EU-UK Evolving Relationship Bulletin

Although the EU-UK trade agreement has been concluded, it has become clear that there are still many issues to resolve and many areas left for the UK and EU to discuss further. At Instinctif Partners we will continue to track the evolving EU-UK relationship and monitor major changes in regulations the UK or the EU may adopt post-Brexit on a weekly basis.

 

EU-UK Future Relationship Updates

 

Rising exports from Ireland to Great Britain

 

  • Exports from Ireland to Great Britain soared in the first six months of 2021 according to the Irish Central Statistics Office (CSO), which said goods exports (excluding Northern Ireland) rose by 20% to €6.7 billion – an increase of more than €1.1 billion compared to the same period in 2020.
  • However, imports into Ireland from Great Britain for the same period fell by more than €2.5 billion, at a total of €3.5 billion.
  • British exporters have been hit harder due to border checks on shipments to the EU, compared to Irish and EU exporters who have benefited from the transition period.

 

UK pushes back launch of post-Brexit safety rule

 

  • Food and Drink Ireland (FDI) have found that more than 50% of Irish companies have seen costs increase by at least 10% on raw materials, energy and packaging. In some cases, this has been as high as 20%.
  • The UK Government has pushed back the launch of the new UKCA mark, the post-Brexit product safety standard, allowing UK companies to continue following EU rules until 2023.
  • This means businesses will therefore have an extra year using the existing CE mark, utilised on a range of goods, including electrical and construction materials.
  • Firms have been struggling to implement these new changes to meet new UK rules, due to the pandemic and its effect on business.
  • UK Ministers have argued that the UKCA mark will allow the UK to better control goods regulations whilst maintaining its high safety standards.
  • Industry leaders have argued that having to meet new requirements immediately would have added significant financial burden, therefore with more time to adapt, the extension of the deadline has been welcomed by many.

 

Immigration’s impact on workforce

 

  • The UK Government is coming under increasing pressure to relax post-Brexit migration rules in order to unblock the growing supply-chain crisis.
  • Industry leaders are calling for urgent changes to the visa system to enable more European workers to return to the UK and take up critical roles in the supply chains, including HGV drivers, warehouse packers and fruit and vegetable pickers.
  • Industry estimates put the shortage of workers needed to drive lorries or handle goods or food in the high thousands and are already anticipating future shortages around the Christmas period.
  • Brexit is just one factor of many that is contributing to the crisis, with around 14,000 EU truck drivers estimated to have left the workforce in the year to June 2020. The UK estimates it requires roughly 90,000 more drivers, in part because of many retiring or leaving the profession.
  • There are calls for the UK Government to update its shortage occupation list to address skills gaps. The roles on the list are awarded more points to make it easier to acquire a visa to work in the UK, however lorry drivers and roles linked to supply chains are not currently included.
  • Moreover, key UK food and drink retailers are suffering from supply chain shortages. These include the food chain Nando’s which has closed over 40 restaurants due to stock shortages, Greggs, and McDonald’s outlets cancelling milkshakes from menus.
  • Medical research labs and parts of the NHS are also experiencing severe delays in processing work in labs, limiting access to blood tests for certain conditions.
  • However, UK Government Ministers still appear to be unwilling to give way on visas, instead insisting that it was in the hands of employers to do more and recruit British workers to support supply chain shortages.

 

Other EU-UK Relationship News

 

  • The UK Government unveiled its Hydrogen Strategy last week. It sets out the Government’s ambition to achieving 5GW of low carbon hydrogen production capacity by 2030, and details how the Government will support innovation and stimulate investment in the 2020s to scale up low carbon hydrogen.
  • It has a number of similarities with the EU’s own blueprint. The document noted that international trade and cooperation with European partners will be essential to the strategy’s success. Opportunities listed by the UK government include the expansion of “regional value chains” and collaboration with North Sea countries on the “production, storage and transportation” of hydrogen.
  • The UK Government has also put forward a new package of measures to help it seize the opportunities of data to boost economic growth. The plans have put forward the intention for new multi-billion-pound global data partnerships with the US, Australia, and Republic of Korea.
  • Stakeholders have warned that a European Commission plan to block the UK from joining the 2007 Lugano Convention will inflict serious complications on divorce settlements and child maintenance awards. The 2007 Lugano Convention is an agreement that determines which countries’ courts have jurisdiction over cross-border civil and commercial disputes, and ensures that the resulting judgments can be enforced abroad.
  • British beetroot sugar farms have warned about the long-term challenges to the industry before a potential surge of imports following the UK-Australia free trade arrangement, as well as an impact on prices.
  • Nearly a hundred highly paid bankers left Britain ahead of its departure from the European Union, according to the European Banking Authority (EBA) – a lot fewer than previously expected. The EBA’s annual survey of bankers earning a million euros or more a year showed that Britain saw a drop of 95 high earners in 2019. These high-earning bankers moves have boosted the number of top earners to 492 from 450 in Germany, to 270 from 234 in France, and to 241 from 206 in Italy.
  • Unlike some UK-based phone companies, a number of phone operators in Germany have said they have no plans to introduce additional charges this year for people visiting the UK, though they noted this may change in 2022.
  • More than 58,000 applications were made to the EU Settlement Scheme in the month after the deadline had passed, Home Office figures revealed. EU citizens living in the UK had until 30 June to apply to stay in the country or lose their rights, under post-Brexit rules introduced by the Government.
  • UK Ministers have been accused of breaching their promise to secure the post-Brexit rights of thousands of British nationals who settled in the EU and married foreigners. Campaigners at British in Europe (BiE) wrote to ministers stating that they are aware of multiple cases of spouses of British people living in the EU being refused family permits under the “Surinder Singh route” for non-British spouses.

 

 

If you have any questions or requests, reach out to daniel.costa@instinctif.com