UK-EU Withdrawal Agreement

Thursday 10th December 2020 Lords Chamber

Statement

The following Statement was made in the House of Commons on Wednesday 9 December.

“With permission, Mr Speaker, I would like to update the House, and indeed the people of Northern Ireland, on the implementation of the Northern Ireland protocol as part of the withdrawal agreement with the European Union. Throughout 2020, we have worked intensively to ensure that the withdrawal agreement, in particular the Northern Ireland protocol, will be fully operational on 1 January 2021. Our aims, and the proportionate and pragmatic way that we intended to pursue them, were set out in the Command Paper that we published in May, The UK’s Approach to the Northern Ireland Protocol. This set out three key commitments that we believed needed to be respected in all scenarios.

We had to ensure that Northern Ireland businesses retained unfettered access to the rest of the UK market. Northern Ireland’s place in the UK’s customs territory had to be protected, and that meant that goods that stayed in the UK were not subject to tariffs. We had to ensure that the important Great Britain-Northern Ireland trade flows, on which lives and livelihoods depend, were not disrupted; we needed to ensure a smooth flow of trade with no need for new physical customs infrastructure.

I am pleased to say that on Monday the European Commission Vice-President Maroš Šefčovič and I, as co-chairs of the joint committee set up to negotiate the implementation of the protocol, came to an agreement in principle on a deal that meets all those commitments and puts the people of Northern Ireland first. I would like to begin by paying tribute to Maroš Šefčovič and his team for their pragmatism, collaborative spirit and determination to get a deal done that would work for both sides. I would also like to thank the First Minister, the Deputy First Minister and all the Members of the Northern Ireland Executive for their crucial intervention at significant moments to ensure that the rights of the people of Northern Ireland were protected.

I turn now to the first government commitment. This deal protects unfettered access for Northern Ireland businesses to their most important market. As the Prime Minister underlined, this had to be protected in full, and that meant removing any prospect of export declarations for Northern Ireland goods moving from Northern Ireland to Great Britain. That is what our agreement will do. There will be no additional requirements placed on Northern Ireland businesses for these movements, with the very limited and specific exceptions of trade in endangered species and conflict diamonds.

On the second commitment, the deal safeguards Northern Ireland’s place in the UK’s customs territory. As recently as July, the Commission had envisaged a default tariff scenario in which

‘all goods brought into Northern Ireland’

were

‘considered to be at risk … and are as such subject to the Common Customs Tariff.’

If that had been implemented, it would have raised the prospect of a 58% tariff on a pint of milk going from Scotland to a supermarket in Strabane or a 96% tariff on a bag of sugar going from Liverpool to the shops of Belfast. As we have repeatedly made clear, this could never have been an acceptable outcome.

Instead, I am pleased to say that, under the agreement we have reached, Northern Ireland businesses selling to consumers or using goods in Northern Ireland will be free of all tariffs, whether that is Nissan cars from Sunderland or lamb from Montgomeryshire. Internal UK trade will be protected as we promised, whether we have a free trade agreement with the EU or not.

Thirdly, this deal would keep goods flowing between Great Britain and Northern Ireland in January and provide some necessary additional flexibilities. It protects Northern Ireland’s supermarket supplies. We heard throughout the year that traders needed time to adapt their systems. That is why we have a grace period for supermarkets to update their procedures. Our agreement prevents any disruption at the end of the transition period to the movement of chilled meats. British sausages will continue to make their way to Belfast and Ballymena in the new year, and we have time for reciprocal agreements between the UK and the EU on agri-food, which can be discussed in the months ahead. This deal also protects the flow of medicines and vet medicines into Northern Ireland. That means we will grant industry a period of up to 12 months to adapt to new rules under the protocol, which will avoid any disruption to critical medical supplies.

So those are three commitments entered into, and three commitments that we have upheld. But this agreement goes further still, providing additional flexibility that will enable us to make the most of the opportunities that face us as the transition period ends. As you know, Mr Speaker, this House has been concerned about the risk of so-called reach-back from the state aid provisions that the protocol applies. The concern that many colleagues had was that a company in Great Britain with only a peripheral link to commercial operations in Northern Ireland could be caught inadvertently by the tests within the protocol’s text. That would not have been acceptable, nor was it what the protocol had envisaged. That is why I am pleased that the agreement we have addresses that risk. It means that firms in Great Britain stay outside state aid rules where there is no genuine and direct link to Northern Ireland and no real foreseeable impact on Northern Ireland-EU trade. That is an important step forward in dealing with an issue raised by a number of Members across the House.

This deal also ensures that Northern Ireland will be out of the common agricultural policy, which means that the Northern Ireland Executive have full freedom to set their own agricultural subsidies for Northern Ireland’s farmers. It also means appropriate and flexible arrangements, so that more than £400 million of spending each year is totally exempt from state aid rules. As well as that, the deal ensures that support for fishermen in Northern Ireland will be exempt from EU state aid rules, which means more than £15 million of flexibility for Northern Ireland’s fishermen over the next five years. And, of course, Northern Ireland’s services industries are totally outside the scope of the protocol and its state aid measures.

The agreement also respects the protocol provisions, which were endorsed by Parliament, that allow some EU officials to be present at Northern Ireland ports as UK authorities carry out our own procedures. Let me be clear: there will be no Belfast mini-embassy or mission, as some in the EU originally sought, and the EU officials will not have any powers to carry out checks themselves. There will instead be sensible, practical arrangements, with co-operation and reciprocal data sharing, so that both sides can have confidence in these unique arrangements. We also want to leave no doubt about our ongoing commitment to peace and prosperity in Northern Ireland. My right honourable friend the Northern Ireland Secretary will set out in the coming days further measures of financial support to help businesses and communities to prosper and thrive from the end of the year and beyond.

We have been able to deliver a package which now means that the protocol can be implemented in a pragmatic and proportionate way. It takes account of the Belfast/Good Friday agreement in all its dimensions, and it protects the interests of both the EU single market and, more importantly, the territorial and constitutional integrity of the whole United Kingdom. This agreement will be approved officially at a Joint Committee meeting in the coming days. Of course, the agreement we have reached also enables the Government to withdraw Clauses 44, 45 and 47 of the United Kingdom Internal Market Bill and avoids the need for any additional provisions in the Taxation (Post-transition Period) Bill. Having put beyond doubt the primacy of the sovereignty of this place as we leave the EU, we rest safe in the knowledge that such provisions are no longer required.

We know that we now need to get on and give further clarity to business as to the specifics of what this deal means for them and how it will work in practice, and we will do that through the publication of further guidance. That will sit alongside the ongoing intensive work that we will take forward to implement the protocol. Above all, we will always work with the interests of the people and businesses of Northern Ireland in mind, as this agreement and the important flexibilities it will provide reflects. We must all remember that, if the protocol is to work, it must work for the whole community in Northern Ireland. Whether it is to be maintained in the future, as the protocol itself sets out, is for the people of Northern Ireland to decide through the democratic consent mechanism that my right honourable friend the Prime Minister negotiated. On that critical note of the primacy of democracy, I commend this Statement to the House.”

18:31

[Baroness Hayter of Kentish Town (Lab)]

Well, yesterday’s Statement already seems an age away as we now contemplate a no-deal exit with even bigger threats to our economy and to Northern Ireland’s by the introduction of tariffs on our food and consumables, and a big hit to our exports as they face charges and bureaucracy that for some could spell disaster. We know that the border plan still leaves Northern Ireland businesses uneasy, as the temporary measures to ease transition from 1 January only highlight the long-term red tape and costs that will then appear.

Mr Gove’s three-month “grace period” for supermarkets from export health certificates—at £200 a piece—on animal products, and his six-month exemption from meat having to be frozen before export, simply indicate what we will face without a deal, when all goods for Northern Ireland would need import declarations. Northern Ireland trade groups worry that, while Mr Gove focuses on tariffs, it is the bureaucracy created that will change the relationship of Northern Ireland businesses and consumers with those in Britain. Even as Ministers keep repeating the PM’s December mantra:

“We’re a UK government, why would we put checks on goods going from NI to GB or GB to NI?”,


in fact civil servants and business know full well that paperwork and checks are exactly what is coming down the line.

I turn more broadly to the so-called negotiations with the EU, which are sounding more and more like the prelude to a no-deal exit, with the Prime Minister this evening even asking us to prepare for that. We on this side of the House are desperately aware of businesses struggling through the pandemic that do not know whether they will face tariffs in three weeks’ time, or even whether their import/export channels will work.

At the start of Brexit we on this side were worried about workers’ rights and jobs, but today we seem closer to the concerns of businesses—traditionally upheld by the Conservatives—that simply despair at the Government’s disregard for their futures. Again and again over the United Kingdom Internal Market Bill, Ministers have said that businesses need certainty—but that is the last thing the Government have provided. It is not simply about tariffs and paperwork; it is about data adequacy, so that information flows can continue, and about driving licences and rules. I have to say that I personally am less than happy about the suspension of drivers’ maximum hours. I do not fancy driving down the M20 alongside lorry drivers who have been driving well beyond their regulated hours.

Nor is the lack of a deal just about the economy. Our security is also at stake. SIS II, Europol and the European arrest warrant are tools that are essential for our safety. And as for waving through changes to customs rules that the Government admit will put the security of the UK border at risk, does the Minister agree that the new customs safety and security procedures regulations sound like a smuggler’s charter, in addition to compromising our border security?

I hope the Minister is not tempted to repeat the nonsense that his colleague in the Commons voiced earlier today, about Labour undermining negotiations by asking these questions. It is the Prime Minister who is undermining negotiations, whether by Part 5 of the United Kingdom Internal Market Bill or by unrealistic demands that only the EU, and not the UK, must compromise. It takes two to tango. The EU knows where the problem is, and it is not in this Parliament.

Today, Mrs Mordaunt urged

“all colleagues, whatever their political … imperative, to put our nation first over the next few days”.

Hear, hear to that. But please will she also address that to Mr Johnson, so that he puts our nation first, and agrees a departure deal to safeguard our security, our businesses, our consumers and our environment? His words tonight bring no reassurance, as he triggers the preparations for no deal. That is not a good signal to negotiators; it is not a good signal to business.

It is interesting that, after the referendum, Ministers from this Dispatch Box claimed that it was immigration, and the desire to end free movement, that led so many to vote for Brexit. But today we are told it is all about sovereignty—that that is why people voted for Brexit. Sovereignty is a word the Minister uses quite often—but is it a sovereign nation that jeopardises trade, security and well-being by refusing to work alongside our near neighbours and main market?

Ursula von der Leyen speaks of a partnership agreement. Partnership: I like the sound of that. So I ask the Minister, given that there are 27 sovereign member states willing to put their citizens first by supporting trade and engagement, should not the UK be willing to put our citizens first, protecting their security and economic well-being by constructing a future partnership deal that avoids: the food price rises we are warned of; the tariffs on exports; the no entry to EU countries due to Covid, with which we have now been threatened; new driving licences and insurance documents; expensive or unavailable health insurance; customs posts and traffic delays; and threats to our manufacturers who are dependent on imports? Is that really too much to ask from this Government? Will the Minister, even at this late hour, urge the Prime Minister not simply to go the extra mile that he has promised but to go as far as is needed to get a deal that is in the interests of the whole of this country?

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Government Chief Whip for facilitating a substitution on our Bench, and I am glad that the Minister is keen today. Will the noble Lord allow this House to debate the content of the technical papers as a result of the agreements that have been reached? We know that the Statement in the House of Commons was just one part. The statement from both the Vice-President of the Commission and the Chancellor of the Duchy of Lancaster was very brief, but it alluded to a series of technical papers that will have far-reaching consequences for the operation of Northern Ireland and GB trade, as well as the other areas that are the responsibility of the joint committee. Will we be able to debate them?

During the passage of the Trade Bill, I have said repeatedly that one of the founding principles of my party was fair, free and open trade. We want to see businesses, large and small, across all countries in the UK, prosper. I do not think anybody could fail to have been moved, listening to “The World at One” on the BBC today, when a businessman in Northern Ireland, representing family businesses, laid bare the reality of the new costs that the Government are imposing on businesses doing their work. He said that, for his business, even with a deal with the European Union, he was looking at extra administrative costs of £150,000 —or, as he put it, four or five people whom he will not be employing.

The totality of these costs was highlighted by the announcement today of a further £400 million, which is going to offset the cost of bureaucracy and business burdens rather than being invested in people and our economy in Northern Ireland.

The Chancellor of the Duchy of Lancaster said in the Statement that he wanted to see the border operating model for Northern Ireland

“fully operational on 1 January 2021”.

We know from the euphemisms about a grace period, or, on the border operating model, a phased introduction, that it will not be fully operational. In fact, it will not even be partially operational. It will not be ready. Ministers in this House and the other place have repeatedly blamed businesses for not being ready, when the Government themselves are not. I hope that the Minister will be able to answer specific questions today from across the House.

There was reference during Commons questions on the Statement to new border facilities for Northern Ireland

“in order to ensure that these limited and proportionate SPS checks”—

checks on live animals—

“can be carried out at the port of Foyle, Warrenpoint, Belfast and Larne”.—[Official Report, Commons, 9/12/20; col. 851.]

These are in addition to what we have always had at the port of Belfast, which has typically been checks on live animals coming across from Scotland. When will these four new ports be operational? Why is there the need for this expansion, if the Government’s mantra is that there are no additional checks? What extra checks, other than SPS, will be carried out on goods going from GB to Northern Ireland under this agreement?

The director at the port of Larne, Roger Armson, spoke to the Northern Ireland Assembly in October, raising concerns about the lack of clarity on the new system for IT at the border and the goods vehicle movement system. He said that given that 40% of cargos head south, it is vitally important to secure clarification. There is still no clarification, so can the Minister say when they will be able to have it?

In the Statement, the Minister said that the agreement will

“allow some EU officials to be present at Northern Ireland ports as UK authorities carry out our own procedures.”

This is the first time that foreign entity staff will be supervising UK staff at our ports. Where will they operate from? This Minister—the noble Lord, Lord True —said on 12 May:

“There is no reason why the Commission should require a permanent presence in Belfast to monitor the implementation of the protocol”.—[Official Report, 12/5/20; col. 655.]


We now know that there is, so how will it operate for these foreign inspectors?

The Minister could not answer simple questions with regard to goods that are packaged in Northern Ireland going to GB, and vice versa. He said that there is no clarity in the first phase but he was hoping that there would be some information very early in 2021. He said, “This is what I am advised”. What can he advise the House now as to when businesses will be clear about the information that they need to put on their goods—goods that are either packaged in Northern Ireland or goods that are going to be moved from GB to Northern Ireland? We need answers.

In its paper on Monday this week, the Chamber of Commerce agreed that it needs answers. That paper made grim reading. Of 35 sets of key questions which they had signposted with a traffic-light system, only 11 were marked green—meaning that they have been given satisfactory answers. There were 19 at amber and five at red. One of the red questions was about what food labelling will be in place. We know that there is a grace period but is it purely, as the Statement said, to allow supermarkets to prepare? To prepare for what? Has the decision been made about whether foodstuffs going from GB to Northern Ireland will have to have EU or UK labelling? A grace period is only that if we know what happens at the end of the three months. Where is the clarity?

It is not just businesses that have not had answers. On 12 November, I asked the noble Lord, Lord True, what labelling would be required for goods. I will quote from Hansard:

“My Lords, I will write to the noble Lord on his very specific point about labelling.”—[Official Report, 12/11/20; col. 1141.]


I have not had a response. I reminded the Minister’s office on 30 November and had a courteous reply from his private secretary, saying that the letter had been commissioned and that he would chase it. I still have not received it. It is not only businesses that are not getting answers but parliamentarians.

We knew that there would be no contingency arrangements for Northern Ireland in the event of no deal when the Government made their announcement earlier this year about some of the potential new checks that would be put in place, plus the new infrastructure and new costs on business. As the noble Baroness, Lady Hayter, indicated, we know that there are no contingency arrangements in place for Northern Ireland when the Prime Minister comes to prepare for no deal, so all these questions are valid.

Regarding the rest of the UK and the announcement from the Commission today regarding contingencies, we will potentially have what is often euphemistically referred to as an Australian deal. But even Australia and the EU have an air agreement and a number of agreements that do not require contingencies to be put in place in just a matter of days’ time. The Commission said that the United Kingdom would be subject to these arrangements if they are equivalent. I quote the Commission’s paper:

“These arrangements would be subject to the United Kingdom conferring equivalent rights to air carriers from the Union, as well as providing strong guarantees on fair competition and on the effective enforcement of these rights and guarantees.”


That is the same for air, haulage operators and others.

Will the Government give such equivalent rights, so that if we are to prepare for the worst we can at the very least ensure that there is equivalence for the contingency arrangements that will be in place? That will remove at least one element of confusion on top of other burdens and costs that businesses will have to face in just a few days’ time.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, there was a very large number of questions there, but most appeared to be in the “dissatisfied” column. I know the House finds this not particularly pleasant to hear, but the United Kingdom Government have made it clear for a very long time that we would not accept an agreement that did not recognise the decision of the people of United Kingdom twice to vote for a sovereign separation from the European Union which should involve our right to control our laws, our borders and our waters.

I infer from the noble Baroness’s remarks that the Labour Party would accept a deal that would not provide us with control of our borders, our laws and our fish because the line she put forward was effectively “agreement at any cost”. We are working tirelessly to get a deal. The Prime Minister made that clear. As I said, we have been clear from the outset that we cannot accept a deal at any cost. As has been made clear this week, there are still differences between the two parties. To repeat what I just said, we cannot accept a deal that will compromise control of our money, our laws, our borders and our fish.

I say in response to both the noble Baroness and the noble Lord that we have been preparing for a long time for all contingencies. We have discussed matters with the devolved Administrations, businesses and affected partners. We have issued advice on a border control operating scheme. We have issued advice to various sectors in Northern Ireland. We are engaged in constant discussions and meetings with those who will potentially be affected. We are also preparing for an Australian-style outcome if necessary. We have invested £705 million in jobs, technology and infrastructure at the border, and provided substantial grants to boost the customs intermediary sector and so on.

The majority of the changes, referring to the impact on businesses, will occur from 1 January 2021 regardless of whether a free trade agreement is made with the EU. Of course, I accept one could always do more to perfect communication, and we are investing an enormous amount of resources to get the case over, to reach businesses and to reach those affected. We are absolutely committed to ensuring businesses have all the information they need to get ready. But I was not sure if the noble Lord was objecting to the idea of phasing the introduction of some arrangements. We believe that that is a sensible and pragmatic approach.

On security, we see no reason why security arrangements should be seriously affected. There is a common interest for all the countries in Europe in relation to security.

On labelling, I may be misremembering, but I believe I wrote to the noble Lord on 30 November with a detailed answer to his question on labelling. If he has not received the letter, I apologise, but I am informed by my office that it was sent.

I was also asked about supermarkets. It is not only supermarkets that we wish to help with the new trader assistance approach; we will reach beyond large operators, but the grace period is offered to supermarkets.

It was implied that EU officials will be issuing directions to United Kingdom staff, but I can assure the House that that is not the case. The House is constantly asking the Government to honour the terms of the protocol, and as the House knows, within the protocol, the EU has the right to ensure and see that matters are being appropriately conducted. But that has never meant, and will never mean, that the EU necessarily has to have an office, embassy or mission building in Belfast. I stand by the comments I and other Ministers have made.

On the announcement today of a new deal for Northern Ireland, the £400 million is on top of other resources announced for assistance with making preparations. So, there is no double counting there; this is new resource.

As far as debates are concerned, both the noble Baroness and the noble Lord will understand that that is a matter for usual channels. There will be another Statement on Monday, I believe, but I hear the noble Lord’s comment about a wider debate. However, he will understand that limited time is available.

Looking at the clock, I am not sure whether I am bound by the 20 minute-rule. Last time I went on after 20 minutes, I was told I should not have done. I cannot get used to the rules of the hybrid House. I thought I should answer the noble Baroness first; I in no way meant to belittle the noble Lord on the Liberal Democrat Benches.

Of course, I reject absolutely the general comments about the United Kingdom Government’s stance and the accusatory remarks made about the Prime Minister. The Prime Minister has been candid, on the one hand, about our position. In a negotiation, each side needs to understand the other’s position. The purported subject of the Statement repeated to the House—the Joint Committee agreement on the Northern Ireland protocol—is a good example of pragmatic co-operation. So, there is evidence that the United Kingdom Government are prepared to seek agreement and negotiate in good faith.

The position, I am afraid to say, does remain, as has been made clear on innumerable occasions—this is not a change or a novelty—that we simply are asking the EU, with the greatest respect, to accept free trade agreement arrangements with us that are similar to those it has agreed with other nations around the world. We do not think that that is an unreasonable request or aspiration. We also ask that they respect and understand the decision of the British people that they wish to have—I make no apology for using the word—sovereign control of their laws, their borders and their waters.

I believe a pragmatic and good outcome is the main burden of this Statement in relation to the agreement on the Northern Ireland protocol. As far as the broader negotiations are concerned, those are continuing, albeit amid the candour on both sides about the difficulties that remain. Let us see how events turn out over the next few days.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

We now come to the 30 minutes allocated for Back-Bench questions. There are 18 speakers listed. I appeal to all noble Lords, out of courtesy to one another and to the House, to be extremely brief. I am sure that the Minister will also be succinct.

18:55

[The Earl of Kinnoull (Non-Afl) [V]]

My Lords, the Statement and its associated Command Paper are very welcome, particularly as they are evidence that both sides in the UK-EU joint committee are now working together in a pragmatic and friendly way. I congratulate all involved. However, we still have no satisfactory structures in place for parliamentary scrutiny, either of the joint committee itself or of new EU law applying to Northern Ireland under the protocol. What steps is the Minister taking to facilitate such scrutiny?

[Lord True (Con)]

My Lords, I am a poor and feeble plant, but by standing here I am seeking to assist scrutiny. I understand the broader thrust of the question from the noble Earl, but he will also understand that arrangements for the scrutiny of government across the board by committees in your Lordships’ House is not a matter for the Executive. It is matter for your Lordships’ House and it is not for me to declare. As far as my ministerial responsibility is concerned, I am ready to appear before whatever committee, and this House, at any time that is requested.

[Lord Robathan (Con)]

My Lords, many people will have been very disappointed that the noble Baroness, Lady Hayter, had not a word or hint of criticism of intransigence on the EU side—only of those working to the best of their ability for the interests of the British people. For instance, what about Macron’s stance on fish? By the way, I voted to leave the EU for sovereignty, not for any other reason. This update is welcome. It is not perfect; I am not sure I give it a full three cheers and changes may be required in the future, but at least there was a spirit of compromise on negotiation from both sides. Can my noble friend confirm that the protocol allows for further changes depending on how things work out?

[Lord True (Con)]

That is certainly true. At the end of the day, the maintenance of the protocol will remain a matter for democratic decision by the people of Northern Ireland. I am grateful for my noble friend’s opening remarks.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Bird, has withdrawn, so I call the noble Lord, Lord Clark of Windermere.

[Lord Clark of Windermere (Lab) [V]]

My Lords, all Members of the House are aware that the Isle of Man lies half way between the United Kingdom and Northern Ireland, yet it has never been a member of the European Union in its own right and is not included in the UK membership of the EU. That relationship is dependent upon protocol 3 of the UK’s Act of accession. That protocol also allows the island to be part of the European Union customs area. Will the Minister double check—or indeed treble check—that the interests of the Isle of Man are covered by and included in this agreement?

[Lord True (Con)]

My Lords, I will certainly check, as the noble Lord asks. I am not briefed in detail on the Isle of Man but I will make sure that I write to him and that the letter is made available to others present.

[Lord Empey (UUP)]

My noble friend will be aware of my views on the protocol, which I believe is a dagger pointed at the heart of the union. But I wish to ask him two technical questions. First, the Statement mentions a three-month delay for the implementation of food into supermarkets. What about the majority of goods that travel between Great Britain and Northern Ireland? Are they, the bulk of traffic, getting any help with an implementation period? Secondly, with regard to goods between GB and NI, for normal goods—non-supermarket goods—will there no longer be a requirement to obtain power of attorney, to have a customs-compliant commercial invoice and to make an entry into the TSS system? It is the technicalities and the bureaucracies that are causing business the greatest anxiety.

[Lord True (Con)]

My Lords, on the specific technical points on power of attorney and so on, I will seek very specific responses, and I undertake to write to the noble Lord on that. Obviously, the three-month grace period is to allow authorised traders—such as super- markets, but other organisations will able to partake—and their suppliers to adapt to certification requirements. Alongside that, the Trader Support Service and the movement assistance scheme will provide support across the board.

[Baroness Neville-Rolfe (Con)]

My Lords, I welcome the limited progress outlined in the Statement on arrangements for the transport of goods, food and drink across the Irish Sea and, in some cases, to or from the Irish border. This was always the job of the joint committee: “pragmatic co-operation”, in my noble friend’s words. However, I would like to know whether some trial shipments by sea and land, and by small and large business—dummy runs, if you like—using the agreed systems, the paperwork, the labelling, the VAT and the tariffs have been attempted across both borders. If so, what were the results?

[Lord True (Con)]

My Lords, so far as individual, specific, in-person dummy runs are concerned, I cannot categorically answer that, but I will find out if I can supply my noble friend with an answer. What I can assure her of is almost daily—literally daily—discussions and consideration at the highest level of the technical and specific impacts of the new regime, or regimes, that come in either on 1 January or in the course of next year. Indeed, the Government have conducted privately a number of specific exercises to test various contingencies.

[Lord Berkeley (Lab) [V]]

My Lords, today the House of Lords EU Goods Sub-Committee has written to Michael Gove, seeking information on government preparedness which, from the evidence the committee received—and I have the honour to be a member of it—appears to be hopelessly late, ineffective and failing on many fronts. The letter lists multiple concerns: IT, communications, transport, and many others. But can I press the Minister today to answer just one small, but very important, question mentioned in the letter? Will he commit the Government to placing toilets at regular intervals adjacent to the queuing lanes on the M20? Everybody thinks they will be needed—deal or no deal.

[Lord True (Con)]

My Lords, I do not carry ministerial responsibility for public conveniences—

[Noble Lords]

Yes, you do.

[Lord True (Con)]

I do not carry ministerial responsibility for public conveniences, if I am allowed to complete the sentence. So far as the planning contingencies for what may or may not happen after 31 December are concerned, I assure the noble Lord that all eventualities are taken into consideration.

[Lord Wigley (PC) [V]]

My Lords, does the Prime Minister now realise that he cannot have his cake and eat it? But I limit myself to the Statement before us, which explicitly asserts that lamb may be sold from Montgomeryshire to Northern Ireland free of any tariff. If that meat is then sold on to the Irish Republic, will it be liable to the 76% tariff for fresh or chilled sheepmeat carcasses applicable in a no-deal scenario? At what point will that charge be levied, and by whom?

[Lord True (Con)]

My Lords, the arrangements we are discussing today relate to the protocol and movements between GB and NI and, indeed, NI and GB. Obviously, a future tariff regime between the United Kingdom and the European Union depends on the outcome of free trade negotiations, which are still continuing.

[Baroness Meyer (Con)]

My Lords, I welcome this agreement, which is a significant breakthrough. However, given that Northern Ireland will continue to follow EU customs rules after 31 December, can my noble friend the Minister confirm that in a case where the ECJ seeks to claim jurisdiction in Northern Ireland, Parliament will if necessary be able to assert sovereignty and authority and overrule the ECJ?

[Lord True (Con)]

My Lords, Parliament voted in the withdrawal treaty Act to include a section asserting UK sovereignty. As for the specifics of any course of justice or jurisdiction, it will have to follow the appropriate course, in line with the protocol.

[Lord Singh of Wimbledon (CB) [V]]

My Lords, with the prospect of a deal with the EU fast receding, the Prime Minister’s visit to India next month has the potential for increased trade with the subcontinent. Can the Minister assure the House that any plans to increase food imports from India will respect the human rights of small farmers already reeling from new laws allowing big business to dictate commodity prices?

[Lord True (Con)]

My Lords, I will not go into the specifics of negotiations with India, although I know the noble Lord has a particular interest and I respect and understand that. The objective of Her Majesty’s Government is to extend free trade agreements as widely as we may, because we believe free trade is one of the greatest sources of the uplifting of poverty and the human condition that has ever been devised. I welcome the recent announcement of a further free trade agreement, with Singapore.

[Lord Whitty (Lab) [V]]

My Lords, the problems for Northern Ireland business are not solely those relating to the ports. For example, on Tuesday we debated an SI amending the REACH arrangements for the use of chemicals. It is clear that businesses both operating in and supplying Northern Ireland will have to engage in a dual process of registration in both the European and British systems. The arrangements announced today do nothing to ameliorate that. What help will the Government give to users of chemicals in Northern Ireland, and indeed in other regimes that require a duality of approach and therefore administrative costs to Northern Irish businesses?

[Lord True (Con)]

My Lords, the movement of chemicals brings particular complexities, as the noble Lord rightly points out, but the Government are committing an enormous amount of resource to the support of Northern Ireland businesses in terms of the movement of goods. That had already been announced. Indeed, I was criticised by the noble Baroness opposite for the scale of support the Government are giving to Northern Ireland and to business generally in confronting the new regime.

[Lord Morrow (DUP) [V]]

Under Article 8 of the Northern Ireland protocol, Northern Ireland will remain part of the EU VAT regime as well as being subject to the UK VAT rules. In practice, that will increase the amount of debt that businesses in Northern Ireland have to collect, which will in some cases lead to higher payments, with a knock-on effect for the consumer. For those in the second-hand car sales trade, the threat is particularly grave. Cars brought in from GB will now have VAT imposed on the full value rather than on the profits made on the sale. Can the Minister tell us why this disruption to the UK internal market was not prioritised in negotiations and why there is no mention of relief for affected businesses in his Statement? Can he outline what unilateral support the Government will provide to small and medium-sized businesses caught by these damaging rules?

[Lord True (Con)]

My Lords, I repeat the very substantial announcements of financial support for Northern Ireland and Northern Ireland business that I referred to in earlier responses. On VAT, as part of implementing the VAT elements of the Northern Ireland protocol, the UK and the EU Commission have needed to agree how EU VAT rules will apply in the unique circumstances created in Northern Ireland, where traders will continue to be part of both the UK and the EU system. That agreement has been reached and is laid out in the Statement. Further guidance on these topics is being published for traders.

We have heard a concern raised about the application of EU second-hand margin schemes. Obviously, these changes will not affect stock bought in advance of 1 January, even if it is sold later, but we acknowledge that this is not a long-lasting solution to these issues. We aim to minimise disruption for Northern Ireland traders to the extent possible, and we continue to explore options.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Balfe, has withdrawn, so I call the noble Lord, Lord Rooker.

[Lord Rooker (Lab) [V]]

I am grateful to the Minister. To be honest, listening to him, I can hear that he is in an incredibly difficult situation with things moving outside the Chamber. I will confine myself to a single point. Northern Ireland will be treated differently—as it always has been—on the customs union and the single market, while it is out of the common agricultural policy, as the Statement says. My question is simple: what is the position of the rapid alert system for food and feed? Some eight to 10 notifications are issued per day around the European Union. How does Northern Ireland figure in RASFF? Is it out or will it be part of RASFF after 31 December, irrespective of whether there is a deal? Food production per head of population in Northern Ireland is far more significant than in England or, indeed, in Scotland, so it is an absolutely crucial issue for Northern Ireland industries. Will they be part of RASFF or not?

[Lord True (Con)]

My Lords, regrettably, I cannot give a specific answer to that question. I am certain that there is a specific answer and the weakness is in me. I assure the noble Lord that he will get an answer to that question.

[Lord Moylan (Con)]

My Lords, I am no longer trepidatious about the prospect of leaving the European Union with no deal. If that is the course recommended by the Prime Minister, I will heartily support him.

On this Statement, it is clear that Northern Ireland will remain in some ways subject to the European Union acquis and thus to the European Court of Justice. Will my noble friend agree to set out—no doubt in writing afterwards—a comprehensive and systematic statement of those parts of Northern Irish life that will remain subject to the European Union acquis so that we all have a firm grasp on it?

[Lord True (Con)]

My Lords, I will undertake to do that, yes.

[Lord Liddle (Lab)]

My Lords, I regard this agreement in the joint committee as good progress on a difficult issue and I notice that, in his Statement yesterday, Michael Gove in fact paid tribute to the Vice-President of the European Commission on the pragmatic approach that the Commission had adopted. When it comes to the wider context of our relationship, does the Minister not agree that the Government are making things far worse by insisting on claiming that the European Union is trying to deny us of the sovereignty we have won as a result of Brexit? It is doing nothing of the sort. It is saying that you can have your sovereignty, but if you want to divert from the rules that we presently have, this represents unfair competition. If it represents unfair competition, you have to recognise that the special and privileged access to the single market that this trade deal will give you can be constrained. Why do the Government not simply recognise that fact, rather than harping on about sovereignty? We will have as much sovereignty to diverge as we want, but we cannot have our cake and eat it.

[Lord True (Con)]

My Lords, the Government, as I said at the outset, have asked for nothing more than an agreement similar to the Canada free trade agreement and other agreements that the EU has struck with other nations. It is for the noble Lord to decide, if the EU wishes to refuse that request, whether that is reasonable or unreasonable.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I urge my noble friend and the Prime Minister to push the boat out, so to speak, to get an agreement. If the European Court of Justice is not to be the dispute resolution mechanism for the Northern Ireland protocol, what resolution mechanism does he have in mind?

[Lord True (Con)]

My Lords, on the details of the mechanism proposed under the protocol, as well as the protocol statement that has been made, my noble friend will find that a number of draft decisions are also being laid before Parliament setting out in greater detail the arrangements agreed, which include provision for the settlement of disputes.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, we are assured in the Statement that the primacy of sovereignty is now beyond doubt. This sounds very positive to me, but I am not convinced that there are not worrying cracks in the Statement that sovereignty can seep through. I echo noble Lords who asked for more detail on EU intervention, but my main point is that, in debates here and in the other place, it has been suggested that that this agreement was pushed through in order to make a deal possible from the EU’s point of view. Can the noble Lord reassure us that he understands that those “red wall” voters who loaned their votes to the Government did not do so for a trade deal? 2016 was not about a trade deal. If it happens, fine, but it is about sovereignty, and sovereignty is not in trade or in technicalities, as discussed here. Does the noble Lord understand it, as some of us do, to be about democratic control at home and not just about trade? Maybe it is time to walk away in order to retain that democratic, sovereign control.

[Lord True (Con)]

My Lords, I find myself between a rock and a hard place, because many of those who have asked questions today have been critical of the Prime Minister for stating what he has said about sovereignty and the need to protect our right to control our borders, to make our own laws and to control our fish. That is a statement that he and the Government have repeatedly made: we ask the EU to recognise and negotiate with us in good faith as an independent sovereign nation, which is what we wish to be. On the other hand, the protocol recognises that we are seeking to be pragmatic, and there are many benefits that your Lordships have not brought out: export declarations have been put in the bin; we have protected supermarkets; and businesses will be able to use VAT returns as they do today, without any burdensome process for splitting some of the issues. So there are pragmatic positives. However, I must tell the noble Baroness that the Prime Minister should be taken at his word on what he is saying.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, I welcome the Statement and, in particular, the straightforward and clear way in which it has been set out. I am conscious that time is limited, so will focus on just the transition period of up to 12 months being granted to industries to ensure the continuity of supply of medicines and veterinary medication. These are vital supplies and I am pleased that they have been addressed at the outset. However, a period of up to 12 months might not be enough. I suggest that a minimum of, ideally, 12 months, with a review after six months, would be better, and I ask for the Minister’s view on this.

[Lord True (Con)]

My Lords, I will take advice on my noble friend’s suggestions of a six-month review. As my noble friend said, we have sought to secure agreement to a pragmatic approach not only on medicines but on other things in implementing the protocol, but it is particularly important in relation to medicines regulation. It will give industry the time and flexibility that it needs and ensure that medicines, including veterinary medicines, can continue to flow to Northern Ireland. Work is ongoing across government to prepare for the end of the transition period to which my noble friend referred, and we will publish further guidance for industry on moving medicines to Northern Ireland in the forthcoming period.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, first, perhaps I may press the Minister further on where these European officials will be accommodated to do their work at the ports. Secondly, could the trader assistance scheme be extended to independent retailers, many of whom are small supermarket owners? Can further assistance be provided to retailers in respect of the export declarations? Some six months down the road, that could cause major problems for them, to the point where they might be out of business.

[Lord True (Con)]

My Lords, I can certainly assure the noble Baroness on the question of smaller suppliers. I was trying to look it up quickly, but one has so little time; I think it is paragraph 33 of the protocol statement that refers to the fact that the Government will certainly not discriminate against smaller suppliers. So far as the office is concerned, I responded to that in my first answer. We have always been clear that it would not be acceptable for the EU to establish some kind of mini embassy in Northern Ireland, which is what some in the EU had suggested. The protocol provides for EU officials to be permitted to fulfil the roles allowed under the protocol. Of course, we will not bar the EU from renting office space or accommodation for its staff if it wishes—but there will be no EU flags flying above a brass-plated embassy entrance in Belfast.