My Lords, the Government are fully prepared for the introduction of border import controls and, as previously announced, will introduce these controls on 1 January for EU goods coming from mainland Europe. However, in order to create the best possible environment for negotiations on the protocol and to avoid complexity and uncertainty, I announced yesterday, on 15 December, that the current arrangements for goods coming from the island of Ireland will be extended on a provisional basis.
My Lords, in an earlier answer the Minister said that he had noticed no difficulties in securing trade with the European Union. But the cross-party European Affairs Committee report on trade in goods with the EU, published today, found that small businesses and agri-food sectors have been hardest hit by the changes of the TCA, resulting in GB exports becoming
“slower, less competitive, and more costly.”
The committee calls for an urgent SPS agreement with the EU. When the Minister is discussing this with the vice-president tomorrow, will he signal that an urgent SPS agreement with the EU is a priority, to support our small business and agri-food sectors that have been so hard hit?
My Lords, I have had the opportunity to look briefly at the report that is referred to, which as always is an extremely comprehensive and worthwhile assessment of the state of play. We have never denied that there are new processes that need to be followed by UK exporters, but experience over the year is that UK business has come to grips with them very successfully and we have brought in, for example, our new export support service to help support smaller companies. On the question of an SPS equivalence arrangement, we asked last year for the TCA to include an equivalence process. That was not possible and, as far as we know, still is not possible, but obviously it would help if the EU was willing to look at that again and move forward.
Further to the Question from the noble Lord, Lord Purvis, he and I are both members of the committee that reported today. Part of the recommendations is a warning that there is likely to be further Brexit disruption in the new year as these controls are phased in. The Minister has indicated that he made a statement yesterday, but will he spell out exactly what the attitude of the Government will be? That will be crucial to whether these rules will cause further disruption, particularly to small and medium enterprises.
My Lords, as I said, businesses have already shown a great capacity to adapt to new rules; people will need to adjust to them. The controls coming into force in January are UK controls, so we can handle them in a sensible and pragmatic way as they come in. We are in close touch with key border industry players and have been running online events such as webinars with companies. We talk constantly to border industry bodies and hauliers both in the UK and in the EU, and we have published explanatory material and so on. We are doing the best we can, and it is our belief that companies and bodies are engaging well with this and that the controls will be introduced successfully.
On SMEs in the EU and the UK, our thoughts were twofold. First, the Brexit support fund was not fully spent because it had rather narrow confines. Secondly, does the Minister agree that the Brexit support fund and similar things should be redoubled to help our SMEs and that our old friends the trade specialised committees under the TCA should be fired up and meeting to try to ameliorate matters for SMEs both in the EU and in the UK?
My Lords, the Brexit support fund was indeed not fully used, which suggested to us that it was not the best means of providing support to companies. That is why we have brought in the export support service, which I hope will grow and become more focused in time—in particular to help SMEs, which obviously have most difficulty in dealing with the new arrangements.
The noble Lord is obviously correct to say that this is business for the trade specialised committees, and when we have particular evidence of difficulties, we will certainly raise them in those fora.
My Lords, in the week that the Government have announced, for very understandable reasons, that they will extend free, unfettered access for firms from the Irish Republic—part of the EU—to the UK market, is it too much to hope that British firms sending goods to the other part of the United Kingdom in Northern Ireland might also benefit from free, unfettered access? Surely that is not too much to ask, and can the Minister tell us when we are likely to see that?
The noble Lord makes an extremely good point. If I may dwell on it for a moment, it is obviously true that the legal framework for Northern Ireland and Ireland goods coming to Great Britain is different because of the unfettered access commitment. In practice, at the moment, it is not always possible to distinguish between the two categories of goods, but that will change in future and we will need a definitive solution to this question. Of course, the degree of pragmatism that we show in future to Irish goods coming to Great Britain will be related to the degree of pragmatism and flexibility that the EU shows in allowing goods to move freely around all parts of the UK.
My Lord, in the light of the questions and answers about Northern Ireland, did the Minister see the report in the Financial Times last week that the most rapidly growing region in the United Kingdom is in fact Northern Ireland? Does this not show that, whatever the problems surrounding the protocol, Northern Ireland is doing extremely well at present from being part of the United Kingdom and part of the EU?
My Lords, I am not sure that I share the characterisation that Northern Ireland is both part of the United Kingdom and part of the EU. It is certainly in a somewhat different position as regards goods trade. Northern Ireland is a very successful part of the United Kingdom, has some great companies and has a very bright future. I am very happy that, as the FT article noted, it has grown well. Nevertheless, the burdens of the protocol are significant and will probably grow over time, so we need to find a solution.
My Lords, this continued failure to reach a stable agreement with the EU is expensive for business and the UK taxpayer. We have one set of checks that were postponed back in September, another waived in December and others that are still due to come into force. The Government are spending £360 million on trader support, £150 million on digital agri-food certification and IT systems and £50 million on checking facilities. What is the Minister’s assessment of how much of this money we would get back should he trigger Article 16?
My Lords, I think it is reasonable that we should bring in controls as we see fit, in a staged and controlled way over time, so that companies have time to adjust to them. That staging means that the process is spread over a year or two, but that is reasonable and makes life as easy as it can be for businesses both exporting and importing.
The noble Baroness is correct to refer to the substantial sums we have spent on implementing the Northern Ireland protocol. That demonstrates that the accusation sometimes made against us that we are not interested in implementing the protocol is not correct. We have spent a lot of money in an attempt to mitigate the burdens, but there are obviously simpler ways of mitigating the burdens than requiring every good moving to Northern Ireland to go through a customs process and paying the heavy costs of that—and it is those new solutions that I hope we can find in the coming months.
My Lords, I think we are ending the year on a positive note. We have had a year’s experience of running the Trade and Co-operation Agreement; we have the governance arrangements in place; all the disasters predicted about threats, problems and the collapse of trade—one set of difficulties after another—have not materialised and we end the year in a good place. It is my hope that we will have a constantly improving and very friendly and warm relationship with our EU neighbours, based on free trade and friendly co-operation. That is where we want to get to, and that is where, I am sure, the Government will be taking things forward next year.