Northern Ireland Protocol Bill

Lord Kerr of Kinlochard Excerpts

Committee stage
Wednesday 2nd November 2022 Lords Chamber

[Lord Dodds of Duncairn (DUP)]

My Lords—

[Lord Kerr of Kinlochard (CB)]

The big point about this clause is the one made by the noble and learned Lord, Lord Judge, supported by the noble Lord, Lord Campbell. We should not be writing into our statute book such extraordinary sweeping powers, to be exercised at the stroke of a pen, with no real supervision or scrutiny by the Executive.

I would like to speak briefly to the second important point, which is, in my view, the one made by the noble Lord, Lord Purvis of Tweed, when he spoke of the “chill effect”. I also found things I agreed with in the speech of the noble Lord, Lord Leigh of Hurley, rather to my surprise. The chill effect is real and will continue. Investors will be deterred from coming to Northern Ireland, and Northern Irish businesses will be deterred from investing, by the uncertainty which will not be resolved by the passage of this Bill but created by its passage. The effect of Clause 12, taken with Clause 22, is to enable the Minister to establish a different regime in Northern Ireland from the regime in Great Britain. The assumption might be that if the protocol falls, what results is the status quo ante: the UK rules. That is not the case. The Minister would be entirely free to produce whatever rules for Northern Ireland he thought fit. It is obvious what that uncertainty does to investment.

I am surprised at the silence of the DUP.

[Lord Dodds of Duncairn (DUP)]

We cannot get in.

[Lord Kerr of Kinlochard (CB)]

I am delighted that the silence may be about to be broken. It seems to me it would be odd to be insouciant about this uncertainty. The DUP may have been given assurances that only UK rules will be applied and nothing will be different, in which case I suppose it might believe such assurances. That would be a triumph of hope over experience, because we would not be where we are today—we would not have this Bill to discuss—if the DUP had not been betrayed and misled by the last Prime Minister but one.

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[Lord Ahmad of Wimbledon (Con)]

No, I think we are. That is exactly what we are seeking to do. It is clear that the noble Baroness remains unconvinced.

Turning back to the amendments themselves—

[Lord Kerr of Kinlochard (CB)]

I do not think it is clear; I do not understand. If the wish of the Government is to apply UK state aid laws in Northern Ireland—and that would be the wish of the noble Lord, Lord Dodds —why does the Bill not say that? Why, instead, does it import this uncertainty, which would be continuing far into the future, because the regulations applying in Northern Ireland would depend on the whim of the Minister, as the noble and learned Lord, Lord Judge, pointed out?

[Lord Ahmad of Wimbledon (Con)]

I have listened again to the noble Lord and, if I may, just for clarity, I will ensure that I get a full response to this. I will check with my officials again and provide the added clarity that the noble Baroness and the noble Lord are seeking. If that needs to be followed up in writing, I will, of course, do so as well. Ultimately, I stand by what I said earlier, that what we are seeking to do here is to address the specific issues that there are in practical terms.

My noble friend’s concerns about the scope of the Bill’s delegated powers were raised by other noble Lords. I hope that I can reassure my noble friend that the power may already be exercised only to make appropriate provision in connection with the exclusion of Article 10 of the protocol and the domestic provision that Clause 12 places on it. This provides a clear and limited framework for what the power can do; providing further constraints would provide additional uncertainty to businesses and consumers. In this case, it would put off, and potentially circumscribe, the ability to facilitate an effective domestic subsidy control regime that applies to the whole of the UK, leaving Northern Ireland being treated unfairly compared with the rest of the UK.

The Government are aware that regulations with retrospective effect are exceptional. However, it is clear that the continuing application of the state aid acquis in Northern Ireland has led to a sense of disconnection for many people, particularly the unionist parties, and puts the re-establishment of power-sharing arrangements at risk. As the EU state aid acquis is removed, it may be necessary to ensure that actions granted under the regime are appropriately reconciled with the UK regime. Removing Ministers’ ability to make retrospective provision, which was mentioned by several noble Lords, could undermine the Government’s ability to ensure a single, coherent, domestic subsidy control programme throughout the UK. It would also, in the Government’s view, create further uncertainty for businesses in Northern Ireland and across the UK. Any such regulations would already be subject to the higher level of scrutiny in the House. I know that my noble friend is concerned about creating uncertainty for investors, to which he alluded in his contribution. I hope he is reassured by what I have said: that the Government’s intention in this case is only to provide certainty. There will be time to examine any subsequent regulations.

The amendment also seeks to ensure that the power can make incidental and transitory provision. I am happy to be able to inform my noble friend that this is already the case by virtue of the operation of Clause 22(2)(e). The amendment also seeks to make necessary regulations subject to annulment by Parliament. We will, of course, debate this further when we reach Clause 22, but the Government’s proposition is that this is appropriate when regulations are making retrospective provision or amending an Act of Parliament, but that it would not be the appropriate level of scrutiny for other instruments making what are likely to be smaller or more technical free-standing provisions. I hope, for these reasons, that my noble friend will be minded to not move his amendment.

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[Lord Kerr of Kinlochard (CB)]

I keep hoping that the noble Lord, Lord Cormack, will say something with which I can disagree—but he keeps on letting me down. I strongly support Amendment 20, of course, for the obvious reasons that I need not repeat. I also support Amendment 21B, put forward by the noble Lord, Lord Hain, and strongly supported by the noble Lord, Lord Deben.

I ought to declare an ex-interest. I used to be a director of a power company and, if I remember right, Northern Ireland is a net importer of electricity but a large net exporter to the Republic. The trade with the Republic is less than the trade that comes in from Scotland on the interconnector. It follows that, if the Bill goes through in the form it is in now, unamended by the noble Lord, Lord Hain, the collapse of the common electricity market will do very grave damage to the Republic as well as to Northern Ireland. For Northern Ireland, it is important for security of supply and to keep costs down; in the Republic, it is much more important because the Republic is a net importer; it is very short of generating capacity.

So I say to the Minister that I really hope he will buy Amendment 21B from the noble Lord, Lord Hain —I cannot see any reason why he should not. If he does not buy it, would the Government please produce before Report a clear statement of the discussions they will by then have had, if they have not already had them, with the Government in Dublin about how the crisis that this would create for the Government in Dublin is to be avoided or mitigated.

I will also add a word on the very important point made by the noble Earl, Lord Kinnoull. He made it very gently. There is no doubt that the European Union means what it says when it says that, if we put this Bill in its present form on our statute book, the TCA bets are off. We are heading for a trade war if we do this. I hope the DUP will bear that point in mind because, although the trade war would be acutely damaging to the whole United Kingdom, it would do particular damage to the economy of Northern Ireland.

[Baroness Hoey (Non-Afl)]

I understand what the noble Lord is saying—that the European Union would likely invoke some kind of trade war—but does he understand that, for many people in Northern Ireland, this Bill is the only thing that is giving them some hope that there will be real change? A trade war is very worrying, but there are also very worrying signs in Northern Ireland of deep unrest, concern and instability. That is why the suggestion from the noble Lord, Lord Cormack, that we should get rid of this Bill would be deeply damaging to relations in Northern Ireland.

[Lord Kerr of Kinlochard (CB)]

With great respect to the noble Baroness, that is not what the public opinion polls are telling us. At present, they seem to be telling us that what a majority of people in Northern Ireland, and a great majority of younger people in Northern Ireland, are looking for is certainty, and they are reasonably content with the protocol.

[Baroness Hoey (Non-Afl)]

The opinion polls told us that remain was going to win the referendum—they were very wrong.

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[Lord Kerr of Kinlochard (CB)]

I have no expertise to match that of the noble Baroness. But I do think we need to remember that, in the last Northern Ireland election, the voting for the DUP was about one in five of those who voted—and, since the turnout was about 60%, it was a pretty low proportion of the electorate. It is worrying, or at least curious, that the DUP, which constitutes, on its voting last time around, 0.4% of the UK electorate, should be able, it seems, to wag the dog. It is a very small tail that is wagging the dog—and, if we all end up in a trade war with the European Union, it will be the tail that gets the most pain.

[Lord Deben (Con)]

Will my noble friend accept this, just to get the two noble Lords together—if I may put it like that? The fact is that nobody in Northern Ireland is going to accept measures that turn the lights off. Most people in Northern Ireland actually want to do something about climate change; the polls are absolutely clear about that. This Bill will mean that we will not be able to fight climate change properly, and the lights are certainly in danger—and, if the lights went off, I do not think that people would thank the DUP for that.