Northern Ireland After Brexit (Northern Ireland Scrutiny Committee Report)
Debate between Baroness Foster of Aghadrumsee and Lord Bew(5 days, 8 hours ago)
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Baroness Foster of Aghadrumsee (Non-Afl)
It is a great pleasure to follow the noble Baroness. I agree with all that she had to say in relation to the issues in the report.
I am delighted to speak to this report as a member of the scrutiny committee. I declare my interests, in particular as chair of InterTrade UK and of Boyce Precision Engineering, and as a member of Co-operation Ireland.
I thank the chair, the noble Lord, Lord Carlile, for the way in which he set out the detail of the report and I echo his thanks to our wonderful committee staff. I want to concentrate on the action taken to mitigate the democratic deficit for Northern Ireland and its people, given that, as we have heard, aspects of EU laws apply in Northern Ireland without the consent of parliamentarians either here or in Stormont.
It is clear from the evidence that we took in our committee and indeed from reports of the Northern Ireland Affairs Select Committee in another place that the arrangements set up to try and mitigate the democratic deficit have, to date, been insufficient. We can never truly deal with the issues arising from the Windsor Framework or the protocol until they are replaced with much more realistic and proportionate arrangements and agreements. Until that happens, we must try to make the mitigations as effective as they can be within the constraints set by these flawed agreements.
When I was reflecting on the comments of the noble Lord the chair at the start of his speech around the Windsor Framework, it reminded me of the old joke: a tourist comes along a country road, sees a farmer hanging over a gate and asks for directions, and the farmer replies, “Well, I wouldn’t start from here”. I think that is certainly the feeling of a lot of us but we have to start from here because that is what we have at the moment.
Lord Bew (CB)
I support what the noble Baroness has been saying. There is a problem with democratic deficit but it is perhaps worth reminding ourselves that the leading thrust of the Windsor Framework is not the democratic deficit. It is about the move away from the British Government’s commitment to supporting an island economy. That is there in the 2017 May Government agreement and the 2019 agreement. It is partly concerned with the democratic deficit but it has transformed the shape of, and the debate about, the Northern Ireland economy. These problems of the democratic deficit absolutely remain, as so many speakers, including the noble Baroness, have said, but they are now in a different context. When the NIO Minister, Matthew Patrick, spoke at the British-Irish Parliamentary Assembly, it is striking that when he talked about the relative success now of the Northern Ireland economy he was stressing areas—most obviously defence and fintechs—that are unambiguously part of the British economy.
Baroness Foster of Aghadrumsee (Non-Afl)
I thank the noble Lord for that intervention. I agree that that is an important part of the Windsor Framework but, unfortunately, the current architecture of the framework is the product of a number of political developments to try to make it more workable for businesses and consumers. When you try to retrofit solutions on to an already-flawed agreement, it often does not end well. That is, unfortunately, where we are today.
The number of bodies that have been set up have led our report to say that it is,
“a complex and opaque set of arrangements which makes it difficult for Northern Ireland stakeholders to engage effectively with key decision-makers and have their voices heard”.
We attempted to construct a diagram of all the bodies in the report, as the noble Lord the chairman has pointed out, but even that does not do the situation justice in terms of the complexity.
The first task, of course, when there are problems and barriers to trade within the UK internal market, is to have those recognised by our own Government and the European Union. But denial, I have to say, has been a huge source of frustration for businesspeople and consumers alike across the UK: “Barriers—what barriers? Costs—what costs?” That is what you are dealt. When there is an air of denial, the problem is not going to go away. Of course, the difficulties are still there. There are small businesses in particular in GB that have decided to stop supplying goods into Northern Ireland altogether. That was the evidence from the Federation of Small Businesses, which carried out an effective and timely survey across the UK, which it was able to share with the committee. I think members will agree that it was very useful at that time and is surely something that should concern His Majesty’s Government.
As we have heard, some new bodies were set up under the Safeguarding the Union Command Paper, which allowed the Northern Ireland Assembly and Executive to resume operation after a two-year hiatus. The independent monitoring panel looks at data and trade flows in the UK internal market, then provides evidence on the workability of the internal market guarantee, while the organisation I chair, InterTrade UK, provides advice to the Secretary of State for Northern Ireland on issues relating to the operability of the Windsor Framework, as well as looking at connectivity across the UK. InterTrade UK started life without a budget line and with the burden whereby many believed that it had the same powers and resources as InterTradeIreland—it does not. We now have a small budget, for which I am grateful, but it will not be able to match the wherewithal of InterTradeIreland, as the two bodies are totally different entities; InterTrade UK is a non-statutory body.
One of the suggestions from our evidence to the committee is that InterTrade UK should have representation from Great Britain as well as from Northern Ireland; that is the recommendation at paragraph 301—the noble Lord, Lord Empey, was very strong on this issue. We have a lot of trading difficulties with small GB-based companies selling into Northern Ireland, therefore there should be GB representation on the board of InterTrade UK. As the chair of that organisation, I fully support that recommendation and hope that the Government will act on it in their response. The response said that the Government “will give further consideration” to the recommendation at paragraph 301, and I hope the Minister has an update on that.
The work that InterTrade UK has undertaken thus far has been to raise issues of concern to the Secretary of State for Northern Ireland on general policy. In the absence of another vehicle, we have also been raising specific issues that have come directly to our attention. The most recent letter in my name to the Secretary of State was on the availability of white goods in Northern Ireland and the price of pet prescriptions. Incidentally, they have doubled in the instance that was brought to my attention. I hope that the much-anticipated one-stop shop, which has to get going as quickly as possible, will help consumers and businesses alike when it is set up. We await a clear timeline and design—I hope as soon as possible.
One of the most impactive evidence sessions that we had as a committee is not actually in the report before us, because it came after the report was concluded. It was from the Road Haulage Association, which brought forward some very important evidence that I will briefly mention. It told us that the latest Northern Ireland Statistics and Research Agency trade data indicates a sustained decline in GB-NI freight volumes. The increasing administrative and regulatory burden associated with moving goods from GB to NI is acting as a deterrent to operator participation. It showed us that the number of GB-based fleets operating in Northern Ireland has declined by approximately 36%, and that GB-to-Northern Ireland journeys undertaken by GB-registered vehicles had fallen by 52% in 2024.
The Road Haulage Association brought forward a number of issues to us. First, there were issues with commodity codes, particularly for groupage movement and haulage. In this system, each pallet in the truck can belong to a different sender, as Members know, which contains many individual items. While that is efficient commercially, it creates complexity for customs because every item requires its own commodity code. That is why groupage movements face higher administrative burdens and delays, which can cause real issues for an entire truck.
The complexity of that system has been made even worse, because the UK internal market scheme allows businesses with a turnover of under £2 million to use the simpler green lane with some exemptions for certain sectors. Although that is higher than the previous £500,000 limit, it is still far below the UK’s SME classification threshold of £44 million. As a result, many small and medium-sized businesses are excluded from the UK internal market scheme. Of course, larger companies are not affected by all this, because they can manage it, but it is a real issue for the smaller companies.
The recommendations made by the RHA go some way to help mitigate the problems of the Windsor Framework. I ask the Minister, if she cannot respond today, to think about some of these issues and revert back to me. First, the RHA would like to see the introduction of a trusted haulier scheme. The noble Lord, Lord Murphy, also referred to this. It would reduce frictions for logistics and haulage businesses and allow qualifying hauliers to move goods with greater ease at a reduced cost to businesses trading between Great Britain and Northern Ireland.
Secondly, the RHA would like to see that £2 million threshold for the UKIMS removed.
Lastly, and most importantly, the RHA wants to move the determination of “at risk” from the Irish Sea border to the point of sale. Hauliers often do not have the information required to resolve problems when they are bringing goods across the Irish Sea, but determining which goods are at risk at the GB-NI border will always cause costly and disruptive delays, especially for just-in-time goods, which a lot of these are. It brings additional cost and delay in moving goods that risks unbalancing Northern Ireland’s dual market access and trade diversion.
Determining risk at the point of sale would mean that goods’ end destination would be known for sure and that customs processes could be applied only on goods that are leaving the UK and going into the single market of the European Union. Information about the buyer and seller is already required for all movements of goods from Great Britain to Northern Ireland, so there is no lost information from allowing goods to move freely across the Irish Sea.
I have managed to speak to only some of the issues raised in what is a very comprehensive report. I am sure other colleagues will deal with the other issues contained therein. But, in concluding, I always come to these matters in a pragmatic way to try to find solutions to problems, because that is what I think politics is about: trying to find solutions. However, to attain solutions to problems, you first have to acknowledge that there is a problem. I am not sure that there is a willingness in either HMG or the EU to admit the scale and nature of the problem that currently exists. With the much-vaunted reset on its way, I hope the closed mindset on what is happening in Northern Ireland can be lifted and that a more open and balanced dialogue can begin, for the benefit of those British citizens who live in Northern Ireland and businesses right across the UK.
Ecodesign for Energy-Related Products and Energy Information (Amendment) (Northern Ireland) Regulations 2025
Debate between Baroness Foster of Aghadrumsee and Lord Bew(1 year ago)
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Lord Bew (CB)
I thank the noble Lord, Lord Dodds, for that information. I have not heard today’s evidence—although I did watch last week’s evidence to the Select Committee—and I am therefore in the dark. I will simply say that it is essential to accept that we are dealing with a very messy historic compromise. It does not help that there is a tendency on the part of those who are unhappy with the messiness of that compromise to discuss the working out of the Windsor Framework and safeguarding of the union without dealing with the obvious, palpable benefits to a narrowly defined unionist community in Northern Ireland. That is the problem. The consequence is that the people of Northern Ireland still have a sense of pessimism about their future, because there is no answer. Everybody knows that the Windsor Framework passed in this House and the House of Commons by a majority of several hundred, and that if there were another vote like the that on the Windsor Framework—under which, essentially, these regulations exist—there would be an even larger majority. There is no help.
People say that this is terrible and there is not political answer to it. My argument is that it is better and more accurate to describe exactly what is happening under the Windsor Framework and the strengthening of the union, and not just to list the frustrations, of which, I accept, there are many. It is better to have a balanced approach to the meaning of these two documents and their impact in Northern Ireland.
Baroness Foster of Aghadrumsee (Non-Afl)
Before the noble Lord sits down, will he reflect on the fact that things could move along better if there were more genuine openness on consultation? He knows the democratic deficit that exists, hence your Lordships’ Select Committee inquiry. That is the difficulty: the consultation issue is key, and yet it has not been acknowledged in the other place. I hope that it is acknowledged in this House.
Windsor Framework (Retail Movement Scheme: Public Health, Marketing and Organic Product Standards and Miscellaneous Provisions) Regulations 2023
Debate between Baroness Foster of Aghadrumsee and Lord Bew
Lord Bew (CB)
My Lords, I rise to speak to the regret Motion of the noble Baroness, Lady Hoey. She and I are very old friends and have agreed and still agree about many things, and I regret not being able to support the regret Motion that she has put before the House tonight, although I agree with much of what she said and much of what has been said from the DUP Benches.
I was particularly encouraged to hear the noble Lord, Lord McCrea, say that the crucial thing was the response to the seven tests. That is a very important matter. I also noticed that the first test makes reference to Article VI of the Act of Union, and the fulfilment of that promise. I regard that as somewhat encouraging. As the noble Lord, Lord McCrea, is a man of great honour, I am certain that he will hold to that position, as it is a matter of some substance. What has happened is that we have moved away from the seven tests, and much of the discussion tonight has moved away from the seven tests.
To go to the heart of the regret Motion of the noble Baroness, Lady Hoey, the Windsor Framework is actually based on technical data-sharing and agreed application and reinforcement. This is a key part of it. In late 2022, I think, in a series of asks, we were able to say to the European Union that we have a new technology that permits us to do things in a new way. The Windsor Framework is not just about that, but it certainly builds on that. Of course, if we refuse to share data, the EU can respond by not accepting the easements that it has put in place and the changes that it has made. But this is a two-way street, and it cannot act arbitrarily—it is as simple as that; it is that sort of agreement. It is important to understand that.
Numerous solutions have been suggested to the 2017 agreement—the UK-EU agreement, which was a major defeat for the United Kingdom. A snap election was called, and the Government were really on their knees. The Irish Government pushed for certain advantages, which it won—and we are still here tonight, six years later, having not escaped from the toils of that Irish negotiation. It is on record that Irish officials were surprised at the ease with which the UK Government conceded. That having been said, it is water under the bridge; we are still here after six years trying to sort it out, but we have an international agreement, and the May withdrawal agreement did not even mention the Northern Ireland Assembly. It is obvious that we have moved on a considerable degree over seven years, in respect of the Government, with regard to the opinions and views of the people of Northern Ireland, the Stormont brake being an obvious example in the Northern Irish Assembly.
I feel that I should say one thing. The latest polling gives the Windsor Framework 60% support in Northern Ireland. It is correct to refer to the polling at the weekend, as the noble Baroness, Lady Foster, did, which shows strong support for the union. There is very strong support for it still in Northern Ireland—there is a very substantial lead. But it is also true, although support for the union is at 50% in that report, and for a united Ireland 30%, if I remember rightly, that support for the Windsor Framework is running at 60% in the latest academic polling. Sometimes, when one listens to the rhetoric about how terrible it all is, one would think that the people of Northern Ireland must be incredibly stupid if 60% of them think that it is actually working quite well and they are prepared to support it. It is worth bearing that in mind.
The opinions of other people in Northern Ireland do matter. I have stood beside the DUP through many debates in this House and supported its objections, but the opinions of the whole community also matter in the consideration of these outcomes. The 2017 report was unleashed in our lives and pockmarked everything since—for example, the concept of the island economy. This is also related to the so-called mapping exercise, brilliantly intellectually deconstructed in the Irish Times by Newton Emerson a couple of years ago. These concepts—duff, essentially—play into British official documents, and the United Kingdom Government say that they will continue to support these things, some of them slightly fantasy elements.
We are nearing the end of the road. The government White Paper that accompanied the Windsor Framework marks a gradual detachment by the UK Government from this level of green fantasy. This is not to say that there is not an island economy in agri-food, by the way, which is one reason why a hard border would have been very difficult, but overall there is not an island economy. The island economy argument has been used by the TUV in particular to say, “We have created an island economy; this will lead to a politically united Ireland”. The difficulty with that is that it is exactly the same argument that Jim Allister put 25 years ago about the Good Friday agreement—which has now been supported, I am glad to see, from the DUP Benches. It is exactly the same argument he put then. Twenty-five years ago, the facts did not bear him out. The island economy was not a growing thing that was going to lead there—two economies on the island of Ireland leading to political unity—but, 25 years later, heigh-ho, we are back with a version of the same argument.
My friend Lord Trimble, in his last public act, introduced a paper for the think tank Policy Exchange by Graham Gudgin. It argued that
“there are two distinct economies on the island of Ireland. The Republic of Ireland is a sovereign state, fully part of the European Union but also one the world’s largest tax havens … With different currencies, different fiscal and monetary arrangements including different interest rates and VAT excise duties, and with separate legal systems, the two areas are distinct … Only 4% of the goods and services produced in Northern Ireland cross the border to the Republic while 16% go to GB; 31% of imports to NI are from GB. Only 2% of the Republic’s exports go to Northern Ireland … Currency, tax rates, excise duties, social security systems, government spending regimes, interest rates, credit and banking rules and business law all differ from those across the border”.
This is really quite important: there are two economies on the island of Ireland, and the Northern Ireland one is locked into the UK in a massive way.
In his realistic worst-case scenario about the future, Dr Gudgin acknowledged that
“the NI economy will be less different from the Republic than would have been the case without the Protocol but little less different than has been the case for decades”.
Baroness Foster of Aghadrumsee (Non-Afl)
I entirely agree with what the noble Lord has to say about this construct of an island economy, which came about during the time that the Assembly was not sitting for three years due to the Sinn Féin boycott. It was allowed to gain currency at that time. Does he agree with me, however, that given that the supply chains between Great Britain and Northern Ireland are so intricately connected, trade diversion is the one thing that people are very concerned about? In other words, “It is too difficult to bring from GB into Northern Ireland, so we will look for other supply chains”—that is a real problem.
Lord Bew (CB)
I thank the noble Baroness for her intervention; I accept that point. There is a significant argument by an esteemed economist about how serious and significant that really is, because we have no figures for the impact of the Windsor Framework. What figures we have go back over several years, and we cannot work out the impact of the Windsor Framework on this problem, which is important.
The government White Paper notes that the Windsor agreement
“marks a decisive break from … the political concept of an ‘all island economy’”—
something that was prioritised in the 2017 document, with the UK Government’s agreement, over Northern Ireland’s place in the UK economy. We have moved on. The island economy is one area where the British Government have been carrying out a major work of rectification to get away from the humiliation of 2017 and that agreement.
I turn briefly to EU law. Again, it is not mentioned in the seven tests. I have heard regularly over the last few days that EU law is dominant in Northern Ireland. Well, okay. Continued alignment with EU law applies to only about 20% of Northern Ireland’s economy. When I heard about the dominance, I thought: is this the Northern Ireland I live in, with its large state sector—larger than in any other devolved region—funded by the UK taxpayer? Is this the Northern Ireland economy I live in, in which the service sector, totally outside the framework of the EU, is the growing sector? There is a question mark about the price to be paid for access to the EU market, which many of our businesses want, but it is not dominant: we are talking about around 20%.
There is an argument here, I accept, and there are people in this House who will never accept that EU law is worth accepting, no matter the value for individual businesses and so on. But it is important to say that what we have in Northern Ireland—well, let me put it this way: changes since the transition period have been remarkably small. There has been nothing of impact in three years since the transition period ended. There is a well-developed marketplace in Northern Ireland, completed over 20 years ago. It is not a building site full of rubble waiting for some spectacularly ambitious, slightly crazed architect to come along and construct something new and wild—it is set in a particular mould; that is how it is. It is rather humdrum to say it, and in any case most manufacturers in Great Britain follow EU regulations because they export to the EU or provide goods to other companies that export to the EU.
The issues of EU law and the island economy are two areas that are very important to talk about; they dominate the current debate in Northern Ireland. It is important to say that, as far as EU law is concerned, there is, and always will be, a division of opinion on that point. However, it is also the case that this is not the first time in our history in Northern Ireland that we have been dealt with in an unequal way in a trade agreement between the British Government and the Irish Republic. In 1938, exactly this happened. If we look at the debate in this House on 10 May 1938 on what was a very bad deal, a humiliation for the British Government in the end, there is no question but that Northern Ireland businesses are treated unfairly and without equality. There is no doubt about that at all, and the point is made very eloquently by the unionist MPs.
However, a broader political decision was made within unionism: you can get hung up on things that offend you, that are bad news and that stick in your craw, or you can look at it in terms of the wider interests of Northern Ireland as part of the United Kingdom. On that occasion, they made a deal that involved unemployment insurance payments for thousands of shipyard workers on the dole in Belfast that could not be met out of Northern Ireland resources. They made a deal for those shipyard workers—an economic deal in the interests of Northern Ireland which, when the Attlee Government came in with the welfare state, turned out to be an absolutely wonderful deal. In other words, they looked at the problem in the round, did not obsess about the one area in which nobody will agree or be happy, and acted in terms of what was the lesser of two evils.