Brexit & Beyond Newsletter

14 June 2022

Welcome to the 14 June 2022 Brexit & Beyond newsletter

The UK Government has published its Bill on the Protocol on Ireland/Northern Ireland. The EU has responded and may initiate or recommence legal proceedings against the UK. Labour leader Sir Keir Starmer visited Northern Ireland last week. The Lords Sub-Committee heard evidence from the UUP and DUP.

UK Government publishes legislation on the Protocol

Yesterday afternoon, 13 June, the UK Government published the ‘Northern Ireland Protocol Bill’. The Government has also published a policy paper and explanatory notes for the Bill, as well as its legal position. As put forward in Foreign Secretary Liz Truss’ speech on 17 May, the Bill would disapply core parts of the Protocol relating to trade in goods, subsidy control, VAT, and the role of the Court of Justice of the EU.

It would establish green and red channels for goods. The diagram below from the Government explains how this would work and how it would manage risk, including a trusted trader scheme and data sharing.

Diagram from the UK Government explaining how the red and green channels would work

Source: UK Government

A dual regulatory regime would be established whereby businesses could to meet either UK or EU standards. The Bill would allow for UK-wide policies on subsidy control and VAT. Currently under the Protocol, EU state aid rules are applied and the Protocol limits how VAT and excise rates can be changed in Northern Ireland.

On governance issues, the UK’s policy paper states: “There are no structures for UK or NI representatives to have a say in EU rules – rules are simply automatically applied in most cases.” On the role of the CJEU, it says, “this contrary to ordinary international norms, there are no mechanisms to preclude the CJEU being the first port of call for the EU when issues arise.” The UK’s solution to this is an independent arbitration panel.

There is a convention that Westminster will “not normally legislate with regard to matters that are within the legislative competence of the Scottish Parliament, the Senedd or the Northern Ireland Assembly without the consent of the legislature concerned.” The Bill contains provisions which cover devolved or transferred matters and where the Bill engages the Legislative Consent Motion process, the UK Government will seek consent from the devolved administrations.

Foreign Secretary Liz Truss spoke to BBC Radio 4 this morning (8.10am). She was asked about the impact of the UK’s unilateral action on its credibility. Truss said that a negotiated solution was her preference but the EU has not agreed to change the text of the Protocol itself. She said the EU’s proposals were “no better” than the current standstill arrangements.

The Commons Library has published a research briefing on the Protocol, including the Bill’s proposed changes.

Reactions from NI

MLAs from Sinn Féin, the SDLP and Alliance wrote to the Prime Minister saying, “We reject in the strongest possible terms your Government’s new reckless Protocol legislation, which flies in the face of the expressed wishes of not just most businesses, but most people in Northern Ireland.”

The DUP released a statement welcoming the publication of the Bill and saying the party will examine it against its seven tests, “to determine that, if enacted, it will restore Northern Ireland’s place within the UK internal market and remedy the democratic deficit of the Protocol.” Sir Jeffrey Donaldson said, “With goodwill across the political spectrum, this legislation has the potential to secure a permanent pragmatic solution”.

EU reaction

European Commission Vice President Maroš Šefčovič made a statement, saying, “It is with significant concern that we take note of today's decision by the UK government to table legislation disapplying core elements of the Protocol. Unilateral action is damaging to mutual trust. The Commission will now assess the UK draft legislation.” He said the UK Government’s approach puts Northern Ireland’s access to the EU single market at risk. The Commission will consider continuing the infringement procedure launched against the UK Government in March 2021, or may launch new infringement procedures. It says it will also soon present in greater detail its “model for the flexible implementation of the Protocol”. RTE reports on the reaction from the EU. Irish Government Foreign Minister Simon Coveney said the plans were a “new low” for British-Irish relations in the past 25 years.

Legal position

The Hansard Society says the delegated powers in the Bill are “quite breath-taking”.

Ahead of the publication of the Bill, there were concerns around the Government’s legal advice. David Allen Green, commentator on law and policy, writes that the situation around this is “odd and worrying”: “The true political problem here isn’t that First Treasury Counsel was not consulted in respect of the new proposals for the Northern Irish Protocol. The problem is that the government tried to go out of its way not to consult First Treasury Counsel when somebody with sufficient clout insisted on it, and then the government only did so with “assumptions” so as to limit the scope of the advice. And now it seems the government wants to suppress and disregard the First Treasury Counsel’s serious doubts as to legality.” There was an urgent question in Parliament last week about the legal advice and consultation with the First Treasury Counsel. Government Minister James Cleverly insisted, “we are confident that our position is legal but we do not discuss the details of legal advice to Government.” This came following the reports that there are concerns about the legality of the legislation.

Views from business

Businesses in NI have called for a negotiated settlement between the EU and UK. Stuart Anderson, head of public affairs at NI Chamber, said "The apparent shifting of risk onto NI businesses is a cause for particular concern…it is incumbent on the EU and the UK to recommence discussions without any further delay.”

Head of Northern Ireland’s Dairy Council Dr Mike Johnston said last week, “Quite simply the protocol is working.” He pointed out that about a third of milk produced in NI is processed in the Republic of Ireland: "It’s the availability of the protocol that allows that flow of the raw milk to continue.” In relation to dual regulatory standards, Johnston said access to the EU market could be compromised if grain was imported to NI which doesn’t meet EU standards.

Sub-Committee hears evidence from DUP and UUP

On Wednesday 8 June 2022, the Lords Protocol on Ireland/Northern Ireland Sub-Committee heard evidence from the UUP and DUP on the Protocol. The Committee previously heard from the SDLP, Alliance and Sinn Féin.

Doug Beattie MLA, leader of the UUP, said there is no requirement to check goods which are staying in Northern Ireland. He said some form of treaty change would be required to the Protocol and the democratic deficit needs to be addressed, suggesting the possibility of a statutory committee at the Assembly to look at EU legislation, similar to the work of the Sub-Committee. He said while he has seen firms booming from the Protocol, others are “on their knees”, adding, it is “feast or famine”. Mr Beattie argued that “everyone knows the landing zone”, which is that there should be no checks on goods which stay in NI. He thinks after the summer, negotiations will resume but with legislation coming, things are likely to get worse before they get better. He emphasised the need to work now to make the Protocol fit for purpose so it has longevity.

Sir Jeffrey Donaldson MP, leader of the DUP, laid out his party’s views on the Protocol, many of which are included in an article he penned in the Newsletter last week. He said the trade crossing the Irish border is less than 1% of EU trade and that they are prepared to have arrangements to ensure that goods moving via NI to the EU meet the EU’s requirements. He said, however, that what is in place at the moment is disproportionate to the risk. He said he struggled to see any benefits to the Protocol, citing additional costs and companies which have difficulties bringing products to Northern Ireland. He said the issues aren’t just about trade and the democratic deficit, but about citizenship. Sir Jeffrey said Northern Ireland has been “used as a pawn” and that this was a high-risk strategy. He asked whether the greater risk is the movement of goods across Irish border (0.02% of EU trade) or the future of Northern Ireland.

Academics from the University of Liverpool and Newcastle University have submitted evidence to the Lords Sub-Committee on the Protocol. They write: “The post-Brexit relationship between the UK and the EU will not, however, be “fixed” by tackling current Protocol tensions. The EU and the UK will continue to have to work together over Northern Ireland’s arrangements. Short-termism will not give rise to sustainable co-operative approaches in the best interests of Northern Ireland, nor will it create a stable foundation for future UK-EU relations.”

Labour leader Keir Starmer visits Northern Ireland

Labour leader Sir Keir Starmer with NI Assembly Speaker Alex Maskey

Labour leader Sir Keir Starmer with NI Assembly Speaker Alex Maskey | Source: NI Assembly

Leader of the Labour Party Sir Keir Starmer and Shadow Secretary of State Peter Kyle visited Parliament Buildings on Friday 10 June, meeting with leaders of political parties and businesses. Starmer met with the UUP and DUP recently at Westminster, and Sinn Féin leader Mary Lou McDonald. Starmer said there were issues with the Protocol which could be fixed, with “guile and hard work”. He said he thought the Government’s legislation would be an impediment to negotiations.

European Parliament on the Protocol

Taoiseach Micheál Martin gave a speech to the European Parliament on Wednesday 8 June. He said, “It is perfectly reasonable to look for ways to improve the operation of the Protocol – but unfortunately what we have seen are bad-faith efforts to undermine a treaty freely entered into. …Unilateral action to set aside a solemn agreement would be deeply damaging.” European Parliament President Roberta Metsola said, “Renegotiating the Protocol on Northern Ireland is not an option. The EP has reiterated its unwavering support for the Protocol on several occasions, and we remain fully committed to preserving peace on the island of Ireland.” The Taoiseach also met with Vice-President of the European Commission Maroš Šefčovič, who said they are on the same page: “only joint solutions - not unilateral action - will work.”

Other news

Northern Ireland Office Minister Conor Burns gave evidence on Investment in Northern Ireland to the NI Affairs Committee on 8 June. Much of his evidence centred around the Protocol.
UK Science Minister George Freeman visited Brussels last week to try and break the impasse over the UK’s access to Horizon, the EU’s research and innovation programme. It is reported that the EU is refusing to engage because of the dispute over the Protocol on Ireland/Northern Ireland. On Wednesday, the European Parliament Committee on Petitions and Committee on Culture and Education will hold a public hearing on the UK and Erasmus+.
On 7 June, Lord Frost, former Brexit negotiator for the UK Government, gave evidence to the Commons Public Administration and Constitutional Affairs Committee on the role of Parliament during the Brexit negotiations.
The Nevin Economic Research Institute has published a blog on the effect of the Protocol on Northern Ireland's economy, concluding that, “The short answer is that we don’t know.”
The Northern Ireland Human Rights Commission has published new research on Brexit, Health, and its Impact on Article 2 of the Ireland/NI Protocol’.
The Equality Commission for Northern Ireland has set out key policy recommendations relating to the proposals outlined by the UK Government on replacement EU funding, including the UK Shared Prosperity Fund (SPF). This is informed by the Commission’s research on EU funding for programmes that promoted equality of opportunity and good relations in Northern Ireland.
Dr Graham Gudgin has published a paper for the Policy Exchange think tank, which examines the concept of an ‘all-island’ economy. He argues, “It is more accurate to say that there are two distinct economies on the island of Ireland.”
The UK Government confirms it has legislated without consent from the devolved administrations on 11 occasions since December 2019, mostly relating to EU exit.