(4Â weeks, 1Â day ago)
Lords ChamberMy Lords, although it is true, as has been acknowledged, that the impact of this SI will be slight to say the least, I accept that the Windsor Framework has been oversold. It was oversold by the Sunak Government and it has been oversold by this Government. But, then again, the Good Friday agreement was oversold by Tony Blair. The fact is that there is no possible better way forward for Northern Ireland in either case. The agreement exists. In both cases, these agreements were a result of a conflict and a historic compromise between profound forces both inside and outside Ireland. So the Windsor Framework is still a model of a way forward.
One of the most important things about the Windsor Framework is the way it declares itself, on page 4, to be restoring the “balance” of the Good Friday agreement of 1998 in its three parts. This is very important. The work of the noble Lord, Lord Frost, on grace periods was, at the time, of tremendous importance for ensuring the stability of Northern Ireland. I recall it with admiration. But, that said, I disagree with what he has just said about the growing separation between Northern Ireland and Britain. The Windsor Framework says on page 5:
“Inherent in this … way forward is the prospect of significant divergence between the two distinct economies on the island of Ireland … building on the existing differences in every area of economic … life such as services, migration, currency and taxation”.
It might now have added defence; Harland & Wolff is now working on contracts for the Royal Navy.
There is not a growing separation. We have a return, in a way, to what the noble Lord, Lord Empey, was engaged in negotiating in the last week of the Good Friday agreement: a practical model of north-south relations rather than one dominated by nationalist solutions of one sort or another—solutions that the noble Lord, Lord Frost, is quite right are to be found in the 2017 EU-UK agreement and in the withdrawal agreement. This is a significant modification, though it is imperfect. In the last debate, the Lord Privy Seal talked about the Prime Minister’s successful trip to Northern Ireland. She said it was clear that the Prime Minister saw Northern Ireland as part of the success he wanted for the UK as a whole. That is the spirit.
(6Â months ago)
Grand CommitteeIt 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.
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.
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 ÂŁ2 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.
(1Â year, 11Â months ago)
Lords ChamberMy Lords, I too can be quite brief, but there are a few points I want to register. I thank the noble Baroness, Lady Hoey, for the Motion and for her helpful remarks.
These regulations testify to something we always feared: that differential arrangements for Northern Island, in which it remains closer to EU laws and rules, would end up being exploited to restrict our freedom and keep the UK-EU relationship one of high alignment, and that is what has happened. It has become harder to get the gains of setting our own laws in our own interests, and there is a risk that we remain in the political and psychological tractor beam of the EU. And so it has proved.
Ever since the original sin, as I regard it, of the joint reports in December 2017, it has been impossible to entirely undo the agreement about the imposition of EU law in Northern Ireland. The Johnson Government, both when I was responsible and under my successors, tried to water down commitments and made it clear they could not be durable, and eventually did their best to unpick it, culminating in the Northern Ireland Protocol Bill, which was so intensely disliked in this House. But that Bill fell, with Prime Ministers Johnson and Truss, and the Sunak Government, having promised one thing, then did another and agreed the Windsor Framework. This did little to improve the situation in practice, but the big change it did make was that the British Government were now actively committed to defending protocol-like arrangements, and that meant defending EU interests in areas covered by the protocol in Northern Ireland.
What we are seeing happen with the regulations today is what we always said would happen: the easy way out would always be taken, and we would increasingly choose to align ourselves with EU laws rather than go our own way. These regulations mark a new stage in that process. Hitherto, the Windsor Framework arrangements were confined to the GB-Northern Ireland “border”, but now we are also aligning a GB external border with EU laws—admittedly for a limited category of third-country goods. As others have said, including my noble friend Lady Lawlor, it will not end there. The Product Regulation and Metrology Bill, which is also being considered by your Lordships’ House, has exactly this purpose in mind, and is much more sweeping in what it can do. As the noble Baroness, Lady Hoey, pointed out, this pre-emptive legislative cringing to the EU hardly even brings us any benefits. It still does not improve the “border processes” between GB and Northern Ireland, and the same will be true of the product regulation Bill.
As I have said before, these arrangements make little sense unless they are the first stage in a process in which the second stage will be formal adoption of EU laws enforced by EU methods. That is, of course, how you get the paperwork to be eliminated, but at what price? We have the gradual watering down of this country’s democracy still further in favour of laws set elsewhere.
To conclude, there are only three possible destinations from where we are. I have just described one, which is the gradual, further dissolution of UK sovereignty in important areas of the economy. The second is an attempt to make the unworkable work, to constantly offset the complexities and the nonsensicalities of the Windsor Framework by more and more complex legislation, with more and more exemptions and special treatment, creating a bigger regulatory burden and, in practice, separating out Northern Ireland still further. If we go down this road, we will be dealing with more and more unsatisfactory pieces of legislation like this one.
The third route is the one that, one day, must be taken and has been referred to already, and that is the route of mutual enforcement, for the Windsor Framework to be ditched and for UK laws to apply in Northern Ireland, as they do anywhere else in this country. In my view, that is the right way forward. I do not think the current arrangements can or will stand. They are overcomplex, create too many political anomalies and simply will not work over time, and it is only a matter of time before that becomes clear. One day, we will sweep away the Windsor Framework and make this a properly United Kingdom once again.
Can the Minister say which of these three paths she believes the Government are on? What is their approach to the Windsor Framework, and what is the direction of travel?
My Lords, I thank the noble Baroness, Lady Hoey, for giving us a chance to have this debate. I find myself in a slightly confused frame of mind, in that I agree with much of what the noble Lord, Lord Frost, has just said about the 2017 agreement and its consequences. However, we are where we are. There is as much chance of mutual enforcement becoming an acceptable solution to this crisis as there is of all the European countries and the United Kingdom deciding that the dictatorship of the proletariat is the best way forward for governance—in fact, there is rather more chance for the dictatorship of the proletariat. To tell the people of Northern Ireland to keep on going, that mutual enforcement is somehow a realistic option, is misleading.
On the disfranchisement of the people of Northern Ireland, the truth is that the Assembly will vote on this matter. I know there are those who dislike that. The major change between the Johnson agreement and the May agreement was putting in that there should be a vote in the Assembly on any new arrangements, giving the Northern Ireland Assembly a chance to vote. As for the talk about 1.9 million people being disfranchised, they are not being disfranchised—they are going to get a chance to vote. I understand the objection to the form of the vote, which is by a majority vote, although that is so because trade matters are actually the responsibility of the United Kingdom Parliament. It was a special concession to give a vote to the Assembly on this occasion. In 1938, at the time of the very controversial Anglo-Irish trade agreement, the unionist MPs all accepted it was nothing to do with Stormont; it was a matter for the Westminster Parliament even though they were concerned it was unfair to Northern Irish businesses. A special case has been made for this vote.
In 2017, there was a general election in Northern Ireland. The DUP got 36% of the vote—it is closer to 20% now. The total unionist vote is little short of 50%. When it was agreed in 2019 that the Assembly would have a majority vote on this matter, it was not so obvious what the outcome would be. Today it is, but when that was agreed to in 2019, it was not at all obvious that a majority vote would be acceptance of the Windsor Framework arrangements, as we are all sure it will be now. It was not at all sure, and it was not inevitable.
There is an argument that one reason why the unionist vote has collapsed is the constant putting forward of solutions which are not solutions, like the mutual enforcement scheme. There is nothing at all wrong with it, had it been serious five years ago. We are now three international treaties down the road, and the European Union is not going to change its mind, and Parliament voted by a huge majority for the Windsor Framework. There is more chance of the dictatorship of the proletariat being decided as the way forward for Europe and the United Kingdom than the idea that suddenly people are going to turn round and say, “Let’s try something else completely different”—considerably more chance.
I have made general observations of where we are, and it is with regret that I say some of this because I think mutual enforcement should have been more properly discussed. The 2017 agreement is deeply flawed and set a framework which leaves us with many remaining difficulties which we have to talk about. None the less, this is where we are. I hate to be so simple about it, but it is the case.