Northern Ireland Protocol Bill

Lord Dodds of Duncairn Excerpts

Committee stage
Wednesday 2nd November 2022 Lords Chamber

[Baroness Suttie (LD)]

I thank the noble Lord for that clarification. However, probably lots of people out there would regard statutory instruments and secondary legislation, and such phrases, as sounding rather technical—but the point that my noble friend was making is that they are important. If we get the laws wrong, they will directly impact on the people of Northern Ireland, who have gone through a difficult situation since the passing of Brexit.

The effect of Amendment 25 would be to safeguard Article 18 of the protocol and allow the democratically elected Northern Ireland Assembly to have its say. I think the noble Lord, Lord Caine, is going to respond, as he is sitting in the middle of the three noble Lords. I would be very interested to hear, for the record, whether he considers that there are circumstances under which he could imagine using the powers granted under Clause 15(2) of this Bill to remove Article 18 of the protocol and remove the right of the Assembly to have that vote in 2024. If that possibility exists, can he imagine that it would ever actually be used?

On a second issue, in an article in June this year, Tony Connelly of RTÉ raised an interesting question about which version of the protocol would be voted on in 2024 by MLAs. Would it be the original EU version of the protocol, or the version as amended by this Bill, if it were to be passed and enacted? It is an interesting question, and I would like to know the Minister’s view on it. Tony Connelly says that those parties that want the protocol to stay

“will have a very strong case to say in 2024 they are being denied a democratic vote that has been mandated by international law.”

[Lord Dodds of Duncairn (DUP)]

I shall just intervene briefly in this interesting debate on the amendment proposed by the noble Baroness, Lady Ritchie. Just to follow on on what the noble Baroness, Lady Suttie, has said about which form of the protocol will be voted on, I do not mean this in a trite or trivial way, but I suspect that, if it were the original form of the protocol, it is unlikely that there would be a meeting of the Assembly to vote on it. That is just the reality. As the noble Lord, Lord Bew, said, it brings us back time and again to the fundamental reasons why this Bill is before your Lordships’ House.

I listened to the noble Baroness, Lady Ritchie, say that the protocol is not subject to cross-community consent because it is a reserved matter and does not fall within the purview of the devolved institution. There are a couple of answers to that; the first one is that the idea that we can dismiss the issue of unionist dissent from the protocol on that technical ground is complete political nonsense. It just will not work. We are in a dire situation politically in Northern Ireland, and to use a technical argument is not going to persuade anyone; it is not a good argument to use.

On the actual position, if we believe that the protocol is a reserved matter, then the decision is for this House and this Parliament. However, the Government, by agreement with the EU, decided that there should be some kind of consent mechanism and a vote in the Northern Ireland Assembly. Then they decided to change the rules of the Belfast agreement and the consent mechanisms within strand 1, the Assembly, having given the decision to that Assembly, by taking away the cross-community element of the vote and saying that it had to be by a majority vote. I have said this before: this is the only single major issue in Northern Ireland that can be decided by a majority vote. Everything else is subject to either cross-community agreement or susceptible to being turned into a cross-community vote by a petition of concern. Why did that happen? In order to prevent unionist dissent from derailing the protocol.

When the Protocol on Ireland/Northern Ireland (Democratic Consent Process) (EU Exit) Regulations 2020 were debated in Grand Committee on 1 December 2020—the statutory instrument brought in to implement Article 18—the noble Lord, Lord Empey, and the late Lord Trimble were both present and indicated their strong concerns, as architects of the original Belfast agreement, about how this drove a coach and horses through the consent principle of the Belfast agreement. People in Northern Ireland are mystified, continually, by people who stand up and say, “We are protecting the Belfast agreement; this is all about protecting the Belfast agreement”, and then they want to change the rules of the Belfast agreement when it does not suit them. They cannot have it both ways.

The fact is that Article 18 of the protocol is a vote four years after the event, four years after Northern Ireland is brought under the auspices of the protocol, four years after there has been dynamic alignment with EU law and four years after gradual separation between regulations and laws in Great Britain and the rest of the United Kingdom, in Northern Ireland. We will have had four years during which trade continues to diversify and so on, where laws are being made with no say, and then the Northern Ireland Assembly is to be given a vote, but not on a cross-community basis. No one says, “Are unionists happy? Are nationalists happy? Is there an overall majority?”, which is what the cross-community voting mechanism is. No, it is to be a straight majority vote.

All this is obvious to unionists in Northern Ireland. This is why we have the problems we do. Anyone who tries to pretend, without addressing these matters, without fixing these problems, that we are going to get anywhere is living in cloud-cuckoo-land. We are not going to get devolution restored, because unionists—not just the DUP—will not accept it. I respect greatly what the noble Lord, Lord Purvis, has said on the issue of delegated legislation and Henry VIII clauses. I understand all that and the noble Lord, Lord Bew, made that point. He talks about this draconian power to rip up Acts of Parliament and all the rest of it, but the protocol itself allows, in 300 areas, for EU law to rip up statute. It also provides for the addition of annexes to new EU legislation within the scope of the protocol, in addition to the 300 areas where we dynamically align. That can rip up Acts of Parliament.

So, I accept the problems that have been highlighted by some about giving Ministers sweeping powers, but we have to fix the problems that are there. We have to do it, acknowledging that if we do not, there is real damage being done to the Belfast agreement, as amended by the St Andrews agreement. That should be the priority. Articles 1 and 2 of the protocol make it clear that the Belfast agreement, as amended, is the key overriding objective. If people believe in that, then they should be prepared to consider carefully what we are saying, and they should therefore accept the rules of consent within the Northern Ireland Assembly itself. I look to the noble Baroness, Lady Ritchie, to uphold this. It is ironic, given the changes that were made by St Andrews, that somehow there is now a drawing away from that consent principle.

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[Lord Dodds of Duncairn (DUP)]

With respect, I will answer the noble Lord’s question first. We had a UK-wide referendum. Northern Ireland is part of the United Kingdom, as provided for under the Belfast agreement. The United Kingdom is the sovereign Government. Therefore, it is not that Northern Ireland is some kind of hybrid or special joint condominium with the Irish Republic, and it can go its own way if the rest of the United Kingdom is doing something else. It was a UK-wide referendum and, just as in Scotland, where people voted a different way, so in Northern Ireland—but we had to respect the outcome of the UK referendum.

[Baroness Ritchie of Downpatrick (Lab)]

I thank the noble Lord, Lord Dodds, for giving way. Further to the point made by the noble Lord, Lord Hannay, would the noble Lord, Lord Dodds, accept that around 56% of the people of Northern Ireland voted to remain within the EU, and we did not give our consent to Brexit. While it may have been a UK vote, and the noble Lord and I will remember well the debates in the other place on this specific matter in terms of the post-referendum Bill and the arrangements thereof, would he accept that the 56% who voted to remain did not give their consent to Brexit and to leaving the European Union?

[Lord Dodds of Duncairn (DUP)]

The 44% who voted to come out was a much higher figure than people had expected—but I accept what the noble Baroness says. But we are part of the United Kingdom and, just as Scotland and London and other parts of England voted in a certain way, we had to respect the overall vote. And if every single person in Northern Ireland had voted to remain—never forget—there would still have been a majority for Brexit and Northern Ireland would still have left the European Union, because we are part of the United Kingdom. The Belfast agreement did not create a hybrid situation in Northern Ireland. The sovereign UK Government are the responsible Government. We are United Kingdom citizens. Special arrangements were made for governance, but not for sovereignty, and that needs always to be borne in mind by those who try to conflate the two things. I think I have said enough on the specific detail.

[Lord Purvis of Tweed (LD)]

Before the noble Lord sits down, I am grateful. I understand his arguments. It is not a question with regards to the result of the referendum. My question is in the context of having scrutinised many trade agreements and treaties, and the deficiencies in the CRaG process. I agree with the noble Lord that there are challenges when it comes to agreements made by the Executive under their prerogative power to negotiate, and then what ability do we have, even quasi-representatives in an unelected Chamber such as this, to raise issues? I get that entirely. But, if the Government secure agreement as a result of these talks, has the noble Lord given any thought to the mechanism for seeking consent for what the Government bring forward?

[Lord Dodds of Duncairn (DUP)]

Well, there are a lot of “ifs” there. If I understand the noble Lord, he is asking, “If there’s an agreement, what should the Government do in terms of getting an endorsement of it?” I presume they would come to both Houses of Parliament and consult with the parties in Northern Ireland. As we learned from the original Brexit negotiations, the Government would be very wise to consult with the parties in Northern Ireland before any final arrangements are entered into.

I have a lot of sympathy with the view expressed by the noble Lord, Lord Hannay, that there is a lot of secrecy around the negotiations. Nobody is quite sure what is going on—technical talks, negotiations or whatever. However, I remember living through one particular week when the UK Government went off to Brussels and then came back again because they had not consulted properly. I would not like to see that happen again, because the whole objective here is to ensure that we can get arrangements which allow the devolved Government to get up and running again, with the support of nationalists and of unionists. So, before we came to any formal vote, I suspect that there would need to be quite considerable discussions and consultations with the parties in Northern Ireland.

[Baroness Chapman of Darlington (Lab)]

I would expect that, too, and I think it is regrettable that we have got to where we are. I was one of those people in the other place who very regularly got up and asked Ministers about Northern Ireland and what the plan was, because there were obviously going to be these issues. There were other solutions; we could have had a customs union or some kind of single market arrangement that would have maybe dealt with this in a slightly different way. I remember talking to one of the noble Lord’s colleagues who said, “Well, we don’t mind what it is as long as we’re all treated the same within the United Kingdom”. Ministers cannot be surprised that we are still having these discussions now.

I want to talk a little bit about this issue of cross-community consent; I am just reflecting on the speech made by my noble friend Lady Ritchie on Monday. It seems clear that the intention of Ministers is to protect the Article 2 rights of individuals, the Article 3 common travel area and the north-south co-operation in Article 11. We have debated the protection of the rights of individuals before, but what we really need is some sort of assurance from the Government that those intentions are reflected throughout the Bill in a consistent and watertight way. So can the Minister confirm that there is no prohibition on the overriding of Article 18 of the protocol, which deals with cross-community consent? We have rightly heard a great deal about this issue, and I would like the Minister to address it to make sure that I have understood it correctly.

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[Lord Purvis of Tweed (LD)]

My Lords, we will build up a fair canter with the next couple of groups because their principles are similar.

Part of the thrust of the argument is that we should be considering how we approach a new regime regarding Northern Ireland as we would for all other parts of the UK. The amendments in this group would do exactly that. They would adopt commitments provided by the Government in other legislation for the implementation of other agreements, including trade agreements, the operation of the single market and consideration of how that market will operate.

For example, Amendment 31 seeks that when the Government wish to operate the framework, they do so informed by the statutory bodies that Parliament has placed in legislation that would operate for all other parts of the UK single market. They should therefore, similarly, consult the Trade and Agriculture Commission, a statutory body tasked with looking at what Governments propose for the operation across the whole United Kingdom, and the Competition and Markets Authority, in relation to the operation of the UK internal market.

These have not been considered burdensome or lacking in timeliness, since these are all provisions in other pieces of legislation. If the thrust of the argument is that there should be consistency in operation for these, surely the Government would want to put in place the consultation of the statutory bodies to inform and advise, on the same statutory basis as in the other pieces of legislation. These amendments should not be too troublesome for the Minister to accept. I beg to move.

[Lord Dodds of Duncairn (DUP)]

My Lords, as the noble Lord, Lord Purvis, said, I hope we are speeding up a little. I will speak very briefly to Amendments 27 and 28 in this group, in his name and that of the noble Baroness, Lady Ludford.

In relation to consultation with various organisations —not statutory bodies—such as the chamber of commerce, the CBI, the Federation of Small Businesses, Trade NI, and, as mentioned in Amendment 28, the UFU, Food NI and the Northern Ireland Food and Drink Association, I wonder why those ones were chosen. If you are a member of Hospitality Ulster, you might be feeling a bit left out. If we are putting this in statute, why are certain groups put into statute and others left out?

Also, picking up on concerns raised earlier—I listened very carefully—proposed new subsection (3A)(e) talks about

“any other persons whom the Minister considers appropriate as representatives of business, trade and economic interests”.

The Government could be consulting for a very long time. Is the noble Lord not concerned that that could give a very open-ended power to the Minister, and would maybe provide him with too much discretion? I am very concerned about anything given to Ministers that allows them an open-ended process. Surely that would be of concern. I agree with the necessity of consultation with bodies such as this, and statutory bodies and so on, but I do not think it is necessary to put it in statute.

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[Lord Purvis of Tweed (LD)]

My Lords, I have a 25-minute speech on VAT and tax, but I might just summarise it for the benefit of the Committee. Again, the Delegated Powers and Regulatory Reform Committee has highlighted an inappropriately wide delegation of power. Here, it is on what would genuinely be an extremely controversial and sensitive issue of tax powers, excise and tax policy. The Government have said it is “not possible” to make such provisions in the Bill. I am just testing why it is not possible to state what a framework would be for provision of taxes, VAT and excise duties.

Everywhere else, what the framework would be is in the Bill—and for good reason. People need to know what the tax powers are and who holds them, and of course it is of controversy that the protocol has these linked elements. So I am simply seeking for the Government to fill in the gaps, state in clear terms why it is not possible and give a bit more information about what they consider to be their proposed framework when they move away from the protocol in these areas. This is the first attempt to get some more information from the Government—because the memorandum was not clear—in order for us to consider it, review it and perhaps return to this issue.

I would be happy for the Minister to write to me on my final point, rather than answer at this stage, because it is genuinely a probing question. Noble Lords may well recall that there had been successful attempts to amend the cross-border trade Act in Section 54, which is the prohibition on the collection of certain taxes or duties on behalf of country or territory without reciprocity. That includes in Section 54(2) that it shall be unlawful for HMRC to account for any duty or customs or VAT or excise duty collected by HMRC to the Government of the country outside the United Kingdom unless reciprocal.

The Government seem to be proposing a breach of Section 54, because the regime that they seem to be proposing is that we would be accounting to the European Union for taxes which we have set ourselves. I am happy to be contradicted about that and similarly happy if the Minister wishes to write on that point. I beg to move.

[Lord Dodds of Duncairn (DUP)]

My Lords, I rise to speak to Amendment 35A in my name on VAT and excise. I do not wish to prolong the debate at this hour. Very briefly, noble Lords will remember back in March when the then Chancellor Rishi Sunak announced measures in the fiscal event—mini-budget, estimate, whatever it was—that there was a zero VAT cut for households installing energy-efficiency measures, which would apply throughout Great Britain, but not to installation in homes in Northern Ireland of materials such as solar panels, insulation or heat pumps.

Consumers in Northern Ireland could not benefit from that VAT cut because of the protocol. Something that was warmly welcomed across the rest of the United Kingdom provoked concern and outrage across the communities in Northern Ireland. Mr Sunak announced that there would be extra money provided by way of Barnett consequentials to make up for it, but, as people with experience of the operation of the Executive know, sometimes the direct tax cut is the most effective and efficient way of getting these things done.

I have tabled this amendment to explore and seek the Government’s reasoning on their approach to the VAT issue. They have not gone down the route that they have in relation to state aid in Clause 12 of excluding Article 10 and annexes 5 and 6 of the protocol. They have not decided to exclude the relevant article of the protocol which applies the VAT rules. Instead, they have adopted the approach of saying there are large areas where we simply disapply that article and we can make provision by regulations in relation to the VAT excise duties and other taxes.

It is more akin to the situation that we find ourselves in with the protocol itself in relation to customs: Northern Ireland is nominally within the UK customs regime, but all the rules of the EU apply. What is the impact of the Government taking this approach in relation to VAT? Why are they not taking the same kind of approach to VAT as they have to state aid? What are the implications? It says clearly in the subsections what steps can be taken in relation to differences in VAT and making sure that the situation that we saw in March may not arise in the future, but what are the implications of not taking out the relevant article in the protocol completely?

[Baroness Chapman of Darlington (Lab)]

I was wondering pretty much the same thing. This is a slightly odd clause, because it says a lot but actually leaves the door open to not doing anything at all. It gives Ministers the right to change

“any other tax (including imposing or varying the incidence of any tax), which they consider appropriate”.

That is fine, but they might not consider anything appropriate and might not do anything.

Subsection (2) says:

“The regulations may, in particular, make any provision”


to bring closer together, or reduce differences between, various taxes in Northern Ireland and Great Britain. I am sure that that is how the Government want to signal their intention, but the Bill does not do that—it leaves it open to Ministers to do nothing at all, or even to create greater variance in the situation. So I was curious about why the Bill says that, rather than saying, “We will make the situation in Northern Ireland the same as it is in the rest of the UK, notwithstanding the various revenue-raising powers that there are in devolved Administrations.”