Northern Ireland Protocol Bill

Ian Paisley Excerpts

Committee stage
Tuesday 19th July 2022 Commons Chamber

[Stephen Farry]

Earlier in the debate on this Bill, we discussed solutions on which I think it is fair to say that there was some common ground, such as the idea of red and green channels. The problem was the means of getting there: threats or unilateral action from the Government, versus building trust and using negotiation. Never mind the means, however; dual regulation is fundamentally a very bad idea. The business community in Northern Ireland has expressed significant concerns about this aspect of the Bill. Notably, this includes the Dairy Council for Northern Ireland, the Northern Ireland Meat Exporters Association, the Northern Ireland Food and Drink Association, and Manufacturing Northern Ireland.

There are many motivations behind the Bill. However, the claim that it responds to the wishes of the people of Northern Ireland or the interests of the business community in Northern Ireland does not stand up to scrutiny. I remain very critical of the so-called engagement process from both the Foreign and Commonwealth and Development Office and the Northern Ireland Office. They have sought an echo chamber to reinforce their own agenda rather than consulting widely.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Member for tabling amendments so that the issue can be debated properly and thoroughly, but this is where I start to disagree with him. One of the conditions laid down in amendment 44 is

“that a Minister of the Crown has reached an agreement with the European Union on the option to choose between dual routes.”

Does he seriously suggest that a Minister of the Crown—of Her Majesty’s Government—must seek the permission of the European Union on how we should trade within the boundaries of the United Kingdom of Great Britain and Northern Ireland? That is effectively what is being asked for.

[Stephen Farry]

Indeed. Unfortunately this is the outworkings of Brexit, which the hon. Member pursued. We have a protocol in place to manage the fall-out from that decision, and a whole host of implications will flow from it. I am very sceptical, as indeed is the business community, about the notion of dual routes, but if that were to be conceded in relation to any one set of products or commodities, it would have to be by negotiation with the European Union. If not, that flow of trade would not have recognition and it would not work for the business sector in question.

On consultation, I want to highlight the current run of propaganda videos coming from the Northern Ireland Office. We are joined by the new Secretary of State, whom I welcome to his place. Those videos focus very heavily on haulage, which of course does have some particular concerns, but that comes at the expense of other interest groups in the business community where there is a very different narrative. Of course businesses recognise the need for some modifications to the protocol, but more and more say that the protocol is working for them and they do not want those aspects to be compromised, undermined or ditched. Those are the voices that the Government are not listening to, never mind seeking to promote.

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[Stephen Farry]

I strongly encourage the right hon. Gentleman to engage with the Dairy Council and listen directly to what it is saying. The issues and complications are manifold in this respect. They come, first of all, from the inputs to the dairy sector—we are talking about the grain, the veterinary medicines—

[Ian Paisley]

Will the hon. Gentleman give way on that point?

[Stephen Farry]

Let me finish the first point and then someone else can come in.

If those inputs are not compliant with EU regulations, the raw milk that is then produced cannot be accepted or certified by Department of Agriculture, Environment and Rural Affairs vets as complying with annex 2 to the protocol, which sets out the various regulations that apply in that regard. Therefore, raw milk from Northern Ireland will not and cannot be accepted for processing in the rest of Ireland. A third of the milk produced in Northern Ireland currently goes south for processing, and that will be dropped.

[Ian Paisley]

I thank the hon. Member for giving way. I should just put on the record that I represent one of the largest farming constituencies in Northern Ireland; I was previously the Chairman of the Northern Ireland Agriculture and Rural Development Committee in Stormont; I have been one of the longest serving members of the British Veterinary Association in Northern Ireland; and, for the record, my son-in-law is one of Northern Ireland’s largest dairy farmers, so I have some knowledge of the agricultural sector.

The hon. Member has touched on the issue of veterinary products for Northern Ireland. Is it not the case that the European Union has strategically blocked the sales and advantage that would come to Northern Ireland as a result of Brexit, because it does not want Northern Ireland agriculture to be a success? Northern Ireland agricultural businesses are in direct competition with businesses in the Irish Republic, and up to 40% to 50% of all agri-medicines for veterinary products, agricultural use and pet use will be blocked at the end of this year, because the European Union wants to block it. The EU is not interested in talking or making a deal with Britain on this matter. In fact, the representative agency, the National Office of Animal Health, has said that more time is no longer required. We need this Bill to solve these matters with regard to veterinary science.

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Order. I want to establish right from the outset that interventions should be brief by their very nature, not speeches in themselves. Mr Paisley, that was longer than some of the speeches I have made in this place.

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[Stephen Farry]

If I can make some progress, clause 7 essentially introduces a dual regulatory system for regulated classes of goods to which any provision of annexe 2 to the Northern Ireland protocol applies, including manufactured goods, medicines and agri-food. It envisages businesses having a choice over the regulatory route between UK requirements and EU requirements, or both.

On the surface, that sounds benign, but it is in fact unworkable. To be clear, there is an implicit element of acceptance that there will be different regulatory regimes, and maybe standards, in the concept of a red-green lane for Northern Ireland customer final destination goods that pose no threat to the single market. It is important to acknowledge that subtlety, but we are focusing in this debate on dual regulation that covers ingredients, components and goods that may enter the single market via further processing or as a final good. More and more businesses in Northern Ireland are exporting to the Republic of Ireland and the rest of the European Union. Since Brexit, this trade has grown significantly. That is market forces in operation, reacting to changing conditions. There is nothing malign about it whatsoever.

If this dual regulation were implemented, it would have major consequences. It would create chaos in many sectors of the Northern Ireland economy and increase the risk of economic crime, including smuggling. Even the Bill itself entails uncertainty for investment decisions, never mind the implications of its full application. It would mean Northern Ireland losing access to the single market for goods, both in practice, as companies in the Republic of Ireland or the rest of the EU would see Northern Ireland products as risky, and as a matter of law.

Such moves would threaten the comparative advantage that Northern Ireland goods currently have from unfettered access to both the Great Britain market and the EU single market. More widely, they raise the question as to how and where the interface between the UK economic zone and the EU single market will be managed. There is a commonality of consequences from the Government unilaterally trying to impose dual regulation, alongside similar measures to disapply article 5 of the protocol and annexe 2 to the protocol, and also the marginalisation of the European Court of Justice, which we will talk about tomorrow.

No doubt the Government and others will argue that GB and EU regulations will in practice be the same, just as they argued that their version of the management of movements between GB and Northern Ireland would protect the EU single market, but this neglects the fundamental point, which relates to the legal regime, in which there has to be either dynamic alignment or mutual recognition. That can be created and maintained only via negotiation, with an agreed means of enforcement. Many sectors of the Northern Ireland economy have both supply chains and sales that operate on both an east-west and a north-south basis. That can only be managed with one set of regulations.

Let us explore one particular sector in depth, the dairy sector, which a number of Members have already drawn me on. The dairy sector is heavily integrated across the island of Ireland. That reflects specialisation and economies of scale. It is an entirely sensible set of arrangements. Every year, about 800 million litres of raw milk, about a third of the entire output, goes to the Republic of Ireland for processing. There is full traceability of that milk. The milk is then often mixed with raw milk from south of the border. It can be mixed, as both Northern Ireland and Republic of Ireland milk is produced to the common EU standards and, crucially, recognised as such. It then goes in to final products, or sometimes into intermediate products that come back to Northern Ireland for final processing, for example at Lakeland Dairies in the neighbouring constituency of Strangford.

[Ian Paisley]

Can the hon. Member perhaps explain how the mixing of that milk will be changed by this Bill?

[Stephen Farry]

The mixing of the milk will not happen, because milk from Northern Ireland will not be accepted for mixing, because—

[Ian Paisley]

That is unreasonable.

[Stephen Farry]

It is not unreasonable. It is basically common sense, because the milk cannot be certified as being in compliance with EU regulations, and therefore it will not be accepted.

[Ian Paisley]

But it’s coming from the same cows, being milked by the same machines.

[Stephen Farry]

The hon. Member may say it is coming from the same cows and the same machines. The issue here is that—

[Ian Paisley]

This is just nonsense—this is bureaucracy at its worst.

[The Second Deputy Chairman]

Order. The same noise is coming from the same mouth, as well—let us stop that, please.

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[Michael Ellis]

If I may, I will make a little more progress.

Clause 9 provides a Minister with the powers to make provisions through secondary legislation to ensure the effective working of the dual regulatory routes in Northern Ireland.

I will move on to clause 10, conscious as I am of the Second Deputy Chairman’s admonition about speed. The clause defines the types of regulatory activity covered by the dual regulatory regime established in the Bill. This provides clarity on interpretation of the Bill’s provisions in relation to the dual regulatory regime and makes the scope of that regime clear.

Clause 10(4) provides that a Minister of the Crown may, by regulations, make provision about the meaning of “regulation of goods” in this Bill, and that includes changing the effect of other provisions of the clause. We want to ensure that the sale of goods made to UK rules in Northern Ireland is not prohibited due to a particular aspect of regulation falling outside the meaning of “regulation of goods” in clause 7. So the power ensures that goods will be able to benefit from the dual regulatory regime.

[Ian Paisley]

This issue is very important because, before January 2021, goods travelling from GB to Northern Ireland had to fulfil four criteria to be loaded on to a lorry and transported to shops or outlets in Northern Ireland. Since January 2021 there are 15 compliance points, including heavy paperwork responsibilities. Is the point not that those matters will now be removed and we will be back to where we were in 2021—with frictionless trade in the UK?

[Michael Ellis]

The hon. Gentleman makes a powerful and succinct point.

Clause 11 gives Ministers appropriate powers to ensure that the regulatory regime in Northern Ireland operates for goods in any given sector, ranging from ball bearings and ice cream to lamp posts, gas cookers and children’s toys—myriad different items, but also intermediate goods such as chemicals. All are regulated in different fashions. We want to ensure that they can all operate effectively. So the powers in clause 11, which I know are controversial in the eyes of some hon. Members, allow a Minister to prescribe a single regulatory route for specific sectors, including a UK-only route with no application of EU law, for example. This can also apply to part or all of a category of goods or to some or all of a regulatory route. We consider the clause vital in ensuring that the dual regulatory regime can be tailored to the needs of industry and ensure the smooth running of the new regime for all sectors.

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[Peter Kyle]

First, I am slightly disappointed that the right hon. Gentleman did not take the opportunity to correct the record from his previous intervention.

My stance and that of the Labour party on the protocol is very clear: it needs to evolve, to change and to be improved, and that should be done by all lawful means. This Bill is not lawful. Of course, the right hon. Member for Maidenhead (Mrs May), the former Prime Minister, said on the Floor of the House just a few days ago that in her opinion it was unlawful. We heard from a former Attorney General in the last day of debate that he felt it was unlawful.

For that reason, the Labour party believes that although we voted against the protocol in the first place, now that it is in domestic statute and part of an international treaty, the responsible thing to do is to negotiate a way forward. What we cannot do is repeat the debates of previous days. We need to stick to the clauses before us. Today, we are talking about—

[Ian Paisley]

Will the hon. Gentleman give way?

[Peter Kyle]

Of course I will give way, but I will not rehearse the debates of the previous two days.

[Ian Paisley]

I appreciate the hon. Gentleman’s giving way. The issue of lawfulness, which he put on the agenda today, has to be addressed. The Northern Ireland Affairs Committee is the only Committee to have taken evidence on the lawfulness, or otherwise, of the protocol under international law. For the record, it was stated:

“no, it does not violate international law. It does not violate the protocol.”

I have heard people who should know better saying that it does, but I am afraid they are wrong. They are obviously not international lawyers. The evidence given to this House by the emeritus professor of public international law at the University of Edinburgh, who advises the Government and the Opposition, says that it does not break the law. Why does the hon. Gentleman persist with this inaccurate point?

[Peter Kyle]

Again, I will not repeat the debate from the first day of Committee, when all those issues were explored in detail. It is a shame to hear the hon. Gentleman say that of the former Prime Minister, the right hon. Member for Maidenhead, whom I know he respects. She said in the House that she asked herself three questions:

“First, do I consider it to be legal… Secondly, will it achieve its aims? Thirdly, does it…maintain the standing of the United Kingdom in the eyes of the world? My answer to all three questions is no.”—[Official Report, 27 June 2022; Vol. 717, c. 63.]

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At present, Northern Ireland vets issue certification that the Republic of Ireland vets accept for each consignment of milk.

[Ian Paisley]

Will the hon. Member give way?

[Peter Kyle]

After I have made this point, I will, because I am always interested in the hon. Member’s views on this issue.

What the Government are proposing would impose additional layers of bureaucracy to prove that every step of the milk processing complied with EU standards. This would be disastrous for the dairy industry; it would require segregation of milk at every stage and push the sector into negative growth in Northern Ireland.

[Ian Paisley]

On that technical point, as the hon. Member will accept, the protocol is an example of red tape being used to tie up commerce. Given what he has just said, does he accept that a commercial opportunity is being set aside, and farmers are not being allowed to take it?

[Peter Kyle]

The hon. Member talks about what I said, but all I did was quote the words of the Dairy Council for Northern Ireland; I was not expressing my views. When I talk about an industry in Northern Ireland, I of course try extremely hard to listen to the people on the frontline who represent that industry. Of course I take into consideration his experience, and the frontline experiences of his family.

My amendment 28 says, “Let’s listen to those on the frontline and get the Government to do an assessment before we do something that could have radical consequences for the sector.” I understand that the hon. Member has first-hand experience of talking to people, and of living in a family of people, who are affected by this. Expert opinion fed to me contradicts that view. What is the logical conclusion? Before we move forward with a set of regulations that could ride roughshod over the dairy industry in Northern Ireland, let us take the time to make an assessment. We should have an impact assessment, lay it before the House, and debate it before we pass a law that could radically impact the industry.

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[Sammy Wilson]

That brings me to my next point—that introducing reserved matters to the North South Ministerial Council would mean that the controversies that have currently stopped it working, and stopped the Northern Ireland Assembly working, would be imported into the North South Ministerial Council so that we would not get the kind of agreement that the Member talks about. Amendment 14 would reinforce the impact that the protocol has had on the current institutions of the Belfast agreement and bring them into the remit of the North South Ministerial Council in future.

New clause 15 goes down the same route of introducing an input for the North South Ministerial Council, and another barrier to the introduction of dual regulation in the Bill, by requiring that the Executive endorse the arrangements—and in a way that, as we have heard, would exclude Unionists because the SDLP has now adopted majoritarianism with regard to the Northern Ireland Assembly.

A comparison was made with Brexit. Brexit was a majority decision. It was not a majority decision in Northern Ireland; it was a majority decision of the people of the United Kingdom as a whole. A referendum was held across the whole of the United Kingdom and it was binding in all parts of the United Kingdom, regardless of pockets where there was a majority for Brexit or a majority against it. If we had gone down the route of consensus on a referendum as suggested by the SDLP—which would of course be impossible—then what would we have done about London or other pockets across the United Kingdom? We cannot make that comparison between the dealings of this Bill regarding the arrangements within the Assembly and a referendum vote.

I hope that the Committee will accept the points I have made and will not vote in favour of those amendments.

[Ian Paisley]

It is an honour to follow my right hon. Friend the Member for East Antrim (Sammy Wilson).

There is no doubt that the Bill before us is a repair job, because Brexit was not completely done. It was not properly done in Northern Ireland, where we were left with a protocol that has caused untold problems, hence why we are back here today. People can say, “Oh, there isn’t really a problem with the protocol. Just get on with it.” However, we have now had I-don’t-know-how-many hours of debate because the protocol is not working. It has broken down and needs to be replaced, and that is the fact of the matter.

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[Stephen Farry]

I am glad the hon. Gentleman is paying respect to Mike Johnston and his integrity. It was the right hon. Member for East Antrim (Sammy Wilson) who alluded to ulterior motives behind some of the people fronting some of those organisations and suggested that they were not representing their members. I am not here to twist the Dairy Council to fit a particular narrative; both I and the shadow Secretary of State were simply reflecting what has been said by the sector to Parliament. It is important that we listen to those voices. On the subject of representing people, the hon. Member for Strangford (Jim Shannon) made reference to Lakeland Dairies’ somehow being out of sync with the Dairy Council, so I will put on the record that during the course of this debate, I have had a message to say that Lakeland Dairies is in fact very much aligned with the position of the Dairy Council.

[Ian Paisley]

I thank the hon. Member for that point, but I want to make it clear that I listened to the comments of my right hon. Friend the Member for East Antrim, who works with and knows Mike Johnston as well as I do, and he did not make any detrimental comment about Mike himself in any of the comments he made. He referred to other members and other motives, but he did not make any reference, derogatory or otherwise, about Mike Johnston. I think that is very clear. It is unfair to cast those aspersions.

It is not for us as politicians to say, “Oh, we’ll parade this body in front of Parliament; they’re for us.” That goes back to the zero-sum game of politics. Parading the Ulster Farmers Union and saying, “They’re on our side on this point,” is a cop-out of our political responsibilities. We have a duty as politicians to solve this political problem. The protocol is not a dairy milk problem; it has an impact on the dairy milk sector, but the protocol is a political problem that has caused these problems in the sector. We have a responsibility as politicians to solve the problem and to pull together to try to fix it, because it affects Protestant farmers, Catholic farmers and farmers of no religion the same way. It damages the potential for their business, and we should be pulling together to try to fix it. If this Bill does one thing to try to fix it, I will support that as a step in the right direction.

[Carla Lockhart (Upper Bann) (DUP)]

I thank my hon. Friend for giving way; he is certainly in full flow. It is important to strip this debate back to the businesses currently impacted by the protocol. We cannot look ahead of ourselves. Wilson’s Country and Glens of Antrim Potatoes cannot bring seed potatoes in to Northern Ireland from Scotland, and that will ultimately damage the potato industry in Northern Ireland in future years. AJ Power in my own constituency has said that the increase in costs is sixfold and is likely to be more when the UK Government input reduces. My hon. Friend makes an important point that those issues are impacting businesses now, and therefore we need this Bill to resolve some of them.

[Ian Paisley]

The point about seed potatoes is particularly interesting, because that represents the entire community in Northern Ireland—companies that employ right across the community and farms from across the community are all being detrimentally impacted in the same way as a result of the protocol. That is why it needs to be fixed.

We have heard some scaremongering about a mass cull of cows and suddenly milk in Northern Ireland becomes different milk because of paperwork, when the milk is being produced in the same way and the same green grass is being used to feed the cows to produce it. Not only is the milk being produced normally, but the same seeds and crops are brought in to feed the cattle, and it is very clear that none of that will change.

The commercial issues that I referred to and that my right hon. Friend the Member for East Antrim touched on are very interesting: I think there are more dairy cows in County Cork than there are in the whole of Northern Ireland, yet County Cork and the Republic of Ireland still cannot produce enough milk. Therefore, they need a commercial relationship with Northern Ireland dairy farms to help them and to increase and encourage their businesses. The commercial reality is that we have to do business across the island. The idea that suddenly people will be able to say to farms in Northern Ireland, “Well, you can’t do business with us in the Republic of Ireland.”, when Republic of Ireland companies need Northern Ireland farm produce, highlights the commercial reality in all this.

Again, I go back to this point: the protocol is a political problem that is interfering in commercial and farming activity, and we have to pull it away from that and solve the politics around this.

The Bill does not change the cows, as the hon. Member for North Down seemed to imply. It does not change the grass that the cows are fed on. It does not change how the cows are milked, what lorries the produce goes into or what factories the milk is processed in. No, this is about Eurocrats stopping trade, not because the standard of the food has changed but because the paperwork might change. That is not a good basis on which to run any business, to run cross-border activity or to run cross-national frontier businesses. It is not. That is why the protocol should be changed and why the European Union should be ashamed of itself when it refuses to change some of the aspects of the protocol and to try to fix these matters.

The hon. Member for North Down has mentioned on many occasions the issue relating to veterinary products, pharmaceutical products and so on. A solution was agreed for human products, but the EU has blocked that solution for animals and animal welfare. It did so in such a manner that in a matter of months 50% of all veterinary products will be prevented from going to Northern Ireland. That will have a detrimental impact on farming, and the commercial aspect of that, on pets and on our income and our economy.

If ever there was a threat to cattle, it comes from the EU blocking veterinary products coming into Northern Ireland. That is the damage to our business. Do not take my word for it. Take the words of the National Office of Animal Health. It has been campaigning for this change and it has written to all the Ministers in the Northern Ireland Executive and told us that this has to be changed. But there is no appetite in the EU to change it. NOAH says clearly that this is not about getting more time to negotiate. Time is over; time has run out. Indeed, the Government’s position is that they have been talking for a year and a half to try to fix this. Time is now over. Time is called on this matter. We have to have it resolved urgently and immediately.

Some references have also been made to manufacturing. I am proud to have one of Northern Ireland’s largest and most obvious manufacturing businesses—a world business in fact—in Ballymena, a part of my North Antrim constituency. Wrightbus has traded both before we were in the EU—before 1973— for 40 years after joining the EU, and since leaving the EU. It has been a successful world business. Why? Because of EU regulations? No. Because of British regulations? No. Because it makes the best product, and the best product sells. When it made poor products they did not sell. So because it makes the best product, it has at its feet a world market. It has been able to trade in the United States, all over Malaysia, in the middle east and in other parts of the world as well as the EU.

The idea that suddenly the protocol is making life easier or better for Wrightbus is wrong. The evidence from Wrightbus has been that, yes, it is getting good trade deals both inside the EU—in Germany and the Republic of Ireland—and outside the EU—in Australia, New Zealand and the United States. That is because of its product, but its product has been made costly to produce due to the impact of the protocol. It has made it more costly to get aluminium and other components into Northern Ireland from Great Britain. That adds to the manufacturing time, and time equals money. There is an impact on its product. While it is a market leader at present, as soon as it is challenged in that market lead, we will soon find out the pressure that that industry will be under.

It is very clear to me that in the Republic of Ireland there is a commercial interest in having some damage done to Northern Ireland’s trade. People do not like that being said, but it is a fact. The Republic of Ireland has breached regulations time and again. It is being investigated for a £200 million loan to Aer Lingus, which was brought to our attention in April. Since Brexit, I understand that the UK Government have set up an EU subsidy monitoring unit, which has asked for that £200 million loan to be investigated. It is causing commercial differences on the island of Ireland, to the point that the arm of Aer Lingus that operates out of Northern Ireland airports is being damaged by the grants and loans being given to its commercial arm in the Republic of Ireland.

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[Ian Paisley]

Last autumn, the Chancellor announced several VAT changes and confirmed that he had to speak to the EU to make those changes. There have been talks with the EU, but those changes are still not in place. Does the hon. Member not agree that it is wrong that all our constituents to have to wait for the EU to go through its machinations before VAT changes can be effected in Northern Ireland? On the point about there being only £1 million of benefit from the subsidy in the spring statement, if the benefit is so minor, why does it take so long to make the change?

[Stephen Farry]

There are two points to raise on that. The first is about the practicalities. My understanding is that discussions have not been taking place between the Treasury and the European Union to get these issues resolved, particularly on the situation with renewables, but the door is open. The amount may be £1 million, but we will get that as a Barnett consequential anyway. The solution is available. Across the European Union, rates of VAT, or its equivalents, are being reduced to support renewables and to help people with energy bills, so we are not asking the impossible.

The wider point is why on earth we have to go through this process in any event. The answer is probably the same one that we give on countless occasions: this is the outworking of the protocol, and the protocol is the outworking of Brexit. Decisions made about the nature of Brexit subsequent to the introduction of the protocol had to be put in place, and these are the issues that have to be managed as a consequence. We have to own the decisions taken by the Government and this Parliament, and work through them to find the best outcomes, which I believe are achievable only through negotiation.

I am not denying that there are issues on state aid and VAT, but unilateral action will not provide a long-term outcome; in fact, it will make things more difficult. We can achieve outcomes through negotiation, and I believe that the door is open for that if the Government choose to walk through it, rather than standing back, and using the issue as an excuse and a reason to construct a narrative as to why this Bill is required.