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Customs Miscellaneous Non-fiscal Provisions and Amendments etc. (EU Exit) Regulations 2020

Volume 809: debated on Tuesday 19 January 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Customs Miscellaneous Non-fiscal Provisions and Amendments etc. (EU Exit) Regulations 2020.

Relevant document: 41st Report from the Secondary Legislation Scrutiny Committee

My Lords, we are here to discuss a further statutory instrument that is part of the Government’s package of SIs for the end of the transition period: the Customs Miscellaneous Provisions and Amendments etc. (EU Exit) Regulations 2020. This statutory instrument will be debated in the other place on Thursday. It came into force at the end of the transition period and is subject to the urgent “made affirmative” procedure. It has already taken effect, but still needs to be approved by both Houses.

Under the European Union withdrawal agreement and the Northern Ireland protocol, certain provisions of EU law continue to apply in Northern Ireland after the end of the transition period. In Great Britain, those same provisions are modified to reflect the fact that the UK has left the EU. Previous amendments to the relevant legislation applied across the whole of the UK. However, further changes were needed to address the specific arrangements for Northern Ireland. Noble Lords will be aware that the Secondary Legislation Scrutiny Committee reported the regulations as an instrument of interest in its 41st report, published on 14 January 2021.

The instrument amends and modifies three fields of legislation: legislation relating to customs safety and security procedures, including entry summary declarations and the registration of businesses for movements from Northern Ireland to Great Britain; application of the Customs and Excise Management Act 1979 and the Finance Act 1994 to movements between Northern Ireland and Great Britain for non-duty purposes; and it ensures that HMRC can continue to collect and process trade statistics data in the same way it did before the United Kingdom left the EU.

I will now turn to each topic in greater detail, starting with entry summary declarations. These declarations contain safety and security information about the movement of goods. Declarations must be submitted to HMRC, then risk-assessed before the goods arrive at the border. These assessments are used in conjunction with intelligence-led targeting by Border Force, to protect the security of the UK. This instrument removes the requirement for an entry summary declaration for the movement of “qualifying Northern Ireland goods” from Northern Ireland into Great Britain, in line with our wider commitments on unfettered access. It also retains the requirement of an entry summary declaration for the movement of “non-qualifying Northern Ireland goods” from Northern Ireland into Great Britain. Non-qualifying Northern Ireland goods include those that are not in free circulation in Northern Ireland—for example, those subject to customs procedures such as inward processing or that are in an authorised temporary storage facility—before they are moved to Great Britain. It also includes the trade of goods subject to specific obligations binding on the United Kingdom and the EU, such as endangered species or conflict diamonds.

These changes are necessary to allow safety and security declaration requirements to be maintained for non-qualifying Northern Ireland goods moving into Great Britain from Northern Ireland, while simultaneously allowing appropriate Northern Ireland traders to maintain unfettered access to the rest of the United Kingdom market. Anti-avoidance measures are also in place to deter businesses from rerouting goods via Northern Ireland if they do so in order to avoid United Kingdom duty or import formalities.

In addition, this legislation states that for goods arriving by sea from Ireland, the Channel Islands and other nearby ports, where an entry summary declaration is required, it must be submitted two hours before the vessel arrives at a port in Great Britain. Without this amendment, earlier submission would be required, which may be impractical given the duration of crossings. It also aligns the declaration time limits to those already in place for the same sea movements in the opposite direction.

This instrument also requires economic operators to obtain a UK economic operators registration and identification number—otherwise known as a UK EORI number—to move non-qualifying Northern Ireland goods from Northern Ireland to Great Britain. An economic operator is a person who, through the course of their business, is involved in customs activities covered by customs legislation. It is necessary for these operators to have a UK EORI number starting with GB to make declarations or get a customs decision in Great Britain. Registration is quick and simple and an EORI number will usually be issued straightaway. This instrument also ensures that penalties apply to failures to comply with the requirements to submit an entry summary declaration, including the need to be registered for a UK EORI number.

I turn to the second area of legislation covered by this statutory instrument: the regulations relating to the Customs and Excise Management Act 1979, otherwise known as CEMA, and the Finance Act 1994. First, CEMA provisions that relate to movements between the Republic of Ireland and Northern Ireland are revoked by this instrument. This is because EU rules concerning the movement of goods continue to apply to these movements under the Northern Ireland protocol. Secondly, this instrument allows CEMA enforcement powers—for example, the ability to seize and detain goods—to be used for enforcing prohibitions and restrictions on the movement of goods, people and vehicles between Great Britain and Northern Ireland, where there is no connection to customs duty.

This instrument also ensures that the enforcement provisions in Part I, Chapter 3 of the Finance Act 1994 can be used in relation to the export of restricted or prohibited goods, as appropriate. These include HMRC’s powers to require the production of documents, to remove documents and to enter premises. This applies in Northern Ireland for the movement of goods from Northern Ireland to Great Britain.

Finally, I turn to trade statistics. This instrument makes minor amendments to the law on statistical data collected on the trade of goods between the United Kingdom and members of the EU, to take account of the Northern Ireland protocol. This is important in order to meet international reporting requirements. This instrument ensures that the legislation works properly in Northern Ireland, where EU statistical rules will continue to apply as a result of the Northern Ireland protocol, and in Great Britain, where they will not. As a result, HMRC will be able to continue to collect and process trade statistics in the same way that it did before the United Kingdom left the EU.

These technical but important customs regulations are already in place. They will help ensure that goods continue to move smoothly and safely between Northern Ireland and Great Britain and that matters related to their movement can continue as anticipated. I hope noble Lords will join me in supporting these regulations. I beg to move.

My Lords, I am a member of the Secondary Legislation Scrutiny Committee which considered this instrument. It caught my attention not because I am in any way an expert on customs rules or the technicalities of these regulations but because it touches on the relationship between Northern Ireland and Great Britain post Brexit, which has been highly political and, I would argue, will be extremely sensitive in future.

It is only just over a year since the general election campaign, in which the Prime Minister declared before a group of Northern Ireland businesspeople that there would be no barriers to trade between Northern Ireland and Great Britain. This position was somewhat revised when Michael Gove presented the Government’s proposals for implementing the Northern Ireland protocol, when he said that there would be no checks between Northern Ireland and Great Britain, although there would inevitably be some checks the other way as a result of goods entering what would in effect be the EU single market.

It was then also stated that there was to be no customs border in the Irish Sea and no new infrastructure to enforce that border. As I understand it, £300 million or £400 million has been allocated to putting in place what can only be described as infrastructure, and therefore I really do not understand what the Government think their position is on this. Here we have a statutory instrument that specifically imposes some requirements and constraints on unfettered trade in goods between Northern Ireland and Great Britain—I am sure the Minister will confirm that. There are goods for which there will not be unfettered trade as a result of this instrument. When it is said that there would be no customs border, it sounds to me as though the second part of this instrument is actually putting in place regulations for a customs border. I should like to get some clarity about what is happening: is wool being pulled over someone’s eyes or is it not?

The entry summary declarations from Northern Ireland to Great Britain will be required only for non-qualifying goods. I have two questions here: how significant are these non-qualifying goods in terms of total trade, and, secondly, who makes the qualifying decision? Is it a question for the United Kingdom customs authorities or for the joint committee between the EU and the UK that is there to implement the protocol? Was this matter fully discussed at the committee before this regulation was laid?

I have a second point on the customs question. The great merit of the trade and co-operation agreement is that there are no tariffs or quotas on trade between the EU single market, including Northern Ireland, and Great Britain, except in two circumstances: first, where goods do not qualify under the rules of origin, and, secondly, were there judged to be offences against keeping the level playing field in place, as provided for in the agreement. In that situation, one side or the other can impose tariffs. The question then becomes: what happens to these customs regulations were tariffs to be imposed?

The Minister may say that this is an entirely theoretical question, but the truth is it is not, because, within days of the passage of the trade and co-operation agreement, the Government let it be known that they are launching lots of reviews of regulations and workers’ rights, and making lots of moves which could be interpreted by the EU as deregulation and could be thought to be offending against the principles of the level playing field. We may end up in a difficult situation quite quickly, unless the Government act with prudence.

My purpose in speaking is to ask the Minister—politely, I hope—what he thinks about my questions, but also for us to start thinking about what the consequences of all this will be for the Northern Ireland-British relationship and the future of the United Kingdom.

The noble Lord, Lord Bilimoria, has withdrawn from the speakers list. I call the next speaker, the noble Lord, Lord Dodds of Duncairn.

I thank the Minister for his speech explaining this piece of delegated legislation before the Committee this afternoon. If I may, I will follow up on some of the points made by the noble Lord in his speech just now.

I make the general point that this is another statutory instrument which, as a result of the protocol, will change regulations that have already been passed to apply to the whole of the United Kingdom to make special provision for Northern Ireland’s trade with the rest of the United Kingdom. I remind Noble Lords—and this is important—that no one in Northern Ireland ever gave their consent to this protocol, despite the promise in the EU-UK joint declaration of December 2017 that regulatory difference could happen only with the consent of the Assembly and the Executive. That was arbitrarily set aside. Since the protocol means that certain provisions of EU law will continue to apply to Northern Ireland, it is certainly not—and the Government would have to admit this—taking back control of our laws, borders and money, as far as Northern Ireland is concerned.

I will turn to some of the detail of this instrument. The Explanatory Memorandum states that

“this instrument comes into force at the end of the transition period. Royal Assent to the Taxation (Post-transition Period) Bill is, however, required before this instrument can be laid. This instrument will therefore be laid as soon as possible after Royal Assent to the Taxation (Post-transition Period) Bill.”

We are also told that

“The consequences of delaying this instrument by using non-urgent powers are that the amendments and modifications required to make changes to address the different regimes applying in NI and GB, and to deal properly with certain movements of goods between NI and GB would not be in place in time (that is at the end of the transition period).”

Given that the transition period ended on 31 December 2020, will the Minister clarify the precise legal position as of today, and indeed for the last almost three weeks? Have these regulations actually been in force from the end of the transition period? What has been the legal position, and what is the current legal position, prior to the approval of these regulations?

Will the Minister also set out the extent of the consultation there has been in relation to these new regulations? Have the Government had any discussions with the Northern Ireland Executive and relevant Ministers about its details and the implications of its provisions? The Explanatory Notes state:

“There is no, or no significant impact on business, charities or voluntary bodies.”

I find the assertion that there is no impact, or no significant impact, on business rather peculiar. I should be very grateful if the Minister would outline what consultation there has been with relevant businesses on the detail of this particular instrument, as opposed to general consultation with businesses on the general issues of the protocol. We know that there has been a lot of engagement with business on the general issue of the protocol, but on this particular statutory instrument and its implications, what has been the consultation process with businesses in Northern Ireland?

An entry summary declaration is required for the movement of goods from Northern Ireland to Great Britain where those goods are subject to customs duty under the Taxation (Cross-border Trade) Act 2018. If the goods are not subject to customs duty, no ENS is required. The Minister has confirmed that this means that customs duty is imposed only on non-qualifying NI goods. Those include things such as fluorinated gas and ozone depleting substances, hazardous chemicals, genetically modified organisms and so on. Can the Minister clarify for the Committee whether any other goods are subject to customs duty under Section 30C of that Act? To repeat a question asked by the noble Lord, Lord Liddle, what proportion of trade movements between Northern Ireland and Great Britain are likely to be caught by the provisions of this instrument?

I welcome the fact that the entry summary declaration can be lodged two hours before a ferry carrying goods from Northern Ireland arrives at the first port of entry in Great Britain. This shorter time limit for submission of the requisite information is of course welcome. Without it, there would be another wholly unnecessary burden for Northern Ireland businesses.

Regulation 4 provides that the registration and identification requirements, which the Minister referred to, that apply to movements into and out of Great Britain apply also to goods moving from Northern Ireland to Great Britain. Where these requirements apply and entry summary declarations are needed, can the Minister outline the form of these requirements and declarations? What will be the process for filling them out and the submission of declarations and other requirements? I presume that at the very least it will entail no extra paperwork and certainly no extra cost for business in Northern Ireland, as that would go against the unfettered trade between Northern Ireland and Great Britain that was guaranteed. It would also go against the declaration that the Prime Minister famously made to businesses in Northern Ireland when he said that, if such paperwork and so on was required, it should be thrown into the bin and the relevant businesses should ring him up. Therefore, I ask for a reassurance from the Minister that those guarantees will be in place for Northern Ireland.

These are technical regulations but they have significant implications, both economic and political, and they bear close examination. I am grateful for the opportunity to speak on them and to seek clarification today. If the Minister is unable to deal with all my questions this afternoon, I shall of course be happy to receive further explanation and elucidation by correspondence in due course.

My Lords, I add my thanks to my noble friend for presenting these regulations. My questions are not dissimilar from those that have gone before.

Are ENS declarations already happening? Is this a new form that has been devised, and will it be done digitally? Although I do not for a minute imagine that Hull will be the first port of call for goods coming from Northern Ireland, I was dismayed to learn—perhaps my noble friend will confirm that it is true—that HMRC has closed its offices in Hull. That begs the question: to what extent has HMRC closed its offices in other ports around the United Kingdom? It strikes me that having men and women on the ground at HMRC who can explain matters in good time to traders who will rely on the ENS is absolutely at the forefront of what HMRC should be doing. I do not know whether it is true that the HMRC offices in Hull have closed but it would be a matter of concern to me if they had.

I understand that the ENS will apply only to goods caught under Section 30C of the Taxation (Cross-border Trade) Act, and that goods that are not subject to a duty will not require an ENS. Looking at the list of non-qualifying Northern Ireland goods, which has been rehearsed by other noble Lords, I cannot imagine that many will fall into this category, but presumably my noble friend will be able to give us a forecast of the number of occasions on which the Government expect an ENS to be required. Like my noble friend Lord Dodds, I would be interested to know whether there will be an additional cost, or at least an additional time factor, in delivering these.

While it is welcome that a two-hour limit is imposed on the submission of an ENS applying to goods arriving in Great Britain by sea from the Republic of Ireland, how realistic is that? Given the time available between the statutory instrument being introduced and made effective by the end of the transition period, to what extent has training been given to those to whom this statutory instrument applies?

I may be wrong, but I cannot imagine that there will be rough diamonds, endangered species or persistent organic pollutants coming from Northern Ireland to the rest of the United Kingdom—or indeed GMOs, because I understand that we are not at this stage seeking to have a flood of GMO products coming in. I hope that does not change too soon. One reason why I think the Government are introducing this instrument is to ensure that Northern Ireland does not become the back door to Great Britain for some of these non-qualifying goods from the rest of the EU. It is probably difficult to say at this stage to what extent ENS will be used, but it would be very helpful to know what forecast and assessment my noble friend and his department, the Treasury, made prior to the statutory instrument taking effect.

Will the ENS be completed digitally? Since, for the most part, we have been in a customs union and a single market with the rest of the EU for the past 30 years—the single market since 1992 and the customs union for a good deal longer—I hope that my noble friend will confirm that some training and explanation have been given to exporters and importers to whom this will apply.

Can my noble friend explain for my greater understanding of the statutory instrument, which, as he said, is very technical, whether there will be two separate regimes: one for goods coming from Great Britain to Northern Ireland and another for goods going from Northern Ireland to Great Britain? That would be very helpful to know. With those few remarks, I would be very interested to hear my noble friend’s answers.

My Lords, I come to this subject with some degree of trepidation, because although I have focused for many years now on the overall shape of the UK-EU relationship, I am no expert on either trade processes or Northern Ireland. But I do know that there has been a great deception: the pretence that the EU ease-of-trade cake could be had as well as eaten, and the preposterous notion that leaving the single market and customs union meant a slashing of red tape. For here we are, facing reality—or rather, our benighted businesses face the reality of reams of form-filling, cost and delay. This reality is not “teething problems”; it is, as Michel Barnier reminded us, the new normal.

As my friend in the other place, Stephen Farry of the Alliance Party, said:

“Deeper challenges lie with Brexit itself and the nature of the UK-EU trade deal. They are being manifested across the UK. Northern Ireland is not alone in that respect.”

By that, of course, he means that Brexit entails friction across the UK; there is no escaping that fundamental truth. He went on to say:

“However, there are issues arising from the specific terms of and operational decisions around the Northern Ireland Protocol”,

because the protocol is a much blunter means to address the challenges of intra-UK trade post Brexit than the backstop.

The subject matter of this statutory instrument is paperwork for trade between Northern Ireland and Great Britain. People in Northern Ireland, both businesses and consumers, are suffering from what Ministers like to call “teething problems” but are in fact intrinsic to the arrangements that they have negotiated. Movement of goods across the Irish Sea is subject to red tape— customs safety and security procedures, including, in most circumstances, entry summary declarations, economic operator registration, enforcement powers and penalties for failure to comply—to address the different regimes applying in Northern Ireland and Great Britain. But the Government have behaved badly by not only stalling on a trade deal until 24 December for press management reasons, but denying for so long the reality of the fact that border controls had shifted to the Irish Sea. Because of those two factors, they failed to prepare properly.

Who can forget—the noble Lord, Lord Dodds, reminded us and I will do so again—that, in November 2019, the Prime Minister told businesses in Northern Ireland that they would “absolutely not” have to fill in extra forms, and that if any of them were asked to fill in such paperwork, they should telephone him

“and I will direct them to throw that form in the bin”.

I understand that, even today, Northern Ireland Secretary Brandon Lewis has claimed that empty shelves in Northern Ireland are due to coronavirus challenges, not Brexit. The continued tendency to bluster on this subject is deeply unhelpful. As my noble friend Lady Suttie said on 6 January in a debate on the Trade Bill:

“We are now beginning to see the realities of barriers to trade and of what the BBC has described as the ‘internal UK border’. We are also witnessing the consequences of doing a deal so much at the last minute that proper preparation for the business community in Northern Ireland was not really an option.”—[Official Report, 6/1/21; col. 173.]

The least the Government can do now is TO consult properly, actually listen, and be prepared to amend where they can if mistakes have been made—subject, of course, to the constraints of the withdrawal agreement and protocol and the trade and co-operation agreement.

I will say a brief word about timing. As the noble Lord, Lord Dodds, said, we are told in paragraph 3.1 of the Explanatory Memorandum:

“This instrument is being laid using the urgent procedure under the European Union (Withdrawal) Act 2018. The regulations introduced by this instrument will come into force at the end of the transition period.”

Obviously, they have been in force now for 19 days, so this debate is—how shall I put it?—not before time. The regulations arise solely out of the withdrawal agreement and its protocol on Northern Ireland, but those were agreed almost 11 months before this draft was tabled on 22 December, so why did it take so long?

I want principally to ask about consultation. Section 10 of the Explanatory Memorandum has quite a lot of blurb on the subject, including this:

“Consultation on the practical implications of the Protocol has taken place with businesses. Throughout the transition period, the NI Stakeholder Engagement Team (NISET) have consulted with a wide range of businesses and representative bodies who would be impacted.”

The following paragraphs elaborate. This general assertion may well raise the eyebrows of parliamentarians in both Houses on relevant committees, all of whom have complained vocally about the paucity of consultation over the past year. However, paragraph 10.1 of the Explanatory Memorandum makes the astonishing statement:

“No formal consultation regarding this instrument has taken place.”

In other words, despite the somewhat diversionary wording of the rest of Section 10, the nub is that, on these nuts and bolts, there appears to have been no consultation. Can the Minister tell us why that is so, and what he defines as “formal” in this context? Are the Government in fact saying that no consultation took place at all on the specifics covered by this statutory instrument?

I am afraid that the Government’s attitude is revealed by Section 12 of the Explanatory Memorandum, as also quoted by the noble Lord, Lord Dodds, where it is claimed:

“There is no, or no significant impact on business… The provisions do not introduce any requirement beyond what has already been agreed, or is a necessary consequence of what has been agreed in the Protocol.”

Surely, however, when it comes to trade, the devil is in the detail—otherwise why would there have been such uproar in the last 19 days leading, in the case of Scottish fishermen, to lorries in Westminster? If we are not to end up with the Northern Ireland Secretary blaming Northern Irish businesses for not filling in the right forms, as the Prime Minister has done with regard to exporters from Great Britain, careful consultation is essential.

These regulations are about goods moved from Northern Ireland to Great Britain, but I hope the Minister can tell us how the Government intend to consult properly not only with Northern Irish businesses but with those GB businesses with whom they are trading, and to learn from all their experiences ahead of the end of the three-month grace period, which extends only until the end of March. While the subset of challenges arising from the operation of the protocol, rather than from Brexit itself, relates in large part to very tight timescales for implementation and poor information, there is also a problem of lack of engagement from companies based in Great Britain about trade with Northern Ireland. What preparations are the Government taking now to ensure that current issues and problems do not reoccur after 31 March?

Lastly, can Minister explain how businesses will feed into the complicated and not very transparent governance arrangements for both the protocol and the trade and co-operation agreement, for example in the specialised committee for SPS measures?

In conclusion, Northern Ireland has been described by Professor Katy Hayward of Queen’s University Belfast as,

“this small but fragile region on the periphery of both”,

the UK and the EU. It is incumbent on the Government, for not only economic but political reasons, to take the greatest care not to put any more strain than the act of Brexit already regrettably does on this “small but fragile region”. Given the failure to consult specifically on this instrument, I am not persuaded that the Government are acting accordingly.

I hope that the Minister can give an assurance that, when there are structural problems that can be addressed only through flexible solutions being agreed by the UK Government and EU institutions, the Government will not be shy of arguing for those flexibilities. That does not mean invoking Article 16 of the protocol. Those pushing for such a remedy are offering a populist, ineffective and false solution. No major business organisation in Northern Ireland or beyond is calling for Article 16 on safeguards to be invoked. Outside the protocol, much unfinished business is still to be done to maximise potential to the Northern Ireland economy. The list includes access to EU free-trade agreements, which is particularly important to the agri-food sector; transit from Great Britain to Northern Ireland via the Republic of Ireland; data adequacy; the future of the all-Ireland service sector; and many others. We in my party, with our Alliance friends, will continue to raise these issues.

My Lords, I am grateful to the Minister for introducing this instrument, and to other noble Lords who have participated in this debate. As has been noted, the instrument was made in December under the urgent procedure. That is rarely desirable but, as the Explanatory Memorandum notes, it could not be laid until after the Taxation (Post-transition Period) Bill had received Royal Assent. We were all somewhat surprised when the Government announced that Bill at short notice, in a manner that suggested that they had only realised its necessity at the last minute. I hope that the Minister can assure us that, with a UK-EU trade deal now provisionally applied, we will return to the normal ways of conducting business.

While not directly relevant to this SI, conversations with colleagues have alerted me to the laying of other made-affirmative EU exit instruments over the Christmas period. In some cases, they appeared despite strong assurances that the relevant departments had concluded all their so-called day-one critical business well in advance of the House rising. Again, we understand the need of recent times. Going forward, however, we can all agree that fast-tracked primary legislation and the use of made-affirmative instruments should be far rarer than we have become accustomed to. I look forward to hearing the Minister’s thoughts on that.

Turning to the contents of the instrument, the Minister outlined the various changes introduced. They have, of course, now been in force for a little over two weeks. We would not have opposed this instrument had it been laid before Christmas and, given the legal chaos that would have resulted from this SI lapsing in February, we will certainly not do so today. I hope that the Minister can shed a little light on the operation of Regulation 5, which allows penalties to be applied if a business fails to comply with requirements in Regulations 3 and 4. Can he confirm the approach that the Government will take with such penalties? Given the lack of notice that many businesses have had, and the difficulties that some have experienced with the technological side of things, will there be a degree of leniency when determining whether to issue fines? If so, for how long? If not, will any special guidance be issued to those who consider appeals?

It may seem a minor point, but paragraph 3.2 of the Explanatory Memorandum notes that this instrument amends several small errors in the 2019 SI. On the one hand, we are glad that these errors were spotted and corrected before the end of the transition period. However, it is slightly concerning that such deficiencies still existed as late as 10 days before the end of the transition period. Is the Minister confident that the department’s chapter in the statute book is now as it should be, or can we expect further correcting SIs in the future?

While these provisions are not necessarily directly responsible, it is fair to say that certain aspects of trade between Great Britain and Northern Ireland have not operated as seamlessly as we had hoped. As my noble friend Lady Smith of Basildon noted during the repeat of an Urgent Question last week, the Government were warned well in advance of the potential for many of the difficulties that we have witnessed.

To put technical regulations in place is one thing—the sheer number of SI debates I have taken part in suggests that there is no shortage of technical regulations—but ensuring that IT systems work and that businesses are fully prepared for new ways of working amounts to a very different task. These are areas that we probed for many months, only to be told that we had no reason to worry. Regrettably, that complacency has resulted in difficulties for businesses on both sides of the Irish Sea. I end, therefore, by asking whether the Minister could use some of his speaking time to provide a general update on the situation regarding GB-NI trade.

I thank noble Lords for their well-considered and insightful comments during this debate. As I said earlier, these measures are necessary to address specific arrangements pertaining to Northern Ireland now that the transition period has ended. I will try to address the questions put forward by noble Lords.

The noble Lord, Lord Liddle, was modest in saying that he did not understand these trade regulations in detail. He displayed enormous knowledge, to my mind, so I will try to answer his questions. The joint committee agreement protects unfettered access, by ensuring that there is no requirement for export checks or declarations for Northern Ireland businesses moving goods in free circulation directly from Northern Ireland to GB. There are some limited exceptions when businesses need to submit an export declaration for the movement of goods from Northern Ireland to GB. The Government have published comprehensive guidance on these exceptions online to ensure that businesses have a thorough understanding of when to submit the export declaration.

As outlined in the Government’s Command Paper, there are no plans for any new bespoke customs infrastructure in Northern Ireland. Agri-food movements from GB to NI will be carried out at existing facilities and designations at NI ports. Expanded infrastructure will be needed at some of these sites for agri-food checks and assurance. The Government have collaborated with Northern Irish ports to agree on the utilisation of existing space and capacity, until infrastructure expansion has been completed. A full impact assessment has not been produced for this instrument, as an assessment was made of the impact of the then European Union (Withdrawal Agreement) Bill in 2019 and the Northern Ireland protocol.

The Government recognise that the priority remains to have a regime in place that strongly focuses on the benefits of unfettered access for Northern Irish businesses, and ensures that they have a competitive advantage over traders elsewhere in Ireland. That is what the second phase of unfettered access will provide, in the second half of 2021. Once delivered, it will ensure that benefits are conferred to genuine Northern Irish traders only. Goods coming from the EU or outside the EU to Great Britain via Northern Ireland will be regarded as imports and subject to controls.

The noble Lord, Lord Dodds, asked about timing and what has happened since leaving—post the transition period. On timings, Royal Assent to the Taxation (Post-transition Period) Act 2020 was required before this instrument could be laid. Section 2 of that Act inserted Section 30C into the Taxation (Cross-border Trade) Act 2018. This imposes a customs duty charge on the movement of goods from NI to GB if the goods are not qualifying Northern Ireland goods. It ensures that unfettered access is available only to appropriate NI traders and deters businesses from rerouting goods via Northern Ireland to avoid import formalities. The Taxation (Post-transition Period) Act received Royal Assent on 17 December last year; this instrument was then made on 21 December and laid on 22 December. The instrument came into force at the end of the transition period and has already taken effect, but still needs to be approved by both Houses.

No formal consultation on this specific instrument has taken place. However, the instrument, together with the Taxation (Post-transition Period) Act 2020, makes provisions in relation to the application of certain provisions in the protocol. Consultation on the practical implications of the protocol has taken place with businesses. Throughout the transition period, the NI stakeholder engagement team consulted a wide range of businesses and representative bodies who would be impacted. Consultation with businesses will continue.

Defining qualifying Northern Ireland goods is a matter for the UK, not for the joint committee. To this end, the Government laid a statutory instrument setting out the definition of qualifying Northern Ireland goods—statutory instrument 2020/1454. A qualifying Northern Ireland good is one that is eligible for unfettered access to Great Britain. Goods will be qualifying Northern Ireland goods from 1 January 2021 if they are in free circulation in Northern Ireland—that means not under a customs procedure or in an authorised temporary storage facility before they are moved from Northern Ireland to Great Britain. The Government will focus the benefits of unfettered access on Northern Irish businesses and ensure that we have a competitive advantage over traders elsewhere.

The Government have been unequivocal in our commitment to unfettered access for Northern Ireland goods moving to the rest of the UK market, and there will be only very limited exceptions to this. This instrument simply ensures that the requirement for entry summary declarations for non-qualifying goods moving from Northern Ireland to Great Britain is retained. This is in line with the requirement for goods imported into Great Britain from the EU and outside the EU.

I was asked about paperwork and costs. In practice, safety and security declarations are made into the same system used for other goods arriving into GB that attract a safety and security requirement. The data required for an entry summary declaration includes fields such as mode of transport, description of the goods and routing information. Traders may use an intermediary to complete safety and security declarations for them. To avoid disruption and facilitate continuity, the Government have introduced a waiver for ENS requirements where such requirements would not have existed before the end of the transition period. This means that there is no requirement for entry summary declarations to be submitted for the movement of non-qualifying EU goods from Northern Ireland to Great Britain until 1 July 2021. This SI does not affect that waiver.

My noble friend Lady McIntosh asked similar questions about ENS: can they be made electronically? These declarations can and are being submitted digitally. They will be made into the safety and security GB system, the same system used for other goods. This instrument retains the requirement of an entry summary declaration for the movement of non-qualifying goods. She asked about training. HMRC and other departments have undertaken a significant programme of ongoing communication and engagement to inform traders of new requirements and to support preparedness. The two-hour time limit requires traders to submit their entry summary declaration a minimum of two hours before arrival to GB, but this two-hour period includes time taken on the journey, so, in practice, will not come about much before traders arrive at ports.

My noble friend is worried that this might provide a backdoor entry into GB for non-qualifying goods. To prevent traders seeking to abuse unfettered access in the first place, it is accompanied by anti-avoidance provisions which deter businesses rerouting goods via Northern Ireland if they do so in order to avoid UK import formalities. HMRC will be able to undertake spot checks when there is evidence that the qualifying goods regime is being abused. HMRC also has the power to prosecute anyone who tries wrongly to claim unfettered access for their goods. This will ensure that only businesses with a legitimate reason to route goods via NI can benefit from unfettered access.

My noble friend Lady McIntosh asked whether there will be two regimes: NI to GB and GB to NI. The Government recognise that the priority remains to have a regime in place that strongly focuses the benefits of unfettered access on Northern Ireland business and ensures that it has a competitive advantage over traders elsewhere in Ireland.

The noble Baroness, Lady Ludford, had similar questions, but I will deal with her particular emphasis on the preparations for the end of the grace period. A dedicated team in government is already working with supermarkets, the food industry and the Northern Ireland Executive to develop ways to streamline the movement of goods in accordance with the protocol, backed by significant UK funding. The Government will provide a major injection of new funding to support preparations for the end of the grace period for supermarkets and suppliers. Further details will be announced in due course.

The noble Baroness asked about the trade and co-operation agreement. The TCA governance requirements were set out clearly in the agreement and will be set up in due course. The agreement builds on multiple avenues of business representation and input and clear independent systems of dispute resolution outside the jurisdiction of the European Court of Justice. The TCA provides a role for domestic advisory groups which will include business and employers organisations. They will be able to submit views and recommendations for consideration by the UK and the EU and may be consulted during consultations as part of the dispute resolution mechanism for the agreement. Businesses may also take part in the civil society forum provided in the TCA. It will meet at least once a year and provide a forum for independent civil society organisations from the UK and the EU to meet and discuss the implementation of the agreement. On the actual governance arrangements, the governance arrangements agreed under the withdrawal agreement will continue through the joint committee supported by the specialised committee on Ireland and Northern Ireland and, in due course, the joint consultative working group. Once established, the joint consultative working group will provide further opportunities for detailed engagement.

I would like to continue for a couple more minutes if the Deputy Chairman will allow it.

In addition to the questions asked by other noble Lords, the noble Lord, Lord Tunnicliffe, asked about penalties. They will be used where a person is found contravening a customs rule, such as failing to complete an entry summary declaration or not providing an EORI number. There is a maximum penalty of £1,000. HMRC may take mitigating factors into consideration, which could lead to a lower or nil penalty depending on the circumstances. While HMRC will penalise non-compliance, it will seek to support those who make genuine errors while trying to get it right. HMRC is planning a package of activities to support and educate traders on their obligations during this period. This includes promoting keeping good records, which will be crucial in minimising errors once supplementary declarations are made. Further tweaks of the regulations will be required, but the changes currently envisaged are improvements rather than corrections.

The noble Lord asked about a general update on the situation regarding trade between GB and NI. I think I can report on a good position over the last two and a half weeks. That has been largely supported by the Trader Support Service, which was set up just before the end of the transition. Some 29,500 businesses have now registered with the TSS and over 25,000 of those are marked as ready to trade. The TSS has handled over 75,000 declarations so far, and 99% of those have been processed within 15 minutes. The contact centre has over 700 staff to assist with trader queries. It handled some 7,000 inbound calls between 1 January and 17 January. Some 97% of those calls were answered within 30 seconds, and they have spare capacity which they have been using to do outbound dialling to other traders who have not yet reached ready-to-trade status. As of 18 January, HMRC had received 1,518 UK trader service applications.

The Government are committed to maintaining unfettered access to the rest of the UK market for Northern Ireland businesses, protecting Northern Ireland’s place in the UK customs territory and ensuring that Great Britain to Northern Ireland trade flows as smoothly as possible. I sum up by saying that these regulations, which are already in place, will help to ensure that goods can continue to move safely and effectively between Northern Ireland and Great Britain. I commend the regulations to the Committee.

Motion agreed.

Sitting suspended.