Tag: Northern Ireland

Windsor Framework Agreement

On 27th February, the UK Government and EU Commission reached an agreement on the implementation of the Northern Ireland (NI) Protocol – the ‘Windsor Framework’.  The deal emerged after months of, often arduous, negotiations and is heralded as a major breakthrough by both the UK and EU negotiators.  It is hoped that this framework will resolve the thorniest issue of the entire Brexit process and has been welcomed by most Northern Irish stakeholders, although the DUP have yet to give an official view on the Framework, which is not expected until April.

The key aspects of the agreement are:

  • Customs Procedures for Goods: there will be a ‘green lane’ for goods moving from Great Britain (GB) into NI which will be consumed in Northern Ireland and not deemed to be at risk of moving into the EU Single Market.  For such goods, nearly all customs procedures will be scrapped.  Goods deemed to be at risk of moving into the EU Single Market will be moved through a red lane, where EU border controls will apply.
  • Chilled Meats: products such as sausages which are sold in GB supermarkets will also be available in Northern Ireland, provided that they are shipped into Northern Ireland by trusted traders.  Chilled meats are usually prohibited from import into the EU Single Market or require arduous certification procedures (sometimes hundreds of certificates for a container with chilled meat and animal products for the retail sector).  This will now be replaced by a single document confirming that the goods will stay in Northern Ireland and are moved in line with the terms of the UK’s internal market scheme.  This is a significant concession from the EU.  It is also a sensible one on the basis that such products are for consumption in Northern Ireland and there is now real-time data on the movement of goods from GB to NI, giving the EU the visibility it needs to ensure that no fraudulent activity is taking place. Any physical or identity checks that do take place will be on a risk and intelligence-led basis, based on decisions by UK authorities.
  • Seed Potatoes, Plants and Trees: certain plant and crop products had been either prohibited from entry into NI from GB since January 2021, or required lengthy certification processes.  Such trade can now recommence under the provisions of the Windsor Framework.  This is seen as a big boost for the seed potato sector in particular.  However, seed potatoes will still be prohibited from being sold to the Republic of Ireland.
  • VAT and Excise Duties: the NI Protocol’s legal text has been amended so that the UK can set VAT and excise duties for the whole of the UK.  It means that the reforms to alcohol duties taking effect in the UK in the summer will now apply to NI, thus lowering the price of beer in NI pubs for instance.
  • Parcels and Online Shopping: no paperwork will be required for parcels moving from GB to NI.
  • Pet Travel: documentary requirements and associated treatments and inoculations that are usually required by the EU have been removed for travel between GB and NI.
  • Applicability of EU Law in Northern Ireland: has been reduced substantially (estimated by the NI Secretary to be 97%) and now only focuses on the ‘minimum necessary’ to avoid a hard border on the island of Ireland.  The EU notes that the European Court of Justice (ECJ) will still have a final say on Single Market issues.  However, it is envisaged that its role will be greatly reduced due to the provisions outlined above and also because of the data sharing, labelling and enforcement procedures within the Windsor Framework.  This will help to safeguard the Single Market whilst also giving opportunities to resolve differences without having to revert to the ECJ.
  • ‘Stormont Brake’: this new mechanism is designed to give the Northern Irish Assembly the opportunity to pull an emergency brake on EU legislative changes which would apply in Northern Ireland.  It is designed to address concerns, particularly amongst Unionists, on what they perceive to be a democratic deficit of the NI Protocol as agreed in 2020.

For the brake to activate, it would require cross-community support and would need a minimum of 30 Assembly MLAs from at least 2 parties to agree to its activation.  The EU stresses that this can only be activated in exceptional and emergency circumstances, where there is a significant impact specific to everyday life in Northern Ireland.  It is also planned to have greater consultation between the UK and the EU on new EU legislation so as to minimise instances of the Stormont Brake being activated.  Once triggered, the UK Government would notify the EU of its activation.  The rule in question would automatically be suspended from coming into effect.  It could only then be reapplied if the UK and EU jointly agree.  If the suspension remains, the EU reserves the right to respond with remedial action to protect its Single Market.  For the Stormont Brake to become an option, it requires a functioning NI Assembly and is seen as a bid to get the NI Executive back up and running.

Overall, the Windsor Framework strikes a pragmatic and careful balance between the concerns of the UK Government and Unionists who wish to ensure that Northern Ireland remains an integral part of the UK, and of the EU in ensuring that its Single Market is protected.  With hindsight, it was the sort of balance that should have been struck when the original Protocol was negotiated in late 2020, but which ended up being rushed and was negotiated without enough attention to the nuance needed for the unique circumstances of Northern Ireland.  Importantly, by giving NI unfettered access to both the UK Internal Market and the EU Single Market, the Windsor Framework gives Northern Ireland the potential for strong economic growth, not just in agri-food but across NI industry generally. Undoubtedly, the Protocol will need further refinements in the years ahead as will the UK-EU trading relationship more generally.  This is as it should be, as trading relationships between near neighbours are constantly fine-tuned.  The US-Canada relationship is a prime example of this.

NI Protocol Deal

At the time of writing (morning of 27th February), it is expected that a deal will be imminently reached between the UK Government and the EU on the implementation of the Northern Ireland (NI) Protocol.  The European Commission President (Ursula von der Leyen) is travelling to the UK today for high-level talks with the Prime Minister to address the final list of issues which are said to require top-level scrutiny by both leaders.

It is said that the remaining issues centre primarily around the role for the Northern Ireland Assembly in having a say around how EU Law is applied in Northern Ireland.  Some also suggest that there will be further discussion around the role of the European Court of Justice, although this is mainly seen as an issue for the European Research Group (ERG) within the Conservative Party.

Although both the UK Government and the EU have remained tight-lipped about the details of the deal, it is widely believed that the deal will remove checks for goods crossing from Great Britain (GB) into NI which are destined for Northern Ireland only.  Key to achieving this has been the real-time access to shipments’ data on goods crossing from GB to NI which has enabled the EU to adopt a more flexible approach.

After meeting with Ursula von der Leyen, the Prime Minister will hold a virtual Cabinet Meeting to discuss the details of the deal (if agreed).  From there, Rishi Sunak will then brief the House of Commons in the evening.  Whilst the deal is imminent, there will still be significant hurdles to surmount including whether the DUP and the ERG wing of the Tory party will support it.  However, Labour has said that it will support the deal.  Many are hoping that this will be one of the last major moments in the Brexit saga.  With numerous other challenges to tackle, all key stakeholders, particularly agri-food businesses are keen for these issues to be resolved so that there can be some certainty on trading arrangements between GB, NI and the EU in the coming years.

As soon as the text of the deal emerges, we will update readers via an online article.

UK Border Operating Model and Ireland

On 15th December, the Government announced that there will be delays to the implementation of the UK Border Operating Model as regards imports from the island of Ireland.  This is due to ongoing negotiations around the Northern Ireland Protocol which will continue into 2022 and associated legal complexities around maintaining unfettered access for NI traders to the GB market.  This means that exporters from the Republic of Ireland – an EU Member State – will continue to be able to export to Britain as they do now.  Meanwhile, exporters from other EU countries will have to complete a range of additional Customs and Sanitary & Phytosanitary (SPS) documentation (e.g. full import declarations) from 1st January.  The UK Border Operating Model will be updated accordingly shortly.

The Chief Brexit Negotiator, Lord Frost, claimed that the move was partly made as a “pragmatic act of good will” but that the continuation of such arrangements would be predicated by the quid-pro-quo that the EU shows in terms of allowing goods to circulate freely within the UK (including Northern Ireland, which although part of the UK, applies the EU Customs Code and other regulatory requirements).

Brexit – North-South Cooperation Areas

On 20th June, details were released of an exercise which outlined the scale of the areas of north-south cooperation on the island of Ireland which could be affected by Brexit.  This exercise informed the UK-EU negotiations which led to the emergence of the Irish backstop.  It shows that there are 142 areas of cross-border cooperation encompassing healthcare, policing, the environment and, of course, agri-food.

Nearly 30 of these areas of cooperation (20%) have direct linkages to agriculture whilst a further 17 are linked to water, waste and the environment.  Areas relating to agriculture and food include;

  • Food safety: linked with the application of EU Regulation 178/2002 on General Food Law.
  • Trade: appears in various guises, whether related to North-South trade promotion (via InterTradeIreland) or the management of cross-border trade with respect to the joint management of customs, transit of goods, mutual recognition of authorised economic operators (AEOs) etc. It also includes collaboration on promoting dairy trade.
  • Common Agricultural Policy: discussion around policy choices and implementation issues which are faced by both jurisdictions on the island of Ireland. It does not involve policy formulation.
  • Rural Development: EU LEADER cooperation including the facilitation of application for funding for collaboration projects including landscape management.
  • Plant health and associated regulatory checks for quarantine pests: a working sub-group oversees cooperation on plant health, pesticide and bee health issues and joint actions delivered through a joint work programme. This area has linkages to external border controls (documentary checks, identity checks etc.) relating to external trade in these products.
  • Collaboration on regulatory checks on live animals and products of animal origin: cooperation encompasses information exchange on consignment movements and trade as well as discussions on topics of mutual interest including the registration of traders and the use of the Trade Control and Expert System (TRACES) which controls the import and export of live animals and animal products in the EU. This area is seen as crucial towards avoiding a hard border. 
  • Animal health, welfare and disease control: includes collaboration initiatives on Tuberculosis (TB) and Brucellosis, veterinary medicines regulation and trade as well as animal transport.
  • Equine industry collaboration: covering cross-border movements and strategy development for the Irish equine sector.
  • Academic partnerships in agri-food: encompasses a variety of partnerships to promote cross-border initiatives including access to research funding as well as programmes to provide a range of higher and further education courses in agriculture.
  • Farm Safety: initiatives to jointly manage issues across the island.

Overall, the information released by the EU Commission and DExEU reveal the extent to which north-south collaboration has evolved over the past 21 years since the Good Friday Agreement.  Tellingly, many of the 142 collaboration areas go well beyond the technical and fiscal aspects of customs and single market regulation and it is implied that technology alone will not be able to solve all of the challenges posed by the Irish backstop trilemma.  Undoubtedly, the continued operation of the Common Travel Area facilitating the free movement of people across the island of Ireland and the UK will be a crucial component of tackling the issue.  However, there are many unanswered questions in other areas, particularly the regulation of agri-food trade which the UK Government will need to address.

To this end, DExEU have also announced the establishment of a Technical Alternative Arrangements Advisory Group to explore alternatives to replace the Irish backstop by the end of 2020. The group will be co-chaired by the Brexit Secretary, Steve Barclay, and Jesse Norman (Financial Secretary to the Treasury) and includes several Northern Ireland-based members (e.g. Declan Billington, Michael Bell and Dr. Katy Hayward) who have been to the forefront of tackling Brexit challenges, particularly from an agri-food perspective. Having such Northern Irish involvement should hopefully lead to more realistic proposals on how to obviate the need for a Backstop in comparison with previous initiatives which have repeatedly come up short in terms of understanding and addressing the complexities involved.

Migration Advisory Committee Report

The recently published Migration Advisory Committee (MAC) report calls for a radical shift in UK migration policy in a post-Brexit world.  Its findings could have major implications for UK agri-food if implemented.  Its key recommendations are listed below with some additional observations in italics;

  • Focus on high-skilled workers: the UK should adopt the general principle for migration policy that it should be easier for higher-skilled workers to migrate to the UK than lower-skilled workers. This potentially exposes the agri-food sector to the risk of significant shortfalls in labour as a substantial proportion of businesses rely heavily on migrant labour to fill operative positions.  Since Sterling’s decline from mid-2016, companies have been experiencing increased problems in sourcing labour.  A move towards focusing on higher-skilled positions will make this challenge more pronounced for food and farming companies.
  • No preference for EU/EEA migrants: this is based on the assumption that UK immigration policy is not included in the agreement with the EU.  This is an arguably unrealistic assumption given how important free-movement is to the EU and the UK’s desire to retain strong access to the Single Market.  Whilst it is perhaps understandable for the MAC to avoid getting embroiled in the current political debate, a report on future migration policy should at least consider a range of future scenarios, one of which is some form of linkage to the EU/EEA as enhanced Single Market access will almost inevitably come with conditions attached.  Note that the EEA is the European Economic Area and includes Norway and Iceland in addition to the EU-28.
  • Abolish the cap on the number of Tier 2 (highly skilled) migrants allowed into the UK: following on from the previous point, this scheme would be equally available to non-EU and EU/EEA migrants.
  • Tier 2 migration open to medium-skilled workers: this makes Tier 2 applications possible for all jobs from RQF 3 or above (RQF ‘ranks’ the skill level).  This means that some more medium skilled jobs (including some professional trades) would be potentially included.  In conjunction with this, the MAC also states that the Shortage Occupation List (SOL) will be reviewed in its next report in response to the SOL Commission.
  • Salary thresholds: maintain existing threshold (£30,000) for all Tier 2 migrants.  It also argues against having regional salary thresholds. When considering the average wage rates for manual/operative positions in agri-food, this threshold is prohibitive. 
  • Immigration skills charge: currently set at £1,000 for most employers.  This should be retained but reviewed.
  • Resident Labour Market Test: this is the requirement to advertise a job vacancy locally before employing migrant labour.  The MAC suggests consideration should be given to abolishing the test.  If it is not abolished, then it advocates extending the numbers of migrants who are exempt through lowering the salary required for exemption.
  • Sponsor licensing system: review how the current system works for small and medium-sized businesses. Any moves to decrease the bureaucratic burden required would be welcomed by most businesses.
  • Consult: engage more systematically with users of the visa system to ensure it works as smoothly as possible.
  • Avoid Sector-Based Schemes: the MAC states these should be avoided for lower skilled workers, with the potential exception of a Seasonal Agricultural Workers scheme.  Whilst some might view it as a positive that the MAC is arguing for a special status for agriculture, most industry professionals believe that a seasonal scheme is simply insufficient for the wider agri-food sector, particularly in year-round operations within the processing sector.  Without labour to process its produce, UK agriculture will struggle to find markets for its outputs.  It is important that this point is made strongly to Government as it appears that the MAC has given insufficient consideration to the wider agri-food industry which relies heavily on migrant labour and has severely struggled to meet its labour needs via indigenous workers.
  • Encourage agricultural productivity: by ensuring upward pressure on wages via an agricultural minimum wage if the SAWS is to be reintroduced. There is a general consensus in the industry that productivity needs to be increased.  But it is not just a question of raising wages, it also concerns issues such as good broadband connectivity, modern transportation infrastructure and better training. It therefore needs a holistic approach from Government working in close collaboration with industry. Focusing on wages alone will not make the UK workforce more productive and could end up generating poorer value for money if not managed properly. 
  • Addressing low-skilled labour gaps: calls for extending Tier 5 Youth Mobility Scheme to meet this need. It is important to point out here that whilst the UK Government may consider some tasks (e.g. fruit picking, meat deboning etc.) to be ‘low-skilled’), they do require specialist skills which sometimes can take several years to develop.  By focusing on youth only, there is a danger that UK businesses will miss out on such expertise.  The focus should surely be on securing the best workers possible for the task at hand that is not available indigenously, no matter what their age is or where they come from. 
  • Monitor and evaluate the impact of migration policies.
  • Local level impacts: pay more attention to managing the consequences of migration at local community level. This is crucial and has arguably been overlooked by policy-makers in the past decade or so.  In some areas, the influx of migrants coupled with austerity has exerted severe pressure on health and education services.  In future, if migration has a more pronounced impact on a given region, then it should be eligible for top-up funds to help cope with the additional burden placed on public services so that the indigenous population does not lose out. 

On Northern Ireland, the MAC report acknowledged that there are unique circumstances and complexities as a result of its land border with the Irish Republic and that the agri-food sector is particularly exposed.  However, it does not look favourably on advocating a separate migration scheme for Northern Ireland, nor a UK-wide scheme to deal with agri-food issues (with the exception of seasonal workers) as outlined above.  In this regard, the MAC is potentially concerned that Northern Ireland would be used as a precedent for the whole of the UK or for other devolved administrations in Scotland and Wales to have their own separate policies.  Given the politics at play in Westminster, it is likely that the DUP will have an influential role in all of this and are likely to push for a NI-specific scheme on fears that NI agri-food businesses could lose-out to companies south of the border. 

The MAC report is seen as an important milestone for the UK in setting its own migration policy post-Brexit.  It is perhaps unsurprising that given a topic as emotive and important as migration that the report’s publication has been met with a broad mixture of views from across the UK generally, but the response from the agri-food sector generally has been lukewarm.  The report is available to download via:  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/740991/Final_EEA_report_to_go_to_WEB.PDF

Brexit Opinion in Northern Ireland

A survey recently published by Queen’s University Belfast suggests a significant shift in opinion on Brexit in Northern Ireland.  The study conducted during February and March, surveyed 1,000 people and found that 69% of those sampled would now vote to Remain in the EU; this is much higher than the 56% Remain vote in the June 2016 referendum.  Increasing awareness of the problems Brexit will cause concerning the Irish border is likely to be the key reason for the shift.  Such findings are likely to get the attention of the DUP, which of course holds the balance of power in Westminster.  Some believe that the DUP has been softening the tone on its Brexit stance in recent weeks. This could signify a move towards a softer form of Brexit, more akin to a customs union-type of arrangement.  It must be emphasised that whilst there appears to be a shift in Northern Ireland, its population is under 3% of the UK total, and there is not much evidence of a shift in views on Brexit elsewhere in the UK.

Brexit Committee Hearing

Speaking in front of the Commons Brexit committee on 25th April, Brexit secretary David Davis suggested that MPs would be allowed to vote to amend any Brexit deal in the autumn.  This means that the Prime Minister (PM) could be instructed by Parliament to seek changes.  This is an apparent U-turn on previous statements by the PM who said that Parliament would only get a take-it-or-leave-it choice.

Such comments are likely to give some hope to remain-leaning MPs that want, as a minimum, for the UK to remain in the Customs Union (but it should be noted that Mr Davis also stated that the expected Parliament to ‘uphold’ the Government’s policy of leaving the Customs Union).  The comment may also be an overture to remain-backing Conservatives who might vote against the Government in important House of Commons votes in the coming weeks. 

Mr Davis did point out that if MPs returned Theresa May to Brussels to renegotiate parts of the deal, then he was “not entirely sure how much force a government sent back with its tail between its legs by Parliament would have in such a negotiation.”

His comments come amidst reports in Bloomberg and the FT that Europe might be willing to strike a customs deal with Britain which mooted the possibility of setting up ‘UK-EU dialogue on trade’.  Although, Mr Davis claimed that it would be a failure if the UK ended up in a Customs Union, there appears to be efforts being made behind the scenes to arrive at a customs arrangement which officially places the UK officially outside of the EU Customs Union but still within the gravitational pull of the EU’s trading framework.

When speaking on Northern Ireland, where agri-food trade accounts for 45% of total goods trade with the Irish Republic, the Brexit Secretary mentioned that the Customs Union on its own would be insufficient to ensure a frictionless border after Brexit.  Mr Davies believes that the best solution was a comprehensive free trade deal in conjunction with a deal to recognise shared regulations and customs procedures. This would encompass mutual recognition on standards and all-island arrangements for agri-food (i.e. the island of Ireland being a single epidemiological unit for animal disease as it at present).

Mr Davis also acknowledged that if an ambitious deal, or alternative technological suggestions to avoid a hard border cannot be agreed with the EU, that a proposed ‘Plan c’ (backstop) to align all regulations was still a potential “emergency parachute”.  Some believe that the extension of Customs Union participation, beyond December 2020, as agreed in the transition phase, has emerged as a fall-back option as the Government’s alternative customs proposals will take time to implement.

The Brexit secretary also added that the Irish border question could wait until a final deal is struck in October, as issues around mutual recognition of standards and rules of origin would only bite from 2021. He saw the June deadline as being an “artificial” hurdle set by the EU side.  Brexit Committee MPs including its chair Hillary Benn expressed concern that an October deal would give Parliament very little time to scrutinise its implications properly which could even then be based on a mere political statement rather than a binding treaty.

It is unsurprising that on Northern Ireland, the can looks set to be kicked down the road yet again. It is by far the most complex and nuanced issue in the negotiations.  Some might argue that if agreement is reached on all other parts of the withdrawal deal with the EU and the framework for the future trading relationship, then the pressure exerted on the Irish Republic would ramp-up substantially. As the Brexit Secretary pointed out there is about £1 billion worth of trade between the Irish Republic and the UK each week, far more than North-South trade which for goods is estimated at €3.2 billion (£2.8bn) per annum. Any significant impact on this East-West trade would hurt the Irish economy.  If agreement is reached on all other major areas and Northern Ireland remains outstanding, the Irish Government could be forced to relent on some key issues.