised arrangements for the scrutiny of EU-UK affairs. The Government has committed to deposit EU documents, including in relation to the Protocol in Ireland/Northern Ireland and proposed EU legislation which may fall within its scope. Committee Chairman Sir William Cash said, “With agreement from the Government to continue to deposit documents, the Committee can continue its role in being the first to sound the alarm on the potential effects EU legislation has on the UK, including in Northern Ireland.”

 

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