Oireachtas Joint and Select Committees
Wednesday, 2 December 2020
Seanad Committee on the Withdrawal of the United Kingdom from the European Union
Engagement on Withdrawal of the United Kingdom from the European Union
I remind members to switch off their mobile phones. We have received no apologies. I welcome the Minister to the committee and thank him for making himself available on quite short notice.
As we know, we are at a critical juncture in the Brexit negotiations so today's engagement on the topic is timely. Before we begin, members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable. I call on the Minister to make his opening statement.
I thank the Chairman and all members for the opportunity to come in and, hopefully, we will have a detailed questions and answers session where we can focus on specific areas where members have concerns. I will make a general introductory statement first in terms of where we are at and the considerations we have.
I am pleased to have the opportunity to come before the committee to give an update on Brexit developments. I last updated the Seanad on Brexit developments in September and, of course, we are all aware of the Brexit omnibus Bill which completed Second Stage yesterday ahead of the Committee and Remaining Stages tomorrow. I wish to convey once again my appreciation for the solidarity shown by the Oireachtas throughout the Brexit process. It has been of critical importance to have that support and unity of purpose as we face the challenges Brexit brings because they are significant.
I will give an update on the three strands of Brexit work ongoing across Government, that is, the EU-UK future partnerships negotiations, the implementation of the withdrawal agreement and the protocol on Ireland and Northern Ireland, and readiness for the end of the transition period in less than a month's time.
This week, as members will know, is a crucial one for the EU-UK future partnership negotiations. Mr. Michel Barnier and his team are in London engaging intensively with the UK side to secure a deal in the short amount of time that remains. We are in decisive days in this process. Commission President von der Leyen briefed the European Parliament last week. She noted that while real progress has been achieved, gaps in the three key issues of level playing field, the governance arrangements to ensure those level playing field agreements can be enforced in the future and fisheries have not been bridged. Closing these gaps is a prerequisite for a successful conclusion of the negotiations. I believe that with political goodwill, a deal can be done. The EU wants a deal but our stance has always been that it cannot be at any price. Any deal must uphold the integrity of the Single Market and reflect the long-term political and economic interests of the Union. This is why free and fair competition is at the heart of these negotiations. It underpins our common current high standards on labour and social rights, the environment, climate change and tax transparency.
As Senators will be aware, fisheries are an area of the utmost political importance and sensitivity, not only for the UK but for Ireland as well. It is vital we do everything possible to protect our vulnerable coastal communities and fishers. In particular it will be important to ensure that no EU member state is disproportionately affected by any new arrangements.
Throughout this process we have worked closely with the EU task force, Michel Barnier in particular. From the start Mr. Barnier has been a good friend of Ireland. He is acutely aware of our concerns and knows that Ireland continues to support fully his work. The work on implementing the withdrawal agreement is formally separate from the future relationship, and the withdrawal agreement is designed to operate regardless of whether there is a separate trade agreement. We remain committed to building a positive and fruitful future relationship with the UK, but this can only be on the basis of trust and confidence that the withdrawal agreement is fully implemented. We have emphasised this in our discussions with our EU counterparts.
The protocol on Ireland and Northern Ireland is a central component of the withdrawal agreement. It is devised to protect stability and certainty on the island of Ireland, the Good Friday Agreement, North-South co-operation and the all-island economy. It prevents a hard border on the island of Ireland and preserves the integrity of the EU Single Market and Ireland's place in it. It ensures access for Northern Ireland goods to the Single Market and allows the trade in goods to continue to flow freely on this island. It is vital that the protocol is now fully and faithfully implemented. There has been some positive momentum on implementation in recent weeks. Progress has been made on a number of key issues, including medicines and the operation of the single electricity market in Northern Ireland. It is vital that this momentum continues, and we expect intensive engagement on the joint committee on implementation of the withdrawal agreement and the specialised committee on implementation of the protocol in the immediate period ahead. We are acutely conscious of its sensitive nature and critical importance in terms of all the issues connected to it. I am confident we will be able to find and implement solutions that work for businesses north and south on this island.
I know that Senators have been following the progress of the United Kingdom Internal Market Bill very closely. I support the Private Members' motion brought before the House on the withdrawal agreement in September. The EU has made clear that a future relationship agreement is predicated on implementation of the withdrawal agreement. We expect that the UK Government will take the necessary steps to ensure there is no suggestion of the withdrawal agreement, including the protocol, being undermined. The withdrawal agreement provides structures for handling issues surrounding implementation of the withdrawal agreement and protocol, and these are the only appropriate way to deal with the outstanding questions.
The third strand of the Government's Brexit work is our preparations for the end of the transition period on 31 December, just 29 days away. Irrespective of the outcome of the ongoing negotiations, the end of the transition period will bring substantial and lasting change, and action must be taken now to prepare for this. There will be no extra time or extension of the transition period. The date 1 January will mark substantial change, and people need to be ready for that. From 1 January the UK will be outside the Single Market and the customs union. This means that new controls and procedures must apply to any goods moving to, from or through Great Britain, processes that do not apply to such trade today. I urge Senators to continue to amplify key readiness messages to stakeholders, particularly businesses large and small. Time is running out, and it is imperative that they now finalise their preparations for 1 January.
In September the Government launched its Brexit readiness action plan. The plan sets out the actions the Government will take and that businesses and citizens must take to address changes arising at the end of the transition period. Since it was launched, there have been more than 50 separate ministerial engagements dealing with Brexit. These were supported by a range of official level meetings and briefings. We are using a multitude of virtual tools, from webinars to instructional videos, to assist businesses to prepare for the new realities they will face. The Tánaiste has sent a Brexit readiness checklist to 225,000 businesses registered in Ireland. The Revenue Commissioners, separately, have written to over 90,000 businesses trading with the UK and have followed up with some 14,000 phone calls. We have made a range of financial upskilling and advisory supports available to businesses. Budget 2021 allocates €340 million to Brexit-related preparation measures.
In response to a specific demand from industry, the July stimulus package included a €20 million ready for customs package to assist with hiring and training staff in customs. As the committee will be aware, businesses that trade to or from the UK will now have to have a customs number. They will have to understand how the customs system works in terms of declarations, checks and so on, something that most businesses in Ireland had simply no experience or understanding of until Brexit came along.
Preparations in our ports and airports are well advanced. In addition to the new infrastructure, we have invested in new staff and ICT systems. Some 1,500 additional staff will be engaged in supporting and carrying out customs and sanitary and phytosanitary, SPS, and food safety checks and controls.
We are working closely with the European Commission to ensure that the €5 billion Brexit adjustment reserve targets the sectors and member states most disproportionately impacted by Brexit, and that certainly means Ireland.
I was here yesterday for the Second Stage debate on the 2020 Brexit omnibus Bill, which is another key part of our national preparations for the end of the transition period. I am grateful for Members' co-operation in ensuring this essential legislation is in place by the end of the year.
Just as the future shape of the relationship between the UK and the EU will be decided in the coming months, we must continue to develop Ireland's bilateral engagement with the UK outside of the EU. We will always be close neighbours, trading partners and co-guarantors of the Good Friday Agreement. The context of our relationship has changed but we are committed to building on and strengthening the British-Irish relationship. Ireland will also continue to work to ensure the closest possible future relationship between the EU and the UK in the time remaining. Ireland's place remains at the heart of the European Union, and I will continue to inform the House on the developments in the days and weeks ahead. I look forward to Senators' questions.
I thank the Minister for coming before the committee and for his forthright explanation of the many challenges that still lie ahead. I would like to raise just one issue with the Minister in addition to all the other myriad issues he has addressed and which have been well ventilated at this stage. Some retailers, particularly those in the west and those around the east coast that are served by Dublin Airport, are concerned that the new threshold included in this Bill for the money back, if one likes, or tax-free nature of shopping through airports is set too high at €75. I know there was an original proposal to set it much higher, but there is a belief that retailers, particularly those at airports and those that serve the US and Canadian markets, will be disproportionately affected by this measure. I know there is justification for it in the context of the travel between Ireland and the UK and that there was a necessity to address that, but there is real concern among retail outlets that serve the tourist market, particularly from the United States and Canada. It must be recognised that many of these retailers have had a very difficult year. They have had no business because they have had no tourism. They are looking to next year and looking to try to rebuild their businesses. There is a view that this threshold will have a negative impact on their sales and will further negatively impact them as they try to recover their business. While I know it falls outside the diplomatic efforts the Minister is making, he might still wish to comment on behalf of the Government and in particular on behalf of the Minister for Finance.
I thank the Minister for coming in. I do not know how he keeps going. He is doing a great job on Brexit, and we really appreciate his taking the time to come before us because we know he is very busy.
I am still a little bit confused about several points and I want to check on them. The measures set out in the omnibus Bill to protect the common travel area and North-South co-operation are very welcome. I know there are measures in the Bill to ensure citizens in both jurisdictions enjoy flexibility and eligibility regarding social protection. This is important given there are 30,000 cross-Border workers at present. It is crucial that we work together to ensure the British Government introduces and implements a worker scheme that offers full protection to those who live and work on both sides of the Border. Are there are contingency plans to do so?
I also want to check on the report published by the Oireachtas committee. I could be behind on all of this stuff and, if so, I apologise. I was a member of the committee on the withdrawal of the UK from the EU in 2019 when Professor Colin Harvey from Queen's University highlighted discrepancies on current implementation gaps in the Good Friday Agreement that would be further increased. In the event of a no-deal Brexit, thousands of citizens who do not live far from this committee room could have far fewer rights than all of us sitting here. That is the concern. How will we reconcile a no-deal Brexit with the inevitable rights-based issues, such as co-operation on health care, the provisions set out in the Social Welfare Act between the North and South and the protection of employees? I want to highlight the rights of citizens in the North and policy developments and make sure these rights-based issues are not an afterthought.
I will deal first with Senator Dooley's comments on the VAT retail exports scheme. This is a scheme that allows people to claim their VAT back after they have made a purchase. It is for people from the US and other third countries outside the EU. As the UK is now becoming a third country, there will be a dramatic increase in the number of non-EU tourists who come to Ireland. Tourists from Great Britain will effectively be coming from a third country. Therefore, the Department of Finance saw the potential for a substantial loss of VAT revenue as a result of this. Originally, it proposed that we put in place a threshold of €175. In other words, people would have to spend €175 to be able to claim back the VAT. Because of concerns raised by a number of political parties, the Minister, Deputy Donohoe, has reduced the threshold significantly by €100 to €75. Some retailers are still concerned about this but because of the numbers who might be using the scheme, if people were to be claiming back VAT on relatively small payments of €20 or €30 there would be significant bureaucracy and cost in doing so. That is why it has set a medium threshold. It is not over €100, which is what it was. The figure of €75 was seen as reasonable.
Senators will have an opportunity to question the Minister for Finance on it tomorrow in the Seanad. He has committed to review it so it could be changed or adjusted if it is not working for retailers or for Revenue. It could be adjusted in the finance Bill next year. The Minister has committed to having a review within 12 months. We will have a budget next September or October and a finance Bill. There will be an opportunity to adjust it if we do not have the threshold at the right level. We are very conscious of the fact this is a new approach to the VAT retail exports scheme and there will be an opportunity relatively early on to adjust and change it, if necessary, with the finance Bill next year.
With regard to Senator Black's question on the common travel area, for a number of years, linked to Brexit, we have been speaking to the UK on a bilateral basis about formalising the common travel area. It goes right back to the 1920s but there was never a bilateral treaty on it. It was always a loose enough series of arrangements, with some of those arrangements backed up by legislation and other elements not. With the previous British Government, when Theresa May was Prime Minister, I signed with David Lidington a memorandum of understanding on protecting and maintaining the common travel area through the Brexit process and out the other side, adding more formality to it. We decided consciously not to put in place a bilateral treaty on the common travel area because if we needed to amend it or change it, it would become much more complicated if a treaty needed to be amended and changed. We felt we should have the flexibility to be able to adjust and adapt to the new realities of Brexit and redesign elements of the common travel area, if necessary. Having this flexibility made a lot more sense to both sides. As long as there is a bit of goodwill on both sides it can be done and is being done.
Essentially it is a recognition of each other's citizenship, although this is not fully true but it explains what we are trying to do, when British people are in Ireland and Irish people are in the UK, in terms of access to education, healthcare, social welfare payments, voting in many elections, being able to carry pension entitlements, recognition of qualifications, obviously the opportunity to work and all of those other privileges that Irish people get in Britain and British people get in Ireland that even go beyond EU membership. We got an agreement early on with the EU that we would have to protect the common travel area through the Brexit process which, in many ways, meant Irish citizens get a lot more privileges and rights in the UK than other EU citizens. We were careful in how we managed that messaging so as not to raise hackles in other member states because there are more Polish people in Britain than there are Irish people but the Irish will get special treatment under the common travel area. Brexit is now exposing this difference in quite a significant way.
It is a really good arrangement for Irish citizens in the UK and UK citizens in Ireland. It will help to protect many of the practical arrangements we have on the island of Ireland in terms of free movement of people to work, study and access healthcare. The formal EU directives that have reinforced this in EU law, such as, for example, the cross-border healthcare directive, will no longer apply to Northern Ireland. We are going to have to put some other arrangements in place to accommodate the practicalities of children coming from Belfast to Dublin for paediatric care, people from Donegal going to Altnagelvin hospital or people from west Cork going to Belfast for cataract operations. These are things we will have to ensure can continue but we have to do it now in the absence of an EU directive that requires it. That is easier said than done but we are committed to doing it.
Likewise, we are also ensuring that we try to protect many of the other rights linked to the Good Friday Agreement. This time last year, I announced that the Irish Government was committed, if necessary, to pay for Northern Ireland students to benefit from Erasmus, or for Northern Ireland citizens to benefit from the equivalent of the European health insurance card, EHIC, which allows EU citizens to travel across the EU and access healthcare. They will not work in the exact same way as they did previously but we are committed to redesigning a scheme that goes as far as we can to replicate EHIC, which will allow people from Northern Ireland to travel across the EU and if they have health bills because of an accident or because they get sick when abroad, they will be able to recoup the cost of it from the HSE south of the Border when they go back to Northern Ireland. There is a cost to this that we are willing to pay. Likewise, the arrangements for Erasmus will probably have to happen through Irish universities south of the Border if there is not an agreement between the EU and UK to facilitate Erasmus. The Department of Education has been working on this. There is a hope and expectation that EHIC-type schemes and Erasmus will be facilitated through negotiations between the EU and UK.
If that negotiation does not result in a positive outcome, we will intervene to offer that to people in Northern Ireland if they want to avail of it. The Government is willing to commit to the taxpayer paying for that, which, I hope, people will support us on if it comes to that but I do not expect that it will. I think the British Government will be supportive of those approaches in principle.
I want to reassure the committee that this is not all about economics and trade. It is also about citizens' rights and protections. Irish people living in Northern Ireland are European citizens. They are EU citizens who happen to be living outside the EU but that does not mean they lose their rights as EU citizens when they enter the EU to work, travel and study. We will try to ensure that those rights and privileges are protected. Unfortunately, we cannot guarantee them that while they are living in Northern Ireland EU law applies because it does not. Under the protocol, there is an obligation on the British Government to ensure that Northern Ireland mirrors or has equivalence to EU standards in law in many areas. Under the protocol, Northern Ireland becomes a de factoextension of the EU Single Market for goods. As a result, there needs to be a commonality of standards and a level playing field to allow an all-island economy to function in that context without any border infrastructure.
This a complex arrangement. It is, however, the best possible arrangement in view of the circumstances we were landed with in the context of Brexit, trying to protect the Good Friday Agreement and prevent border infrastructure re-emerging on the island of Ireland, respecting that Northern Ireland remains part of the United Kingdom and, therefore, is leaving the European Union. We are trying as best we can to manage all of these issues in a way that limits disruption. It is about no diminution of rights for people in Northern Ireland, which is very much the language of the protocol, and about facilitating trade in the absence of border infrastructure North-South while facilitating unfettered access for businesses in Northern Ireland into Great Britain, GB. The price of all of this, which is where the controversy lies in regard to the protocol, is that goods coming into Northern Ireland from GB have to have some checks because, owing to how the protocol works, that is effectively an entry point now into the EU Single Market for goods. This limited series of checks is a necessary consequence of the protocol to ensure that Ireland's place in the EU Single Market remains protected and that its integrity is protected too. In other words, we cannot have a protocol that opens up an unguarded backdoor into the EU Single Market via Northern Ireland. That will not wash with our EU colleagues or the European Commission. That is why the protocol is controversial. It is the best outcome that we could have designed in view of the politics of the issues.
I will try to brief in my responses to the next questions but perhaps in this response I have answered some of the questions members had intended to raise.
I welcome the Minister. One of the key issues in terms of the negotiations is the fishing sector. The fishing community is vulnerable in the context of the Brexit negotiations. Following on from Mr. Barnier's remarks at the weekend that even with a good Brexit there will be in a 15% to 18% reduction in quotas, I would welcome the Minister's views on the likely outcome of the negotiations in this regard. On 15 and 16 December, negotiations will take place within the European Union on quotas for next year. In the Minister's view, is it likely a deal will be in place before then in order that the negotiations at EU level on quotas for catch for next year can take place? Mr. Barnier's reference to a 15% to 18% reduction in quota came as a surprise to the fishing community, even though it was obvious there would be some reduction in quota. I would welcome the Minister's views on the direction he believes that negotiation will go over the next ten days.
Another issue is that of infrastructure, both here and in France. I ask the Minister to comment on whether he believes we are Brexit-prepared in regard to key infrastructure at the relevant ports and if the Continent has the capability to deal with the trade, hopefully, coming directly from Ireland.
In regard to the passports issued over the past four years in particular, is it anticipated that that trend will continue such that large numbers of passports will need to be processed by the Department of Foreign Affairs. What are the numbers like currently in terms of passport applications, particularly from the UK?
My final question is on a political point. Since the mid-1970s, Ireland has been involved with the UK in regard to the European Union. That political involvement will be broken. Through what forums will Ministers meet and interact with their colleagues? If we are to have a coherent approach to our engagement with the UK, which is our nearest neighbour and our dearest trading partner, that political interaction will be important. I would like to hear from the Minister what that might look like. For example, will there be a forum or will special meetings take place? How does he envisage that political dynamic will work and to the benefit of the Irish community in the UK and in Ireland to make sure that they have representation on key issues?
I welcome the Minister. I also welcome the pragmatic flexible approach he is indicating that Ireland is taking. People sometimes elevate principles to too much importance when practical matters are more important.
Following on from Senator Lombard's point in respect of fisheries, my take on it is that when Ireland and the UK joined the European Economic Community in 1972, we had different territorial waters. People cannot blame the EU for everything that has happened since. Waters which were international then have become national now. When one looks at fisheries as a percentage of UK GDP and Irish GDP, while it is important, there are other more important matters that have to be dealt with. From my reading of the English press, the Daily Mail, The Daily Express and so on, this is the jingoistic issue on which people are taking robust stances and elevating to a matter of principle, ignoring the fact that Britain has to get fish exporting rights into the EU if its fisheries industry is to prosper at all. Is there a question of postponing it or having a temporary arrangement? I ask the Minister to comment on that matter. While we are all shaping up to each other, is there a possibility that the temperature could be lowered a bit? Leverage is not all that important now. One of the thoughts in the back of my mind is that reflagging of ships could probably happen and the industry will be very flexible in the context of what is agreed.
The Minister mentioned the state aid mechanism. I appreciate that on the previous occasion I raised it with him, he had to be somewhat coy and diplomatic. I presume that remains the case so I will not press him. I am interested in the free ports that the Tory Party in England is always talking about. Is the Department of Foreign Affairs, as the Irish trade Department, considering any proposals for free ports in Northern Ireland such as the Belfast-Larne area? The Minister also mentioned the governance of future agreements as an issue. Will that be dealt with by way of a dispute mechanism resolution or a tribunal?
We have an awful lot of mutual interests with the United Kingdom and with the island of Great Britain as well as just Northern Ireland.
In respect of the shared island concept that is part of the Government's programme and the common travel area considerations, do we have a plan to develop UK-Ireland relations to a higher degree than they are at the moment?
In the context of theDaily Mail, The Daily Express and so on, and the Prime Minister, Mr. Johnson's, remarks about devolution in Scotland having turned out to be a total disaster, I get the impression there is a great deal of macho unionist talk and integrationist talk in the UK. Are we squaring up to that tendency, which is not a very helpful one?
When I was involved in government, between 1999 and 2007, there was immense reliance by Ireland as a State on UK research and analysis and legislative scrutiny of what was happening in Britain. I refer even to UK university research, not just state research. Britain was far more tooled up to deal with EU legislation and proposals for EU legislation. I am really worried that I do not see a development of our intellectual infrastructure, either at an Oireachtas level, outside the Oireachtas or at a departmental level to make up for what will be a huge vacuum in our capacity to fire on all cylinders when we are interacting with other member states at Council level and dealing with the Commission and the European Parliament.
I will respond to Senator Lombard first. On fishing, for members who have been following this process or have been talking to me about it, we have been flagging for 18 months that fishing was going to be the most difficult issue to resolve in regard to Brexit. The reason there was not a significant discussion of fishing as part of the withdrawal agreement was that we knew it would be very difficult to resolve and that it would in some ways poison the discussion that resulted in a withdrawal agreement last year that involved the protocol and all the other matters we know about. The idea of the protocol, and of the commitment in the political declaration that framed the approach towards getting a future-relationship deal, was that we would try to get fishing out of the way first and have it done by mid-summer. As part of that, an informed decision would then be made as to whether there would be an extension of the transition period to allow for all the technical work that would be required for all the other areas, from aviation and road haulage to data, services, financial services, judicial co-operation, security co-operation and climate co-operation. Eleven different strands of negotiation were all moving forward in parallel to constitute the future-relationship deal. Fishing was one but it was always earmarked as potentially the most difficult because of the politics and emotion that come with fishing.
On the British side, one of the reasons that fishing is so difficult relates to the political promises that have been made to coastal communities and fishermen in the UK, and the emotive language of taking back control of laws and waters. The fishing issue has been inextricably linked to the expression of sovereignty on which many people base their Brexit perspectives, which makes it really difficult. On the EU side, it is equally difficult because, at the outset of the future-relationship negotiations, the mandate for Michel Barnier was to maintain the status quoon fishing, in terms of access and quota share. The reason the EU was so demanding of Michel Barnier was that fishing was to be negotiated in the context of an overall deal and the UK was seeking and still seeks EU facilitation in many different areas. The UK wants to access for free the EU energy markets and to get a facilitation for aviation access, road haulage access and tariff-free and quota-free access to the EU Single Market. It also wants access to financial services.
The EU, perfectly reasonably, said that if it was to facilitate UK access to the benefit of the British economy in all these areas, surely it was not unreasonable that the EU would ask for access into British fishing grounds to ensure that it could protect the interests of its fishermen in the same way that the UK is seeking access into EU markets for the benefit of many different sectors of its economy. Michel Barnier was instructed that the price of the facilitation in many of these other areas was to seek a reasonable agreement that would involve compromise, and potentially some transfer as the negotiations have developed of increased fishing opportunities for British fleets in British waters, but that there would still be a long-term certainty about access and quota share that would be reasonable. That is where these negotiations have gone.
The starting points were extremely far apart and they have moved slightly closer to each other. The combined EU fleets in British waters - Spanish, French, Dutch, Danish, Belgian, Irish - catch about €650 million worth of fish per year, although the UK, obviously, catches a substantial quantity of fish in its own waters. The UK has stated that it wants 80% of that back, that is, €500 million of the €650 million. The EU has offered about €100 million, or slightly more than that, in recognition of the change that Brexit will bring and so on. While both sides have moved slightly closer to each other, it is still a significant gap. How we bridge that in a way that will not create winners and losers on the fishing debate linked to Brexit is the big challenge.
There will not be an agreement unless we can find a solution on fishing. There is no way the EU or I will support an agreement that can, effectively, be described as selling out our fishing interests to get a deal on everything else because fishing represents a very small percentage of overall GDP. About 16,000 people in Ireland have employment linked to the fishing industry. It is worth between €1 billion and €1.5 billion to our economy. The communities that rely on that income and those jobs do not have a whole lot of other alternatives. Coastal towns such as Killybegs and Greencastle, Rossaveal, Castletownbere, Union Hall, and along the south and east coasts, are heavily reliant on the fishing industry, both demersal and pelagic, and on accessing some of that stock in British waters. The two most important stocks for us in value terms are mackerel, on the pelagic side, although it is supplemented by herring, horse mackerel, blue whiting and so on, while on the whitefish side, there are all the other demersal stocks from haddock and cod to saithe and all the others. Prawns too are a significant part of our fishing industry.
We are trying to ensure that the Irish fishing industry survives Brexit, not on the basis of financial compensation for loss of fish but by ensuring it can access fishing opportunities in the future to keep these communities intact from a fishing perspective. As for the effort to suggest that they could be paid off and financially compensated for dramatic losses in order to get a deal, that would be a disastrous outcome. We want fish, not money. Compensation packages are about restructuring industries and so on and money will be needed arising from Brexit and Brexit disruption but in the case of fish, the most important thing is to maximise fishing opportunities and access into British waters. We must also limit the displacement problem that will arise from limited access to British waters, which may drive many other EU fleets that currently catch fish in British waters, which may lose those opportunities, into Irish waters. That would be a double negative for the Irish fishing industry in terms of sustainably managing our stock.
If I am overdoing it on fish, the Chairman should stop me but this is an important issue. The final thing I will say on fish is this assumption some people have that all fish caught in British waters are British fish also needs to be challenged. It is this idea of zonal attachment that where the fish are caught is where the fish are owned.
If one looks at the most valuable stock, which is mackerel, the truth is that most of the mackerel we catch off the west coast of Scotland are actually born off the west coast of counties Kerry, Cork and Clare. They mature, grow and swim north past the coasts of counties Galway and Mayo and mature into adolescent fish off the coasts of counties Mayo and Donegal, where some of them are caught as they become adults. Most of them, however, then swim into Scottish waters as adults when the fat levels are right and they are ripe to catch in the most sustainable way. These are not Irish fish and they are not British fish. They are a shared stock that is hugely valuable for everybody who catches them. We need to manage them in a sustainable way that does not create perverse incentives for the Irish fishing fleet to catch them as juveniles before they swim across this imaginary line at sea where they enter British waters. That is the danger.
If, therefore, we are serious about protecting our stock, which is an extraordinary resource that is shared in a sort of transnational way between EU, Irish and British waters, then we need a fisheries deal that recognises this is a shared stock which swims between jurisdictions and cannot have these simple hard and fast political slogans attached to it linked to sovereignty, and so on. I suspect a mackerel off the coast of County Mayo swimming towards Scotland does not feel Irish or British, quite frankly. They just happen to be swimming in those waters that are highly fertile fishing grounds for everybody.
That is the challenge of fish and whether it gets put off. The danger for putting it off or doing a partial agreement now and coming back in five years' time, which has been written about, is that if one puts the decision off it is hard to then come to an agreement on fish that is part of an overall agreement where there is give and take in many other areas, whether that is energy, services, financial services or whatever.
The only way to get a fair deal on fish for the EU side is if it is part of a bigger package of arrangements where the UK wins in terms of accessing EU markets in many areas and the EU gets a reasonable deal which allows our fleets to be able to access fish in British waters, whereas, if one isolates fishing and does it on its own it becomes a sort of horse trading session, stock-by-stock, where the UK demands X and the EU can only give Y. One then tries to find some arrangement in the middle, which is not easy.
We need to try to take the emotion and emotive language out of this particular element of the negotiation and try to have as much pragmatism as we can towards recognising British sovereignty. That is a must to get a deal. Britain needs to be respected as an independent sovereign country outside of the EU. At the same time, however, it also needs to respect that we have fishing industries and families who rely on income from fish and who have been fishing in these waters for many decades. As part of an overall package where the UK is facilitated, the UK also needs to recognise EU concerns in this area.
I will be much quicker on the other issues and around the governance issue. My understanding is the negotiations at the moment are centred around, first, that the EU can never sign up to a trade deal that involves no tariffs or quotas unless it can have reassurance around fair competition. The UK is just too big an economy and too close to the EU Single Market to have tariff-free trade and a risk that a future British Government could decide to create competitive advantage for its economy by deregulating that economy or by applying state aid that goes way beyond what the EU allows in the Single Market, and then have free access into the Single Market to use that competitive advantage for the British economy. That can never be facilitated. The EU wants tariff-free trade and a trade deal that allows as seamless a trading relationship as possible. It must, however, get guarantees around fair competition between both economies. There needs to be a series of sectoral agreements around the principle of fair competition on a level playing field. We know the kinds of areas we are talking about there from environment to labour standards, consumer protections, taxation, state aid and so on.
Second, one then needs governance arrangements that can deal with disputes if and when they arise. In other words, what is the consequence if somebody breaks that agreement? As a result of the Internal Market Bill and the approach taken by the British Government in these negotiations which said, effectively, in the case of the Internal Market Bill, unless it can implement the protocol in the way it would like, then it will pass legislation anyway to give a British Minister the power to do that, overriding the protocol and breaking international law and the terms of that treaty. Since that approach, which has damaged trust, I believe the EU is even stronger now. It needs a robust and independent dispute resolution mechanism and a governance around it, which the UK and the EU accepts, that allows there to be a consequence that would be triggered quickly for a breach in the level playing field agreement. In other words, if one side breaches it, the other side can retaliate within the framework of a deal and that would be facilitated through a governance arrangement, and so on.
These kinds of things are difficult to design and get right and, of course, all this must respect British sovereignty outside the European Union, making its own decisions in its own parliamentary system through its own legal mechanisms and courts, and so on. That is complicated, to say the least. Those two issues are level playing field and governance and the difficult issue of fishing, which goes way beyond its value financially because of the reasons I hope I have outlined.
The state aid issues as they relate to the protocol are slightly different because there is a dispute between both sides. No one is disputing that under the protocol that Northern Ireland needs to mirror EU state aid rules in terms of level playing field. It gets complicated if a company has a footprint in Northern Ireland and in Great Britain. If a future British Government provides significant state aid to a parent company in Great Britain, does that derive competitive advantage for a satellite of that parent company in Northern Ireland in a way the protocol does not cover? We would say the protocol covers that but the British Government has a different perspective.
I want to pay tribute to both Mr. Michael Gove and Mr. Maroš Šefcovic, who are the two co-chairmen, one might say, of the joint committee which is responsible for the implementation of the withdrawal agreement. They have a good relationship and I believe there is much pragmatism now in the process of trying to find ways of implementing the protocol in a way that makes life as straightforward as possible for all the different stakeholders impacted by that. We are getting pretty close to agreeing the outstanding issues in terms of the implementation of the protocol because of that pragmatic relationship between those two individuals and their teams. I believe that would be fair to say.
All of the media coverage focuses around the Michel Barnier-David Frost relationship and the task force versus the British negotiating team. Much quiet and good detailed work linked to the joint committee and specialised committee has been done and few outstanding issues are left in the context of implementing the protocol in full. I hope that will mean the British Government will not make what I would regard as a significant mistake next week as this process hopefully draws to a conclusion and reintroduces Part 5 of the UK Internal Market Bill, which had been removed by the House of Lords, in a way that threatens to breach, in British law, the withdrawal agreement again.
There is also, potentially, a second piece of legislation, a finance and taxation Bill, that would do the same. If the British Government does that, it will be a clear signal to the EU that this process is not going to conclude well and, effectively, that the UK does not want a deal. I hope that does not happen. We have certainly given signals in as respectful but blunt a way as we can that it would be a mistake for the UK to do that at this stage. That was reflected in Michel Barnier's briefing of the Committee of the Permanent Representatives of the Governments of the Member States to the European Union, COREPER, meeting this morning.
Days matter in these negotiations. A lot of negotiating will happen between now and next week when the United Kingdom Internal Market Bill may come back into the House of Commons and the finance Bill may also come to the House of Commons. I hope that there will be no need for any domestic legislation that threatens the implementation of the protocol because of a successful outcome of negotiations. Time will tell. I am afraid that there is still quite a lot in this.
I thank the Minister. We are now coming up to the last hour of this meeting because of Covid-19 restrictions. I am conscious that quite a number of members are waiting to get in. I will take the next three Senators who have indicated. I note that some Senators are not at microphones and I ask them to exchange with somebody who has already contributed. I invite Senators to come forward and indicate to me that they wish to come in.
I thank the Minister for coming here and for his contribution yesterday on the Brexit omnibus Bill, which was comprehensive. The Minister made a point around Michel Barnier's warnings and described his own fear of the UK making a significant mistake. The reality is that next week is make or break. It is up to the UK. If it makes a particular decision about the internal market and finance Bills and breaches international law, the reality is that we are into a no-deal situation. I appreciate that the Minister is being diplomatic but those are the stakes. We obviously hope that we do not get to that stage but if we do, if Boris Johnson's Government decides to go ahead and we end up in a no-deal situation, I would like reassurance that we, as a country, are ready for that and in a position to address a lot of the concerns.
Part of the challenge is that most of the public are aware of Brexit but not of the direct impact it will have. Food is still on the shelves and supply chains are still operating. People are aware it is a big issue but it is not directly impacting their lives. I know that the Minister is talking about fish but the issues for people at home were sausages and chips. I heard people start to talk about the potential impact in that regard. Is there a communication strategy in place if we end up with a no-deal Brexit?
I will follow on from what Senator McDowell said. I raised a point during the debate in the Seanad yesterday and we had a discussion around the data issue which is going to be critical in the case of a no-deal Brexit. I would be concerned about the introduction of state aid. The policy of Boris Johnson's Government has been to pump money into particular industries and sectors. I have a particular concern that there would be a decision to pump money into some of the airports in an effort to attract transatlantic flights into the UK. I know that they will not necessarily have air access but it could distort other sectors of the economy, including our tourism sector which is crucial at the moment.
I welcome the fact that the Minister said that we need ways to continue to develop the bilateral arrangement. That is important. Not having the UK at the EU table is going to be a difficulty for Ireland and we need to look at building relationships and forming alliances with other member states. The Minister might make reference to that.
Senator McDowell made a point about our intellectual infrastructure and the capacity to engage, and that is going to be a challenge. We, effectively, operate a common higher education and research area with the UK. It is going to be absolutely essential that we avail of the opportunities that Brexit provides to Ireland and that, in building the bilateral arrangements that the Minister talks about, the strong existing links in education and research between Ireland and the UK are maintained and strengthened, but that we also explore ways to further strengthen links at a European level.
I join the welcome that others have extended to the Minister and thank him for his commitment to this important issue that will impact many aspects of our lives and could have done so more devastatingly. He helped to achieve European cohesion and all of that.
I was fascinated by his description of the fishing situation. I was thinking that it was great that he has a background as a fisheries Minister. It is good to know that there are no nationalist or unionist fish. There is enough nationalist and unionist cleavage without having it among the fishing stock. That is encouraging.
I will have to leave because I have a matter on the agenda of our parliamentary party meeting and I want to go. I will read and hear about the debate tomorrow. The Minister yesterday indicated a good confidence about customs working well and that we will have a green lane for Irish trucks, etc. He thought that there will not be long delays and, of course, we have the 1,500 new people. I would again like to hear the Minister go into that and give assurances in this forum on that score because it is a real concern with implications. I was this morning talking to a good haulier, known to the Minister, from a good firm. He said that any delays would have huge implications for his margins. It would be interesting to get clarification around that matter.
The Minister also said yesterday that the cross-Border health scheme could not continue in its present form because the UK will no longer be in the EU. I am interested in how he sees that being rectified and over what kind of a timeframe.
The Internal Market Bill is the great chestnut. The reintroduction of the section that was defeated in the House of Lords when the Bill is presented in the House of Commons next week would almost be seen as a casus belli, a declaration of war by the UK. It would declare an intention to not go ahead with agreements and to breach protocols. We certainly hope that does not happen. All I can say publicly is that all of us, of whatever party and Independents, are proud that Ireland is firmly standing up to the Internal Market Bill because it breaches ethics, international law and high principle. How do we expect the ordinary citizenry to be straight and proper in their dealings with the state if states' dealings with each other are to be crooked and not honoured properly? It is hard to instil confidence in politics and the democratic system in those circumstances.
That is all I want to say. I want to leave. I thank the Chair. I do not know if I got the opportunity to publicly congratulate her on her election. I wish her well.
I thank the Minister. The update today has been comprehensive and helpful. It gives the committee the benefit of being able to have this kind of conversation. I have two brief questions. RTÉ today reported that many thousands of businesses across the island have indicated they are unprepared for post-Brexit trading realities. What is the likelihood of a grace period post 1 January to allow some of those businesses to allow for a gradual shift to the new, post-Brexit reality to which the Minister earlier spoke?
I appreciate the update from the Minister on things such as the European health insurance card and I sincerely hope that issue is resolved. If it is not, has an oven-ready plan been put in place?
Does it include a communications strategy to let people in the North know how the process will work? I assume that there will be a number of communication strategies to convey the information.
The Minister should think about the following matter, on which I have engaged with him previously. As we move through this Brexit period and edge ever closer to 1 January, regardless of the outcome, there is an increasingly strong argument and rationale for the Irish Government to consider providing a service or facility that will meet the requirement of Irish citizens and EU citizens in the North. We know about the controversy surrounding the British Government's refusal of an EU presence. The Irish Government, through the Department of Foreign Affairs has, through its secretariat, space in Belfast, for example. There will be a range of Irish and other EU citizens who will want to and will be entitled to engage with the Irish Government - and with the EU structures through the Irish Government - whether that is in respect of the European health insurance card and its complexities or of the Erasmus programme, as the Minister has noted, or of passports, as other colleagues have mentioned. We need a one-stop-shop or a signposted satellite service that can work to meet the needs of citizens. It is all well and good to have plans in place but people will need to avail of them, understand them and communicate them. If they are in the North, they will need a very direct interface with the Department of Foreign Affairs and the Irish Government. There is a genuine and clear rationale for providing such a service. I ask the Minister to consider my proposal outside of everything else that he is dealing with at the minute.
In some ways we need to tone down the language on the Internal Market Bill because it is a huge distraction from the actual negotiations, which is unwelcome. We have wasted so much time talking about the Internal Market Bill and on what is the motivation for the British Government to do it, whether that is a negotiating strategy or a way to sink these negotiations if it wanted a tool to do that. Five former British Prime Ministers from both parties have come out against the legislation and its approach. The Bill has, undoubtedly, damaged Britain's international reputation, not just in the European Union but on the other side of the Atlantic as well. People are trying to understand what the British Government is at. In the context of these negotiations, they should be between two negotiating teams that are trying to put a future relationship in place that benefits both. I hope that our future relationship with the UK will be very close for mutual benefit. In some ways, the Bill is a very provocative approach that has undermined trust and sucked in a huge amount of oxygen that could have been used to focus on resolving issues through negotiation. It is what it is and we cannot ignore it, which is why I mentioned it today. We could have a second item of legislation that doubles down on the issue, through the Finance Bill next week, in the context of another element of the protocol. One would have the state aid element and the list of goods not at risk issue in two different Bills. I believe the EU will draw only one conclusion from that course of action if it happens, which would be hugely regrettable but again, that is a matter for the British Government.
If that were to happen and there was a no deal on the back of it, then what happens next? We are as ready as we possibly can be. There are companies, mainly small ones, that have not thought about Brexit as much as they should or could have. They have been greatly distracted by Covid. They have been closed down, opened, closed down again and are opening again this week and they simply have not had the bandwidth to focus on Brexit as well as Covid, and perhaps other challenges too. They have got to find the bandwidth, however, because they will be impacted whether they like it or not.
There is not going to be a grace period on 1 January. The UK is applying what is, in effect, a grace period on some of the checks that they will require at their ports on goods coming into the UK. I understand that the UK will facilitate us by providing a period of flexibility that will last about six months. The EU does not have that luxury because it i s not a single country; it is a Union of 27 countries. If the EU sets a precedent by offering flexibility on timelines when everybody has known about this for quite a long time, then a precedent will have been set that could cause problems with other third countries with which it may be developing relations, such as Turkey or whatever. There may well be some flexibility in some specific areas that simply do not have political solutions right now where there is more time needed. There are some examples, potentially, in the implementation of the protocol of the need for more time, and medicines is a good example. There will be goodwill to try to give some time.
A general extension of the transition period beyond 1 January is not going to happen. It is very important that we are honest about that in order that people sit up and take notice.
I am glad the Senator asked his question because it allows me to be very blunt and honest with people that on 1 January, everything will change. I mean that the UK will be no longer be in the customs union and the Single Market. Legally it is out and there is no legal mechanism to extend the transition period. That time has passed.
At different stages there has been a lot of marching the army up to the top of the mountain and back down again about Brexit. This time, there is no extra time, which every business needs to understand. There are about 100,000 businesses in Ireland that either trade with or through the UK, which is a lot of businesses in a country of 4.5 million people, and about 200,000 people are employed in that trading relationship. There are about 40,000 businesses that trade with the UK regularly, that is, something like once a fortnight. In some cases, such as supermarket chains and so on, it is every day. All of our data indicate that the vast majority of the businesses that trade regularly with the UK are gearing up to be as ready as they can be in terms of having a customs number. They are gearing up to make sure that they can do the customs declarations that they need, the processes, the sanitary and phytosanitary or SPS checks and all of the other things but there will be some that will be caught out and we need to help those companies.
Let the message not go out that there will be a period of flexibility for three or four months to allow everybody get in shape. I do not believe that is where we are going to be. That is why I think there will be a lot of disruption at the start of January, particularly in the UK and in ports where our hauliers may get caught up in the disruption. That is why we have placed a big emphasis on direct ferry routes between Rosslare and Dublin Port, primarily, but also Cork and other ports. Last week alone, a new Port of Cork to Zeebrugge service was announced and a Rosslare to Dunkirk daily roll-on, roll-off service was announced. The capacity on the existing direct ferry links between Ireland and the rest of the Single Market through mainland Europe has had less than a 50% uptake. We are ready for a big shift over on to direct ferry routes should that happen. I think we can deal with that capacity if it happens. If we have to have extra capacity, the ferry companies have made it clear that they can shift capacity off the Irish Sea to the direct ferry routes, should it be necessary. As the UK land bridge is still the fastest way in principle to transport goods to and from mainland Europe, we would like to continue to do that but of course we must avoid disruption and delay should that happen in early January.
I hear what the Senator said about state aid. If we can get a deal, then state aid is not going to be a problem because it will be part of the level playing field negotiation. If we do not get a deal and if the UK decides to use state aid, beyond what the EU is allowed to do, to create a competitive advantage for itself, then that has consequences in the context of a trading relationship that continues to have tariffs and other disruptions, which is regrettable if that is where we go.
In responding to disruption, the EU will allow some flexibility in the application of state aid rules in Ireland. If we had to put a package together to support the beef sector, for example, I would be surprised if there were a problem around state aid limitations to keep people in jobs and give families incomes. We will access as much of the €5 billion Brexit adjustment fund as we can. It should not be forgotten that this is a fund for the whole EU. Ireland will have the strongest case and, I hope, secure more of the fund than any other country. I am pretty confident we will, and rightly so given our vulnerabilities.
A number of Senators asked about the future bilateral relationship with the UK. It is really important. The offices of the Taoiseach and UK Prime Minister have been talking about that quite actively, and I suspect we will hear a lot more about it early in the new year. What we previously considered with the British Government was having an annual British–Irish intergovernmental conference or summit, alternating between Britain and Ireland every second year and involving at least half a dozen, if not ten, Ministers plus the Prime Minister and the Taoiseach. This would force in being circumstances in which senior civil servants would have to compare agendas on areas of common interest on which they could work together, whether it was transport, climate change, foreign policy, development aid or marine protection areas. There are dozens of such areas on which the UK and Ireland should be working together to their mutual benefit. It is important that we have time to get to know our counterparts in the British Government so we can build relationships of the kind that can keep the British–Irish relationship strong and intact. We are simply not going to meet the British at EU meetings anymore. They are already gone. If structure is not created, it is very hard to build relationships that will last or exist in difficult times when we need to find solutions.
I have probably answered most of Senator Joe O'Reilly's questions. We are going to try to replicate, as best we can, the cross-border healthcare directive to make sure cross-Border healthcare continues to be facilitated on the island of Ireland. Regarding the consequences of reintroducing Part 5 of the Internal Market Bill, we have probably addressed that issue in making reference to the grace period.
Senator Ó Donnghaile raised the issue of an office or one-stop shop in Northern Ireland to facilitate many of the services required. I am aware that he has been raising the issue of a passport office for the North. The number of passport applications has been tiny this year by comparison with last year because nobody is travelling. There has not been much demand but I suspect that when people start travelling next year, many will realise that since they have not been travelling this year and have therefore not looked at the expiry dates on their passports, their passports will have expired. When they look at them, they will see they are out of date.
I will. To go off script significantly, I have a lot of sympathy for people with British passports who have been able to live here as Irish citizens for many years. Owing to the common travel area and EU membership, they could gain access to all services. They cannot vote in referendums but they can vote in virtually every other election. For people in that category who want to get an Irish passport, we should make the process as easy, quick and cost-effective as possible because, in many ways, they have essentially committed their lives to living here. There are many thousands of British people who have happily been living in Ireland with a British passport but who will now, all of a sudden, realise that holding an Irish passport is quite different from holding a British one in the context of the relationship with the rest of the European Union. There are differences in respect of business, travel, holidays and other purposes, and in accessing EU services and so on. I want to do some work on this matter with the Department to ensure we can facilitate the transition for those who want to make it. Unfortunately, holding a British passport now means something quite different from holding an Irish passport in that the latter affords all the rights and opportunities associated with being an EU citizen. It is one of the many consequences of Brexit, I am afraid. I would like Ireland to be as welcoming a country as possible for British people living here who want to apply for an Irish passport.
I thank the Minister for his time, both today and during our consideration of the Brexit omnibus Bill, read on Second Stage yesterday. It is much appreciated. I can only imagine how busy his timetable is.
The Minister referred to the common travel area and the unique relationship between Britain and Ireland. Thankfully, on a very significant day for a maturing democracy, the people of Ireland voted in the mid-1980s to allow British citizens here to have a vote in a general election. The British were far ahead of us in that the Irish in Britain got to vote many decades sooner. In one sense, the cultural, social and economic ties between the North and the Republic are closer than the ties between the north of England, such as Yorkshire, and the rest of England might be. It is a unique set of circumstances and it is not of our making. Ireland is the new frontier of the EU in the sense of protecting the integrity of the EU, with all its complexities and challenges.
I really welcome what the Minister said about the Erasmus scheme. Some ingenuity, generosity and inclusivity have been applied. Even if the students from the North have to register with a university in the Republic, they are not being deprived.
The €5 billion Brexit adjustment reserve targets sectors and member states impacted most disproportionately by Brexit. Ultimately and legally, it is the EU versus the United Kingdom, and we have put our trust in the EU. For instance, Mr. Michel Barnier, rather than a senior Irishman, is directly on the front line. We are the EU. There has been great generosity on the EU's part in respect of the protocols. Apart from that, has a lot been done for the special categorisation of the Republic of Ireland? Is the Minister confident we will get the lion's share of the €5 billion? Ireland will be the member state most adversely impacted. Does the Minister trust and hope we will get the funding? Does he get reassurances? I am sure the EU will not sign off on this without Ireland on board if, as I hope, there is to be a deal.
Also on the question of the €5 billion, will there be an ongoing fund to help us owing to the inconvenience, disruption and disturbance Brexit will cause — but not of our making — as we become the new frontier of the EU? Even if there is a seamless agreement or soft Brexit, there will be many challenges for the State and for so many businesses. As the Minister said, 40,000 businesses trade regularly with the UK. We have a special relationship, and I am aware that the Minister is aware of that.
I detect the goodwill in the Houses of the Oireachtas. They are two Houses that know when to disagree with the Minister, and they would let him know about it. There is considerable good-will directed towards the team led by the Minister, but that does not mean that we cannot at all times seek assurances and reassurances. We are very grateful for the good work he is doing.
I will be brief. I do not know how the Minister does it. I am wrecked just listening to all the comments on what is going on over Brexit.
It is hard enough to be a Senator, not to mention sorting out the Brexit issue for the country.
I am very interested in enterprise, trade and employment and rural development, on both of which I am spokesperson. We must have looked in great detail at the amount we import from Britain. Something I raised earlier today in the Seanad is that in the future this country needs to be resilient because of Brexit, Covid, climate change and who knows what else is coming down the road. To that end, I would value access to the figures the Department of Foreign Affairs has on exactly what we are importing from England. I hear all sorts of figures, such as 42,000 tonnes of potatoes and onions and all sorts of mad things. If we cannot grow potatoes in Ireland, there is something seriously wrong. I know the Minister is going to sort it all out, with everybody behind him, but I would like access to figures. We should try to become more resilient and use the figures we have when dealing with Brexit to see how the country can reduce our imports for both climate change and resilience reasons. We should put our land to good use and see what we can do for ourselves.
I welcome the Minister and thank him for his time and presence here and, indeed, the exhaustive work he has done on the Brexit scenario since it first arrived on our shores. I note that my colleagues are all behind him provided he gets the right result. They did not say whether they would be if he did not get the right result, but perhaps that is for another day. I am sure the Minister noted that.
Absolutely. The Minister mentioned the word "focus". Being from a Border county, it was difficult to get people to focus on it even before Covid. It is one of those scenarios where people think it will be all right on the night, that it will work itself out eventually, a deal will be done and life will go on. One thing I have taken from the Minister's very informative contribution, and it is an important message to convey, is that when we pull our bedroom curtains back on 1 January, the world will look like a different place. Perhaps more work needs to be done to convey that message between now and the end of the year, because I am not convinced people are tuned into what life will be like on 1 January. Some form of television or marketing campaign to hammer that point home might not be a bad idea. There is so much happening at present with people's attention on Covid and trying to stay safe that I sense Brexit is very much on the back burner. I worry about that and that we are not understanding what the consequences will be for us when 1 January arrives.
Senator Martin mentioned in his contribution that no country will be more affected by Brexit than Ireland, which is a fair comment. I would dig deeper and say no part of the country is going to be more affected by Brexit than the Border counties. That concerns me. I am concerned about the free movement of people over the Border, how that is going to affect relationships North and South and how it will affect business from the point of view of businesses in the South trying to trade and keep going. It is to be hoped the issue of smuggling along the Border will not be a problem, but traditionally there always has been movement between North and South. If prices are cheaper in the North, the reality is that people in the South, especially in the Border counties, will travel there to shop and so forth.
The other issue is that when push comes to shove and in all negotiations, we are one player in the EU. When the pressure is applied, and we all understand that every side has to give a bit to get a deal, is the Minister concerned that the pressure might come from the EU to get a deal and basically get this off the table, and that we might be asked to take a deep breath and swallow things that we would not swallow today? We might be forced to do so as it approaches the finish line. How concerned is the Minister about that at present?
The other issue, which the Minister mentioned, is the relationship with the UK post Brexit. That is vital because the UK is our nearest neighbour and we have a unique and close relationship with it, despite the history. It is and always will be our closest neighbour. I worry that relationships could become fraught when these negotiations are over. I hate to think that would be the case. It is important that there are channels whereby we can rebuild the relationship with the UK, if that is necessary.
I wish the Minister well. The country is in safe hands with him at the wheel. I sincerely hope he gets a deal we all can live with and that we will all be back here singing his praises after 1 January.
I am the last contributor so I will ask my questions now to save the Minister responding a second time. I concur with the many Senators who have spoken about beyond Brexit and building that relationship or setting up the structures. Minister, you have spoken about exchanges between the Prime Minister and the Taoiseach. They are already looking to that new mechanism, but it might be worth considering, and perhaps it is being considered, to have it not just at governmental level but also at parliament level. It would be not just Ministers but all Members of this Parliament having more opportunity to engage with Members of Parliament in the UK. Some of those Members will end up moving up the ranks to the level of Government. We should not seek simply to replace the structures that exist but to go better and stronger than that. We should get beyond this and make it an even better and stronger relationship post Brexit, and get everybody working on it.
Perhaps the Minister will clarify one matter. If a person is living in Northern Ireland and working in the Republic, is it the common travel area that is the legal basis for doing that in terms of getting a personal public service, PPS, number, being paid and the practicalities of it?
With regard to Dover port, has the Minister had any more recent updates as to how it is preparing in comparison with the preparations that have happened at Dublin Port, for example, in terms of building new infrastructure for checks and a traffic management plan? How is it fixed for 1 January?
As regards the Finance Bill, I am concerned that it is even being suggested that there is a possibility the UK Government could be setting out purposely to undermine the negotiations with a view to having a no-deal scenario, and perhaps with a view to trying to blame the EU for it. I sincerely hope that what is being rumoured and suggested by some is not true. I am finding it difficult to decipher the end game of the UK Government. Whenever a person starts a negotiation, he or she always knows where he or she wishes to get to, and usually that person has an idea of where he or she is willing to compromise. Perhaps he or she ends up compromising a little more, but that person knows what the end result is supposed to be. I assume the UK Government knows whether it wants or does not want a deal, but it is quite hard to read the situation at times. I would welcome the Minister's thoughts on what he is hearing on the Finance Bill. Are we going to see a repeat of what happened with the Internal Market Bill, with a direct and overt attack on the withdrawal agreement and the protocol on Northern Ireland?
They are the main questions. In terms of the Brexit supports, there might be a job of work to be done after 1 January, and this committee will certainly examine it. The supports we have in place are many and substantial. Perhaps those supports should be assessed in mid-February or thereabouts to see if they are still fit for purpose and working and to see if anything else must be done to help. Regarding the sausage wars and the potato wars, it was unfortunate that we had news reports this week of a shortage of potatoes and they were lined up alongside the RTÉ documentary on the Famine. It brought people's minds back. It is amazing what focuses the mind and the things that impact on people. There is an element of citizens thinking things are going to be fine, because they have been fine to date, and perhaps not fully understanding that after 1 January they will change.
What struck me most from the Minister's contribution on the fishing issue was his comment that what we want is fish, not money. I support him on that. We could financially compensate fishing communities today, but if we do that there will be no fishing communities 50 years hence because the next generation will not have those fishing opportunities. It is very important for protecting the fishing industry in the future that people can actually fish.
There are a couple of principles on which, from an Irish perspective within the EU, I have tried to be vocal. One is that whatever deal is done in respect of fish, the priority has to be access to fishing opportunities, not big compensation packages to compensate for the absence of fishing opportunities. The money in that regard will be gone in a few years' time and then we would be dealing with the consequences. People will remember what happened to the sugar beet industry in Ireland and all of the political rows relating to compensation packages. We have got nothing now in terms of that industry. We still grow sugar beet but it is for different reasons. What we want here is an outcome. We have got to be realistic as well. The UK has serious concerns in respect of fishing. Therefore, a deal is difficult and requires compromise on both sides. First and foremost, this is about trying to protect our fishing industry by protecting stocks and ensuring that we will have opportunities in the future for fishing communities.
The second principle that is important for me is, whatever compromises are necessary to get a deal, if we get a deal, that there will be fair burden sharing across the EU of the loss of opportunities, if there are some losses of opportunities, for the EU fleet as a whole and that one, two or three countries are not being asked to have to carry that burden on their own, for example, Ireland, because we happen to be located next door. I spent quite a lot of time discussing this issue with Mr. Michel Barnier, particularly in the context of those two key principles.
There are linked issues in terms of the displacement of fishing fleets into Irish waters as a result of lost opportunities in British waters. This is also a big problem that needs to be factored into how we manage EU fish stocks in the future in Irish waters in the context of the Common Fisheries Policy, etc. This is difficult, complex stuff. I agree that solidarity needs to mean something in the context of how the EU collectively addresses the consequences of whatever deal might or might not be agreed.
It is a good observation that we do not know what the British Government wants but that is a deliberate strategy by the UK.
If one is to maximise the concessions that one is trying to secure, one has got to make people believe that one is willing to drive over the cliff and not agree a deal and that one can live with that. The British Prime Minister has done quite a good job of persuading people that he is willing to do that if he is not happy with the deal as a way of trying to maximise pressure to get what he wants. One has to look at the practical consequences of a no-deal for Britain and for Ireland and the cost of that, which would, in my view, be significant. It is not only not getting a deal on trade in terms of the absence of tariffs and quota, but it also makes it much more difficult to get the sectoral arrangements in place on all these other areas that are hugely important for the British economy and for the EU-UK relationship in the future politically, from security to data, to access to aviation and haulage, to services in banking and financial services, energy, etc., that will fall into place if there is a trade deal or are likely to do so because the mood music will allow for that. If there is not a trade deal, it makes it much more fractious because we will essentially move into a political blame game very quickly in the absence of a deal which makes these sectoral arrangements around contingency planning in the absence of a deal for 1 January next much more difficult. For both sides, the absence of a deal has real consequences.
I would not be ruffled by not knowing what the British Government really wants. That is a fairly standard negotiating strategy. Actually, the EU is the opposite of that. Everybody knows what the EU wants because it is such a predictable animal. It works, as stated earlier, on the basis of precedent, law, treaties, directives and mandates that the negotiating team has been given. The two sides have approached this very differently but, hopefully, they will be able to find a way of getting a deal that everyone can live with.
I do not want to comment on the level of preparations in Dover. That is a matter for the British side. All I would say is that when the French tested the system of checking passports last week, the queue was 5 km long. This would suggest that there could be significant disruption here, at least, in the short term after 1 January. One cannot compare Dover with Dublin. Dublin is a busy port, but not in comparison with Dover.
The number and frequency of ferries coming and going in Dover, and the turnaround times relating thereto, are many multiples of those in Dublin. We have got to get our house in order in the context of Dublin Port. We have spent a lot of time and money trying to do that. It is really a partnership between Revenue, Dublin Port and the Departments of Agriculture, Food and the Marine, Transport and Health all trying to work together to make sure that we have a plan that works for everybody. In truth, the challenge for Dover is many multiples of that. That is why - we will have to wait and see - we must have contingency plans in place in case that does not work out to well, and we do in terms of direct ferry links.
On the common travel area, CTA, and frontier workers, etc., if you are an Irish or British citizen living on the island of Ireland, you have no worries. Your freedom to move around and work will be the same on 1 January as it is today. If you are an EU citizen living in the Republic of Ireland and working in Northern Ireland, you will be able to travel, of course, because of the CTA, but you may need to avail of the permitting system the UK will have for EU nationals working in the UK post Brexit. If you are currently an EU national who works in the UK, including Northern Ireland, you are automatically covered - it is a sort of formality - and somebody who comes in the future to do that will have to apply for that permitting process. That is why the CTA is a fantastic solution if you hold an Irish or a British passport. If you hold a Polish, Dutch, French or German passport, while you can travel without restriction, your ability to be able to work and access welfare and all the other things requires some paperwork.
On the island of Ireland, North and South, I do not envisage huge problems. There is also then a frontier workers' issue of facilitation which will cover many of the workers also. This will not be a too difficult a space. If, however, you are a non-Irish but EU citizen in Ireland and you need to go to GB, for example, for a six-month contract, that will not be as seamless as it is today. It will require an application process and permitting system. What we take for granted today, namely, hopping on a flight to London and doing what one needs to do for a few weeks, if one is a Dutch person working for Apple, Dell or an Irish company that has a footprint in the UK, it is not so straightforward anymore. This is Brexit, I am afraid.
There is no problem there in continuing to work because that person is an EU citizen. If an EU national comes to Ireland, he or she can work at whatever he or she wants even if that person is resident in Northern Ireland. Such a person is an EU national resident outside the EU but, in the context of work, in the fairly extraordinary arrangement under the protocol, is frontier working in the EU.
I believe I am correct in that. The person is frontier working in the EU, so there is no issue.
In response to Senator Gallagher's point on the Border counties, in the first half of the Brexit negotiations, when we were trying to get a withdrawal agreement, I spent a lot of time in the Border counties at public meetings with stakeholder groups and so on, because the big concern near the Border was whether we were going to have a physical border again, a barrier to trade and movement of goods. Of course, that is no longer an issue. The danger is that many people in the Border counties, because the Border issue gets solved by the protocol, think everything is solved. Actually, for the all-island economy, most things are solved. That is what the protocol does: it allows the free movement of goods on the island of Ireland without any checking system. However, there are other issues that, under the protocol, need teasing out in terms of implementation, so people need to be alive to that. Even on issues like purchasing online from the UK, the consumer protections we take for granted under EU directives and EU law today no longer apply, and we will be relying on whatever consumer protections the British Government decides to introduce. For example, we are potentially exposed in terms of returns policies. If there is a fault with what is bought, people normally get their money back. However, all the things we would have taken for granted whereby people trust purchasing something in the UK, just like they would trust purchasing something in Ireland, now have question marks over them because we are purchasing from a third country, the equivalent of the US, Canada or elsewhere.
I take the Senator's point in regard to the communications campaign. Believe it or not, we have actually had a communications campaign going in the last few weeks. It has been on television, on radio and on local media, but it is so hard to break through the Covid fog that has descended on Ireland, which means everything is seen through a Covid lens and it is dominant in terms of media coverage. By the way, it is the same in the UK too, which might be quite helpful to us in the context of finalising a Brexit deal, in my view, because there is not huge interest in Brexit in the British media right now, and it is very much focused on Covid, on vaccines and on the three-tier system that has been introduced, and all of the debate around that. I hope that may potentially give some cover to allow for sensible compromises that can get a deal done, but we will see.
I spoke earlier about the UK-Ireland relationship, which is very important. We are going to put structure around that. I take the Senator's point in regard to that going beyond Governments and Ministers. There is an interparliamentary group and maybe we could look to modernise that a bit and to add to its agenda in a way that creates a bit more dynamism and more interest to discuss policy, as well as build relationships. If the Senator has suggestions in that area, I could discuss them.
On the €5 billion Brexit adjustment fund, as I said yesterday and earlier today, this is a €5 billion fund for the whole of the European Union. I am pretty confident that Ireland will make a stronger case than any other country because it is simply the truth that we are more disrupted than any other country due to Brexit and, therefore, we should be accessing more of this fund than any other country. When the Senator says we should get the lion's share of it, I think that is perhaps dangerous language. If there is a fund for 27 countries, no one country is going to get more than half of the fund. If we got 20% of the fund, we would be doing very well and it would probably be twice the amount the next closest country gets.
Trust me, we are pretty ambitious and pretty pushy in regard to accessing this fund because it was designed to help countries like Ireland. We are making a very strong case. I have met the line Commissioner twice to make our case and he is very receptive to that case, and very helpful to Ireland, as so many of the Commissioners have been. If ever we needed an example of what it means to be in the European Union, Brexit is it. It is extraordinary how a small country, hugely vulnerable to something that is happening outside of its own control, has been protected by the collective negotiating strength of the European Union. We have had European Commissioners coming to Ireland to understand in real detail the vulnerabilities and concerns that Ireland has, backing that up with an approach to the negotiations and maintaining solidarity across the European Union. It has been quite extraordinary in the context of the withdrawal agreement and the protocol initially, and again now in terms of the Brexit reserve fund and the negotiations that Michel Barnier and Maroš Šefcovic are leading. I get phone calls from Maroš Šefcovic, who is Vice-President of the European Commission, really wanting to make sure that Ireland is being understood through this process. We sometimes hear loose language around unelected, faceless bureaucrats in Brussels, and so on. These people are working night and day to protect Ireland at the moment. As someone who is very passionate about the European Union, I suggest that if we want a pragmatic example of why it matters, this is it. Covid is another example in terms of getting vaccines through the central purchasing power of the European Union, but Brexit is a phenomenal example of solidarity and the backing of a small member state in the face of huge challenges that we could not have faced on our own.
On trade, which Senator Garvey raised, we have a trade relationship with the UK worth about €80 billion a year. By the way, we buy more from Britain than we sell to Britain, which many people do not realise.
We are the fifth biggest export market for the UK, not per capitabut in real terms. The UK's trade with Ireland is worth more than its trade with China and Brazil combined, which demonstrates the scale of this. We are a very important trading partner for the UK, even though we are much smaller.
On the food side, we export about €5.5 billion worth of food and drink to the UK and we purchase about €4.5 billion worth from the UK. We need to be a little careful with this narrative of whether we could stop importing and produce more for ourselves. We export over 80% of everything we produce in Ireland, not just food but manufacturing generally. Our whole economy survives on being competitive but also being an exporter to Europe, the UK and other parts of the world. We try to do it at the lowest carbon intensity we can, and I think we have set standards in regard to food, and dairy in particular, in terms of how we do that. However, as to taking an approach that we should stop importing and do more at home, if other countries that import huge volumes of Irish product decided to do that, we would be in a difficult place fairly quickly. On the potato side-----
We would like to think that Ireland has a reputation for producing really good potatoes and so on, which we do, but we import about 80,000 tonnes of potatoes from the UK. We primarily buy varieties that do not grow very well here, what are called ware potatoes, which are very good for chips because of their sugar content. We have not traditionally grown them here and we are potentially going to have to find alternative sources. The other thing is that almost our entire stock of seed potatoes, which is, of course, hugely important for our entire industry, is imported from Scotland each year. We may have to restructure our potato sector if we cannot get a negotiated agreement around sourcing from the UK.
The support the Government has had in navigating the very stormy waters of Brexit right the way through, for four and a half years now, has been in stark contrast to the situation in some other jurisdictions where there have been significant political divisions. In my view, it is because of the cross-party unity that we have managed to be as effective as I hope we have been to date in negotiations and trying to protect Irish interests. I hope we will be able to see that across the line but I am conscious that if I do not get what members want, then, all of a sudden, the support will disappear.
On behalf of the committee, I thank the Minister and his officials for their attendance and for engaging with the committee. It has been very useful and helpful. We appreciate the Minister making himself available for such a lengthy period. As we are approaching our two-hour deadline and there are no more questions to be asked, the meeting will now conclude. Our next meeting is scheduled for Wednesday, 9 December at 6 p.m. and will be held in the Seanad Chamber. As there is no other business to be dealt with, the committee stands adjourned.