Northern Ireland Protocol Bill

Lord Ahmad of Wimbledon Excerpts

Committee stage
Tuesday 25th October 2022 Lords Chamber

Moved by

[Lord Ahmad of Wimbledon]

That the House do now resolve itself into Committee.

Amendment to the Motion

Moved by

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[Lord Dodds of Duncairn (DUP)]

I am grateful for the opportunity that the noble Lord gives me to clarify that point. If he looks in detail at the Bill, he will see that it does provide the opportunity for regulations to come forward. The Government have announced that they will produce regulations which allow for checks on goods destined for the European Union, and for the Irish Republic exclusively.

I agree with what the noble Baroness, Lady Chapman, said in her amendment about the publication of regulations. It is important that the regulations provided for in the clauses in the Bill are published, and as quickly as possible, so that we can all see exactly what is proposed to replace the current, unacceptable arrangement. However, my understanding is that those regulations have talked about a red and a green channel, and that checks will be applied only to goods coming into the Irish Republic, so there will not be that gap or hole that the noble Lord, Lord Clarke, talked about.

It is also clear from the Bill that access to the single market would be retained, but that it would be the choice of businesses in Northern Ireland whether they want to be subject to EU or UK regulation, therefore sorting out to a large extent the democratic deficit point, while providing a way forward economically which is in everybody’s interests. When we come to sorting out the problems of the protocol, we have been told that no impact assessment has been carried out and that we need one for the Bill. There was no impact assessment carried out when the protocol itself was introduced, of course, concerning the negative impact that it has had on business.

I have a letter here from hauliers in Northern Ireland, who have written to a number of noble Lords saying that it is their contention that the economic costs of the protocol far outweigh the economic benefits. They say that if the protocol was implemented in full, it would crash Northern Ireland’s chilled and frozen food supply chains within 48 hours, and that it is reasonable to anticipate that this would cause a socioeconomic crisis. They talk about the need for the Bill. These are businesspeople. These are people who carry goods into Northern Ireland from Britain, into the Irish Republic, and from the Irish Republic and Northern Ireland into Great Britain. They know what they are talking about, so we should not generalise here. We must take the evidence of the damage that has been done economically and constitutionally.

On international law, I bow to the superior knowledge of many very distinguished lawyers and practitioners in this House, but the noble Lord, Lord Bew, is right when he argues about the prior position of the Belfast agreement and that the protocol references the Belfast agreement in its wording—as amended by the St Andrews agreement, of course—and that cannot be ignored. We are told that upholding and keeping our word is vital to our international standing. However, I have in front of me the joint report, from the negotiators of the European Union and the United Kingdom Government, of 8 December 2017, when Theresa May was trying to make progress in her negotiations with the European Union. That agreement was hammered out over a number of days. If we are talking about people maintaining and upholding their word, I point out that it contains the following, in Article 50:

“In the absence of agreed solutions… the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom”,


which they now have,

“unless, consistent with the 1998 Agreement”—

so the EU and the UK Government recognise that it is inconsistent with the Belfast agreement to have such regulatory difference—

“the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland.”

The Northern Ireland Executive and Assembly have never agreed to that. They were never even asked. This was the promise made to people in Northern Ireland by the EU and the UK. After that was agreed, the UK Government, never mind the EU, paid scant attention to that article when seeking the agreement of people in Northern Ireland to any regulatory divergence. If we are talking about upholding our word, people in Northern Ireland are entitled to ask, “What happened to that agreement? What happened to that commitment? Why was the protocol imposed without any say or consent by people in Northern Ireland?”

We talk about the blunderbuss—the threat that has been put on the table. I remind noble Lords that the EU has now launched infringement proceedings against the United Kingdom for its having unilaterally extended grace periods and other matters—without which, as the hauliers say in their letter, the supply chain to Northern Ireland would crash and burn within 48 hours. This is essential for the free flow of goods to Northern Ireland, yet the EU has put on the table legal action against the UK Government, and that is not mentioned.

I will close; I am conscious of time, but it has been a wide-ranging debate thus far. The Bill is necessary because the protocol, as it stands, is incompatible with the Belfast/Good Friday agreement. At the heart of that agreement, as amended by the St Andrews agreement, is the principle of consent. It is not only the DUP that opposes the current arrangement. Every single unionist elected to the Northern Ireland Assembly, as late as five or six months ago, opposes the protocol. The foundation of power-sharing in Northern Ireland is not majority rule any more; we have not had majority rule for 50 years in Northern Ireland. It is the mutual agreement of unionists and nationalists, and not a single unionist of the Ulster Unionist Party, the Democratic Unionist Party, the Traditional Unionist Voice, or independents, of which there are a number, supports the current arrangements.

The protocol is incompatible not only with the Belfast agreement but with Northern Ireland’s constitutional position. I am conscious of the point made by the noble Lord, Lord Bew, that it was not necessary to deal with that in this legislation, but the courts have ruled that Article 6 of the Act of Union has been subjugated by the protocol and that Great Britain is now a third country as regards “imports” from Great Britain into Northern Ireland.

As I have said, the protocol is incompatible with the upholding of proper British and UK democratic standards, for the reasons that I have already outlined, and it is damaging our prosperity. You cannot have VAT exemptions or derogations, which the UK Government have recently announced on energy products, applied to Northern Ireland, because we are subject to EU VAT rules. That cannot be right. It is also contrary to the New Decade, New Approach document, which was agreed by all the parties, the Dublin Government and the UK Government in January 2020. It says on page 47, annexe A:

“The Government is absolutely committed to ensuring that Northern Ireland remains an integral part of the UK internal market”,


As has been set out in the reasons given for the introduction of the Bill, this is to address the fact that Northern Ireland is no longer an integral part of the UK single market. That is indisputable.

To those who say it is unbelievable that a Conservative Government would be doing this and bringing forward this legislation, I say it is unbelievable that a Conservative and Unionist Party ever brought forward the protocol in the first place. That is the really telling point. We did not support it. What we are asking for is our democratic rights to be restored.

The Conservative Party can be criticised for many things, and we have criticised it very often. We have had our battles over the years. But if there is now an attempt to put right something that is fundamentally wrong, antidemocratic and runs counter to the Belfast agreement, runs counter to the agreement the basis of which was for the restoration of Stormont and the Assembly, that should be applauded. I hope negotiations can succeed, but they will have to deliver what is in the protocol, otherwise we will not get to a point where we will have stable government restored in Northern Ireland. That is a fundamental fact. Sinn Féin kept Stormont down for 1,044 days over the Irish language issue that the noble Lord, Lord Bew, referred to.

We do not want instability to continue for one day longer. In July 2021, the Government published a Command Paper saying that the conditions had been met then for the instigation of Article 16. As has been said, Article 16 is now very much flavour of the month, but at the time it was denounced by all the parties in Northern Ireland and most people here as being an outrageous infringement of democratic norms and a breach of good faith and of international law. All sorts of things were said about it. So there is urgency, and that is why I urge noble Lords to proceed with the Bill and move ahead. If negotiations do not end in a satisfactory outcome, we will have to return to this legislation, and it is better to proceed with it now than to have to start further down the road at a point when it would become absolutely essential.

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, first I thank all noble Lords who have taken part in this debate. As I was rising, I looked at the clock and never in the Ahmad history in the House of Lords has something so innocuous as saying “I beg to move that the House do now resolve itself into a Committee on the Bill,” resulted in such an intense debate. I shall remember for next time.

Secondly, my noble friend Lord Clarke mentioned that he looks towards the House of Lords and, as he comes here more often, I assure him, not that I agree with the substance of what he has said, but that his contributions and those of all noble Lords enrich the debate. One of the key components of the House of Lords is asking the Government to think again. I am sure I speak for my colleagues on the Front Bench as well in saying that we have certainly been in thinking mode.

There is a third element before I get into the detail. I was taken by the various descriptions of the Bill. The noble Lord, Lord Kerr, referred to it as a “pig”. As a Minister who also is a practising Muslim, I thought for a moment that the stewardship and handling of the Bill would cause me a cultural challenge. But I soldier on with loyalty to King, country and Government.

In all honesty, this debate has been an important one. I think we are all agreed that it has again brought forward views on the importance of Northern Ireland as an integral part of what defines our very United Kingdom. Notwithstanding the different perspectives, I know all Members of your Lordships’ House are at one on the principle that the integrity of the United Kingdom must be protected. The fact is that the Northern Ireland protocol must work for all communities in Northern Ireland and, of course, the wider United Kingdom. Of course, the noble Lord, Lord Pannick, is correct—we signed the Northern Ireland protocol. But any contract—I do not speak as a lawyer but I have done a few contracts in a previous life as a banker—is also signed in good faith. It has to work for all sides and all communities.

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[Baroness Royall of Blaisdon (Lab)]

My Lords, that the Government have said they will publish the draft regulations is very welcome, but I do not think the Minister mentioned when. This is a key issue, because noble Lords deserve to see the draft regulations before progressing.

[Lord Ahmad of Wimbledon (Con)]

One of my introducing Peers was my noble friend Lord Howard. He often said to me, “Tariq, when noble Lords get on their feet, as a minimum, they already have the answer to the question they are asking. They have probably also written a book about the subject”. I suggest that the noble Baroness has not written a book about regulations, although a number of our colleagues may have. I cannot specify a date at the current time, but I note the noble Baroness’s comments.

I hope that my noble friend Lady Altmann and the noble Baroness, Lady Chapman, are minded to withdraw their amendments.

[Baroness Altmann (Con)]

My Lords, I shall not detain the House. We have had a very good debate. I thank my noble friend for his words and beg leave to withdraw my amendment.

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[Baroness Ludford (LD)]

My Lords, we heard two views earlier in the debate, which was longer than any of us expected, on the two amendments. We heard two views on whether this Bill was going to poison the chance of negotiations with the EU. One was from the noble Lord, Lord Bew, who thought it would not. I agreed with the view put forward by the noble Lord, Lord Clarke, that the Bill is extremely unhelpful to negotiations, and with the point he made about the risk of a trade war with the EU, which is the last thing we could possibly afford to risk—and I would add the prospect of undermining relations with the United States.

I noted the helpful and sensible suggestion of the noble Lord, Lord Cormack, that we get a briefing session on the negotiations, but perhaps even today we might hope that in replying the Minister can give us some flavour of the issues that the Government believe can be the peg for progress in the negotiations in, hopefully, the weeks rather than the months to come. The EU has been making suggestions for the best part of 18 months, I think—certainly more than a year—but the Government have not taken up the opportunities that have been offered, so I fervently hope that they are now going to be extremely serious about these negotiations.

I want to pick up three suggestions—which are not exhaustive—made by my Alliance Party friend in the other place, Stephen Farry MP. The first is about flexibilities in the protocol. The EU has made numerous suggestions and progress on the issue of medicines. The Government do not seem to have given much acknowledgment to the progress that was made on that subject. Perhaps the Minister might give us some idea of other sectoral issues where he thinks progress could be made.

The second suggestion made by Stephen Farry was to use Article 13(8) of the protocol, which allows the protocol to be superseded in whole or in part. Apparently, that was put in at the request of the UK Government, and it could be used to negotiate changes to the protocol by mutual agreement. Perhaps the Government could tell us whether they have any intention of invoking Article 13(8) of the protocol.

Mr Farry’s third point is one that has just been made by the noble Baroness, Lady Ritchie, and by my noble friend Lady Doocey at Second Reading. It relates to the very valuable contribution that a veterinary or SPS agreement could make, particularly to solve problems around food and agriculture, especially in the dairy industry. This offer has been on the table from the EU since the protocol was first signed, and it has been a matter of considerable puzzlement that the Government have not progressed that.

Perhaps the Minister, in replying, could give us some sort of steer on where he thinks the opportunity exists to make improvements either in the protocol itself, if Article 13(8) were to be exploited, or in the implementation of the protocol by taking the route of flexibility and additions, such as an SPS agreement.

[Lord Ahmad of Wimbledon (Con)]

My Lords, I thank all noble Lords for their contributions. I will go straight to the amendments. Amendments 1 and 70 in the name of the noble Baroness, Lady Chapman, would make the commencement of regulations under this Bill dependent on the Government confirming that they have been unable to reach a negotiated settlement with the EU and are of the opinion that all legal routes have been exhausted. I will repeat what I have said a number of times: our preference remains to resolve the issues around the protocol through talks. As I have already indicated, my right honourable friend the Foreign Secretary and Vice-President Šefčovič have already spoken a number of times to reiterate their shared commitment to finding solutions to this issue. Consequently, as I have also said already, the Government are engaging in constructive dialogue with the EU to find solutions to these problems. The Government will update Parliament on the talks with the EU at the appropriate time.

My noble friend referred to possible briefings. I cannot make the detailed commitment that my noble friend is seeking, but I will certainly reflect on his suggestion. I have just spoken to my noble friend Lord Caine about whether we could provide, as the noble Baroness, Lady Ludford, suggested, an outline at times; I certainly respect your Lordships’ insights on this. I will take that back and reflect on the proposals that have been put by my noble friend. As I said in concluding the earlier debate, to the Front Benches in particular, I assure noble Lords that I will seek to continue to update noble Lords on progress. I know that I speak with a similar commitment to that of my noble friend Lord Caine in dealing with Northern Ireland on this issue as well.

However, it is the Government’s view that we need to progress this Bill now to fix the practical problems that have been highlighted. Under these amendments, the UK would not be able to implement the solutions to the issues of the protocol while discussions with the EU were ongoing. This would mean that the EU could, for example, seek to introduce discussions indefinitely, under the knowledge that this Government would have to admit that negotiations had not reached a successful conclusion.

I am sure noble Lords would agree that we should not present ourselves with a choice between continuing negotiations indefinitely and no unilateral solutions for Northern Ireland. The Government—although I know that other noble Lords have different perspectives —have given their position as to why we feel it is necessary at this time to pursue and continue with the progress of this Bill.

We also believe that these amendments would require the Government to confirm that they have exhausted all legal routes under the withdrawal agreement before they could bring substantive provisions of the Bill into force. The Government have been clear that the Bill is justified, in our view, under international law. That is without prejudice to our position on other mechanisms available—

[Lord Purvis of Tweed (LD)]

Could the Minister clarify the sequencing of talks with the EU, Article 16 and the regulations under this Bill? Is it still the Government’s position that, before the regulations under this Bill, or Act, are brought forward, Article 16 would be triggered?

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[Lord Ahmad of Wimbledon (Con)]

What I said, and I have said it before, and without prejudice to our position on other mechanisms available under the withdrawal agreement and protocol, is that the Government reserve their position on Article 16. Article 16 remains an option—the Government have not taken it off the table—and it remains an option for the EU has well.

[Lord Pannick (CB)]

Can the Minister explain how the doctrine of necessity can be satisfied when the Government themselves reserve their position to use a power that is contained in the protocol?

[Lord Ahmad of Wimbledon (Con)]

I am sure we will return to the principle of the doctrine of necessity in later amendments. The use of Article 16 was debated during Second Reading, when a number of noble Lords, including my noble friend Lord Howard, suggested its use—indeed, that has been cause for debate. The noble Lord will be aware that that remains very much at the Government’s disposal, as it does at the disposal of the EU, because that was an agreement that was signed. On the principle of necessity, as I said, I will defer to my noble and learned friend Lord Stewart, who I am sure will discuss this with the noble Lord in other amendments that we are scheduled to discuss.

The noble Baroness, Lady Ludford, talked about Article 13(8) of the protocol, which deals with how subsequent agreement interact with the NIP. The EU, from our perspective when this has been raised, continues to reject any changes to the NIP itself. However, in saying that—and I am going by the discussions we are having with the European Union at this time—my experience is that it is not just the substance of what is being discussed with the EU at the moment but the tone of the engagement as well. While there are differing opinions—I accept fully that some are saying that a delay, which has been proposed, would strengthen the Government’s position—our view remains that the EU is very clear on our position on what we are seeking to do with the Bill, but that has not prejudiced the tone or substance of our engagement with the EU.

[Lord Hannay of Chiswick (CB)]

I thank the Minister for giving way. I welcome very much his willingness, expressed to the noble Lord, Lord Cormack, to consider a proper process of reporting back on what is going on in Brussels. Having lived all my life in a profession where words mattered, I find it very difficult that the words through which the process in Brussels is referred to keep shifting all the time. Sometimes, they are technical discussions; sometimes they are talks. The word “negotiations” somehow never quite seems to come out of the Minister’s mouth, but how on earth do you conclude a negotiation without negotiations? I simply do not understand; it seems that we are in an Alice in Wonderland situation.

It would help greatly if the Government were prepared to give a careful and systematic account of what is going on from their point of view. We know the Commission’s point of view. It has said on a number of occasions that its mandate, which it used last October, is not exhausted. Does it have to say more than that?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I hear what the noble Lord says; of course, he is a real veteran of diplomacy. When I refer to technical talks, of course, officials take forward some elements of the nature and detail of the discussions or negotiations—I have said it now—which are taking place between ourselves and the European Union. I totally agree with him that words matter. That is why I keep emphasising the importance of the tone of the engagement. Notwithstanding the fact that the Bill is here in your Lordships’ House, we continue to engage and have those constructive exchanges, within the parties, with businesses and other partners, but also, importantly, with the European Union itself.

As I said in my earlier comments, we will explore practically how we can best respond to my noble friend Lord Cormack’s suggestion; I know him well. Of course, noble Lords will also appreciate—many in your Lordships’ House have been involved in negotiations —that we cannot provide a running commentary on every element. There was an Order Paper produced in June of this year, which set out the issues and what we believed some of the solutions to be. That was documented, outlining some of the key points and priorities for His Majesty’s Government. I give way.

[Lord Purvis of Tweed (LD)]

I am grateful. I read that paper, but that was prior to Michael Ellis, the Paymaster-General, when the Bill left the House of Commons, telling the Commons that talks had been exhausted and this Bill was therefore necessary. Now we are told that talks have not been exhausted. The EU has not changed its mandate, so what have the Government put on the table that is different from what it was in July?

[Lord Ahmad of Wimbledon (Con)]

My Lords, in any negotiation, parties will consider their position as discussions continue. What I have sought to do is provide an update to your Lordships’ House of the current position. I think the current trajectory of the talks, discussions and engagement is positive. As I have already highlighted, I will certainly seek—under the conditions of the discussions, with the sensitivities of many of these negotiations—to update your Lordships’ House accordingly.

[Baroness Hoey (Non-Afl)]

I appreciate that there cannot be day-to-day updates on negotiations; that would be nonsense. I also do not agree with the noble Lord, Lord Cormack, that we should spend the day having briefings; that, I think, is another pointless way of simply delaying. Can the Minister confirm something important—a big issue but easily answered: that at this stage the negotiating mandate of Šefčovič has not changed?

[Lord Ahmad of Wimbledon (Con)]

The noble Baroness is right. The point of contention for us in any discussion has remained the ability to amend the protocol itself; that remains a key point. In all of these areas, as the discussions earlier have indicated, there are ways and means through. Of course, people will state their negotiating positions at the start and there are discussions to be had. What is clear to us is that the reason for the Bill, as well as for the good faith in which we continue to negotiate, is to find the desired outcome, which works for all communities in Northern Ireland and, importantly, addresses specifically some of the issues—including the east-west issue, which has been talked about quite extensively during Second Reading and in other debates.

I now turn to Amendment 6 in the name of the noble Baroness, Lady Chapman. The Bill is designed to bring swift solutions to the issues that the protocol has created in Northern Ireland. These solutions are underpinned by the designation of elements of the protocol as excluded provision. This is a domestic legal action to reflect the operation on the international plane of the UK’s assertion of the application of the doctrine of necessity, which was referred to earlier in relation to relevant parts of the protocol. Put simply, it is by excluding some elements of the protocol and withdrawal agreement in domestic law that the Bill is able to introduce, with necessary clarity and certainty for users, the changes to the law that are needed in Northern Ireland.

These amendments, through the conditions they impose, would undermine the ability to exclude elements of the protocol and, therefore, undermine the entire operation of the Bill. The first condition, in particular, that provision is excluded only if the EU and the UK agree to that, is, frankly, unworkable. While we are engaging in constructive dialogue with the EU to find solutions to these problems, it is surely quite evident that, if the EU were currently amenable to the full provisions of the Bill, we would already have agreed them; of course, that is not the position.

The second condition—that provision is excluded only if necessary as part of an Article 16 safeguard—also fails to meet the needs of the situation. Article 16 has inherent limitations in its scope. While the Government reserve their position in relation to Article 16—again, a point raised earlier in the debate—there would be a different action on the international plane to the operation of the doctrine of necessity. In sum, these amendments would in our view undermine the co-operation in the Bill, preventing it from delivering the solutions desired in Northern Ireland, which it is intended to provide.

On Amendments 3 and 67, in the names of the noble Lord, Lord Purvis, and the noble Baroness, Lady Ludford—

[Lord Purvis of Tweed (LD)]

These have not yet been moved.

[Lord Ahmad of Wimbledon (Con)]

My apologies; I have covered Amendments 2 and 43, which are the ones in this group. Without repeating myself, the notion of a regular report to Parliament on negotiations would in our view not be appropriate. It has been the position that the Northern Ireland protocol and negotiations regarding it are, like any other treaty, a matter for the Government operating under the foreign affairs prerogative.

In addition, as I have already said, it would not be conducive to a successful outcome in negotiations to provide a running commentary, nor, ultimately, do I believe the House would expect that. However, as I have said, where I can, I will look to update your Lordships’ House accordingly and we will update Parliament on the status of negotiations at the appropriate times. Also, the usual mechanisms for the House to scrutinise our activity will remain open to all noble Lords. I therefore hope that, at this juncture, with the responses that I have given, the noble Baroness will be minded to withdraw her amendment.

[Baroness Chapman of Darlington (Lab)]

I am grateful to the Minister. I note again his rather charming tone, but I am afraid he cannot disguise with a charming tone what is becoming more clearly quite a weak position. Some of the things he said have made me more inclined to support the amendments that have been tabled in this group than I was before. I thank the noble Lord, Lord Purvis, and the noble Baronesses, Lady Ludford and Lady Ritchie, for their support for our amendments.

On the point made by the noble Lord, Lord Cormack, about having a briefing, on the one hand, yes, that does make sense, but I am nervous about entering into novel processes or getting into things that are outside of the Chamber. I think it is far preferable to have something that everybody is able to participate in, and that it is on the record. Noting what the Minister said about running commentaries, no one is asking for a running commentary. This is not like negotiating through the Article 50 process; this is quite straightforward and limited in scope, everybody knows what the issues are, and there are plenty of suggested solutions. This ought not to be beyond the wit of a Minister such as he to be able to make progress. I am very—

[Lord Ahmad of Wimbledon (Con)]

Does the noble Baroness accept the principle that the noble Baroness, Lady Hoey, asked me to clarify? The starting position, which is behind one of the reasons why we put the Bill forward, is that the Northern Ireland protocol is not working for all communities. There is a democratic deficit. We can talk processes, but the Government’s intention is to unlock that principle, and I hope the noble Baroness agrees on that.

[Baroness Chapman of Darlington (Lab)]

I have been very clear about that. I am surprised by the Minister’s intervention on that point, because in both speeches I have made, and in comments elsewhere, I have been very clear on that point. The truth is that these issues are only resolved through negotiation. The question really is about the Government’s approach. I have some sympathy because Ministers have inherited this approach. It is not something, perhaps, that they would have initiated themselves, and it is born of a different political landscape. However, it is something that they have to pursue now, and the Government are not being clear enough about their preferred solutions. If it were to be so, and those solutions were to be viable, they might just find that His Majesty’s Opposition would support the Government in those. We want to approach this with as much consensus as we can; we do not want to have arguments with the Government over Northern Ireland. We want to agree with the Government. We want to help find solutions. That is a much more powerful position for the Minister to be in, when he is negotiating with EU partners, surely.

We will not go to a vote today and I will withdraw the amendment. Unfortunately, this dogged determination that the Government have to stick with their approach come what may, because they do not want to be seen to back down, is I think not really helping matters in this House. I beg leave to withdraw the amendment.

Northern Ireland Protocol Bill

Lord Ahmad of Wimbledon Excerpts

2nd reading
Tuesday 11th October 2022 Lords Chamber

Moved by

[Lord Ahmad of Wimbledon]

That the Bill be now read a second time.

Relevant documents: 7th and 12th Reports from the Delegated Powers Committee

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, I first thank all noble Lords with whom—together with my noble friend Lord Caine and my noble and learned friend Lord Stewart—I have been engaging on this Bill. While there may be different perspectives and views, I am as ever grateful for the courtesy extended to myself and my colleagues and for the engagement that we have had through our conversations.

This Government remain very much committed to upholding the Belfast/Good Friday agreement, which has, as we all acknowledge, for almost 25 years brought peace and political stability in Northern Ireland. Irrespective of the speeches that will follow, I believe that all noble Lords without exception share strongly in this key principle. The Northern Ireland protocol was also agreed with the objective of protecting the Belfast/Good Friday agreement in all its dimensions and, indeed, in avoiding a hard border on the island of Ireland. That was key. Furthermore, it was also agreed by both sides that it would not undermine the wish of the United Kingdom and the interests of all parties in Northern Ireland.

In practice, however, the Northern Ireland protocol is undermining the delicate balance of the Belfast/Good Friday agreement and, as we all know, the functioning of the power-sharing institutions in Northern Ireland. Indeed, the Executive are not functioning at all. The protocol has diverted east-west trade between Northern Ireland and Great Britain and it is creating fractures within the UK internal market. Again, I am sure all noble Lords would agree that this cannot be right and cannot continue. It is also impacting negatively on the everyday lives of people in Northern Ireland. It has weakened their economic rights and contributed to the sense of a democratic deficit in Northern Ireland—a point to which I will return shortly.

This Bill gives the Government powers to address these urgent political challenges by seeking to fix the practical problems created by the protocol. It allows the Government to restore the balance of the original objectives of the protocol, thereby avoiding a hard border on the island of Ireland and—as I know to be important to all—protecting the integrity of the United Kingdom internal market while also protecting the EU single market.

The Government remain clear—a point that, again, I have shared with colleagues through engagement—that our preference would be to reach a negotiated solution to the protocol with our partners in the European Union. We have always said that we remained open to constructive dialogue and discussions with the European Union on the Northern Ireland protocol. I assure all noble Lords that this remains the case today.

Within the past fortnight, my right honourable friend the Foreign Secretary and EU vice-president Maroš Šefčovič have spoken to reiterate their shared commitment to exploring potential solutions on this very issue. I am pleased to take this opportunity to report to the House in response to a question that I received from noble Lords in advance of Second Reading, including from my noble friend Lady Altmann: I can confirm that officials from the UK and the European Union are now conducting further technical discussions on the protocol.

As my right honourable friend the Foreign Secretary agreed with Vice-President Šefčovič when they spoke recently, both sides—the UK and the EU—want to look for solutions to protect the Belfast/Good Friday agreement. That is another sentiment that I know has been echoed in contacts with the Irish Government, including between my right honourable friend the Foreign Secretary and the Irish Foreign Minister, Simon Coveney, most recently last week and over the weekend.

However, the situation on the ground in Northern Ireland remains urgent, and the Government cannot allow that to continue. We must ensure that the Government retain the ability to act in all scenarios that prevail. It is a fact, as we all know, that Northern Ireland has been without a fully functioning power-sharing Executive since February this year. The political settlement in Northern Ireland is based on respect between all communities and the consent of those communities. I know we all recognise the huge insight of a number of noble Lords and colleagues who were there when that agreement was set up and initiated. However, the protocol in its current form is undermining that delicate balance, as I said earlier, and is contributing to ongoing political instability.

The Government remain committed to the restoration of the power-sharing devolved institutions, including the Northern Ireland Assembly, the Northern Ireland Executive and the North/South Ministerial Council. We remain equally committed to preserving Northern Ireland’s place within the UK and removing barriers to east-west trade. This is particularly critical during the challenging economic period that has been fuelled by President Putin’s illegal invasion of Ukraine. I assure all noble Lords that the Government will continue to engage, as the Bill proceeds through your Lordships’ House, with the remaining parliamentary stages of the Northern Ireland Protocol Bill, while, I also assure noble Lords, continuing to conduct technical talks and explore shared solutions with our EU friends and counterparts.

I turn to some of the substantive provisions within the Bill. The Bill allows the Government to fix specific problems with the protocol by granting powers to make changes in four main areas: first, to provide and improve the customs and sanitary and phytosanitary regime; secondly, to create a new dual regulatory model; thirdly, to ensure that Northern Ireland can benefit from UK policies on subsidy control and VAT; and, fourthly, to legislate for new governance arrangements that address the democratic deficit created by the protocol in its current form.

On customs and SPS, the Bill allows the Government to introduce a green-lane and red-lane system to remove barriers to internal UK trade. There will be no unnecessary paperwork, checks or bureaucracy on goods staying in Northern Ireland as they will move via the green lane. Businesses will be able to use this green lane as part of a trusted-trader scheme. Goods destined for Ireland or the rest of the EU will go through full EU checks, controls and customs procedures via the red lane.

The UK is committed—a point that again several noble Lords raised with me during discussions—to a comprehensive approach to data sharing with the EU under our new model, a key ask that the EU has made of the UK. We would continue to share comprehensive data on the operation of the trusted trader scheme and on goods movements between Great Britain and Northern Ireland. This would of course enable the UK and the EU to jointly monitor the risk of abuse and allow for risk-led intelligence sharing and co-operation. Data-sharing arrangements would be delivered through a purpose-built IT system, with information available to the EU in real time. This would include standard commercial data for green-lane movements and more than 110 fields of data collected through customs declarations for red-lane movements. Any trader found abusing the green lane would incur penalties and face ejection from the trusted trader scheme. We fully understand and respect the legitimate concerns of our EU counterparts and friends that the single market should be protected. These provisions in the Bill will achieve that.

The Bill will also establish a dual regulatory regime so that businesses can choose between meeting UK or EU standards, or both, should they wish to do so. This will remove the barriers to goods made to UK standards being sold in Northern Ireland and cut the processes that drive up costs for business, particularly at this time. It will help address divergence between the two parts of the UK internal market. Anyone who trades into the EU single market will still have to do so according to EU standards. This will also protect the EU single market and we are committed to ensuring that firms in Northern Ireland that benefit from access to the EU single market retain that access.

The Bill will also ensure that the Government can set UK-wide policies on subsidy control, VAT and excise, so that people in Northern Ireland can benefit from the same policies as the rest of the United Kingdom. For example, at present, people in Northern Ireland are not able to benefit from VAT reliefs on energy-saving materials for homes. These reliefs help fight the cost of living and climate crises and pose no risk to the EU single market but cannot be implemented in Northern Ireland because of the protocol. At a time when a warm home and clean and secure energy are more important than ever, is it right that a typical family in Northern Ireland needs to find nearly £300 more to install solar panels? Surely that cannot be right.

Tax and spend are essential sovereign functions, especially in Northern Ireland where the UK Government play a significant role in the local economy. We will also maintain the VAT arrangements in the protocol, which support trade on the island of Ireland while ensuring Northern Ireland can still benefit from the freedoms and flexibilities available in the rest of the United Kingdom.

I turn now to the governance provisions in the Bill. Rules applying under the protocol are currently made without any say for Northern Ireland representatives and with no means to adapt them for the Northern Ireland context. In some cases, this has uniquely disadvantaged Northern Ireland, yet the rules have not been subject to any dialogue beforehand. This has been cited as symptomatic of the significant democratic deficit that I referred to. The proposals in the Bill will give businesses and consumers new flexibilities and freedoms to ensure that they are not bound to follow rules over which they have no say. Furthermore, prominent members of the unionist community in Northern Ireland have also expressed serious reservations about the role of the European court in overseeing the operation of the protocol. Unlike ordinary international treaties, disputes under the protocol can be taken to, and settled by, the Court of Justice, the court of one of the parties. The Bill will remove the domestic effect of the role of the European court where it is not appropriate. Disputes between the European Union and the United Kingdom would be settled by independent arbitration, in line with normal international dispute resolution provisions, including those in the trade and co-operation agreement.

However, the Bill would also enable the Government to implement a mechanism that allowed courts to seek an opinion from the European court on legitimate questions of interpretation of EU law, ensuring that it can still be applied where necessary, such as for the purposes of north-south trade. To be absolutely clear, the Bill seeks to change only those parts of the protocol that are causing problems and undermining the three strands of the Belfast/Good Friday agreement; it keeps the rest. We have, for example, explicitly protected the articles of the protocol that cover north-south co-operation, the common travel area and the rights of individuals, and we will maintain the functioning of the single electricity market, which benefits both Ireland and Northern Ireland.

The Northern Ireland protocol in its current from has created real problems and challenges for ordinary citizens and businesses in Northern Ireland and contributed to political instability in the region.

[Lord Howard of Lympne (Con)]

If the Government wish to take action to remedy the situation the Minister has identified, why do they not take that action by invoking Article 16 of the protocol, which provides a perfectly legal route for such action to be taken?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I know that my noble friend has raised this point. As I have indicated, there are parts of the protocol that we believe are working. I have already alluded to the common travel area, for example. While Article 16 remains a provision that the Government obviously know is at their disposal, and can enact it if so required, we believe that the Bill seeks to present a solution to the exact issues that we are identifying and need to be addressed, but not by removing the protocol altogether. I have cited two or three reasons that are currently operational and work within the existing protocol.

To continue, we also believe that the current protocol creates new, cumbersome processes and bureaucracy for traders. It undermines Northern Ireland’s position within the United Kingdom internal market and, as I said, has contributed to the diversion of east-west trade. Most urgently, it has provided an obstacle to the restoration of the devolved Government in Northern Ireland, undermining the important power-sharing institutions established by the Belfast/Good Friday agreement. The Government are continuing, again, as I said earlier, to engage in constructive dialogue with our EU partners to find shared solutions to these problems. I have referred to the discussions under way on current technical decisions between the UK and EU officials, which are a positive forward step.

Let me say again, as I said at the start of my remarks, that our strong preference remains to have a negotiated solution. However, we cannot stand by and allow the current situation to continue. We must ensure that the United Kingdom Government have the powers they need to address these urgent problems and enact lasting solutions to the problems inherent in the protocol, given any scenario. The Bill ensures that we have covered all the bases to implement what we believe are durable solutions while, to reiterate the point on the issue raised by my noble friend Lord Howard, preserving those parts of the protocol which are currently working.

I am confident that once the Bill has received Royal Assent, we will be well on our way to restoring the balance between the communities in Northern Ireland, which is integral to the Belfast/Good Friday agreement. I assure your Lordships that we continue to engage directly on the ground with businesses and communities in Northern Ireland; importantly, we continue discussions with our EU partners. The purpose of the Bill is to ensure that we have all the tools available to the Government to deal with the scenarios that we currently face, but we remain committed to finding a lasting solution.