Oireachtas Joint and Select Committees

Thursday, 14 February 2019

Joint Oireachtas Committee on Foreign Affairs and Trade, and Defence

Miscellaneous Provisions (Withdrawal of the UK from the EU on 29 March 2019) Bill 2019: Tánaiste and Minister for Foreign Affairs and Trade

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael) | Oireachtas source

On why I think the legislation will not be needed, we will need to get it ready to be enacted. However, I am of the view that a strong majority of MPs in Westminster do not want a no-deal Brexit and will act to avoid it, although I cannot be sure that will be the case. The reality is that any sane individual who looks at the consequences of a no-deal Brexit for Britain and Ireland in particular, as the two countries that would be damaged the most, as well as many other EU countries, would try to avoid it. A no-deal Brexit is unlikely, but it is possible. I believe we will find a way to prevent it. I hope the British Parliament can find a way to so do because, essentially, the problem is there, not here. The British Government signed up to a deal which took all perspectives into account, had taken two years to negotiate and involved compromise by all sides. The British Prime Minister defended it and, in my view, still believes in it. However, because of the political pressures and realities in Westminster, she has been forced to move in a different direction. The responsibility to come up with ways to solve the current impasse lie where the impasse is, which is London and not Brussels, Dublin, Belfast or anywhere else.

I believe a way can be found, but the only thing the Irish Government can do is continue to be respectful but firm and fair. It is not reasonable to ask Ireland to essentially undermine core commitments that were made to Ireland, North and South, to protect the peace process and guarantee the absence of Border infrastructure. Those guarantees were not time-limited and did not come with exit clauses. They were guarantees. By the way, the British Prime Minister repeated them last week, when she gave what I would regard as a quite generous speech in Northern Ireland. The problem here is politics. There is a fair deal on the table but there are some who want more, who seem to want to change the current deal to take out compromises that the UK has been asked to make but insist that the EU maintains all the compromises it was willing to make. One cannot negotiate on that basis and I do not believe the EU will negotiate on that basis. That is why I do not believe the withdrawal agreement will be reopened. Of course the EU will act and try to put together a package that will give reassurance and clarification to the British Parliament. We all need to work to try to do that. There is a lot of scope in the political declaration, which is of course open to discussion and change. That is a political ambition for the future. It is not a legal divorce agreement, which is what the withdrawal agreement is.

I am not comfortable with the language of a game of chicken or a question of who will blink first. We are all neighbours and friends here. One of the things that is so uncomfortable about this negotiation is the pressure that has been put on the Parliament in Westminster, and indeed the Government and Parliament here and in other parts of Europe. I refer to lobbying, undermining of people's positions and so on. Britain is a very close friend of Ireland. We are close neighbours with a very complicated and tragic history. We have to find a way through this and out the other side that does not damage that relationship and provoke tensions many people thought we had left behind. I ask people to think about that when they talk about playing games of chicken. That applies on both sides. One of the big mistakes made in London is the perspective that the EU needs a deal as much as we need a deal. First and foremost that is factually not true. However we do want a deal. When I say "we" I am talking about the EU. We want to be reasonable and fair about that. We want a future relationship with Britain which is positive, whereby there are not winners and losers in these negotiations. We want to find a compromise to move this process forward in a way that respects that relationship.

In regard to Opposition support, I have been critical of the party in government in Westminster but also the party of opposition. Compare it to what is happening in our Parliament. We have been working with the main Opposition party and with Sinn Féin, parties that are in intense competition at election time and do not agree with each other's political approaches and perspectives in lots of areas. By and large people are willing to work together on this issue and try to find a way forward. It is regrettable that this kind of approach has not been possible, even now with 43 days to go. We still do not have a proper formal dialogue between the two main parties in the British Parliament. I say that as somebody who spent a lot of my life in England and is a product of the Anglo-Irish relationship. A lot of my family on my mother's side have British passports. I was in university there. I worked in Scotland. Britain is a great country, but we have to call it as it is. It is incredible, in my view, that the British Parliament has allowed it to come to this. That being said, I still believe there is a way to get through this process and have a managed, controlled and predictable Brexit. We have the basis for the deal. It is there, if people would just take it rather than trying to look for more all the time. Instead of trying to compromise with hardliners on both sides, if middle-ground sensible thinking took control of this process I think we would find a solution a lot more quickly.

Deputy Collins asked about the 14 remaining sitting days. We can get this done. The reason the Netherlands, France, Spain and others either have legislation in train or have passed legislation is that they have done it very differently from us. Their legislation is much more straightforward. In some cases they are essentially giving the Government powers to act by decree. In other words, they are giving emergency powers to a Minister or Ministers in certain sectors. We are not really doing that. We are actually passing more detailed legislation which primarily provides for the protection of a common travel area between Britain and Ireland, whereby British and Irish citizens are essentially almost recognised as citizens of each other's countries. In multiple areas we have much more comprehensive legislation than most other countries that passed short and punchy emergency legislation. Because ours is a much bigger piece of legislation, passing it weeks or months ago without knowing that we really needed to do so would have taken up an awful lot of parliamentary time and would have been unnecessary. However, we need to do it now.

On the Brexit sentiment survey I note that lots of surveys have taken place. The one thing we know for sure from speaking to Irish agencies like local enterprise offices, Enterprise Ireland, IDA Ireland, or the Department of Business, Enterprise and Innovation is that there has been a dramatic increase in awareness of Brexit issues over the past six to 12 months. I am sorry, but I just do not believe anybody who tells me that businesses are not talking about Brexit right now. It may be the case that the percentage of businesses with a formal Brexit plan is not high enough. That is true. However, many businesses simply do not know what kind of plan they need to put in place because they do not know what Brexit is going to look like. That is also the truth. Just because a business does not have a formal Brexit plan does not mean it has not put contingencies in place for different scenarios.

In regard to the Brexit loan scheme, we never expected a huge uptake of that scheme until Brexit actually crystallised. For example, if a company knows it will have to significantly invest in increased storage if Brexit goes the wrong way because it cannot rely on the just-in-time economic model that goes with the Single Market and the customs union, but it will have to spend hundreds of thousands or millions of euros to do that, it will not trigger that decision until it actually knows it needs to. Those Brexit loan schemes are important. There has been quite significant uptake of previous Brexit schemes for farmers. I think people are holding back from the current €300 million loan scheme until they get more clarity on what they need to do.

In regard to the Student Universal Support Ireland, SUSI, grants, the legislation initially deals with 2019 but the intention is to renew it year after year. The key thing is that we will have the base legislation to facilitate that. This Government has no intention of removing the supports for young Irish students going to college in the UK.

This is a huge issue for the medtech sector. The truth is that medicines and a lot of medical devices are authorised and approved for the EU market in the UK. That authorisation is not likely to be available in the UK any longer. Businesses will essentially have to reshape their supply chains - where they get authorisation, where they take product and where they finish product - in order to get authorisation.

It also needs to be taken into account in the supply of medicines, in terms of where and how we will source them. The European Medicines Agency has signed off on all of the medicines produced and approved in the UK, where it is a significant industry. That certification may no longer be available in the UK, therefore, these supply chains will need to change. A huge amount of contingency planning has been done in the medicines, medtech and pharmaceutical sectors generally. Last night, I was at a Brexit meeting where I spoke to two pharmaceutical companies afterwards. They have been planning for this for two years. Six months ago, they signed off on assuming the worst. Much of the money has already been spent in terms of reshaping supply chains because companies cannot wait for political decisions given the time it takes to implement new plans. A significant opportunity has already been lost even if Brexit becomes a more controlled and managed process than it is threatening to be.

I am wary of Brussels sources, quite frankly. Every day, I hear rumours about Brexit coming out of Brussels just like I hear rumours coming out of London. Unless there is a name behind a source and a quote I am pretty suspicious of it. There is a lot of spin, manoeuvring and politics on this issue. We continue to talk all the time to the European Commission on contingency planning, where the EU must make decisions collectively and where Ireland has responsibility to make decisions. The sensitivity of the Border issue in Ireland is understood in the European Commission. As far as I am concerned, the British Government has made a commitment to Ireland not to make decisions that would result in physical Border infrastructure re-emerging between the two jurisdictions on the island and it has an obligation to follow through on this commitment. As countries we are co-guarantors of the Good Friday Agreement in terms of its text and spirit. This is why the backstop emerged as the compromise solution. Deal or no deal, there is an obligation on the Irish and British Governments and the EU to try to work together to find a way to avoid physical Border infrastructure on this island. We have been very clear and firm on this and will continue to be so.

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