With permission, Mr Speaker, I will make a statement on the Government’s approach to implementing the Northern Ireland protocol as part of the withdrawal agreement with the European Union.
The protocol exists to ensure that the progress that the people of Northern Ireland have made in the 22 years since the Belfast/Good Friday agreement is secured into the future. The Belfast agreement is built on the principle of consent. It was ratified by referendums in both Northern Ireland and Ireland, and the agreement is crystal clear that any change in the constitutional position of Northern Ireland within the United Kingdom can come only if the majority in Northern Ireland consent to any change.
The vital importance of consent is recognised in the provision for any alignment in the protocol to be disapplied if Northern Ireland’s political representatives conclude that it is no longer desirable. Embedding that recognition of consent in the protocol was intrinsic to its acceptance by the Government. Therefore, for the protocol to work, it must respect the needs of all Northern Ireland’s people, respect the fact that Northern Ireland is an integral part of the customs territory of the UK, and respect the need to bear as lightly as possible on the everyday life of Northern Ireland.
Although there will be some new administrative requirements in the protocol, these electronic processes will be streamlined and simplified to the maximum extent. As the European Commissioner’s own negotiator, Michel Barnier, has spelled out, the protocol’s procedures must be as easy as possible and not too burdensome, in particular for smaller businesses. As is so often the case, but not always, Monsieur Barnier is right. The economy of Northern Ireland is heavily dependent on small and medium-sized enterprises. Subjecting traders to unnecessary and disproportionate burdens, particularly as we wrestle with the economic consequences of covid-19, would not serve the interests of the people of Northern Ireland, for whom the protocol was designed. The protocol text itself is explicit that implementation should impact as little as possible on the everyday life of communities.
In that context, it is important for us all to recall that the clear majority of Northern Ireland’s trade is with the rest of the United Kingdom, so safeguarding the free flow of goods within the UK’s internal market is of critical importance to Northern Ireland’s economy and people.
Today, we are publishing a Command Paper that outlines how the protocol can be implemented in a way that would protect the interests of the people and the economy of Northern Ireland, ensure the effective working of the UK’s internal market, and also provide appropriate protection for the EU single market, as well as upholding the rights of all Northern Ireland’s citizens. Delivering on these proposals will require close working with the Northern Ireland Executive, underscoring once again the significance of the restoration of the Stormont institutions in January. I would like to put on record my gratitude for the constructive approach that has been shown by Northern Ireland politicians, including the First Minister and Deputy First Minister, as well as by hon. Members from across this House.
There are four steps we will take to ensure the protocol is implemented effectively. First, we will deliver unfettered access for NI producers to the whole of the UK market. Northern Ireland to Great Britain goods movements should take place as they do now. There should not be export declarations or any other processes as goods leave NI for GB, and we will deliver on unfettered access for Northern Ireland goods through legislation by the end of this year.
Secondly, we will ensure that there are no tariffs on goods remaining within the UK customs territory. In order to ensure that internal UK trade qualifies for tariff-free status, there will need to be declarations on goods as they move from Great Britain to Northern Ireland, but these systems will be electronic and administered by UK authorities. It will be for our authorities to determine any processes that are required, using the latest technology, risk and compliance techniques to keep these to an absolute minimum.
That will also allow us to deliver on our third key proposal, which is that implementation of the protocol will not involve new customs infrastructure. We acknowledge, however, as we have always done, that on agrifood and live animal movements, it makes sense to protect supply chains and the disease-free status of the island of Ireland, as has been the case since the 19th century. That will mean some expansion of existing infrastructure to provide for some additional new processes for the agriculture and food sector, but these processes will build on what already happens at ports such as Larne and Belfast, and we will work with the EU to keep these checks to a minimum, reflecting the high standards we see right across the UK. There is no such case, however, for new customs infrastructure, and as such there will not be any.
Fourthly, we will guarantee that Northern Ireland businesses will benefit from the lower tariffs that we deliver through new free trade agreements with third countries. This ensures that Northern Ireland businesses will be able to enjoy the full benefits of the unique access that they have to the UK and EU markets.
These four commitments will ensure that, as we implement the protocol, we give full effect to the requirements in its text to recognise Northern Ireland’s place in the UK and in its customs territory. As we take the work of implementation forward, we will continue to work closely with the First Minister and the Deputy First Minister, with Northern Ireland MPs from across parties, and with the business community and farming groups that have provided such valuable feedback for our approach.
Of course, we have already guaranteed, in the “New Decade, New Approach” deal, that the Northern Ireland Executive have a seat at the table in any meeting where Northern Ireland is being discussed and the Irish Government are present. Alongside that, there will be a new business engagement forum to exchange proposals, concerns and feedback from across the community on how best to maximise the free flow of trade, and we will ensure that those discussions sit at the heart of our thinking.
We recognise that there will be a wide range of voices and responses to our Command Paper. We will listen to these respectfully while we continue to put our own case with conviction at the Joint Committee. Our approach will of course continue to be informed by extensive engagement with businesses, politicians and individuals right across communities in Northern Ireland. We stand ready to work with the EU in a spirit of collaboration and co-operation so that a positive new chapter can open for Northern Ireland and its people in every community, and it is in that spirit that I commend this statement to the House.
I thank the Minister for advance sight of his statement and the Command Paper.
During the election campaign, the Prime Minister told Northern Irish businesses that if they were asked to fill in any extra paperwork, they should call him personally and
“I will direct them to throw that form in the bin”.
On 22 January, when the Prime Minister was asked in this House whether that meant unfettered access between Great Britain and Northern Ireland, and Northern Ireland and Great Britain, he said: “Emphatically it does.” But today, for the first time, the Command Paper states that there will be “some new administrative requirements”.
Checks on animals and agrifood will be a significant escalation of what currently takes place and will mean a border management system that is quite new in terms of its scope and scale. The document published today states that we will need to
“expand some existing entry points…to provide for proportionate additional controls.”
Will the Minister confirm what proportion of animal and agrifood products he expects will require additional physical checks? Will those checks take place at ports in Northern Ireland? Physical checks require a product to be taken off the lorry, opened, inspected, tested and quarantined until deemed legitimate. That is quite a burden. Can the Minister confirm that there will be physical checks, or, indeed, that there definitely will not be physical checks?
The document published today states that
“some new administrative process for traders,”
“electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”
This is no small matter. Import declarations can require 40 separate data points, and Her Majesty’s Revenue and Customs has estimated that each declaration for shipment will cost between £14 and £56. Can the Minister confirm the number of checks and the costs of those checks to businesses? For the 1.8 million goods vehicles that crossed from Great Britain into Northern Ireland last year, that certainly adds up.
On tariffs, the Government have previously promised that there would be no tariffs on goods traded either way between Great Britain and Northern Ireland. Indeed, they have said that there will be no tariffs, fees or charges or quantitative restrictions. But today, for the first time, the Government have accepted that there will be tariffs on goods entering Northern Ireland. The Command Paper says that
“goods ultimately entering Ireland…or at clear and substantial risk of doing so, will face tariffs.”
So can the Minister say who will be levying or administering those tariffs, what “clear risk” means, and who will define it? Could tariffs be applied and later reimbursed, and if so, what would the timetable for that be? The Command Paper says:
“We will produce full guidance to business and third parties before the end of the transition period.”
That does not give much time for businesses to prepare for what could be quite profound changes.
The Minister says that goods moving from Great Britain do not need to be checked because the majority will remain in the UK. This is a hugely important point. Indeed, 70% of goods that flow from Great Britain are destined for the high street. I hope that a way forward can be found so that those goods can move freely. However, the Command Paper accepts that
“some new administrative process for traders, notably new electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”
will apply. So can the Minister confirm that that will include rules of origin checks, safety and security checks and import declarations, and if so, where and how will those checks take place? There is no mention in the document published today of a trusted trader scheme, which is surely essential for ensuring the free flow of goods without tariffs from Great Britain into Northern Ireland that we all want to see.
We welcome this statement, but it does expose the broken promises made by the Prime Minister. Today, for the first time, there has been an admission that there will be additional checks and that there will be tariffs on goods at risk of entering the single market. Even now, many fear that the Government are not willing to admit the full extent of those. We have seven months to get this right, and we must.
I am grateful for the welcome that the hon. Lady gives to the approach that we are taking, and grateful also for her commitment and her party’s commitment to supporting the implementation of the protocol in a way that safeguards the gains of the Good Friday agreement.
The hon. Lady says that as a result of the implementation of the protocol there will inevitably be checks on not just animals but agri-food products, but, as she is aware, those checks already exist for live animals. Checks are already carried out in the port of Larne and the port of Belfast. We will of course exercise any new checks on agri-food products in a proportionate way, but in doing so we imagine that the proportion of goods that will need to be checked will be very minimal. Of course, because of the very, very high standards that we will maintain in this country on SPS—sanitary and phytosanitary—matters, people can have absolute confidence that the quality of goods that are being placed on the Northern Ireland market is of the highest level.
The hon. Lady asked about the cost of the checks. We will be working with HMRC in order to ensure that the checks are as light-touch as possible and integrated, for example, into the operation of VAT returns and other processes with which businesses are already familiar. We are confident that Northern Ireland’s businesses and HMRC can work collaboratively in the course of the remaining seven months before the transition period ends in order to have a system that is operational, light-touch, effective and unobtrusive.
The hon. Lady makes a point about tariffs. Of course, tariffs would apply only in the case of there being a zero-tariff, zero-quota free trade agreement with the European Union. The European Union is committed in the political declaration to securing such a zero-tariff, zero-quota arrangement, in which case the provisions in the protocol for the remittance of tariffs would not be required. I refer her to paragraph 27 of the Command Paper, which makes it clear that if it were the case that there were no agreement and that tariffs did have to be levied, the Government would
“make full use of the provisions in the Protocol giving us the powers to waive and/or reimburse tariffs on goods moving from Great Britain to Northern Ireland, even where they are classified as ‘at risk’ of entering the EU market.”
So there would be no additional costs for businesses.
The approach that we have taken, as the hon. Lady knows, is designed to ensure the maximum level of security for the businesses of Northern Ireland. If the protocol is implemented in line with our approach, that means that they will have unfettered access to the rest of the UK’s internal market and also free access to the EU’s single market. That is a great prize and one that I believe all businesses in Northern Ireland would want us to help them to grasp.
I am grateful to my right hon. Friend for his statement. Will he confirm that, as from 1 January 2021, Northern Ireland —that is, a part of the United Kingdom—will be required to abide by EU regulations on certain goods until at least 2024 and potentially indefinitely?
I am very grateful to my right hon. Friend for her question. Let me take this opportunity to pay tribute to her for her work during her time as Prime Minister to ensure that the position of Northern Ireland could be secured within the United Kingdom even as we left the European Union. It is the case that there will be EU regulations and aspects of the acquis that will apply in Northern Ireland until 2024, but of course she draws attention to a very important point. If the workings of the protocol are viewed by the people and parties of Northern Ireland as onerous, too much, intrusive and unacceptable, they have the opportunity to vote them down in 2024. That is why it is so important that we design an approach that can continue to command consent.
Ninety seconds? Thank you, Madam Deputy Speaker.
Today, we seem to be presented with another episode of Schrödinger’s border—one that is both there and not quite there, all dependent on what side of the EU negotiations a person happens to be on. UK Ministers have repeatedly said that there will be no border or any checks down the Irish Sea. We now know that that is not exactly the case, as we heard in the last response. From the very beginning, the possibility of that was crystal clear given what is in the withdrawal agreement and the need for a level playing field between the EU and Northern Ireland. We all know that there will be customs checks between the rest of the UK and Northern Ireland, so why do the UK Government not just acknowledge that fact? The EU has said that there must be the introduction of customs procedures and formalities in Northern Ireland for all goods traded between Northern Ireland and Great Britain.
There have been no discussions about this with the Scottish Government, even though we will be placed at a competitive disadvantage with Northern Ireland because of these arrangements. We would give our national right hand to have the arrangements and competitive advantage that Northern Ireland will have, so why can we not get some of this if Northern Ireland does not want it?
These negotiations need skill, guile and dexterity, and I think we have seen again today a Government who are singularly not up to it.
Skill, guile and dexterity are all virtues that we associate with the hon. Gentleman, so if he wants to join the Government negotiation team, he would be more than welcome on board. The point about customs infrastructure and customs checks is a misunderstanding on his part. We want to ensure, as he recognises in his question, that the people and businesses of Northern Ireland have the opportunity to benefit both from their secure position within the United Kingdom and from access to the EU market. Northern Ireland’s history, its traditions and its geography put it in a unique position, but the proposal that we put forward today means that there is no need for new customs infrastructure and at the same time Northern Ireland stays within the customs territory of the United Kingdom. I know that the hon. Gentleman is an enthusiast for border posts and would want to have them not just at Belfast but at Berwick, but my own view is that our United Kingdom is better off without them.
If we are correct to presume that any paperwork will be digital, can my right hon. Friend assure me that there will be compatibility between the IT systems of HMRC and those of the European Union in order to ensure that that system can work swiftly and smoothly? He mentioned consultation in his statement. We have been hearing in the Select Committee inquiry on this important issue of precious little engagement with the business community by his Department. May I urge him to sharpen his pencil and engage with the community to ensure that it is understood and that his Department understands that most businesses are mostly focused on dealing with covid and trying to survive?
We will of course work to make sure that IT systems are efficient and compatible and consult with business. In fact, my right hon. Friend the Secretary of State has a business roundtable this afternoon. Engagement with Northern Ireland’s citizens and its many small and medium-sized enterprises is critical to making everything work.
We all hope there will be an exit agreement with the EU, but if there is not, how will the Government stop goods, such as cars made in the EU, which in those circumstances would attract a 10% tariff, from entering Great Britain tariff-free via Northern Ireland? The right hon. Gentleman has told the House that goods would have unfettered access moving from Northern Ireland to GB. Would there in fact have to be checks if people tried to do that?
The way the UK and the EU seek to address “Ireland’s unique geographic situation” in the negotiations could have constitutional and practical implications for Northern Ireland’s status within the UK. Could my right hon. Friend reassure me that he can square that circle, or is it, on the current trajectory of the talks, an impossible objective?
The Minister will be aware that we voted against the withdrawal agreement because of the Northern Ireland protocol, but we welcome the clarity that this statement brings—that Northern Ireland will remain part of the UK customs territory, that there will be no new customs infrastructure, that there will be no tariffs on goods flowing between Great Britain and Northern Ireland and that Northern Ireland businesses will have unfettered access to the Great Britain market. Will the Minister and his team continue to work with us and the business community in Northern Ireland to ensure that these matters are taken forward and that Northern Ireland remains an integral part of the UK single market?
Yes, we absolutely will. Our whole approach is about making sure that the protocol, which of course was unwelcome in many quarters in Northern Ireland, is implemented now that it is law, but in a way that goes with the grain of Northern Ireland opinion and reflects the interests of Northern Ireland’s peoples, whom the right hon. Gentleman so eloquently defends.
I welcome my right hon. Friend’s statement confirming Northern Ireland’s continued position as an integral part of the United Kingdom and customs territory and that he will deliver on the apparently contradictory demands of the protocol, which requires that the single market be respected and its integrity not damaged. The Alternative Arrangements Commission came up with very sensible suggestions that would conform with these requirements and square the circle through the use of enhanced authorised economic operators. Will he work with leading companies that ship goods across the Irish sea in both directions to set up trials in the next few weeks so that by the autumn, whether we have a free trade agreement or not, we are in a position to present the EU with a practical solution to ensure continued unfettered trade across the Irish sea in both directions?
My right hon. Friend, who was a brilliant Northern Ireland Secretary as well as a brilliant Secretary of State for Environment, Food and Rural Affairs, is absolutely right. Building up the capacity of authorised economic operators and other trusted traders can make the protocol and the economy of Northern Ireland work better.
The Minister has finally confirmed that there will be a large increase in the amount of red tape and therefore the costs to consumers and businesses in Northern Ireland. Although I welcome latterly from the Minister language around commitment to the Good Friday agreement, I do not believe the rhetoric in the statement reflects the uniqueness of the place. Does he accept that every divergence and further political choice that his Government choose to make in pursuit of castles in the air—trade deals with the United States—increases the checks required in the Irish sea and that the only way to ensure that there is no fettering and barriers to trade is to soften Brexit?
No, I do not accept that. The primacy of the interests of Northern Ireland’s businesses and indeed the primacy of Northern Ireland’s people is at the heart of our approach to implementing the protocol. The Good Friday agreement depends on consent across Northern Ireland, from Unionist, from nationalist and from non-aligned individuals. We want to ensure that their interests come first through the light-touch approach that we propose.
I welcome the Command Paper, but we now, as my right hon. Friend has said, need quickly to reassure the Unionist grassroots on their fears about the exact nature of the processes referred to, and nationalist and non-aligned voters who have serious concerns about leaving the EU. Above all, on business, I am not sure that we have got seven months. Businesses in Northern Ireland, as in the rest of the UK, have got their backs against the wall with covid. Please, please will my right hon. Friend use all his energy to work with them on exactly what they will need and a constructive approach with the EU to getting a practical solution?
Yes. I am very grateful to my right hon. Friend—we would not have able to make progress in this way if it had not been for him and the “New Decade, New Approach” document, which he was responsible for bringing to life in the Northern Ireland Executive, which he helped to restore. He is absolutely right: we have got to get cracking. That is why I hope that we will have positive engagement from the EU as well as the positive engagement that we will have with Northern Ireland’s businesses.
Last November, the Prime Minister told Northern Irish business leaders that there would be no forms, no checks, no barriers of any kind. He said that he would recommend that any such forms be put in the bin. Of course, the Secretary of State’s paper today does refer to new administrative processes and acknowledges the potential for them to be disproportionately burdensome. Does he therefore appreciate that the need for clarity on what the Government actually mean and how it might be implemented is yet another reason why we must have an extension to the transition period?
The arrangements that my right hon. Friend has described are potentially good news for businesses and consumers in Northern Ireland and a great opportunity, but may I press him on what he describes as very minimal checks? Does he mean the 4% of imports that are currently checked coming into the United Kingdom and the 1% that are physically checked? Does he mean more or less than that? Clearly, the European Union thinks that substantial checks will be required, presumably exceeding those levels, because it is setting up a bureaucracy in Belfast to cope with it.
My right hon. Friend makes a very good point about the number of checks that are currently required as goods move into the United Kingdom, often from jurisdictions that do not have such high SPS standards as we uphold. We will continue to have high SPS standards, so the proportion of physical checks required is almost certain to be fewer than are currently required for goods coming from outside.
The withdrawal agreement and its separate arrangements for Northern Ireland will always be offensive to Unionists, regardless of what allowances the Government try to make. Will the right hon. Gentleman give us an assurance that at least any of these arrangements will be totally in the control of the UK Government and not the EU, and that the Government will resist all attempts by the EU and the European Court of Justice to dictate how business regulations and human rights laws should be applied in Northern Ireland?
The right hon. Gentleman makes a very good point. It is the case that it is for the UK Government to be responsible for the application and delivery of the protocol. We are one customs territory; we are one United Kingdom; and it is in that spirit that we have said to the EU that we do not think it is a good idea for it to establish a new mission in Belfast because, again, as the right hon. Gentleman knows, that would be seen by many in Northern Ireland as unnecessary and not in keeping with the spirit of the Belfast agreement.
When I was in business in the 1990s, exporting all over the world, I just wanted to know what the rules were, then I would comply with them and then sell my goods. Could the Secretary of State assure the House that the rules will be made available to businesses in Northern Ireland at the earliest possible opportunity? Then they will get on with doing business.
Twice this year, I have come to Northern Ireland oral questions and asked both the Minister and the Secretary of State for Northern Ireland the same question: will there be checks? Twice I was told no, but now the Minister today is saying, yes, there will be checks in some form. Will his colleagues come to the House to correct the record and also to detail their assessment of the financial impact such checks are likely to have on the Northern Ireland economy?
There will not be any customs infrastructure and there will not, save in the specific example of agrifoods and products of animal origin, be the requirement for physical checks of the kind about which I believe the hon. Member has expressed concern. It will be the case that we will implement these principles in a way that has the lightest possible touch, so that Northern Ireland’s businesses—wrestling with covid-19—have the brightest possible future.
The whole point of the protocol is that it is part of the withdrawal agreement. We cannot have a no-deal scenario because the withdrawal agreement is a deal. However, in a spirit of generosity, I know what the hon. Member means: if we have an Australian-style trading relationship rather than a Canadian-style one, will the protocol apply? The protocol exists for just such an eventuality. As for bins, there will be no need for forms, because it will all be done electronically.
I welcome the insertion of “substantial” in the test of whether goods are at risk of further transit into the European Union. Will the Chancellor of the Duchy of Lancaster indicate how realistic he thinks it is that the Commission will agree to that insertion, and will he give us a progress report on the pragmatic development of what is considered to be a good at risk of further transit?
The hon. Gentleman knows that the majority of Northern Ireland’s trade is with the UK, a smaller proportion is with the Republic of Ireland and the amount of produce that goes from GB, through NI and into Ireland is very, very small, so we are taking a risk-based approach. We are saying to the European Commission, “We know that you want to safeguard the gains that Northern Ireland has made in the last 22 years, and one of the best ways to do that is to recognise that, in the same way as Chairman Mao said that the kingdom of heaven was upheld by both men and women, so the Belfast agreement depends on the support of both nationalists and Unionists.”
Yes. I think it was Margaret Thatcher who said that Northern Ireland was “as British as Finchley”, and that has always been my view. It is of course the case that the Belfast agreement recognises the particular history, traditions, geography and conflict that have existed in Northern Ireland, but the people of Northern Ireland have decided and voted consistently to remain part of the United Kingdom, and I celebrate that.
On resuming, the House entered into hybrid substantive proceedings (Order, 22 April).
European Union Withdrawal (Implementation Period) Bill
Presentation and First Reading (Standing Order No. 57)
Sir Edward Davey presented a Bill to require Her Majesty’s Government to seek a two-year extension of the implementation period under Article 132 of the Withdrawal Agreement; to repeal the prohibition on agreeing to such an extension under section 33 of the European Union (Withdrawal Agreement) Act 2020; and for connected purposes.
Bill read the First time; to be read a Second time on 12 June 2020, and to be printed (Bill 130).