Official Report: Minutes of Evidence

Members present for all or part of the proceedings:

Mr Colin McGrath (Chairperson)
Mr John Stewart (Deputy Chairperson)
Mr Pádraig Delargy
Mrs Diane Dodds
Mr Alex Easton
Mr Pat Sheehan
Ms Emma Sheerin


Witnesses:

Mr Kearney, junior Minister
Mr Middleton, junior Minister



United Kingdom Exit from the European Union: Mr Declan Kearney MLA and Mr Gary Middleton MLA, Junior Ministers, Executive Office

The Chairperson (Mr McGrath): I can see that we have junior Ministers Kearney and Middleton. You are both very welcome to today's meeting. Good to see you again. Thank you for coming to give us an update today. As ever, I will pass over to you to give us an update and a report. We can then open up for questions from Committee members. I pass over to you.

Mr Kearney (Junior Minister, The Executive Office): Tráthnóna maith, Colin. It is good to see you all this afternoon. I will kick off, if you do not mind. As always, we welcome the opportunity to update the Committee on EU exit matters. I will start by updating the Committee on developments relating to the protocol since our last appearance in June. We will then provide an update on the common frameworks issue.

As we outline in the written document that has been provided to the Committee, on 6 September, the British Government announced that they would unilaterally extend the protocol grace periods that are currently in force. Although the European Commission did not agree to that extension and reserved its right in respect of infringement proceedings, it stated that it will not open any new infringement proceedings for now. We welcome that standstill as it avoids a cliff edge for our businesses and, we hope, provides the time and space for permanent solutions to be found as the British Government and the EU continue their discussions.

As we also outlined in the written update, since our last appearance on 30 June 2021, the British Government and the EU have each published papers proposing solutions to some of the issues that are impacting on businesses. Our officials have been working with officials across the relevant Departments to analyse the proposals contained in the British Government's Command Paper and the EU's non-papers on medicines and various sanitary and phytosanitary (SPS) issues.

Although we welcome the ongoing dialogue and the efforts that are being made on all sides to find solutions, the proposals in the non-papers and the Command Paper do not fully address the concerns of our citizens or our business community. Our businesses have called for certainty, simplicity and affordability. That means long-term workable solutions that create the least disruption to communities here. It is essential that any proposed solutions meet those asks. Without certainty about future requirements, our businesses will be unable to plan ahead, which will impact on their investment and overall competitiveness, hinder their growth and inevitably have a negative effect on the overall health of our economy as we try to recover from the impact of the COVID-19 pandemic. Businesses also need time to implement any agreed solutions.

It is also essential that the complex and cross-cutting nature of the various issues is taken into account, as a potential solution that might work for one sector may have unintended consequences that have a detrimental impact on another sector. Although this is not an agreed TEO position, I suggest that an example of that is the British Government's proposal in the Command Paper to remove medicines from the protocol. That might solve the issues related to the supply of medicines, but it would also have a significant negative impact on our pharmaceutical industry due to the nature of its supply chains and customer base, which rely on continued access to the British single market and the EU single market. Similarly, officials in our Department of Health have advised that the EU's non-paper does not outline the broad solution that is required to meet the needs of our industry and our patients. It lacks the flexibility necessary to adapt to the way in which our medicines supply works and to ensure that there is equity of access with Britain to new treatments. It is therefore important that there is enhanced engagement on the development of potential solutions with the Executive and our local businesses so that we can ensure that the EU and the British Government are fully aware of all the impacts and that any solutions that are proposed will work in practice for our community.

You will be aware that European Commission Vice President Maroš Šefcovic visited here in early September and met local businesses, representatives of civic society, the leaders of political parties, joint First Minister Paul Givan and me. We welcome Vice President Šefcovic coming over here and making the time to speak with our businesses, civic society and political leaders. During our meeting with him, we clearly made the point about the need for enhanced engagement with a solutions focus, and we understand that businesses also clearly outlined that they want to be in the room when solutions are being discussed rather than just being relied upon to continue providing information on impacts. We will continue to make those points in our ongoing close engagement with the European Union and the British Government, including in our meetings with David Frost.

Since the publication of the Command Paper, official-level meetings between the British Government and the EU have been ongoing over the summer months to examine how future discussions on the points made in the Command Paper may take place.

The Joint Consultative Working Group took a break in August but met again on 14 September. That meeting focused on the functional aspect of information sharing between the British Government and the EU. The Executive Office was represented at that meeting at an official level. Since July, information has been communicated by the EU through the Joint Consultative Working Group on a number of EU Acts that amend or replace legislation in the protocol. The Executive Office has been ensuring that the relevant Departments are advised of those Acts that fall within their devolved areas of responsibility or are reserved matters that are of interest to them.

A meeting of the Specialised Committee took place on 24 September. That official-level meeting was attended by Tom Reid, the director of our EU exit team. That meeting covered the progress that is being made on customs IT systems and exchanges of information between the British Government and the EU as well as the Joint Consultative Working Group and plans for future joint stakeholder engagements.

Turning to common frameworks, on 8 September, I attended a ministerial meeting with representatives of the British Government and the Scottish and Welsh Administrations to discuss progress on the development of common frameworks. It was a very helpful meeting, with discussion on how to progress the frameworks, address the remaining cross-cutting issues and ensure that all our respective legislatures are in a position to subject them to democratic scrutiny. We agreed to meet again, with the aim of finalising a common position on the remaining cross-cutting issues as they affect common frameworks, the internal market and international relations. That meeting will be arranged once we are aware of who is going to replace Chloe Smith in the Cabinet Office.

In July, at a meeting of the Executive Committee on EU exit matters, Ministers noted a change to the clearance process for common frameworks. That change removed the need for provisional confirmation by the Joint Ministerial Committee (European negotiations) — JMC (EN) — Ministers in all four Administrations and allows the frameworks to progress directly to scrutiny in the relevant Assembly Committees. The first cohort of common frameworks should reach the Infrastructure, Health and Economy Committees this week for them to begin scrutiny. We anticipate that the remainder of the frameworks will be submitted towards the end of October.

I now hand over to Gary.

Mr Middleton (Junior Minister, The Executive Office): Thanks, Declan. Thanks, Chair, for the introduction. I welcome Pádraig and Alex to the Committee and pay tribute to George Robinson for the work that he carried out in the Committee over many years.

I will take this opportunity to update the Committee on work that is continuing across Departments to address the residual withdrawal agreement issues related to the end of the transition period. I will then turn to the EU Settlement Scheme and the dedicated mechanism.

Addressing the residual issues remains an ongoing and fluid process as the UK and EU continue to engage on a number of areas, including those that are subject to additional grace periods. Ministers and officials have continued to take the opportunities available to them to ensure that the UK Government and the EU are fully aware of the impact of the end of the transition period on our businesses and citizens and to emphasise the need for ongoing engagement with us. We have been clear in our representations to the Government that it is essential that we are represented in the governance structures of the Trade and Cooperation Agreement (TCA) and the withdrawal agreement, particularly where it falls within the devolved competence of the Assembly and the Northern Ireland Executive.

Lord Frost has set out the Government's approach on engagement regarding the TCA's implementation. Whitehall Departments will be primarily responsible for the detailed implementation of the Trade and Cooperation Agreement in their policy areas. That includes the chairing of the relevant Specialised Committees and engaging directly with their counterparts in each jurisdiction. Executive Ministers will attend the partnership council, which oversees the implementation and operation of the TCA at a political level, where items of devolved competence are included on the agenda. Although it is unlikely that there will be an opportunity for our Ministers to speak at the partnership council, a ministerial pre-meeting with Lord Frost will be convened prior to each meeting to enable our Ministers to put forward their views on the position taken by the Government on each agenda item.

The first meeting of the partnership council was held on 9 June. In preparation for that, the former First Minister and the deputy First Minister attended a ministerial pre-meeting that was chaired by Lord Frost, at which there was an opportunity for them to put forward their views. The agenda for the partnership council included discussions on SPS and customs facilitation, fisheries, law enforcement, long-term visa fees, union programmes and TCA governance structures.

Articles 12 to 14 of the Trade and Cooperation Agreement provide for engagement with civic society. Article 14 in particular provides:

"The Parties shall facilitate the organisation of a Civil Society Forum to conduct a dialogue on the implementation of Part Two."

The consultation on how the Government should engage with business and civil society on the implementation of the TCA ran from 9 August to 21 September 2021, having been extended by a week to accommodate the receipt of responses. A total of 66 replies were received from businesses, charities and NGOs from across all four Administrations, with the key emerging theme being the timing and frequency of meetings along with how input from thematic focus groups with the appropriate level of knowledge and expertise will be received. We would be happy, of course, to provide a further update to you as more detail emerges from the consultation.

The EU will also consult its stakeholders on the implementation of the Trade and Cooperation Agreement. It opened a call for expressions of interest to participate in the EU domestic advisory group. The deadline for applications was 5 July.

There have been no further announcements regarding the formation of the group, but the UK and EU domestic advisory groups will meet annually in the civil society forum.

Finally and briefly, I turn to the EU Settlement Scheme. The Committee will be aware that the European Union Settlement Scheme closed to new applications on 30 June. We are delighted that 99,830 applications were received by the deadline from EEA citizens who wish to continue to live here, and we recognise the valuable contribution that they make to not only our economy but culture and wider society. We welcome the fact that the citizens who missed the deadline can make a late application and that, in doing so, their rights to continue living and working here are protected while their application is being considered.

We recognise that changes can be confusing for EEA citizens' employers and services alike. Therefore, it is essential that all EEA citizens living here can demonstrate their status easily when needed. The First Minister and the deputy First Minister, along with Ministers from the Scottish and Welsh Governments, wrote to Kevin Foster, a Minister at the Home Office, to urge him to ensure that the proof of status, which is currently digital only, be implemented and supplemented with a form of physical proof for those individuals who have difficulty with digital access. Officials continue to work closely with the Home Office and other devolved Administrations and to support the work of advocacy agencies here, namely the South Tyrone Empowerment Programme (STEP) and Advice NI, which continue to support our EEA citizens.

Hopefully, that update provided some helpful information.

The Chairperson (Mr McGrath): Thank you very much to both junior Ministers for that update. We will move now to questions. A number of members would like to ask a question, but I will go first. I will start with a quick non-Brexit question, but one on which I would like clarification. The issue of the flags, identity, culture and tradition (FICT) report has been rumbling on and on and on. We have written to you, and others have written to you, and, in Question Time, on Monday, we got some guidance, but we still seem to be devoid of a date as to when the report will be published so that we can move to the next stage. It has been built up as a super report because of the mystery that surrounds its publication and progress. Are you in a position to tell us when the report will be published?

Mr Kearney: During Question Time, on Monday, I outlined to the Assembly a chronology of where we have been on the report. Suffice it to say, I wanted to see it move forward much more quickly. We brought a report to the Executive, in March, and agreed a pathway for how we would proceed towards publication, with appropriate scaffolding to ensure that there would be implementation of the 45 recommendations upon which there is consensus. There have been difficulties ever since in trying to move to the point at which we could come back to the Executive. We were due to come back at the end of April or beginning of May, but that did not happen. We then had further discussions, moving towards the summer. There was to be another meeting of the working group on 21 September, but that did not happen: I do not know why, but, as you will appreciate, they are joint meetings.

I spoke on the issue at the Executive meeting on 23 September. I reiterated, as I have done on many occasions in the Executive as well as publicly, that it is essential that, as an Executive, we embrace the report and take advice from our officials on the next steps. They are very clear. They provide a systematic way forward. Agreement was indicated in the Executive that we should proceed to that point. I have already asked, through the office, that we identify the date for the Executive meeting at which we can have the dedicated discussion that we agreed that we would have back in March in order to ensure that we proceed.

I do not think that there is any great mystery in relation to the report. It has been well trailed. Every party has a copy of the report, because all five main parties were involved in the deliberations of the commission. All Ministers, I am quite sure, had access to and read the report informally through the offices of their parties. There is no mystery about what we are dealing with. We just need the political will to recognise that the report is not a silver bullet and will not provide all the answers, but it certainly does provide a pathway to deal with some of the most contentious issues that we as a society continue to confront.

Mr Middleton: Mr Kearney is quite correct in that this was raised at a recent Executive meeting. The minutes may portray a slightly different version, but what we do need to see is the report published in its raw format — the format in which it was completed. I expect that to happen in a stand-alone fashion in the very near future. There may be another meeting of the FICT working group to bring together that detail and to provide a date to the wider Executive. Hopefully, we will see that in the very near future.

The Chairperson (Mr McGrath): I appreciate that potentially it is not the fault of either of you as individuals, but this is just not acceptable. If it is not going to cause a major amount of concern but may provide up to 45 recommendations that may help to provide some solutions, and the report was presented to the Executive in January, since when there has been almost 10 months to assess it, and today we are still talking about maybe another working group meeting before it goes to the Executive before it is potentially published for the public to be able to see it, the term glacial comes to mind about the pace to be able to deliver this.

That is not fair on the public. Everybody who has come in behind it has said that there was a process there and that the working group would get together. It was given the space to go off and explore the issues and to work on recommendations that would bring real solution to many people in many communities right across Northern Ireland. There has been delay after delay after delay and promise after promise after promise. I ask that you both do what you can within the Executive Office to get this published as quickly as possible so that people are able to move on with those recommendations and to try to get some resolution to really big concerns in communities.

Mr Kearney: That is fair comment, Colin, but, for the record, the slowness and blockage do not rest with me. I note from Gary's comments that he appears to be suggesting that there should be a simple publication of the report, which I agree with, but the previous DUP position on progressing this matter much earlier this year, and before Gary came into office, was that we would, in fact, take an orderly approach to publication of the report alongside next steps that would be sensibly worked out, in conjunction with officials, owned by the entire Executive and then implemented by all the Ministers affected.

As you will appreciate, there are cross-cutting issues relating here to dealing with these issues, so we need a cross-departmental approach. I see no difficulty in achieving any of that, but there does seem to be a difficulty in taking this forward in the way that we discussed in March and that we proposed to bring to the Executive in April/May. Despite my best efforts, we have still not successfully managed to do that. Nobody has been more proactive on this issue than me. I assure you that I will continue to be proactive.

A conversation that the previous First Minister had with me at that Executive meeting in March was, "Let's do this in a sensible way, and let's not do this in a fashion where it constitutes a free-for-all". So, let us publish the report. Let us bring forward the sensible scaffolding and the work that has been done by officials — work has been done by officials and tabled with the working group. It appears as if there is some step back from engaging with those proposals within the working group. Perhaps that is why the meeting did not take place on 21 September. I am certainly up for getting this done soon, as quickly as possible, and ensuring that we have a pathway forward on all these issues in wider society.

The Chairperson (Mr McGrath): I think that the internal machinations of the Executive Office will always continue to astound all of us at how things can be delayed and squabbled upon and take forever to be published, but let us hope that we can take both junior Ministers at their word today that they are going to try to progress this as quickly as possible.

Mr Middleton: If we are all on the same page, I am happy to suggest that the report be published within the next week. There is no issue on our side with publishing the report, so I look forward, hopefully in the very near future, to that report being published.

Mr Kearney: Does that extend, Gary, to the proposals that have been tabled and worked up by officials?

Mr Middleton: No, because that is not the position of the Executive. The position of the Executive is to release the report in its current format, and I think —.

Mr Kearney: The position of the Executive, Gary, is that they have not been allowed to see the report that has been drafted by officials. That is the situation.

The Chairperson (Mr McGrath): Ministers, it is not very —.

Mr Kearney: The blockage rests with your side of TEO.

The Chairperson (Mr McGrath): Ministers, it is not very often that I have to call order on two Ministers from the same Department while they are presenting virtually to the Committee, but I ask you maybe to have your conversations offline and just come back to this Committee and the Assembly with the report that we have asked for. You have both undertaken that you are going to do it. There has been one suggestion that we will have it next week, so I look forward to welcoming it under Chairman's remarks next week.

Moving to the matter of Brexit, one of the biggest issues that we are dealing with at the moment is labour shortages and, obviously, the impact that labour shortages will have on a whole range of industries, not least the agri-food industry. Junior Minister Kearney, can you give us an update on your understanding of labour shortages, where we are and what work is being carried out by the Executive Office to deal with that? Junior Minister Middleton, maybe you want to tell us what is causing the labour shortages.

Mr Kearney: It is well documented that we are experiencing labour shortages, particularly in our food processing plants and specifically in the pork industry. It is interconnected with the ongoing impacts of the pandemic, but it is structurally linked to Brexit and the change in immigration rules that have been brought in by the Tories as a direct consequence of Brexit. What we are seeing here, I think, is not as severe as what is happening in Britain at this time, where there are severe workforce shortages, not only in the haulage industry but in hospitality, in care homes and in other critical industries. That is entirely bound up with the Brexit situation.

In some respects, I do not think that we have been hit with the worst effects of what is being experienced in Britain because we have the mitigation of the protocol, and that really surfaces the question of ensuring that we have speedy, proportionate, flexible and pragmatic implementation of the protocol, because it clearly, in this instance, can give us the best potential for blunting the worst effects of Brexit in how that will impact upon our economy. We always predicted that Brexit would have major repercussions on the resilience of our workforce, the maintenance of supply chains and the overall ability of the economy to function. We are now starting to see that come through in Britain, and, thankfully, I do not think that we are seeing the worst effects of that hit here in the North. However, I think that getting to implementation of the protocol and resolution of the outstanding issues more quickly will provide a protective field against some of the severity that we are seeing in Britain at the moment.

Mr Middleton: On your question to me, Chair, it does appear that there is a general tightness in the labour market, with labour shortages in a number of sectors and firms having difficulty in filling their vacancies.

We are aware from various engagements that a shortage of drivers in particular is having an impact on businesses, most notably resulting in supply chain disruption.

I appreciate that it goes across a wide range of sectors, but it is also clear that those issues are not unique to Northern Ireland, with food shortages being reported at UK level and beyond. I take issue with the assertion that it is to do with the protocol. The COVID pandemic and the UK Government's immigration policy have impacted on parts of our economy. That has manifested in various forms, including what we see on our TV screens around HGV drivers. Impacts on that include signs of disruption in supply and increased costs for freight consumers.

I am happy to get into more specifics about the haulier issues if you wish, Chair. Otherwise, as I said, the Executive Office is mindful of those issues.

The Chairperson (Mr McGrath): I appreciate those responses, but I hope that the Executive Office is not taking the approach that, as long as our labour shortages are not as bad as GB, we will be OK. Many industries out there are facing serious shortages. It has been reported that some of the agri-food industry is operating at 75% of its workforce. I think that Brexit has some part to play in that because the number of people who are here from an EU background has reduced, and it would not be too difficult to highlight the fact that Brexit has resulted in those people moving away from the North to other parts of Europe. Does the Executive Office recognise that, and are you trying to remedy it?

Mr Kearney: Of course it is recognised. The reality is that we are facing workforce shortages, and, structurally, it is directly connected to the effects of changing immigration arrangements, which stem from the imposition of Brexit.

It might be helpful for the Committee to know that the interdepartmental steering group has been established, which is the successor to the senior users group. It was originally established at the outset of all this under the future relations programme board relating to EU affairs.

That is an interdepartmental coordination group, and it is responsible for constantly monitoring all those issues and ensuring that we have a coordinated and joined-up departmental response to the kind of issues that are now emerging as we deal with the existence of Brexit, but in the context of trying to ensure that we work through the remaining difficulties around the protocol and ensure that we optimise the protections that the protocol will provide. There is a structure in place. The group meets regularly. It has been repurposed in recent weeks with a view to ensuring that it is adequately focused on the newly emerging pressures and difficulties, such as the labour and workforce shortages that we are speaking about.

The Chairperson (Mr McGrath): Before you come in, Gary, I appreciate the language that you are using, Minister Kearney. It is very much future tense. That interdepartmental working group is welcome, but has it met to discuss labour shortages in various sectors and industries in the North at the moment? Has that been the focus of an agenda item for that interdepartmental working group?

Mr Kearney: I did not look at the relevant agenda of the group when it convened recently, but, given that it is made up of representatives of all the relevant Departments, including the Department for the Economy, I expect that workforce shortages have been part of those discussions.

Mr Middleton: Just to add to that, these are cross-cutting issues. We very much rely on our ministerial colleagues in the Department for the Economy and the Department for Infrastructure and others to bring forward the issues as they see them in their Departments. We have received particular updates around the pressures in the Department for Infrastructure and the haulage sector, and the Department for the Economy has also been keeping us up to date with its issues. Those are very much on the agenda, and we keep a close eye on them, monitor them and work with industry.

The Chairperson (Mr McGrath): I certainly appreciate watching a problem, but I would love to hear the solutions that we are providing. That is what will make the difference for people. Maybe we could write and ask for details of any discussions at that interdepartmental working group to get a flavour of those.

This is my final question. It is about the PEACE PLUS programme. The requirement for the North/South Ministerial Council (NSMC) to sign off and release that funding has been raised over the past week or two. I ask my question very clearly: does the North/South Ministerial Council have to meet to sign off those hundreds of millions of pounds of finance so that it can be made available to groups? That is pretty much a yes/no answer.

Mr Middleton: My understanding is that it may do. I understand that that issue is to come to the Council around December. That is as much as I know. I have not been invited to such a meeting, so I do not know.

The Chairperson (Mr McGrath): OK. Given that it involves upwards of £1 billion of investment, could I suggest that the Executive Office gets a clearer understanding of that, rather than a "yes" on one side and a "maybe" on the other? With that funding, many groups and people's jobs are on the line. They would appreciate something slightly more than a "maybe". We need to be much more concrete than that.

Mr Kearney: Sorry, Colin. To clarify and to be helpful to you, you asked for a clear answer and I provided you with one. If you read the appropriate documentation, you will find that there is a requirement for the NSMC to be involved in sign-off to ensure the release of the €1·1 billion that constitutes PEACE PLUS. I do not think that I can be much clearer than that, and I would appreciate it if you would acknowledge the clarity of that position.

The Chairperson (Mr McGrath): I acknowledge it and suggest that you provide the same document to your colleague and partner, who seems to have a different interpretation.

Gentlemen, thank you for your answers to my questions. I will pass to the Deputy Chairperson, whom I will also ask to take over the meeting.

(The Deputy Chairperson [Mr Stewart] in the Chair)

The Deputy Chairperson (Mr Stewart): Thank you, Chair. Junior Ministers, thanks very much for coming along today. We appreciate the update and the breakdown of the ongoing process between the EU and the UK Government on the protocol and the ongoing negotiations on the back of the Command Paper etc.

My first question is to junior Minister Middleton. You referred to the ongoing role that Ministers are playing in meetings and how those feed in to that process. Can I get clarity? Will all Ministers or junior Ministers continue to attend the Specialised Committee on the implementation of the protocol as part of the Joint Committee? Your line broke up a bit when you talked about that, so I am not quite sure.

Mr Middleton: Yes. The last meeting of the Joint Committee took place on 9 June. Since that meeting, the UK Government have published their Command Paper. The then First Minister and the deputy First Minister attended that meeting, so, ultimately, it would be for the First Minister.

John, to give a bit of clarity, where we can have an input to the negotiations, we will absolutely attend and make the case. I suppose that that is a different position to where the North/South relationships appear to exist. The Joint Committee and the Specialised Committee are different. We will use every opportunity to raise the concerns of Northern Ireland businesses.

The Deputy Chairperson (Mr Stewart): OK. Thanks for that, Minister Middleton. Junior Minister Kearney, is there anything that you want to add to that?

Mr Kearney: Yes. John, to clarify, officials attend the Specialised Committees; there are 19 of them. Officials also attend the Joint Consultative Working Group. In the past, the First Ministers and junior Ministers have attended the Joint Committee, and we have a right to address it as part of the respective delegations. However, while we had a pre-meeting with David Frost and colleagues from Wales and Scotland in advance of the Partnership Council, the first meeting of which took place on 9 June, we were advised that we would have the ability to observe but not to speak at the Partnership Council. Clearly, we are not content with that. That position is also shared by our Welsh and Scottish colleagues.

We will take every opportunity to represent the interests of our democratic institutions and the people whom we represent. We will do our best to influence the nature and direction of the discussions that take place, but, from our perspective, the British Government always maintain the lead in any of those negotiations. We are not given an opportunity to input substantively or meaningfully to the negotiations, as much as Gary, the two First Ministers and I would prefer otherwise, but we take every opportunity to ensure that our issues are clearly heard and understood, when the opportunity to do so arises through the JMC and the Joint Committee and with our officials attending the Joint Consultative Working Group and the Specialised Committees. I hope that that is helpful, John.

The Deputy Chairperson (Mr Stewart): It is. Thank you for that.

That leads me on nicely to my next point. You referred to the democratic institutions here. I am keen to get a flavour of what you or the Executive Office are doing about the EU legislation that Northern Ireland potentially will have to follow via the Northern Ireland protocol. It has now been nine months since that was laid out. I am curious about whether TEO has an idea of how much legislation it expects and when you are likely to inform Committees and the Assembly of the impact of those.

Mr Middleton: Yes, John. That is the frustration of being half in and half out of the European Union and of the difficulties that we face in Northern Ireland in particular. The latest monitoring returns from 13 September indicate that, in relation to Westminster Bills, there is the Environment Bill, which was a supplementary legislative consent motion agreed by the Executive on 9 September. There is the Professional Qualifications Bill, which is at Committee Stage in the House of Lords. Apologies, the Committee Stage was completed on 22 June. The Subsidy Control Bill, which Diane raised earlier, is also in progress. Forty-four statutory rules have been identified as being required in the post-transition period. Thirty-four statutory instruments that cut across devolved matters have also been identified as being required in the post-transition period. None of that legislation, of course, sits with TEO.

There is a real issue with the democratic deficit in relation to having our views heard, certainly in the EU, about the policies it will have and their impact in Northern Ireland. That greatly concerns us, and we raise that issue continually with the UK Government, who, of course, represent us in all the negotiations.

The Deputy Chairperson (Mr Stewart): I totally agree, as I am sure everybody does, about democratic deficits, whether through the Northern Ireland protocol or the feed-in process. It is lamentable that you can be told that you have a seat at the table but no active or constructive role to play there. Let us hope that that changes.

My final point is about state aid rules. Is there anything coming forward on those? To date, I have not seen anything relating to the new state aid rules. Does the Executive Office envisage an early testing of our legal position, potentially through the European Court of Justice?

Mr Kearney: I am unaware of any intention to take forward legal action on that matter, unless officials have discussed that. They have not brought it to our attention at this point.

The Deputy Chairperson (Mr Stewart): That is all from me. I am conscious of your time, junior Ministers. There are three members who wish to come in. I will bring in Pat Sheehan.

Mr Sheehan: I thank the junior Ministers. Recently, we have heard a lot in the media, or, I suppose, through leaks to the media, that the British Government intend to trigger article 16. We know that they unilaterally extended the grace periods.

In contrast, Maroš Šefcovic was at a Committee meeting in early summer, and he visited here and met the parties at the start of September. The attitude seems to be more one of trying to focus on solutions. That seems to be the position of the EU Commission. Specifically, finding a solution to the issues of medicines and SPS checks has been mentioned. Can the Ministers give an assessment of how they see the European Commission's approach, given that, certainly, the public face of it seems to be focused on finding solutions?

Mr Middleton: Thanks for that, Pat. There is certainly a difference in approach. I know that the recent Command Paper issued by the UK Government was a step in the right direction, albeit it did not go far enough. Pat, you touched on medicines, which is of particular concern not only to me but, primarily, to the Health Minister and his Health officials. That issue needs to be resolved. The Command Paper does not go far enough in dealing with those issues. On the EU non-paper, I am told that there will be additional proposals from the EU in mid-October. That is welcome, but will they go far enough? Time will tell.

I, for one, welcome engagements, be they with Maroš Šefcovic or Lord Frost. I want them to speak to real people in Northern Ireland. I want them to speak to businesses and people affected by what is happening at this time. Junior Minister Kearney and I met a number of representatives from the Danish embassy, for example, and people from Germany. Many of them told us that those are technical issues that can be resolved. If they can be so easily resolved, we need to see solutions.

We talk about article 16 being triggered and the language around that. The fact is that the EU did trigger article 16, which, of course, created an issue for us in Northern Ireland. I want to see both sides work together and come to a solution. We are not asking for anybody to do anything that they have not already agreed to. We all came into the Executive on the basis of New Decade, New Approach. We all committed to unfettered access east-west and, indeed, recognised the importance of our relationships North/South. I am in solution mode, and, hopefully, everybody around the Executive table is in solution mode. We need the UK and the EU to get around the table and address not only the very serious economic issues but the constitutional issues.

Mr Kearney: Thanks, Pat. I will come in briefly on that. The meetings that we had with Maroš Šefcovic on 8 and 9 September were very significant. We had an opportunity to listen to his thoughts on what could be done to try to address issues, particularly the priorities of medicines and SPS checks, as they relate to trade on an east-west/west-east basis. We are absolutely united on the fact that we need to see a frictionless arrangement, east-west/west-east. I do not want to see any borders damaging our ability to flourish or prosper as a society.

To go back to the point about a democratic deficit, one of the difficulties is that we can express and represent our concerns about the absolute need to provide certainty, simplicity and stability for our businesses here in order to secure jobs and attract further investment, but we are not in a position to influence the negotiation strategy being taken forward by the British Government. That is a democratic deficit.

As Gary and I said to representatives of the Danish embassy in London yesterday, we would much prefer to represent the interests of our own people and to do that in a very coordinated, joined-up and effective way. We are not in the driving seat of the negotiations, however.

It alarms me when we hear commentary about a willingness or intent to trigger article 16. David Frost said that, in his view, he has the conditions and circumstances to do that but that he chooses not to trigger article 16 at this point. At this time, we need a solution-focused approach to dealing with these issues. We need to drop the inflammatory language, and we most definitely need to drop the dishonesty in how many of these issues are being highlighted and used to create smokescreens. It appears to me that the driving agenda on behalf of some sections of Whitehall, although perhaps not all, is increasingly a very narrow approach to sovereignty and a stand-off with the European Commission and the European Union on sovereignty issues. As a result of that, this region and its economic and societal well-being has to absorb the repercussions of that instability and the failure to close out issues that can very quickly be resolved. Those issues can certainly be resolved, but we need to agree timelines for their resolution. Maroš Šefcovic said that they are prepared to change significant sections of European legislation in order to find solutions to the matter of medicines. Clear solutions — landing zones — are available for dealing with SPS, and they have been tried and tested in other places.

The only point of difference between Gary and me on the need to find a resolution to all those issues is that I believe that we have to extract the emphasis on constitutional issues. That is a rabbit hole that creates further difficulties, unnecessarily. We need to concentrate on the common-sense solutions that can be found. It is for the British Government and the European Commission to find those resolutions and technical solutions. I urge them both to double down to do that, to do it in a timely way and to allow us to move on and ensure that our businesses and our overall society have the best opportunity to exploit access to the dual market opportunities of continued involvement in both the British single market and the European single market. Very few other places in the world are potentially poised to maximise on those kinds of benefits. If we can clear up those other issues and close them out, that will put us in a very good position.

Mr Sheehan: Thanks for that. I will ask this question very briefly, if the Chair does not mind.

Mr Sheehan: In your answer to me, Gary, you said that you are in "solution mode". I do not doubt you when you say that, but how do you reconcile that with your party's threat to pull down the institutions and using phrases like, "It's the protocol or the institutions; you can't have both"?

Mr Middleton: Therein lies the issue, Pat. It is a constitutional issue. Northern Ireland is separated from the rest of the United Kingdom, and that is a major constitutional issue for me as a unionist, but it also affects the economic position of Northern Ireland within the United Kingdom. Our leader has been quite clear in his comments. We have said that we want Northern Ireland to work. For that to work and for the agreements to work, we need to ensure that east-west arrangements work as well as the North/South arrangements. I encourage you and all your colleagues in the Executive to get on board with us and sing off the same hymn sheet when it comes to unfettered east-west access. That is all that we are asking for. We all committed to that, but, for some reason, people are content to drag their heels. I hope that that is not for political reasons. That is why I said that we are in solution mode. We want Northern Ireland to work. The only way for that to succeed is for us to get to a situation where the east-west barrier can be removed.

Mr Sheehan: Do you not think that Brexit is responsible for all this? Your party pushed for a hard Brexit: do you not accept any responsibility for that?

Mr Middleton: The responsibility for creating the border in the Irish Sea lies with those who supported and championed the protocol. I note and welcome the fact that many of those who championed it and called for its rigorous implementation have rolled back. There is now an acknowledgement that there are issues. Recognising that there is a problem is a positive step forward, but it is not enough. We need solutions. If, for example, residents in your area go to England with their pet but are not able to bring that pet back, that is a ludicrous position. Thankfully, steps have been taken to push the can down the road and ensure that the checks do not happen at this time, but that is not a sustainable position. It does not have to be a unionist/nationalist issue. We can and need to work collectively to draw out where the issues lie. At the moment, that is east-west.

Mr Sheehan: OK. Thank you.

The Deputy Chairperson (Mr Stewart): I have three more members who want to come in. Alex Easton, I think that you indicated and, possibly, then put your hand down. Do you want to come in?

Mr Easton: Thank you. As far as I am concerned, there is no point trying to nitpick or make small amendments to try to fix the protocol. It is not working, it is not going to work, and it has to go. My first question is to both Ministers: do you accept that the Northern Ireland protocol has damaged the institutions, damaged relationships and damaged businesses across Northern Ireland?

Mr Middleton: Alex, thanks for the question. I completely agree with everything that you said, particularly about the relationships within the institutions. It is unfortunate that people do not see the real damage that has been caused. Not one unionist representative supports the protocol or the position taken by the European Union, and that should alarm all of us. David Trimble has spoken out very strongly about the effect that the arrangement had and still has on the Good Friday Agreement. If it were the other way around, we would expect people to sit up, listen and say, "This is a major issue". Unfortunately, there seems to have been an exercise of burying the head in the sand, where nobody has wanted to listen to the genuine concerns. It has had a severe impact, as you will know, on the institutions, but we can resolve that by removing the Northern Ireland protocol and coming up with other solutions, such as mutual enforcement and working with our counterparts in the EU to come to frictionless arrangements. Unionists will not tolerate the current situation.

Day and daily, we see the economic damage that the protocol is doing, whether to simple things, such as Marks and Spencer being unable to get its product lines on to the supermarket shelves, the issue with pets or the more serious, life-threatening issues around medicines. I completely agree with you. It is not about tinkering around the edges, making tweaks or kicking the can down the road with additional grace periods. We need long-term solutions, and the time for those solutions to come forward is starting to run out.

Mr Kearney: Thanks, Alex. Welcome to the Committee.

Mr Easton: Things have been quite exciting since I joined. [Laughter.]

Mr Kearney: OK, well, I am glad to hear that.

I have a different view. We have a protocol because of Brexit, and it needs to be worked as a mechanism to blunt the worst effects of Brexit. It is entirely wrong to conflate the issues around the protocol, which we need to see resolved, with political and constitutional issues. The reality is that we have to navigate new trading circumstances that have come about as a result of Brexit and the existence of the protocol. I think that it is a huge mistake and a great disservice to us all to see how the protocol has been seized on for what I believe are selfish electoral reasons at this time.

You asked about damage to the institutions. No, I do not believe that there is damage to the political institutions, but, when there is division in this society, it is never good for politics or the political process, and that inevitably puts pressure on our political institutions. The key here is that those who have been most inflammatory, for entirely disingenuous reasons, around the protocol need to step back from the brink. We need to ensure a proper, proportionate, pragmatic implementation of the protocol to ensure that we face no worst excesses arising from Brexit, and we need to maintain power-sharing.

Mr Easton: Declan, I know that you have a different view from me, and you are entitled to that, but surely you will accept that the protocol has caused damage to businesses in Northern Ireland. I know that things need to be done to fix that.

Mr Kearney: I recognise that a number of businesses are experiencing disruptions. There is, however, a flip side to that, and that is why we have to have an honest discussion on this, Alex. In the first six months of this year, trade from North to South was raised by 77%, and, in May 2021 alone, cross-border trade, North to South and South to North, was worth in the region of €612 million. A number of businesses are already in the process of adapting to the new trading realities and to the real potential that can open up arising from the protocol and the special position that it confers on the North by giving us unique access to the British single market and the European single market. I want to see those disruptions resolved. There are ways of doing that, if the political willingness is displayed by the British Government and the European Commission. That would allow us to maximise the opportunities that can be developed on the other side through having a frictionless and unfettered ability to trade North/South, east-west and west-east. It is about ensuring that this region can access the best of both commercial and trading worlds.

Mr Easton: I do not know who wants to answer my next question. I am happy for either or both of you to answer. Declan, you quoted some figures. I do not know whether Gary has figures. What has been the extra cost to businesses in Northern Ireland from all the bureaucracy and red tape that have been added? Has there been a reduction in trade between Northern Ireland and the rest of the UK, and, if so, by how much?

Mr Middleton: Alex, I do not have the figures on the cost to hand. I know that it is significant, and I know that a report was done by an economist from Ulster University on the impact that it would have. It was in and around £850 million per annum, and that is business loss, not the cost to, for example, the Department of Agriculture following its experience at the ports. That figure relates to businesses. Those costs are significant, and, of course, a significant number of businesses rely on supply chains from England, Scotland and Wales. An example on the ground was local cricket clubs accessing cricket loam, which is the soil used for cricket wickets. A specialist company in England provides that, but local clubs were not able to bring it into Northern Ireland, so there is a cost there at a micro level. Overall, the figure was around £850 million per annum, which is significant. We cannot tolerate that, and we need it to be addressed.

Mr Easton: Basically, some are saying that it is OK to lose east-west trade if that trade to goes North to South. That is not sustainable, and it is not good. It does not reflect a good attitude when you say, "It is OK if we take your business and bring it down South, but you are not allowed to do business with the rest of the UK". I find that very difficult to accept, I have to say.

Finally, you mentioned 44 statutory rules. Are those to come to the Northern Ireland Assembly? [Interruption.]

Excuse my dog. I think that he is protesting against the protocol. Will those 44 statutory rules come to the Assembly for a vote? Gary or Declan, do you know whether that is the case?

Mr Kearney: Earlier, Gary accurately summed up what we are looking at in terms of statutory rules and statutory instruments, and I touched on the common frameworks that are coming directly to the scrutiny Committees. We had a shortfall of something like 27 frameworks. Those were due to come back here to Committee. They had been held up, but that congestion has now been lifted, and 26 of those 27 common frameworks will arrive in Committee, starting from next week.

Mr Easton: Thank you very much for that information.

The Deputy Chairperson (Mr Stewart): Thank you, Alex. You are very welcome to the Committee, as is your dog. We look forward to your contributions. We have two more members to come in, junior Ministers, and then, you will be glad to know, you will be finished for now.

Ms Sheerin: I have a scenario that follows on from Colin's earlier remarks on the protections granted to us by the protocol. I have a sister teaching just outside Liverpool. She is currently on a quarter tank of petrol and is making arrangements to stay with a friend near her school in Widnes because she will not have any means of travelling there from her home near the city of Liverpool. I have not heard of anyone in the North of Ireland having that problem, because, as a result of the protections offered to us by the protocol here in the North, we are not experiencing the shortages being experienced across the water in Britain as a result of Brexit. There are more examples than just that one.

We have some issues here as a result of Brexit. In my constituency, a number of food processing plants are experiencing issues because of a loss of workforce. People from EU countries who were working in some of our factories have returned home because of Brexit, the implications of the EU Settlement Scheme and the problems that they faced or feared. That is having real implications for businesses. Obviously, the protocol has offered protections to other types of food producers. There has been a brilliant showing in the livestock trade. People who are selling beasts are, because of the protocol and the fact that their supply chain is smaller, not having problems. Marks and Spencer was mentioned, and we have seen in the news in the past couple of days that it plans to close 11, I think, shops in France because of problems with Brexit. What are your thoughts on that, the particular protections that we have been offered by the protocol and how we will mitigate the loss of workforce? The Agriculture Minister suggested last week that we should have some sort of divergence from British immigration law, which, obviously, we have not been entitled to thus far, to allow us to get those migrant workers back.

Mr Middleton: Thanks, Emma. I will come in briefly and, no doubt, Declan can come in after that.

I will answer your question on the protocol. The protocol does not protect us one bit in relation to fuel provision in Northern Ireland. My understanding of the GB position is that there are ample fuel stocks. There was some panic buying, and, of course, there are particular issues around haulage drivers. Thankfully, however, in Northern Ireland, we have been reassured that there are no issues with our fuel supply or, indeed, any shortages.

Ms Sheerin: I will just clarify that although I put that across in jovial terms, that is the reality. I have a sister working in England, and that is her situation at the moment. There might not be a shortage of fuel, but, as you pointed out, there is a shortage of haulage workers, and that is as a result of Brexit. It is important that that is clarified. I know that you supported Brexit but these are the real-life implications for people.

Mr Middleton: Yes, they are, but the driver issue is not Brexit-related. We have issues with drivers across the United Kingdom. There are solutions that we can look at, and, hopefully, the Department for Infrastructure will address some of the issues around licensing and testing. Those issues can be overcome. To say that they are Brexit-related is not true.

I take your point about workforce issues. The Agriculture Minister has made some suggestions. Minister Kearney and I regularly attend meetings across the United Kingdom with the other devolved Administrations, and we have raised and will continue to raise that. To say that the protocol protects us is just not true.

Mr Kearney: I will add a brief rejoinder on that particular point. A recent report from accountancy firm Grant Thornton concluded that somewhere in the region of one million vacancies exist in Britain, half of which are in the food and drink sectors. Over the last 20 to 30 years, those sectors have relied very heavily — disproportionately — on an EU workforce. Industry bosses in Britain are saying that that, as is reflected in the Grant Thornton report, is the cliff edge that was caused by Brexit, with a lack of British workers filling gaps in the haulage industry, warehousing, hospitality, meat production and so on.

Interestingly, in the region of 1·3 million foreign-born workers who were previously employed in Britain have left and are yet to return. It is a matter of fact that Brexit alone has made it hard for British-based haulage firms to hire drivers from the continent. It is a structural consequence of Brexit. From the outset, back in 2015 and early 2016, I predicted that the imposition of Brexit would not just be bad for workers, businesses and their families here in the North and on the island of Ireland but would have very significant adverse consequences for England, Scotland and Wales.

The chaotic and calamitous scenes that we have seen over the last fortnight are direct consequences of Brexit. It is a tragedy that that is the case, but it is a result of the wrong policy decisions that are being made by the Tory Government and the mess that they have got us all into. I include all of us in that. Every single party in the Assembly and the Executive is having to manage the consequences and repercussions of a huge, calamitous mistake that was made back in June 2016. We are living with the consequences of it and seeing its worst effects play out in Britain. We are increasingly moving away from the restrictions that we have had to live with under COVID. Probably, the pandemic has, to some extent, masked some of those underlying and structural difficulties. Those are the challenges that we need to double-down on and address.

Ms Sheerin: Obviously, I agree with the latter comments. That is helpful. Thank you.

The Deputy Chairperson (Mr Stewart): The last member is Pádraig Delargy. You are very welcome, Pádraig.

Mr Delargy: I know that PEACE PLUS funding has been touched on, but I want to come back to that. It is a massive amount of funding — £1 billion — and my concern is that, if there is a DUP boycott, that will be at risk. I have seen that funding play out in Derry, and in border regions in particular, transforming communities, social services and SMEs, but also across the North. Can the junior Ministers provide any clarity on how secure that funding is at the minute? What impact would a DUP boycott have on the security of that funding?

Mr Kearney: The funding is in place. It is a significant amount of cash — €1·1 billion. At this point, we are due PEACE PLUS funding. However, it is dependent upon the necessary institutional mechanisms signing off to ensure that it is released.

At the moment, the NSMC continues to function in all its aspects. I hope that that continues to be the case. I hope that it continues to meet in sectoral and plenary formats. If the NSMC and the North/South institutions continue to function effectively, yes, we will be able to trigger and clear the release of the PEACE PLUS funding.

Mr Middleton: Thanks, Pádraig, for your question. Unfortunately, earlier, the Chair, who had to leave, did not allow me to come back with a response. I wanted to tell him that I, like you, recognise the value of these types of programmes. The latest update, which we received today, was that Finance officials are meeting all Departments over the next couple of weeks to discuss the draft cooperation programme document and to ensure that each Department's policy position is reflected in the content and proposed budget allocations of the programme.

Once that has been completed, it will require approval from the Executive. Of course, approval will be required from the Irish Government and the EU Commission as well. It was hoped that that would be approved, with completion and calls for proposals early next year. That is the schedule that we are working to. So when referred to

[Inaudible]

possibly the December period, that is why I mentioned what I did. We are supportive of that. We are not in the business of collapsing the institutions. If we are left with no choice, and if people feel that they are willing to sacrifice the devolved settlement over ensuring that the protocol remains, that is a choice for them. We want to make Northern Ireland work, and we want to see those funds delivered to our communities, not least, of course, to the Foyle constituency.

Mr Delargy: Thanks for your responses.

Mr Kearney: John, if I may come in briefly, it was remiss of me not to welcome Pádraig to the Committee before responding to his question.

The Deputy Chairperson (Mr Stewart): Thank you for that, Minister Kearney.

Thank you so much for your time. We really appreciate it. You have given us a good chunk of your day. We look forward to seeing you at the next meeting.

Mr Kearney: Thank you, John. All the best to everyone.

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