Monday 13th September 2021

(2 weeks, 1 day ago)

Grand Committee

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Cabinet Office

Motion to Take Note

Moved by

Earl of Kinnoull Portrait The Earl of Kinnoull
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That the Grand Committee takes note of the Report from the European Union Committee The Protocol on Ireland/Northern Ireland (9th Report, Session 2019–21, HL Paper 66).

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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My Lords, the protocol on Ireland/Northern Ireland has never been far from the news since it was agreed. Activity over just the last few days shows how timely today’s debate is. The encouraging thing is that dialogue is seen by all as the correct route forward. The two reports provide analysis of the protocol approximately seven months before and seven months after it came into effect on 1 January this year. I will introduce the first report, undertaken by the former European Union Select Committee, which I chaired. My noble friend Lord Jay of Ewelme will introduce the second report, which was undertaken by the new Sub-Committee on the Protocol on Ireland/Northern Ireland.

I thank the Chief Whip for bringing forward this debate at this time. I also most warmly thank the staff of all the committees concerned. I particularly thank Chris Johnson, who was the principal clerk at all the relevant times, and Stuart Stoner, who has the unique distinction of being the clerk to both committees when the reports were settled.

The European Union Committee’s report on the protocol followed its previous scrutiny of the revised withdrawal agreement and political declaration negotiated by this Government in October 2019. That report included a much shorter initial analysis of the protocol and was published in January 2020. It was clear to us that, as it was such a technically complex and politically contentious document, further detailed work on the protocol was a necessity.

Our fresh inquiry started in February 2020. There followed a careful process which included discussions on the ground with politicians north and south, business leaders and academic experts. The Government published a Command Paper on 20 May on their approach to the protocol, which we took into account. We published our report on 1 June 2020. The report was intended to be a reasonably complete guide to the protocol on which any interested party could rely, with analysis of the protocol, its recitals, its 19 articles and seven annexes. In our conclusions and recommendations, we highlighted the main elements of the protocol, the tensions and contradictions at its heart and the “many unanswered questions” about its operation that remained outstanding. The government response of August 2020 was commendably on time and addressed some of the issues we had raised but was less helpful on many others, on which the Government were simply silent.

A moment ago, I said “tensions and contradictions” because there is not only the matter of the recitals at the front of the protocol and how they relate to the true construction of the articles, and especially their implementation, but also the matter within the articles themselves. In particular, there is an inherent tension, or perhaps an apparent contradiction between and among, Articles 4, 5 and 6. Article 4 states:

“Northern Ireland is part of the customs territory of the United Kingdom”.

This is reinforced by Article 6, which states:

“Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom's internal market.”

However, these are offset by Article 5, which applies the entirety of EU customs legislation, including the union customs code, to Northern Ireland. Article 5 thus retains a single regulatory zone for goods on the island of Ireland, achieving the key aim of avoiding a hard border between Ireland and Northern Ireland. Yet this requires the imposition of new customs processes and regulatory checks on goods moving from Great Britain to Northern Ireland.

The first paragraph of our summary noted that:

“On the one hand, the UK Government has been unable to explain precisely or consistently what it agreed with the EU. On the other … the EU’s insistence that ‘the rules are the rules’ has left Northern Ireland businesses fearing that there will be no flexibility to apply the Protocol proportionately. This has led to a diminution of trust between the two sides, with the upshot”—

in the words of a witness—

“that Northern Ireland has felt like ‘a pawn in the game’.”

Those words date from 1 June 2020 and events since then, notably in the last few days, suggest that the drafting has withstood the test of time. A good number of the issues that we highlighted in June 2020 remain matters of contention today. Indeed, the report anticipated many of the concerns set out over a year later in the Government’s Command Paper, Northern Ireland Protocol—Next Steps, published on 21 July this year. There are many potential illustrations of this point. To pick just two, in paragraph 25 of our report we said:

“The Protocol must ultimately be viewed through the lens of the peace process, and therefore judged by the impact it has on the people, communities and economic prosperity of Northern Ireland and Ireland.”

The first of a few questions for the Minister is: will he confirm whether or not he agrees with that assertion?

Sitting suspended for a Division in the House.

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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My Lords, I was just drawing the Committee’s attention to a couple of paragraphs in our report in which we referred to issues that we felt were most important in 2020, and which are still current today. The second of my two examples is in paragraph 91:

“There is a real danger that businesses based in Great Britain could conclude that it is economically unviable to continue to operate in Northern Ireland … thus undermining Northern Ireland’s economic model, its future prosperity and, potentially, its political stability.”

Perhaps the Minister might comment on that as well.

Chapter 12 of our report concerned the governance of the protocol. This is in three layers: the Joint Committee, which sits at the top of the withdrawal agreement; a specialised committee on Northern Ireland; and the joint consultative working group. Much of the detail of how the protocol should operate lies within these very powerful bodies. The Joint Committee, after all, has even the power to alter the withdrawal agreement itself. We were concerned in June of last year that it was not meeting and beginning to crack through the many matters of implementation detail. Indeed, the Minister has answered more than once at the Dispatch Box questions from me on this topic. Perhaps he might give us an update as to the recent and currently planned meetings of these bodies and their current workstreams.

In our final conclusion, we said:

“it is incumbent on all parties, including the UK Government, the EU, the Irish Government, and the political parties in Northern Ireland, after the divisions of the past four years, to work in a common endeavour to prioritise and urgently address the interests, stability and prosperity of the people and communities of Northern Ireland. As we concluded in our 2016 report, anything less would diminish the efforts of all those who have worked so hard for peace and good relations across these islands.”

These issues will be resolved only by dialogue in a spirit of trust. My final question to the Minister is therefore this: in the light of the publication of the Government’s July 2021 Command Paper and the further extension of the grace periods announced last week, what steps is he taking to ensure that the ongoing talks with the EU will take place in such an atmosphere of co-operation and trust, above all putting the interests of the people of Northern Ireland first?

Our report highlighted many other issues, and I am sure we will hear about many of them. In particular, it highlighted the vital importance of parliamentary scrutiny of the operation of the protocol. I was therefore delighted when, in December 2020, the Liaison Committee of this House agreed that the new European Affairs Committee, which I chair, should appoint a dedicated committee on the protocol. At this point, I will pass the baton to the Chair of that committee, my noble friend Lord Jay of Ewelme, to introduce his own report.

Lord Jay of Ewelme Portrait Lord Jay of Ewelme (CB)
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My Lords, it is a pleasure to follow my noble friend the Earl of Kinnoull. The appointment of a dedicated sub-committee on the protocol was a welcome and important step, and it is an honour to chair it. Its appointment has enabled the House to take advantage of a formidable range of experience in Northern Ireland affairs in your Lordships’ House, much of which is around us today. I am delighted that many members of the committee will be speaking in this afternoon’s debate.

The sub-committee’s membership includes strong and divergent views, both on the constitutional status of Northern Ireland and on the protocol itself, yet we were united in our determination to agree a report unanimously and by consensus. We did not consider that our task was to argue for or against the protocol itself, but rather to scrutinise its operation in an objective and evidence-based manner. That is what we have tried to do, and we hope that that gives added force to our conclusions.

The report takes account of evidence given to the sub-committee by the Minister. We were very grateful to hear from him, and we trust that he will be willing to appear before us again in the future. The report also takes account of oral and written evidence from business, community and civil society representatives, political parties in Northern Ireland, academic and political experts, and the Irish and EU ambassadors in the UK.

The report is billed as an introductory report by the protocol committee, which first met on 21 April. It endorses the six key elements of the committee’s remit, as set out in the Liaison Committee report: document-based scrutiny of new or amended EU legislation within the scope of the protocol; scrutiny of the implications of relevant domestic UK legislation and policy for Northern Ireland; scrutiny of the Northern Ireland-related work of the governance bodies established under the UK/EU withdrawal agreement; monitoring the protocol’s political and socioeconomic impact on Northern Ireland; reviewing the impact of Brexit and the protocol on the UK/Irish bilateral relationship; and developing interparliamentary dialogue in relation to the protocol, including with the Northern Ireland Assembly and the Irish Oireachtas.

I emphasise in particular the importance of the committee’s scrutiny of EU legislation as it applies to Northern Ireland. We are no longer able to examine draft legislation round the EU’s council table, so parliamentary scrutiny of the legislation that will affect Northern Ireland really matters. I am grateful to the noble Lord, Lord Frost, for recognising the importance of comprehensive and comprehensible explanatory memoranda.

Chapter 2 gives an account of the negotiation and implementation of the protocol and of developments since it came into force on 1 January. The committee identified five interlocking problems or failures by the Government or the EU that have contributed to the tensions that have arisen: lack of transparency about what was agreed; lack of readiness, notwithstanding the best efforts of business, for the protocol’s provisions to be implemented; lack of balance and understanding of the protocol’s impact, in particular on Northern Ireland’s relationship with the rest of the UK; lack of flexibility in the application of the protocol; and a lack of trust between the two sides.

Chapter 3 sets out the economic impact of the protocol. The initial negative impact of the protocol in the first weeks of its operation had many causes and was more limited in scope than some media reports would have us believe, but businesses were undoubtedly hindered by the lack of clarity in advance about the protocol’s operation. The long-term impact of the protocol on trade flows is not yet clear, but there are early signs of a growth in north/south trade. On the other hand, businesses told us of repetitive and disproportionate new logistical processes for goods moving from Great Britain to Northern Ireland. We heard serious concerns about the impact of the expiry of the grace periods and the absence of mitigating measures, and fears that businesses in Great Britain will withdraw from the Northern Ireland market because of the actual or perceived administrative burden of the protocol. Yet we also identified potential economic benefits under the protocol, given Northern Ireland’s unique access to both the UK and the EU single markets, including as a destination for foreign investment. However, political stability is a prerequisite if such benefits are to be fully recognised.

Chapter 4 sets out the political and social impact of the protocol. We acknowledge the destabilising impact of first Brexit and then the protocol on the political situation in Northern Ireland and on the delicate equilibrium encapsulated in the Belfast/Good Friday agreement as questions of borders and identity have once more come to the fore. We heard about the concerns of the unionist and loyalist communities that Northern Ireland’s place within the United Kingdom has been undermined by the protocol. Yet the unrest and sense of alienation in loyalist communities has several deep-seated causes, and there are also deep concerns over the democratic deficit at the heart of the protocol whereby significant aspects of EU law apply to Northern Ireland without its consent. While that deficit can be mitigated, it cannot be eliminated. This is a difficult issue, to which the committee will return later in the autumn. We also stress the importance of meaningful engagement by both the UK and the EU with the people and communities of Northern Ireland, including women and young people who have felt sidelined in discussions so far.

Chapter 5 of our report considers mitigations and solutions. We called on the UK and the EU, in a renewed spirit of urgency, partnership and trust, to agree practical solutions to ensure the proportionate application of the protocol in order to meet the commitment that it should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland. Business leaders and others proposed over 20 practical mitigations, including a UK-EU SPS veterinary agreement. We also called for measures to maximise Northern Ireland’s influence both within the UK and with the EU, and stressed the key roles to be played by the Northern Ireland Executive and the intergovernmental institutions established under the Belfast/Good Friday agreement.

Some witnesses argued that the disruptive effects seen since the protocol came into force already justify the use of the safeguarding mechanism in Article 16. Others argue that any unilateral action by either side had destabilising political and economic consequences. In any event, Article 16 is not a means to abandon the protocol, and is a measure underpinned by an obligation to continue dialogue to resolve the issues of concern. It would surely, therefore, be preferable for both the EU and the UK to seek to identify mutually acceptable solutions.

Our report also acknowledged the principled opposition of many in the unionist and loyalist communities to the protocol and the alternatives that some of them have put forward; yet, for many nationalists and republicans, the protocol is a necessary and the only means to avoid a hard border on the island of Ireland. We stressed that the UK and the EU had an obligation both to consider alternatives and to work together to seek resolutions within the protocol.

Our report was agreed a matter of hours after the Government’s Command Paper was published on 21 July. It does not therefore take account of the Government’s specific proposals. The committee’s intention is to scrutinise the Command Paper and the EU’s response in the coming weeks as talks between the two sides continue and, we hope, make progress. In that context, I note the Minister’s announcement last week that the current arrangements for the protocol will continue and that the grace periods will be rolled over, and the European Commission’s response that no new infringement procedures will be opened for now. We all hope that this opens the way for constructive discussions between the UK and the EU, but the gap between the two sides remains large. The cliff edge has, if you like, been replaced by a slippery slope.

What updates can the Minister give us today on the discussions that have taken place since the Command Paper was published? How long can those discussions realistically continue? What assurance can he provide that the opportunity that this breathing space has provided will not be wasted and that both sides will explore the room for compromise that will be necessary if agreement is to be reached?

I finish by reiterating the final conclusion of our report:

“addressing the issues of conflicting identity that first Brexit, and then the Protocol, have brought to the fore seems for the moment an insoluble problem. That was also true of the political situation in Northern Ireland during the Troubles. But through a slow and painstaking process led by political leaders in Northern Ireland and successive governments in London and Dublin, the peace process took root and flourished, leading to the Belfast/Good Friday Agreement and the subsequent steps towards a power-sharing arrangement … This process took time, patience, dialogue, and most of all trust. The same is true in addressing the problems that Brexit and the Protocol present for Northern Ireland. There is therefore an urgent imperative for all sides to make concerted efforts to build trust by recommitting themselves to that process of dialogue, repairing the damage caused to relations across these islands during the past five years, in the interests, as the Protocol rightly acknowledges, of communities in both Ireland and Northern Ireland.”

Lord Wood of Anfield Portrait Lord Wood of Anfield (Lab)
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My Lords, as a member of both the former EU Committee of this House and the current European Affairs Committee, I want to start by thanking not just my noble friend Lord Kinnoull, who has led both committees with skilful even-handedness and good humour but, as he did, the staff of both committees. Their professionalism and excellent work are on show in these two reports, particularly over a period as challenging as that experienced since the onset of the pandemic, and testify to the calibre of those on whom we rely so much here in this House.

The core insight of the June 2020 report was simple: that there is a clear contradiction between the protocol’s rule that EU customs legislation applies in its entirety to Northern Ireland, and the Government’s long-standing and continuing claim that the protocol, which they co-authored, would guarantee “unfettered market access” for goods going from Northern Ireland to Great Britain. It is a contradiction between the reality of a signed treaty and the political claims that continue to accompany it. The contradiction is still worth noting, not to re-run the Brexit debate nor to score points, but because only by understanding that it is a contradiction and that trade flows both ways between Northern Ireland and Great Britain cannot remain unaffected or unchanged by adherence to the protocol will we be able to distinguish real, lasting solutions to the current impasse from illusory solutions.

Once we understand the fundamental nature of the protocol in that respect, a few things about the way forward become clear. First, the problems of the moment are not merely differences of interpretation or implementation; they are more fundamental, and the ultimate compromises required on all sides to achieve a durable solution will be correspondingly greater. Secondly, there is no solution to the problem that can be engineered by simply dismantling the protocol. It was an essential pillar of the Brexit agreement for both the EU and the UK sides, in complex ways. Simply scrapping the protocol would have knock-on consequences for Northern Ireland, the UK and the EU, and for stability, democracy, borders and trade, that would make things considerably worse for all rather than better. Thirdly, it becomes clear that the current phase of delicately fudging the protocol with a litany of grace periods subject to shifting deadlines offers short-term respite but cannot provide a way out of the impasse.

The truth is that the multiple problems of the operation of the protocol, which the report of the sub-committee of the noble Lord, Lord Jay, has done such an excellent job of conveying, did not arise out of the blue during the implementation phase; they were baked into the treaty the Government signed. The Government know this to be the case, as do Northern Irish unionists, whose opposition to the Brexit deal was crystal clear from the outset and who now oppose the protocol for the same reasons they opposed it before it came into operation.

The protocol made Brexit technically doable by accepting rules that changed the commercial arrangements between Northern Ireland and Great Britain. That is the nature of the beast to some significant extent, whatever tweaks to the protocol might be achieved in the months or years ahead by the noble Lord, Lord Frost, and his team. I make this point because it is important for a Government demanding changes to the protocol, as our Government have done now for some months, to be candid and transparent about what the true negotiating space is. I am not clear that that is the case at the moment.

Of course, both the EU and the UK Government need to shoulder responsibility for some aspects of the current state we are in. The EU has clearly acted inflexibly in some respects. In particular, as the July 2021 report shows, the supplementary customs declarations required for moving goods from Great Britain to Northern Ireland are not suited to the regional supply chains where the risk of goods moving into the EU single market is low, but the problems of the UK Government’s position are more serious, because they continue publicly to demand “interpretive” changes to the protocol which are in fact substantive alterations to it. Their rhetoric, such as that on unfettered access, continues to fuel unrealistic notions that a revision of the protocol can get rid of all commercial restrictions on trade between Great Britain and Northern Ireland. Yes, more flexibility on the part of the EU is required, but getting rid of contradictory ambitions is a more pressing requirement on the part of the UK Government.

In the short term, I am sure that Members across the House will welcome the idea of grace periods on existing terms of trade being extended to allow more time for discussion on the timetable for introducing the protocol’s provisions. From the standpoint of stability, it is obviously far from optimal to have unilaterally declared grace periods that keep getting extended. However, given the position in which we find ourselves—the DUP withdrawing from North/South Ministerial Council, and the threat possibly to withdraw in the near future from the power-sharing structures altogether —the extension of grace periods as a temporary measure last week by the Minister, the noble Lord, Lord Frost, was a necessary move, and one that looked to be co-ordinated, at least in some tacit way, with the European Union.

However, extending grace periods on SPS rules, agri-food certification, customs declaration arrangements and so on is not a long-term way out of the current mess. Indeed, while, in the short term, the greater risk is that differences over the protocol threaten peace and devolved power-sharing arrangements inside Northern Ireland, the longer-term danger is that the fudges required to delay the protocol and avert these threats never get unblocked—a situation in which the temporary fixes become permanent simply because the politics do not exist to go any further. It is a world in which grace periods, extended serially, would become the norm—governance by grace periods, if you like.

There may be a temptation for many to think that this would not be such a bad place for Northern Ireland to be in eventually; after all, the world is full of impasses with interim arrangements whose fundamentals never get sorted, because political moves beyond the interim are unmanageable. It would be a mistake, however, to contemplate this as a durable future state of affairs for Northern Ireland, in part because the UK signed an international treaty, of which the protocol was a key aspect. Avoiding its implementation as part of a long-term political strategy would do immense damage to the UK internationally. More importantly, it would be a very bad outcome for Northern Ireland. In the medium term, investment in Northern Ireland requires the economic, institutional and political certainty that continuously extended short-term grace periods just cannot provide. It is also crucial for Northern Ireland, especially given its history and the intricate web of bespoke institutions, rules and understandings on which the Belfast agreement was built, that the arrangements on which economic and social life depend continue to enjoy basic consent. That is not the case at the moment, but it has to be an ambition if the protocol is to enjoy long-term confidence.

We already know something about what the solution to the protocol might look like: it will be messy, complex and please no purist on any side. What we do not know is whether those party to bringing this solution about will have the political courage to make the compromises required. However, we do know something about the political conditions that will be conducive to a successful outcome. They will require the Government to reject the dangerous idea, suggested by some on their Back Benches, that the protocol can be abandoned without thereby creating serious consequences for stability, democracy and prosperity in Northern Ireland. They will require those in Northern Ireland who are passionate about the union to work within, rather than outside, the multiple structures established since the Belfast agreement. They will also require the EU to seek resolution through long, patient negotiation rather than through taking legal action. I hope we can all agree that, whatever our party and whatever our view on Brexit, we will do whatever we can to make all those conditions come to pass.

Baroness Suttie Portrait Baroness Suttie (LD)
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My Lords, I too congratulate both the European Union Committee and the new Sub-Committee on the Protocol on Ireland/Northern Ireland on producing two excellent, balanced and detailed reports. I also add my thanks to the staff, not least Christopher Johnson and Stuart Stoner, for the work they continually do on these committees.

I had the privilege of serving on the EU Committee for four years with the noble Lord, Lord Jay, and the noble Earl, Lord Kinnoull, and, indeed, went on an excellent fact-finding visit to Dublin, Belfast and Derry/Londonderry shortly after the referendum. The European Affairs Committee and its sub-committees do an extremely important job and have produced some excellent and highly detailed reports since Brexit. It is perhaps a shame that the Government do not always pay quite as much attention to their findings as I believe they should. It is also testimony to the finely tuned diplomatic skills of the noble Lord, Lord Jay, that he has managed to produce such a balanced report from what we might call a diverse membership with such a wide cross-section of views.

Back in December 2016, the House of Lords European Union Committee published a report on UK-Irish relations following Brexit, highlighting the potential issues that would be faced politically and economically by the people on both sides of the border on the island of Ireland. That report also regretted that there was not a more honest debate about these issues during the referendum campaign.

In debating the current post-Brexit situation in Northern Ireland, it is hard not to repeat the simple fact that the Government promised three fundamentally incompatible things: no north-south border, no east-west border and their insistence on their red line that we had to leave both the single market and the customs union. It is also worth recalling that the Northern Ireland protocol we are debating today is the Government’s own policy and that it was their choice to sign up to it in order to “get Brexit done”. However, to coin a phrase, we are where we are. It is equally important to try to find a way to move the debate forward.

As other noble Lords have already indicated, quite a lot has happened since both the committee reports we are debating today were published—not least the publication in July of the Government’s own Command Paper on the protocol. At the end of last week, we also had Commission Vice-President Šefčovič’s visit to Northern Ireland, where there were some very welcome changes of tone.

I will concentrate my remarks this afternoon on three areas raised by the sub-committee’s introductory report. The first point is the very urgent need to reach agreement on a UK-EU SPS/veterinary agreement. As paragraph 246 of the introductory report states,

“an SPS/veterinary agreement of any form is manifestly in the interests of Northern Ireland”.

Does the Minister agree with the report that not to reach such an agreement, when it would make such a positive difference to the lives of people in Northern Ireland, would indicate that the Government consider regulatory sovereignty a higher priority than political and economic stability in Northern Ireland? Can he further say whether there are areas he may be willing to compromise on to reach such an agreement?

The second theme that I would like to highlight from the report—already raised by the noble Lord, Lord Jay—is trust. Paragraphs 317 and 318 highlight the importance of the dialogue and political leadership over several Governments and many years that helped bring about the Good Friday/Belfast agreement. That dialogue, trust and constructive leadership have sadly been lacking in the last five years since Brexit.

There was a welcome change of tone, as I have referred to already, from the European Commission Vice-President last week, when Mr Šefčovič ended his visit by saying that the EU was not looking for a political victory in Northern Ireland. I hope that the Government will adopt a similar tone. The business community and the majority of the wider community in Northern Ireland want certainty and solutions rather than dialled-up rhetoric. For there to be trust, there has to be a level of openness and transparency that has been very much lacking up until now.

In an extremely thoughtful article in response to the publication of the Government’s Command Paper in July, Professor Katy Hayward from Queen’s University highlighted some of the political consequences in the months ahead—in particular, that the protocol will inevitably feature heavily in next year’s Assembly elections. In their dialogue and negotiations over the next few months, I hope the Government will factor in the potential impact of these negotiations, as well as their tone, on the forthcoming Assembly elections. The Government’s July Command Paper highlights that the lack of unionist and loyalist buy-in has brought tension into the Executive and Assembly, but the Government never publicly acknowledge that there is a parallel lack of buy-in to the whole Brexit process from the majority of Northern Ireland voters.

My third and final point follows on from this: that is, the need for enhanced political dialogue and inclusion at all levels. As paragraph 205 rightly states:

“There is a widespread perception that the Protocol was imposed on Northern Ireland without meaningful engagement with its communities, and without a full and transparent explanation of the impact it would have.”

There has also been extremely little done to sell the potential positive benefits of the protocol for Northern Ireland, with its unique access to both EU and British markets. Can the Minister say whether the Government intend to provide an information campaign on these potential benefits and how they plan to improve dialogue with all sectors in Northern Ireland, including civil society? As we approach the next stages of negotiations ahead of the end of the various grace periods in the weeks and months ahead, will the Minister give very serious consideration to the proposals contained in paragraph 269, which sets down some very constructive suggestions for strengthening Northern Ireland’s influence within both the UK and the EU?

Lord Caine Portrait Lord Caine (Con)
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My Lords, it is a pleasure to take part in this important debate today, and a privilege to serve on the European Affairs Committee’s Protocol on Ireland/Northern Ireland Sub-Committee, so expertly chaired by the noble Lord, Lord Jay of Ewelme. Our committee, as has been said, brings together a wealth of experience on Northern Ireland including three former Ministers in the Northern Ireland Executive, a former Secretary of State for Northern Ireland, and my own rather more modest contribution as a special adviser for some 13 years. We not only represent all strands of opinion in this House, but also the main unionist and nationalist traditions in Northern Ireland. For the avoidance of doubt, while I strongly associate myself with the former, I will always value and deeply respect the latter. The fact, therefore, that our committee was able to produce a unanimous report does, I believe, give it a significant weight, and I trust that it will be regarded as a serious and well-informed contribution to this vexed issue of the Northern Ireland protocol.

I played absolutely no part at all in the negotiation of the current version of the protocol, as my time in the Northern Ireland Office came to an end on 24 July 2019, at the time Mrs May relinquished office. I did, however, have what might be described as a walk-on part in some of the discussions that formed the backdrop to the previous version of the protocol. I would like to share a couple of thoughts on that today which I believe are still relevant.

First, it always seemed to me that in that crucial period after the triggering of Article 50 and in the run-up to what became the joint report of 8 December 2017, the UK Government far too readily accepted the EU-Irish interpretation of what was required to protect the single market, prevent a hard border on the island of Ireland and preserve the Belfast agreement in all its parts. It did so, I regret to say, with very little involvement of the department of state responsible for Northern Ireland. Indeed, the first time most of us saw the draft of the joint report was on the morning of Monday 4 December 2017, while the Prime Minister was on the train to Brussels to finalise it.

Our Democratic Unionist confidence and supply partners had been given an oral briefing the night before—but, crucially, no text—on the basis of which, Mrs May’s political advisers assured her that everything was fine. Well, it took little more than a few seconds to glance at the text to see that this could not possibly be the case. We were frankly shocked at what we saw. On seeing it, even the then Permanent Secretary at the Northern Ireland Office rushed into the Secretary of State’s office and said, “I don’t see how the DUP could possibly agree to this”, at which point I added, “I don’t see how the Secretary of State and I can possibly agree to this”. At a meeting the following day in the Cabinet Room, I stated that the document had every hallmark of having been drafted in Dublin, at which point one very, very senior official replied, “That’s because it largely was”.

As a result, as is well known, Mrs May was forced to return from Brussels that day, and there then ensued four days and late nights of discussions with the DUP, including my noble friend Lord Dodds of Duncairn, and the Commission in an attempt to salvage the situation and keep the Government together. In classic EU negotiating fashion, we were unable to remove any of the agreed text and therefore had to resort to adding language, including paragraph 50, on unfettered access, to counter paragraph 49, which contained the dreaded backstop, in an attempt to come up with something we could live with. Early on the Friday morning, Mrs May did indeed fly to Brussels and sign the joint report. Regrettably, the die had been cast and whatever way we tried to present the situation, the principle that Northern Ireland would be treated separately from the rest of the United Kingdom had been conceded. Thereafter, the debate was about how that separate treatment might manifest itself. To me, this was a fundamental mistake that has dogged us ever since.

My second, briefer, point concerns the EU, which, for whatever reason, seems to see Northern Ireland through predominantly nationalist eyes and the 1998 agreement almost exclusively through strand 2, the north-south relationship, with everything else subordinate to that. This was made very clear to me at a meeting with the apparently now Eurosceptic Monsieur Barnier in Brussels in June 2018. To my astonishment, I found myself having to explain to him that the 1998 agreement did not establish Northern Ireland as some kind of hybrid state—half in and half out of the UK—that the only choice in the agreement is full membership of the United Kingdom or a united Ireland, and that by disregarding the views of the pro-union majority, he risked undermining the very stability ushered in by the agreement that he was purporting to uphold. At that point he rather bizarrely accused me of wanting no deal, to which I had to reply that, as a remain voter in the referendum, I wanted to leave in good order, consistent with the constitutional and economic integrity of the United Kingdom. It was not a very happy encounter, but it did underline the apparent unwillingness of the Commission to consider all strands of the 1998 agreement equally.

As is frequently said in Northern Ireland, and as was just repeated by the noble Baroness, Lady Suttie, “we are where we are”. To paraphrase Burke, we need to confront the world as it is, rather than how we would like it to be. For my part, I do not doubt the intentions of the Prime Minister and my noble friend the Minister in agreeing the protocol in good faith, and I do not for a second underestimate the near-impossibility of the predicament they found themselves in in the autumn of 2019. I also strongly supported the commitments around unfettered access as set out in the Northern Ireland Conservative manifesto at the 2019 general election, sections of which I drafted. But what is abundantly clear is that, however well-intentioned the protocol is, in its current form it is simply not working, and our report contains many examples to support that view. It has disrupted trade, damaged businesses, hit consumers and contributed to growing political instability in Northern Ireland. It has to change fundamentally, and in this respect I warmly welcome the Government’s Command Paper published in July and the approach of my noble friend.

Let me conclude with a few thoughts. We have been told throughout that checks are an essential part of protecting the EU single market and, as a rules-based construct, the EU’s position is one we all respect. However, it seems to many of us that what has been insisted upon is wholly disproportionate to the actual risk. Leaving aside the utter absurdity of having to check products going from Great Britain to supermarkets in Northern Ireland owned by retailers who have no stores outside of the United Kingdom, it has always seemed to me that the notion of using Northern Ireland to flood the EU single market with illegal produce is somewhat exaggerated when one considers the logistical and transportation challenges involved. To make any money, one would have to be doing it on such a grand scale that it would quickly and easily be detectable by any law enforcement or intelligence agency, of which we still have an extensive capability within Northern Ireland.

Therefore, while I accept that some checks might be necessary, they should only be proportionate to the risk. The Government, our committee and others, including both the Democratic Unionists and the Ulster Unionists, have set out positive and constructive proposals as to how such checks can be mitigated. After all, the EU has obligations under the laws of international trade and treaties it has signed to adopt a proportionate approach to border-related checks and control. It accepts in the protocol that it should

“impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.

I sincerely hope that the EU engages seriously around the alternatives because, as my noble friend and the Prime Minister have both made clear, the current situation is not sustainable; indeed, it is becoming increasingly dangerous. It is no good Maroš Šefčovič insisting in Belfast last week that the protocol is not the problem but the solution. Such a position is regrettably a conflict with reality. Without urgent action and remedy, we now risk rushing headlong into a full-blown political crisis from which the institutions established under the 1998 agreement could take years to recover—if they do at all. It would be a supreme irony if the EU’s theological and dogmatic interpretation of the protocol that it insists is designed to protect the 1998 agreement resulted in the destruction of that agreement; an agreement that a number of members of this Committee, on all sides, have spent many years trying to uphold, myself included.

Common sense, pragmatism, proportionality and an understanding that arrangements that do not command widespread consent across the whole community in Northern Ireland can never work are needed from the EU now—perhaps that common sense and pragmatism which were in such short supply in early 2016 but which, had they been forthcoming, might have prevented us from being in this position in the first place. Of course, addressing overzealous implementation of checks does not deal with some of the more fundamental constitutional and democratic issues thrown up by the protocol, something to which I hope the committee will turn its attention shortly, but it would be a start and I wish my noble friend every success in his endeavours.

Lord Empey Portrait Lord Empey (UUP)
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My Lords, I join in congratulating the noble Earl, Lord Kinnoull, and the noble Lord, Lord Jay of Ewelme, on chairing these committees. Although the principal committee’s report is over a year old, many of the issues that it pointed to on publication have come to pass. It has been an excellent reference document for those of us who are concerned with what is going on and, indeed, anticipated some of the problems. The noble Lord, Lord Jay, can take some pride in the fact that the sub-committee—a pretty diverse bunch—managed to get a unanimous report. We are therefore here to praise him, but perhaps the day will come, on subsequent reports, when we are here to denounce him, so we had better not get too carried away.

There is an interesting and significant point in the fact that people were able to agree this report. It illustrates that you can achieve something. Enough people in this room sat for years trying to negotiate what became the Belfast/Good Friday agreement. As it was possible to sort out some of those problems, which literally dealt with blood and guts, it is surely not beyond the bounds of possibility that we can sit down with our European partners and deal with this.

The whole thing was not properly thought through from the beginning and people did not grasp the significance of the relationship that we had built up with the European Union over 40-odd years. I am no spokesperson for the EU and do not believe in its federalist tendencies, but the fact is that this Parliament signed up to every single, solitary thing. In many respects, it did so carelessly. Being on the committee dealing with those matters in the other place was almost like being put in a sin bin. We agreed to things of far-reaching significance, which many in this Parliament did not fully appreciate. We are living with the consequences of that now.

To take a case in point, throughout the reports are many criticisms of the fundamental contradictions that exist in the Government’s position—from the point of the referendum to the present circumstances. I will just illustrate one, which our helpful Library note spells out from the start, in its first sentence:

“Under the terms of the Protocol on Ireland/Northern Ireland agreed between the EU and the UK as part of the Withdrawal Agreement, Northern Ireland has a unique status.”

That is the fundamental point: our status has changed. People can huff and puff, but that is a fact. It goes on:

“It is part of the UK’s customs territory but is subject to the EU’s customs code, VAT rules and single market rules for goods … SPS … rules to protect animal … health”,

et cetera. So it has changed. For proof of that, when some people decided to take legal action against the Government and challenge the protocol, what was the Government’s defence? “Oh, but we’ve changed the act of union” was their defence. That is being appealed and it would not be appropriate to comment further on it, but I am just making the point.

In parallel with that, the Secretary of State for Northern Ireland said in the earlier part of this year that there was no border. When he was interviewed later in the year, before the Summer Recess, he had to concede that it was a comment that had not aged well. It was nonsense when it was made and it is still nonsense. The Government have to be much more realistic about where they are. As a former colleague of mine in local government who made malapropisms from time to time said, the cows are coming home to roost. That is what is happening to us now. All these contradictions are confronting the business community and people who are trying to make a living. We as a country are spending hundreds of millions of pounds on providing mechanisms, through the trader arrangements, to deal with the paperwork and to try to keep businesses going. This is an unsustainable position.

The noble Lord, Lord Jay, on numerous occasions used the word “trust”. We have to have a negotiation. We can call it whatever we like—discussions, chatting to the vice-president, or whatever it is—but we have to sit round the table. The European Union is our nearest and most significant trading partner. Looking at the world in the past few months, one can see the necessity for this. The EU was willing to play a significant part in solving our problems in Northern Ireland from the days of Jacques Delors, who was the first person to agree the funding streams that are still going on, so surely, with that sort of approach, it ought to be possible to get a negotiation going that will deal with the downstream consequences of all this.

Under these rules, we are effectively being treated as a third country. My noble friend Lord Caine was talking about Sainsbury’s sausages, but that is what he meant. What nonsense this is. Our committee was given statistics by Professor Shirlow of the University of Liverpool. He pointed out that trade from Great Britain to Northern Ireland is equivalent to 0.0008% of European GDP and that only a very small proportion of that would be at risk of entering the EU single market. People on the island will know immediately if there is any attempt to flood the EU single market with inappropriate goods. My party has called for the law to change—I was delighted to see this in the Command Paper—to make it an offence to use the territory of the United Kingdom to send unregulated goods into the single market. That would send a signal to the EU and our traders that that is not something we will allow.

Other issues in the report and the Command Paper can be used as a strong basis. One thing stands in the way of taking the positives from this. If you are trying to get people to invest in the unique situation of having access to both markets, there is one roadblock, which is the requirement for the Assembly to approve it after four years. If you are going to market something to an inward investor, that is a huge roadblock. That is saying that there is a question mark over the investment before you even get started.

While we have that sort of arrangement, which is not satisfactory anyway, getting any gain or advantage will be hugely challenging. There could be potential, but we also have the democratic deficit. I think that the phrase used during the referendum was of a “vassal state”; well, we are the vassal region. We are taking rules over which we have no say or input whatever. It is a constitutional carbuncle. When my noble friend replies, can he tell me and the Committee on what basis did the Government attempt to establish what consent existed for the protocol? Who indicated consent for the core elements within it? How did they judge that?

What we should now be doing—I hope that our committee addresses this—is to encourage a dialogue, sitting down away from the war that goes on in the press. We are in a difficult period in Europe, with elections coming up for the French president and a new chancellor in Germany. These are important times. As my noble friend said, we risk instability in Belfast if we do not deal with this now. We have to sit down with our colleagues in Europe and settle this.

Lord Brougham and Vaux Portrait The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
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Before the noble Lord, Lord Dodds, addresses us, I just let the Committee know that the noble Baroness, Lady Goudie, the noble Viscount, Lord Trenchard, and the noble Lords, Lord Bilimoria and Lord Bhatia, are not speaking today.

Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn (DUP)
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My Lords, it is a great pleasure, as a member of the Sub-Committee on the Protocol on Ireland/Northern Ireland, to take part in this debate today, particularly as it is happening physically. This is the first time that I have had the opportunity to speak in Grand Committee in this format. That is not to detract in any way from the excellent work that our staff have done to make our meetings happen virtually and work so well and smoothly in the circumstances, but it is so much better to be able to debate these things in person, in my view. Indeed, for me, it is the first time that I have been able to interact with other members of the committee in this way, so I really welcome that.

I welcome the report and thank both our chair, the noble Lord, Lord Jay, and the noble Earl, Lord Kinnoull, for the work that they have carried out to bring us to this point, as well as our excellent staff, particularly Stuart Stoner. Before I come on to the report, I allude to one aspect of the work of the committee, which is that it also carries out an enormous amount of scrutiny work of legislation, statutory instruments and delegated legislation affecting Northern Ireland. It is just worth putting on record, as the Minister is here, that this is an extremely important part of the committee’s work. Given the lack of any other real role for the Northern Ireland Assembly, the other place or this House in that, it is absolutely essential that we get the widest possible and most generous co-operation from the Government as we carry out our important work.

On the report, I welcome the fact that we have been able to reach a consensus; that is an extremely powerful statement. It was done on the basis that we came to the finalisation of its contents without prejudice to the views that each of us held on the substance of the issue of whether the protocol was a good idea or not. We looked at the factual situation and what could be done so long as the protocol exists. There is a fundamental division, nevertheless, as is reflected in Northern Ireland, on the suitability of the protocol as a matter of principle. There is no shying away from that. My noble friend Lord Caine has gone into some of the background and history and has most helpfully put on the record some of the narrative of what happened in the lead-up to the events of January 2017 and some events since.

The issues at stake in Northern Ireland in terms of trade, sovereignty, the democratic deficit and political stability affect everyone and not just the unionist community. Diversion of trade, obstacles to access to goods at a reasonable price—and to the same range of goods as previously—access to medicines and access to a whole range of manufactured goods for businesses and consumers are issues that affect everyone and not just unionists. It is vital therefore that we address them in the interests of everyone in Northern Ireland.

On the trade aspect, which is looked at mainly in the first report, we have found quite significant disruption. There is no doubt that many firms based in Great Britain, even where there is no technical reason why they cannot bring goods from Britain into Northern Ireland, have just given up on the grounds that it is too much hassle and too much work to get their heads around the processes. It is staggering that, between them, the trader support scheme, the digital assistance scheme, the veterinary arrangements and all the other checks amount to some £560 million of public expenditure. At a time when we are talking about other pressures on public expenditure and the need to introduce measures of taxation to plug the gaps, these are enormous sums of money being spent on administrative schemes that do not produce a single contribution in any shape or form to our economy and our productivity. It is pure bureaucracy.

We have the issue of the diversion of trade. There is reference to increased trade between Northern Ireland and the Irish Republic. I urge noble Lords to look at the recent comments of Esmond Birnie, an economist at Ulster University, who says that that needs to be looked at carefully, because it is not necessarily the advantage that people talk about but adds to the costs of business. If it had been advantageous for Northern Ireland businesses to bring goods in through the Irish Republic, they would have been doing it before now, because they are businesspeople and it would have been easier to do so. It must be an added cost.

We have heard it argued that we have the best of both worlds. Yes, one can send goods into the single market of the European Union without checks and restrictions, but one has to be able to get the raw materials and so on into Northern Ireland, mainly from Britain. If we have that problem, the advantages of getting things into the single market are not what they appear at first sight.

So this trade and economic aspect to the protocol is immensely concerning and causing enormous problems. Esmond Birnie has referred to an £850 million per annum detriment to Northern Ireland, which I am sure the committee will want to look at in more detail in future deliberations. However, it is not just the trade aspect; we also have the issue of sovereignty, which other noble Lords have referred to, and the serious issue of the Government’s admission that they have altered the Act of Union 1800 to accommodate the protocol, which is a direct admission that the sovereignty of Northern Ireland and of the United Kingdom has been impacted significantly by the protocol. That cannot be dismissed lightly. The direct application of laws of a foreign jurisdiction on a part of the United Kingdom without any say whatever by anyone in the legislature in Belfast or here at Westminster is quite simply in this day and age totally and utterly unacceptable. The issue of taxation without representation led to cataclysmic and far-reaching consequences previously and it will lead to far-reaching consequences if it is not addressed in the Government’s approach going forward.

Then we have the effect on stability in Northern Ireland, and the Belfast agreement, the St Andrews agreement and subsequent ones. You cannot have a situation where people are saying, as Vice-President Šefčovič was, that the protocol is there to protect the Belfast agreement and is the only way to do so, when in fact the result of its application—without the consent of anyone in Northern Ireland—is to undermine all those agreements and to cause the sort of instability we now see being played out in Belfast. It will have an inevitable consequence. A noble Lord referred earlier to the fact that, if the institutions come down, it will take a long time—as we have found from bitter experience—to get them restored again, and it would be very difficult to suggest how quickly this might occur if it were to happen in this situation.

The Government have produced their Command Paper. I welcome the narrative in it and the very strong commitments made to look at renegotiating Article 13(8) and the principles they have outlined, but I say to the Government that there is urgency to this. Do not forget that on 29 January—this has not been mentioned thus far—the European Union took steps, though thankfully withdrawing from the ultimate step, to instigate and trigger Article 16, undermining at a stroke the whole rationale of the Northern Ireland protocol. That caused enormous impact, not just for the unionist community but throughout Northern Ireland. We are still feeling its reverberations.

When he responds, I urge the Minister to clarify that he notes the urgency of this matter and to give a timescale in which he can come forward with some idea to replace our current arrangements.

Lord Kerr of Kinlochard Portrait Lord Kerr of Kinlochard (CB)
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I have very little experience of Northern Ireland and am in awe of the expertise in front of me in this Committee. I did work under the noble Earl, Lord Kinnoull, in his chairmanship of the European Union Committee and on the first of the reports he described today, but I was then exiled for bad behaviour to the icy wastes of the International Agreements Committee. I learned a very great deal from this new report and have very little to add to it, except three glosses.

However, I will first comment on one or two things that have happened since, particularly the July White Paper, the speech the noble Lord, Lord Frost, made in Oxford on 4 September, Vice-President’s Šefčovič’s speech the other day and the statement at the weekend from Sir Jeffrey Donaldson. I should say at the outset that I too dislike the protocol intensely. Like the previous Prime Minister and the present one, I thought that a customs frontier inside a state was something no Prime Minister could possibly accept. I was a bit surprised when the present Prime Minister enthusiastically signed up for it. But, as the noble Baroness, Lady Suttie, memorably said, we are where we are.

I am surprised to see the White Paper attack the protocol so strongly. Sir Jeffrey Donaldson calls for it to be thrown away, but he does not tell us what he thinks should replace it. I must say, in my view, the return of a hard border across the island of Ireland would be a complete disaster, not just for Northern Ireland but for the United Kingdom and its reputation and external relations, particularly with the United States—I used to work there and know about that. The speech of the noble Lord, Lord Frost, at Oxford was more constructive, but only marginally. The core of his attack on the protocol came when he said that

“solutions which involve ‘flexibilities’ within the current rules won’t work for us. The difficulties come from the way the Protocol is constructed, not just the way it is being implemented.”

So why did we agree to it?

I confess I find Mr Šefčovič’s answer rather plausible:

“Everyone around the table understood what these compromises meant in practice,”

he said on 9 September.

“And the implementation of this agreement will continue to require compromise from both sides.”

That is, of course, a central theme of the Committee’s report: the need for both sides—the UK and the EU—to demonstrate greater flexibility in operating the protocol. I agree.

Of course, the noble Lord, Lord Frost, is perfectly correct when he says that the protocol could be changed by mutual agreement, as Article 13(8) acknowledges. I suspect that some of our EU friends would be perfectly willing to consider certain of the changes demanded in the White Paper—for example, Article 10 of the protocol, in respect of subsidies in Great Britain. Certain other proposals would plainly never secure mutual agreement—for example, the suggestion that the EU should concede that the application in Northern Ireland of their single market laws should not be under the jurisdiction of their court, as the protocol says, but should be a matter for international arbitration. It seems to me that Mr Šefčovič was again nearer the mark when he said:

“The Protocol is not the problem. On the contrary, it is the only solution we have. Failing to apply it will not make problems disappear.”

Renegotiating it

“would mean instability, uncertainty and unpredictability in Northern Ireland.”

Now for my three glosses on the report. First, I recall from my Foreign Office days how, following the Good Friday agreement and the Belfast treaty, we immediately strengthened inward investment teams in the United States and other diplomatic missions, and it worked: the end of the Troubles, as we saw it. Northern Ireland’s highly educated and efficient workforce made it a very attractive destination for investment. It should be even more attractive, now it is the only place in the world where manufactured goods will circulate freely throughout the EU and the UK—a point the report makes. It is not a point the White Paper makes. Finding the next Bombardier would be much easier if the Government were to stop attacking the protocol.

To me, the most surprising passage in the committee’s report is at paragraph 122, where the noble Lord, Lord Frost, is quoted as, not seeing

“a case for the Government setting out”

the inward investment benefit of the protocol and adding, rather elliptically:

“I do not think it totally makes sense to encourage a situation that generated more of something that is a problem”

I am not absolutely sure I understand exactly what that means, but in my book, inward investment is not a problem and deterring it by encouraging uncertainty and instability is. Do we not owe it to Northern Ireland to do better? Surely, a Government who believe in the market should not be complaining about the relative growth of intra-Irish supply chains and direct trade flows between Northern Ireland and the rest of the single market directly, rather than over the land bridge across Great Britain. Water tends to flow downhill, and the more efficient the Northern Irish economy, the better for the people of Northern Ireland. I believe the Government should start to sell the single market opportunity.

Secondly, I was glad to see that the committee intends to come back to the question of the democratic deficit. For me, that is a central and serious problem. Since Northern Ireland is not represented in Commission, Council or Parliament, ways must be found to ensure that these institutions take account of Northern Irish concerns in the single market laws they write, and Northern Ireland must apply. The report lists a number of ways. For my part, I strongly agree with the suggestion from both the DUP and the UUP that Northern Ireland Ministers must be allowed to play central parts—not merely attending as observers—when the withdrawal agreement Joint Committee considers EU laws that would apply in Northern Ireland. I also believe the Dublin Government could help. I have long been impressed by the pleas from the noble Lord, Lord Empey, for greater use of the north-south institutions created by the Belfast treaty. I was very sorry to see Sir Jeffrey Donaldson’s threat to boycott them. I think that would be a serious self-inflicted wound.

My additional suggestion would be to consider the precedent of the informal arrangements the EU makes to inform acceding states about laws that will apply to them on or shortly after accession. I was in COREPER and saw ambassadors from non-EU states sitting in on our debates, in working groups, before their countries joined the European Union. Such arrangements might be hard to negotiate, but we should be trying. Something similar, specific to Northern Ireland and to single market laws, might be possible. It would be completely outside the treaties and so would depend on trust and good will.

This brings me to my final point. For me, the sub-committee’s key finding is at paragraph 223, where it concludes:

“in order to maximise the prospect of the EU taking a flexible approach to the implementation of the Protocol, the Government needs to rebuild trust by demonstrating its good faith. This requires open and constructive engagement, meetings its legal obligations and fulfilling its outstanding political commitments.”

I was in Washington when John Major and Tony Blair transformed our standing in America with Bill Clinton and John McCain by demonstrating that they were trustworthy on the Northern Ireland issue.

Of course, it would be possible to cut down the number of supplementary customs declarations. I am sure that point is absolutely correct; it is an absurd number now. I suspect that that is what Mr Šefčovič had in mind when he said last week:

“Let’s see what can be done to further ease the supply of goods”.

We should take up that offer from him. With great respect to the noble Lord, Lord Frost, I find it implausible in practice that he would reject

“solutions which involve ‘flexibilities’ within the current rules”.

I hope the noble Lord drops the confrontational chest-beating tone. A good rule in negotiation is not to insult the other side.

I end with an olive branch—something the noble Lord, Lord Frost, said which seems 100% correct. In paragraph 268 of this admirable report, the sub-committee has him saying:

“it is important that we all try to act in a way that is conducive to a good negotiation”.

That is quite right. “Physician, heal thyself.”

Lord Thomas of Gresford Portrait Lord Thomas of Gresford (LD)
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My Lords, it is a privilege to serve on the Northern Ireland sub-committee, under the excellent chairmanship of the noble Lord, Lord Jay of Ewelme. I pay particular tribute to Stuart Stoner for his contribution, and to Breda Twomey, who was in charge of the administration. The noble Lord, Lord Jay, achieved something that is quite surprising: agreement, by all members of the committee, to this interim report. As the noble Lords, Lord Caine and Lord Empey, both pointed out, a diverse bunch of people were on that committee and to get them to agree an interim report was quite something.

But things have moved on. If I may coin a phrase, we were where we were. On the day we published our report, 21 July, the Command Paper that has been referred to was published. Paragraphs 45 and 70 called for UK-EU negotiations so substantive as to create a new settlement to supersede parts of the protocol. The response of the EU was:

“we will not agree to a renegotiation of the protocol.”

Two days later, the Minister formally requested a standstill of current arrangements in accordance with paragraph 77 of the Command Paper and a freezing of the EU’s existing legal actions. While not obliged to do so, the Commission halted its proceedings arising out of the British unilateral action last March to extend the grace periods.

Then we had the ministerial Statement on 6 September, which was another unilateral declaration to continue the grace periods and easements currently in force to which the European Commission had not assented. The Commission replied the same day to the effect that both sides were legally bound by an international agreement to fulfil their obligations under it, emphasising that it would not agree to renegotiation. At the moment we are in a position of stalemate. The European Commission said:

“Our focus remains on identifying long-term, flexible and practical solutions to address issues related to the practical implementation of the Protocol”.

To my mind, that sounds an admirable aim. The question is: will it happen? The Commission also said:

“Our approach to the Protocol is based on the achievement of stability, certainty and predictability in line with the objectives of the Good Friday (Belfast) Agreement and in order to protect the Single Market.”

That is a statement of intent which, again, seems perfectly reasonable and desirable.

The next thing to happen was the speech of Sir Jeffrey Donaldson, which introduced the fantasy world in which he threatened to break up the power-sharing Government in Northern Ireland if the protocol was not abandoned. The Belfast Telegraph described it in terms such that Boris’s bridge to Northern Ireland would be built before that happens. The Minister said in his speech to the British-Irish Parliamentary Association on 4 September that his purpose is not to scrap the protocol but to rebalance it. Does he support the new stance taken by Sir Jeffrey Donaldson? I am sure he will answer that question in his reply. If he is not prepared to do what Sir Jeffrey Donaldson suggests—to abandon the protocol—why is he not prepared to use the dispute mechanisms he agreed to in the protocol? Why has he proceeded by unilateral diktat?

This was anticipated many years ago. The noble Baroness, Lady Kennedy of the Shaws, said in 2017, when she was a member of the European Union Committee:

“Going forward, the Government will have to ensure that it can agree a clear, certain and robust enforcement mechanism to ensure that any rights and obligations under the Withdrawal Agreement (and subsequent partnership arrangements with the EU) can be upheld in the event of a dispute.”

The noble Lord, Lord Caine, told us just now that the protocol is not sustainable. But is it beyond resolution? There are problems and one of the concerns I have voiced in the committee has been about the democratic deficit—which is an important issue of principle that has to be resolved.

Professor Katy Hayward of Queen’s University Belfast, in an article for UK in a Changing Europe in July, said:

“Such matters can be resolved largely through the work of the Specialised Committee, whose continuing technical talks are leading to some legislative change in the EU to allow flexibilities for Northern Ireland. Or, if more substantial, the Joint Committee could adopt a decision to amend the Withdrawal Agreement if ‘necessary to correct errors, to address omissions or other deficiencies, or to address situations unforeseen when this Agreement was signed’ … The UK government is seeking fundamental changes of the type and scale it thinks requires renegotiation, but fails here to present evidence as to what cannot be resolved through the existing means.”

Why did the Minister agree to the European Court of Justice being the final arbiter? Why did he concede that final jurisdiction to Michel Barnier of all people, who revealed last week that he believes that the legal sovereignty of France is threatened by the rulings of that court? Perhaps Monsieur Barnier is trying to tune in to the populist urges of his right-wing party in his bid to be its leader. The impression is strongly given in this country—the Minister can perhaps deal with this—that he cannot now stomach the role he agreed for the European court and therefore now avoids, shies away from, the dispute mechanisms he agreed to in the withdrawal agreement.

Analysis from the Institute for Government shows that between 2003 and 2016, compared with other EU member states, the UK resolved its cases in the ECJ early, ended up in court less often than most and won more often than most. This was due to the quality of British lawyers—well, I would say that wouldn’t I?—and their skill in presenting and arguing their case. We have nothing to fear from that court. Why replace it with a set of unknown, ad hoc international arbitrators as the final decision-makers?

We on these Benches did not seek to leave the European Union, and I suggested at the time that it would lead to the break-up of the United Kingdom, a threat which has not gone away as the cold light of day falls upon the promises that were made, but my approach within the committee, as committee members will know, has been to be more optimistic for Northern Ireland. I see that there is a prize to be grasped: the prize of prosperity due to the unique circumstances of its access to both the single European market and the UK, a point strongly made by my noble friend Lady Suttie and recently by the noble Lord, Lord Kerr. I was heartened to find that my perception was strengthened by our witnesses, who spoke of the increased trade with the Republic of Ireland and the many business inquiries from all over the world. The noble Lord, Lord Empey, referred to the constitutional carbuncle that will take place in 2024 when a decision is to be made about the continuation of the protocol. That puts considerable pressure on the political parties that will be fighting next May’s elections.

The possibility of prosperity is the future which Sir Jeffrey Donaldson should grasp. That is what this Government at Westminster should be working for: to sort out and minimise the practical problems by negotiation within the terms of the dispute mechanism. That is the way we will find certainty and ultimately stability for the whole of Northern Ireland and its people.

Lord Hannay of Chiswick Portrait Lord Hannay of Chiswick (CB)
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My Lords, the report from your Lordships’ European Affairs Committee and its Northern Ireland sub-committee and the introduction to both by our two chairs do not stand alone. They need to be considered alongside the Government’s July White Paper on the same subject. Indeed, the fact that the Government chose to table their proposals for modifying the Northern Ireland protocol just 24 hours ahead of the committee’s report without waiting to consider its views or, indeed, without taking the opportunity to provide in evidence, which the noble Lord gave to the committee not long before, their own thinking was, I fear, a singular and lamentable act of disrespect to Parliament.

Although a member of the European Affairs Committee, I can without immodesty say that the report is a balanced, unvarnished account of the difficulties that have arisen over implementing the protocol, since we did not modify or criticise any of the sub-committee’s findings. I wish I could say the same of the White Paper, but it is an altogether more partisan document, designed as much to dismantle and renegotiate as to implement what was agreed so recently between the UK and the EU.

The hard fact is that the protocol was agreed by the two parties to it and was then endorsed and ratified by the two parliamentary institutions on both sides, thus becoming binding international law. It must seem odd to some looking at this that its principal negotiators on our side, the Prime Minister and the noble Lord, Lord Frost, now find so much in it to challenge despite probably having more experience of the way the EU operates than any of their predecessors in these jobs. Did they really not understand what it meant, or did they understand and conclude the agreement without any intention of implementing it? I shall be interested to hear which of those two the noble Lord, Lord Frost, opts for.

No one disputes that implementation raises a number of sensitive and complex problems which need solutions. They are reviewed in detail in the committee’s report. They cannot and must not be ignored. No one disputes either that solutions need to be found in a spirit of pragmatism and flexibility, but pragmatism and flexibility are two-way streets; they are not something you can ask just one side to show. You have to be prepared to show it yourself as well. I am afraid that pragmatism and flexibility are not encouraged by modifying deadlines and the protocol unilaterally, as the Government did earlier in the year, nor by threatening to invoke the main safeguard clause if we do not get our way, nor by seeking pretty fundamental changes in the governance procedures laid down in the protocol, nor by dismissing out of hand the idea of negotiating sanitary and phytosanitary conditions on a temporary basis, which would remove many implementation problems. Better surely to practise the qualities we are calling for, pragmatism and flexibility, and to eschew megaphone diplomacy.

A clear example of megaphone diplomacy was last week’s speech by the relatively new leader of the Democratic Unionist Party, Sir Jeffrey Donaldson. That sort of bluster and blackmail will serve no useful purpose, provoking, as it has already done, a reiteration of the EU’s refusal to renegotiate the Northern Ireland protocol, so recently concluded. It reflects too a refusal by the DUP to recognise the validity of a protocol which was agreed by the UK Parliament despite the DUP’s objections. That is the very conjunction which resulted in Britain’s exit from the EU despite the majority of Northern Ireland voters having voted to remain. Surely what is sauce for the goose should be sauce for the gander.

There are obviously major issues at stake here, including the overall health of the UK-EU relationship, which can hardly be said to be flourishing. We should not forget that triggering the Article 16 safeguard clause would open up the possibility for the EU to retaliate. Do we seriously accept the assertion that it is the protocol which endangers the Belfast agreement rather than a breakdown over implementing it being the immediate cause, with the main cause, of course, being Brexit? I know that that last statement will be considered a bit provocative, but how else is one to interpret a reversion to pre-Belfast agreement rhetoric by the leader of the DUP, which we heard last week?

Then, what price the prospects for a UK/US trade deal in circumstances where the protocol fails to be implemented or is set aside? The Government quite rightly take the view, and have often said so from the Dispatch Box, that Britain’s interests are best served by upholding the rules-based international order, but this protocol is part of that order. A post-Brexit Britain whose word is no longer its deed will pay a heavy and unnecessary price. It is surely preferable to negotiate calmly and purposefully to implement the protocol that we put our name to. I hope that the noble Lord, Lord Frost, when he replies to this debate, will confirm explicitly that that is the objective that the Government are pursuing.

Lord Hannan of Kingsclere Portrait Lord Hannan of Kingsclere (Con)
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My Lords, the Northern Ireland protocol stands on a palpable absurdity, namely the idea that checks on goods between Northern Ireland and the Republic of Ireland will upset the political equilibrium, possibly even threaten the peace, but that such checks on goods between Northern Ireland and Great Britain are just fine and dandy. It is because we have all been dancing around that anomaly that we are meeting here in this Committee. All the ripples have been caused by trying to come to terms with something that is simply absurd.

I add my voice to all those who have complimented our chairman. Our committee indeed has, to use his phrase, “strong and divergent” views. There speaks nearly 40 years of diplomatic experience. That is one way of putting it. None the less, we have come up with some serious proposals with consensus. I think that we were able to do so for one reason, which is worth bringing out: of all the witnesses we heard from, there was not one that was actively pro-protocol. There was certainly a variety of views. I was very impressed. It was the first time that I had been on a Select Committee and everything that people said about the balance, fairness and thoroughness was absolutely right. We heard from every different quarter of opinion. There were those who thought it was a price worth paying, those who did not, those who put the blame on Brexit and those who put the blame on the protocol, but there was not one voice arguing that the protocol was an improvement on the status quo ante—not one.

I can broadly group under two headings the complaints that I heard from the various witnesses who appeared before us. One lot are what we might call the practical objections. They were uniform, I think, across Northern Ireland. You could not tell which tradition someone was from when they voiced them. They were concerns to do with sausages, pet passports and all the other pragmatic difficulties of overzealous implementation. I think there would, in theory, be quite easy solutions to them if there were a modicum of good will. The second lot, I think it is fair to say, were objections voiced largely from unionist and loyalist sources and had to do with what we might loosely call the democratic deficit—the idea that Northern Ireland will have laws, even taxes, imposed on it by people that it cannot vote for. Those are much harder to deal with, at least within the protocol. We can safely disregard the various ideas that they can be resolved by somehow allowing Northern Ireland to be politically further annexed by the EU. They are a very difficult set of problems to resolve.

If I were an EU negotiator, I would be super-flexible about the first lot, thereby maximising the difficulties of any UK Government wanting to deal with the second lot. It would not really be any skin off my nose. We heard my noble friend Lord Empey quote the figures of the miniscule amount of the EU economy accounted for by Great Britain/Northern Ireland trade—0.008%. However, it seems that the Brussels negotiators do not have the same diplomatic skill that I see arrayed on the Bench opposite, albeit with a little gap now with the noble Lord, Lord Kerr, having absented himself. Instead of showing flexibility on the practical side and digging in on sovereignty—which is what we might expect them to do—they have been difficult and obstreperous about every issue, even requiring rabies shots for pets moving from Great Britain. It is very difficult to avoid the conclusion that they relishes our discomfort and are seeking to use the protocol as a pressure point, a way of exerting pressure on the UK to secure our long-term adherence to EU standards. We heard some of the figures: 20% of EU external checks are applied to 0.5% of its trade, if you count Great Britain-Northern Ireland trade as external trade. Why are they doing this?

It is extraordinary, listening to the debate in this Chamber, another Chamber, more widely in the media and, I have to say, from three speakers so far how often the only answer we get is, “Well, you signed it”. Seriously, is that all you have? How does that take us forward? It is true that it was signed, as what we might call an unequal treaty. History is littered with examples of treaties that ceased to be valid and were then abrogated or annulled. An apt example, given both the subject matter and this being its centenary year, is the Anglo-Irish treaty of 1921. It was repudiated in stages by successive Irish Governments, first breaking their residual constitutional links with the UK, then declaring a republic and leaving the Commonwealth. I note en passant, as we old Brussels hands say, that when that the final break was made in 1949 the UK Government were remarkably affable about it. In fact, King George sent the following message to the Irish President:

“I hold in most grateful memory the services and sacrifices of the men and women of your country who rendered gallant assistance to our cause in the recent war … I pray that every blessing may be with you today and in the future.”

I wonder whether the European Union will be similarly accommodating if a similar repudiation happens. Somehow, I doubt it. Maybe that is something we can all agree on around this Room.

When a treaty is not working, when a treaty is a product, as this one was, of the Benn Act and of a Parliament that was not working to get the best possible terms, it will obviously have to go in one way or another. It seems to me that there are three options. In declining order of drama, there is outright repudiation, the triggering of Article 16 or asking for some changes within the existing structures. The first is the cleanest, and there is precedent, but so far I see little appetite for it.

There is already ample justification for the second. Article 16, just to remind members of this Committee and other noble Lords, contains the following clause:

“If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures.”

Leaving aside “environmental”, it seems to me that we have already passed that threshold on the others. In terms of economic disruption, Northern Ireland sells more to Great Britain than to the Republic of Ireland, the rest of the EU and the rest of the world put together. We heard from one of our witnesses that Northern Ireland-Great Britain trade is now subject to £10 billion of extra costs, and three-quarters of Northern Ireland businesses said they had been negatively impacted. As for societal difficulties, when, according to the opinion polls, half of Northern Ireland is against it—it is now almost exactly half and half—that is normally taken in the Northern Ireland context as a pretty good argument to desist from your course of action and try something more consensual.

As for trade diversion, that is not in doubt. We heard that north-south trade increased by 50% as businesses in the Province shifted their sourcing and trade, but to portray this as a good thing, to portray the cause of extra cost and bureaucracy forcing trade diversion as somehow an economic step forward, is rather like arguing that it was a great thing that the blockade in the Second World War led to people growing more potatoes in their gardens. The most basic principle of trade is that we should trust businesses to do what is rational and profitable. If they cannot do so because of needless paperwork—applied, to repeat, not in any proportionate spirit but for the sake of making trouble—it seems to me that must be reckoned a net cost.

So one way or another, the current deal is going. The only question is whether it goes in agreement with our European partners or through unilateral action. I have to say—I know this goes against the spirit of the meeting—that my noble friend the Minister has shown heroic restraint so far in asking nicely for changes, rather than making them unilaterally. When we think that the European Union triggered Article 16, albeit briefly, on no grounds beyond pique that the UK vaccine programme was ahead of its own, we have ample cause in terms of the economic and societal impacts that we have already seen.

I hope we can do this consensually. I hope that Northern Ireland becomes a bridge between the UK and the European Union, but there is no veto here: one way or another, the protocol has to go.

Baroness Hoey Portrait Baroness Hoey (Non-Afl)
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My Lords, when I used to appear at referendum campaign rallies with the previous speaker, I always made it clear that I would only speak before him. Unfortunately, today, I have to follow him and can say what a great speech that was. I also pay tribute to the speech of the noble Lord, Lord Caine. I am really looking forward to the book, which will be well worth reading. We were all enlightened today to hear a little more about the negotiations going on way back under the former Prime Minister.

Like most committee reports, by the time they have been published and debated, they are a little out of date as events have moved on, but I welcome the reports, as far as they go, and accept that they are preliminary and that this project is ongoing. I suggest the committee tries to meet some of the younger pro-union loyalists next time, who are now beginning to speak out in Northern Ireland. The problem for establishment committees such as this is that they go for the well-known, regular commentators, and they know what they are going to say before they turn up. Those at the grass roots of what is happening in Northern Ireland get ignored, not listened to.

We saw that just last week, when Vice-President Šefčovič—I apologise to him for my pronunciation—spent two days in Northern Ireland. He refused to meet the leader of one of the main unionist parties, the Traditional Unionist Voice party, Jim Allister. He did not meet any of the loyalists I am talking about in their communities. The whole idea of outreach, which the EU has made a great deal of, needs to be looked at.

There are two points I want to put on record at the beginning. First, there is a tendency for those who voted to remain in the referendum to tell us leavers that we own Brexit, that we own the protocol and that it is our fault. I campaigned for Brexit very strongly and I would do it again, but I campaigned for the whole United Kingdom to leave the European Union in totality. I did not see on my ballot paper a little bit put off saying, “Do you want to leave the United Kingdom, but to leave out Northern Ireland?” I strongly believe that we do not have Brexit in Northern Ireland, and that is part of the problem.

Secondly, we hear a lot from many people, including those in government, that Brexit made an Irish Sea border inevitable, but anyone who says that is actually stating that Northern Ireland voters did not have the right to take part in a nationwide referendum on the same basis as those in the rest of the United Kingdom, and that the outcome of that referendum applied in Northern Ireland without any qualifications. Those who say that do not really believe in the union of Great Britain and Northern Ireland. If they are being honest, they should say that they are not unionists. The trade checks are not done in the Irish Sea, anyway. They are on the land of the island of Ireland, at Larne, Belfast, et cetera. All those who said we could never have a land border on the island have exactly that; the only difference is between one part of the United Kingdom and another, not between Northern Ireland and the Republic.

In Northern Ireland, the good, decent, honest people who feel British and believe that they were guaranteed the right to be British unless there was a majority who did not wish to be, are expected to put up with this. Would noble Lords be sitting here debating in the same way if it had been the other way round—if it was a nationalist community saying, “We don’t want a land border between Northern Ireland and the Republic”? The pro-union community is expected to put up with it. We know why we have this. It is because the collusion between the Irish Government and the European Union, and the threats of violence, led our Government to go along with saying that there can never be a trade border on the island of Ireland at the frontier—which is where any normal country would think it should be. The Belfast agreement would be broken, according to nationalists and many here, by a land border between Northern Ireland and the Republic of Ireland, but it is not broken by having a border between one part of the United Kingdom and another. The Belfast/Good Friday agreement was based on balance and the balance has now gone completely the other way.

I am very surprised that the committee did not say more about the court judgment at the end of June, which I know the Lord Speaker has said we can refer to, when Mr Justice Colton confirmed that

“the government has removed critical aspects of the Acts of Union 1800; the legislation that effectively created the United Kingdom.”

As one of the applicants for the judicial review along with Jim Allister, Ben Habib, Arlene Foster, Steve Aiken and the noble Lord, Lord Trimble, I find it very concerning. It has huge political ramifications as well as legal significance. It represents a direct challenge to what the Prime Minister said in response to Sir Jeffrey Donaldson in Prime Minister’s Questions, when he said explicitly that this provision had not been repealed by the withdrawal agreement and the protocol. We are going to appeal. The case raised complex legal issues, but they will eventually be settled, and I am sure many noble Lords here will be delighted that it will be going to the Supreme Court and keeping our lawyers in business. The Acts of Union are a constitutional statute and the courts do not seem to have considered a case like this before where constitutional statutes clash.

As there are many lawyers here and I am sure they read the European Journal of International Law, I want to refer to a recent, excellent article by Professor Joseph Weiler. He has written about the treaty of Versailles, Brexit, the Irish protocol and the Versailles effect. As someone who used to be head of the European University Institute in Florence and a very strongly pro-EU person, he quite explicitly argues very coherently about why the European Union has been so wrong in the way it has handled the whole of the Northern Ireland protocol. I suggest that Members might like to refer to that.

The grace periods have been extended and I thank the noble Lord, Lord Frost, for all that he has done. I know he is battling against very difficult European Union representatives who still seem to want to find ways of punishing us more for leaving. The grace periods have been extended, but that does not change what is currently happening. They were going to bring in much worse things, both in trade issues and in other ways; those have now been put off, but it does not change what is happening. There are still checks in Larne and companies in Great Britain not wanting to send anything to Northern Ireland. Not a week goes past but there is something else and another company says, “We can’t really be bothered with this; it’s not worth the hassle, we really don’t want to do it.” Tinkering with the protocol is not good enough. Even if we manage to get trade flowing freely, as long as we in Northern Ireland are left under European Union rules and the European Court of Justice, that will not be acceptable to people in Northern Ireland who want to stay part of the United Kingdom.

When people talk about compromise, they have no understanding of the strength of feeling. The United Kingdom Government cannot compromise any more. They need now to stand up, be strong and speak up for the country they are meant to be running. This Government have a choice to make. I am very pleased that Sir Jeffrey Donaldson—I am not a member or necessarily a supporter of the DUP, but I support anyone in Northern Ireland who speaks up for the union whatever their political party—has come out and said that since the east-west dimension of the Belfast/Good Friday agreement has been broken, why should we carry on with the north-south?

I think it is rather sad that one Unionist is now saying let us have more north/south bodies. Would that really make things better? I do not agree with that, and I am very pleased that Sir Jeffrey has spoken about this. We need to take his warning very seriously. The Government have now got to make it clear that the protocol is not sustainable, as the noble Lord, Lord Caine, and others said. It is not sustainable; it has to go. The Government have to choose: do they want to see stability in Northern Ireland, do they want to see institutions maintained and to keep that balance that has been so difficult over many years, or do they want to keep the protocol? They cannot have both. That is the dilemma the Government face. I hope that committees like this will understand that this is a crucial time. There is no point in having more committees, meetings and lots more reports over the next six months. We do not have six months. I know that the noble Lord, Lord Frost, understands that and I hope the Prime Minister understands that and will now recognise that this protocol has to go, one way or another.

Baroness Ritchie of Downpatrick Portrait Baroness Ritchie of Downpatrick (Non-Afl)
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My Lords, it was my pleasure to be a member of the Sub-Committee on the Protocol on Ireland/Northern Ireland, under the direction and chairmanship of the noble Lord, Lord Jay of Ewelme. I acknowledge the work of our staff, led by Stuart Stoner, because they have undertaken sterling work on our behalf. I also acknowledge the noble Earl, Lord Kinnoull, the chair of the parent committee, because the noble Lord, Lord Caine, and I went to that committee along with our chair to find if it would approve our consensus report. I am very glad to say that happened.

I am pleased that the Minister is present today and I hope that he will be able to give details of the timeframe for discussions with the EU on the protocol. I hope that these discussions will lead to solutions and provide for much-needed political and economic stability in Northern Ireland while, at the same time, ensuring that the people, communities and businesses can avail themselves of the unique opportunities and benefits of the protocol, because there are benefits: being able to trade in the UK internal market and the EU single market.

I devote my remarks to our committee’s report. I believe it should form the basis of future inquiries, including examinations of the Government’s Command Paper, which came out a number of days prior to the publication of our own report in late July, the EU’s response to that Command Paper, the ongoing discussions between the UK and EU, the way forward and subsequent political and economic developments since July 2021 up until today. Our committee contains members from different political perspectives on Brexit, the protocol and the constitutional issue. There are three of us from Northern Ireland who all served together on the Northern Ireland Executive as Government Ministers, but we come from different political perspectives. I come from a Democratic Irish Nationalist background, while the noble Lords, Lord Empey and Lord Dodds, come from a Unionist perspective, but I believe there is beauty in diversity. There are benefits in diversity. I hope that the necessary solutions to the protocol can be found in those diverse perspectives.

I campaigned to remain within the EU and feel that the root cause of the current economic and political problems lies with Brexit and particularly the hard Brexit that the Government sought, and which some elements of Unionism also sought. I believe the protocol is a practical solution to a difficult issue: to prevent a hard border on the island of Ireland. I am also opposed to any other border in the Irish Sea or anywhere else, as are my political colleagues. As we have said, on numerous occasions, borders create impediments, they create barriers and they do not lend themselves to solutions. It is important that a solution is finally found to all this.

Unfortunately Brexit and the protocol are also aligned with political identities and the constitutional issue in Northern Ireland and Ireland. Bearing in mind the political statements of the past few weeks, it is not a binary choice between the protocol and collapsing political institutions and withdrawing from north/south bodies and the North/South Ministerial Council, as suggested by the leader of the DUP. It is not the protocol versus devolution. The issue is recognition of the reality that Northern Ireland needs a bespoke and unique post-Brexit solution to trade and normal relationships because of our unique geographical position on the island of Ireland and the nature of our politics, whether we are from a unionist or nationalist perspective. That fact was recognised by the former First and Deputy First Ministers in a letter to the former Prime Minister in August 2016. Devolution cannot be sacrificed because some parties choose to put their narrow self-interest above the interest of our communities.

A point highlighted by Professor Hayward in her recent paper is that Northern Ireland business representatives do not want a cancellation of the protocol. The Minister should take heed of that. What they have been requesting since before the end of the transition period is certainty, stability and clarity of procedures. They complain about the complexities of the situation. Our report reflected that position and the difficulties and challenges that the business community have faced. There are those who think that there are benefits in the protocol, and Manufacturing NI referred to the increased opportunities for inward investment. None of us should gainsay that fact.

Our committee also concluded that the EU and the UK

“have a continuing obligation to consider alternatives”

to the protocol and

“an equal obligation on all sides to find resolutions within the Protocol.”

Of course, we also referred to the fact that proposed solutions have to prove how they can be compliant with the Belfast/Good Friday agreement. In our view, technical solutions to

“ease some of the burden of the Protocol’s practical operation can be found, as long as there is goodwill and flexibility on all sides”.

We concluded that like the negotiations, which have already been referred to by the noble Lord, Lord Jay of Ewelme, which culminated in the Belfast/Good Friday agreement,

“time, patience, dialogue and most of all trust”

need to be applied to addressing the problems that Brexit and the protocol present for Northern Ireland. As our committee declared, rather than taking unilateral action, it would be

“preferable for the UK and the EU … urgently to identify mutually agreeable solutions”.

Those are the words that I heard coming back to me last week from Vice-President Šefčovič. He talked about not wanting a victory, but to listen, understand and try to provide solutions. I hope that that is the way forward and that the UK and the EU can find solutions to the protocol within the protocol that will provide a solution to the business problems that have been encountered and which do not wreck our existing political institutions.

I urge those who have indicated that they wish to walk away from those institutions that there is far too much work to be done in Northern Ireland, in terms of the Executive, the Assembly and the north-south bodies, in terms of the current pandemic, in terms of the climate emergency and in terms of the plethora of other legislation that has to go through before the Assembly elections in May of next year. Can the Minister tell us about the progress of those discussions and say how far down the road we are to finding solutions? Let us always remember that there is beauty and benefit in the diverse views that have been presented today. Let us hope that that helps provide solutions that also address the democratic deficit and allow Assembly Members a greater say in how the protocol is effected and is worked out in terms of the wider community and businesses in Northern Ireland.

Lord Moylan Portrait Lord Moylan (Con)
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It is a pleasure to rise in the wake of the speech by the noble Baroness, Lady Ritchie of Downpatrick. I want to make a small preliminary remark, which is that, although I count myself as a unionist in the general terms of supporting the United Kingdom, I am not and never have been connected with the unionist tradition in Northern Ireland. In fact, before I entered your Lordships’ House, I do not think I had met a unionist politician from Northern Ireland, with the exception of one meeting with the former First Minister, Peter Robinson, and even then, he was judiciously balanced by his deputy, Martin McGuinness. That is the extent of my connection with the unionist tradition.

I make that point because the points I want to focus on today in the time allotted are ones that I regard as having constitutional and democratic significance for every part of Northern Ireland and every person there, irrespective of which community they belong to and whether they belong to any community at all. In my doing so, it may be thought that I am making some remarks about the report of the committee which are less than wholly obliging. If that is the case, let me assure noble Lords that it is not meant to detract from the report as a whole, which I found extremely valuable, informative and useful, and I have learnt much both from the report and in sitting in this debate. I can say that without hurt to anyone since I appear to be the last Back-Bench speaker.

Let me come to my three points. First, there is a tone throughout the second, more recent report of a parity of treatment of the two parties to the Northern Ireland protocol, the British Government and the European Union, and that, in so far as the mechanisms are not working, blame can be equably distributed in a sort of Olympian fashion between the two. This is a huge mistake. While it may be perfectly true that, looked at purely from the point of view of the Northern Ireland protocol, the two parties have entered it as sovereign equals, the responsibilities of the British Government in Northern Ireland go way beyond simply the management of trade and a trade border in a way that is simply not true of the European Union. It is the British Government, working with the devolved Administration when appropriate under the devolution settlement, who are responsible for housing people, for their health, for their transport, for their connectivity and, crucially, for their safety and security. Those responsibilities are not shared by the European Union and they place a different burden on the British Government as they approach and interpret the protocol.

His Excellency the EU ambassador is quoted in the report as saying that the EU has

“an economic, diplomatic and even an emotional and financial commitment to Northern Ireland”.

That is all very well, but that is not to share in the responsibility for the government of Northern Ireland and the accountability to the world at large and to the democratic world at large for how the country is conducted. That should be recognised. In my own case, that would lead me to cut the British Government a bit more slack in this Olympian allocation of blame between the two parties. The pressures and demands on them are so very much greater.

Secondly, as referred to in the report and explicitly referred to by the noble Baroness, Lady Suttie, the fact is that a significant constitutional change in Northern Ireland has been imposed. I know that the Northern Ireland protocol, in paragraph 1, page 1, or something—really early—says that it represents no change from the constitutional position of Northern Ireland. I have always thought, however, that that is a little bit like the burglar leaving a note saying that he has not actually burgled you. It reads well, but it bears no relation to the facts. The fact is that there has been a very significant constitutional change and it is one that clashes with the Good Friday agreement. We have seen, for example, that the vote that is to take place in the Northern Ireland Assembly has required legislation since the protocol was put in place in order to change the Good Friday agreement so that the vote can take place on the basis that the protocol agreed.

That seems to leave us in no doubt that, whereas the pre-eminent constitutional document under which Northern Ireland was governed until recently was the Good Friday agreement, it now seems that, without that being aggregated or abolished, none the less the pre-eminent document that now governs it is the Northern Ireland protocol. Nobody in Northern Ireland has been asked about this. The riposte that people in Northern Ireland voted by a majority of 55% to stay in the European Union just does not cut it, because people were not asked should Northern Ireland stay in the European Union. In fact, that would have been to ask a question that invited a major contravention of European Union law, because the European Union does not admit bits of states to membership, only whole states. The question asked was whether the United Kingdom should leave or stay, and the answer was not necessarily what the people of Northern Ireland wanted, but the outcome was clear by a majority vote. It was a vote for the status quo; I think we can all agree on that. And I think we can all agree that what they have got in return is not the status quo. That is why I think that argument simply fails.

This deserves more prominence. If we were talking about a change in Government and a change in constitutional status for another country, there would be many people in your Lordships’ House who, quite understandably, would say that such a change would require the consent of the people involved. That has not been achieved. After all, we offer referendums for much lesser matters than this. The people of London were offered a referendum, in which they voted yes, in order for the introduction of the Greater London Authority. That is merely, if I may say so—even though I had some involvement with the Greater London Authority—a modest constitutional change compared with what has happened in Northern Ireland, yet the people of London were consulted and asked. This is the sort of thing that should be high on the committee’s agenda and something that the Government, if I may say to my noble friend the Minister, should be much more voluble about. However implicated they may be in it, it simply is not right.

My third point, which is also mentioned in the report—I trespass on dangerous ground for me because I am not a lawyer—is the reference to Article 3 of the first protocol to the European Convention on Human Rights, which of course guarantees as a human right, without any qualification on the face of the convention that I can see, the right to a regular, secret vote for a legislature. That is presumably the legislature that is making your laws, as opposed to a different legislature. That is implicit, and I think we can all agree on that.

A judge in Northern Ireland has decided that the current situation does not breach that convention right. I understand this is subject to appeal, but I will not go further into the legalities of that. My reading of the judgment was that he did not actually dispute the facts, but felt that there were circumstances justifying departure from the application of the right, but I am not a lawyer and will be careful what I read into that.

I will make a slightly different point. Even if it turned out that the current situation—in which amendments to the existing legal framework can be made without any say by the people of Northern Ireland in laws that they are obliged to live under—was compliant with the convention, is that what we would want in Britain? Would the rest of the world welcome that? My noble friend Lord Hannan of Kingsclere disappointed me slightly when he said that these are difficult issues. They are not difficult: the response to a lack of democracy in a democratic state is democracy. We should start to address that.

I would like to see these issues brought more to the fore in the discussion. They affect the entire community and we would expect other countries to address them and put them at the forefront, if we were talking about them. We owe it to the people of Northern Ireland and ourselves to do the same when discussing their affairs.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, as a Scottish Borderer, I want to tread lightly in this debate on the Northern Ireland protocol. I am a creature of the multifaceted and complex union. I love it with all my heart. As a Borderer in the Scottish Borders who often refers to a different act of union, it has been fascinating to be here, in the context of this debate.

The noble Lord, Lord Caine, added an extra level of complexity and perhaps contradiction to the debate, as I heard him powerfully say that the May approach was unacceptable and the Johnson approach now requires substantial change. I look forward to the book I hope he writes. If he does not mind, I would be tempted to flick through to the end to see if there is a happy ending.

My version of my noble friend’s comment is that we do not like where we are, but the destination is not necessarily where we want to get to either. At its heart, it is why many of us have struggled with Brexit. As the noble Lord, Lord Jay, said, the sub-committee report was published on the same day as the Government’s Command Paper, and any reader of them both on that day, at the same time, would have seen the strength of consensus and unanimity in one and the relative weakness of going alone in the other. One called for building trust in dialogue and discussion; the other, for unilateral argument and renegotiation. One showed what a destination of travel may be; the other faced a dead end already.

As others have, I congratulate the noble Earl, Lord Kinnoull, and the noble Lord, Lord Jay, for introducing this debate so comprehensively and setting the tone. I am a happy member of the European Affairs Committee and a great admirer of the sub-committee’s work, not least its ability to bring about unanimity and consensus. I thought about which of his previous postings would have required the noble Lord, Lord Jay, to have the greatest skill and diplomacy to bring about this consensus, but I suspect it was a combination of them all. As the noble Earl, Lord Kinnoull, said, the committee sought to make, and in many ways made, sense of the tensions and contradictions described within the protocol.

The Government have been trying to deliver two competing narratives within our union for a number of years: that the freedoms now enjoyed as a result of leaving the EU single market, for GB, will liberate us; but for the other part of the UK, remaining in the EU single market will enrich it. Neither is necessarily true, no matter how many times it is said. This debate laid bare that concern.

The Minister in charge, Michael Gove, described the Northern Ireland protocol as the “best of both worlds” in this regard. He is in accord with the EU Vice-President Maroš Šefčovič, who cited a Northern Ireland businessman last week describing it as

“jam on both sides of the bread.”

However, the noble Lord, Lord Frost, who negotiated this “best of both worlds” deal now says he does not “entirely buy this”, giving evidence to the sub-committee to that effect. His own agreement, which he negotiated and which Michael Gove was so pleased to initial, represents what he now says is an

“unacceptable disruption to day-to-day lives”

of people in Northern Ireland.

There are two paths ahead: either to work to resolve problems and be open and honest about the consequences of this form of Brexit, or to seek to frame this as an EU intransigence argument. This is not a new approach—we have heard it quite a lot since 2016. The difficulty with saying that it is the EU intransigence in others is that tension is built and temperatures are raised. I believe the Government’s position is to take the undesirable parts of the protocol, rework them—rebalance them, as they said—and take away its worst aspects. However, their narrative has been challenged by Sir Jeffrey Donaldson, whom we heard last week. To quote from his speech:

“There are those who say the Protocol is here to stay and advocate working it and there are some who limit their ambitions to addressing its worst aspects. However what flows from the protocol is so fundamental and the problems it creates so great that the consequences of adopting such a strategy would damage Northern Ireland.”

These tensions and contradictions are still in play today.

The contradictions arising from compromises, as the sub-committee said, were a result of the form of Brexit the Government chose. To avoid a border on the island of Ireland, a sea border within our trading area was inevitable. To honour the treaty obligations, Northern Ireland would continue to be part of the EU—in law-making, judicial processes and taxation agreements—but with no representation. That is deeply unpalatable, as the noble Lord, Lord Empey, indicated, as any unionist within any part of these islands would have done.

These compromises were a result of that type of Brexit. As the Vice-President put it last week in the speech the noble Lord, Lord Kerr, referred to:

“This solution required compromise. Everyone around the table understood what these compromises meant in practice.”

I think Ministers did too, but for political reasons then chose not to outline the consequences. Whatever the motive, I agree with the sub-committee in paragraph 70:

“Yet the Government did not make adequately clear to the people of Northern Ireland what the Protocol would mean in practice.”

We are where we are. But where we need to be is honouring these treaty obligations. A year ago almost to the day, Sir John Major said:

“Over the last century, as our military strength has dwindled, our word has retained its power. If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained.”

As the noble Lord, Lord Jay, indicated, that means time, patience, dialogue and trust. Concerted efforts to build trust in this area are for the Government and for all parliamentarians to address.

I am glad that the sub-committee will address the issues of democratic deficit in its next work. I look forward to its work, because these are deeply problematic challenges. As the noble Lord, Lord Wood, put it, permanent grace periods deliberately setting aside some of these difficulties are not the response. In my view, perpetual grace is perpetual grievance, because it means that areas of complexity are not resolved in a consensus-building way but continue to be blamed on the others. For example, there are elements the Government Command Paper did not mention; decisions made by the Johnson Government, not the EU, over the last year have meant challenges to trade within our union. For the first time in our history, a Government of the UK are compelling UK businesses that trade within the UK to Northern Ireland to register with them as an exporter. Any goods from GB to Northern Ireland will have to be separately conformity assessed and separately labelled.

This has been delayed for a further year by the Government—to the great relief of the business community, because it is not ready for it—but nevertheless, this is the Government’s policy. Since last month, over the summer, new parcel and shipping taxes for consumers, set by a foreign power and over which they have no representation, are now being paid by people within the United Kingdom. There is no mention of any of them in the Command Paper. Will the Minister say whether these measures will stay? If the Government want to rebalance the approach to remove these challenges, what is their response to the challenges that they have put in place?

I asked the Minister previously about this, and he said in reply

“we are proposing … an extremely light-touch measure to allow trade to flow freely within the UK customs union and single market”.—[Official Report, 21/7/21; col. 268.]

However, there are barriers and restrictions and what the Government have not done in building their case to say that there are costs and burdens on business is to strip out the areas that they have introduced compared to those that the EU has asked for in its interpretation of the protocol. It is now up to the Government to own the areas of their agreement so that people can believe their word. They indicated in their Command Paper that they have paid £1.2 billion to ameliorate the costs. What is the likely ongoing cost of trade support for businesses?

Finally, I turn to an area where I simply cannot understand the Government’s position. The Vice-President of the Commission indicated in his speech last week that there were significant potential gains for Northern Ireland from being part of the single market. The Government have indicated that that is not the case. Will the Government and the European Commission work together to promote Northern Ireland as a place of investment and of economic prosperity? Whatever destination we may end up at, we know that Northern Ireland will still be part of the European single market under this treaty obligation. It is not just for the Northern Ireland business community to make it a success; it is for the Government and the European Union working together to ensure that Northern Ireland flourishes as a wonderful part of the union.

Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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My Lords, it is a pleasure to follow the noble Lord, Lord Purvis, especially as he ended on something of an optimistic note. There was not a lot of optimism in his contribution, but he at least spoke of future prosperity for Northern Ireland, which I think is a desire we all share.

I thank the committees, and especially the noble Earl, Lord Kinnoull, and the noble Lord, Lord Jay, for their excellent work in leading this important task. The noble Earl began by recalling someone saying that being in Northern Ireland at the moment has felt like being used as a pawn in a game. It is a dreadful assessment, and it ought to stop us all in our tracks. Both reports emphasise the value of establishing a relationship of trust between the United Kingdom and the European Union. The point made by the noble Lord, Lord Jay, about scrutiny of EU legislation as it affects Northern Ireland is important and I look forward to the Minister’s response to his question.

The committee sees some reasons for optimism about Northern Ireland’s ability—

Baroness McIntosh of Hudnall Portrait The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
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My Lords, I apologise for interrupting, but, as we have all been anticipating, there is a Division in Chamber. The Committee will adjourn for five minutes—I believe that is the accepted time—in order to allow Members to record their votes.

Sitting suspended for a Division in the House.

Baroness McIntosh of Hudnall Portrait The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
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The five minutes we were allotted for voting have elapsed, but a significant number of Members of the Committee seem to have gone elsewhere. Since we are on winders, I am afraid we cannot really proceed without them. Anybody who knows where they are and could chivvy them might be doing us all a favour.

Sitting suspended.

Baroness McIntosh of Hudnall Portrait The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
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My Lords, rather than delay the Committee any further, I think we will proceed, although I believe we are still missing one Member, who, let us hope, will return shortly.

Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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I am sure that the lure of a cup of tea was probably greater than the speech that I am about to finish, or that the Minister will provide as well.

The committees have done vital work but, so far, the Government have been unable to clarify a way forward. Perhaps not today—that might be too much to ask—but we look forward soon to the Minister providing answers to the question of what the future will look like for Northern Ireland and when we will see arrangements on a long-term, secure and predictable footing. As the noble Lord, Lord Wood of Anfield, said, the Government need to be candid—as candid as they can—about what the protocol does, as opposed to what the Government say or have said in the past it does. Does the Minister agree with the noble Lord that failing repeatedly to implement the protocol and having government by grace period is disastrous for the UK’s international reputation?

Various solutions have been proposed, but we all seem broadly to agree that a red line needs to be that any suggestions requiring border infrastructure on the island of Ireland should be disregarded. Many issues will have to be overcome, but I do not want to have to explain to the next generation of young people in Northern Ireland that a hard border, with all the consequences we fear that would bring, came about because this generation wanted the freedom to reduce food standards despite saying that they had no intention of reducing standards. As the noble Baroness, Lady Suttie, said, regulatory sovereignty should not be prized at the expense of political stability. I realise that that is a very stark way of putting this. I expect the Minister will say we can have both—I do hope so—but it would be useful to know how he intends to do that.

I enjoyed the speech of the noble Lord, Lord Empey, very much. It was really engaging. I was just saying to the noble Earl, Lord Kinnoull, that I could listen to him all day.

Lord Empey Portrait Lord Empey (UUP)
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Everybody should say that.

Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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I am sure they do. He urged realism and pragmatism, and encouraged dialogue, and he is obviously right on all those points. We used to hear a lot of talk about technological solutions to this problem. Can the Minister update us on whether the Government are still pursuing those technological solutions and describe to us what they could involve?

The current situation of deadline followed by extension followed by deadline is a nightmare for business. Options are available: alignment, equivalence, domestic legislation. The choices we have are sometimes considered in a very rigid and limited way, posing alignment against equivalence. As the noble Baroness, Lady Ritchie, said, we need a bespoke solution for Northern Ireland.

The Government have rejected alignment, and the EU has rejected equivalence. That is fine, but we need flexibility and compromise, and, as we have heard repeatedly today, we need trust. We could introduce domestic legislation, for instance. What response have the Government had from the European Union to the option of imposing penalties on businesses which are found to have failed to comply with the rules?

In his speech at the British-Irish Association on 4 September, which was referred to by other contributors, the Minister said that these are

“existential issues of territory, of identity, of borders, all against a background of a peace process and institutions in Northern Ireland which can only bear so much weight … So we badly need to look reality full-on. To put our arrangements here onto a more durable and sustainable footing, one that represents genuinely mutual benefit”.

I welcome this. I could not agree more. This is the kind of approach that we need from the Government. I note that the tone from the European Union also seems to have changed in recent weeks. However, other than saying in the Command Paper that Article 13 of the protocol allows for subsequent agreements to replace it, the Minister does not really tell us what he thinks should be done. Still, this is a change of tone, and we should welcome it.

While we have the Minister here, I want to ask him about Article 10 of the protocol, which has not received much attention today. Can he provide the Committee with his assessment of whether, and in what circumstances, Article 10 has any impact on state subsidy in Great Britain, not just in Northern Ireland? What legal advice was sought before agreeing to Article 10? Did he know that restrictions on subsidy in Northern Ireland could “reach back”—which I think is the legal term used—into the rest of the UK? I ask this because not only because I am interested in the answer but because I know from the Command Paper that the Government think that Article 10 is now redundant. I can see why they would make that claim, but it reveals their approach to these negotiations. After all, the Prime Minister described the protocol at the time as an ingenious solution. Did he know when he made that comment that he was potentially compromising on state aid? If he did not, he really should have done.

The Government have an appetite for immediate gratification, agreeing things to get through the immediate crisis. This can work; we get it—

Baroness McIntosh of Hudnall Portrait The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
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I am terribly sorry to interrupt the noble Baroness again. She is most unfortunate to have had both these votes in her speech, but there is a Division again in the Chamber. The Committee will adjourn for five minutes to allow Members to record their votes.

Sitting suspended for a Division in the House.

Baroness McIntosh of Hudnall Portrait The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
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I sense the Committee is anxious to be under way again, so let us say five minutes have passed.

Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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Thank you, I feel like I should appeal for injury time or something. I was talking about the Government’s appetite for immediate gratification and was about to ask the Minister whether he has reached the point where he accepts that a change in approach is needed.

It seems very clear that in their haste to sign an agreement the Government either did not do their homework and think through the implications or, perhaps more likely, knew what they were signing up to but did so with insufficient regard to the UK’s need to keep its obligations. This is particularly troubling when we seek to establish new trade relationships around the world. The country and our partners abroad will be asking themselves whether this is just bad faith or incompetence. Whichever it is, it is coming at a real cost for Northern Ireland and the UK.

We need serious long-term solutions, and it seems pretty obvious to most people, from contributors to this debate to the CBI and the Ulster Farmers Union, that we need a veterinary agreement. We have nothing to fear from cast-iron commitments to high standards. After all, that is a commitment the Conservatives made in their manifesto. Finally, I stress to the Minister that instability is once again building, and we cannot have another year of stop-gap solutions. We need a long-term agreement which will reduce the barriers to which the Government agreed.

Lord Frost Portrait The Minister of State, Cabinet Office (Lord Frost) (Con)
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My Lords, I begin by thanking all noble Lords who have contributed to today’s debate, and everyone on the two committees, the European Union Committee and the Sub-Committee on the Protocol on Ireland/Northern Ireland, who prepared the two reports that we have discussed today.

It has been an incredibly rich debate and very many interesting points have been raised. It is fair to say that quite a lot of them have been discussed extensively already, one way or another, over the last five years, but I will do my very best to deal with the points made in the limited time I have available. Much has of course changed since the European Union Committee’s report from last year. Nevertheless, as has been noted, the report correctly anticipated many of the difficulties we are now facing, in particular, as many noble Lords referred to, the complexity of balancing the commitments in Articles 4 and 6 of the protocol with those in Article 5.

The introductory report from the Sub-Committee on the Protocol on Ireland/Northern Ireland, chaired by the noble Lord, Lord Jay, identifies many of the issues that we must confront if we are to deliver a sustainable solution for Northern Ireland. Of course, as has been said, the date of its finalisation coincided with the publication of the Command Paper, which means that the very latest evolution of the position could not be fully taken into account. The report is no less powerful and useful for that in its scrutiny of the operation of the protocol and I am grateful to the committee for it. The Government will respond later this month; lots is happening but, in doing so, we will of course provide the most up-to-date response possible, with an eye on the situation in Northern Ireland and on talks with the EU, which both continue to evolve rapidly. That timing will also us time to comment on the planned joint consultative working group which—to the point from the noble Earl, Lord Kinnoull—will take place tomorrow and on a potential specialised committee, which may take place during this month. If that is the case, we will reflect those in our response.

I also thank the noble Lord, Lord Jay, for his comments on scrutiny. It is of course our intention—I repeat it again—to ensure that the committee has what it needs to do its job in these very unusual circumstances.

As I was listening to the debate, I was reminded of the very well-known opening line from Anna Karenina:

“All happy families are alike; each unhappy family is unhappy in its own way.”

What I have heard is nobody being particularly happy about the protocol, but everybody having a different set of problems with it. Unfortunately, it is the responsibility of the Government not just to analyse but to act, and that is what we intend to do. That is what we have set out in the Command Paper and that is how we intend to take things forward.

Against the background of the comments on the two reports that we have been debating, the Government of course agree with the analysis that there has been significant economic disruption in Northern Ireland. As the noble Lord, Lord Dodds, noted, this affects everybody in Northern Ireland, not just a part of it. Much of the problems that we face can be attributed to the EU’s rigid focus on protecting the single market over and above other elements of the protocol. This has forced businesses to engage in these burdensome and disproportionate customs and agri-food requirements and has caused significant trade diversion as companies reorganise their supply chains. I agree with the noble Earl, Lord Kinnoull, that companies could consider—indeed, they arguably are, in the worst case—the viability of operating in Northern Ireland at all.

We have also seen a degree of political instability and community unrest, exacerbated by concerns—about which we have heard today—that there is a democratic deficit with large volumes of EU law applying without any say for the people of Northern Ireland. I agree that significant constitutional and democratic issues are raised by the protocol. My noble friend Lord Moylan put them very clearly. They are also touched on in the court case, the judicial review, which several noble Lords referred to. I will not go further on that as it is under appeal, but it is obviously a significant case.

I will pick up a couple of points made by a number of noble Lords. The issue of why the Government agreed the protocol in the first place was, not surprisingly, touched on by many—the noble Baroness, Lady Suttie, the noble Lords, Lord Thomas, Lord Kerr and Lord Empey, and, perhaps most strongly, the noble Lord, Lord Hannay. Many noted that the protocol was agreed by this Government and wondered why we agreed a deal the difficulties of which are so evident. In answer, I refer to my noble friend Lord Caine’s description of the circumstances that led to the unsatisfactory joint report at the end of 2017. As he rightly said, that shaped everything that followed.

In paragraphs 13 and 14 of the Command Paper, we set out our analysis of the situation. We point out the consequence of the then Parliament’s decision to undermine the Government’s negotiating hand at a critical moment in these talks. As we say in the Command Paper, in those circumstances, it was right to agree the best compromise we could, which allowed the UK as a whole to leave the EU in a genuine and meaningful way, without being locked into the backstop and enabling a free trade agreement such as that which we subsequently agreed. We feared that some of the elements of the protocol that were forced upon us in those final days and insisted upon by the EU would turn out to cause problems, and we were right in that analysis. Nevertheless, as many noble Lords said, that is how we have got to where we are now.

The noble Lord, Lord Purvis, and the noble Baroness, Lady Suttie, asked whether this is the best of both worlds, having agreed the protocol. Is the right to access the single market important? I am with the noble Lord, Lord Dodds, on this: he pointed out, as is correct, that Northern Ireland’s economic links are overwhelmingly with Great Britain. Access to the single market does not, in our view, compensate for disruption of those links. The important thing is the economic unity of the UK; the protocol purports to protect the UK single market, but it does not, at the moment.

If there is relative calm in Northern Ireland at the moment, it is because the proposals in our Command Paper are recognised as serious and enjoy a lot of support, and because there is an expectation that the EU will take them seriously. We therefore agree with the assessment of the committees’ reports that the UK and EU must collectively take urgent action to address the situation as it now is. If our proposals in the Command Paper were agreed, they would satisfactorily address many of the reports’ conclusions, including those on at-risk goods, supplementary declarations, parcels, medicines, livestock, pets, VAT, quotas—the list goes on.

As we know, the problem is that the protocol is not delivering in its current form. It is not delivering on its core objectives: to minimise disruption to everyday lives, to respect Northern Ireland’s integral place in the UK’s internal market and, above all, to preserve the delicate balance in the Belfast/Good Friday agreement, in all its dimensions. Once again, I very much agree with the noble Earl, Lord Kinnoull, that the protocol must ultimately be viewed through the lens of the peace process.

This situation needs to be fixed. We would prefer to do so by negotiation and have set out proposals to that effect. We believe they are extremely reasonable. As the noble Lord, Lord Thomas, noted, they work with the grain of the protocol. They do not scrap it or sweep it away. We agree with the noble Lord, Lord Wood, that simply scrapping the protocol is not a solution. There will always need to be a treaty relationship between the UK and EU covering Northern Ireland. The question is: what? Our proposals would put that on to a different and more sustainable footing.

Substantively, they would differentiate goods moving from Great Britain to Northern Ireland according to destination and we, as the UK Government, would take on the responsibility of managing those processes ourselves. They would enable goods of both standards, UK and EU, to circulate within Northern Ireland, thus eliminating one of the major impediments in practice to maintaining the UK’s single market.

In this context, the noble Baronesses, Lady Chapman and Lady Suttie, and the noble Lord, Lord Hannay, again raised the question of an SPS agreement. Our proposals as set out in the Command Paper would deal with the issue of agri-food and food standards by this dual-standard proposal for Northern Ireland. As we say in the Command Paper, a tailored SPS agreement could certainly help support those arrangements, but they are not essential to them. We have put forward such a proposal. It has not been discussed as much as we would like, but perhaps it will be in the future.

The noble Baroness, Lady Chapman, also raised Article 10, which, as she rightly noted, is touched on in the Command Paper. It is correct to say that Article 10 is to a large extent superseded. We will soon have a clear, legally binding framework for state aid and subsidy policy within the UK. It makes sense to fit arrangements in Northern Ireland into that context rather than the other way round.

To make all this work, we are ready to put in place exceptional arrangements for data sharing to reassure the EU, and, as has been noted, we are ready to penalise those looking to export to the EU goods which do not meet EU standards. These would be significant changes to the protocol, but they are still highly unusual by international standards. They would represent a huge compromise by the Government: to enforce others’ rules within this country.

If these arrangements under the protocol are to be sustainable, they must be underpinned by an amended governance framework. I am afraid I do not share with the noble Lord, Lord Thomas, the benign view of the European Court of Justice and the way it has worked. Our view is that, in the sensitive situation of Northern Ireland, the best way forward is to remove the role of the EU institutions and the jurisdiction of the court by negotiation if we can. I have met many in Northern Ireland. I know that the pre-eminence of these institutions has fostered a sense that Northern Ireland is being treated like an EU member, to be held in compliance in relation to rules over which there is no say and without any of the checks and balances that apply if you are a normal member state.

The noble Lord, Lord Kerr, raised north-south bodies and went a little further by suggesting that a sensible way forward would be for Northern Ireland to have some representation within the EU institutions while these arrangements applied in Northern Ireland. It probably will not surprise the noble Lord to hear that I am not a fan of that solution. The UK is not a member state of the European Union; it is not represented in the EU institutions. It could not make sense for a part of the UK to be so represented. More to the point, I do not think it would help reassure those concerned about their identity and the status of Northern Ireland within the UK if we went down that road. It is not a useful way forward. As my noble friend Lord Hannan noted, it would pull Northern Ireland further into the EU’s orbit in a way that would exacerbate some of the difficulties rather than help resolve them.

The reality is that disputes in Northern Ireland are best resolved not through imposing the EU’s legal order but by finding compromises through arbitration that can balance all the objectives of the protocol and win the support of everybody in Northern Ireland. We believe that is the right way to proceed.

As I have said, we would prefer to proceed by negotiation. I agree with the noble Lord, Lord Jay, and the conclusions of the committee that this is the most constructive way forward. I welcome the comment of the noble Baroness, Lady Chapman, that she has noted a change of tone in the way that we have pursued things in recent weeks.

We now need the space to conduct the necessary discussions with the European Union as part of a meaningful political process. That is why, straight after publishing the Command Paper, we proposed a standstill in operating the protocol to create room for exactly those negotiations. That is also why, as I have noted, last week we announced that the protocol will continue to operate on its current basis for now. The current processes for moving goods between Great Britain and Northern Ireland are maintained, and the grace periods and easements remain in place.

The Commission has noted this decision and has said that the current legal actions are on hold. We too welcome this change in tone from it, which I think allows room for discussion. It will also ensure that businesses can have confidence that there are no cliff edges in operating the protocol and that consumers in Northern Ireland can continue to be supplied. However, the extension of grace periods is not and cannot be a permanent solution to this problem and something more durable needs to be found. I can certainly reassure the noble Baroness, Lady Hoey, that our aim is not to continue this situation indefinitely. The current situation is designed to create space for discussions; that is its purpose.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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Can the Minister please give way? I am grateful. For clarification, regarding the democratic deficit and the need for consultation, in paragraph 71 of the Command Paper the Government are calling for

“more robust arrangements to ensure that, as rules are developed, they take account of their implications for Northern Ireland—and provide a stronger role for those in Northern Ireland to whom they apply”.

Can the Minister outline what the Government intend by some of these mechanisms, because they do not state it in the Command Paper?

Lord Frost Portrait Lord Frost (Con)
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I thank the noble Lord for his intervention. The point that he mentions in paragraph 71, the issue of engagement of the Northern Ireland institutions in this process, is one of the most sensitive of all and I do not think it would have been right for us to set out a specific way forward in the Command Paper.

The difficulty we have is the lack of democratic consent for specific measures as they come through from the EU’s law-making process. At the moment those are imposed without consent. We are proposing a reordering of the governance arrangements of the protocol so that the consent, if it exists in Northern Ireland for such measures, can be more real, meaningful and based on genuine debate. There are a number of ways of achieving that if the EU wants to go down that road and that is a pre-eminently political question for people in Northern Ireland, as well as one for the UK Government. That is why we have set out the issue without proposing a specific way forward, but it is very much an issue for discussion.

We want to proceed by negotiation and that is part of it. I want to be clear about what is possible for us in doing so. First, the Command Paper sets out how the tests for Article 16 are, in our view, met. I urge the European Union to take that judgment seriously. It would be making a significant mistake if it thought we were not ready to use Article 16 safeguards if that were the only apparent way forward to deal with the situation in front of us. As my noble friend Lord Hannan commented, there is ample justification for doing so.

Secondly, if we are to avoid this situation there needs to be real negotiation between us and the European Union. The noble Earl, Lord Kinnoull, correctly referred to the need for an atmosphere of co-operation and trust. Others, such as the noble Baronesses, Lady Suttie and Lady Chapman, and the noble Lord, Lord Empey, echoed that. The question of trust has come up a lot in these discussions. The noble Lord, Lord Jay, asked for assurances that the time we have before us would be used constructively and the noble Baroness, Lady Ritchie, asked for an assessment of progress on that negotiation. We have had several technical discussions. I will give the floor to the noble Lord, Lord Hannay.

Lord Hannay of Chiswick Portrait Lord Hannay of Chiswick (CB)
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The noble Lord mentioned Article 16. Can he answer two questions? First, does he agree with the view expressed in the debate—which I do not agree with—that the European Union triggered Article 16 in January? My understanding is that the Commission sought the powers to trigger but never triggered. The more important question is: have the Government done any analysis at all of the sort of compensatory measures the European Union would likely take if we triggered Article 16 in circumstances it considered unjustified?

Lord Frost Portrait Lord Frost (Con)
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I thank the noble Lord for his intervention. The issue of what the European Union did or did not do at the end of January deserves a bit of comment. There are two aspects to this. The first is the question of Article 16: was it triggered or not? In a way, obviously, the intention is as important as the fact. It is our view that it was triggered, however briefly. It was certainly the intention to do so. The second aspect of what the EU did in January—the reason why Article 16 was used—sometimes gets less comment. It intended to use it to put in place a process across the land border on the island of Ireland, something that for the previous five years we had been told was impossible, undesirable and disastrous. That is as much why this struck and changed the debate so much as the very fact of Article 16.

On the second point, if we were to use Article 16, it would obviously be open to the EU to consider countermeasures if it wished. I do not want to get too far down the hypothetical road, but it is obviously a possibility. Of course, there has been a good deal of analysis of that. We would have to see what the situation was in those circumstances, but everyone has an interest in avoiding needless deterioration of trade and needless further economic difficulties for either side, at a time when supply chain and trade costs are so significantly raised already. That will obviously be a matter for the European Union, and we have to take it as such.

To return to my flow, regarding where we are in talks at the moment, we have had a series of technical discussions with the EU and continue to do so. These have been quite helpful, but they are nevertheless talks about talks; they are not yet a process that gets to the fundamentals, and we need to get into that. We must get into something more substantive as a matter of urgency.

A real negotiation does not mean the EU coming up with its own plans for solutions within the framework of the existing protocol and presenting them to us, take it or leave it. To be honest, I have been a bit concerned by a couple of the comments I have heard from Commission representatives in recent days, which seem to suggest they might be considering that way forward. The noble Lord, Lord Kerr, picked up the comment by Maroš Šefčovič the other day, when he said:

“A renegotiation of the protocol … would mean instability, uncertainty and unpredictability in Northern Ireland.”

Unfortunately, we already have all those things in Northern Ireland. The question is: how do we move on from them? I do not take Commissioner Šefčovič’s words as a dismissal of our position. I take them as acknowledgement of it, but also as a fairly clear indication that there is more to be done. I urge the EU to think again on that point and consider working to reach genuine agreement with us so that we can put in place something that will last.

I am conscious of time and will wind up quickly. The negotiations need to begin soon. I will not put a timescale on that, but it needs to be urgent as the situation is urgent.

Finally, I would urge the Commission to be sensitive to the situation in Northern Ireland in its actions. The EU has a treaty with us, and as my noble friend Lord Moylan made very clear, that does not make it a part of the Government of Northern Ireland. We are very happy to receive representatives of the Commission in Northern Ireland at any point, so that they understand the situation there, but I gently suggest that they should be cautious in coming to public judgments about the situation, or suggesting it is for the EU itself to decide how to resolve it. I do not think that will make the situation calmer; it will make it more difficult.

The situation we face is complex and challenging, self-evidently, but there is still a real opportunity for us both to find durable arrangements. That is our intention and our wish, and that is where we will be putting all of our effort in the next few weeks—in arrangements that can win the confidence of communities in Northern Ireland. We are ready to seize this opportunity and we urge, as strongly as we can, the EU to do the same. Bold action is needed to build a new, sustainable consensus. Once again, I thank all noble Lords for their contributions to the debate, and I look forward to continuing it, as I am sure we will, in many different fora in the future.

Earl of Kinnoull Portrait The Earl of Kinnoull (CB)
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I suppose the refrain of the afternoon is that we are where we are, which is almost at the end. I would like to add my thanks to all noble Lords who have taken part in what has been an absolutely absorbing and very high-quality debate, with views from every side of this very difficult set of problems.

I want to make three very brief observations. First, I note the sheer scale of the achievement of the noble Lord, Lord Jay, and his committee in producing a punchy and very helpful report by consensus, knowing what strong feelings there were sitting around that table. I hope that the Government, when they read the output of that committee’s work now and in the future, will listen all the more carefully knowing where it has come from. It is a remarkable achievement. My second point was prompted in this debate by what the noble Lord, Lord Woods, said, right at the start: a grace period extension is not a solution. It was very heartening to hear the Minister grapple with this issue and say that dialogue is the way forward, and to see him look very determined indeed to get that dialogue going. It will not be an easy road. This brings me to my third point, one I think everyone has raised this afternoon, which is trust and the importance of it. Trust is the necessary fertilizer of any successful dialogue, and it is important to carry on building that trust. Every single thing communicates in trust, which needs to be built by all sides. It is not just the Government or just the EU; it is also the concern of other parties involved in this very difficult negotiation. Everyone here should be part of that process and, having said that, I beg to move.

Motion agreed.

Lord Jay of Ewelme Portrait Lord Jay of Ewelme (CB)
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I too am grateful for all those who have taken part in the debate this afternoon. I am grateful too, to the noble Lord, Lord Frost, for the answers he has given so far. I look forward to further answers in response to the committee’s report in the days to come. It has been a fascinating debate and it shows that you can discuss even the most difficult issues—and there are some pretty difficult issues here—with calmness, a certain dignity and, from time to time, a historical aperçu, if I may use that expression.

The committee will be looking at some quite tricky issues in the months ahead. Ahead of that, I have taken very careful note of the Gypsy’s warning issued by the noble Lord, Lord Empey.