Third Report of Session 2021–22 Contents

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2Northern Ireland: PEACE PLUS Programme3

These EU documents are politically important because: Northern Ireland will continue to participate in the EU’s PEACE PLUS Programme, part-financed by the UK Government. Action Write to the Secretary of State. Draw to the attention of the Northern Ireland Affairs Committee.

Overview

2.1The EU’s “PEACE” Programme was initially created in 1995 to support cooperation across the Irish border as a positive response to the paramilitary ceasefires of 1994. Throughout negotiations on the UK’s withdrawal from the EU, both the EU and UK were clear that they wished the Programme—now known as “PEACE PLUS”—to continue. The PEACE PLUS Programme will run until the end of 2027 with a budget of over €1 billion (over £869 million), to be jointly financed by the UK Government, the EU, the Republic of Ireland and the Northern Ireland Executive.4 This budget represents a substantial increase on the PEACE IV Programme (2014–20), which was worth around €270 million (£235 million). The UK Government has committed over £500 million to the Programme and will therefore be the majority contributor.

2.2The EU legal basis for the Programme is the Regulation on European Territorial Cooperation (otherwise known as “Interreg”—inter-regional cooperation). This is a long-established strand of the EU structural funds, designed to promote regional cooperation across borders within the EU and with third countries. The latest iteration of that Regulation was proposed in 2018 (document (b)) and was agreed politically in December 2020.5 While it is yet to be formally adopted, the text is available.6

2.3In the UK/EU Trade and Cooperation Agreement (TCA), the UK and EU recalled their commitment to PEACE PLUS and indicated that it would be the subject of a bespoke financing agreement, separate to the TCA’s provisions on the UK’s involvement in other EU financial programmes. The financing agreement—required by the EU legislation establishing PEACE PLUS—will need to include provisions on programme authorities, large infrastructure projects, management methods, eligibility, procurement and financial management. The EU, UK and Ireland should all be parties to the agreement.

2.4The Secretary of State for Northern Ireland (Rt Hon. Brandon Lewis MP) reminded us in his letter of 16 April 2021 that the UK Government has committed over £500 million to the Programme over the course of seven years. He confirmed that, to support delivery of the Programme, a standalone UK-EU Financing Agreement is required. The Government expected to start discussions with the EU on the Agreement within several weeks from the date of his letter and would provide a substantive update once a draft of the text had been agreed in principle.

2.5The Secretary of State also drew attention to the work of the Special EU Programmes Body (SEUPB)—responsible for administering the Programme—in preparing for the Programme’s launch.7 The SEUPB has identified six different themes: peaceful and thriving communities; economic regeneration and transformation; investing in young people; healthy and inclusive communities; sustainability and connectivity; and partnership and collaboration.

Our assessment

2.6It is welcome that the SEUPB is already preparing the Programme, and we note too the optimistic tone of recent oral evidence given by the SEUPB to the Northern Ireland Assembly’s Committee for the Executive Office.8 The SEUPB was hopeful that swift progress could be made in the coming months with a view to launching the Programme. It nevertheless remains unclear when the Programme can indeed be launched. It appears from the EU’s Regulation that the Programme cannot be implemented before the financing agreement has been concluded, so the timing of the agreement’s negotiation is critical. We will seek clarity from the Secretary of State.

2.7We welcome the Secretary of State’s offer to provide a substantive update once a draft of the text has been agreed in principle.

2.8One of the issues which we expect will need to be addressed in the financing agreement is that of dispute resolution, particularly where there are divergent legal and administrative rules. A residual salient element from our earlier scrutiny of the PEACE PLUS proposal is the Commission’s proposal for a European Cross-Border Mechanism (ECBM) Regulation (document(a)), which was published at the same time but has since made little progress. Following past experience that the effectiveness of Interreg projects has been undermined by the lack of a power to address conflicting legal and administrative rules affecting a cross-border region, the Commission proposed this voluntary mechanism to help resolve those obstacles. It would allow for the application in one Member State of the legal provisions9 from another Member State, where conflicting national rules constitute a legal obstacle10 to the delivery of a joint project. The Commission proposed that it could be applied in cross-border regions straddling a border between a Member State and a third country, such as the cross-border region on the island of Ireland. We will clarify with the Secretary of State whether this draft Regulation was forming any part of the discussions with the Commission or, indeed, whether it might provide some inspiration for how cross-border divergence might be managed in order to ensure the effectiveness of PEACE PLUS.

Letter from the Chair to the Secretary of State for Northern Ireland (Rt Hon. Brandon Lewis MP)

We considered your letter of 16 April 2021 on the PEACE PLUS Programme at our meeting of 9 June 2021.

We welcome your offer to provide us with a substantive update on the negotiation of a Financing Agreement once a draft of the text has been agreed in principle. We ask that you clarify in your letter the process for conclusion of the Agreement and the impact of any delay on the timing for implementation of the Programme.

We anticipate that one of the issues arising in the negotiation will be dispute resolution, particularly where there are divergent legal and administrative rules on both sides of the border. We recall that, in 2018, the Commission proposed a European Cross-Border Mechanism (ECBM) Regulation allowing for the voluntary application in one Member State of the legal provisions from another Member State, where conflicting national rules constitute a legal obstacle to the delivery of a joint project. The Commission suggested that this could also apply at the EU’s external border, so covering cooperation within a region straddling the border between a Member State and a third country. Has this draft Regulation formed any part of the discussions with the Commission or, indeed, might it provide some inspiration for how cross-border divergence could be managed in order to ensure the effectiveness of PEACE PLUS?

We look forward to your substantive update in due course.