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On 20 September 2023, the House of Lords is due to debate a report from the House of Lords European Affairs Committee on ‘The future UK-EU relationship’. The report was published in April 2023. The government responded to the committee’s report on 28 June 2023.

The committee’s inquiry set out to “examine the overarching state of the post-Brexit UK-EU relationship and to consider how this might be developed in the future”. The inquiry took account of domestic and international developments since the UK and the EU signed the Trade and Cooperation Agreement (TCA) in December 2020. It focused on four themes the committee considered “especially salient” as ongoing issues of concern or as presenting potential opportunities for future cooperation.

Overall, the committee said that many of its recommendations focused on actions it believed should be taken within the next few months, “as part of a systemic effort at developing a more cooperative relationship following the agreement on the Windsor Framework”. The committee also said it hoped its recommendations would help to inform the review of the TCA that is due to happen in 2025.

This briefing summarises the committee’s findings across the four themes it identified, as well as the government’s response and other recent developments.

1. Political, diplomatic and institutional relationship

1.1 Committee findings

The committee said it was “highly unsatisfactory” that the political relationship between the UK and the EU was “characterised by tension and mistrust” for the first two years since the TCA came into force. The committee welcomed the “change in mood around UK-EU relations” since autumn 2022, particularly since the conclusion of the Windsor Framework in February 2023. The committee’s sub-committee on the Protocol on Ireland/Northern Ireland published a separate report on the Windsor Framework in July 2023. This is covered in the House of Lords Library’s briefing ‘Northern Ireland Protocol and Windsor Framework: Reports by the House of Lords Protocol on Ireland/Northern Ireland Sub-committee’ (4 September 2023).

The European Affairs Committee urged the government and the EU to “seize the opportunities” presented by the agreement of the Windsor Framework, and to prioritise rebuilding mutual trust. The committee called for the UK and EU to conclude agreements as soon as possible where these had previously been blocked due to the dispute over the Northern Ireland Protocol, for example on Horizon Europe (the EU’s research and innovation programme), financial services cooperation and electricity trading.

As an “essential step towards rebuilding trust”, the committee said there should be more regular dialogue with the EU, and particularly more regular use of the institutional framework established under the TCA and the Withdrawal Agreement. The TCA (the agreement on the future relationship) established a joint UK-EU Partnership Council to oversee the operation of the agreement. Numerous specialised committees sit below the Partnership Council. Similarly, the Withdrawal Agreement (the ‘divorce’ deal) established a Joint Committee and specialised committees to oversee the operation of that agreement. The European Affairs Committee suggested the government and the European Commission were not “providing the necessary political momentum” to these bodies. It also proposed that when the TCA is reviewed in 2025, consideration should be given to moving towards a single structure of committees covering all major areas of cooperation.

In addition to the existing structures, the committee proposed that regular UK-EU summits should be held as a focus for political and diplomatic engagement, including at the level of the prime minister/presidents of the European Council and European Commission. The committee also welcomed the UK’s participation in the new European Political Community (an intergovernmental forum separate from the EU) describing it as “a strong symbol of a renewed intention for the UK to engage positively with European partners”.

1.2 Government response

The government said it was “committed to a positive, constructive relationship as partners”, as was the EU. It noted that the joint political declaration that accompanied the Windsor Framework set out how the UK and EU intend to “fully exploit” the potential of the TCA and to maximise the UK-EU relationship to the benefit of both parties across a range of areas such as energy, trade and security.

The government said it was in discussions with the EU about the UK joining the Horizon Europe scheme. While it hoped the UK would join, the government emphasised that UK participation must “be fair for UK researchers, business and taxpayers, good value for money, and reflect the lasting impact of two years of delays on the UK sectors’ ability to participate successfully going forwards”.

The government agreed with the committee on the importance of maintaining a regular dialogue with EU institutions at all levels. It said it would continue to do so under both the formal treaty framework and through other avenues. It believed the TCA’s institutional framework was functioning well. However, it emphasised that there was also “extensive engagement” outside these structures, and that the “intensity of contact” between UK officials/ministers and the EU should not be used to measure the TCA’s success. The government noted the committee’s recommendations about unifying the TCA and Withdrawal Agreement committee structures and about holding regular UK-EU summits but did not comment on them further.

1.3 Recent developments

The UK and the EU agreed a memorandum of understanding (MOU) on financial services cooperation in June 2023. The government described this as “an important step in UK-EU relations post-Brexit”. The agreement establishes a joint EU-UK financial regulatory forum for the two sides to discuss voluntary regulatory cooperation on financial services issues. An EU spokesperson said the MOU “does not restore UK access to EU [financial markets], nor prejudge […] adoption of equivalence decisions”.

On 7 September 2023, the UK and the EU announced they had reached agreement in principle on a deal for the UK to join Horizon Europe as an associate member. The agreement also covered associate membership for the UK of Copernicus, the Earth observation component of the EU’s space programme. A joint statement described the agreement as “a landmark moment for scientific and space collaboration between the EU and the UK following the agreement of the Windsor Framework”, marking “another step forward for the EU and UK to work together in the spirit of friendly cooperation on issues of shared interest”.

Under the deal, UK researchers will be able to fully participate in Horizon Europe on the same terms as researchers from other associated countries from the 2024 work programme onwards, including any 2024 calls opening in 2023. Setting out the terms of the deal, the government said it would give UK researchers “certainty that the UK will be participating as a fully associated member for the remaining life of the programme to 2027”. It said the UK had “secured improved financial terms of association to Horizon Europe that are right for the UK”, ensuring the UK would pay for costs from January 2024, but not for the time since 2021 that UK researchers were excluded from the programme. There is also a “new automatic clawback”, under which the UK will be compensated if UK scientists received significantly less than the UK puts into the programme. The European Commission estimates that the UK will contribute almost €2.6bn per year on average to join both Horizon Europe and Copernicus.

As part of the same announcement, the government said it had decided to pursue a domestic fusion energy strategy instead of becoming an associate member of the EU’s Euratom programme. The government said this was “in line with the preferences of the UK fusion sector”. It added that the domestic strategy would include “close international cooperation, including with European partners”. The European Commission said that the UK’s decision not to participate in Euratom or Fusion for Energy (F4E) and the international thermonuclear experimental reactor (ITER) was “guided by the UK’s assessment that its industry’s long absence from Euratom and F4E/ITER programmes cannot be reversed”.

The TCA Partnership Council has not met again since the committee report and government response were published (it last met in March 2023). The Withdrawal Agreement Joint Committee met on 3 July 2023. On the same day, the third meeting of the UK-EU Parliamentary Partnership Assembly (PPA) took place. The PPA was established under the TCA as a forum for parliamentary delegations from the UK and European Parliaments to exchange views on the implementation and operation of the TCA.

Speaking to the PPA, James Cleverly, the foreign secretary, welcomed “close and friendly cooperation” between the EU and the UK and said he was “committed to maintaining that positive trajectory”. He outlined the UK and EU’s shared geostrategic priorities and shared values, concluding that the two sides had “an incentive in mutual cooperation for mutual gain”. Similarly, in his speech to the PPA, Maroš Šefčovič, vice president of the European Commission, said the Windsor Framework had put the UK-EU relationship “on a more positive trajectory”. He believed that “a stable and positive relationship between the EU and the UK, based on the international agreements we both signed and ratified, is clearly in our mutual interest”.

2. Foreign policy, defence and security relationship

2.1 Committee findings

Cooperation between the UK and the EU had been “close and productive” in response to Russia’s invasion of Ukraine, said the committee. It welcomed what it described as effective cooperation between the UK and the EU in imposing sanctions against Russia. However, it argued that “the ad hoc approach to sanctions coordination with the EU should be replaced by a more formal mechanism to make the overall sanctions regime more robust and maximise its effectiveness”. It recommended this should be complementary to the G7 sanctions enforcement coordination mechanism announced in February 2023.

The committee welcomed the UK’s decision to join the ‘Military mobility’ project, which is part of the EU’s Permanent Structured Cooperation (PESCO). PESCO is a mechanism to allow willing EU member states to cooperate on specific defence capability projects. Non-EU member states can be invited to participate in a specific project if they would contribute “substantial added value”. The aim of the ‘Military mobility’ project is to enable the unhindered movement of military personnel and assets within the borders of the EU. The committee said it agreed with the government that the UK should continue to consider seeking to participate in other PESCO projects on a case-by-case basis.

The committee said recent events, such as Russia’s invasion of Ukraine and China’s “increasingly assertive actions”, underlined the mutual benefits to be gained from close cooperation with the EU and its member states on foreign policy and security issues. It recommended the government should approach the EU with the aim of establishing appropriate structured cooperation arrangements. It proposed this should include arrangements for the foreign secretary to engage with the EU Foreign Affairs Council at least twice a year. The committee recommended the government should also continue to invest resources in its bilateral relationships with individual EU member states.

2.2 Government response

On sanctions, the government detailed ways in which it was continuing to work closely with the EU and other Western partners. It believed existing structures for coordination and engagement were working well, though it said it remained open to ways of further improving coordination with the EU.

The government said it was pleased the committee had welcomed its decision to join the PESCO ‘Military mobility’ project. It said it would continue to monitor and evaluate other PESCO projects.

The government stated the UK engaged regularly with the EU across several areas of strategic importance and mutual interest in foreign policy, notably on Russia and Ukraine. The government said it was open to participating in EU forums when invited and when it aligned with UK interests. The government did not respond directly to the committee’s recommendation about more structured cooperation arrangements. The government agreed with the committee on the importance of bilateral relationships with EU member states. It said the UK’s bilateral ties with many EU member states “are as close now as they have ever been”.

2.3 Recent developments

James Heappey, minister for the armed forces, said on 26 June 2023 that the government was negotiating the technical terms of the UK’s participation in the PESCO ‘Military mobility’ project in the form of an administrative agreement. He said the UK and the EU had reached agreement on the majority of the text. He emphasised that the government would only join other elements of PESCO “where it is in the UK interest to work with the European Union to the advantage of NATO and our own national interest”.

It has been reported that the Ministry of Defence (MOD) does not plan to publish the UK’s agreement with the EU on participating in the project, arguing it is not MOD policy to publish memoranda of understanding because they often deal with classified military or technical matters. David Jones (Conservative MP for Clwyd West) argued it was unsatisfactory that Parliament could not scrutinise the arrangements into which the government was entering. He expressed concerns about whether PESCO would align with the objectives of NATO. The House of Commons European Scrutiny Committee, on which Mr Jones sits, is currently conducting an inquiry into PESCO and UK-EU defence cooperation.

The Financial Times reported in July 2023 that the UK had declined a proposal put forward by Charles Michel, president of the European Council, for regular formal meetings, or a “strategic dialogue”, to discuss global issues. The government said it had no plans for a new dialogue outside of the TCA structures, but that it continued to “work with our EU partners on wider global issues and solutions for common global challenges”.

In July 2023, the European Affairs Committee launched a new inquiry looking specifically at the implications for UK-EU relations of Russia’s invasion of Ukraine.

3. Energy security and climate change

3.1 Committee findings

The committee welcomed the “close technical cooperation” between the UK and the EU in response to energy security challenges in Europe since the Russian invasion of Ukraine. However, it recommended there should be regular meetings between the secretary of state for energy security and net zero and the European commissioner for energy. It also recommended an agreement should be reached with the EU to guarantee that energy flows between the UK and the EU would be maintained if there was a critical shortage of energy supply.

In December 2022, the UK signed an MOU with the North Seas Energy Cooperation (NSEC) forum. The aim of the NSEC is to support and facilitate offshore grid development and renewable energy potential in the North Sea region. Its members are Belgium, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden and the European Commission. The MOU sets out terms on which the UK and the NSEC will cooperate on projects linking electricity interconnectors and windfarms. The committee said it welcomed the MOU “as far as it goes”, but suggested the government should keep under review whether there would be benefits to seeking full membership. It said engagement with other North Sea countries on developing renewable energy infrastructure, including multipurpose interconnectors, was “essential in light of the ambition of respective decarbonisation targets”.

The energy provisions of the TCA include a commitment to develop post-Brexit trading arrangements for the efficient use of electricity connectors between Great Britain (GB) on the one hand and the EU and the single electricity market on the island of Ireland on the other. The EU and the UK agreed in the TCA to introduce a model (‘multi-region loose volume coupling’) where electricity and cross-border transmission capacity on an interconnector would be auctioned together on a ‘day ahead’ timeframe. This was supposed to be in place by April 2022, but was delayed in part due to disagreements over the Northern Ireland Protocol. The committee urged the UK and the EU to conclude an agreement to deliver on the TCA energy trading provisions “without further delay”.

The committee recommended the government should approach the EU to explore linking the UK emissions trading scheme with the EU emissions trading system. It believed there could be “significant mutual benefits to be gained from such an arrangement”.

The EU is introducing a carbon border adjustment mechanism (CBAM), which it describes as a “tool to put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU”. The CBAM covers imports from all non-EU countries other than those included in the EU’s emissions trading scheme or a linked scheme. The committee described the CBAM as “a clear example of how EU policy developments can have important implications for the UK”. It argued this further strengthened the argument for linking the UK and EU emissions trading schemes.

3.2 Government response

The government said there was regular dialogue with the EU on energy security issues at the highest levels. The government said the TCA “supports and strengthens the UK and EU’s respective security of supply”. However, it did not respond directly to the committee’s proposal for an agreement to ensure energy flows in the event of a critical supply shortage.

The government said full membership of the NSEC was not possible as the UK had left the EU’s internal energy market. However, it said it would keep under review whether the level of cooperation under the terms of the MOU was sufficient. The government noted that since the MOU, the UK has been invited to attend NSEC meetings when mutually agreed “topics of direct common interest” are on the agenda. The government response also detailed other agreements it has recently reached with European partners on renewable energy and multipurpose interconnector projects, such as the Ostend declarations, aimed at jointly developing the North Sea as the “green power plant of Europe”, and MOUs with Belgium and Denmark.

The government said it had been “consistently pressing the EU” to progress more quickly on conducting an agreement to deliver on the energy trading provisions in the TCA.

On emissions trading, the government said it was “open to cooperating with the EU on carbon pricing, and to considering linking our respective systems as set out in the TCA”. The government said it expected the EU to take account of the UK’s own “ambitious carbon pricing” when the EU implemented its CBAM. The government said it had not yet taken a decision on a potential UK CBAM.

3.3 Recent developments

The government’s consultation on introducing a UK CBAM and other potential policies to address ‘carbon leakage’ closed in June 2023. The government said in July 2023 that it would respond in due course.

The House of Commons European Scrutiny Committee (ESC) published a report on the EU emissions trading scheme and CBAM in June 2023. The ESC urged the government not to respond to the EU CBAM by basing its domestic carbon leakage policy on the approach adopted by the EU. It noted that the issues raised could potentially be resolved by linking the UK emissions trading scheme to the EU one, but it cautioned that “any such policy development would require thorough analysis”.

In August 2023, the government published the outcome of its consultation on proposals to support efficient cross-border electricity trading with the EU. Following analysis of the consultation responses, the government said it had decided to legislate to achieve a single GB clearing price in the ‘day-ahead’ timeframe, subject to engagement with the TCA Specialised Committee on Energy (SCE) and other stakeholders. The government planned to engage with the SCE to ensure the UK and the EU had a shared understanding of how a single GB clearing price would support meeting the shared obligations under the TCA.

The government also announced in August 2023 that it plans to hold a global energy security conference in London in 2024.

4. Mobility of people

4.1 Committee findings

The committee said the evidence it had received suggested that “the complexity of the post-Brexit rules is a significant barrier to mobility”. It recommended the government make its guidance on business and professional travel between the UK and the EU “more straightforward to navigate and interpret”. The committee was also “disappointed that very little progress” had been made in addressing the challenges faced by creative professionals wishing to work and tour in the EU. It called on ministers to take this up as a priority with the EU and for the matter to be raised with the European Commission in the Partnership Council.

The committee assessed that the large decline in inbound school visitors from the EU to the UK would have “a considerable long-term cultural impact” and “a significant economic impact”. Organisers have said school trips from the EU to the UK are more difficult because of the requirement for all children to have an individual passport, where previously they could have entered on an ID card or on a group document through the EU list of travellers scheme. The committee recommended the government should reintroduce a youth group travel scheme that would not require pupils on school visits from any EU country to carry individual passports.

Looking at higher education, the committee said the Turing scheme, which provides funding for UK students to go on international work and study programmes, had “significant strengths”. However, it recommended the government should explore adding a reciprocal element for visiting students to come to English universities, modelled on Wales’s Taith scheme. It also proposed the government should consider whether there was scope for this to run alongside resumed participation in the EU’s Erasmus+ scheme. In addition, the committee recommended the government should explore the possibility of negotiating “an ambitious reciprocal youth mobility partnership” with the EU, such as the one the UK recently agreed with Australia.

4.2 Government response

The government said it had worked with business focus groups when developing its ‘Travel to Europe for work’ guidance. It believed the approach and level of detail were appropriate. It said it conducted regular reviews of legislative changes in EU member states to keep the guidance up to date and had last updated the page in May 2023. The page was since updated again in August 2023, providing information in the country guides that was up to date as of 21 July 2023.

On entry requirements for touring artists, the government said it had been engaging “at pace” with EU member states on a bilateral basis since the UK left the EU. Through this engagement, the government said it had confirmed that UK musicians and performers do not need visas or work permits for “some short-term touring in the vast majority of member states”. The government continued to engage with the four EU member states that did not provide any visa- or work-permit-free routes. The government said it had already raised the issue through the Partnership Council in June 2021 and March 2023.

On school visits, the government acknowledged the importance of cultural and educational exchanges. However, it indicated that the need to know about travellers in advance of their arrival and the ambition to increase the use of automation, such as electronic passport gates, meant that in the future the UK was “likely to require individual documents” for travellers. It noted that the EU was moving in a similar direction and several EU countries no longer accept a collective passport issued by the UK. The government also gave some details about an agreement it had reached with France to address bilateral mobility issues. This included commitments for the UK to change documentary requirements for schoolchildren on organised trips from France, and for France to put mechanisms in place for visa-free travel for schoolchildren on organised trips from the UK. The government said changes in legislation would be required to deliver this and further details would be announced in due course.

The government said it was not exploring the possibility of adding a reciprocal element to the Turing scheme. It argued that prioritising the use of public money to fund opportunities for UK students abroad rather than opportunities for foreign students to come to the UK was “one of the strengths” of the scheme. It said the number of placements arranged through the Turing scheme indicated that “funding for reciprocal inbound mobility is not necessary for higher education institutions in the UK and the EU to form exchange partnerships”. The government had decided not to continue participation in the Erasmus+ scheme after the UK left the EU as it “did not represent value for money and was not in the interests of the UK taxpayer”. However, Erasmus+ funding was available for EU students to undertake higher education placements in the UK, as the UK has ‘partner country’ status.

The government said it was interested in exploring bilateral opportunities for reciprocal youth mobility schemes with international partners, including European neighbours.

4.3 Recent developments

Lord Murray of Blidworth, parliamentary under-secretary of state for migration and borders, said in June 2023 that the government would welcome negotiating with other EU member states similar arrangements on school visits to those agreed with France.

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Cover image by Starline on Freepik.