Negotiating Objectives for a Free Trade Agreement with India

Lord Frost Excerpts

Tuesday 6th September 2022 Grand Committee

[Lord Frost (Con)]

My Lords, I thank the noble Baroness, Lady Hayter, for securing this debate, as well as for her broader work in chairing this important committee and producing this report. I assure her that she will be hearing more from me in this capacity and that no valedictory is due—for the time being, anyway.

I go back some way in my interest and involvement in trade issues with India. Ten years or so ago, when I was the UK’s representative on the EU’s Trade Policy Committee—also known the Article 133 committee—I spent a lot of my time promoting the UK’s interests in what we hoped at that time would be a free trade agreement between the European Union and India. Even then, it was clear to me that the task was an almost impossible one. Coupled with the Indians’ reluctance to make major concessions, the fact that the EU Commission had to promote so many interests, both offensive and defensive, and approached the task in such a mercantilist way—as trade negotiators tend to do—made it always seem unlikely that the right balance would ever be found. Indeed, so it proved when the EU suspended the talks in 2013.

Luckily, we in the UK have been given another opportunity to reach an agreement with India thanks to the fact that we no longer have a trade policy in which we are a minority share participant. We are now in a position to prioritise our own objectives, determine our own trade-offs and, let us not forget, conduct a negotiation in which UK officials are actually in the room and negotiating directly rather than having to rely on accounts from a third party.

Moreover, as the committee’s report makes clear, the time is propitious, with India, I hope, taking a more positive attitude to trade agreements and with the strategic case for an agreement with India ever more important. Indeed, this more positive environment is why the EU too resumed negotiations in June, although I suspect it will find the task of balancing its different interests as difficult as ever.

We now have a new Prime Minister, one who was formerly Secretary of State for International Trade and one who I know to be an economic liberal and believer in the merits of openness and competition. I express the hope to my noble friend the Minister that this attitude will feed through to a new government approach to this negotiation.

The committee’s report endorses the observation of the current Secretary of State for International Trade—at least I think she still is—my right honourable friend Anne-Marie Trevelyan that the Government will sign a deal by Diwali only if it is “good for UK businesses”. Of course, what is good for existing UK businesses is not necessarily the same as what is good for the UK economy overall. This is particularly true when looking at trade liberalisation. We cannot determine whether an agreement is beneficial to us purely by looking at one test: whether it reduces barriers, tariff and non-tariff, for our exports. That is a very important test, but not the only test.

The important judgment to make is whether, taking one thing with another, the agreement is beneficial to our country overall. That requires a broader assessment. It requires looking at the benefits of increased competition to our economy through more openness to Indian exports, notably but not only in agriculture, even if that might make life tougher for some existing businesses. It requires looking at the broader national economic and security interest we have in rebalancing our trade policy away from the current arrangements, which, in effect, are a giant preference scheme for the European Union. And it requires looking at the strategic case for a trade agreement with India, in the context of our broader aspiration to join the CPTPP, which is in many ways complementary, and our aspiration for a broader strategic and defence political involvement in the Indo-Pacific.

That is why, with the greatest respect, I disagree with the committee’s judgment that there is only questionable value in setting deadlines for the conclusion of negotiations. The noble Baroness, Lady Hayter, alluded to this. I know, perhaps better than anyone, how much a deadline focuses minds on both sides, but I draw different conclusions. Without a deadline, we will always be prey to the wishes of our domestic lobbies; there will always be the wish to take a bit longer and to push negotiations that one step further. Like the tortoise in Zeno’s paradox, the perfect moment for concluding talks will always seem a little way in the future. This approach risks us never getting any agreement at all.

It may be that, given events, the Diwali deadline is a bit too soon, although I note that, strictly speaking, it was a deadline

“to conclude the majority of talks”,

not to have a completed agreement. Be that as it may, we should set a credible deadline soon, seek to reach the best agreement we can and reach a judgment on whether it is in our interests overall. If that agreement looks more like an interim than a comprehensive agreement, and it can be harvested so further talks continue, we should be very open to that.

I will briefly make two other points—one on which I agree with the committee and one on which I do not. On the first, I agree that it is time we had a broader UK trade strategy—one that sits within and is consistent with the revised and updated integrated review, which I hope we will see shortly. That strategy should also include some proposals and ideas for the greater involvement of Parliament in signing off agreements, as the noble Baroness, Lady Hayter, noted. I hope that the new Secretary of State for International Trade will take this forward.

My second point is on the committee’s comment that the devolved Administrations have concerns regarding the sharing of information pertaining to areas of reserved competence in the negotiations. The noble Lord, Lord Grimstone, the previous Trade Minister, is quoted as justifying the current arrangements on the grounds of confidentiality. That is all well and good, but there is a clue in the words “reserved competence”. Information need not be shared with the devolved Administrations in areas of reserved competence because, to put it bluntly, it is not their business. Where competence is reserved, it is for the DAs to implement decisions taken by the national Government in the negotiations. I urge the Government and the Minister to be more robust in policing these boundaries; we have seen a tendency for the boundaries to move, and in only one direction.

I conclude by once again thanking the noble Baroness, Lady Hayter, and the committee and by expressing my best wishes and support for their further work in this important area.

European Union: Border Control Checks

Lord Frost Excerpts

Thursday 16th December 2021 Lords Chamber

[Lord Purvis of Tweed]

To ask the Minister of State at the Cabinet Office (Lord Frost) what plans Her Majesty’s Government have, if any, to extend easements to border control checks on goods from the European Union on 1 January 2022.

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

My Lords, the Government are fully prepared for the introduction of border import controls and, as previously announced, will introduce these controls on 1 January for EU goods coming from mainland Europe. However, in order to create the best possible environment for negotiations on the protocol and to avoid complexity and uncertainty, I announced yesterday, on 15 December, that the current arrangements for goods coming from the island of Ireland will be extended on a provisional basis.

[Lord Purvis of Tweed (LD)]

My Lords, in an earlier answer the Minister said that he had noticed no difficulties in securing trade with the European Union. But the cross-party European Affairs Committee report on trade in goods with the EU, published today, found that small businesses and agri-food sectors have been hardest hit by the changes of the TCA, resulting in GB exports becoming

“slower, less competitive, and more costly.”

The committee calls for an urgent SPS agreement with the EU. When the Minister is discussing this with the vice-president tomorrow, will he signal that an urgent SPS agreement with the EU is a priority, to support our small business and agri-food sectors that have been so hard hit?

[Lord Frost (Con)]

My Lords, I have had the opportunity to look briefly at the report that is referred to, which as always is an extremely comprehensive and worthwhile assessment of the state of play. We have never denied that there are new processes that need to be followed by UK exporters, but experience over the year is that UK business has come to grips with them very successfully and we have brought in, for example, our new export support service to help support smaller companies. On the question of an SPS equivalence arrangement, we asked last year for the TCA to include an equivalence process. That was not possible and, as far as we know, still is not possible, but obviously it would help if the EU was willing to look at that again and move forward.

[Lord Foulkes of Cumnock (Lab Co-op)]

Further to the Question from the noble Lord, Lord Purvis, he and I are both members of the committee that reported today. Part of the recommendations is a warning that there is likely to be further Brexit disruption in the new year as these controls are phased in. The Minister has indicated that he made a statement yesterday, but will he spell out exactly what the attitude of the Government will be? That will be crucial to whether these rules will cause further disruption, particularly to small and medium enterprises.

[Lord Frost (Con)]

My Lords, as I said, businesses have already shown a great capacity to adapt to new rules; people will need to adjust to them. The controls coming into force in January are UK controls, so we can handle them in a sensible and pragmatic way as they come in. We are in close touch with key border industry players and have been running online events such as webinars with companies. We talk constantly to border industry bodies and hauliers both in the UK and in the EU, and we have published explanatory material and so on. We are doing the best we can, and it is our belief that companies and bodies are engaging well with this and that the controls will be introduced successfully.

[The Earl of Kinnoull (CB)]

On SMEs in the EU and the UK, our thoughts were twofold. First, the Brexit support fund was not fully spent because it had rather narrow confines. Secondly, does the Minister agree that the Brexit support fund and similar things should be redoubled to help our SMEs and that our old friends the trade specialised committees under the TCA should be fired up and meeting to try to ameliorate matters for SMEs both in the EU and in the UK?

[Lord Frost (Con)]

My Lords, the Brexit support fund was indeed not fully used, which suggested to us that it was not the best means of providing support to companies. That is why we have brought in the export support service, which I hope will grow and become more focused in time—in particular to help SMEs, which obviously have most difficulty in dealing with the new arrangements.

The noble Lord is obviously correct to say that this is business for the trade specialised committees, and when we have particular evidence of difficulties, we will certainly raise them in those fora.

[Lord Dodds of Duncairn (DUP)]

My Lords, in the week that the Government have announced, for very understandable reasons, that they will extend free, unfettered access for firms from the Irish Republic—part of the EU—to the UK market, is it too much to hope that British firms sending goods to the other part of the United Kingdom in Northern Ireland might also benefit from free, unfettered access? Surely that is not too much to ask, and can the Minister tell us when we are likely to see that?

[Lord Frost (Con)]

The noble Lord makes an extremely good point. If I may dwell on it for a moment, it is obviously true that the legal framework for Northern Ireland and Ireland goods coming to Great Britain is different because of the unfettered access commitment. In practice, at the moment, it is not always possible to distinguish between the two categories of goods, but that will change in future and we will need a definitive solution to this question. Of course, the degree of pragmatism that we show in future to Irish goods coming to Great Britain will be related to the degree of pragmatism and flexibility that the EU shows in allowing goods to move freely around all parts of the UK.

[Lord Tugendhat (Con)]

My Lord, in the light of the questions and answers about Northern Ireland, did the Minister see the report in the Financial Times last week that the most rapidly growing region in the United Kingdom is in fact Northern Ireland? Does this not show that, whatever the problems surrounding the protocol, Northern Ireland is doing extremely well at present from being part of the United Kingdom and part of the EU?

[Lord Frost (Con)]

My Lords, I am not sure that I share the characterisation that Northern Ireland is both part of the United Kingdom and part of the EU. It is certainly in a somewhat different position as regards goods trade. Northern Ireland is a very successful part of the United Kingdom, has some great companies and has a very bright future. I am very happy that, as the FT article noted, it has grown well. Nevertheless, the burdens of the protocol are significant and will probably grow over time, so we need to find a solution.

[Baroness Chapman of Darlington (Lab)]

My Lords, this continued failure to reach a stable agreement with the EU is expensive for business and the UK taxpayer. We have one set of checks that were postponed back in September, another waived in December and others that are still due to come into force. The Government are spending £360 million on trader support, £150 million on digital agri-food certification and IT systems and £50 million on checking facilities. What is the Minister’s assessment of how much of this money we would get back should he trigger Article 16?

[Lord Frost (Con)]

My Lords, I think it is reasonable that we should bring in controls as we see fit, in a staged and controlled way over time, so that companies have time to adjust to them. That staging means that the process is spread over a year or two, but that is reasonable and makes life as easy as it can be for businesses both exporting and importing.

The noble Baroness is correct to refer to the substantial sums we have spent on implementing the Northern Ireland protocol. That demonstrates that the accusation sometimes made against us that we are not interested in implementing the protocol is not correct. We have spent a lot of money in an attempt to mitigate the burdens, but there are obviously simpler ways of mitigating the burdens than requiring every good moving to Northern Ireland to go through a customs process and paying the heavy costs of that—and it is those new solutions that I hope we can find in the coming months.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend for all he has done in very difficult circumstances this year. What positive news can we expect on EU and UK matters in the years ahead?

[Lord Frost (Con)]

My Lords, I think we are ending the year on a positive note. We have had a year’s experience of running the Trade and Co-operation Agreement; we have the governance arrangements in place; all the disasters predicted about threats, problems and the collapse of trade—one set of difficulties after another—have not materialised and we end the year in a good place. It is my hope that we will have a constantly improving and very friendly and warm relationship with our EU neighbours, based on free trade and friendly co-operation. That is where we want to get to, and that is where, I am sure, the Government will be taking things forward next year.

Retained European Union Law

Lord Frost Excerpts

Thursday 16th December 2021 Lords Chamber

[Baroness Ludford]

To ask the Minister of State at the Cabinet Office (Lord Frost), further to his Written Statement on 9 December (HLWS445), how Her Majesty’s Government will consult Parliament in their reviews of (1) the substance of retained European Union law, and (2) the status of retained European Union law in United Kingdom law.

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

My Lords, the Written Ministerial Statement referred to sets out full details of the two reviews of retained EU law. I and other responsible Ministers are of course ready to engage with Parliament in an appropriate way—for example, directly with this House, with interested Select Committees and with noble and learned Lords who have a particular interest in this question. Of course, we wish to establish proposals which are likely to be acceptable to the largest possible number of parliamentarians while achieving our policy aims.

[Baroness Ludford (LD)]

My Lords, Parliament agreed with the Government that a snapshot of EU law at the point of exit should be onshored into UK law in the 2018 and 2020 withdrawal Acts. This was for the sake of continuity, certainty and stability for manufacturers and service providers, and thus the economy, throughout the UK, including Northern Ireland, beyond the protocol. A mere nine months on, the Minister expressed his desire—in what seems a highly ideological and unnecessary move when all the practical issues of financial services, Horizon, and so on are unresolved—not only to take a wrecking ball to the settlement but to do so in a way which takes back control for the Executive such as to represent, in the words of EU law expert Professor Catherine Barnard,

“a full takeover by Whitehall of Westminster”.

The announced intention is only to “incorporate Parliament’s views”, which is not good enough. I thus ask the Minister now for a commitment not only to involve Parliament fully in the review but then to make any changes via primary legislation and not Henry VIII powers.

[Lord Frost (Con)]

My Lords, the noble Baroness is of course right in saying that retained EU law was brought on to our statute book for reasons of convenience and a smooth transition. It does not mean that it can never change; indeed, it must change, because that is how we get the benefits of reform and change after leaving the European Union. That is the process we intend to begin. As I have said before, I do not think that it makes sense for rules which never had proper scrutiny in this House to require full dress processes to remove them. The way they were incorporated was not normal in terms of parliamentary procedure, and therefore we should look at other ways of dealing with the consequences.

[Lord Adonis (Lab)]

My Lords, in the spirit of good will, could I wish the Minister a very happy Christmas? When he reads A Christmas Carol, who does he like most? Is it the ghost of Christmas past, when he was a huge enthusiast for the European Union? Is it the ghost of Christmas present, when, like Mr Scrooge, he carries his own low temperature always about with him? Or is it—I hope—the ghost of Christmas future, when we rejoin the European Union and he can buy all his nieces and nephews glorious presents in the single market and customs union?

[Lord Frost (Con)]

My Lords, I thank the noble Lord for his good will, and I extend good will to all Members of this House. If I am forced into a false choice, it will be Christmas future, because I believe that our future outside the European Union is a great one. I must say that I have not noticed any difficulty in access to products from the European Union, and our exports to the European Union are continuing well. I am sure we will prosper on that basis.

[Lord Moylan (Con)]

My Lords, does my noble friend agree as a matter of principle that in this pandemic, government support for business should be distributed equitably throughout the United Kingdom, and that it really is not appropriate that the Government should need to go off and ask a foreign power for permission to do that with regard to Northern Ireland?

[Lord Frost (Con)]

I very much agree with my noble friend. It is of course a problem that, even though we have agreed new subsidy control provisions in the TCA—and of course we are bringing our own Subsidy Control Bill through Parliament—we are still working with the arrangements that were agreed in 2019 as regards state aid in Northern Ireland. It is excessively complex and difficult for companies in Northern Ireland to deal with these two regimes, and it does not make sense for us not to be able to support businesses in Northern Ireland in the recovery from Covid as we can everywhere else in the UK. I hope we can find solutions as we take forward the discussions on the protocol.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, central to this question is the principle of democracy. The Minister is having ongoing discussions and negotiations with the European Union. Maybe he would like to tell the House today about those discussions in terms of addressing the democratic deficit in the protocol and how Members of the Northern Ireland Assembly will be able to have decision-making authority in relation to EU legislation and all other matters.

[Lord Frost (Con)]

My Lords, obviously we are in the middle of a negotiation that continues to cover a wide range of issues, including the democratic deficit that the noble Baroness mentions. Unfortunately, we are not likely to complete those discussions this year; I expect that they will run into next year. However, it would not be a good solution to give the Northern Ireland Assembly or Executive decision-making roles in the European Union. The UK is not a member of the European Union, and therefore it would not be right or appropriate to try to resolve these questions in that way.

[Lord Wallace of Saltaire (LD)]

My Lords, the Minister may remember that one of the studies in preparation for the single market demonstrated that the UK, before the single market, tended to take US regulations as the standard for British regulations under a sort of extraterritorial jurisdiction. The business media now tells us that the world is moving towards three focuses of regulation: American, Chinese and European. Do we intend to add a fourth, which would be purely national, to the great disadvantage of exporters within Britain, or do we intend to return to incorporating American regulations as British, perhaps without fully consulting Parliament on the unsatisfactory compromises we have to make?

[Lord Frost (Con)]

My Lords, regulatory freedom is one of the advantages of Brexit, not one of the disadvantages. We now have a choice as to whether we proceed nationally in regulations and standards, if we wish to get ahead of other international bodies and organisations, or whether we wish to track other organisations’ rules. US regulations, European Union regulations, others’ regulations or national ones may be the best ones for this country in future, but we have the ability to make that choice now, and that is one of the advantages of Brexit.

[Lord Empey (UUP)]

My Lords, it is fair to say that the relationship between the EU and the UK has become very complicated, and that has been added to by the arrangements with the protocol. Would my noble friend be prepared to publish an organogram that would set out for us what all these committees are and who populates them, so that we have some grasp of the relationships between the EU and the UK, including the very complicated committee structure under the protocol?

[Lord Frost (Con)]

My Lords, I would be very happy to publish such an organogram—I think we will need an A2 or maybe an A1 piece of paper to get it all on. But it is still a lot less complicated than it was when we were a member of the European Union, and the arrangements still fit within the norms of a trade agreement. I appreciate that they are complex, and I am happy to try to make that as clear as we can in public.

[Lord Grocott (Lab)]

On the crucial issue of democratic accountability and proper scrutiny of legislation and the legislative process, which I am sure we all want to see enhanced, will the Minister, with his experience, care to compare the degree of scrutiny and democratic accountability that exists in respect of laws that were made in Brussels and the degree of scrutiny and democratic accountability that exists in respect of legislative processes in this Parliament?

[Lord Frost (Con)]

The noble Lord makes an extremely good point. It is obviously possible and has been the case for a regulation with direct effect to be agreed in Brussels, perhaps despite us having voted against it, and for that regulation then to become the law of this country without further ado, despite the best efforts of the scrutiny committees in both this House and the other place. There is no ability to amend such rules. It is right in a democracy that Parliament should be able to set the rules by which we live, and that is a principle that we will try to take forward.

EU–UK Partnership Council

Lord Frost Excerpts

Thursday 16th December 2021 Lords Chamber

[Baroness Hayter of Kentish Town]

To ask the Minister of State at the Cabinet Office (Lord Frost) what is the agenda for the next meeting of the EU–UK Partnership Council, and when that meeting will take place.

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

My Lords, we have not yet agreed a date for the next meeting of the Partnership Council. The trade and co-operation agreement requires the council to meet once a year, unless otherwise agreed by the co-chairs. This condition has been met with the Partnership Council’s meeting on 9 June to begin the process of implementing the TCA’s governance structures. All TCA specialised committees are now scheduled to meet before the end of this year.

[Baroness Hayter of Kentish Town (Lab)]

As someone who may be nominated to be on the PPA overseeing the Partnership Council, I hope it will meet a little more frequently and with a little more content. The TCA included a declaration on the UK’s participation in EU programmes such as Horizon; it was agreed in principle but there was no time to finalise it before the agreement was signed. The issue was to go to the appropriate specialised committee for action “at the earliest opportunity”. A year on, nothing has happened on Horizon. Can the Minister ensure, even if the Partnership Council is not meeting, that the other committees he mentioned meet and get on with this so that we can participate in Horizon, which is so important for all our researchers?

[Lord Frost (Con)]

My Lords, I very much agree with the thrust of the question of the noble Baroness. I think it is well known that we have wanted to get the Horizon arrangements up and running for some time; it is a matter of great disappointment that we have still not managed to do so. It is not 100% clear why, but that is the situation. However, the good news is that we have now agreed that there will be a meeting of the relevant specialised committee before the end of this year, provisionally on 21 December. I hope that might mark a change in the approach being taken and enable us to move this forward.

[The Earl of Kinnoull (CB)]

My Lords, the very first of those declarations made that day concerned financial services. There was an agreement that, by March 2021, an MoU would be concluded to get regulatory framework co-operation. That has not happened, although there were some technical discussions. Will this declaration feature on a future agenda for the Partnership Council, as it is certainly important? Until that MoU has been done, the EU will not assess us for the various equivalence decisions that are so vital to the City. China has 14 equivalence decisions, Mexico has 13 and we currently have two, which are time-limited.

[Lord Frost (Con)]

My Lords, the noble Earl is right that there is a provision to agree an MoU. Indeed, there were discussions at the start of this year provisionally to agree that text. Those discussions have paused, again for reasons that we are not 100% clear about, although we can speculate. Naturally, we hope it will be possible to pick them up and move this forward, given that, as the noble Earl knows, some of the equivalence decisions are now imminent if not quite yet urgent.

[Baroness McIntosh of Pickering (Con)]

My Lords, in addition to the Horizon programme, which is causing some concern, my noble friend will be aware of the ongoing anxiety about the REACH programme. For those who have been affected by the fact that the unilateral UK REACH programme is not as comprehensive but is proving more expensive than the EU REACH programme to which all were subscribed before, what representations can be made to the EU-UK Partnership Council in this regard?

[Lord Frost (Con)]

My Lords, obviously we have inherited the REACH programme in the retained EU law that came on to the statute books and in the TCA. It is something we keep under close review, and it is certainly true that the costs of reregistering through REACH are considerable. We keep under close review the possibilities of trying to streamline and reduce them.

[Lord Hannay of Chiswick (CB)]

My Lords, would the Minister not agree that a slightly more proactive approach to holding meetings with the TCA might be better than simply standing at the Dispatch Box and saying that we have fulfilled the minimum requirement under law? Would he perhaps answer the part of the Question from the noble Baroness, Lady Hayter, that related to matters which might be discussed at such a future meeting? Has he given consideration, for example, to raising the issue of performing artists so that the work that the Government are doing bilaterally is supplemented by work with the EU where the EU has competence in these matters—for example, with cabotage?

[Lord Frost (Con)]

My Lords, the Partnership Council is, of course, the highest body of the governance structure created by the TCA, and as such it does not need to meet very frequently. That is why the treaty commitment is to once a year. However, the specialised committees are important and look through the detail, and those have been running since June. As I said, all of those will shortly have met. So the governance structures are working well. We obviously have been giving thought to the agenda of the Partnership Council; it will no doubt take the issues that are of highest priority at that point. We touched on the question of touring artists at the 9 June meeting, and I imagine that we will do so again at the next meeting.

[Baroness Scott of Bybrook (Con)]

My Lords, the noble Lord, Lord Campbell-Savours, wishes to speak virtually. I think this is a convenient point for me to call him.

[Lord Campbell-Savours (Lab) [V]]

My Lords, could we seek to place on the council agenda the whole issue of French threats to blockade channel ports, transport arrangements and compromised channel fishing rights? Can the Minister raise at such a meeting that it might be prudent for the United Kingdom to start moving cross-channel, roll-on roll-off trade to Belgian ports? We cannot go on under constant threats from France to block our European trade routes, because British jobs are at stake—and I say that as someone who loves France.

[Lord Frost (Con)]

My Lords, I share the noble Lord’s opinion about France, and it is therefore all the more regrettable that France made threats against us earlier this year as a result of the ongoing disputes on fishing. I am very glad that those threats were withdrawn, and actually we have been able to continue the fishing discussions on a relatively constructive basis and bring them more or less to a conclusion recently. I think those threats would have been a breach of the treaty and therefore would have been something that it would have been necessary to raise at the Partnership Council—but I hope that we will not be in that situation when the Partnership Council meets.

[Baroness Foster of Oxton (Con)]

My Lords, I congratulate my noble friend on the Government’s engagement with the fora set up for the trade and co-operation and withdrawal agreements. Does he agree with me that if the EU is willing to show the same spirit of constructive engagement and flexibility required, the problems concerning the Northern Ireland protocol could be speedily resolved, enabling both the EU and the UK to benefit from a more constructive and long-lasting relationship as neighbours and trading partners?

[Lord Frost (Con)]

My Lords, I of course very much agree with my noble friend’s question, and she is right to refer to the spirit of constructiveness. It is natural that the disputes catch attention, but it is worth dwelling on the fact that a huge amount of business in this very wide-ranging trade and co-operation agreement is carrying on satisfactorily. I hope that the same spirit might be shown in the ongoing discussions on the Northern Ireland protocol, which no doubt we will touch on.

[Baroness Chapman of Darlington (Lab)]

My Lords, the key word in my noble friend’s Question is “partnership”. Both our economy and our place in the world will be stronger if disputes can be resolved amicably. Some commentators have likened the Minister’s negotiating strategy to puffing out his chest for weeks or months before finally getting down to the serious business of achieving consensus. On the issue of Northern Ireland, will he assure us that he is not intending to use the issue of the supply of medicines to the people of Northern Ireland as leverage in his negotiations?

[Lord Frost (Con)]

My Lords, there has been a lot of discussion of my negotiating strategy over the last two and a half years. The fact that we achieved the broadest, most wide-ranging and most comprehensive trade and co-operation agreement ever reached is testimony to my wish to achieve partnership with the EU. On the issue of medicines, we continue to be in discussion with the EU on this subject, and I will talk again to Maroš Šefčovič tomorrow. I am not convinced that we are going to reach agreement on it by the end of the year, but we will try. Of course, it is a national priority that medicines should be available in Northern Ireland, as they are everywhere else in the UK.

Northern Ireland: Supply of Medicines

Lord Frost Excerpts

Thursday 9th December 2021 Lords Chamber

[Lord Moylan]

To ask Her Majesty’s Government what steps they are taking to ensure the uninterrupted supply of all medicines to Northern Ireland from the end of this year.

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

My Lords, the people of Northern Ireland must have access to the full range of medicines available to people elsewhere in the UK. We are currently in intensive discussions with the Commission to see whether we can establish a consensual way of resolving the current difficulties in this area, among many others. Some progress has been made, but agreement has not been reached.

[Lord Moylan (Con)]

My Lords, does my noble friend agree that Her Majesty’s Government have a unique and inescapable obligation to ensure the flow of medicines to all parts of the United Kingdom, including Northern Ireland, without disruption or barriers? Does he agree that the imperatives of health exceed any contractual obligations that we might have with partners and friends? Does he also agree that the Government would not only be justified in taking but are required to take all necessary steps to ensure that medicines continue to flow to Northern Ireland, as now?

[Lord Frost (Con)]

My Lords, I very much agree with the question posed by my noble friend. There is obviously an obligation on this Government, as on any other, to provide medicines throughout the United Kingdom. Indeed, we would argue—and I think that it would be accepted—that the provision of medicines is an essential state function, as set out in Article 1 of the protocol. That is why it is important to find a solution that respects that.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, it has been suggested in some quarters that a deal on medicines could be imminent and would result in the EU changing legislation to ensure that medicines, including generics and innovative drugs, could be licensed by the UK legislator for GB licence holders so that they could flow freely to Northern Ireland. When will the Minister and the Government sign up to this approach and create the momentum that could lead to agreement in other areas?

[Lord Frost (Con)]

My Lords, there are a number of difficulties in this highly technical area of the supply of medicines. We have been looking at the proposals made by the Commission. The problem set out by the noble Baroness is not the only issue that needs to be resolved. At the moment, we are not confident that what is on the table would resolve all the issues, but we continue to talk.

[Lord Dodds of Duncairn (DUP)]

My Lords, does the Minister accept that the grace period to allow medicines to come to Northern Ireland from Great Britain is about to run out and that that will have devastating consequences for the supply of over-the-counter medicines and essential drugs for hospitals for people in Northern Ireland? What will he say to people in Northern Ireland to bring certainty on this vital issue? Does he accept that medicine should never have been part of the protocol in the first place? Why was it?

[Lord Frost (Con)]

My Lords, the grace period formally expires at the end of this year, but we are also in a standstill agreed between the two sides in July that keeps current arrangements running. It is our expectation that the current grace period arrangements will continue beyond the end of the year as long as we are in constructive discussions with the EU. The existence of the grace period has meant that some of the supply difficulties that we had earlier in the year have changed, but obviously we need to find a permanent solution to this problem.

[Baroness Suttie (LD)]

My Lords, surely it is vital to give certainty to the people of Northern Ireland on healthcare. Does the Minister agree that, in taking his decision tomorrow during the negotiations, now is the time to put pragmatism before ideology?

[Lord Frost (Con)]

My Lords, we would love to find an agreement if one were available. We think that the proposal that we made to take medicines out of the protocol entirely would be the simplest way of solving this problem, but we continue to look at the proposals that the EU has put on the table. At the moment, we do not have the necessary detail or understanding of the texts to enable us to accept these proposals, but we continue to talk.

[Lord Lansley (Con)]

My Lords, does my noble friend agree that the simplest and probably best solution would be if there were mutual recognition between the United Kingdom and the EU of the authorisations of the European Medicines Agency and our MHRA? That would be a bilateral, trade-related solution that would also serve the needs of Northern Ireland.

[Lord Frost (Con)]

My Lords, that might indeed be a solution; it has not been part of the discussions so far, and I think that the regulators on both sides guard their discretion closely and the ability to proceed at the speeds that they think best, as we have seen this year on vaccine licensing.

[Baroness Chapman of Darlington (Lab)]

My Lords, there can be no question of any interruption to the supply of medicines to Northern Ireland. This is urgent for the UK, but we should remember that the EU needs to resolve this issue for Malta and Cyprus as well. Patients, their families and clinicians need certainty. Will the Minister confirm that he is not taking a “nothing is agreed until everything is agreed” approach? The EU needs to resolve this issue on behalf of member states and is likely to present further suggestions imminently. Does he accept that supply of medicines should be dealt with as a priority and, if necessary, separately from other Northern Ireland protocol issues?

[Lord Frost (Con)]

My Lords, I repeat that the Government will not allow there to be any disruption to supply of medicines to Northern Ireland; that is an absolute obligation on us. Of course, medicines are only one of many problems that we have put on the table. They are a special case, if you like, of the issue of supply of goods more generally to Northern Ireland, so the matter cannot be seen entirely in isolation but needs to be solved as part of many of the other difficulties on the protocol.

[Lord Taylor of Holbeach (Con)]

My Lords, my noble friend the Minister will be mindful of the fact that I have a family horticultural business. Before the House met today, I was on a call with the National Office of Animal Health, which emphasised to me that animal health medicines are also part and parcel of this package. Is he similarly negotiating for those?

[Lord Frost (Con)]

My noble friend is absolutely right to raise this important aspect of the question. Although veterinary medicines are part of the general discussions that we are having with the EU, they are by no means as far advanced as those on broader medicines. Unfortunately, we are some way from a solution on that matter.

[Lord Kilclooney (CB)]

My Lords, important as medicines and trade are, does the Minister recognise that the main challenge of the Northern Ireland protocol is a possible constitutional crisis?

[Lord Frost (Con)]

My Lords, we are well aware of that aspect; we are well aware that the protocol is not working for the people of Northern Ireland. There are societal and economic difficulties, identity is being eroded, and it is compounded by trade diversion. We need to restore the balance if we are to avoid a loss of confidence in the institutions established under the Belfast/Good Friday agreement, and that is what we are working to try to ensure.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, it is astonishing that the Minister confessed in the answer to a previous question that this is just one of many problems arising from the agreement. He is the Minister who negotiated that agreement—every aspect of it. When is he going to confess that he messed it up?

--- Later in debate ---

[Lord Frost (Con)]

My Lords, it is well known by now that I was the Minister who negotiated this agreement; it is also well known that the agreement required careful handling, which it has not received during this year, and that is why we face so many of the problems that we are now trying to deal with.

[Lord Purvis of Tweed (LD)]

My Lords, the Minister forgot to answer the second question from the noble Lord, Lord Dodds: why were medicines there in the first place?

[Lord Frost (Con)]

My Lords, as I said in answer to an earlier question, medicines are a special case of the general issue of supply of goods into Northern Ireland. As the protocol covers that general issue, it includes medicines. It has created special difficulties that we are trying to resolve.

[Lord Kirkhope of Harrogate (Con)]

My Lords, on the supply of medicines, I understand that one issue in these negotiations is that there is further information which apparently is not being provided to the UK Government. Could my noble friend elucidate on this a bit more because, obviously, we all want agreement to be achieved as soon as possible?

[Lord Frost (Con)]

My noble friend is absolutely right that in an area as technical and complicated as this, it is obviously essential that we have full access to all the detail, all the potential legislation and all the potential guidance issued. At the moment, we do not have that. We have not been able to see it all, but I hope that we might be able to do so before too long. It is obviously not possible for us to reach agreement unless we have access to that level of detail.

Retained EU Law

Lord Frost Excerpts

Thursday 18th November 2021 Lords Chamber

[Baroness Ludford]

To ask Her Majesty’s Government, further to the Statement by the Minister of State at the Cabinet Office (Lord Frost) on 16 September (HL Deb, col 1533), whether the review of the substantive content of retained European Union law has commenced; and what engagement they are planning to undertake with stakeholders, including those in Northern Ireland.

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

My Lords, I have now launched two reviews: one into the substance of retained EU law and one into its status in law. As regards the substantive review, departments have been asked to review and map the content of retained EU law that falls within their responsibility in order to be clear where the heaviest concentrations are and what the effect is. Departments are responsible for consulting stakeholders as appropriate in order to complete this task, including, of course, those in Northern Ireland.

[Baroness Ludford (LD)]

My Lords, the freezing of EU law in domestic law at the end of last year delivered legal certainty and stability, including for the position of Northern Ireland in relation to the EU single market. Will the Government take great care in unravelling that? How do they intend to implement any change to retained EU law? Will they commit to doing so through primary legislation only?

[Lord Frost (Con)]

My Lords, as regards Northern Ireland, we will of course proceed with an eye on stability and with predictability, as we have made clear on many occasions. On retained EU law more broadly, I noted in my Statement on 16 September that many such laws had not been discussed or agreed to in this Parliament in any way during the course of our EU membership and any amendments to those laws in future would need to reflect that reality.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, the Minister visited Northern Ireland yesterday and the day before and I understand that he met various people. Who were those stakeholders? Did he discuss this issue about the review of retained EU law? Did he also discuss the need, in his own words, to provide political stability and sustainability and the need to promote the benefits of the protocol through access to the EU single market and the UK internal market?

[Lord Frost (Con)]

My Lords, I indeed met a wide range of people in Northern Ireland yesterday, as I always try to. It is fair to say that I heard a lot of concerns about the way the protocol is being implemented. I heard some concerns about the democratic legitimacy of laws being imposed without consent and a great wish to do something about the current situation, which is what we are trying to do.

[Baroness Smith of Newnham (LD)]

My Lords, in answering my noble friend Lady Ludford, I am not sure that the Minister actually dealt with the question of whether any changes to retained law would be dealt with through primary legislation. Could he possibly try again? He suggested that the retained law had not necessarily been scrutinised by Parliament before and that any changes needed to reflect that reality. But surely, if we are taking back control, this House and the other place should be able to decide any changes to retained law. If so, how are the Government Whips going to find parliamentary time to do so?

[Lord Frost (Con)]

My Lords, the best way I can answer the question is to refer back to what I said on 16 September, when I referred to the democratic deficit issue of such law, and note that

“we will look at developing a tailored mechanism for accelerating the repeal or amendment of this retained EU law in a way which reflects the fact that, as I have made clear, laws agreed elsewhere have intrinsically less democratic legitimacy than laws initiated by the Government of this country.”—[Official Report, 16/9/21; col. 1533.]

There are various ways of achieving that end, and that is what we are working on.

[The Lord Speaker (Lord McFall of Alcluith)]

The noble Lord, Lord Lilley, is not present, so I call the noble Lord, Lord Dodds of Duncairn.

[Lord Dodds of Duncairn (DUP)]

My Lords, a bonfire of regulation or a selective shredding of EU retained law here in Great Britain will of course not apply to Northern Ireland because we still remain under EU control and EU laws and, as the Minister has said, with no democratic input whatever from anyone elected in Northern Ireland. How is Northern Ireland going to remain competitive or even on a level playing field if Britain diverges from it continuously, not just now but over years and decades to come, unless the protocol is changed?

[Lord Frost (Con)]

The noble Lord raises a very good question. It is indeed one of the difficulties with the protocol, as constructed, that EU law, in areas of the single market for goods, is imposed without any agreement by the institutions in Northern Ireland. That is a situation we are seeking to remedy in the negotiations I am currently conducting.

[Baroness Chapman of Darlington (Lab)]

My Lords, the Minister is being rather slippery in his responses to questions about retained EU law. The reason I say this is that we were promised—in the other place at least and, I am sure, in here too—that changes to retained EU law would be subject to primary legislation, and I can remember vividly Secretaries of State Raab, Barclay and Davis saying in terms at the Dispatch Box that this would be the case. Is the Minister now overriding that commitment?

[Lord Frost (Con)]

A number of things have happened since those commitments were made, including a general election, which we won with a clear set of policies. Our policy on this matter was as I set out on 16 September in my Statement, and we are considering the best way of delivering that policy.

[Lord Wallace of Saltaire (LD)]

I recall an earlier review of the balance of competences between the UK and the EU. Does the Minister recall that one of the most prolific submitters of evidence was the Scotch Whisky Association, of which he was then, I believe, director? All of them argued in favour of the advantages of the single market and shared regulation. Can he explain when, why and how he went through a damascene conversion from the evidence that was then submitted to his current extraordinary ideological position?

[Lord Frost (Con)]

My Lords, actually, I was not CEO of the Scotch Whisky Association at the time; I was an official, working on the very review the noble Lord refers to. The policy of the Government at the time was to remain in the European Union, and therefore it is not surprising that the review reached that conclusion.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend ensure that any such review of retained EU legislation will be based on fact and science? He will recall that when the EU nitrates directive was adopted, the bar was set very high to prevent any recurrence of blue babies. There has been no blue baby for 400 years. Why then are we actually extending the nitrates provisions and making them even more stringent on our farmers, when we should be reducing the restrictions?

[Lord Frost (Con)]

My Lords, I am not familiar with the detail of the points my noble friend raises. The general point that the EU tends to legislate in a highly risk-averse way, which has economic consequences, is a good one, and we will obviously have it in mind as we take this review forward.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, one of the key tenets of Brexit was the removal of substantive undemocratic layers above sovereign lawmaking to enhance democratic accountability. But does the Minister recognise that this control over laws is not yet a real, live felt experience for voters? If so, does he appreciate that the retained EU law review is an opportunity for a democratic engagement with voters—not stakeholders—about what they believe should be prioritised in the legislation, and that it should not be left to committees?

[Lord Frost (Con)]

My Lords, the noble Baroness makes an extremely good point, and it is our wish to widen this debate as far as we can. One of the ways of doing it, we hope, will be the standing commission on deregulation, which I referred to in my Statement of 16 September, on which I hope to be able to update the House fairly shortly.

[Baroness Hoey (Non-Afl)]

My Lords, the Minister talks repeatedly about stability in Northern Ireland, which is very important. How can he possibly think there will be stability in the future if Northern Ireland, under all these retained laws, will not get the benefit of them? Will he say now whether he actually contemplates Northern Ireland remaining under the EU’s VAT rules, for example?

[Lord Frost (Con)]

My Lords, we set out our position in the Command Paper of 21 July on VAT and many other points. Having two different systems of lawmaking on important points within the United Kingdom is likely to build up tension and divergence and create difficulties over time. We are trying to design a system in these negotiations that will resolve that. I wish we were making a bit more progress, but we will keep trying.

Protocol on Ireland/Northern Ireland: Impact on UK Internal Market

Lord Frost Excerpts

Thursday 18th November 2021 Lords Chamber

[Lord Dodds of Duncairn]

To ask the Minister of State at the Cabinet Office (Lord Frost) what assessment Her Majesty’s Government have made of the impact of the Protocol on Ireland/Northern Ireland on (1) Northern Ireland’s place in the United Kingdom internal market, and (2) the flow of trade.

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

My Lords, the protocol recalls the importance of maintaining the integral place of Northern Ireland in the UK’s internal market and is clear that Northern Ireland is part of the UK’s customs territory. We are concerned that these provisions are not reflected in the way in which the protocol is being implemented. As a result, there is clear evidence of trade diversion. Trade data shows that trade between Northern Ireland and Ireland has increased significantly in both directions this year.

[Lord Dodds of Duncairn (DUP)]

My Lords, the Minister knows that the protocol is having a major adverse impact on trade flows between Northern Ireland and the rest of the United Kingdom, never mind the massive destabilising effect on the political institutions and the political process in the Northern Ireland. The chairman of Marks & Spencer says the EU proposals threaten to increase the administrative burden on imports to Northern Ireland. They could result in “worsening friction”, he says and, as a result, his firm and others might have to stop sending goods to Northern Ireland.

The head of the Road Haulage Association in Northern Ireland referred to the EU proposals as “window-dressing”. He knows, as we all know, that the EU proposals do not address the fundamental issues of the protocol. Will he now tell the House and tell the people of Northern Ireland when he is going to implement the proposals set out in the Command Paper of July this year to finally restore Northern Ireland’s place in the UK internal market fully, to fully restore Northern Ireland’s place inside the UK customs union, not on paper but in reality, and finally restore full democratic accountability to Northern Ireland as part of the United Kingdom in the 21st century?

[Lord Frost (Con)]

My Lords, the noble Lord sets out serious concerns, which we share. I should like to make our position on these negotiations and Article 16 100% clear, as he asks. Whatever the messages to the contrary that the EU may think it has heard or read, our position has not changed from the one I set out on 10 November or, indeed, in July at the time of the Command Paper. We would prefer to reach a negotiated agreement if we can. That is the best way forward for the stability and prosperity of Northern Ireland but I want to be clear that, as the responsible Minister, I would not recommend any outcome from the negotiations that I did not believe safeguarded political, economic or social stability in Northern Ireland. In such circumstances, we obviously would need to provide the necessary safeguards using Article 16. Those safeguards remain very much on the table and they are a legitimate provision in the protocol. No decision has been taken to exclude a priori any specific timing for Article 16. That will be shaped by whether and how quickly negotiations make progress.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, the Minister is once again equivocating on a very important issue, just as he did when he praised the treaty he had negotiated and then rubbished it. When he threatens to trigger Article 16, he then says, “Oh no. There’s no way I am going to do that”. Would he be surprised if increasingly, he is known here and in Northern Ireland as the “Grand Old Duke of York”?

[Lord Frost (Con)]

My Lords, to be honest, what I have just said cannot be described as equivocating. I have tried to make my position 100% clear on these negotiations and on Article 16, and it has not changed. It is that if we can find a negotiated solution, that is better. If we cannot find one, then the safeguards are legitimate.

[Baroness Suttie (LD)]

My Lords, Belfast Queen’s University’s most recent survey found that 52% of those who responded think that on balance, the Northern Ireland protocol is a good thing. Does the Minister agree that, rather than threatening to invoke Article 16, 52% is a sufficient mandate to get these practical changes done and to make the protocol work for the people and businesses of Northern Ireland?

[Lord Frost (Con)]

My Lords, I have indeed looked at the polling conducted by Queen’s University, where I had a good meeting yesterday, by the way. There is a lot of other polling around on this subject, and the conclusion I draw from it is that there is significant and stark division of opinion in Northern Ireland. Different polls have slightly different numbers but there is a clear division about the benefits of the protocol or its difficulties. In those circumstances, it is difficult to implement and that is why we are in the situation in which we find ourselves.

[Lord Godson (Con)]

My Lords, some overstated language has been employed regarding the potential implications of Article 16, such as its detonation being a nuclear response. Would my noble friend care to say a little more about what the normal procedures would be, were the article to be invoked, for ensuring that the UK’s rights under Article 16 and national rights are properly safeguarded and protected?

[Lord Frost (Con)]

I thank my noble friend for his question, which is a good one. The safeguards in Article 16 are what they say they are: safeguards. They are not an on/off switch but are significant and potentially capable of being used in a significant way. We as a Government will always proceed on the basis of predictability, certainty and clarity. There is a one-month process of consultation for the use of Article 16 between notification and activation, and we would expect to follow all the necessary procedures to provide the maximum possible legal certainty—if we reach that point.

[The Earl of Kinnoull (CB)]

My Lords, can the Minister say to what extent the protocol situation has affected the operation of the trade and co-operation agreement and the other EU-UK workstreams?

[Lord Frost (Con)]

My Lords, the trade and co-operation agreement and the withdrawal agreement are obviously separate. I have said that the difficulties we are having on the protocol are at the heart of some of the broader mistrusts that exist in the process at the moment. That said, the implementation of the TCA is going well. The specialised committees have largely met. The trade committee met earlier this week and, despite difficulties on issues such as fisheries, we are nevertheless implementing the TCA well and effectively, and the processes are working well.

[Baroness Chapman of Darlington (Lab)]

My Lords, there is a problem here, because the response the Minister gave to the noble Lord, Lord Dodds, seems to contradict the impression given to the UK and European media—and Simon Coveney, who said that he welcomed the change of tone from the Minister and anticipated that with political will, this issue could be resolved by Christmas. Earlier, I implied that the Minister was not in the mood for answering questions today. Can he prove me wrong by giving us his percentage assessment of the chances of success by Christmas?

--- Later in debate ---

[Lord Frost (Con)]

My Lords, it is somewhere between 0% and 100%, to be honest. It does not help to put specific numbers on these sorts of things. The noble Baroness makes a good point, though, about the comments of the Foreign Minister of Ireland and many others about what they perceive to be going on in the negotiations. Actually, I will talk to Simon Coveney later today. When I do so—and as I do in all those contacts—I will make our position abundantly clear, as I have set it out to this House. That remains our position, whatever else may be read in the media or by figures in the EU who are interpreting it.

[Lord Purvis of Tweed (LD)]

My Lords, it is the Government’s policy, not the EU’s, to enforce the system whereby any goods entering Northern Ireland will have to be marked as conformity assessed, separate from those sold within Great Britain. That was referred to by the chair of Marks & Spencer, who the noble Lord, Lord Dodds, quoted. It is nothing to do with the European Union; it is British government policy. The British Government have not asked in the negotiations on the protocol for that to be changed. So when will it change? Or is it the Government’s policy that it is permanent?

[Lord Frost (Con)]

My Lords, the processes that goods undergo when they enter Northern Ireland are those that, in our view, are required by the protocol, which, of course, has direct effect in UK law in many respects through the withdrawal Act. People would not want us to proceed in any way other than is consistent with those legal obligations. That is what we are required to do; the difficulty is that it is not consistent with social and economic stability in Northern Ireland.

[The Deputy Speaker (Lord Haskel) (Lab)]

My Lords, the time allowed for this Question has elapsed.

Protocol on Ireland/Northern Ireland: Court of Justice of the European Union

Lord Frost Excerpts

Thursday 18th November 2021 Lords Chamber

[Lord Dubs]

To ask the Minister of State at the Cabinet Office (Lord Frost) what plans Her Majesty’s Government have to involve the Court of Justice of the European Union in dispute cases regarding the Protocol on Ireland/Northern Ireland.

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

My Lords, the Government have proposed changes to the governance arrangements in the protocol involving the Court of Justice of the European Union. The court’s jurisdiction in settling disputes under the protocol is currently limited, of course, to those covered by the second sub-paragraph of Article 12(2), Article 5 and Articles 7 to 10 of the protocol. In other withdrawal agreement disputes, including those under Article 16, cases are ultimately resolved by arbitration, with a role for the court only where disputes raise questions of interpretation of EU law.

[Lord Dubs (Lab)]

My Lords, is the Minister aware that he has created an impression that his position is softening on many of these issues? A German journalist asked me bluntly after the noble Lord’s 10 November Statement, “Is it true that Lord Frost is moving from his earlier position?” Would the noble Lord care to comment?

[Lord Frost (Con)]

My Lords, the answer is “no”. We are trying to reach an agreement. That has always been our position; it was our position in July and it is now. I suggest that our friends in the EU do not interpret the reasonable tone that I usually use in my discussions with them as implying any softening in the substantive position.

[Baroness Foster of Oxton (Con)]

My Lords, despite bordering four EU countries and being part of Schengen and the single market, with an excess of 120 bilateral agreements, Switzerland does not permit EU law to override Swiss law. Therefore, the ECJ cannot be the final arbiter of any dispute. As a third country, as the UK now is, can my noble friend reassure the House that there will be no role for the ECJ in Northern Ireland or across the UK and that the provisions of the trade and co-operation agreement will be interpreted in line with international law, including the 1969 Vienna Convention on the Law of Treaties, as agreed?

[Lord Frost (Con)]

My Lords, my noble friend asks a very good question. I assure her that there is no role for the court of justice in the trade and co-operation agreement. There are provisions in that agreement which make it very clear that interpretations by one court cannot bind the courts of the other and that they are to be interpreted in line with the normal provisions of international law. That is 100% unambiguous. Regarding the withdrawal agreement and the protocol, we know that we have a problem. Most people would regard it as unusual for disputes between two parties to be solved in the court of one of the parties.

[Lord Kerr of Kinlochard (CB)]

My Lords, the Minister baffled the House earlier with his answer to the question asked by the noble Baroness, Lady Chapman. He is now baffling the House again. The conceptual core of the protocol is that the EU agrees that Northern Ireland may remain in the single market. The necessary concomitant to that is that the ECJ must have a role. I agree that we should not be shocked by the Minister’s line. He told us in his speech in Oxford during October that difficulties with the protocol come not from the way that it is being implemented but from the way that it was constructed. Coming from its constructor, that could seem a curious statement, but that is what he said, and that is what he goes on saying.

If the Minister insists on attempting to remove the court of justice, which is central to the conceptual core of the protocol and the deal struck by him, he cannot do it under Article 16, because, as he has just explained, that is simply about trade safeguards. Under what powers would he do it? He has the powers by regulation under the withdrawal Act to act in a way that is consistent with Article 16 to act on trade measures, but he has no power to withdraw the court of justice. Are we back to primary legislation and a specific and limited breach of the treaty and international law? If so, I doubt that the House will agree.

[Lord Frost (Con)]

My Lords, I cannot believe that I have really baffled the noble Lord, with his deep knowledge of EU affairs that is much greater than mine. The Government will set out the basis on which we would use Article 16 if and when that eventuality arises. We hope that it will not, but obviously we will be clear when and if we reach that point. Of course, it is well understood that the court has a role as the final arbiter of EU law. We do not seek to change or challenge that. What is not working is the role of the court as the arbiter of disputes between the two parties, which is unusual.

[Lord Liddle (Lab)]

My Lords, I am trying to follow the Minister’s answers as well, and with some difficulty. In answer to the question on the Northern Ireland protocol, he spoke about changing the arrangements. Does this mean that he is no longer arguing for removal of the court of justice’s jurisdiction over the European single market, which, if we are to keep no border in Ireland, must still apply in Northern Ireland? If we keep the border open, does he agree that he must accept some role for the court of justice?

[Lord Frost (Con)]

My Lords, I cannot add very much to what I said earlier, which is that the EU defines the court of justice as the final arbiter of what EU law means. We do not challenge that and cannot do anything about it. For as long as EU laws apply in Northern Ireland, no doubt the court will continue to assert that right, but that is not the same as saying that it is reasonable for disputes to be settled in the court or for infraction processes to be launched by the Commission, as they already have been in this context. It is the settlement of disputes that is the difficulty.

[Lord Newby (LD)]

The noble Lord just said that the role of the court is not working; as far as I am aware, the court has not yet been asked to adjudicate on anything in terms of the operation of the protocol. If that is correct, why was the Minister so prepared to sign up to a role for the court in 2019, when he is now implying that it is a constitutional outrage?

[Lord Frost (Con)]

My Lords, it is true that the dispute has not reached the court yet but, nevertheless, an infraction process was launched in March. The Commission’s launch of an infraction process, seemingly on a hair trigger, has created many of the concerns that we now have about the court. That sort of process is appropriate for member states, with all the checks and balances that exist when you are a member state. As we can now see from the way that it is being used, it is not appropriate for this country, of which Northern Ireland is a part and which is not a member state of the EU.

[Baroness Chapman of Darlington (Lab)]

My Lords, I am not the only one scratching my head as a result of these exchanges. Can the Minister help us by outlining what the benefit to the UK position of triggering Article 16 would be? Surely it would only set the clock ticking and increase the pressure, while he would be negotiating on the exact same issues with the exact same people, probably in the exact same rooms. What do we gain by triggering Article 16?

[Lord Frost (Con)]

My Lords, Article 16 is a safeguard. It changes reality because it enables us to safeguard, within the provisions of the protocol, against certain effects of the way that it is currently being implemented and working out. Of course, it begins a new and slightly different phase if Article 16 is used, but it also creates a new reality and safeguards against some of the difficulties that we currently find. That is why it is such a relevant provision.

[Lord Cormack (Con)]

Naturally I wish my noble friend success in his negotiations, but as he bears some responsibility for the protocol, can I urge him not to rule things in and out from the Dispatch Box, but to negotiate as a trained diplomat, which he is—calmly, gently and with the aim of coming to agreement with our friends and neighbours?

[Lord Frost (Con)]

My Lords, my noble friend is right, as always. It is good to negotiate calmly and find the best possible agreements between two parties. That applies to both sides. I urge the EU not to overplay the significance of using Article 16, as perhaps it has in the last couple of weeks. It is a legitimate provision within the protocol which we are discussing, and can as such be used if the situation arises.

[The Deputy Speaker (Lord Haskel) (Lab)]

My Lords, the time allowed for this Question has elapsed.

Ireland/Northern Ireland: Solid Fuels

Lord Frost Excerpts

Thursday 18th November 2021 Lords Chamber

[Baroness Hoey]

To ask the Minister of State at the Cabinet Office (Lord Frost) what discussions Her Majesty’s Government have had with the government of Ireland about that government’s plans to introduce physical checks on solid fuels entering the Republic of Ireland from Northern Ireland.

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

My Lords, we are aware of the Irish Government’s plans to introduce new standards for domestic solid fuels under their forthcoming clean air strategy. Of course, the implementation of this policy is for the Irish Government. Our understanding is that they plan to introduce it in 2022. We hope to have technical discussions with the Irish Government later this week to establish some further detail on how and when they plan to bring these measures into force.

[Baroness Hoey (Non-Afl)]

The Minister for the Environment in the Republic of Ireland said that

“inspections of cross-border fuel movements will be required.”

Does the Minister not think that shows huge hypocrisy from the Irish Government? The border sometimes matters—when it affects them—but as far as anything to do with the protocol is concerned, there could not possibly be any kind of border at the frontier. The Minister is being very patient with the European Union. Is he beginning to feel that time is running out and that it is time to simply say, “This is not working; it has to go”?

[Lord Frost (Con)]

My Lords, the noble Baroness makes a very good point. The UK and the Republic of Ireland are obviously different countries divided by an international border, and most areas of national life—for example, legal systems, currency, taxation and many others—change when you cross that border. Some of those arrangements relate specifically to the movement of goods—VAT and excise, for example. These differences are nevertheless managed in market, without the need for physical infrastructure at the border, so I wait for the discussions with the Irish Government. I do not want to prejudge them, but obviously I do not see why we would have any difficulties if the Irish Government wished to manage one further regulatory difference between our two countries in a sensible and pragmatic way, as goods go on to the Irish market.

[Lord Hain (Lab)]

My Lords, both this Question and the Answer are misleading, as 100,000 tonnes of smoky coal goes from north to south on the island each year, and the stricter regulations being applied in Ireland come under EU directives for cleaner air that have been retained and so also apply across the UK today. In Northern Ireland, the Department of Agriculture, Environment and Rural Affairs under the DUP’s Edwin Poots said last year that there will soon be no smoky coal in Northern Ireland. Any future inspection on premises in the Republic of Ireland—not on some border that does not exist—to prevent the illegal sale of such dangerous solid fuel, especially from third countries, is nothing to do with Brexit, borders or customs. It is everything to do with the far more urgent and important challenge of tackling climate change and protecting public health.

[Lord Frost (Con)]

The noble Lord makes a very fair point about the objectives of this legislation. That is why we need to establish the detail of what the Irish Government intend to do and how they intend to go about it. What he says rather proves the point that we have always made: it is perfectly possible for two separate jurisdictions to pursue complementary policy ends that do not involve accepting exactly the same legislation in exactly the same way. That is the approach we have tried to take.

[Lord Dodds of Duncairn (DUP)]

My Lords, to come back to what the Irish Government actually said about this matter—not the interpretation that has just been put on it—are we not in an ironic situation? The Irish Government and others said that any checks on the island of Ireland equalled a hard border and that a hard border would lead to violence. Now the Irish Government are proposing such a thing—that is the reality of it. People can shake their heads all they like, but the fact of the matter is that the Irish Government, when Varadkar came to power, changed what Enda Kenny was doing and said that no checks—even away from the border or digitally—would be acceptable. Will the Minister go back and indicate to his good friend Simon Coveney, whom he is meeting and talking to later today, that no checks means no checks if what they believe is true?

[Lord Frost (Con)]

My Lords, there has indeed always been some complexity in interpretations of this matter. It is certainly true that in areas such as red diesel, for example, where there is a need to avoid fraud due to different excise rates between Northern Ireland and Ireland, there is very good co-operation between HMRC and the Irish Revenue Commissioners. There is lots of multiagency and cross-border co-operation, intelligence and information sharing and so on, and that works perfectly well. I do not necessarily say that is a model you can generalise to absolutely everything, but it certainly shows that this issue is not quite as black and white as it is sometimes painted.

[Lord Howard of Rising (Con)]

Can the Minister say whether the discussion and fuss over fuel is merely an example of Mr Castex’s call for aggressive action against the United Kingdom?

[Lord Frost (Con)]

My Lords, my noble friend makes a very good point. We have been concerned about the threats made against us in the last few weeks, which are not really consistent with a reasonable negotiation. I am glad to see that the French Government have, for the moment anyway, withdrawn those threats. I hope they will do so permanently, because they do not make it any easier to conduct a good process and put relations on to a better footing.

[Lord Purvis of Tweed (LD)]

My Lords, I thank the Minister for his measured responses to earlier questions on this subject, because it is very sensitive. I have in front of me the answer in the Dáil, and there is no reference to border checks. There is reference to Irish local authorities having increased powers to check on solid fuels imported from Northern Ireland, which they had already. Indeed, the north-south Joint Agency Task Force has been operating since 2015 in this regard. Can the Minister please reassure the House that this will not be used to inflame some of the tensions that already exist and that the north-south Joint Agency Task Force will operate normally on fuels to ensure that there is proper consensus on this?

[Lord Frost (Con)]

My Lords, we do not wish to inflame tensions in any way, of course, and I do not think we go about this in a way that would do that. The point that I and other noble Lords have been trying to make is not that this proposal from the Irish Government would require checks at the border—they are not saying that, we are not saying that and nobody wants that—but that it is possible to manage differences without such checks in certain circumstances. This is perhaps a concrete case of that; there are some others.

[Lord Moylan (Con)]

My Lords, far from adding to tensions, is this not actually a rather hopeful sign? As the noble Lord, Lord Purvis of Tweed, said, it is envisaged that local authority officers will check for goods coming into the Republic of Ireland from Northern Ireland that should not be coming in. Is this not a pattern that could be applied, to great benefit and great effect, as a substitute for the ridiculous and unworkable attempts to operate the protocol as it currently works? It might even be called mutual enforcement. It is very hopeful.

[Lord Frost (Con)]

My Lords, my noble friend makes a very good point, as always. It is a concrete case that demonstrates that it is possible to manage these matters in other ways. This is one of the reasons why what we put forward in the Command Paper is a compromise. It is not my noble friend’s proposal. It is that we would for most purposes police goods going into Ireland and the single market in the Irish Sea, but would wish to see goods flowing freely into Northern Ireland. That is a workable and sensible compromise proposal, and in the negotiations we have not yet heard why it could not work.

[Baroness Chapman of Darlington (Lab)]

My Lords, this situation rather highlights the need for a certain amount of bandwidth on behalf of the Government, in that occasionally they need to negotiate simultaneously with the EU and with individual member states. Does the Minister think that the undeniable damage to the Prime Minister’s authority in recent weeks is leading to a bit of a problem with government bandwidth? I ask this because it is really easy to talk tough about Article 16, at least when he is here, but not if the Minister and the Prime Minister do not have the backing of the entire Cabinet to see through the consequences, which would be further damage to international relationships and possibly a trade war. Is he confident that any of his Cabinet colleagues will be with him in the trenches if he leads us into further disputes?

[Lord Frost (Con)]

My Lords, the Cabinet and the Government stand fully behind the policy that we set out in the Command Paper in July, which is a very good compromise policy that we still hope to negotiate. We have made it clear that a negotiated outcome is the best one, but that policy paper, which we all stand behind, also makes it clear that Article 16 is a legitimate and useful tool if necessary. That remains the Government’s position.

Protocol on Ireland/Northern Ireland: EU Negotiations

Lord Frost Excerpts

Thursday 18th November 2021 Lords Chamber

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

My Lords, it is a pleasure now to repeat an Answer as delivered to an Urgent Question made in the House of Commons by the Paymaster-General earlier today. The Answer is as follows:

“Let me begin by reaffirming the Government’s commitment to keeping both Houses of Parliament updated on the UK-EU relationship. We remain committed to doing just that. My right honourable friend Lord Frost provided an update to the House of Lords on EU relations just last Wednesday, 10 November, in the form of an Oral Statement. Unfortunately, as this honourable House was in recess at the time, that could not immediately be repeated on the same day. The timing of that update was unavoidable, led by external international business. However, I recognise the importance of keeping both Houses duly informed.”

[Baroness Chapman of Darlington (Lab)]

My Lords, it is shameful that we have come to this today. Last week, the Minister came to this House and committed to ensuring that an equivalent Oral Statement would be made in the other place to reflect his remarks here last Wednesday. That did not take place; instead, the Government attempted to get by with a Written Statement issued on Tuesday, and the words that we have heard today in the other place were only as a consequence of the Minister there being dragged there in response to an Urgent Question. That is not good enough. These issues are of intense interest to Members on all sides of this House and the elected House. It is essential that we do not have this situation again. If the Minister wants to come here and make a Statement then he must ensure, as he promised, that a Statement is made in the equivalent way in the other House at the earliest opportunity.

[Lord Frost (Con)]

My Lords, the noble Baroness is of course correct that I said on Wednesday that a Statement would be made in the other place in due course and that it was made in the way that she describes. How the other place runs its business and chooses its Statements is obviously not a matter for this House. Obviously, I respect the right and responsibility of the Opposition to hold the Government to account, which is why I am here today answering five Questions on very similar subjects, and will continue to do so as long as it is necessary.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, the Good Friday agreement requires that there is political balance and respect for both traditions in Northern Ireland. I therefore ask the Minister: in his negotiations with the EU, who is he negotiating for—unionists, nationalists or other? To me, representing the nationalist community in Northern Ireland, it looks very much as if the Minister is negotiating only for unionists.

[Lord Frost (Con)]

My Lords, our interest, and the way that I am pursuing these negotiations, is the interest of everyone in Northern Ireland, and of the prosperity and stability of everyone in Northern Ireland and of Northern Ireland. That is how we seek to pursue this. I believe that is a common aim between us and the European Union, but it seems we interpret that in rather different ways. Nevertheless, I hope we can move forward and get to a position that provides a better outcome for everyone in Northern Ireland than the one that we have now.

[Lord Cormack (Con)]

But does my noble friend accept that the noble Baroness opposite had a point? I wish my noble friend absolute good fortune in what he is seeking to do, and he knows that. But, particularly when we have the good fortune to have the Cabinet Minister in this House, it is particularly important that the other House is informed, if not simultaneously then at the earliest possible moment. I urge him to tell his Cabinet colleagues that there should have been a Statement on Monday in the other place. We really must keep in step on these things. Again, I wish him success. Delicacy is important, but so is parliamentary protocol.

[Lord Frost (Con)]

My Lords, I have said what I have said. I must say that I have a degree of sympathy with the point that my noble friend makes. It is obviously extremely important that both Houses are kept up to date in the most timely and appropriate fashion possible —certainly, I try to achieve that.

[Viscount Waverley (CB)]

What exactly would be the consequences should Article 16 be triggered? How much weight does the Minister give in his negotiating strategy with the EU to the fact that an overwhelming majority of 55.8% voted to remain and 44.2% voted to leave? What were the reasons for that?

[Lord Frost (Con)]

My Lords, we have always said that there will need to be a treaty arrangement between this country and the European Union to deal with the special features of Northern Ireland and to protect the Belfast/Good Friday agreement. I think it is common ground that there will need to be some such special arrangements. That is not the same as saying that Northern Ireland should remain some sort of shadow member of the European Union for certain purposes. In some ways, that is the situation that we have in certain aspects of policy, and that is what we need to change. But it is of course important to respect the balance, and that is why we talk about trying to find a new balance—the right balance—between all the different interests in Northern Ireland.

[Baroness Suttie (LD)]

My Lords, can the Minister say whether a possible decision to invoke Article 16 is more likely to be influenced by an analysis of changes to trade flows resulting from the Northern Ireland protocol or by political factors? Will he undertake to inform this House of the criteria used to take any such decision?

[Lord Frost (Con)]

My Lords, the noble Baroness is right that there are a number of conditions referred to in Article 16 for its use—economic and social disruption, trade diversion and so on—and, although they are conceptually separate, they all sort of feed into each other and create the conditions that might require the use of safeguards. I repeat what I said earlier: obviously we will be transparent and clear and set out our approach to Article 16 and the justification, if and when it comes to that point.

[Lord Hannan of Kingsclere (Con)]

My Lords, I very much welcome my noble friend the Minister’s original Statement, and his repetition today that we are prepared to say that the threshold for triggering has been met. It is indisputable that there has been trade diversion and that there is a political crisis if half the population and every unionist party is against the protocol. Will my noble friend the Minister take this opportunity to confirm that, if we go down the route of Article 16, it will not be simply for the purpose of extending waivers, derogations or exemptions but to take the opportunity to tackle the jurisdictional problem that part of our country is governed from abroad? We exported to the world the sublime idea that laws should not be passed nor taxes raised except by accountable representatives. We should extend that principle to our fellow countrymen in Northern Ireland.

[Lord Frost (Con)]

My noble friend is right that the current situation in Northern Ireland, with various grace periods and other easements in the implementation of the protocol, is nevertheless generating tensions and difficulties, and that the full implementation of the protocol, were that ever to be required, would generate even more difficulties. I think it is correct to think that, if we use Article 16 and safeguards, it will be to improve the situation over the one that we have now.

[Lord Kilclooney (CB)]

My Lords, the Belfast agreement has been mentioned, and I was very much involved in its negotiations. Can the Minister confirm that, in the agreement, all communities were involved and both the Irish Government and our Government were involved? Can he confirm, as Article 1 states, that they unanimously agreed that there could be no change in the status of Northern Ireland without the consent of the majority of the people of Northern Ireland? Can he confirm that the protocol was imposed on Northern Ireland without any consent?

[Lord Frost (Con)]

My Lords, the noble Lord is obviously much more deeply expert in the Belfast/Good Friday agreement than I am, given his background. He is, of course, absolutely right in what he says about the article to which he referred. As regards the protocol, I point out that it was approved by this Parliament, but nevertheless it has created significant difficulties in its implementation. We seek to find a way forward from that and come to a better balance.

[Lord Hain (Lab)]

Is George Peretz QC’s opinion correct when he says that,

“it is not at all clear that the government has a solid legal basis for invoking Article 16, at least in relation to the large majority of concerns set out in the July Command Paper. Therefore, if the UK government chooses to implement measures that are otherwise in breach of the Protocol but which are justified solely on the basis of Article 16, it is at real risk of having those measures struck down in the domestic courts, especially if the measures exceed a limited duration or scope.”?

[Lord Frost (Con)]

My Lords, we will, of course, set out our justification for using Article 16 and the legal basis and so on, if we get to that point. As regards to the legal opinion quoted by the noble Lord, to be fair, there is quite a lot of debate among learned lawyers on this subject. I imagine that, if we were to use Article 16, that would be subject to a degree of legal testing. We will see where that gets to, if and when Article 16 is used.