Northern Ireland Protocol Bill

Stephen Farry Excerpts

2nd reading
Monday 27th June 2022 Commons Chamber

[Stephen Farry (North Down) (Alliance)]

This is an extremely bad Bill. It is unwanted, unnecessary and, indeed, dangerous. A number of Members have referred to Orwellian double-speak; we should add that there is also some Alice in Wonderland thinking to what is happening here.

The Foreign Secretary’s approach to opening this debate was deplorable and did not take the issues entirely seriously. As well as the process by which she has reached this point being extremely disappointing, her engagement in Northern Ireland has been incredibly selective. She has chosen an echo chamber to reinforce her own prejudicial views on the way forward rather than to engage with the entire community in Northern Ireland.

The Bill is opposed by a majority of Members of the Northern Ireland Assembly and, indeed, of voters in Northern Ireland. The business community is deeply concerned about many aspects of the Bill and it is not even effective in getting the DUP to recommit to an Executive. Some Members have lauded the words today from the DUP leader, the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson), but if Members listen carefully and read Hansard, they will find that what he said was full of ifs, buts and maybes. If Members read those words carefully, they will see that they do not commit to returning to the Executive any time in the near future.

[Ian Paisley]

Such a cynic!

[Stephen Farry]

I hear those words from the Bench behind me rather than anyone trying to refute what I am saying. That tells its own story.

The protocol is a consequence of the Government’s decisions on Brexit, and particularly of the decision to go for a hard Brexit. It also reflects the fact that the DUP pursued Brexit without any real consideration of the impact on Northern Ireland and the reality that any hard Brexit would require some form of special arrangements for our part of the world. A hard Brexit poses some particular challenges to the whole notion of a shared and interdependent Northern Ireland. It has to be recognised that Northern Ireland is a diverse society. The protocol is by no means a perfect solution, but it offers Northern Ireland the opportunity of a soft landing, given all the tensions Brexit brings to it. It brings opportunities in terms of dual access to both the GB and EU markets, but of course it also has its challenges. We must do all we can not only to maximise the opportunities but to address the challenges.

The Bill is very far-reaching. It immediately disapplies some aspects of the protocol and gives Ministers the ability to disapply others. It brings major consequences: it threatens Northern Ireland’s access to the EU single market for goods. The business community sees the dual regulatory system as unworkable. I hope that Ministers have heard from the Dairy Council, the meat producers, the Northern Ireland Food and Drink Association and Manufacturing Northern Ireland, all of which have expressed major concerns in that regard.

The loss of the jurisdiction of the European Court of Justice will also bring consequences. The protocol is not the same as a free trade agreement: it is a different type of beast. It is about us having access to the single market as a region. It is not a neutral situation that we have to almost tolerate; it is to Northern Ireland’s benefit because the most likely outcome is a situation in which other parts of the European Union do not treat Northern Ireland’s goods as having free access. We may need the European Court to enforce access for our businesses, so let us not throw it away without thinking through the consequences.

The Bill risks a trade war with the European Union—I do not want to see that but it is a potential risk—and undermines relations with the United States of America. The rules-based international order is of fundamental importance to the UK and the wider world and we mess with it at our peril. The Government have been disingenuous in a number of aspects related to how they have sought to defend the Bill. This is not about defending the Good Friday agreement. Brexit was a threat to the Good Friday agreement; the protocol is a response to protect it against that situation. There is not a choice between the protocol and the Good Friday agreement; the two can be reconciled if people wish.

[Sir Jeffrey M. Donaldson]

The hon. Member says that the protocol is designed to protect the Good Friday agreement. The north-south institution has collapsed, the Assembly is not meeting, the Executive is not functioning adequately and, in the words of the Irish Foreign Minister, east-west relations are at their lowest ebb for years. How is the protocol doing in protecting the Good Friday agreement?

[Stephen Farry]

I rather suggest that the right hon. Gentleman lies at the heart of all four of the outcomes he just listed, in the sense that DUP Ministers pulled out of the north-south institutions, they pulled out of the Executive, they are not allowing the Assembly to meet and, frankly, east-west relations have been poisoned by both the Government and the comments from a number of Unionist Members in Northern Ireland in recent years.

On the other issues used to justify the Bill, one of the first things the Government say is that they cannot reduce VAT on renewables in Northern Ireland—“This is an outrage!” I have looked into the matter, and the Government’s own figures suggest that the entire net value of the measure for Northern Ireland is a sum total of £1 million per year. The Government also have the option of going to the European Commission to ask for flexibility. Have they done that in the past three months since the Chancellor made the announcement? No, they have not. It is clear that they prefer to have this manufactured grievance rather than trying to find a genuine solution.

The Government say that no proper negotiations have happened over the past 12 to 18 months. Why is that the case? The Government have not approached the matter in good faith, so negotiations have stalled. They now say that they cannot proceed unless the EU says it is up for the renegotiation of the protocol. That denies the fact that there are three different ways in which things can be fixed that are all consistent with the protocol as it currently stands. First, there are flexibilities inside the protocol. We have already seen progress on the issue of medicines, but the Government, for their own reason, refuse to acknowledge the progress that has been made. I wonder why that is the case.

Secondly, I agree with other Members that article 13(8) of the protocol exists to allow the protocol to be superseded in whole or in part. I understand that that was put into the protocol at the request of the UK Government. That provision can be used but it has to be done by negotiation and mutual agreement.

Thirdly, we can do things in terms of supplemental agreements to the trade and co-operation agreement, such as a veterinary agreement. Again, those options have not been pursued. There are plenty of options out there that the Government can pursue entirely in keeping with the EU’s current negotiating mandate. People say that there is no alternative to this Bill, but there is: it is to go back and negotiate in good faith to build trust and partnership with the European Union.

Let us think about this for a second. Will this Bill improve trust and partnership? Will it make those negotiations any easier? No, it will make them harder, because every practical solution that I agree with depends on the EU and the UK trusting each other, and that is not where the Government sit tonight.

Northern Ireland Protocol Bill

Stephen Farry Excerpts

Committee stage
Wednesday 13th July 2022 Commons Chamber

[Sir Jeffrey M. Donaldson]

My right hon. Friend makes a strong point. To be clear, the greater issue for us as Unionists is our place within the United Kingdom and our ability to trade freely within that United Kingdom in accordance with our rights under the Acts of Union. That is fundamental to us as Unionists. I understand why the hon. Member for Foyle and, indeed, perhaps the hon. Member for North Down (Stephen Farry) will argue strongly that the protocol should be retained. I have heard their arguments for that, but let us be clear: the Belfast agreement respects the right of Unionists to adhere to their position and to support and uphold their position as part of the United Kingdom. It represents for us a fundamental change that that is now threatened and, unless that is corrected and resolved, it means that our confidence in the agreement itself and its ability to protect our place in the United Kingdom is fundamentally undermined.

[Stephen Farry (North Down) (Alliance)]

I think we all agree on the principle of consent as set out in that agreement, but does the right hon. Gentleman recognise that the one-sided approach taken by the Government and by his party is eroding support for the Union inside Northern Ireland and that, by contrast, finding a workable solution around the protocol would provide a soft landing, which might create a much longer perspective on the maintenance of the Union itself?

[Sir Jeffrey M. Donaldson]

The hon. Gentleman started out this journey as someone whose party advocated that the protocol should be rigorously implemented. Now he has shifted to saying that it should be rigorously retained. He cannot say that the protocol is creating problems and then not come up with viable solutions to deal with that. I have heard his solutions, but they do not have cross-community support in Northern Ireland. What we are looking to do—I believe that what the Government have proposed is capable of achieving this—is to resolve the issue in a way that meets the needs of everyone.

The Government’s proposals meet the needs of the United Kingdom, so that the integrity of our Union and of our internal market is respected. They meet the needs of the European Union, in so far as it takes measures to protect the integrity of the EU single market, to ensure that goods at risk of entering the EU are dealt with properly by this country in a way that meets its requirements. The proposals enable the restoration of the political institutions in Northern Ireland so that the Belfast agreement can continue to be the basis upon which we move forward there.

I believe that what the Government are proposing is not one-sided, but reasonable, measured and fair. There is so much focus on how the Government are doing this that we have lost sight of what they propose to do. Any objective assessment of the Government’s proposals can only conclude that they are reasonable and fair in all the circumstances and that their overriding objective is to protect the very delicate progress that has been made in Northern Ireland under the Belfast agreement.

In relation to agreement, and this is important, we have heard much about the need to ensure that the UK maintains its honour and its international reputation. However, I remind Members that the Belfast agreement is itself an international agreement, and the protocol undermines that agreement. It is an agreement whose co-signatories are the Irish and UK Governments. There was an international agreement attached to the Belfast agreement that was co-signed by those two Governments, making it an international agreement of international standing—indeed, one that has been approved in many international bodies across the globe. Therefore the protocol, in undermining that agreement, is harming an international agreement, and that needs to be addressed.

The basis on which the political institutions were restored in Northern Ireland at the beginning of 2020, after a three-year period in which Sinn Féin left Northern Ireland without a functioning Government, was the New Decade, New Approach agreement. Again, that was an agreement concluded by and involving the British and Irish Governments. The right hon. Member for Skipton and Ripon (Julian Smith), the former Secretary of State for Northern Ireland who was instrumental in bringing about that agreement, is in his place this afternoon. I remind the Committee that New Decade, New Approach—the basis on which my party committed to re-enter, and did indeed re-enter, government in Northern Ireland—included a commitment from the Government that they would protect Northern Ireland’s place within the UK internal market. That commitment was fundamental to my party deciding to re-enter government on the basis of that agreement, but it has not yet been delivered. Northern Ireland’s place within the UK internal market has not been properly restored. It is damaged by the protocol. It is impeded by the protocol. That is why in February this year I reluctantly took the decision to withdraw the First Minister from the Executive on the basis that other elements of New Decade, New Approach were being delivered, but the most fundamental element for the Unionist community was not being delivered. On that basis, we fought an Assembly election. My party obtained a mandate for the position that it has taken, and that mandate remains intact.

--- Later in debate ---

[Michael Ellis]

I am grateful to my hon. Friend for his intervention. “Urgent” does not necessarily mean “immediate”; it means, “As soon as we can reasonably and practically do it.” I think he knows that. I will come to article 16 in due course, but we are going as fast as we can given when the House is sitting.

Additional parliamentary procedures after Royal Assent would risk delays to the regime coming into force, and undermine the certainty and clarity that we are looking to provide through the Bill. That would risk undermining the aim, which we all share, of seeing an Executive back up and running and delivering for the people of Northern Ireland, and risk real harm to businesses and citizens.

[Stephen Farry]

Will the Minister give way?

[Michael Ellis]

If I may, I will make some progress. The amendment is well-intentioned, but I hope the Committee will understand that our priority as a Government is to proceed in a way that best supports the functioning of the Belfast/Good Friday agreement and its institutions, which in this case means giving certainty to the people of Northern Ireland that the regime we propose under the Bill will be in place as quickly as possible. That is why I ask my hon. Friend the Member for Bromley and Chislehurst to withdraw the amendment.

--- Later in debate ---

[Michael Ellis]

I thank my right hon. Friend for making that point.

With your permission, Dame Eleanor, I will speak to amendment 25 and new clause 7 together, which are in the name of the hon. Member for North Down (Stephen Farry). The Bill is designed, as I have said, to bring swift solutions to the issues that the protocol has created in Northern Ireland. These solutions are underpinned by the designation of elements of the protocol as “excluded provision”. Put simply, it is by excluding some elements of the protocol and withdrawal agreement in domestic law that the Bill is able to introduce, with the necessary certainty, the changes that are needed in Northern Ireland. By requiring the prior approval of the Northern Ireland Assembly, the amendments would undermine the ability to exclude elements of the protocol, and therefore undermine the entire operation of the Bill. That is unworkable. Because of the protocol, no Northern Ireland Assembly is currently sitting to pass the approving resolution that the amendment would require. The Bill as introduced aims specifically to restore stability in Northern Ireland, and a working Executive and Assembly. Therefore, in requiring the Assembly to approve the operation of the Bill, there is an essential flaw in the logic of the amendment.

As the hon. Member for North Down will be aware, the Sewel convention applies to this Bill, as it does to all Bills of this Parliament that intersect with devolved competence. I confirm that in the absence of functioning institutions, senior officials in the Foreign Office have already made contact with the head of the Northern Ireland civil service regarding legislative consent, and we hope to reach a positive solution as soon as the institutions are restored. By contrast, the amendment would allow the Northern Ireland Assembly to constrain the UK Parliament’s power to legislate, even if that legislation related to a reserved matter. That, of course, is wholly inappropriate under devolution arrangements. The Government will consult stakeholders in Northern Ireland, including Members of the Assembly, on the operation of the Bill during its passage and thereafter. I therefore ask the hon. Gentleman to withdraw his amendment.

[Stephen Farry]

The Minister has mentioned the word “logic” on several occasions and linked the necessity of the Bill to the restoration of power sharing. Does he recognise that there is a real danger in setting a precedent of linking the two together? Have the Government considered a scenario in which Sinn Féin reacts to the Bill and, very regrettably and irresponsibly, withdraws from power sharing? Where does that leave us? Are we any better off? Are we not in a different form of crisis?

[Michael Ellis]

I will come on to the hon. Gentleman’s question—forgive me; I was distracted. Would he reiterate his point?

[Stephen Farry]

I will happily do so. I am talking about a situation in which the Government have linked the passage of the Bill to the restoration of power sharing in Northern Ireland. I am asking on a point of logic: if a dangerous precedent is set by that, how do the Government respond to a situation where, as a reaction to the passage of the Bill, Sinn Féin, very irresponsibly and regrettably, walks out from power sharing devolution and leaves us no better off overall?

[Michael Ellis]

My understanding is that Sinn Féin is willing to go back in and has not set preconditions. That is the actuality of the position, rather than the hypothesis raised by the hon. Gentleman.

--- Later in debate ---

Movement of goods (including customs): excluded Protocol provision

[Stephen Farry]

I beg to move amendment 24, page 3, line 3, leave out subsections (1) to (3).

This amendment removes the designation of Article 5(1) to (4) and Annex 2 of the Northern Ireland Protocol relating to movement of goods and customs, as excluded provision.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 34, in clause 5, page 4, line 14, leave out “the Minister considers appropriate” and insert “is necessary”.

This amendment changes the threshold for giving a Minister power to make regulations under this Clause. The threshold is amended to make it objective rather than subjective.

Clause 5 stand part.

Amendment 35, in clause 6, page 4, line 29, leave out “they consider appropriate” and insert “is necessary”.

This amendment changes the threshold for giving a Minister power to make regulations under this Clause. The threshold is amended to make it objective rather than subjective.

Clause 6 stand part.

Amendment 15, in clause 24, page 13, line 16, leave out from “to” to the end of line 22 and insert

“House of Commons draft affirmative procedure”.

This probing amendment would apply “House of Commons draft affirmative” procedure in place of regulations on tax or customs matters being subject to annulment.

Amendment 16, page 13, line 27, leave out from “procedure” to the end of line 32.

This probing amendment would prevent Henry VIII powers (amending Acts of Parliament by regulations) being made on tax or customs matters using the “made affirmative” procedure.

Amendment 17, page 13, line 34, leave out “draft affirmative procedure” and insert

“super-affirmative procedure (see section (Super-affirmative resolution procedure: general provisions))”.

This probing amendment would replace draft affirmative procedure on tax and customs matters with super-affirmative procedure (see NC5).

Amendment 18, page 13, line 36, leave out subsections (7) to (9).

This amendment is a probing amendment removing the “made affirmative” procedure on tax or customs matters.

Clause 24 stand part.

New clause 4—UK-EU Joint Committee: reduction of sanitary and phytosanitary checks—

“A Minister of the Crown may not exercise any powers conferred by this Act until a Minister of the Crown has sought an agreement at the UK-EU Joint Committee on reducing sanitary and phytosanitary checks and laid a report setting out the details of those discussions before each House of Parliament and provided a copy of that report to the Speaker of the Northern Ireland Assembly.”

New clause 5—Super-affirmative resolution procedure: tax or customs matters—

“(1) For the purposes of this Act the “super-affirmative resolution procedure” in relation to the making of regulations subject to the super-affirmative resolution procedure is as follows.

(2) The Treasury or HMRC must have regard to—

(a) any representations,

(b) any resolution of the House of Commons, and

(c) any recommendations of a committee of the House of Commons charged with reporting on the draft regulations, made during the 60-day period with regard to the draft regulations.

(3) If, after the expiry of the 60-day period, the Treasury or HMRC wish to make regulations in the terms of the draft, the Treasury or HMRC must lay before the House of Commons a statement—

(a) stating whether any representations were made under subsection (2)(a); and

(b) if any representations were so made, giving details of them.

(4) The Treasury or HMRC may after the laying of such a statement make regulations in the terms of the draft if the regulations are approved by a resolution of the House of Commons.

(5) However, a committee of the House of Commons charged with reporting on the draft regulations may, at any time after the laying of a statement under subsection (3) and before the draft regulations are approved by that House under subsection (4), recommend under this subsection that no further proceedings be taken in relation to the draft regulations.

(6) Where a recommendation is made by a committee of the House of Commons under subsection (5) in relation to draft regulations, no proceedings may be taken in relation to the draft regulations in that House under subsection (4) unless the recommendation is, in the same Session, rejected by resolution of that House.

(7) If, after the expiry of the 60-day period, the Treasury or HMRC wish to make regulations order consisting of a version of the draft regulations with material changes, the Treasury or HMRC must lay before the House of Commons—

(a) revised draft regulations; and

(b) a statement giving details of—

(i) any representations made under subsection (2)(a); and

(ii) the revisions proposed.

(8) The Treasury or HMRC may after laying revised draft regulations and a statement under subsection (7) make regulations in the terms of the revised draft regulations if the revised draft regulations are approved by a resolution of the House of Commons.

(9) However, a committee of the House charged with reporting on the revised draft regulations may, at any time after the revised draft regulations are laid under subsection (7) and before the revised draft regulations are approved by that House under subsection (8), recommend under this subsection that no further proceedings be taken in relation to the revised draft regulations.

(10) Where a recommendation is made by a committee of the House of Commons under subsection (9) in relation to revised draft regulations, no proceedings may be taken in relation to the revised draft regulations in that House under subsection (8) unless the recommendation is, in the same Session, rejected by resolution of that House.

(11) For the purposes of subsections (4) and (8) regulations are made in the terms of draft regulations if the regulations contain no material changes to the provisions of the draft regulations.

(12) In this section the “60-day period” means the period of 60 days beginning with the day on which the draft regulations were laid before the House of Commons under section 24 of this Act.”

This new clause sets out the House of Commons super-affirmative procedure for tax and customs matters.

--- Later in debate ---

[Stephen Farry]

Amendment 24 would remove from clause 4 the measures that strip out the heart of the protocol, namely article 5, which relates to the management of the customs union and single market as they pertain to Northern Ireland, making it an excluded provision under domestic law. That, of course, would be a unilateral breach of the protocol, rather than working through negotiations to find durable solutions. The effect of that unilateral action would be to undermine Northern Ireland’s current unfettered access to both the single market and customs union for goods.

Fundamentally, there is no escaping the Brexit trilemma. When the Government decided to leave both the single market and the customs union, that required some form of interface to be put in place somewhere between the UK and the European Union’s economic zones, and that interface must be managed and mitigated as far as possible. The protocol offers relative opportunities for Northern Ireland compared with Great Britain, and they should be preserved and maximised. However, the protocol also poses challenges that need to be minimised.

The solutions must be mutually agreed, sustainable and legal. Northern Ireland businesses need certainty, and the only way through the process is negotiation. As someone who is at least a pragmatist or a realist on the protocol and who was a strong opponent of Brexit, I firmly believe that the European Union needs to be as flexible as possible, and that much more can be done in that regard—it is important that I put that on the record. At the same time, we must be brutally honest that the Government have been disingenuous in their approach to the negotiations over the past 12 months. Engagement has been extremely limited and, at times, counterproductive.

The Bill itself makes the prospect for negotiations even harder. Indeed, the passage of the Bill will probably make negotiations almost impossible. The European Union has been clear that it is tantamount to asking for negotiations with a metaphorical gun sitting on the table. By contrast, the key ingredients for progress are trust and partnership, but unilateral action undermines trust. Trust is central in two respects—first, to securing solutions in the first place; and, secondly, to ensuring their ongoing operation.

I want to highlight two particular solutions that are out there. A lot of Members have talked about them and, indeed, there has been a lot of commentary outside this Chamber as well. The first relates to red and green channels. On the surface, I think there is a lot of common ground between me and others from Northern Ireland, the Government and the European Union on something generally speaking along those lines. There is of course a major difference in the approach by which we get from A to B and reach such a conclusion, and I think that is the fundamental difference of opinion in relation to the Bill.

While Ministers keep saying that there is broad-based support for at least some aspects of the Bill, I am firmly opposed to achieving those through unilateral action, because that is not actually a genuine solution. We have to recognise that there may be some differences over the details of what this may look like in practice, and we need to be open, frank and honest about those. A green lane may not necessarily mean a fully open door; there may still need to be some degree of a risk-based approach to how that is managed. However, I think the essential concept remains that processed or final goods destined to remain in Northern Ireland should not be treated as something posing a risk to the EU single market or customs union.

The second aspect I want to focus on is a UK-EU veterinary agreement. It may be that we do end up with something that is very bespoke for the Irish sea interface, but I think we should focus on what should be the first preference, which is a UK-wide solution. The UK retains very high standards for agrifood, and they are de facto aligned with those of the European Union, but because the legal regimes do not align, we end up with barriers—frankly, needless barriers. That makes it much more difficult than it need be to manage movements across the Irish sea, but it also poses huge issues for the entire UK economy. In particular, the agrifood sector exports to the European Union—indeed, the European Union is by far the main export market for UK agrifood producers —and we are seeing a major shortfall in agrifood exports as a consequence of Brexit and the absence of a veterinary agreement.

People talk about what I suppose are the two polar opposite approaches to a veterinary agreement: first, there is the Swiss model, which is based on dynamic alignment; and, secondly, we have the New Zealand model, which is based on mutual recognition. The nature of New Zealand’s trade with the European Union, given the geography and a more limited range of products, will be different from that of the UK, which has its own requirements. Frankly, however, it is absurd that New Zealand has easier access to Northern Ireland for agrifood than the UK.

The Government face a choice between continuing to pursue the hardest of hard Brexits, especially on agrifood, when it makes no sense to diverge whatsoever, and being pragmatic and considering some form of veterinary agreement. That veterinary agreement may well end up being unique. It will be a UK-EU solution: it will not be the Swiss model or the New Zealand model, but something else. A veterinary agreement has the potential to reduce agrifood checks across the Irish sea by as much as 80%, and that would go a massive way to addressing the heart of the issue. Parallel movements could also address the pets issue, which has been a source of contention for many pet owners across these islands.

[Tony Lloyd]

On the veterinary agreement, an EU that has negotiated—in good faith, one assumes—with New Zealand and Switzerland, would negotiate in good faith with the United Kingdom. The point that the hon. Gentleman makes is a real one, but for many years, both the agrifood business and farmers have worked to the same common standards in the UK and the EU. We have not diverged so far, so could that not be part of rebuilding the trust that he spoke about?

[Stephen Farry]

Absolutely. I very much agree with the hon. Gentleman. He has been a strong advocate for a common-sense approach to agrifood movements, as have many Opposition Members as well as some Conservative Members. The Government keep telling us that there is no intention of diverging or lowering agrifood standards, so there is no benefit whatsoever to holding out against the logical solution of a veterinary agreement.

[Hilary Benn]

I agree with the hon. Gentleman completely about the need for a veterinary agreement. Is one advantage of an EU-UK veterinary agreement that it would deal with the objections that were raised earlier by some colleagues from Northern Ireland about Northern Ireland being a rule taker for things that it had not agreed? If an agreement is for the whole UK, and Parliament agrees to it, does it not remove that objection?

[Stephen Farry]

I very much agree with the right hon. Gentleman. Our first preference in all these matters should be a UK-wide solution, and only when that is not available, for whatever reason, should we consider something more bespoke for Northern Ireland. We are discussing the protocol, and I reiterate that this issue is very much in the interests of the entire UK agrifood sector, which is an export sector. Many Members talk with great pride about different industries in their constituencies, and all of those are struggling as a consequence of the impact of Brexit. I am labouring the issue of red and green channels, and the veterinary agreement, to point out that solutions are out there and that the measures in clause 4 and elsewhere in the Bill are not necessary. Solutions are there if people have the creativity and willingness to go out and grasp them, especially when that is fundamentally in the interests of us in the UK, as well as being of benefit to the European Union.

Reference was made previously to the Acts of Union, and I wish to clarify a couple of points in that regard as the situation changes over time. The Acts of Union of 1800 were between Great Britain and Ireland, and we are now talking about Great Britain and Northern Ireland, so that is one change we have seen via the Government of Ireland Act 1920, and the more recent Good Friday agreement, the Northern Ireland Act 1998, and the principle of consent, which is the bedrock of that. That is just a precursor, and while I agree fundamentally with the point just made—that our preference should be for a UK-wide approach and solution to some of these issues where possible—we must recognise none the less that Northern Ireland has always, from its inception, done things differently from the rest of the UK in economic matters.

Northern Ireland has always had devolved powers, right from its foundation, and on matters such as employment law or other issues it has had the right to diverge. Further to that, although I am not encouraging checks down the Irish sea, for various reasons throughout our history, including in wartime and other times of stress, there have been checks on certain movements across the Irish sea, including agrifood movements. Indeed, it is accepted practice that farm equipment is inspected. Ireland only really works as a single unit in terms of animal health, and before a lot of the controversy emerged around the protocol, that was an accepted fact for people from all backgrounds in Northern Ireland, as it was the most pragmatic way of doing things. In the same way, the single electricity market on the island has not been a source of debate, although it is a reality that Northern Ireland energy issues are distinct from those in Great Britain, and happen primarily on an all-Ireland basis.

To conclude, I will stress a couple of points. First, if the will is there, the means exist to resolve these issues without going down the route of unilateral action. Under the protocol, there is scope to progress a lot of those issues, including within the current negotiating mandate for the European Commission from the European Council. The question of medicines was progressed without a change in mandate, and the European Union went ahead and legislated for change. Secondly, issues can be addressed through supplemental agreements to the trade and co-operation agreement—the veterinary agreement probably fits that category best. A specialist committee has been set up for that purpose, so a vehicle exists to progress similar issues. While the UK Government have put forward their Command Paper, the European Union put forward its own proposals in October last year, and updated proposals last month.

If clause 4 remains as currently drafted, including the excluded provision, there will be a series of consequences—indeed, there will be consequences from the Bill itself—both for the UK and, in particular, for Northern Ireland. Those will include the undermining of the rules-based international system; setting a very bad precedent by breaching international law; and the risk of a very damaging set of EU retaliations, right through to a full-on trade war. Sadly, we are already seeing the consequences for UK academics and researchers who have been excluded from Horizon Europe. Research has been a real success story for the UK, so the costs are already clear in that regard—costs that are being paid for something that is not necessary, is unworkable, and is counterproductive.

For Northern Ireland, the effects of clause 4 will be as follows: it will undermine our access to the single market and the customs union. It will create more and more uncertainty for businesses as to the legal regime under which they are operating. It will pose dilemmas to members of the Northern Ireland Executive about how they conduct their duties. Finally—I say this with a degree of trepidation—it will beg the question of how and where the interface between the UK economic zone and the European Union economic zone will be managed. The answer to that question may well pose even greater challenges and difficulties.

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to speak in this debate, Madam Deputy Speaker, and to follow the hon. Member for North Down (Stephen Farry); I agree with some of what he said, if not, perhaps, some of his conclusions. I think that, of all the contents of the Bill, the Government are on the strongest ground when it comes to the clauses we are now debating, and that the EU could have found a way of agreeing with the UK Government how to fix this problem. In the protocol, it was agreed that Northern Ireland was in the UK customs territory, and only goods that were at risk of going into the single market needed to be inspected as they crossed the Irish sea. We ended up with the EU seemingly interpreting everything as possibly being at risk of going into the single market, which produced a ridiculous level of tests that would never be acceptable to the Unionist community of Northern Ireland and are doing the economic damage and causing the tensions we have seen.

It should be obvious and acceptable to both sides that it has been agreed that Northern Ireland will have a foot in both camps: a foot in the EU single market and the EU customs zone, and a foot in the UK single market and the UK customs zone. The only way to make that work is to accept that there is a porous border, where there is no way of exercising the usual level of control that the EU would insist on at its other single market borders around Europe. The key questions for everyone to focus on are these: what goods are we really worried about? What goods have a real risk of crossing that border without being checked—without having the customs declarations and the duty paid, or the various other checks that are required? Finally, how do we put in place measures that can mitigate that risk, and make people on both sides of the border happy that nothing is crossing that border that poses a real threat to the integrity of either market?

To be fair, the UK Government have been extraordinarily generous, not just at the Irish border but at the Dover-Calais border, by not introducing the checks we could have introduced and which we would expect to see at a normal border, because we largely trust goods that are in free circulation in the EU, even if they are not absolutely consistent with UK regulations, either now or in future, or perhaps there is a theoretical customs issue, even though we have a zero-tariff, zero-quota deal, and there may be some duty payable because of rules of origin. We have been extraordinarily relaxed in accepting that those risks are much lower than the risks of trying to impose the burden of huge amounts of checks.

Until we get the EU into the mindset of accepting the same position in relation to goods circulating in Northern Ireland, there is no solution, because at some point there will have to be a border with checks and processes somewhere. We know it cannot be on the island of Ireland. We accepted that trying to make the EU put the border between the European mainland and the island of Ireland would be a horrible situation that the Republic of Ireland could never accept and effectively mean that it had left the single market by mistake, which the Irish Government would never entertain. It always looked to most people that there was the prospect of a compromise by doing something down the Irish sea, where goods spend several hours on a ship allowing for inspections and for declarations to be made, but that it had to be done sensitively and only on the things that were really at risk, otherwise we would end up with the problem we have now, where the Unionist community will not accept it and there is too big a dividing line between the UK mainland and Northern Ireland.

I support what the Government are trying to do and some kind of red and green channel is the right solution. I think the problem we have is that we have extraordinarily little detail about how it will work and how we satisfy the EU that the data we think we can collect and give it is sufficient to get it in a place where it will not have some horrible overreaction. We have not managed to reach an agreement. In fact, I understand it will not even look at our database and the data we could share to see if it is enough to get it there.

We have what looks like a theoretically attractive solution that is the right end position, but we have no idea how to make it work on the ground. We are going from a position where it looked like the EU was going to accept trusted trader exemptions, where everything must be checked and declared unless we have pre-agreed that certain traders are trusted and therefore we can exempt them from it, almost to a position where, if I read red and green right, everything is exempt unless either the trader self-declares that he will go into the single market, or we presumably do some risk-based inspection and spot something that should have been in the red channel in the green channel. It is a stretch to think we will get the EU happy with that without its having serious trust in our internal identification processes.

Then there is the difficult scenario of what happens when somebody changes their mind: goods go into Northern Ireland to be sold in a Northern Ireland store, and then they get low on stock in the Republic of Ireland and decide they want to move them into the Republic. The goods will not have been checked and they will not have done the customs declarations. What will the process be? Where do they go to get the goods checked so that they can legally move them across the border? Or do they just move them, nobody ever checks it, it is all fine and that is that? Again, I would be surprised if we get the EU happy about that. We are going from a position where goods are in free circulation on the island of Ireland, to a position where goods may not be in free circulation on the island of Ireland. How do we fix that?

I urge the Government, as the Bill progresses, to publish the processes for exactly how that will work, and how we can have an effective international border and make the red and green lanes work, so that we can show we are really trying to identify the goods most at risk of cheating or abusing the rules to try to get around them. If we can do that, there is scope to negotiate with the EU and get to the end point that we will inevitably have to get to. Unless the EU wants no border at all or a border on the island of Ireland, it will have to make the system work. That has been apparent for the couple of years since we knew this was coming, but we need to have in place trust between the EU and the UK Administrations, and we need to have the working arrangements and trust between the Irish and the UK authorities in Northern Ireland, so they can work together, trust each other to do joint inspections and share information on a real-time basis—all those common working practices that we have not managed to get to, due to the tensions on both sides, and where we need to get to.

The question we have to ask is: does proceeding with the Bill help us to get towards negotiating a compromised, pragmatic end position or does it make that harder? Fundamentally, I suppose the Government’s answer will be, “We have tried to get the EU somewhere sensible on this matter for the past year or more and we have not managed it. So we will put in place these arrangements and the EU will have a choice: either come and work with us and get to the stage where you are happy with the processes that we have in place and the data we can share with you, or it is just tough—accept what we will offer you.” I sincerely hope, before we do this on a unilateral basis, that at least in this area, where it looks like a compromise should be achieved, we manage to put in place something that both sides are happy with.

Northern Ireland Protocol Bill

Stephen Farry Excerpts

Committee stage
Tuesday 19th July 2022 Commons Chamber

[Stephen Farry (North Down) (Alliance)]

I beg to move amendment 44, in clause 7, page 5, line 5 insert—

“(1A) This section applies only if the following conditions have been met.

(1B) The first condition is that a Minister of the Crown has consulted appropriately with representatives of Northern Ireland business organisations on the option to choose between dual routes.

(1C) The second condition is that a Minister of the Crown has reached an agreement with the European Union on the option to choose between dual routes.

(1D) The third condition is that the Northern Ireland Assembly has approved by resolution the option to choose between dual routes.”

This amendment would impose conditions before the option to choose between dual routes could be implemented.

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

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 45, in clause 8, page 5, line 24, at end insert—

“only if the conditions in subsection 7(1A) to (1D) have been met.”

This amendment is linked to Amendment 44.

Clause 8 stand part.

Amendment 36, in clause 9, page 5, line 27, leave out “the Minister considers appropriate” and insert “is necessary”.

This amendment changes the threshold for giving a Minister power to make regulations under this Clause. The threshold is amended to make it objective rather than subjective.

Amendment 28, page 5, line 34, at end insert—

“(3) Before making regulations under this section, a Minister of the Crown must carry out an economic impact assessment of the proposed regulations, and conduct a consultation on the proposed regulations with any stakeholders whom the Minister of the Crown considers appropriate.

(4) The Minister of the Crown making regulations under this section must lay before each House of Parliament with a copy or draft of the regulations a copy of the relevant economic impact assessment and a report of the relevant consultation.”

This amendment would require an economic impact assessment to be carried out before a Minister could make any provisions for the dual regulatory regime.

Clause 9 stand part.

Clauses 10 and 11 stand part.

New clause 13—Report on dual access—

“A Minister of the Crown must, at least once in every three months from the day on which this Act is passed, lay before each House of Parliament a report stating what, if any, steps are being taken by Her Majesty’s Government to promote, uphold, support and facilitate dual access to the British market and European markets for Northern Ireland businesses either as a consequence of the exercise of the powers conferred by this Act or by alternative means.”

This new clause requires a Minister of the Crown to lay a report before each House of Parliament stating what, if any, steps the Government is taking to promote, uphold, support and facilitate access to both British and European markets for Northern Ireland businesses, pursuant to the powers conferred by this Act and any other powers.

New clause 14—UK-EU Joint Committee: duty to give primary regard to North-South proposals—

“A Minister of the Crown must respect, reflect and support in UK-EU Joint Committee meeting proposals relating to the regulation of goods made by the North-South Ministerial Council and other North-South Implementation bodies to the Specialised Committee on the implementation of the Protocol on Ireland and Northern Ireland pursuant to Article 14(b) of the Northern Ireland Protocol.”

This new clause seeks to require a Minister of the Crown representing the United Kingdom in UK-EU Joint Committee meetings to respect, reflect and support proposals made by the Strand Two Belfast/Good Friday Agreement bodies acting in their capacity as set out in Article 14(b) of the Northern Ireland Protocol.

New clause 15—UK-EU Joint Committee: report to Parliament—

“(1) When the UK-EU Joint Committee has discussed regulation of goods in connection with the Northern Ireland Protocol, a Minister of the Crown must lay a report before each House of Parliament detailing those discussions within 21 days of the meeting of the UK-EU Joint Committee at which those matters were discussed.

(2) Each such report must include information on how UK representatives adhered to and sought agreement with representatives of the European Union on relevant proposals—

(a) agreed by the Northern Ireland Executive or endorsed by the Northern Ireland Assembly, or both, and promoted by the First Minister and deputy First Minister acting jointly, or

(b) agreed by the North-South Ministerial Council or North-South Implementation bodies and made to the Specialised Committee, pursuant to Article 14 (b) of the Northern Ireland Protocol.”

This new clause would require a Minister of the Crown to report to each House of Parliament on meetings between the UK and EU in the Joint Committee within 21 days of each meeting and to include information on the regard afforded to any submissions from the Strand One and Strand Two institutions of the Belfast/Good Friday Agreement by UK and EU respectively.

[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.

[Jim Shannon (Strangford) (DUP)]

On the programme “Countryfile” on Sunday night, a farmer from my constituency, Sam McChesney, outlined very clearly that the Northern Ireland protocol is affecting him, and his lamb and beef. He cannot sell beef cattle across the water to the mainland in the way that he once did. He said that he wants to see changes to the nitty-gritty of the bureaucracy, red tape and small print that is affecting his business, and that if this continues as it is, he will not be in business. Will the hon. Member take a deep breath and think about what Sam McChesney said, and then he will think the same as us and ask for the changes that he wants to see?

[Stephen Farry]

I advise the hon. Gentleman to reflect on some of the things that the Ulster Farmers Union has been saying about this aspect of the Bill. He should listen to what the Northern Ireland Meat Exporters Association is saying—so if the gentleman he mentions is exporting meat, that is what his trade body is saying. Of course there should be no obstacle for anyone in Northern Ireland selling into Great Britain, but we are in danger of losing the ability for meat producers in Northern Ireland to sell into the Republic of Ireland and onwards into the European Union. [Interruption.] I will come to that in a moment, if the hon. Gentleman wishes to have some degree of patience.

We will also talk about the interests of the dairy sector in Northern Ireland. If the hon. Gentleman wants to reflect the views of his constituents, he will be aware that one of the major employers in his constituency is Lakeland Dairies, which, along with the wider dairy sector, is extremely exercised about this aspect of the Bill.

[Jim Shannon]

I have met the chief executive of Lakeland Dairies on a number of occasions, and I do so regularly, because it is a major employer in my constituency. He says that he can work with this process, and if changes to the Bill come through, he can also work with that. There are factories south of the border and north of the border. Lakeland Dairies wants a workable system and says that it can work with this. I am not sure who the hon. Member is talking to, but I talk to the chief executive regularly and he tells me that he can deal with the system and with the issues as they come forward.

[Stephen Farry]

We will talk about the dairy sector in much greater detail shortly. Indeed, it has given significant evidence to Committees in this Parliament. Whenever we talk about the dairy sector, it is important to bear in mind that this idea of the hon. Gentleman’s that we will end up with segregated production, north versus south, is not feasible. If that was to be introduced, the lead-in time would potentially be two to three years, and the costs would be between £200 million and £250 million, so the notion that this is an easy option is a major fallacy. Indeed, the notion that we want to spend extra money to reorientate an industry that works quite successfully at the moment is for the birds.

[Colum Eastwood (Foyle) (SDLP)]

I am grateful to the hon. Member for giving way. Does he agree with me and with Mike Johnston, the chief executive of the Dairy Council for Northern Ireland, that the Bill risks making rural areas poorer by cutting off £600 million of trade?

[Stephen Farry]

Indeed, and the dairy sector in Northern Ireland is absolutely clear. The provisions in this Bill are an existential threat to their business model, and we will come shortly to the consequences of that.

[Sammy Wilson (East Antrim) (DUP)]

I thank the hon. Member for giving way; he has been quite generous, but it is important that we scrutinise the amendment. Will he explain to me how the dairy sector, or whatever other sector wished to trade with the Irish Republic, would be disadvantaged if it agreed to dual regulation—in other words, if it complied with EU regulations for the products that it wished to trade with the Irish Republic? Is the EU going to say, “We will not accept your goods, even though you’ve accepted all our regulations, you’re applying those regulations and your goods are safe to enter the EU”?

--- Later in debate ---

[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.

[Stephen Farry]

I will briefly respond, and then hopefully I will make some progress. What the hon. Member has said is utter nonsense. The notion that there is some sort of conspiracy or plot to undermine the Northern Ireland agriculture sector is for the birds. The threat actually comes from this Bill and from Brexit. It does not come from the protocol; it comes from the notion of scrapping some provisions in the protocol, which are working on behalf of the sector. The sector is diverse and some people may have a different perspective on it, but I urge Members to listen to the representative business organisations that reflect the views of their members. The Dairy Council is adamant and very vocal in this regard.

[Tony Lloyd (Rochdale) (Lab)]

The hon. Member is making a very good speech. It is not the EU that wants to change the rules; rather, we hear from some contenders for the Conservative leadership that they want to change the rules. They want to strip away regulation, as indeed do some members of the DUP. Is that not a concern for the agricultural sector?

[Stephen Farry]

Absolutely; I concur very much with what the hon. Member says. Regulation sometimes has a negative connotation, but it is there to protect everyone’s interests and it is there for often very good and valid reasons. It is noticeable that we do not have the Foreign Secretary with us today—or indeed for any stage of the Bill, apart from the first hour—even though she has been very keen to promote it, for whatever agenda she has.

[Jim Shannon]

It is because it is right.

[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.

--- Later in debate ---

[Stephen Farry]

The hon. Gentleman tempts me to refer to the time when his father famously said that the people of Northern Ireland may well be British,

“but our cows are Irish”,

which recognised the integration of animal health and agriculture on the island of Ireland. It was certainly a wise comment from the hon. Gentleman’s father.

Final products go right across these islands, into the European Union and further afield. The Bill is a threat to the sector in that it would allow products to enter Northern Ireland that are not produced to EU standards. The biggest issue relates to grain, around 400,000 tonnes of which are imported in Northern Ireland annually, but seeds and veterinary medicines may also cause complications. Even if the imported grain, seeds and veterinary medicines are in practice produced to the same standards as the European Union, that still misses the point in terms of the legal regime.

According to the Dairy Council, if any of those inputs were used in the production of milk, it would mean that the raw milk could not be supplied to customers in the EU, as Department of Agriculture, Environment and Rural Affairs vets would not be able to sign the necessary certificates to demonstrate that the milk had been produced in accordance with EU regulations and standards. Such an outcome would pose an existential threat to the Northern Ireland dairy industry.

The notion of trying to segregate inputs such as grain or milk produced to different standards or under different legal regimes is simply not realistic. Segregation would involve separate production, storage and cleaning. Tankers may collect milk from five to 10 farms into one tanker. The sector is already very efficient and works to very tight margins of 3% to 4%. It cannot absorb the additional costs of managing such segregation, and to do so would anyway make no sense. Indeed, it would involve substantially more paperwork and red tape, something I understood Brexit was designed to cut back on.

[Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)]

I have listened intently to the hon. Member and I am left confused by what he has to say. As I understand it, the dual regulatory system is a voluntary one, so what is to stop the co-operatives, which dairy farmers are part of, voluntarily agreeing to follow EU regulations under this system and abide by EU rules? The farmers are sending the milk in tankers to be processed in Monaghan, so it is processed within EU territory. What happens between the milk’s leaving the farm and its arriving at the processing centre in Monaghan that makes that milk incompatible with EU standards?

[Stephen Farry]

I think perhaps the right hon. Member was not listening fully. The point relates to the inputs in terms of grain, seeds and veterinary medicines. That is where the particular issue is. My point is that, if people decide not to do that, the scale of the segregation that would be involved in trying to accommodate that choice would lead to costs that the sector simply cannot afford.

[Sir Jeffrey M. Donaldson]

Will the hon. Gentleman give way?

[Stephen Farry]

I have already given way to many DUP Members.

[Sir Jeffrey M. Donaldson]

I can answer his point.

[Stephen Farry]

No doubt the right hon. Gentleman will have a chance to speak shortly.

The outcomes here will pose an existential threat to the Northern Ireland dairy sector. We are talking about potentially 800 million litres of milk that need to be accommodated somehow. The cows, of course, still need to be milked, and that begs the question as to where the surplus milk will go; that could pose considerable environmental challenges. It is simply not sustainable for farmers to retain animals that no longer have an economic purpose, so we could face a brutal cull of healthy cows. It would cost between £200 million and £250 million to create alternative processing capacity in Northern Ireland, and could take three years. Even if it made any sense to do so, by then the markets for Northern Ireland products would be long gone.

It is worth stressing that the island of Ireland has always been treated as a single unit for animal health. That makes huge sense, but dual regulation undermines it; there has not been dual regulation in the recent past. The same dynamic that applies to the dairy sector also applies to other aspects of agrifood, such as Northern Ireland’s very successful meat exporting industry. Any dual regulation in relation to feedstuffs and medicines undermines the ability to access the European Union in accordance with EU regulations.

Again, it is not realistic to segregate certain fields or farms for domestic Northern Ireland or Great Britain markets from those for EU markets, because—this may address the point by the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson)—we will not have a situation where one farm says, “We’re only going to do Northern Ireland and Great Britain forever.”, and one says, “We are going to do the European Union.”

[Sir Jeffrey M. Donaldson]

Why not?

[Stephen Farry]

Because in a free market situation, businesses want to maximise their sales. No business wants to shut off one half of a market when it does not need to.

Overall, the Northern Ireland Food and Drink Association estimates that agrifood provides £4.9 billion in terms of value added to the Northern Ireland economy and supports more than 100,000 jobs. Agrifood may be a small aspect of the economy across the United Kingdom, but it is massive in Northern Ireland, and it is worth noting that, if this Bill destroys the business model for many, there will be few alternatives for employment in many rural areas.

The same dynamic applies to manufacturing. Very few manufacturers seek to service a domestic market only. Any components in goods that are manufactured or processed in Northern Ireland that do not comply with the relevant parts of EU law will not be certified for export into the EU either for further processing or for final sale. Dual regulation may make things easier for suppliers in Great Britain supplying Northern Ireland. However, the needs of Great Britain’s suppliers would be better addressed via improved information and guidance, and of course the delivery of sustainable solutions around the red and green channel and a sanitary and phytosanitary agreement—or, even better, a full UK-EU veterinary agreement.

There are strong reservations, through to outright opposition, to this proposal for dual regulation within the Northern Ireland business community, and I urge hon. Members to listen to them. The amendment therefore provides significant safeguards against dual regulation in broad terms, but also the potential to facilitate dual regulation for any set of products or sectors where it makes sense. Consultation with the Northern Ireland business community is vital, as it has the expertise and on-the-ground knowledge. Agreement with the EU is necessary, as without a proper legal regime it would not work and indeed would be self-defeating. So is the agreement of the Northern Ireland Assembly, since this is notionally for the good of Northern Ireland and the Assembly represents a much more balanced perspective of the political views of the people of Northern Ireland.

[Several hon. Members rose—]

--- Later in debate ---

[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.]

[Stephen Farry]

Will the hon. Gentleman give way?

[Peter Kyle]

I am going to move on, because we need to stick to the clauses before us. I will give way once, but I promise, Mr Evans, that I will then crack on with the business before us.

[Stephen Farry]

Hopefully it will be a very helpful intervention. Does the shadow Secretary of State agree that it is important for Members to reflect fully on the evidence that was given to the Northern Ireland Affairs Committee? The last time the hon. Member for North Antrim (Ian Paisley) made reference to it, at least one of the people who gave evidence expressed concern, along with other international lawyers, that what was said did not fully reflect the subtlety of the arguments put before the Committee, which were not as simplistic as the hon. Gentleman said.

[Peter Kyle]

I am very grateful for that intervention. For the record, I think that all the interventions I receive here are helpful. They are certainly in the spirit of the debate that this place exists for. I believe that the hon. Gentleman is right, and I am grateful to him for setting the record straight so that we can move forward.

Today, we are considering clauses 7 to 11, which deal with the dual regulatory regime the Government want to set up for Northern Ireland. Amendment 28 would require a Minister to carry out an economic impact assessment and a consultation before making any regulations for a dual regulatory regime. Some parts of the Bill indicate that the Government have been listening to problems that businesses and consumers in Northern Ireland are facing. In those areas, the Labour party is clear that the EU must show more flexibility to deliver the progress that businesses in Northern Ireland need.

However, in proceeding with the dual regulatory regime, the Government demonstrate that they are ignoring the voices of most businesses. We saw that in the Government’s press release about Second Reading. It revealed, alarmingly, that the Government had only just begun

“a series of structured engagements with the business community, to discuss and gather views on the detailed implementation of the Bill.”

That had happened in recent days—not recent weeks, months or years, but in recent days. Businesses I know that are taking part in the process have asked for a commitment from the Government that they will publish the results in a report. I hope that the Minister will give that assurance from the Dispatch Box today.

Instead of taking the time to develop a policy that works for businesses, the Foreign Secretary is doing what the Government have done from the start: they have been so preoccupied negotiating with the various factions in their own party that they neglect to engage meaningfully with the stakeholders and partners who are the only ones able to unlock the progress our country needs.

Declan Billington, the chief executive of John Thompson and Sons animal feed manufacturers and co-chair of the Northern Ireland Food and Drink Association, said, when asked for his assessment of the proposals,

“I cannot actually answer the question because when I say, ‘Lift the bonnet under the bill and show me the detailed policies that we can engage with,’ I hear conversations about co-design and, therefore, I cannot benchmark.”

This is absurd. Instead of coming up with serious proposals, the Government are simply asking businesses to do the hard graft for them. In a damning assessment, the trade expert Sam Lowe described the proposed dual regulatory regime as

“a solution looking for a problem: it is near-impossible to find a business in Northern Ireland advocating for it.”

There are many reasons businesses are not calling for a dual regulatory system. High on the list is the shift in the burden of responsibility for ensuring that goods do not enter the EU off the Government agencies and on to the 75,000 individual Northern Ireland businesses. That might work for retailers, but exporters and businesses with highly integrated all-island supply chains see it as an almost existential threat. Again, the Government have been clear that their preferred outcome for the protocol is a negotiated solution. Such unserious proposals undermine the common ground in other areas.

The dissent in Tory ranks complicates the situation further. Several prominent Conservatives, including the Attorney General, have said that they want the dual regulatory regime to be scrapped in favour of mutual enforcement down the line. The irony of asking for mutual enforcement is that it requires absolute trust between the UK and the EU. It would take serious negotiation and deep good faith to achieve it. It is pure fantasy to think that we can get there with this Bill, which unilaterally rewrites the agreement we have.

--- Later in debate ---

[Peter Kyle]

The point I am making is quite clear. There is a difference of opinion here, and I think it is unwise to reject out of hand the representative body for the dairy sector in Northern Ireland. Let us engage with that. I have been very respectful of the right hon. Gentleman’s view, but I make the point that that was the second intervention from him, and I did ask him to correct the record in relation to his previous intervention, when he said something that was categorically untrue about my voting in the past. I hope that when he makes his next intervention he will do the right and honourable thing, which is to correct the record unequivocally and recognise that I voted in the polar opposite way to the way that he said I did.

The best way for us to resolve these issues is to have an independent assessment of the impact on different sectors that might be negatively affected—or certainly affected—by the legislation. It would be irresponsible not to, because there is such a difference of opinion.

[Stephen Farry]

Talking of putting things on the record, would the shadow Secretary of State join me in standing up for the credibility of Mike Johnston, who leads the Dairy Council for Northern Ireland? I stress that no one here has any evidence whatsoever that he has any motivation other than standing up for the interests of his industry.

[Peter Kyle]

I am certainly very grateful for the intervention, and to the witness for giving the benefit of his insight, wisdom and experience to a Select Committee of the House—insight gained from his membership of his organisation. All submissions to this place are welcome, and must be received in the spirit in which they were given to the House. However, it is the role of Government to deliver, and I urge the Government and Ministers to deliver in the way that has the least chance of negatively impacting a sector as important as the dairy sector in Northern Ireland. We are talking about the dairy sector, but it is just one of many sectors that could be negatively impacted if the Government get the implementation of the Bill wrong.

The Dairy Council for Northern Ireland estimates that processing all the milk that Northern Ireland produces would take three years and up to £250 million of investment. Let us be clear that we are debating a proposal that would cripple a part of the economy that supplies basic consumer goods and is working well. The proposals would take a wrecking ball to this key sector in the middle of a cost of living crisis, wreaking havoc on businesses and driving up prices. It would be a different debate if the Government were saying that they are introducing a dual regulatory regime because they do not want Northern Ireland to have dual market access any more, and this was the first step towards that, but that is not what Ministers are saying.

On Second Reading, the Foreign Secretary said that this regime

“cuts the processes that drive up cost for business”—[Official Report, 27 June 2022; Vol. 717, c. 40-41]

and allows business to choose which market they want to use. That is the exact opposite of what businesses are saying that a dual regulatory regime would achieve in practice. It is self-explanatory that moving to a dual regime would lead to more administration. The clue is in the name: dual regulation, under a dual regime, means double the number of processes that a business could encounter.

--- Later in debate ---

In moving his amendment, the hon. Member for North Down (Stephen Farry) dwelt mainly on the impact on milk. There are a considerable number of dairy farms in the North Down constituency, so I know that he will have had representations from the dairy industry, but I think it is wrong for the Alliance party in Northern Ireland to pitch this as a “them and us” argument, because it affects every single farmer in Northern Ireland, including every single dairy farmer. It will affect them in slightly different ways, given how they have calibrated their businesses and which area they wish to trade in, but this should not be turned into a zero-sum game. I thought it was unfair of the Member for the Alliance party to parade Mike Johnston out as someone from the dairy sector who supports his point of view and not someone who supports our point of view. It is grossly unfair to characterise Mike Johnston in that way, because he is an absolutely honourable, decent gentleman, and he will tell hon. Members that the current protocol is not the answer to the problems either.

[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.

--- Later in debate ---

[Sammy Wilson]

Although the proposer of the amendments, the hon. Member for Hove (Peter Kyle), has said that these are complex issues, for people in Northern Ireland they are very simple. First, simply the inclusion of Northern Ireland under the VAT regime of the EU means that when there are tax changes that can apply to the rest of the UK, they cannot apply to Northern Ireland. I know that he has placed considerable faith in the willingness and ability of the EU to negotiate its way around some of these obstacles, but the fact of the matter is that despite two years of negotiations, these obstacles have not been removed. When it comes to the kinds of things that the Government may wish to do, and which he would like the Government to do, for example, on VAT on electricity bills, the action required is not something to be done some time in the distance future; it is something that is essential now, because people are facing the high fuel and energy bills now. Frankly, many people in Northern Ireland, where fuel poverty is higher than it is in most parts of the UK, would find themselves disadvantaged for not weeks or months but perhaps even years while negotiations went on as to whether or not the EU would be prepared to permit the UK Government to exercise the fiscal freedoms that we thought we had obtained when we left the EU and to apply them to Northern Ireland.

I believe that this Bill and this clause are necessary. I also believe that the wording is correct, with the Government deeming the issue “appropriate” rather than “necessary”, because it could be argued that in some instances although it might be good to change the VAT rate, it is not necessary to do so; it could be argued that it is not necessary to keep in line with the rest of the UK and that particular circumstances pertain in Northern Ireland that do not make it necessary. That is why I believe the threshold of appropriateness is correct.

When it comes to state aid, the issues are also not complex—they are very simple. They have implications for the constituents of all Members of this House, because let us not forget that the state aid provisions refer to any state aid and any support that the Government may give to industries or firms anywhere in the UK if it impacts on trade between Northern Ireland and the EU. That is what article 10 says about any respective measures that affect trade between Northern Ireland and the Union, and that are subject to the protocol. Annexes 2 and 5 of the protocol contain lists of the kinds of sectors that would be impacted by that.

That means that the Government are always looking over their shoulder when they seek to give support to businesses. That support may be peripheral—for example, if the Government decide, as they have done, to support the production of batteries for motor cars in a factory in GB. If those cars are selling in Northern Ireland and, as a result of the subsidy and support, cars made in GB would have an advantage on the Northern Ireland market—compared with French cars, for example—that could be an area where the EU Commission would say that state aid rules apply, and the Commission and European Court would make a decision on that.

That is why it is appropriate that the Government have such a provision, because we cannot define or be sure at what stage the EU may say, “The support you have given that industry will impact on and give a Northern Ireland seller an advantage on the EU market, and therefore we wish to interfere in the support that you give to industry.” That is not just about Northern Ireland, because state aid provisions do not just apply specifically to Northern Ireland firms; they apply to those firms that may sell in Northern Ireland and get support elsewhere in the United Kingdom. That is why it is correct that Ministers have the ability to make a decision on whether something is appropriate.

Secondly, Ministers should have the flexibility to consider circumstances and issues that may emerge, and actions that the EU may wish to take. Those actions cannot be foreseen now, but we might have to act on them quickly in future. For that reason, I hope the amendments will not be pushed to a vote, and that Labour Members will see that rather than being complex, these are simple issues that require the kinds of actions already included in the Bill.

[Stephen Farry]

I will be brief, as I have just a few short points. First, I recognise that there are genuine concerns about state aid and VAT. We want to see those issues resolved, but that resolution has to be via negotiation with the European Union. On state aid, it is worth reflecting that companies will be operating across the service and goods sectors, and this is where things become incredibly complex, given the different nature of the regimes and how that applies to the European Union. State aid rules are not an absolute barrier, and prior to leaving the European Union, all parts of the UK would routinely apply to the European Commission for permission in that respect.

We should desire a situation where there are reduced rates of VAT in line with wider UK policy, and allow various incentives for people to do activities or help people with bills. We have the option of negotiating again with the European Union. Application to Northern Ireland is not barred under the protocol, but it does involve the UK Government making an application to the Commission. I have spoken to Maroš Šefčovič in that regard, and the door is open for those discussions.

There was a lot of cynicism about what was announced by the Chancellor in his spring statement on VAT and renewables, and this was seen as a major cause célèbre for why the protocol had to be addressed and fixed. In practice, the actual value of that measure to Northern Ireland per annum, based on the Treasury’s figures, was only £1 million, yet a huge drama was built up around it. Of course it was open to the Government to talk to the European Commission about the measure’s application in Northern Ireland. I asked the Treasury a question towards the end of April, and the answer was, “We’ve had no such discussions with the European Union in that regard”, and that it would be part of wider discussions on the Northern Ireland protocol. Rather than actually addressing the issue when a solution was readily available, the Government were more interested in using it as something with which to bash the European Union about the head, and to create a narrative of crisis.

[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.

[Gavin Robinson (Belfast East) (DUP)]

I heard your positive assent, Dame Eleanor, when the shadow Secretary of State sat down, and you were rather impressed when the usual channels inquired of us how long we would take and we indicated that we would be brief. We were asked whether we would be about 20 minutes, and I aim to please, Dame Eleanor.

I am pleased to follow the hon. Member for North Down (Stephen Farry), who in many ways makes a great argument, but not, I think, the one he intended to make. What he outlined highlights starkly not just the practical application of state aid policy, subsidy policy and VAT policy, but the interface between that practical application and the constitutionally injurious position that we are left in because of the protocol. Whether the differential between VAT on solar panels and renewables was £1 million or £100 billion, the issue is not the scale of the sum; it is why this sovereign Parliament is constrained in setting VAT rules for the nation. That is the nub of it. People say that there is no constitutional harm with the protocol, and when we highlight the constitutional damage that has been done, they rubbish it and wish it away, but here is the outworking of that; one part of our country is unable to benefit from VAT rates set nationally by this Parliament.

The fact that there are two probing—and, I respectfully suggest, rather superficial—amendments before us from across the political spectrum highlights that not only is there a problem with VAT rates, subsidies and state aid under the protocol, but that a resolution is required. Why should we have to negotiate that agreed solution or outcome? It is because we have ceded sovereignty in a way that constitutionally impinges on article 6 of the Acts of Union. That is why we are in this position. If that had not been impliedly repealed, as the Government lawyers state in our High Court in Belfast, we would not have these challenges.

The Joint Committee has summarily failed in many aspects of what it was tasked to do under the Northern Ireland protocol. It did not designate anywhere near enough goods as goods that could come from GB to Northern Ireland without risk of onward transit into the single market. We raised the issue of the VAT margin on the sale of second-hand cars, for example, for which there should have been a quick fix, but there was not. Whereas a second-hand car salesman in England pays VAT only on the profit from the sale of the car, in Northern Ireland they have to pay VAT on the entirety of the sale. Why? Because of the Northern Ireland protocol. The solution is very simple, but it took months and months of painstaking negotiation, and that is but one example from scores of issues that pervade industry and business in Northern Ireland.

That was the VAT margins; then there are the importation tariffs that our businesses in Northern Ireland had to pay in importing steel, a raw product, from GB to Northern Ireland. There should not be any tariffs at all within our own country. That highlights the practical application of the constitutional harm. Again, it took month upon month of painstaking work to get agreement through the Joint Committee, but when we were on the cusp of agreeing a solution for steel, I said, “Hang on a second. I have an aircraft manufacturer in Belfast East that uses aluminium. What about tariffs on aluminium?” It remains the case that a tariff is applied to any aluminium, a raw product, coming from GB to Northern Ireland, and a further tariff is applied to anything fabricated in Northern Ireland as a result of that raw product going back to GB for further integration—a tariff on the movement of a material from one part of our country to another, and back again.

[Stephen Farry]

rose—

[Gavin Robinson]

Civil aviation parts are tariff-free internationally anyway, and large manufacturers such as Spirit Aerosystems in my constituency have an agreed workaround and are exempt, but many in the supply chain do not, including some engineers in the hon. Member’s constituency.

--- Later in debate ---

[Stephen Farry]

Indeed, and I am having dinner later tonight with representatives from an esteemed local company in the aerospace sector. Does the hon. Member recognise that his very valid points about tariffs point to an issue not with the protocol, but with the trade and co-operation agreement, and the gap that was rather, shall we say, irresponsibly left by the lead negotiator, Lord Frost?

[Gavin Robinson]

No, I would not agree at all with that, because the tariffs came long before the TCA and arise from the protocol. I heard the hon. Member’s suggestion that people were making a mountain out of molehill in relation to VAT on renewables; with respect to him, I think that was a bit of a stretch. I do not agree with him on that, but the tariffs on raw materials coming from one part of our country to another are unnecessary. They are a breach of article 6 of the Act of Union. That breach is constitutional harm arising from the practical application of a protocol that was, I recognise, agreed by this Parliament, but not without warning from us.

Dame Eleanor, you will recognise that none of these contributions is going into extraordinary detail on the issue. There is a complexity to it, but in the real world of politics, consumers and the businesses that we represent, we need a practical solution. Given how limited the amendments in this group are, it is fair to say not only that is it accepted that there needs to be a practical solution, but that this Bill takes us far along that path.

--- Later in debate ---

[Sir Jeffrey M. Donaldson]

My right hon. Friend makes a valid point, but the matter goes further than that. It is not just that our Government cannot apply their own policies and economic and financial initiatives to Northern Ireland in the same way that they can to the rest of the United Kingdom; it is that those restrictions imposed by the European Union are restrictions over which none of us on the DUP side has any control. They are regulations and rules on VAT brought forward by the European Union, on which we have no say whatsoever.

[Stephen Farry]

It may surprise the right hon. Gentleman that I have quite a lot of sympathy with what he is saying on VAT. Perhaps it is for this reason. A lot of the issues relating to regulation of goods relate to the devolved competencies of the Northern Ireland Assembly. Obviously, we are talking here about UK-wide macroeconomic tax policy. That is a different issue. I do not want to get into the whole background of Brexit and the protocol during this Committee stage, except to say that the reason for the differential relates to the fact that, in order to avoid a land border on the island of Ireland, certain decisions were taken, and one of those was that Northern Ireland should retain access to the single market for goods. The VAT rules are linked to that. While I acknowledge that there is some validity in the right hon. Gentleman’s argument, it is important to acknowledge the background, and the only way to address it is through negotiation.

--- Later in debate ---

[The Financial Secretary to the Treasury (Lucy Frazer)]

I thank my right hon. and learned Friend the Minister for the Cabinet Office and Paymaster General for opening the debate this afternoon, and I thank hon. Members across the Committee who have contributed to it.

There has been a lot of talk this afternoon about negotiation. The Government have consistently said that it is our preference to resolve the issues through negotiation. Our door remains open, but the EU has so far not been willing to make changes to the protocol that deliver the solutions Northern Ireland needs. In that context, the Government are acting now to provide the solutions, to be implemented through this legislation, including for fiscal policy.

The reality is that businesses and consumers in Northern Ireland are not currently afforded the same UK tax breaks as those in the rest of the United Kingdom. That is preventing them from reaping the full benefits of this Government’s policies, and this simply cannot continue to be the case. The clauses we are discussing today will enable us to remedy these discrepancies, by paving the way for Northern Ireland to benefit from VAT, excise and subsidy control regimes consistent with those in place in Great Britain.

Let me begin by addressing clause 12. The hon. Member for Hove (Peter Kyle) said that the clause was complicated. It provides the basis for a single UK-wide subsidy control policy rather than the two separate regimes currently existing under the Northern Ireland protocol. The clause will provide legal certainty, and therefore confidence, about the extent to which businesses will be able to receive subsidies. It will provide clarity in domestic law that article 10 is disapplied, meaning that any subsidies that would previously have been notifiable to the EU under article 10 will no longer need to be notified. The clause will also amend section 48(3) of the Subsidy Control Act 2022 so that UK subsidy control requirements will apply to all UK subsidies, including those in Northern Ireland. Clause 12(3) provides powers for a Minister to make appropriate provision regarding any part of the Northern Ireland protocol to which the clause relates.

The protocol creates a two-tier system in the UK under which people and businesses in Northern Ireland are at risk of losing out in comparison with the rest of the UK. EU state aid rules have limited the level of support that may be granted in Northern Ireland without approval from the EU. With the covid-19 recovery loan scheme, for example, there were more limitations on who was eligible for the loans in Northern Ireland than in Great Britain. The Bill will remove that uncertainty for businesses and bring about parity between Northern Ireland and the rest of the UK.

Clause 17 provides Ministers with the ability to ensure that VAT, excise and other relevant tax policy is consistent across the whole UK, including Northern Ireland. That means that people in Northern Ireland will benefit from the same policies as people in Great Britain where it is beneficial for them to do so—as, of course, they should. I would like to explain why that is important. The EU has set rigid limits on VAT and excise rates and reliefs in Northern Ireland, meaning that even if UK policy changes would have no impact at all on the EU, they may not currently apply in Northern Ireland. That is why, as hon. Members across the Committee have mentioned, we still have not been able to introduce the new temporary zero rate for energy saving materials in Northern Ireland, as we have done in Great Britain.

[Stephen Farry]

Will the Financial Secretary clarify whether the Treasury has made any approach to the European Commission to seek the flexibility to have the same rate? Whenever she wrote to me at the end of April, she said that no discussions whatever had taken place since the Chancellor’s spring statement.

[Lucy Frazer]

As the hon. Member will know, because the point has been raised across the Committee over the past few days, negotiations have been taking place for almost two years. There have been 300 hours of negotiations with our EU counterparts, UK officials have shared 17 further non-papers with the European Commission, and we have been attempting to find common ground across these areas. Since the date that the hon. Member mentioned, the Foreign Secretary invited Vice-President Šefčovič to a joint committee meeting, where she announced our intention to table legislation. We would like to resolve the issue through negotiation, but it simply has not been possible.

In future, businesses in Northern Ireland will be subject to new EU VAT, excise and energy tax directives even where they are inappropriate and burdensome for Northern Ireland. That includes forthcoming changes to the application of the EU VAT registration thresholds, which could have a significant administrative impact on businesses in Northern Ireland. Under the Bill, however, we will be able to introduce targeted reliefs to support individuals with the cost of living crisis and achieve net zero, in addition to being able to reform our complicated alcohol duty system, bringing our tax system into the modern era and benefiting the entire UK.

It is not right that there should be unnecessary tax discrepancies between Northern Ireland and the rest of the UK. Clause 17 will enable the Government to lessen or eliminate those discrepancies.

Northern Ireland Protocol Bill

Stephen Farry Excerpts

Committee stage
Wednesday 20th July 2022 Commons Chamber

[The Minister for the Cabinet Office and Paymaster General (Michael Ellis)]

Allow me, Dame Eleanor, for I think the penultimate time, to thank hon. Members who have spoken in Committee. I would like to turn to the clauses under discussion in this debate. With the leave of the Committee, I will deal with some of the amendments very briefly.

Clause 13 outlines the exclusions that seek to redress the feeling that there is a democratic deficit created by the arrangements for the implementation and enforcement of the protocol. The present role of the Court of Justice of the European Union clearly causes Unionists to feel less connected to, and part of, the United Kingdom. That was reflected in the September 2021 joint statement by all Unionist parties on the protocol. Clause 13 provides that any provision of the protocol that confers jurisdiction on the CJEU over arrangements in Northern Ireland is excluded provision. That means that CJEU decisions, including infractions, will no longer have effect in domestic law across the entire protocol.

I confirm to the Committee that the Bill does not disapply the withdrawal agreement’s arbitration process, which would be convened at the international level in the event of a dispute. It simply affirms that the arbitration provisions in the withdrawal agreement do not have effect in our domestic law, and that is normal for international treaties. It then helps to restore the UK Government’s sole oversight of arrangements on the ground in Northern Ireland, providing that the provisions relating to the powers and presence of EU representatives are excluded. Finally, via subsections (4) and (5), clause 13 allows for the establishment of new arrangements for co-operation with EU authorities to monitor the trade boundary regime, and enables us to implement robust data sharing on the operation of the trusted trader scheme and on all goods moving between Great Britain and Northern Ireland. That will support assurance processes to uphold our commitment to protect both the UK internal market and the EU’s single market.

Clause 14 supports the coherent functioning of the Bill by fully insulating any excluded provision from being brought back into our domestic law as a result of obligations arising from other provisions of the protocol and withdrawal agreement. If needs be, regulations under subsection (4) can be used to make appropriate provision in connection with any provision of the protocol or withdrawal agreement to which this clause relates. The clause provides important clarity on the interaction between excluded provision and any wider provisions in the protocol or withdrawal agreement related to it.

Clause 18 provides a power for a Minister to engage in non-legislative conduct where they consider it appropriate in connection with one or more of the purposes in the Bill. The clause also clarifies the relationship between powers to make secondary legislation under the Bill and those arising by virtue of the royal prerogative. The clause will ensure that actions not requiring legislation, such as issuing guidance to industry or providing direction to officials, can be taken in a timely manner by a Minister of the Crown. It is not, as I think has been misconstrued in some quarters, an extraordinary power. It simply makes clear, as would normally be taken for granted, that Ministers will be acting lawfully when they go about their ministerial duties in support of this legislation.

Clause 20 allows for the proper functioning of domestic court proceedings following the removal of the domestic effect of CJEU jurisdiction. That means that domestic courts would no longer be bound by CJEU principles or decisions when considering matters relating to the protocol. The clause provides a power to make related new provision. Regulations made under the power could, for example, provide for a procedure to refer questions of interpretation of EU law to the CJEU if a domestic court considered it necessary to conclude its proceedings.

[Stephen Farry (North Down) (Alliance)]

Will the Minister give way?

[Michael Ellis]

If the hon. Member would not mind, I will give way to him when I come on to his amendment specifically. I would be very grateful if he would give me that indulgence.

Clause 20 is important to the functioning of the Bill to allow domestic courts to consider proceedings relating to the protocol without being subject to CJEU jurisdiction, in line with the general principles of the Bill.

I now move on to the amendments in order. Some, with the leave of the House, I can deal with very briefly. Amendments 38, 39, 42 and 43, in the name of the right hon. Member for Tottenham (Mr Lammy) and the hon. Member for Cardiff South and Penarth (Stephen Doughty), would, as has previously been explained regarding similar amendments, in our view wrongly apply a necessity test for the use of such powers. Parliament has previously determined, for example in the European Union (Withdrawal) Act 2018, that “appropriateness” is the appropriate word. That is my response to that series of amendments.

Amendment 12 in the name of the right hon. Member for Leeds Central (Hilary Benn) would remove the power for Ministers to engage in conduct in relation to the protocol which is normally within the Executive’s competence but not otherwise authorised by the Bill. As I explained a short while ago, this provision simply makes it clear that, as would normally be taken for granted, Ministers of the Crown would be acting lawfully when they go about their ministerial duties—for example providing instruction to civil servants or guidance to industry—in support of this legislation. It is not an extraordinary power, but rather it provides certainty that the Government can implement our proposals. I urge the right hon. Gentleman to withdraw his amendment.

Amendment 48 from the hon. Member for Foyle (Colum Eastwood) would be unworkable. It would require the Assembly—which is of course not sitting, which is part of the whole essence of this Bill—to pass a prohibitive number of votes to enable swift implementation of the solutions delivered by the Bill, so I ask him to withdraw the amendment.

Amendment 49 also from the hon. Gentleman would require Ministers to have due regard for the principle that the Belfast/Good Friday agreement should be protected in all its parts. The hon. Member states this amendment is based on the fourth point in the preamble to the protocol which sets out the United Kingdom and the European Union’s affirmation of their commitment to do just that. The Government’s overriding commitment—I emphasise this as strongly as I can—is to protect the Belfast/Good Friday agreement in all its dimensions. That commitment is absolute, but the balance within that agreement, and which was critical to its negotiation, must be maintained, and it is for that very reason that the Government have introduced this Bill. Although I welcome and endorse the sentiment underlying the amendment, it is, for the same reason, unnecessary, and I urge the hon. Member to withdraw it.

Amendment 46 from the hon. Member for North Down (Stephen Farry) would require the Assembly to approve clause 20. That is inappropriate under the devolution settlements because it would prevent the Bill from making important changes that go to the heart of the current democratic deficit. Does the hon. Gentleman wish me to give way now?

[Stephen Farry]

Yes, I am grateful to the Minister, and I assure him this is only a probing amendment and I will not be putting it to a vote. In terms of the Government’s position of removing the ultimate jurisdiction of the ECJ, do they recognise that in doing so they will in effect unpick Northern Ireland’s access to the single market for goods in that we would not be fully in line with the required EU law for that to take effect?

--- Later in debate ---

[Claire Hanna]

I desperately hope with every fibre of my being that the position the right hon. Gentleman sets out in his final words is the one we reach at the end of this process. The people of Northern Ireland want more than anything in this world to not hear this situation being played out aggressively in a toxic fashion day after day, as it has for the last six years, but they do not believe it will happen unilaterally through this Bill. Anybody who legitimately and thoroughly supports the Good Friday agreement and the teachings of John Hume will know that this Bill is a world of logic, decency and reality away from what he outlined about consensus and power sharing.

We have tabled amendment 49 to give an opportunity to protect fully and truly the Good Friday agreement with negotiated solutions. That is where we want to get to. Members should be fair and current about the context in Northern Ireland, because people at home do not recognise the Mad Max scenario being portrayed of people unable to access goods and services in Northern Ireland—it is just not reflective of the reality. Once again I say, as I have probably done every time I have spoken on this issue, that I fully understand the hurt of many Unionists. I have also spoken about the constitutional identity of many of us. I am Irish and I am Northern Irish, and I do not pay my taxes to the same state that my passport comes from—I understand that those are compromises, and it is frustrating when the impression is given that such compromises are for non-Unionists, but Unionists should never have to compromise on their lines of governance.

In terms of the actual material effect on people’s identity, I quoted yesterday words from the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) that I agree with. He said clearly that customs checks do not alter the constitutional status of the UK, and I think he is correct, but it is also appropriate that people reflect on the reality of what is and is not happening with goods moving through, where there is not the full panoply of EU checks. The situation is evolving. We were not given the benefit of an implementation period—such was the rush from other parties to get Brexit done, they did not allow businesses a period in which to adapt—but as was always envisioned, the protocol is evolving and the EU has set out legally dropped checks that are available permanently for easement, so Members should be rational about that.

Members should also be rational about the impact of the European Court of Justice. If I understand it correctly, it applies to the sovereign parts of Cyprus in the absence of Brexit. Perhaps Ministers in their summing up could advise whether the constitutional status of those UK sovereign areas of Cyprus has changed due to the jurisdiction of the ECJ.

Consistent with those points, amendments 48 and 49 would try to apply the consensus and the trust of the Northern Ireland Assembly to some of the powers that will be exercised apparently for its benefit. That consent from the Assembly will better reflect the range of views across Northern Ireland’s diverse communities, as well as businesses, whose representative groups—Members and in particular Ministers should be honest about this—have all rejected this Bill and set out their grave reservations about it. It is important that those views be reflected, if only because Members have, shamefully, maligned some of those business representatives in the Chamber, and I do not believe that their accusations have been withdrawn.

When Ministers sum up, will they say whether they will table a report that gives qualitative and quantitative information on the feedback that the Government have received from businesses on the Bill? It is frustrating for many that little pieces of feedback are being appropriated by some, while the vast majority of feedback—the representative feedback—is being distorted. I ask the Government to commit to publishing a report on the feedback—anonymised, where appropriate—that they have received, so that we can ensure that the voices of the economic actors in Northern Ireland are heard without distortion or impediment.

It is wrong to imply, as some did in debate yesterday, that Northern Ireland exporters will have a choice on regulations and standards. In fact, customers will have that choice; that is how these things work. The UK proposes a dual-regulation system on an open border. That will require customers—mostly other businesses—to make judgments and assumptions about the validity and standards of Northern Ireland produce. The Bill creates that serious reputational risk to businesses. I must repeat that the Bill’s powers, to the extent that they can be quantified—there are a lot of unanswered questions—are unwanted by a majority of Members of the Legislative Assembly, and by all the business organisations. Our amendment will help to ensure that those powers are appropriately moderated by the Northern Ireland Assembly. I do not want to hear the all-purpose excuse, “The Assembly isn’t sitting.” We are told, as part of the two-step that is going on between the Government and the Democratic Unionist party, that once the Bill passes, the Government will give democratic governance to the people of Northern Ireland, so that should not be an impediment. I ask the Government to accept that.

[Stephen Farry]

It is a pleasure to speak in the debate. I want to make a few points about the European Court of Justice and my amendment 46. It is important to recognise that the ECJ has not been a big issue in Northern Ireland to date. No business has ever expressed any concern to me about its jurisdiction. Indeed, it was a very minor issue in political debate in Northern Ireland until Lord Frost took it upon himself to escalate the issue in a speech that he made last October in Lisbon, I think. It was on the eve of the European Commission tabling proposals for breaking the deadlock on this issue; that shows how well the Government have handled some of the so-called negotiations. The European Court of Justice seems to be an obsession for hard-line Brexiteers in this Chamber and elsewhere, and for those who advocate what could be described as a purist and old-fashioned approach to sovereignty that denies entirely the realities of the modern, interdependent world.

It is important to focus on the distinction between dispute resolution mechanisms in a free trade agreement, and the situation regarding the protocol. Many people suggest that we should simply have an arbitration mechanism for the protocol, and deliberately conflate the two types of agreement. It is entirely appropriate to have an arbitration mechanism for the trade and co-operation agreement, which is a free trade agreement between the United Kingdom and the European Union. It is about two equals coming to the table and working out exactly how things will be taken forward. The position on Northern Ireland and the protocol is qualitatively different; we are talking about a region that continues to have direct access to the single market for goods, and is required to remain aligned with a body of European law, as is set out in annex 2 of the protocol. We will in a minute discuss the pros and cons of that, and the justification for it, but that is the situation that pertains, and why there is a different arbitration mechanism for a free trade agreement.

If the ultimate jurisdiction of the European Court is removed, that will jeopardise or destroy Northern Ireland’s ability to access the single market for goods. It is important that Members are fully aware of the implications of going down this particular road, because the two go hand in hand. Northern Ireland needs to remain in line with that law, and the European Court is part and parcel of how the situation works. Of course, if that were to happen, there would be massive implications for all businesses that operate on a north-south basis or that trade directly into the European Union. It is important that we do all we can to preserve that jurisdiction, while at the same time trying to fix the issues that pertain across the Irish sea. Through the Bill, a unilateral approach will be imposed on the European Union that probably will not address the issues across the Irish sea and at the same time will undermine Northern Ireland’s current dual-access opportunities.

I will go further and say this: we do not simply have to tolerate and put up with the situation. I maintain that being within the jurisdiction of the European Court of Justice is actively in Northern Ireland’s interests, because there may well be situations that come to light over the years where—due to the complications around the protocol, and the distinctions between Northern Ireland and the rest of the United Kingdom—some businesses and places in the European Union do not accept goods from Northern Ireland, because they are confused about the overarching situation. In such situations, it is crucial that we have the European Court of Justice to enforce the rules and protect the rights of Northern Ireland businesses. If we are to change the jurisdiction, there is a real danger and risk that we throw away the opportunity and advantage that we have.

Last night, I had a conversation with a major export business in my constituency, whose representatives said that they were recently at a trade fair in Italy and people said to them, “Thank God you’re still part of the single market via the protocol, because we cannot do business readily with your counterparts in Great Britain, but because you’re part of the protocol we have that export opportunity.” Many hundreds of people are employed by that company. It is important to recognise that issue.

[Hilary Benn]

The hon. Gentleman is making an interesting and important speech. In clause 20(4), the Government propose to allow cases to be referred to the European Court; they say they want the European Court to have nothing to do with any of this but are then taking a power to allow referrals. Does he, like me, think that that is because businesses in Northern Ireland that choose to operate under the dual regulatory system under EU rules may themselves, in the circumstances he has just described, want to go to the Court to demonstrate that they are abiding by the rules, and therefore ensure that the Republic or any other EU country cannot say, “We are not taking your goods”? That is in the interests of business in Northern Ireland, is it not?

[Stephen Farry]

Absolutely. I am grateful to the right hon. Member for reinforcing that point; there is a kernel of rationale as to why the provision is in the self-interest of Northern Ireland businesses. If the Government even slightly recognise that—without, perhaps, wanting overly to acknowledge it—that is indeed welcome. I hope that the Minister will expand on that whenever he speaks.

I want to make some closing comments on the democratic deficit. Of course, the largest democratic deficit we currently face in Northern Ireland is the fact that we do not have an Assembly, which means that we cannot do any self-government, pass any laws or strike a devolved budget, and there is money building up through Barnett consequentials to address the cost of living that cannot be allocated to help struggling households. That is the big democratic deficit that the people of Northern Ireland are talking about at present, not the intricacies of European law.

--- Later in debate ---

[Jim Shannon]

I am very pleased to be called to speak, Mr Evans. The Minister referred to the democratic deficit and clause 13, and that is what I want to focus on. I want to focus on the effect it has on my constituents in Strangford. I thank the right hon. Member for Chipping Barnet (Theresa Villiers) for her significant contribution, too.

I have informed the hon. Member for North Down (Stephen Farry) that I intend to refer to some remarks that were made yesterday. Yesterday, I listened to him as he told hon. Members in the Chamber what conversations took place—he seemed to know better than I did—between me and Lakeland Dairies. To go on the record, let me be quite clear: I have been assured not that Lakeland Dairies is for or against the protocol; rather that it looks at the issue of the protocol and simply wants to know how we intend to deal with it in this place, so it has the information to move forward.

I refuse to allow others in this place to misrepresent me and my relationship with one of the largest employers in my constituency of Strangford. It is also noteworthy that meetings took place on a regular basis between myself and Lakeland Dairies staff, because they understand that I am up to the case and up to the job of helping them. I have had meetings with Lakeland Dairies directors, the Minister here and Ministers in the Department for Environment, Food and Rural Affairs. They were quite clear where they are on those issues. So that is where we are, on the record.

I want to see a way that works for Lakeland Dairies, but also for the seed farmers in my constituency, for the small business person, for the dog owner and for the pharmacist. Lakeland Dairies is not against that either. It has stated an opinion on how its business is currently operating and wants to know how to continue to grow its incredible global enterprise. That should not be twisted by any Member, whether it be the hon. Member for North Down or any other Member.

[Stephen Farry]

I am grateful to the hon. Gentleman for giving way. It is perhaps useful to distinguish between what are two separate conversations. One is a business saying that, on how the protocol is addressed, it is pragmatic, open-minded or indeed that it does not take a position in that respect. Yesterday, we were having a very good separate discussion on dual regulation. I was articulating the views expressed quite openly by the Dairy Council. It is worth making clear that the authoritative information I have is that Lakeland Dairies is entirely in agreement with the stated public position of the Dairy Council.

[Jim Shannon]

For the record again, I repeat, and do so with authority: Lakeland Dairies has told me that whatever legislation is in place, if it assists the Bill to go through it will work with that, north and south, to make it happen—and that is the important point.

It is all very well for the hon. Gentleman to read off a bit of paper and say this group supports this and that groups supports that, but let me tell him something. He reads it off a bit of paper. The difference between him and me is that I live this every day. When it comes to knowing the difference between a field of barley and a field of wheat, do you know something? I know it because I live it. When it comes to knowing the difference between a cauliflower and a cabbage, I know it—I don’t read it on a bit of paper. When it comes to knowing the difference between a Friesian cow and a Dexter cow, I know the difference. You know why? Because I live it. The hon. Member just reads it on a bit of paper.

If you want to know the difference, Mr Evans, between a John Deere tractor and a Ford tractor, I know it because I live it every day. I do not read it off a bit of paper. With great respect to the hon. Gentleman, he can read it off a bit of paper and know nothing about it, but you can live it and know everything about it. That is the difference—

[Stephen Farry]

I’ve milked the cow!

[Jim Shannon]

Well, have you brought your wellies? He wants to go and buy himself a pair of wellies. Before he goes on to the farmer’s field, he’d better ask for the farmer for his permission.

I am quite concerned about how we are, so let me be rightly understood in the Committee today. The protocol can undoubtedly work for some—I have never said that it does not—but the fact of the matter is that the majority of individuals who have approached me in my constituency have told me that it does not work for them and their businesses.

If the hon. Member for Belfast South (Claire Hanna) was here, I could ream off to her, if she had the time and the patience to listen to me, perhaps 100 businesses in my constituency that are impacted by it. They have told me that it does not work for them or their businesses. I believe that to be replicated in other constituencies. In my intervention on the right hon. Member for Chipping Barnet, I referred to businesses in South Down and West Belfast. I mentioned another one yesterday. Again, the hon. Member for North Down ignored it as if it did not matter, but it matters to me because a constituent of mine is involved.

Sam McChesney, who was on “Countryfile” on Sunday night, said that the protocol as it is at this moment impacts greatly on him, and on his cattle and his sheep. He cannot take his cattle across to the markets in Carlisle and the rest of north England or in Scotland without a financial equation being involved. Just for the record, he happens to be a member of the Ulster Farmers Union, as am I—I declare that as an interest. The hon. Member for North Down can read things off a bit of paper and hold up some names, but he does not know it because he has not lived it, unlike we who understand the agricultural business and who speak to the farmers.

I spoke to farmers on the 12th day; they happened to be in my lodge, Kircubbin LOL 1900—true blues they are, just for the record. They were telling me their thoughts on the Northern Ireland protocol and why they want it changed. When we live with them, understand them, socialise with them, and are members of a lodge with them, then when they tell us what their problems are on the farm, we know it because we live it—we don’t read it off a bit of paper. That is the issue for me; I just want to put it on the record.

I also have concerns about the 300 hours spent by the EU not to find a solution—if only that were the case—but just to be obstinate and awkward, and never at any stage to have it in mind to deal with this.

I want to ask the Minister some questions because yesterday I met people involved in the pharmaceutical business; I will be happy if he can come back to me at a later stage with answers. Should the Northern Ireland Protocol Bill pass, can the Government confirm that the regulation of all medicines, health technologies and vaccines in Northern Ireland will fully and exclusively fall under the remit of the UK Medicines and Healthcare Products Regulatory Agency as the primary assessor and regulator, and no longer under the European Medicines Agency, as is currently the case? I want to make sure that what I am looking for and what they asked me to ask about is in place. They also seek confirmation that in such an eventuality all pharmacovigilance reporting for drugs, medicines and vaccines will thus transfer fully and exclusively to the UK MHRA.

Similarly, can the Government confirm that should the Bill become law the testing and batch release of relevant health technologies and vaccines will fully and exclusively fall under the UK National Institute for Biological Standards and Control, and that the European official medicine control laboratories network will no longer have any responsibility for Northern Ireland? Can it subsequently be confirmed that the requirements under the falsified medicines directive, which includes products having to be serialised and barcoded for decommissioning, will also no longer be required for Northern Ireland, as is already the case for the rest of the UK?

Importantly, pharmacies and pharmaceutical companies are asking for the same thing that the agricultural representative bodies that I referred to earlier are looking for: an explanation of the transitional arrangements and preparations that have been made and an account of what guidance will be issued to urgently bring clarity. Most businesses understand the nature of this Bill, but they need to know that they will have useful information from day one and not be left uncertain, as they have been in recent days.

Certainty is the order of the day: certainty that Northern Ireland can trade with her biggest market; certainty that Northern Ireland citizens can access the same medicines as the rest of the United Kingdom; certainty that farmers can get seed potatoes from, or sell their beef to, their biggest market, the UK mainland; certainty that people can take their dog on a staycation trip to Scotland without a costly pet passport; certainty that they can see their Amazon order delivered without a message telling them the seller will not post outside the United Kingdom because they think Northern Ireland is not part of the United Kingdom; certainty that they can order dog biscuits, frames or plastic flowers from their supplier without needing to fill out paperwork for each colour of each flower, which shows how absurd the EU is and why this Northern Ireland Protocol Bill needs to be law, giving us in Northern Ireland the same opportunities as the rest of the United Kingdom; certainty that our Chancellor and Government in this House can progress state aids which are currently being withheld from the people in Northern Ireland struggling with the price of daily living; certainty that the Unionist voice in Northern Ireland in terms of the upholding of the Belfast agreement is on equal footing with the nationalist voice, facilitated in this House by the SDLP and Alliance party pan-nationalist front, which is aided, disappointingly, by some on the Labour Benches—there are some that do not, but there are some that do; and certainty that, unless the people of the Province determine otherwise by a democratic specific vote, we still have the right to call ourselves as British as Finchley, as Margaret Thatcher once famously said.

This Bill is not perfect, but it starts a journey back to certainty that every single person in Northern Ireland deserves. I ask that we do the right thing.

I will refer briefly to clause 18 and the amendments tabled by SDLP and Alliance party Members, including amendments 46, 48 and 49. Despite the fact that all those Members have sat in the Northern Ireland Assembly and that they are intelligent and thoughtful individuals, there seems to be a grave misunderstanding about the role of this House in legislating through the Bill. It is not for the Northern Ireland Assembly to circumnavigate the decisions of the Minister as they pertain to individual protocol issues. Those Members should well understand the role of this House in rectifying the complete override of this House that was caused by accepting the role of a foreign power in Northern Ireland—namely, the EU: that insatiable giant that soaks everything up and takes all the goodness away. Its power was abused to punish the temerity of the British people for seeking to withdraw from Europe. We wanted to withdraw from Europe, and the Bill would give us the same authority and make me as British as Members on the Government Benches.

--- Later in debate ---

In conclusion, I oppose the amendments. I oppose the rationale behind them by the pan-nationalist front of the SDLP, the Alliance party and some Labour party Members here. The Bill must be passed. The time for Northern Ireland to pay the price has come to an end. Members should do what they constantly ask us to do: accept the will of the people and work in this place get the best for their individual constituencies and our wee nation in this United Kingdom of Great Britain and Northern Ireland.

[Stephen Farry]

On a point of order, Mr Evans. Will the hon. Gentleman reflect on the use of the term “pan-nationalist front”? I appreciate that this is a heated debate, but I understand that there have been multiple pieces of guidance on the use of temperate language. The use of the term “pan-nationalist front” has led to people being put under threat of their lives. It is a dangerous concept that implies that both my party and the SDLP are somehow in league with other nefarious forces who are trying to do certain things to people. I am sure that the hon. Gentleman would not like me to refer to the “pan-Unionist or loyalist front” for exactly the same reason.

--- Later in debate ---

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

It is a pleasure to see you in the Chair, Dame Rosie. I am grateful to the Minister for the constructive approach he has taken, as always, and I am grateful, too, to the Ministers in the Northern Ireland Office, particularly the Minister of State, my right hon. Friend the Member for Bournemouth West (Conor Burns), who is not in his place. He has been very helpful in a number of discussions we have had. I welcome my right hon. Friend the Secretary of State to his place for the first time in the Chamber.

The reason behind my two amendments, 2 and 47, was well rehearsed on Second Reading and on the first day in Committee, so I do not seek to repeat that. As the House, and my hon. Friends on the Treasury Bench, know well, I have misgivings about the Bill, as do a number of right hon. and hon. Members, and I cannot say that that has changed. My right hon. and learned Friend says that amendment 47 is unprecedented. With respect, it is unprecedented for regulations to breach international law; that is why I tabled the amendment. However, he and I, and everyone in this House, hope that we will never get to that stage; of course, by far the best outcome would be for negotiated changes to the protocol, which we all want, to be brought into force. Those with whom I have engaged, on both sides of the Irish sea, have good will and are men and women of honour; I hope that that will enable us to find a window for that negotiation, if the Bill passes its stages in this House.

Of course, the Bill would then go to the upper House. As the Bill was not in an election manifesto, that revising Chamber will be entitled to look with considerable care at the issues that I and others have ventilated in these debates. The best outcome would be if that never became necessary, for the reasons that we have all rehearsed.

I have set out the caveats, have said where I hope this matter will go, and have said that it will be troubling if the Bill needs to go through the whole parliamentary process and ever needs to come into force; I hope it is made redundant by a negotiated change. In that spirit, I will not press my amendments to a Division.

[Stephen Farry]

I will speak to my amendment 3, and some others. The Bill is notionally about the good of Northern Ireland, but we cannot escape the reality: it is not supported by the majority of people or businesses in Northern Ireland, which rather prompts the question: why is the Bill going forward, if it is so unwanted there, and is seen as damaging to the wider community and the economic life of the region?

We could discuss consent to Brexit and the protocol, and how we got here, but I will not give into that temptation. I will focus on consent to where we are on the Bill. Brexit, the protocol and any modifications to it are matters for the UK Government and the European Union to work through in negotiations. Northern Ireland is not directly party to those negotiations. The issue of the consent of Northern Ireland, and specifically the Assembly, is recognised in article 18 of the protocol. I believe that was inserted into the protocol at the insistence of the UK Government, rather than the European Commission, so the Government have recognised the importance of the views of the Assembly.

The Government talk about the importance of Unionist concerns, and of getting some degree of cross-community consent, but the bottom line is that the Government are working towards a minority agenda. It is fine to have a debate about whether the aim should be majority consent or cross-community consent, particularly in the context of a divided society, but I am not aware of any democratic society in the world where progress is based on the views of a minority.

[Sir Jeffrey M. Donaldson]

Northern Ireland.

[Stephen Farry]

Well, obviously, that is about to happen in Northern Ireland, if the Bill goes through its stages. We cannot escape the reality that a majority of MLAs have signed a letter making it very clear that they do not support the Bill. I urge all Members of this House, and of the House of Lords, to respect the views of the people of Northern Ireland, who have a direct mandate. Obviously, we have a group of MPs here who represent Northern Ireland, though some of them do not take their seats, which is regrettable. The views of the DUP are not the views of Northern Ireland. Of course, we have to address the views of the DUP, alongside the views of others, in trying to find a way forward, but it is not consistent with democracy to allow that view to dictate what happens to the overwhelming majority of people in Northern Ireland.

[Gavin Robinson (Belfast East) (DUP)]

I have listened to the hon. Member outline to the Committee that the majority of people in the Northern Ireland Assembly are against the Bill. We hear him say that he recognises there are issues that need to be resolved, yet he was fully supportive of the Northern Ireland protocol and talked about its full implementation. He was supportive of New Decade, New Approach in 2020, yet he was against the provisions within it on the UK internal market. His party was against the United Kingdom Internal Market Act 2020, against triggering article 16 when the conditions were met and outlined in the White Paper, and now against this Bill. When are we going to get to the stage where we actually resolve the issues in Northern Ireland?

[Stephen Farry]

There is a lot in that intervention. I hope that I can address the hon. Member’s points in order. I have been consistent throughout this process in recognising that there is a need for pragmatism, but the bottom line has to be that outcomes are mutually agreed between the UK and the European Union, and they have to be sustainable and legal solutions. I very much supported New Decade, New Approach; I did not support the UK Internal Market Act, because that diverged from that. Of course I want Northern Ireland to have full access to Great Britain and Great Britain to have access to Northern Ireland, and to reduce the impediments as far as possible.

We have discussed at length on many occasions a range of constructive proposals to address the issues, including the red and green channel proposal, which can only be delivered through negotiations, and wider sanitary and phytosanitary measures—preferably a wider UK-EU veterinary agreement—to address movements across the Irish sea. Those are pragmatic solutions that would address the vast bulk of the issues raised by businesses, as opposed to the ideological matters of sovereignty spoken about by people in here or elsewhere in Great Britain; that is an important distinction to make. I regret to say that at various times, such solutions—particularly the veterinary agreement—have been rejected by Unionism, and I confess that I find that bizarre.

There are some genuine concerns about the implications of the Bill. There are major implications for Northern Ireland’s economy, particularly for the ability of businesses to access the single market. There are also implications for the UK as a whole. The UK’s international image will take an even further hit from breaking international law and undermining the rules-based international order, at a time when that is so important whenever we are facing down Russian aggression against Ukraine, and other countries around the world are potentially breaching international law—I am looking at China in particular, among a number of other situations.

The UK is also risking economic retaliation from the European Union, which I do not want to happen, but is a genuine risk if this legislation passes. At a time of major economic pressure in the UK as a whole, it is bizarre that anyone would seek to make the situation worse through a trade confrontation with the European Union.

It is absurd for people to vote for and proceed with the passage of the Bill—to take all that pain and those consequences—in the name of doing Northern Ireland a favour, when the majority of people and businesses in Northern Ireland do not believe it is a favour; indeed, they believe it is incredibly harmful. The Government have acknowledged that the Sewel convention should apply to this legislation, but also recognise that, unfortunately, in the absence of an Assembly, that becomes moot.

We are in a chicken and egg situation. The Government are saying, “We can’t talk about consent of the Assembly in the absence of the DUP,” but want the Bill to get the DUP back into power sharing. Of course, if amendment 3 were accepted, there would be a huge incentive for the DUP to go back into power sharing in order that eventual consent or otherwise could be considered by the Assembly, if warranted. There is a certain inbuilt incentive to put that challenge to return to the DUP.

My amendment would essentially link commencement of the Bill to the democratic vote in the Northern Ireland Assembly. We can discuss whether that should be a majoritarian vote or a cross-community vote in the Assembly, but either would be far better than a situation where we have a minority dictating an outcome. There is, in theory, an article 18 vote scheduled for 2024, and that covers the continued application of articles 5 to 10 of the protocol. That vote will become null and void if the Bill is passed and implemented, and in particular whenever large aspects of article 5 have become excluded provisions. Indeed, the Bill goes even further; it even allows Ministers to do away with article 18 votes on a legal basis, so that the views of the Assembly in 2024 could be absolutely taken away.

The amendment would ensure that the democratic voices of the people of Northern Ireland, as expressed through the Northern Ireland Assembly, were taken into account. If the Bill is genuinely about the good of Northern Ireland, respect will be given to the views of the Assembly.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clauses 21 to 23 and 25 ordered to stand part of the Bill.

Clause 26

Extent, commencement and short title

Amendment proposed: 3, in clause 26, page 15, line 44, at beginning insert “Provided that the Northern Ireland Assembly has first passed a resolution indicating support for this Act,”

This amendment, together with Amendment 4, will make all operational aspects of the Bill dependent upon the approval of the Northern Ireland Assembly.—(Stephen Farry.)

Question put, That the amendment be made.