On 15 November, the House of Lords Grand Committee convened to debate reports produced by the, now defunct, European Union Committee (EUC) on the impacts of Brexit. The series of reports, entitled ‘Beyond Brexit’, were brought back to the Lords on 6 December for further debate.

The latest debate focused on three of the Beyond Brexit reports, covering:

• The institutional framework
• Trade in services
• Trade in goods

Read more here about the debate on 11 November, covering food, the environment, energy and health.

Former chair of the EUC, the Earl of Kinnoull, spoke of the 50+ years that various Lords committees had been analysing and reporting on all aspects of EU relations. Eleven months on from his committee’s production of the Beyond Brexit reports, he spoke of the relief that the ratification of the trade and co-operation agreement (TCA) had brought. However, he said it was now important to “take general stock of the position and how it matches up to the various words and aspirations of the TCA package”.

The post-Brexit institutional framework

The Earl of Kinnoull raised the issue of the lack of regulatory co-operation for financial services, and the failure to sign a memorandum of understanding (MoU). This failure meant that the EU had not assessed the UK for equivalence – a promise originally made in July. He also expressed concerns regarding the UK’s participation in EU programmes, such as Horizon, which currently excludes the UK’s “vast higher education and research community”. He asked that the government commit to providing the committee with a full picture of developments.

Lord Kerr of Kinloch spoke of the lack of structure for handling important discussions with the EU on common, global issues, such as the climate crisis, refugees and covid. Lord Frost had earlier told a committee that such structures would happen “naturally and organically”. Lord Kerr asked how many such meetings had taken place, or had been proposed, as he could not recall any.

Lord Kerr spoke of earlier discussions regarding a ‘parliamentary partnership assembly’ consisting of members of parliament and of the European parliament. This proposal had been welcomed by Mr. Gove, but it appeared that hold-ups were coming from the UK side, despite the EU being “out on the pitch and warming up”. He asked the minister to explain the position of Jacob Rees-Mogg – was it “recumbent”, “laid back” or “supine”?

Trade in services

Baroness Donaghy emphasised the importance of economic services to the UK. In 2019, the UK exported £317bn of services to the EU and imported £217bn, and has consistently run a trade surplus. Donaghy described the UK services sector as “a major success” story, as well as iterating the importance of the creative industries. She added that the government had only succeeded in “minor acts of mitigation”.

The Baroness expressed concern regarding the creative industries, which she described as “hugely important and influential”, being worth £100m in 2019. Lord Hannay of Chiswick added that discussions with the government regarding the creative arts felt “more like a dialogue of the deaf than a constructive and concerned response to the dire situation into which one of the most vibrant and profitable sources of our invisible exports has been cast following Brexit”.

Baroness Donaghy, Lord Hannay of Chiswick and Baroness Bennett of Manor Castle all spoke of the damage caused by the loss of the Erasmus scheme and in the inadequate substitution of the Turing scheme.

Trade in goods

Chair of the sub-committee on the protocol, Lord Jay of Ewelme, spoke of his concern regarding the provision of medicines in Northern Ireland, and the impact on the vulnerable. He also raised the issue of threats to trigger article 16, and the lack of parliamentary scrutiny.

Shortages of labour and drivers was raised by Baroness Armstrong of Hill Top, who also mentioned the “poor quality of facilities for those moving goods”. She said she was “severely embarrassed” to hear of the conditions facing drivers stuck on motorways or in car parks who were “unable properly to use services to look after themselves, let alone the goods they are seeking to move”.

Lord Hannay of Chiswick raised the issue of sanitary and phytosanitary (SPS) controls, and questioned why the government were not looking for an SPS accord. He said that even though this had been considered during the pre-Brexit negotiations, that did not mean it should not be revisited.

Baroness Bennett of Manor Castle said she came to this debate from a different position from other noble Lords, because she does not go “Yay – trade! More trade!” She said her interest was in “the well-being of the people of the UK and of the planet”, and the well-being of the planet itself. She expressed concern that the government often seemed to push for free trade agreements with other parts of the world “at great cost to the environment and to existing businesses”

Lord Desai begged the government to consider taking “care of our citizens, trade and economy which are suffering”. He suggested his noble colleagues “read the report from the Office for Budget Responsibility which talks about ‘scarring’ due to Brexit. It is costing us 4 percent to 5 percent of GDP. This is a serious matter, and the government ought to let go of their pride and get some business done”.

Relations with the EU

Baroness Armstrong of Hill Top spoke of the importance of developing good working relations with the EU, and said we would be far more successful in our negotiations if only we “act as grown-ups, treating others with respect and as we would wish to be treated ourselves, while keeping our word and acting with integrity”. She described the view that this approach would be seen as “rolling over” as “absolute nonsense”, reflecting “old-time male attitudes”:

Criticism of the government approach was also made by Lord Hannay of Chiswick, who spoke of the need for rebuilding the trust with the EU, that had been “so undermined in recent times”. He said liberal democracies needed to “work together, not pull apart”. Former MEP, Lord Inglewood, described “the bed we have made” and which “we are all now lying in” as a “hard Brexit with a deal”.

Lord Kerr asked who was responsible for bilateral relations with our 27 EU neighbours – was it the foreign secretary or Lord Frost? And if it was Lord Frost’s responsibility, Lord Kerr added, “can he and does he draw directly on [Foreign and Commonwealth Office] expertise?” Lord Kerr went on to cite the “unfortunate letter” to President Macron that “could have been better drafted had an expert eye looked at it”.

Government rhetoric, “that discourages co-operation”, was again raised by Lord Thomas of Cwmgiedd. He said, “The only way we will succeed in competition is by friendly co-operation, with a keen eye on our long-term goals. This is a long game, and we must not lose it by rhetoric that does not foster co-operation”.

Lord Desai described the current situation as a “car crash that is causing enormous damage” and likened discussions between the UK and the EU to a divorced man not caring about the children, and who thinks he is free to walk away without talking about the necessary future arrangements. He said it was symptomatic of the approach taken by the “winning section in the Conservative Party”, who were so hostile to Europe. They said they would conduct “free trade agreements with 100 countries in no time whatsoever”, he added, “as if they had not held a responsible job in their lives”.

Lord Frost missing in action

Lord Kerr of Kinlochard referred to the fact that Lord Frost was unavailable to attend the debate and speak on behalf of the government. Frost’s place was taken by Lord True, whom Kerr described as “a genial, subtle debater, and not at all frosty”.

Baroness Chapman of Darlington, speaking of Lord Frost’s absence, said, “he has taken to making statements on the last day of term, or when the Commons is not sitting, and issuing Written Statements rather than Oral Statements. I hope that will not become a habit”.

Government response

Lord True began his half-hour response by stating that it had never been the government’s intention “to be triumphalist, aggressive or divisive on these questions”. He said the government saw the EU as “a close friend and partner” and wished for “nothing other than good relations”. He described parliamentary scrutiny as “invaluable and essential”. He said the ratification of the TCA had been a “landmark moment” which fulfilled the promise to “take back control of our laws, borders, money, trade and fisheries”.

In regard to SPS checks, the EU were deemed to be at fault in failing to agree to proposed equivalence commitments – a decision described by Lord True as “surprising”. He also complained of an EU failure to grant the UK “full listed status” regarding, for example, the movements of molluscs or pets.

On the finance sector, Lord True welcomed the European Commission’s extension of an equivalence decisions re clearing houses. On the MoU, he said that technical discussions had concluded and that the MoU could be signed once formal EU procedures are concluded.

The government is committed to being “a science and research superpower”, and are awaiting the EU’s formalisation of UK participation in collaborative international programmes. The priority, said Lord True, must be in “supporting the UK’s scientists and researchers”. The decision regarding the Erasmus programme was to pursue a global exchange programme rather than contribute “a large net contribution” to Erasmus.

On the creative arts, again the blame was levelled at the EU for failing to adopt a UK proposal, which had been accepted by Norway and Iceland. Lord True stated that it is not government policy to negotiate a visa waiver. Lord Hannay responded by saying the minister had replied, “exactly as I predicted”. The government had again failed, he said, to propose any solution to limit the damage. Lord True’s rejoinder was merely to say he had set the record straight, drawn attention to “progress that has been made” and had reasserted “the government’s concern for the well-being of these industries”.

In response to Lord Kerr’s questions about responsibilities for ongoing bilateral discussions, Lord True said that Lord Frost, who “works hand in glove with the Foreign Office”, was the person responsible for those discussions. It is unlikely that Lord Kerr will have felt reassured.

Lord True described the gap between the UK and EU positions as “significant” and said progress had been “limited”. The government maintains that, “the threshold has been met to use the article 16 safeguards to protect the Belfast/Good Friday agreement if solutions cannot be found”.

In summation, the Earl of Kinnoull concluded by referring again to the state of relations between the UK and the EU. He regretted that we “have fallen out with” our neighbours and friends and spoke of the need to “rebuild trust and respect”.

Lord Frost may have had somewhere more important or interesting to be, but Lord True, “true diplomat” or not, certainly towed the party line, even if with rather more decorum. Whether any of the noble lords and ladies present will feel as though they received any straight answers, or feel any the wiser, is highly unlikely.

Read the full transcript from Hansard of the House of Lords Grand Committee debate on 6/12/21 here

The EU introduced full customs controls on 1 January 2021, but the UK chose to phase in border controls over time. On 14 September, chief Brexit negotiator Lord Frost issued a statement in which he spoke of the government’s timetable for the rollout of UK staged customs controls. Frost said that despite having been ready to meet the original timetable, “the Government has decided to delay further some elements of the new controls, especially those relating to Sanitary and Phytosanitary goods”.

Frost placed the blame for the delay on the pandemic, unsurprisingly, despite having had years to prepare. The pandemic did not cause any problems for the EU however, who were ready on time.

On January 1st, another wave of Brexit protectionism kicks in, with new checks on imports from the EU coming into play. This is Brexit: a series of things being implemented that makes the economy weaker, staggered so that the shock is spread out, in the hopes people don't notice.

— Nick Tyrone (@NicholasTyrone) December 5, 2021

Current customs rules

For imports from the EU, UK importers currently have two options for standard goods, until the end of this year. The first option is to file an import declaration immediately on entry. The alternative is to register the goods, but not submit a declaration until six months later. In practice, this means there are currently relatively few delays at the British border.

There are, however, many exceptions where full border controls already apply, eg excise goods, such as alcohol and tobacco, controlled drugs and chemicals. Live animals and ‘high risk’ agricultural goods are additional exclusions, as they require a veterinary or phytosanitary health certificate before UK entry.

The new customs requirements

From 1 January, it will no longer be possible to “delay making import customs declarations under the Staged Customs Controls rules.” Before goods arrive in the UK, a security declaration or entry summary declaration must also be submitted to UK customs.

The government suggests that some businesses might want to involve the help of an intermediary, such as a customs agent, to help with the process. They also suggest applying for a “simplified declarations” form from HMRC, which “allows their goods to be released directly to a specified customs procedure without having to provide a full customs declaration at the point of release”. Unfortunately, it takes up to 60 days to process a simplified declaration application, so this is of little help for those facing the 1 January deadline without one.

Unless goods have a valid declaration, and have received customs clearance, they will not be ‘released into circulation’ or allowed to leave the port. If the necessary checks cannot be carried out at the border, they may be directed to an inland border facility for documentary of physical checks.

Changes still to come

If the measures coming into force at the beginning of next year weren’t enough to contend with, there are many more restrictions yet to be added. As of 1 July, these additional changes include:

Mandatory safety declarations for all cargo
Certification for most veterinary and phytosanitary products
Physical border checks on sanitary and phytosanitary products
New requirements for export health certificates
Further requirements will be added later in the year. From 1 September, certification will be required for all dairy products. From 1 November, certification will be required for all remaining veterinary cargo, including combined products and fish products.

Brexit isn’t ‘done’

By any definition, it is clear that Brexit is far from ‘done’. The hurdles facing UK importers and exporters have made trading with the EU more difficult, more expensive and more risky. For some, dealing with our largest and closest market is no longer economically viable – half of UK businesses have reduced their EU trade or stopped dealing with the EU altogether. Add to that supply chain issues and staff shortages already caused by Brexit and it’s clear that things are likely to get worse before they get better. If they get better.

According to the Federation of Small Businesses, only 25 percent of firms that will be affected by the new rules are ready. Many may not fully understand the implications of the changes or what is required of them. Some may even still be struggling to cope with the earlier impacts of Brexit.

We can only hope that our government, at least, is ready. Though that would be breaking the habit of their parliamentary lifetime.

Additional source documents that might be useful for traders:

https://commonslibrary.parliament.uk/new-customs-rules-for-trade-with-the-eu/

https://business.gov.nl/running-your-business/international-business/brexit/brexit-the-border-operating-model/

https://www.getreadyforbrexit.eu/en/at-the-uk-border-2/

Although cases have been surging across Europe, Spain’s numbers are so far relatively low by comparison, and the vaccination rate relatively high – Spain was the first country in Europe to vaccinate over 80 percent of its population.

Over the last week, according to Worldometers, Spain’s new cases numbered 39,584, ranking 14th in Europe. The UK, by comparison, recorded 289,218 cases over the same period, beaten into second place in Europe only by Germany, with a worrying 349,762 new cases.

Travel to Spain from the UK

It is now a requirement for all UK visitors to Spain to prove they have been fully vaccinated. A negative covid test will no longer be an alternative option.

These latest measures in effect remove an earlier exemption that applied to UK visitors. Travellers from other third countries have been excluded from non-essential travel to Spain, unless double vaccinated, since 30 June. Now, the rules for UK visitors have been brought in line with those of other third-country nationals, over concerns around the new variant.

In an official announcement last Saturday, the Spanish authorities said, “the appearance of new variants forces us to increase travel restrictions. Consequently, together with other measures adopted by Spain’s Ministry of Health, the exemption applicable to people residing in the United Kingdom will be cancelled”.

The requirement for all visitors to complete a Spanish Travel Health Form remains in place. If you are planning to visit Spain, whether from the UK or elsewhere, you can view all the latest requirements on the Spanish Health Ministry website or on the British Government website

Vaccine requirements for Spain

The new vaccine requirements apply to anyone aged 12 and over. Under 12s do not need vaccine certification, and can travel to Spain with fully vaccinated parents – Spain accepts the NHS covid pass. Fully vaccinated means either having received “both doses of a two-dose vaccine or one dose of a one-dose vaccine”, at least 14 days prior to travel to Spain. Certificates of recovery, a medical document proving you have recovered from Covid-19 in the last six months, are also no longer acceptable. As children in the 12–15 year age group are only now being offered a second vaccine in the UK, the new rules will prevent them from visiting Spain for the next few weeks, and certainly for Christmas.

Given the level of concern regarding the Omicron strain, further restrictions, over the coming weeks, cannot be ruled out. Any further tightening of the rules is liable to affect third countries, including the UK, first.

Travel to the UK from Spain

Effective from 30 November, anyone travelling from Spain to the UK will also be subject to new travel restrictions and safety measures. Lateral flow tests will no longer be accepted, but will be replaced by more reliable, and more expensive, PCR tests.

The PCR test must be taken by the end of day two of any visit – the day of arrival counts as day zero. Until a negative result is returned, visitors must self-isolate. Although, in theory, test results can be returned in a matter of hours, in reality, this could take several days. During isolation, you may only venture outside your temporary home in order to take a test, receive emergency medical care, or to buy essential supplies. Those items include food or medication, but only if nobody else is able to buy those items for you

Despite these new measures, it is permissible to use public transport to travel to your destination from airports and ports. Existing rules for non-vaccinated travellers to the UK still apply.

Any new restrictions will no doubt cause anger and fear, not least amongst families long separated and desperate for a return to ‘normal’. How long these new measures will last, in both directions, or whether in fact may be strengthened further, is anyone’s guess. In the meantime, we can only hope that the measures are successful in reducing the risk to public health, and that early action will prevent more extreme measures further down the line.

For those of us in Spain, who watch the actions, or lack of, from the British government, and worry for our friends and families’ wellbeing, we can only but be grateful that the Spanish government take matters more seriously, and act accordingly.

Once the government considered Brexit ‘done’, it wound down the scrutiny committees in both Houses. But before its demise, the House of Lords European Union committee (EUC) produced a series of reports entitled ‘Beyond Brexit’. The committee clearly felt there was much work to be done, and stressed the importance of maintaining good relations with the EU. On 11 November, the House of Lords Library published an article examining the key findings of the EUC report on food, the environment, energy and health, which preceded Lords grand committee debate on 15 November.

Grand committee debate

Committee chair Lord Teverson (Lib-Dem) started by pointing out that, while the report was several months old, the issues facing the UK now are “exactly the same” as they were when it was published. He was grateful we had avoided no deal and secured the trade and cooperation agreement (TCA), but added that the deal was “as good a free trade agreement as we were going to get given the red lines that we had”. Teverson went on to list many of the issues that remain of concern, including fisheries, the environment and health.

Brexit impact: Food and farming

The Duke of Montrose (Conservative) raised the issue that UK agri-food exporters to the EU had lost more than £1.8bn in income since January, according to the National Farmers Union. Not only that, but EU competitors are at a distinct advantage selling into the UK market, having been given extended grace periods.

The Earl of Caithness (Conservative) said recent trade negotiations with Australia and New Zealand had “put the fear of God into our farmers”. He asked how the government intends to support the agricultural industry, and highlighted the support that foreign governments, like Australia and New Zealand, provide to their own farmers.

Brexit impact: fishing

On the subject of fishing, the Earl said that prior to the finalisation of the TCA the government had said there would be “an incremental benefit to the fishing industry to the tune of about £148m by 2026”. He asked, “Where are the figures to justify this?” saying it was “quite wrong that the government have not produced those”. The Earl contrasted the government’s figures with those produced by the National Federation of Fishermen’s Organisations (NFFO), whose own report showed a loss of £300m over the same period.

Baroness Hayman of Ullock (Labour) also drew attention to a recent NFFO report that was critical of fishing quota agreements. The report stated there would be losses of £64m a year unless changes were “secured through international fisheries negotiations”.

Brexit impact: environment

Discussions on both fishing and farming inevitably led to the knock-on effects on the environment. Baroness Hayman of Ullock asked how the TCA could “provide a minimum baseline for future free trade agreements so that we do not have an environmental race to the bottom?” She also raised the issue of chemicals, the setting up of the new chemical regulation UK REACH, and the potential of future divergence from EU rules. Of the 13 hazardous chemicals that the EU have restricted or are restricting, only two of them are expected to be restricted in the UK, according to the Department for Environment, Food and Rural Affairs (DEFRA).

On the topic of fishing, the Earl of Caithness said that while he wanted a “vibrant, economic fishing industry”, it must also be environmentally friendly. He drew attention to the damage caused by trawlers, stating that, “bottom trawling fisheries release about 1 billion metric tonnes of CO2 annually”. Of that total, Britain produces about 90 million metric tonnes of CO2. The Earl asked why these figures were not mentioned at the COP26 summit, when Britain “produces more CO2 from the seabed than the aviation industry does”. He pointed out that while the aviation industry is rightly “getting stick”, the fishing industry is not:

Brexit impact: health

Discussions on health and social care were limited. Baroness Hayman of Ullock spoke of “alarming staff shortages in the health sector”, and the fact that 15 percent of NHS staff are non-British. She added that the reduction in numbers of European staff was of real concern, in both the healthcare and social care sectors.

The post-Brexit points-based immigration system was excluding many potential employees, as they were not considered “skilled workers”. The Baroness pointed out that the situation is likely to get worse over winter, and said she did “not think that the government’s winter plan for social care will solve all these problems”.

The government’s approach to negotiations

In his introduction, Lord Teverson said how he was saddened by the “confrontational attitude that we still have between the UK and the EU”. He described the government’s approach as having had “an almost proactively aggressive attitude” towards the EU. He added, “If article 16 is enacted, I believe that is a threat to the TCA altogether and effectively takes us back to a no-deal Brexit”. The Duke of Montrose described the government’s response to the report as “full of the idealism that characterised much of our approach to the whole Brexit deal”.

Fellow Conservative Lord Cormack was similarly unimpressed with the government’s actions. He said he wished that points raised by the committee in their report had been taken more seriously, adding, “one hates to say this”, but “we told you so”.

Lord Cormack suggested that the underlying lesson is that, “when you try to achieve great things to artificial deadlines you almost always fail”. He said he had raised this point before, having practically begged the prime minister “not to be driven by a deadline”. The Northern Irish protocol, he said, was a direct result of being driven by a deadline, and the prime minister and Lord Frost – who were responsible for agreeing it and despite “commending it to parliament” – now seem to find it “full of holes”.

Lord Cormack also referred directly to Frost, quoting a W S Gilbert line from The Gondoliers, which was on the desk of Harold Macmillan: “quiet, calm deliberation disentangles every knot.” He added, “we must not bang drums or issue threats, warnings or deadlines. We must come to an agreement”. In conclusion, Lord Cormack suggested the government re-read the report in full, and realise that “some of the pitfalls could have been avoided”. Only then, he said, would this debate not have been in vain.

Response from Lord Goldsmith of Richmond Park – minister of state for DEFRA

Lord Goldsmith started by stating that the government had been elected to “get Brexit done”, and how “we are already realising some benefits of our departure from the EU”. If the committee were expecting a long list of those supposed benefits, there were disappointed.

On the subject of farming, Lord Goldsmith said the goal was to help farmers improve the environment and animal health and welfare. “We are revolutionising the way that we support farmers”, he said.

In what most would describe as an understatement, Lord Goldsmith said that with regards to fishing, the TCA “did not deliver everything that we and the industry hoped for”. He said that the fishing sector was “now showing some clear signs of recovery”, and referred to pre/post-covid levels of trade. Brexit was not, of course, mentioned. He did, however, suggest that the UK’s fishing future was rosy, by adding, “Freed from the common fisheries policy, we can help our fishing fleet recover and strive to be the most sustainable fleet in the world”.

On the environment, Lord Goldsmith said the TCA recognises the UK’s “ongoing commitment to high environmental standards” while also enforcing “our role as a global leader in environment and climate policy”. He promised that, “We will not pursue free trade agreements in such a way that our own standards are compromised”.

Regarding health issues he said the government is “committed to growing and supporting the workforce to ensure that it continues to provide world-class health and care”, though he did admit “there is a gap that needs to be filled”. How that gap equates to his comment that “there are record numbers of doctors and nurses working in the NHS today”, was rather unclear. He added that by waiving the immigration health surcharge for key health and care workers, the government had made it “quicker and cheaper” for international health and care professionals to come to the UK to work.

On the TCA, Lord Goldsmith said, “it was the first time that the EU ever agreed a deal with a trading partner based on zero tariffs and zero quotas. It is an agreement based on friendly co-operation between sovereign equals, centred on free trade and inspired by our shared history and values”.

Summing up

The debate was concluded by Lord Teverson who said that for the five years he has been chair of the committee, comments from ministers from DEFRA tended to have a different focus from those from international trade ministers. DEFRA ministers, as was the case on this occasion, have focused on welfare and environmental standards. The emphasis from trade ministers has been on free trade and consumer benefits.

Regardless of the department, it seems our government has plenty of empty rhetoric to go around, but is short on realism and any plans to solve the many issues. Having largely ignored the excellent ‘Beyond Brexit’ report the first time around, this latest debate is likely to do little to open the government’s eyes or change their opinions. As Lord Cormack so eloquently said, it’s not like they haven’t been told before.

Full transcript of grand committee debate from Hansard is available here.