The European Commission’s preparations for a “no deal” Brexit have been accelerating. The most recent plans relate to funding for projects, social security rights and Erasmus+ students – and all these affect devolved policy areas.
This blog examines the Commission’s preparations, including from a Scottish devolved perspective.
Action plan published
In November 2018, the European Commission published a Contingency Action Plan (also discussed in Spotlight blog: Preparing for a No-deal Brexit). This Action Plan identifies a set of six principles stating that the EU’s no deal contingency measures:
- should not replicate the benefits of membership of the Union, nor the terms of any transition period, as provided for in the draft Withdrawal Agreement
- will in general be temporary in nature, and should in principle not go beyond the end of 2019
- will be adopted unilaterally by the European Union in pursuit of its interests and can therefore, in principle, be revoked by the European Union at any time
The Action Plan summarises actions already taken at that point to relocate EU bodies based in the UK (such as the European Medicines Agency and the North Sea Advisory Council); to reattribute regulatory functions away from the UK (for example under the European Chemicals Agency and Community Plant Variety Office); and to disconnect the UK from databases and IT systems to which the UK should no longer have access.
The Action Plan also identifies key policy areas where preparatory work was planned “with a particular sense of urgency”. These are:
- citizens residence rights
- movement of persons
- financial services
- air transport
- road transport
- sanitary/phytosanitary requirements
- personal data
- climate policy (EU Emissions Trading System)
100 days to go
On 19 December 2018, with the Withdrawal Agreement still not approved by the House of Commons, the European Commission announced that it started implementing its Action Plan with 100 days to go before the UK’s exit. The Commission adopted 14 legislative proposals and outlined its efforts to coordinate action by Member States on citizen’s residence rights and social security.
The legislative proposals adopted by the Commission include “basic connectivity” for air and road haulage services, provided reciprocal rights are granted by the UK to EU operators. Proposals include: a 9-month window where UK road hauliers can carry goods into the EU, subject to customs controls; and, a 12-month window where UK airlines can serve direct routes to and from EU countries, but not operate intra-EU flights or onward journeys.
The Commission also reiterated its calls on Member States to “remain united” on contingency action as well as withdrawal negotiations.
58 days to go
On 30 January, the Commission adopted what it described as its “final set of contingency proposals”. These proposals cover:
- Erasmus+ programme
- social security coordination
- the EU budget
There are an estimated 14,000 young people from the EU27 in the UK thanks to the Erasmus+ programme and 7,000 such UK participants in the EU27. In a no deal scenario, the Commission’s proposal states that these participants:
…would have to interrupt their learning mobility activities. Many students would lose their academic credits and could be obliged to repeat their academic semester or year. This would be a very disruptive impact for students themselves as well as for their sending and hosting institutions.
The Commission’s “no deal” proposals would allow Erasmus+ activities and funding which involve the UK or UK participants to continue, but only for activities which have started before exit day.
Social security coordination
While social security remains a matter for Member States, rules to help promote the free movement of workers have led to some “coordination” and the mutual recognition of entitlements.
The Commission’s “no deal” proposal applies the core principles of EU social security coordination with the aim of ensuring that the entitlements of people who exercised their right to free movement before the UK’s withdrawal are safeguarded. For example, the proposal aims to ensure that an EU27 citizen who has worked in the UK for 10 years will have this period taken into account by their home country when calculating their pension entitlements. The Commission states:
This will require Member States to take a generous approach to the UK nationals who are already resident in their territory. The expectation is that the UK acts in the same manner.
Some benefits that would be conferred by the Withdrawal Agreement are not covered. The Commission states the proposal:
…does not cover rights accumulated after 29 March 2019, nor does it cover the exportability of cash benefits, the continuous provision of sickness benefits in kind and the rules on applicable legislation.
All Member States make contributions to and receive funding from the European Union budget. This process is currently governed by a seven-year agreement called the 2014-2020 Multi-annual Financial Framework.
Should the Withdrawal Agreement be ratified, the UK would continue to make contributions to and receive funding from the EU Budget until 31 December 2020. However, the default “no-deal” position would result in an abrupt end to EU funded programmes in Scotland (such as the European Social Fund, Scottish Rural Development Programme and Horizon 2020). In this “no deal” scenario, the UK Treasury has guaranteed funding to allow most programmes to continue in the short term. The implementation of the guarantee in Scotland is discussed in the Spotlight blog Preparing for a no-deal Brexit: EU funding.
The Commission’s “no deal” proposal made on 30 January is:
…to continue making payments in 2019 to UK beneficiaries for contracts signed and decisions made before 30 March 2019, on condition that the UK honours its obligations under the 2019 budget and that it accepts the necessary audit checks and controls.
This would allow continued operation of all EU funding programmes in Scotland across 2019. Projects would continue to receive EU funds in 2019 so long as they were signed before exit day, however this proposal would require payment from the UK Government into the EU budget after exit day of around €13 billion. This arrangement may end up being politically unacceptable to the UK, and the UK Government may prefer to fund the programmes itself under the terms of the Treasury guarantee.