The Spanish Foreign Minister and Chief Minister of Gibraltar have said the UK and Spain have reached an agreement in principle over Gibraltar’s future relationship with the EU. Arancha Gonzalez Laya said this was a time of hope and the start of a new relationship, while Fabian Picardo said this would be the beginning of the creation of an area of shared prosperity. They highlighted that the negotiations had gone down to the wire last night, with the negotiations hindered by the pandemic.
Ms Gonzalez Laya says the historic deal will see the lifting of the Gibraltar / Spain border. Access in and out of Gibraltar would be controlled by the European border agency, Frontex. According to Spanish press reports, this item had remained the stumbling block in negotiations over the last few days.
Ms Gonzalez Laya said Spain, as a Schengen member state, would have responsibility for the application of Schengen norms, but that Frontex would be in charge of the operation at Schengen entrance points in Gibraltar for a transitional period of four years. Neither Ms Gonzalez Laya nor Fabian Picardo confirmed exactly what would happen after that. In response to GBC questions, the Chief Minister said there were areas still to negotiate; he added he reserved his views at this stage, but said people should not be concerned that the Guardia Civil would follow Frontex.
On concerns over security at a more open frontier, the Chief Minister said Gibraltar would benefit from the Schengen information system and from enhanced electronic surveillance. He said there would be two controls: Gibraltar entry points and Schengen entry points, with the Borders and Coastguard Agency to work closely with Frontex.
The Chief Minister said the agreement allows Gibraltar to avert the worst effects of a Hard Brexit, providing the framework for a treaty on Gibraltar’s future relationship with the EU that will deal with maximized and unrestricted mobility of people between Gibraltar and Spain. He said no aspect of the agreement transgress sovereignty, jurisdiction and control. Meanwhile, Arancha Gonzalez Laya said the agreement had prevented Gibraltar from becoming the only place to suffer a hard Brexit. She said the agreement had been reached with neither side renouncing its principles on the question of sovereignty.
Both Ms Gonzalez Laya and Mr Picardo said more details would follow, including a finalized text for the in-principle agreement. Details are to be given to both the Gibraltar and Spanish parliaments. A period of six months was set for the treaty to be finalized, at which point it would be signed into international law.
Announcement comes as large retailers pause deliveries or cancel orders over uncertainty about rules
From 11pm on New Year’s Eve [that's January 1, 00:00 h on the continent], Northern Ireland will apply EU customs rules at its ports, meaning goods crossing the Irish Sea from other parts of the UK will be subject to customs checks.
Customs declarations will also be required, even though the Brexit deal allows for tariff-free trade in goods.
Just hours before the introduction of the trading arrangements, the government announced that customs declarations would not be required for most parcels received by Northern Ireland residents or businesses during a three-month grace period, until 1 April.
One exception is parcels sent by businesses to businesses containing goods worth more than £135. However, the firms will have three months to submit the customs declaration.
The government guidance does not state what will happen after 1 April.
... ... ...
The Brexit deal for Northern Ireland is an "unmitigated disaster" and should be suspended, the Democratic Unionist Party (DUP) has said.
At a hearing of the Commons Northern Ireland committee on Wednesday MPs heard evidence from hauliers and retailers about the problems the new arrangements were causing compared to EU membership.
MP Ian Paisley Jr, the DUP's communities spokesperson who sits on the committee, said: "They've basically told us that the protocol and its workings, on day six, is an unmitigated disaster.
"That's one of the reasons I was against it, because I think a blind man on a galloping horse could have told you it was going to be an unmitigated disaster."
Mr Paisley argued that the UK should invoke Article 16 of the agreement, which allows for its suspension in the case of "serious" economic, social, or trade disruption that is "liable to persist".
Conservative MP Simon Hoare, who chairs the committee, described the suggestion as "slightly eccentric".
It comes amid revelations that some British businesses have stopped delivering to Northern Ireland because of the extra bureaucracy Brexit has created.
No business group giving evidence at the committee on Wednesday endorsed the suggestion that the Northern Ireland protocol should be suspended, though many painted a picture of a very difficult situation.
"Before you invoke Article 16 you need a realistic alternative that's going to work. You can't just walk away from this," said Seamus Leheny, policy manager at Logistics UK, which represents freight operators.
He added: "I think to invoke Article 16 you'd create more problems compared to what we're facing today."
Mr Leheny warned that some lorries were being held at customs control for six to eight hours crossing from Great Britain to Northern Ireland for not having the right paperwork.
And he said some declarations that the government had pledged would take around 30 seconds to process were actually taking as long as 12 hours.
Other operators were completely unaware of many entry requirements, and one had had to teach itself how to fill in a customs declaration by watching a YouTube video.
And a support scheme for traders that the government had pledged would have 70 staff was left with just four people answering telephones on the opening weekend of the new arrangements.
"There's people ringing the call centre looking for assistance, it's ringing off the hook - it seems like they've been overwhelmed," he said.
Mr Leheny added: "It's the lack of preparation on the Great Britain side... everything from [small and medium enterprises] right up to blue chip companies.
"One large manufacturer in Great Britain had 15 lorryloads of food to go to Northern Ireland this week.
"Not a single one of them could move because when the lorries arrived there was no customs declaration.
"The operator quite rightly said there's no point me lifting these because I'll simply be detained or refused entry to board the ferry at Cairnryan or Liverpool."
Aodhán Connolly, director of the Northern Ireland Retail Consortium, said many companies had stopped serving Northern Ireland because of the last-minute way the new rules and been brought in.
"There were people being trained up on 30 December for restrictions that were in place on 1 January," he said.
"We've already seen that some suppliers, either because they don't understand the new regime or because it's too much hassle have opted out of serving the Northern Ireland market.
"We didn't receive the guidance from HMRC until 31 December and because of that some retailers took the decision not to service Northern Ireland. Quite a few have come back online but not all."
Mr Connolly said there was a feeling that the disruption so far amounted to "the opening skirmishes" of wider problems which would emerged more clearly in the coming weeks. He said freight traffic around New Year had been around 20 per cent of normal and that stockpiling by firms in December had helped reduce the impact.
"There are real hardships that are going to come at the middle of this month and then of course there's the deadline in April and July for the export health certificates and the restricted lists," he said.
"The big message from us is that it's great that there's been a deal and agreement on the protocol but we need the EU and UK to sit down together and talk about how the systems can be simplified and how we can get a long term workable solution because quite frankly this isn't it."
The Northern Ireland protocol was negotiated in 2019 as part of the government's Brexit withdrawal agreement, but it only came into force at the start of this year with the end of the transition period.
The protocol keeps the border between the Republic and Northern Ireland open, but at the expense of extra checks and controls on trade between Great Britain and Northern Ireland.
The news coming from Gibraltar these days is mixed. The British Overseas Territory, also known as the Rock, is in the tight grip of the COVID-19 pandemic, with virus infections among the population of 34,000 recently topping 1,000, threatening the brisk traffic of goods and people across its border with Spain.
On a more positive note, the Rock's inhabitants were able to secure widespread privileges under the Brexit deal that sealed Britain's exit from the European Union. To avoid a hard border with Spain, Gibraltar will join the EU's Schengen zone and follow other EU rules, while remaining part of the United Kingdom. The EU plans to install Frontex border guards to facilitate free movement to and from Gibraltar.
Gibraltarians are British citizens, and wealthy ones for that: they generated the third-highest GDP per capita in the world in 2018, according to the latest available figures. They elect their own representatives to the territory's House of Assembly while the British Queen appoints a governor.
The Gibraltar agreement, negotiated between London and Madrid, gives about 14,000 Spanish commuters working in the exclave a long-term perspective for the post-Brexit era and is expected to make the Rock a lucrative place for even more foreign investment. There are also hopes that a thriving cross-border economy will narrow Gibraltar's huge income gap with Spain, thus curbing rising crime in the La Linea-Algeciras-Gibraltar regional triangle.
The relationship with Britain is important for Spain as about 10% of all Spanish exports — mainly agricultural produce, but also medicines and cars — go to the UK. And nowhere in the EU do more British citizens live than in Spain.
"Official records from the British Embassy say there are about 300,000 Brits resident in Spain. But unofficial figures show it's probably more than a million," says Camilla Hillier-Fry, vice president of the EuroCitizens lobby group.
After Brexit, Gibraltarians now enjoy even more rights than their fellow nationals living in mainland Spain. Unlike them, they are allowed full freedom of movement within the Schengen zone. This has caught the ire of Spanish nationalists, who are still dreaming of repatriating the Rock after more than 300 years of British occupation. But Spanish Prime Minister Pedro Sanchez has chosen to adopt the more realistic policy of rapprochement with Britain about Gibraltar.
... ... ... ... ... ...
Another pro-Brexit campaigner, Jacob Rees-Mogg, was also accused of hypocrisy when Somerset Capital Management, a hedge fund manager in which he owns a 15 per cent stake, set up two funds in Dublin to give it continued access to the EU after Britain’s exit.
Lorry drivers in Kent have been handed more than £32,000 in fines in the first week after the Brexit transition period ended, after some hauliers were caught entering the UK without the necessary new documentation and others tried to skip the queue.
Meanwhile, UK retailers such as John Lewis and Fortnum & Mason have been forced to suspend shipping their products to the EU, while continental customers of other brands have reported being hit with additional post-Brexit charges.
Scottish seafood firms say their businesses are in crisis because of Brexit-related delays and costs exporting fresh seafood and salmon to Europe.
Seafood exporters and fishers have suspended exports of live seafood and fresh fish, seen customers cancel orders or have failed to get their produce to market on time because of new export regulations and procedures.
Some fear that the trade, worth more than £1bn to Scottish businesses, is on the brink of collapse because the new rules require every box of fresh seafood and salmon to be offloaded from lorries and inspected by vets before they leave Scotland. That had been taking five hours per lorry this week, trade bodies said.
Santiago Buesa, of SB Fish in Troon, Ayrshire, said: “Our customers are pulling out. [We] are fresh product and the customers expect to have it fresh, so they’re not buying. It’s a catastrophe.”
Hundreds of businesses including high street retailers Marks & Spencer and Fortnum & Mason have suspended exports to the EU with Brexit smallprint expected to drive up costs.
Small businesses have also been affected. Parcel courier DPD announced on Friday it was suspending its road delivery services to the EU.
Although the government sealed a “tariff free” trade deal on Christmas Eve, it has now emerged that food and clothing products that do not qualify as made in Britain could be hit be these special export levies.
Under the agreement if more than 40% of its pre-finished value was either not of British or EU origin, a product will attract tariffs.
Boris Johnson was said to have swerved the topic of Brexit impact in a call with over 200 business leaders earlier this week.
“It was a meaningless call, it was all mottos, We are going to build back business better, build back business greener and a few Patsy questions about how much better would it be, nothing about the realities of Brexit and Covid hitting us all hard,” said one business leader.
Retailers including Tesco, fashion website Asos and high street stores such as Matalan and River Island have now calculated that the cost of this Brexit shock could affect clothing that includes fabric from Asia or food that is largely based on non-British or EU ingredients.
In addition, retailers have been hit by the cost of customs paperwork that applies to all imports and exports including goods moving from Great Britain to Northern Ireland.
DPD said “complex” Brexit procedures meant a fifth of parcels were now going into its system with “incorrect or incomplete” data and it would pause deliveries to the EU with the intention of recommencing on 13 January.
M&S has temporarily cut nearly 400 products from the food and drink aisles of its 20 stores in Northern Ireland. The exercise is designed to simplify the business and so avoid the delays at the border amid reports of retailers having trucks turned back due to inadequate paperwork.
The reduction equates to about 5% of the 6,500 products usually sold in M&S food halls and includes popular readymeals, such as lasagne and beef bourguignon, as well as takeaway salads and some essential lines such bread, sugar and teabags.
A spokesman for M&S said it had served customers in Northern Ireland for over 50 years and its priority was to deliver the “same choice … our loyal customers have always enjoyed”. Its stores had been receiving regular deliveries this week but the changes came as it moved over to new processes, he said.
M&S has also warned that more than 2,000 of its food products, including Percy Pig sweets, could attract new import taxes when re-exported to its stores in EU countries such as Ireland and France. The new “rules of origin” regulations dictate whether tariffs must be paid based on where a product’s ingredients come from and where it has been manufactured.
The M&S chief executive, Steve Rowe, said: “Tariff free does not feel like tariff free when you read the fine print. For big businesses there will be time-consuming workarounds but for a lot of others this means paying tariffs or rebasing into the EU.”
Tesco said it had experienced short delays moving goods into Northern Ireland but that it had a “good supply of products coming into Northern Ireland”. “There has been a short delay on certain products but we’re working with suppliers to get these back on the shelves as quickly as possible and direct customers to alternatives where we can.”
Tesco said it was discussing the “rules of origin” regulations with HMRC and Irish Revenue and hoped “to find a satisfactory resolution as quickly as possible.”
The department store chains Debenhams and John Lewis, which recently closed its international business, are among the big names no longer serving the Irish market. Fortnum & Mason, the famous London department store, has also temporarily ceased shipping to Northern Ireland and EU countries.
The British Retail Consortium said: “At least 50 of our members, all of them large retailers, face potential tariffs for re-exporting goods to the EU.”
Dominic Goudie, head of international trade at the Food and Drink Federation said some product specific rules meant “exports are no longer viable” with “serious challenges for supply chains that span across the UK and EU”.
He also said that EU produced food and drink that moves to other EU markets via Great Britain without further manufacturing taking place in Britain faced the payment of full EU tariffs on return to the EU.
“As a result, suppliers are being forced to cancel deliveries of products to customers, particular those in Ireland,” he added.
One unnamed source for a logistics business spoke of mayhem behind the scenes. He described how one truckload of parcels had to be completely offloaded and relabelled on Thursday night before export to the EU, simply because one line on the code for goods was wrong.
He also told of companies hiking charges for invoices to £3.50 a parcel going to Europe, making low-value goods too expensive to export.
Another company John Arbon Textiles, a small aristan knitting wool company in Devon said it had been told by DPD, its spools and balls of fibre would not be accepted in Europe.
“I feel DPD are being cautious, but I have no confidence that I can send anything to my customs in the EU at the moment,” owner Juliet Arbon said.
Northern Ireland’s chief vet aid that goods arriving in the region, which is now following EU rules for imports, would be destroyed or returned if not compliant after a short grace period.
Robert Huey told a Stormont committee that some companies contracted to do the paperwork for hauliers were “overwhelmed” and in one case a staff member had to show a major supermarket how to complete its paperwork.
The UK rejected an offer of visa-free tours by musicians to EU countries, despite blaming Brussels for what the industry is calling the devastating blow of them requiring permits.
A “standard” proposal to exempt performers from the huge cost and bureaucracy for 90 days was turned down, The Independent has been told – because the government is insisting on denying that to EU artists visiting this country.
“It is usually in our agreements with third countries, that [work] visas are not required for musicians. We tried to include it, but the UK said no,” an EU source close to the negotiations said.
The government is arguing it “pushed for a more ambitious agreement which would have covered musicians and others, but our proposals were rejected by the EU”.
In fact, countries as contrasting as the United States and Saudi Arabia enjoy a permit-free exemption for performers in their deals with the EU, which offers the arrangement as “standard”.
“The UK refused to agree because they said they were ending freedom of movement. It is untrue to say they asked for something more ambitious,” the source said, adding “there has to be reciprocity”.
It appears the stumbling block was Priti Patel’s immigration crackdown which has introduced tough restrictions on tours by EU musicians.
From this month, they must, like non-EU artists, apply for visas – to visit for more than 30 days – as well as providing proof of savings and a sponsorship certificate from an event organiser.
The Independent understands the UK did ask for a similar 30-day exemption for its performers, but rejected 90 days – to fit with its own new rules.
Deborah Annetts, the ISM’s chief executive, said: “I’m horrified by this new development. The government must come clean about what steps it took to protect the performing arts in the negotiations.
“The music sector feels deeply let down by the government and we want to get to the bottom of what happened.
“All the way through 2020, we were given assurances that the government understood how important frictionless travel is for the performing arts.”
Alison McGovern, Labour’s shadow culture minister, said: “If Boris Johnson’s Tories have stopped musicians from touring in Europe to make a political point, then music fans will not forgive them.
“Music is a huge export for the UK and touring and performing is now one of the main ways artists make money – so why would the Tories deliberately make it harder for musicians to make the most of opportunities in Europe?”
And Jamie Njoku-Goodwin, chief executive of UK Music, said: “Who is at fault is irrelevant and a blame game helps no one.
“The important thing is that both sides appear to genuinely want this issue sorted, so it is imperative that they get around a table and urgently agree a solution.”
But, in a House of Lords debate on Friday, the Cabinet Office minister Lord True said: “The UK proposed measures that would have allowed musicians to travel and perform in the UK and the EU more easily, without needing work permits.
“Specifically, we proposed including the work done by musicians, artists and entertainers, and their accompanying staff, in the list of permitted activities for short-term visitors.
“In practice, this would have delivered an outcome closer to the UK’s approach to incoming musicians, artists and entertainers, but these proposals were, sadly, rejected by the EU.”
It is now a matter for each EU member state to decide whether to demand work visas, in the absence of a bloc-wide agreement.
Deliveries of fresh Scottish seafood to the EU have been halted until 18 January, after post-Brexit problems with health checks, IT systems and customs documents caused a huge backlog.
DFDS [the industry’s biggest logistics provider] said it expected to resume deliveries next Monday, but the service would take considerably longer than before Brexit, and highlighted the importance of 100% correct paperwork.
Goods sent off on day 1, for example from Larkhall near Glasgow, are now being scheduled to arrive in Boulogne on day 3 – one to two days longer than it took to send goods to France before Brexit.
New Brexit rules require every box of seafood and fish to be offloaded from lorries and inspected by vets before it leaves Scotland. It has taken business owners five hours per lorry to obtain a health certificate, which is required to apply for other customs paperwork. If the issues are not resolved soon, some fear the trade, worth more than £1bn to Scottish businesses, could collapse.
At the same time, the UK government proposed to fast-track empty supermarket food lorries returning to Europe to reload, amid concerns that disruption at ports could lead to food supply shortages, the Financial Times reported (paywall). A consultation document sent to the industry by the agriculture ministry on Tuesday said “the potential for further disruption remains high”.
It said: “Given the potential for border delays to impact supply chains over the next few weeks, we are proposing an emergency contingency measure … to expedite the return of empty food lorries from the UK to the EU where they can be restocked with supplies.”
German logistics giant DB Schenker said ion Wednesday it was halting deliveries from the European Union to the UK, less than two weeks since the country officially left the EU customs union.
The logistics company said the suspension stemmed from the lack of properly filled paperwork on deliveries due to Brexit. It did not say when the suspension would be lifted.
"Only around 10 percent of the deliveries assigned to DB Schenker are accompanied by complete and correct paperwork," said DB Schenker in a statement.
The company added that investigating the documentation linked to the deliveries was causing a massive strain on their British-based staff, who were unable to cope with the sheer volume of the problem. DB Schenker said there was no trouble with deliveries from the UK to continental Europe.
While the company was not accepting new deliveries to the UK, it said it would still deliver items that have already been accepted. DB Schenker says it handles about 500,000 shipments from mainland Europe to the UK every year.
Downing Street has signalled that Boris Johnson has not read the full text of his EU trade deal, telling reporters only that the prime minister was “fully aware” of its contents.
Fisheries minister Victoria Prentis has come under fire for saying that she did not read the Trade and Cooperation Agreement when it came out on Christmas Eve because she was busy organising a nativity event.
But when Mr Johnson’s official spokesman was asked repeatedly whether the PM had read every word of the 1,246-page document, he was unable to confirm that he had.
Instead, he told a Westminster media briefing: “The prime minister is fully aware of the deal that we agreed.” Pressed on whether Mr Johnson expected his cabinet colleagues to read the Agreement text, the spokesman said: “The prime minister and other ministerial colleagues are fully aware of the deal we agreed with the EU.”
Exports to the EU will plunge by more than one-third because of Boris Johnson’s hard Brexit trade deal, a new study is predicting.
Total UK trade will nosedive by 13 per cent, says the London School of Economics (LSE) analysis, making a mockery of the government’s claims of a buccaneering ‘Global Britain’ outside the bloc.
And Britons will feel the pain in their wallets and purses, with income per-head forecast to fall by 6 per cent – just 2 per cent less than if there had been a no-deal Brexit.
The study comes after a Cabinet minister rebuffed a call to assess the economic damage from the Christmas Eve agreement, telling MPs it was time to “move forward”.
Meanwhile, Michel Barnier, the EU Brexit negotiator, dismissed UK claims of “teething problems” affecting trade – warning of “obvious, inevitable consequences” of the choices made.
Most important is leaving the EU single market and customs union, creating barriers to cross-Channel trade, warned Thomas Sampson associate professor of economics at the LSE.
“Goods trade costs will increase due to customs red tape, border delays, rules of origin requirements and the need for products to satisfy different regulations and standards in the UK than the EU,” he has written.
The government’s proposals to enable British musicians to tour the EU without having to negotiate individual visa requirements for each member state were not fit for purpose, according to an EU spokesperson.
As it stands, British musicians may be forced to pay for country-specific visas and equipment carnets when touring the continent – a situation that has been decried by the British music industry as prohibitively expensive and laborious, potentially limiting its £5.8bn contribution to the economy.
The government and the EU have been blaming one another for the breakdown of negotiations regarding visa-free touring on the continent since the Independent reported on Sunday that the UK has refused to allow European acts 90 days of visa-free travel, prompting widespread condemnation, including from Radiohead’s Thom Yorke, who called the government “spineless”.
On Wednesday, culture secretary Oliver Dowden sought to blame the EU for the red tape facing British touring musicians, telling NME that it had “repeatedly” turned down the government’s proposal for a “mutually beneficial agreement that would have allowed performers to continue working and perform across the continent without the need for work permits”.
But the government’s proposal would not have solved the problem of British musicians having to negotiate individual visa requirements with each member state, according to a spokesperson from the EU.
Having refused to include a chapter on mobility in the Brexit agreement, the UK government rejected the EU’s standard offer of visa-free short stays – working up to 90 days in a 180-day period – and a list of paid activity exemptions that could exclude musicians, artists, sportspeople and journalists from the requirement to seek visas to work in individual member states. This offer was incompatible with the Conservative manifesto commitment to taking back control of Britain’s borders, the government claimed.
Instead, the UK attempted to negotiate the issue via the short-term business visitor category and the category for contractual service suppliers and independent professionals known as Mode 4. The World Trade Organization says Mode 4 “does not concern persons seeking access to the employment market in the host member”.
Neither category covers musicians, said the EU spokesperson. It would also be ineffective: Mode 4 discussions are neutral on the matter of visas, meaning that requirements regarding entry and temporary stay continue to apply. Even if the EU had agreed to the UK’s proposal, British musicians would still be left facing the same red tape.
DCMS said the EU’s statement was misleading. The government claimed that its proposals would have allowed musicians to travel and perform in the UK and the EU without needing work permits, and that the EU’s offer only covered ad-hoc performances and did not address technical staff or the issue of work-permits.
A DCMS spokesperson told the Guardian it stood by Dowden’s earlier comments. “I’m afraid it was the EU letting down music on both sides of the Channel – not us,” Dowden had told NME.
The EU declined the UK’s offer of 30 days’ visa-free work for EU musicians on the grounds that this is the UK’s existing standard policy and offered no added value to its members, and because it offered significantly less than the EU proposal at the mobility negotiation.