Summary of conclusions and recommendations
Food and agricultural produce trade
1.Tariffs and quotas on food and agricultural produce trade would have threatened the viability of some producers and led to rises in consumer food prices. We share the relief of businesses that an agreement was reached that provides for tariff and quota-free trade. (Paragraph 25)
2.We are disappointed that the Government and the EU did not achieve more through the sanitary and phytosanitary measures Chapter of the TCA. This has resulted in substantial barriers to trade which risk reducing the profitability of parts of Great Britain’s food and agricultural produce sectors. We recommend that the Government seeks supplementary agreements with the EU in these areas, along the lines of the EU-New Zealand agreement. We find it strange that the TCA accomplishes less on sanitary and phytosanitary measures in comparison. (Paragraph 26)
3.We regret the Government’s decision to defer establishing the Partnership Council and other bodies and urge it to review this position. We are especially frustrated by the delay in setting up the Trade Specialised Committee on SPS Measures. We urge the Government to work with the European Commission to set up the Committee swiftly, and for it to operate inclusively and with transparency. (Paragraph 31)
4.Trade in food and agricultural produce between Great Britain and the EU will suffer if significant policy divergences on either side lead to tariffs and increased checks being introduced. Both sides should thoroughly assess potential trade barriers that may arise as they develop approaches to regulating and supporting food and agricultural production. (Paragraph 35)
5.Some of Great Britain’s exports of food and agricultural products to the EU, such as seed potatoes, have come to a complete halt following the end of the transition period, with severe impacts on the affected sectors. (Paragraph 40)
6.We welcome the TCA’s equivalence agreement on organics, but we are dismayed that the agrifood sector more widely is facing increased trade frictions because other equivalence agreements could not be reached. (Paragraph 41)
7.The increases in paperwork and preparation required for food and agricultural exports to the EU are presenting very difficult challenges for the sector, particularly small businesses. (Paragraph 49)
8.We deeply regret that certification processes are not yet fully electronic nor streamlined. The Government should move quickly on these fronts, updating and integrating systems as far as possible. We call on both Parties to the TCA each to urgently establish a single window where traders can submit documentation. (Paragraph 50)
9.It is unclear whether there will be sufficient veterinary capacity to meet the increases in demand for export health certification as the grace periods currently in place fall away. We welcome the Government’s steps to increase veterinary capacity. It is essential that the Government continues to monitor this serious issue closely and takes steps to ensure sufficient capacity is in place. (Paragraph 58)
10.We welcome the Government’s promotion of the use of Certification Support Officers. We believe apprenticeships should be developed to improve the professional development offer for veterinary paraprofessionals like these. (Paragraph 59)
11.Trade certification activities are important but often not the best use of a vet’s time and expertise. The Government should explore with the EU and other trade partners whether the requirement for export health certificates to carry a vet’s signature could be removed or adapted. This could take time to negotiate but ultimately would free up valuable veterinary capacity. (Paragraph 60)
12.Higher haulage rates and issues with groupage and parcel delivery services are putting further pressure on food and agricultural produce exporters, especially smaller businesses. (Paragraph 64)
13.The Government must resolve the issues with Great Britain to EU groupage transport. We urge the Government to also promote understanding within parcel delivery companies about trade in food and agricultural produce under the TCA. (Paragraph 65)
14.The perishability of food and agricultural produce means that delays at the border can be particularly costly. EU exporters to Great Britain will not encounter these barriers and costs until the Government introduces its border controls. This might make EU border control officials more amenable to a change in practices on Great Britain’s exports. We urge the Government to continue monitoring the situation closely and act quickly to resolve issues that cause delays. (Paragraph 72)
15.We recommend the Government raise two issues in the Trade Specialised Committee on Sanitary and Phytosanitary Measures: the consistent application of rules at border control posts, and the designation of EU ports to receive live animals. (Paragraph 73)
16.The Government must ensure HMRC has sufficient resource to advise businesses on export issues, including for both back-office functions and customer-facing offices as close to traders as possible. (Paragraph 74)
17.If workable arrangements cannot be found soon for the movement of food and agricultural produce from Great Britain to Northern Ireland the potential impacts on Northern Ireland’s consumers—as well as the political implications—will be acute. All parties should continue to focus on finding solutions so that goods can be moved as smoothly as possible. We trust that Lord Frost will recognise the urgency of the situation for Northern Ireland. (Paragraph 80)
Fishing
18.The ability to export fish and seafood products to the EU tariff-free is vital to the prosperity of the UK’s seafood sector, and we welcome the fact that the TCA achieves this. But this outcome is undermined by other serious shortcomings. (Paragraph 101)
19.The Government asserts that UK fishers will have access to 25 per cent more quota in five and a half years’ time: independent analysis suggests that the UK’s share of the quota in its own waters will in fact increase by 16.6 per cent. (Paragraph 102)
20.The species whose quota will increase are not necessarily those of value to the UK fishing industry, and will benefit some parts of the sector more than others. The industry will need to adapt as the quota adjustments take effect. (Paragraph 103)
21.When conducting future quota negotiations with the EU, the Government should consult with industry and devolved administrations to ensure that they are prioritising appropriate stocks. In the meantime, the quota gained through the TCA settlement should, as far as possible, be distributed to support those parts of the sector that would otherwise benefit less from the overall deal, such as inshore fishers. (Paragraph 104)
22.In light of ministerial statements during the future relationship negotiations, we were surprised that the TCA grants EU vessels fishing access to parts of the UK’s 6–12 mile zone. We acknowledge this is a politically contentious subject, but urge the Government to explore ways to reduce EU fishers’ access to the UK’s coastal waters while ensuring they are still able to catch their full quota. (Paragraph 107)
23.The UK fishing fleet is heavily dependent on exporting to the EU market, and thus has to balance its need to export with its desire to acquire more fishing rights. (Paragraph 111)
24.While the Fisheries Minister highlighted the importance of tariff-free access for the fisheries sector, the Secretary of State prioritised control over the UK’s fishing waters. Both are important considerations, but their juxtaposition contributes to mixed messages being received by the fishing industry over whether the Government will seek to further reduce the EU’s ability to fish in UK waters after the adjustment period. (Paragraph 112)
25.There is no doubt that the safeguarding measures in the TCA will be a serious barrier to any unilateral reform of access to UK fishing waters. No reform should be considered without full consultation with the whole fishing supply chain, including fishers and those who process, market and export their produce, and with the devolved administrations. (Paragraph 113)
26.Quota swaps have, in recent years, been an essential and mutually beneficial management tool for supporting sustainable fishing in mixed fisheries, and are vital to the functioning of both UK and EU fisheries. We greatly regret that the TCA has not maintained arrangements for swaps between producer organisations. The Government should seek to agree a process for in-year quota exchanges with the EU as a matter of urgency, and should seek to make that process as responsive and flexible as possible. (Paragraph 117)
27.Some of the difficulties the fishing industry is experiencing with exporting products to the EU are probably ‘teething problems’ which can be solved with familiarity and guidance. We welcome the Minister’s efforts across the sector, Government and with Member States to resolve these, and urge the Government to maintain financial support for the sector while these initial challenges remain. (Paragraph 124)
28.But other difficulties facing the fishing industry are the direct result of the UK’s withdrawal from the EU and its new status as a third country, and thus represent unavoidable, long-term impacts on the sector. These new challenges disproportionately affect smaller fishing operators. (Paragraph 125)
29.Ensuring the long-term health and sustainability of fishing waters is necessarily a joint endeavour. We welcome the ongoing cooperation between UK and EU fishing regulators, and encourage all parties to maintain that cooperation to support sustainable and law-abiding fishing in both UK and EU waters. (Paragraph 128)
30.We urge both the Government and the European Commission to establish the Specialised Committee on Fisheries swiftly, and to ensure that its work is informed by scientific expertise, the fishing industry, and civil society. It is also important that the devolved administrations have direct influence on the Committee’s work. (Paragraph 132)
31.We welcome the Minister’s commitment to provide statements to the House both before and after the annual Total Allowable Catch (TAC) negotiations, but it is vital that such high-level statements are supplemented by expert parliamentary and select committee scrutiny. (Paragraph 133)
Environment and climate change
32.We are glad that the Government and the EU were able to find compromises on the environment and climate change Chapter of the TCA, though we share the concerns voiced by witnesses about the enforceability of some provisions. (Paragraph 147)
33.The TCA negotiated by the Government will affect the policy choices available to devolved administrations and legislatures in areas of devolved competence including the environment. There are already diverging environment and climate change goals across the UK, which could indicate challenges ahead. We urge the Government to address any concerns raised by the devolved administrations regarding the TCA’s environment and climate change provisions—via the Common Frameworks programme or other routes—as fully and promptly as possible. (Paragraph 148)
34.We welcome the inclusion of climate change as an essential element in the TCA, which reflects the fact that addressing climate change is the most serious challenge of our time. We urge the Government to seek similar commitments in the trade agreements it negotiates with other international partners. (Paragraph 152)
35.It is in the UK and EU’s mutual interest that levels of environment and climate change protection are maintained. We are glad that there is provision for temporary remedies should there be breaches of the non-regression provisions. We urge the Government to dedicate appropriate resource to monitoring non-compliance with Article 7.2(2) in the EU and engage with the European Commission constructively on cases of suspected non-compliance. (Paragraph 159)
36.Although the TCA requires arrangements to be in place for the domestic enforcement of environmental law, UK and Welsh Governments have not yet established new domestic enforcement mechanisms. We are deeply disappointed that the statutory basis for the Office for Environmental Protection is still not in place, and call on the Government to progress this as a top priority. (Paragraph 163)
37.Environment law will be more effectively enforced if the UK’s supervisory authorities cooperate closely with one another and with the European Commission. We urge them to enter into this cooperation openly and with the goal of ensuring the maximum level of protection for the environment. (Paragraph 164)
38.We welcome the fact that the rebalancing measures help mitigate the threat of competitive disadvantage that could otherwise have limited the Parties’ ambitions on environment and climate change protections. There are policies—especially in relation to climate change—where the UK’s progress exceeds the EU’s. (Paragraph 169)
Energy and carbon pricing
39.For energy policy especially, success of the TCA depends critically on implementation and further negotiation. The UK and EU should, where possible, jointly set out their ambitions, processes and timetables for delivering the TCA’s energy and carbon pricing commitments. We urge the Parties to proceed with the necessary resources and goodwill to ensure timely and positive outcomes. (Paragraph 188)
40.We welcome the Nuclear Cooperation Agreement agreed between the UK and Euratom, which provides an underpinning for civil nuclear cooperation in the future. (Paragraph 189)
41.We share the energy industry’s concern that the termination clause could undermine investor confidence in large energy projects. It is in the interests of both the UK and EU to maintain close energy cooperation further into the future, and swiftly to implement the TCA’s energy and carbon pricing provisions in the meantime. (Paragraph 194)
42.The Secretary of State’s assertion that the EU was unlikely to link energy and fishing negotiations in the future was somewhat undercut by his acknowledgement that the EU introduced such a linkage into the TCA. (Paragraph 195)
43.We are concerned that consumer electricity prices could increase due to the inefficiency of the initial cross-border electricity trading arrangements between Great Britain and continental Europe and the island of Ireland, and the uncoupling of Great Britain’s two power exchanges. The Government, Ofgem, and Northern Ireland’s Utility Regulator should monitor closely for price rises, and consider taking mitigating actions if necessary. (Paragraph 199)
44.The Government should explore options for recoupling Great Britain’s two power exchanges while the new day-ahead trading arrangements—which should resolve this issue—are being developed. (Paragraph 200)
45.We welcome the fact that the TCA envisages a return to more efficient day-ahead cross-border electricity trading arrangements. It is disappointing, though perhaps expected, that these will be less efficient than the EU Internal Energy Market’s trading mechanisms and could affect consumer prices. We urge the Government and other involved parties to develop the new arrangements with urgency. (Paragraph 206)
46.We urge the Government and the EU to focus on improving cross-border electricity trading arrangements across the market timeframes, and to provide guidance through the Specialised Committee on Energy on the current position and future plans for cross-border balancing services. (Paragraph 209)
47.We share the view of industry and environmental groups that the UK and EU should prioritise linking emissions trading systems, and should jointly set out a timeline for the discussions. This is an opportunity—which the Government should take—to show global leadership on climate change ahead of COP26. We hope that the EU’s proposal for a binding ‘net zero’ objective will be passed, allowing any linkage of the two schemes to be aligned with that objective. (Paragraph 214)
48.We welcome the TCA’s provisions on cooperation on renewable energy in the North Sea, given the importance of this area to decarbonisation. We nonetheless regret that the TCA does not provide for UK participation in the existing North Seas Energy Cooperation initiative. We urge the Government to seek such participation, and hope the Parties will cooperate closely in the meantime. We also support close cooperation between the Parties on renewable, sustainable energy beyond the North Sea. (Paragraph 219)
Chemical regulation
49.Tariffs and trade quotas would have been a substantial barrier for the UK chemicals sector given the amount of trade it does with the EU, so we welcome their absence from the TCA. (Paragraph 227)
50.The Secretary of State’s suggestion that chemical companies may be willing to share substance data without significant cost ignores the situation the industry has been describing throughout the Brexit process. The Government cannot act in the interests of the chemicals industry unless it acknowledges the challenges it faces. (Paragraph 232)
51.Divergence between the UK and EU REACH systems would increase compliance costs for the UK chemicals sector. In exercising its new sovereignty, we urge the Government to avoid divergence for divergence’s sake. (Paragraph 233)
52.The fact that institutional data sharing on chemical regulation was not agreed through the TCA is a necessary consequence of the UK’s withdrawal from the EU Single Market and the Government’s decision not to commit to aligning with EU REACH in the future. Although the chemicals industry is keen to find an alternative way towards a data sharing agreement, the positions taken by the UK and the EU suggest that such an outcome is unlikely. (Paragraph 238)
53.We call on the Government to monitor how many substances are registered with UK REACH over the coming months, to publicly report how these registrations compare to the number of substances already registered with EU REACH, and to set out what actions it will take if it appears that the new regime will result in fewer substances being available for use in the UK. (Paragraph 239)
Healthcare
54.We welcome the replacement healthcare arrangements that the Government has established, and the reassurance this will provide for UK citizens when they travel, particularly those with long-term health conditions. We support the Government’s objective of extending those arrangements to EEA countries and Switzerland. (Paragraph 252)
55.It is beneficial for the UK’s pharmaceutical and manufacturing industries that the TCA allows tariff-free export of medicines and medical devices to the EU. (Paragraph 259)
56.While mutual recognition of Good Manufacturing Practices is helpful for the medical industry, it is disappointing that such recognition has not been extended to other regulatory processes such as batch testing. We note that the EU has reached mutual recognition agreements with other third countries, and urge the Government to seek a similar agreement. (Paragraph 260)
57.We welcome the grace period that the Government has secured to allow businesses time to adjust their supply routes to accommodate the post-Brexit application of the Falsified Medicines Directive in Northern Ireland. We also welcome the Government’s continuing engagement with the sector: if disruption once the grace period has elapsed is to be minimised, it will be essential to explore the alternative possibilities mentioned by the Minister, such as bonded warehouses and cabotage. (Paragraph 266)
58.We are encouraged that the Government was prompt to request access to the Early Warning and Response System in relation to the COVID-19 pandemic, and that the EU was equally swift to grant that access. This bodes well for future cooperation on monitoring cross-border health threats. To ensure transparency on the use of this measure, we urge the Government to make a statement to both Houses whenever such a request is made, and to confirm whether or not it has been granted. (Paragraph 269)
59.The UK’s recognition of EU-based clinical trial sponsors is helpful, but the lack of mutual recognition risks both significantly harming the UK’s ability to conduct clinical research and reducing UK patients’ access to clinical trials on rare diseases and children’s cancers. We recommend that the Government seek EU recognition of UK-based clinical trial sponsors, and in the meantime take steps to ensure UK-based researchers have the funds available to establish EU-based legal representatives. (Paragraph 273)
60.The flow of data between the UK and EU is important for enabling both patient treatment and clinical research. In the absence of a positive data adequacy decision from the EU, the Government will need to provide advice on data protection to the healthcare industry and researchers, and support them in forming alternative arrangements for data sharing. (Paragraph 279)
61.The UK’s NHS and social care workforce has been subject to unprecedented and unforeseeable pressures over the last 12 months. The inevitable impact of the COVID-19 pandemic on recruitment and retention of staff will compound the existing and alarming shortages in the sector. (Paragraph 286)
62.We see no evidence of a credible plan from the Government to address the shortage of social care staff in the UK. While we support its ambition to encourage more ‘homegrown’ care workers, such measures will take years to materialise, and the need is immediate. (Paragraph 287)