Northern Ireland Protocol Bill

Elizabeth Truss Excerpts

2nd reading
Monday 27th June 2022 Commons Chamber

[The Secretary of State for Foreign, Commonwealth and Development Affairs (Elizabeth Truss)]

I beg to move, That the Bill be now read a Second time.

We are taking this action to uphold the Belfast/Good Friday agreement, which has brought peace and political stability to Northern Ireland. The Northern Ireland protocol is undermining the function of the agreement and of power sharing. It has created fractures between east and west, diverted trade and meant that people in Northern Ireland are treated differently from people in Great Britain. It has weakened their economic rights. That has created a sense that parity of esteem between different parts of the community, an essential part of the agreement, has been damaged.

The Bill will address those political challenges and fix the practical problems the protocol has created. It avoids a hard border and protects the integrity of the UK and the European Union single market. It is necessary because the growing issues in Northern Ireland, including on tax and customs, are baked into the protocol itself. Our preference remains a negotiated solution, and the Bill contains a provision that allows for negotiated agreement, but the EU has ruled out up-front making changes to the text of the protocol.

[John Redwood (Wokingham) (Con)]

I congratulate the Foreign Secretary on her very patient and good diplomacy. Will she confirm that this very moderate measure is completely legal and essential to the peace and good will of Northern Ireland?

[Elizabeth Truss]

I can absolutely confirm that this Bill is both necessary and legal, and the Government have published a legal statement setting that out.

[Caroline Lucas (Brighton, Pavilion) (Green)]

rose—

[Elizabeth Truss]

I will make a bit more progress and then allow some further interventions.

We continue to raise the issues of concern with our European partners, but we simply cannot allow this situation to drift. Northern Ireland has been without a devolved Government since February due specifically to the protocol, at a time of major global economic challenges. Therefore, it is the duty of this Government to act now to enable a plan for restored local government to begin. It is both legal and necessary.

This Bill fixes the specific problems that have been caused in Northern Ireland while maintaining those parts of the protocol that are working. It fixes problems in four areas: customs and sanitary and phytosanitary; a dual regulatory model; subsidy control and VAT; and governance. On customs and SPS, the Bill creates a green and red lane system. All those trading into Northern Ireland will be part of a trusted trader scheme. Goods destined for Northern Ireland will not face customs bureaucracy. Goods for the Republic of Ireland and the EU will go through four EU-style border procedures. All data from both the green and red lanes will be shared with the EU in real time as the goods depart from Great Britain. This means that the EU will have this data before the goods arrive in Northern Ireland, ensuring that the EU single market is protected.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for bringing this forward and for her comprehensive understanding of the position of many people in Northern Ireland. As someone who has had businesses contacting me for those who have openly stated that they are from a nationalist tradition and yet feel afraid to voice complaints to their own MP for fear of reprisals, I speak with confidence in assuring the Secretary of State that Northern Ireland as a whole needs this Bill not simply for cultural identity, which is imperative, but for financial viability for small businesses due to the effects of the EU’s vindictive approach to block VAT and state aid. This Bill really is long overdue.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Interventions should be fairly brief because we have a lot of people wanting to speak in this debate.

[Elizabeth Truss]

I was talking about the data that we are sharing with the EU. I am pleased to say that we already have this system in place. We are giving demonstrations to businesses and the EU to show how it works, and I am happy to make those demonstrations available to Members of Parliament as well. Any trader violating the lanes will face penalties and would face ejection from the scheme.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I have an immense amount of sympathy with what the Foreign Secretary is saying, and it does seem to me as though the EU is not being particularly constructive in trying to get the solution that we all want to see. But many of us are extremely concerned that the Bill brazenly breaks a solemn international treaty, trashes our international reputation, threatens a trade war at a time when our economy is flat, and puts us at odds with our most important ally. Can she say anything to reassure me in my anxieties on these points?

[Elizabeth Truss]

As I said at the outset, our preference is for a negotiated solution, and we have sought that for 18 months, but as recently as last weekend the EU has refused to change the text of the protocol. That is why there is strong legal justification, as set out in our legal statement, for us taking this action. Our priority, as the United Kingdom Government, has to be political stability within our own country. While we put this Bill through Parliament, we will continue to seek a negotiated solution with the EU, and there are provisions in the Bill to deliver that. I would strongly encourage my right hon. Friend to raise this with the EU directly and to encourage a negotiated solution, because there is a solution to be achieved. We have laid it out very clearly with our red and green proposal, but we do need the EU to agree to change the text of the protocol. That is the fundamental issue that needs to be addressed.

[Joanna Cherry (Edinburgh South West) (SNP)]

I am grateful to the Secretary of State for giving way. The Government’s legal position prays in aid the international law doctrine of necessity, but the International Law Commission says that where a state has itself contributed to the situation of necessity, that doctrine cannot be prayed in aid. Given that the Prime Minister signed the withdrawal agreement, including the protocol, in the knowledge that it would give rise to precisely the difficulties of which the Government now complain—we debated it on the Floor of the House—does the Secretary of State not see that there is a pretty big hole in the legal advice she has been given?

[Elizabeth Truss]

We set out the case extremely clearly in the legal advice, and the doctrine of necessity has been used by other Governments in the past where there is a severe issue and the other party is unwilling to renegotiate that treaty. That is the position we are in with the Northern Ireland protocol. What I would ask the hon. and learned Lady and other Members on the Opposition Benches is this: given that the EU refuses to reopen the Northern Ireland protocol, and issues around customs and tax are specifically baked in, what is their solution for dealing with the real issues in Northern Ireland? We have looked at all the alternative solutions, and the only effective solution is this Northern Ireland Protocol Bill, in the absence of the EU being willing to negotiate a new protocol.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

My right hon. Friend could also point out that the protocol itself contains provisions for it to be changed, and the EU refuses to contemplate using those provisions. May I also point out that at the time we signed the protocol, we did not know the shape of the trade and co-operation agreement, and it was reasonable to expect the EU to give mutual recognition of products and standards, including SPS standards, as it has with New Zealand, for example? The EU refuses to give us those provisions. The problems in the protocol would be much less if the EU had given us a better trade deal.

[Elizabeth Truss]

My hon. Friend is absolutely right that the protocol is not set in stone. That is why for the past 18 months this Government have sought to achieve negotiated changes to the protocol. In the absence of the EU being willing to change the text, the only way to resolve this matter is for us to legislate.

[Several hon. Members rose—]

[Elizabeth Truss]

I am going to make more progress, and then I will take more interventions.

We fully understand and respect the legitimate concerns of the EU that the single market should be protected. Our solution does just that. The Bill will also establish a dual regulatory regime so that businesses can choose between meeting UK and EU standards. That removes the barriers to goods made to UK standards being sold in Northern Ireland and it cuts the processes that drive up cost for business. It prevents unnecessary divergence between two parts of the UK internal market. Anybody who trades into the EU single market will still have to do so according to EU standards.

The Bill will also ensure that the Government can set UK-wide policies on subsidy control and VAT, overcoming constraints that have meant Northern Ireland has not benefited from the same support as the rest of the UK. For example, at present people in Northern Ireland are not able to benefit from the VAT cuts on solar panels that the Chancellor announced in the spring statement.

These are essential functions of any 21st-century state, but they are especially important in Northern Ireland, where the UK Government play an outsized role in the local economy. We will maintain the arrangements in the protocol on VAT, which support trade on the island of Ireland while ensuring that Northern Ireland can still benefit from the freedoms and flexibility available in Great Britain.

[Caroline Lucas]

Does the Secretary of State understand why so many people would accuse this Government of the most rank hypocrisy? First, this is a predictable outcome of the agreement that they negotiated when they did not give a fig for the situation in Northern Ireland, frankly. Secondly, if they were serious about negotiations, they could be using article 16. Thirdly, at the very same time that the Prime Minister is gladhanding G7 leaders in Bavaria and extolling the virtues of a rules-based international system, his own Government at home are riding a horse and coaches through a rules-based system. Does she understand the concerns we have? What kind of reputation will the UK have on the global stage as a result of this proposal?

[Elizabeth Truss]

As I have made clear, the Belfast/Good Friday agreement should have primacy. The fact is that it has been undermined over the past two years, as we can see from the fact that the institutions of Northern Ireland are not up and running. That is why the Government need to act, and we are doing so in a reasonable and legal way.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I entirely accept my right hon. Friend’s desire to achieve a negotiated settlement if at all possible; I know how much work has gone into that. To return to the legal point, she will know that the application of the doctrine of necessity requires both the legal tests to be met and the evidential base to be there, because it is largely fact-specific to show whether those tests have been met. I know that the Government have been working hard to assemble that evidential base, but can she tell us when it will be available to the House so that we can form a judgment as to whether those legal tests are met and, therefore, proportionality and necessity are met? It would be helpful to have that before we come to a conclusion on the Bill.

[Elizabeth Truss]

I thank my hon. Friend for that point. There are clearly very severe issues in Northern Ireland, including the fact that its institutions are not up and running, which mean that the UK has to act and cannot allow the situation to drift. I do not think that we have heard what the Opposition’s alternative would be, apart from simply hoping that the EU might suddenly negotiate or come up with a new outcome.

[Karin Smyth (Bristol South) (Lab)]

Will the Secretary of State give way?

[Elizabeth Truss]

Perhaps the hon. Lady can give us an idea about her alternative plan.

[Karin Smyth]

Over the past six years, I have given several alternatives, including as a shadow Minister. The Secretary of State talks about the institutions. Can she give the House the details of the agreement she has secured from the political parties in Northern Ireland that they will return to Stormont on the completion of the Bill—or on the completion of Second Reading, at any point during the Committee stage, or on Third Reading? What in the Bill has secured that? What role is there for anybody in Northern Ireland, given that the powers go to the Minister of the Crown?

[Elizabeth Truss]

I note that the hon. Lady has not come up with any alternatives to the Bill to move the situation forward. The approach we have taken, with the four areas that I am talking through, is to identify what the practical problems are for the people of Northern Ireland and to come up with solutions that address those problems while protecting the EU single market. It is our expectation that the passage of the Bill will result in the institutions being re-established.

[Several hon. Members rose—]

[Elizabeth Truss]

I will make progress on talking through the elements of the Bill, but I will be happy to accept further interventions later.

The Bill will ensure that the Government can set UK-wide policies on subsidy control and VAT, which will overcome the constraints that have meant that Northern Ireland has not benefited from the same support as the rest of the UK, as I mentioned. It will also maintain the arrangements in the protocol on VAT that support trade on the island of Ireland, while ensuring that Northern Ireland can still benefit from the freedoms and flexibilities available in Great Britain.

The Bill will remove the role of the European Court where it is not appropriate, including its role as the final arbiter of disputes. That is in line with normal international dispute-resolution provisions, including in the trade and co-operation agreement. The Bill will also enable courts to seek an opinion from the European Court on legitimate questions of the interpretation of EU law, which will ensure that it can still be applied for the purposes of north-south trade.

The Belfast/Good Friday agreement is based on consent from both communities. All Unionist parties have cited the European Court as a main cause of major democratic deficit. Together with VAT and state aid rules, it causes Unionists to feel less connected and less part of the UK. This is not a hypothetical issue; the European Court has already become one of the most controversial elements of the protocol and threatens to disrupt everyday lives. The EU has brought infraction proceedings against the UK in five areas that cover issues such as parcels and transporting pets. To be absolutely clear, the Bill changes only the parts of the protocol that are causing the problems and undermining the three strands of the Belfast/Good Friday agreement.

[Chris Bryant (Rhondda) (Lab)]

I have a very short question, which is simply this. The Foreign Secretary says the Bill is legal, but lots of people disagree with her, including lots of very eminent lawyers both in this country and elsewhere. Which body will arbitrate on the decision as to whether this Bill is legal?

[Elizabeth Truss]

We have published our Government legal statement, which clearly states the reasons why this Bill is legal and the necessity of pursuing this Bill. I return to my point about the lack of alternatives being proposed by the Opposition. We have exhausted all the other avenues, and this remains the course of action that is actually going to deliver for the people of Northern Ireland and re-establish the institutions.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

There is a lot of talk about international law, but can I take the Foreign Secretary to paragraph 3 of article 2 of the UN charter? It says:

“All Members shall settle their international disputes by peaceful means in such a manner that international peace and security, and justice, are not endangered.”

That is incumbent on us and the EU, and the EU needs to engage with us and negotiate so that peace is not threatened.

[Elizabeth Truss]

My hon. Friend is right. It is very clear from the legal advice that one of the issues is that the EU will not change the text of the protocol even though, when the protocol was negotiated, it was very clear that it was not set in stone and should be subject to change because of the very unique situation in Northern Ireland.

We are very clear that there are elements of the protocol that are working and that we do want to maintain. We will maintain the conditions for north-south co-operation and trade, and uphold the common travel area. We will maintain the functioning of the single electricity market, which benefits both the Republic of Ireland and Northern Ireland.

The Bill provides specific powers to implement technical regulations as part of our solution, and today we launched a consultation with businesses to make sure that the way it is implemented works for the people of business in Northern Ireland. We will continue consulting with businesses and the EU over the coming weeks to make sure that the implementation works.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

One of the fundamental purposes of this long-awaited Bill is to uphold the critical Good Friday agreement, which as the whole House knows completely underpins the maintenance of peace and political stability in Northern Ireland. That being the case, for those who follow this matter closely, including in the United States, will the Foreign Secretary confirm that one of the strongest advocates for action on this has been Lord Trimble, the Nobel laureate, who helped negotiate the Good Friday agreement in the first place?

[Elizabeth Truss]

My right hon. Friend is absolutely right. We all know how hard-won peace and political stability in Northern Ireland was, and we all know how important it is that the Belfast/Good Friday agreement is upheld and is not undermined. That is the discussion I have been having with colleagues in the United States and around the world, and those who have experienced the situation in Northern Ireland fully understand how important it is that we act and that we cannot allow this situation to drift.

I know there are those across the House who want to give negotiation more time. The problem we face is that we have already been negotiating for 18 months. We have a negotiating partner that is refusing to change the text of the protocol. Meanwhile, we have a worsening situation in Northern Ireland. So it is firmly the view of this Government that we need to act. We are pursuing this legislation as all other options have been exhausted.

Our first choice was and remains renegotiating the protocol text with the EU. This is in line with the evolution of other treaties, which happens all the time. For example, both the EU and the UK are currently renegotiating changes to the energy charter treaty. Given the unique nature of Northern Ireland and the unprecedented nature of these arrangements, it was always likely that flexibility would be needed. In fact, that flexibility was explicitly acknowledged in the protocol itself, but despite the fact that we have been pursuing these renegotiations we have not seen the flexibility needed from the EU.

As recently as this weekend, the EU said it will not renegotiate the text of the protocol, and Members across the House will have seen that the EU put forward proposals last year and again a fortnight ago; it is worth pointing out that those proposals will leave the people and businesses of Northern Ireland worse off than the current standstill arrangements. Its proposals would make the situation on the ground worse, adding further to the tensions and stresses; goods going solely to Northern Ireland would still face customs paperwork and sanitary and phytosanitary certificates.

[Sally-Ann Hart (Hastings and Rye) (Con)]

Does my right hon. Friend agree that this Bill is borne out of necessity: necessity to act in our national interest, to provide a permanent solution to a temporary measure, to preserve the Belfast agreement, and to preserve the constitutional settlement that keeps Northern Ireland as part of the UK? It is a necessity to prevent a democratic deficit and to use international law to safeguard and protect our essential interests while protecting those of the EU.

[Elizabeth Truss]

My hon. Friend is absolutely right. We still face a situation in which the EU has refused to change the text of the protocol, and its proposals do not even address many of the issues of concern—over governance, subsidies, manufactured goods and VAT. Without dealing with those very real issues for the people of Northern Ireland we are not going to see the balance of the Belfast Good Friday agreement restored, and we are not going to see the cross-community support we need to get the political institutions back up and running.

[Gavin Robinson (Belfast East) (DUP)]

The Foreign Secretary knows that the three things that need to be resolved are the friction in trade; repairing the harm to our constitutional position within this country; and erasing the democratic deficit at the heart of the protocol. The Foreign Secretary has fairly outlined the myriad steps the Government have taken; if this Bill is required, they can have our support in resolving these issues, but she will also hear a lot of opposition from Members of other parties on this side of the House. In hearing that opposition from colleagues sitting to my right and left, can she identify even one of them who advocated using article 16 or the provisions of the protocol, or have they simply no interest in trying to resolve the issues affecting the people of Northern Ireland today?

[Elizabeth Truss]

The hon. Gentleman makes a very good point. Those who advocate further negotiation with the EU need to persuade the EU to change its negotiating mandate so the text of the protocol can change, because we know that those specific issues, including on the customs bureaucracy and VAT, can only be addressed by addressing the text of the protocol itself.

I want to come on to the specific point the hon. Gentleman made about article 16. Of course we have looked at triggering article 16 to deal with this issue; however, we came to the conclusion that it would not resolve the fundamental issues in the protocol. It is only a temporary measure and it would only treat some of the symptoms without fixing the root cause of the problems, which are baked into the protocol text itself. It could also lead to attrition and litigation with the EU while not delivering sufficient change.

I want to be clear: we do not rule out using article 16 further down the line if the circumstances demand it, but in order to fix the very real problems in Northern Ireland and get the political institutions back up and running, the only solution that is effective and provides a comprehensive and durable solution is this Bill.

[Hilary Benn (Leeds Central) (Lab)]

I suspect that when the Foreign Secretary was campaigning for Britain to remain in the European Union, she never in a million years thought she would be standing here proposing a Bill of this sort. In light of the comment she just made about article 16, why are the Government not proposing to use the legal method to raise these questions with the European Union through the treaty they signed, rather than claiming necessity? The Foreign Secretary has yet to give me a single example where the British Government have claimed necessity for abrogating a treaty they have negotiated and signed.

[Elizabeth Truss]

The reason why I am putting the Bill forward is that I am a patriot, and I am a democrat. Our No. 1 priority is protecting peace and political stability in Northern Ireland and protecting the Belfast/Good Friday agreement. Nothing that the right hon. Gentleman has suggested will achieve that end.

[Several hon. Members rose—]

[Elizabeth Truss]

I will finish off my remarks.

The only way for us to uphold the Belfast/Good Friday agreement and fix the problems in Northern Ireland is to pass this legislation. We have heard all kinds of complaining from the Opposition side about the solution that the Government are putting forward, but no alternative solution that will deliver.

I want to be clear that this is not my preferred choice, but, in the absence of a negotiated solution, we have no other choice. There is no need for the EU to react negatively. It will be no worse off as a result of the Bill. These issues are very small in the context of the single market, but they are critical for Northern Ireland.

[Simon Hoare (North Dorset) (Con)]

The Foreign Secretary knows that I have grave concerns about her Bill, but may I ask her coolly to reflect on praying in aid patriotism as a defence of it? Is she seriously impugning the patriotism of colleagues across the House who have concerns about her Bill? I find that a false conflation.

[Elizabeth Truss]

I was directly responding to the point made by the right hon. Member for Leeds Central (Hilary Benn) about why I campaigned one way in the referendum and am now working to ensure that the Brexit negotiation that we achieved works for the people of Northern Ireland. That is because I believe in the Union of the United Kingdom and in the relationship between Great Britain and Northern Ireland, and I want to resolve those issues.

All I am pointing out to colleagues across the House is that I have negotiated in good faith with the European Union, but it has refused to change the text of the protocol. I have looked at all the options—including triggering article 16—to see whether they would work to resolve the serious issues in Northern Ireland, and I have come to the genuine conclusion that they will not.

[Ian Paisley (North Antrim) (DUP)]

Will the Secretary of State commit that never again will a Government stand at that Dispatch Box and change the Act of Union in a way that is detrimental to this United Kingdom that we all adhere to and all admire? Will she also confirm that more than 300 hours have been spent in negotiations with the EU and that it has resisted any change whatsoever, such is its animosity towards Northern Ireland?

[Elizabeth Truss]

The very clear reason why we are acting now is that there has been a refusal to change the text of the protocol, which is causing real problems in Northern Ireland. As I have said, these issues are very small in the context of the single market, but they are critical for the people of Northern Ireland, and it is in their interests that we are acting in putting through the Bill.

Once the legislation is enacted, we can draw a line under the issue and unleash the full potential of our relationship with the EU. Fundamentally, we share a belief in democracy, in freedom and in the right of all countries to self-determination. We are natural allies in an increasingly uncertain and geopolitical world.

[Colum Eastwood (Foyle) (SDLP)]

Will the Foreign Secretary give way?

[Richard Graham (Gloucester) (Con)]

Will the Foreign Secretary give way?

[Elizabeth Truss]

I will not give way any more—the House will be pleased to hear that I am almost at the end of my remarks. We want to work with the EU for the betterment of not just Europe but the world, and we want to focus all our efforts on tackling external threats, such as Putin’s Russia. Once this legislation is passed, we will have a solution that helps to restore the balance between the communities, and that upholds the Belfast/Good Friday agreement. That is the purpose of the Bill, and I commend it to the House.