Considered in Grand Committee
That the Grand Committee do consider the Definition of Qualifying Northern Ireland Goods (EU Exit) Regulations 2020.
Relevant document: 31st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
My Lords, the statutory instrument that we are discussing concerns the establishment of a definition of “qualifying Northern Ireland goods”, or QNIGs, as it says here in brackets; people come up with an acronym for everything these days. That definition is established for the purposes of delivering unfettered access for Northern Ireland goods moving to the rest of the UK market from the end of the transition period. The statutory instrument should be seen in its wider context of this Government’s clear commitment to deliver unfettered access for Northern Ireland goods to the rest of the UK market, and to guarantee this in legislation by the end of this year. This commitment was made in both the 2019 Conservative manifesto and the New Decade, New Approach deal, which restored power-sharing in Northern Ireland. This instrument is fundamental to delivering on that commitment.
Unfettered access is based on several fundamental tenets: first, that there will be no customs and regulatory checks and processes for qualifying Northern Ireland goods moving from Northern Ireland to Great Britain; secondly, that there will be no additional authorisations or approvals required for placing those goods on the market in the rest of the UK; and, finally, that those goods can continue to be sold throughout the UK market.
We intend for the United Kingdom Internal Market Bill to put the building blocks in place for unfettered access for the long term. The measures that we propose in that Bill will enshrine in primary legislation that qualifying Northern Ireland goods will benefit from mutual recognition—enabling goods to continue to be placed on the whole UK market, even where the protocol applies different rules in Northern Ireland—and prohibit new checks and controls as goods move from Northern Ireland to the rest of the United Kingdom.
These are significant and robust protections. They will be subject only to the most limited possible exceptions, such as to ensure that the UK can comply with its international obligations, for example regarding endangered species movements. Although this House regrettably removed those important protections in its consideration of the Bill in Committee, the Government will ensure that these measures are reinserted to provide the certainty that the Northern Ireland Executive and Northern Ireland businesses have called for.
All these elements flow from there being a definition in law of what are the qualifying Northern Ireland goods that benefit from unfettered access. This is the purpose of this statutory instrument.
It is important to be clear that the policy of unfettered access will be given effect in two phases. The first phase is focused on avoiding disruption and maintaining continuity for the first half of next year, in line with the broader approach that we are taking for GB-EU movements. That is what this instrument is concerned with. In order to avoid any disruption, it takes a necessarily broad-based approach, outlining that goods will qualify where they are in free circulation in Northern Ireland, on the basis that they are not under customs supervision—excepting any supervision arising from the good being taken out of Northern Ireland or the EU—and where they are a good that has undergone processing operations in Northern Ireland under the inward processing procedure and incorporates inputs only from Great Britain, or was in free circulation in Northern Ireland.
Those are some quite technical descriptions, but in practice they will mean no change to how Northern Ireland businesses move goods directly to the rest of the UK from 1 January 2021 compared with now. This is an important first step to make sure that Northern Ireland traders can continue to move their goods in an unfettered way from the end of the transition period, meeting the Government’s clear commitment under the New Decade, New Approach deal. Although this first phase will be comparatively brief, it is none the less important to guard against the possibility that its provisions are abused. That is why the phase one approach will be accompanied by anti-avoidance measures to be contained in legislation to be brought forward by colleagues in the Treasury in due course to enable us to take action in those cases.
That will be the first phase of the regime. We recognise that this is only a bridge to the more durable and permanent arrangements in phase two, which will focus the benefits of unfettered access solely and exclusively on Northern Ireland businesses. This will ensure that they have a competitive advantage over other traders on the island of Ireland and will ensure that goods moving from Ireland or the EU are subject to full third-country checks and controls. That regime, which will take effect in the course of 2021, is being finalised at pace, working with Northern Ireland business and the Northern Ireland Executive. We are also working with the devolved Administrations more broadly on its operational implications. We will provide further details on the specific approach and its timing as soon as possible. In the meantime, we consider that it is right to proceed in a pragmatic way that maintains continuity for business, which our phased approach would do. Should both Houses approve this instrument, it will enable us to bring forward clear guidance for businesses to ensure that they are ready for the end of the transition period.
I would again like to assure Members of the Committee that this instrument is part of our clear and unequivocal commitment to unfettered access, ensuring that businesses can continue to trade as they do now and protecting Northern Ireland’s place in the UK internal market. Those are and will remain our overriding priorities as we take forward the important work here in the weeks ahead. I commend the regulations to the Committee.
My Lords, I thank the Minister for his explanation of these regulations and his customary professionalism and courtesy, although I am afraid that he rather glossed over, in the inimitable way of Ministers during this chaotic last stage of the Brexit saga, many of the things involved. Although he reaffirmed the UK Government’s promise of unfettered access into Great Britain for Northern Ireland goods, the question arises: what exactly are Northern Ireland goods?
The UK Government needed to define what are those Northern Ireland goods that qualify for unfettered access, but this has not been straightforward, given that some goods leaving Northern Ireland for Great Britain are the product of a complex process of production that includes components from elsewhere, especially in the Republic of Ireland. The picture is especially complicated for agri-food. For example, if a pig was born in the Republic of Ireland, slaughtered in Northern Ireland, processed into sausage in the Republic of Ireland and packaged in Northern Ireland, is that a Northern Ireland or a Republic of Ireland sausage?
As I understand it, the Government have taken all sorts of advice from businesses, but it became complicated, because it is so different for different industries and sectors. For instance, some have no contact with the Republic of Ireland and, therefore, the European Union, while others are fully integrated with both. If a good is defined as a Northern Ireland good but has very little contact with Northern Ireland—for example, it is just packaged there—there is a risk that Northern Ireland could become a back door into Great Britain, especially in a no-deal scenario, to avoid tariffs. That would undermine genuinely local Northern Ireland goods.
The Government did not have time fully to address the complexity of all this, so I am afraid that the statutory instrument is just a sticking plaster for phase 1, as they are calling it, and as the Minister virtually said. We are told to expect much more detail, as he said, and nuance in phase 2, which we are all promised will come next year. The problem is that the sticking plaster prioritises flow over control; that is to say, it basically defines everything in free circulation or moving around Northern Ireland as a Northern Ireland good. That could potentially include Irish and EU goods. The upside is that it avoids the need for new checks and procedures to distinguish between Northern Ireland and other goods leaving Northern Ireland for Great Britain come 1 January. The downside is that, especially if there is no deal, although conceivably even if there is a thin deal, it shares an advantage given to Northern Ireland goods, which is unfettered access into Great Britain, with those from outside Northern Ireland. Again, that is particularly bad in the event of no deal, given that Northern Ireland goods should not face tariffs on entry to Great Britain but Republic of Ireland goods would.
In other words, this is all a real dog’s breakfast, but one with potentially costly and important consequences for Northern Ireland’s economy and businesses, and another case of how Northern Ireland always seems to end up second best over the Government’s hard Brexit dogmatism.
My Lords, as the Minister said in his opening remarks, this regulation is designed to guarantee unfettered access for Northern Ireland goods into Great Britain. I welcome what Her Majesty’s Government have said about guaranteeing those commitments in legislation. As the Minister pointed out, it is in the New Decade, New Approach document, which was agreed by all the parties in Northern Ireland; they all signed up to that document. It was also in the December 2017 joint European Union- United Kingdom document, which at paragraph 50 said:
“In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.”
That paragraph was inserted after my party negotiated with Theresa May during that fateful week. We were always conscious of the need to ensure that protection was in place.
It is always a delight to follow the noble Lord, Lord Hain. He knows a lot about Northern Ireland, and he talked about a dog’s breakfast. Part of the problem that we are facing with Northern Ireland goods and trade with the rest of the United Kingdom is because some people prioritised trade with the Irish Republic and European Union above the biggest market of Great Britain. By far and away the biggest market for Northern Ireland is trade from Great Britain to Northern Ireland and from Northern Ireland to Great Britain. At the time when we were pointing out all those problems over the past couple of years, people did not seem to regard those issues; instead, they talked about all sorts of invented issues about problems north-south, when Simon Coveney, the Foreign Minister, Michel Barnier, and everyone else, including all the parties in Northern Ireland, guaranteed that there would never be any checks on trade north-south, in any circumstances. That is something that the Foreign Minister of the Irish Republic said just the other day.
I will bring the Minister on to a couple of questions that I have about this approach. As he said, this is phase 1 of the issue of how we grapple with defining what is a Northern Ireland good for the purposes of unfettered access. When exactly will we have the longer-term definition? We were told that it would be at some point during the course of 2021, but can the Minister be more precise about that? Can he also undertake that these issues will be sorted out for Northern Ireland at the same time as they are for general UK-EU trade? There is that aspect to it as well—the movement of goods between the European Union and the rest of the United Kingdom. Our view must be that it should all be done at the one time.
On the current or phase 1 definition, under these regulations, how will the Government ensure that Northern Ireland products move through ports in the Irish Republic to Great Britain? Some 20% of our trade with Great Britain goes through the Irish Republic. That needs to be clarified. The agri-food sector has been mentioned, and it is a very important part of our economy. There is concern among producers in Northern Ireland in that sector that this very wide definition, albeit temporary, could lead to goods from the Republic of Ireland being moved through Northern Ireland to Great Britain, which would potentially create great problems in terms of reputational damage for the Northern Ireland agri-food industry.
That brings us on to the issue of anti-avoidance measures, which the Minister mentioned and which are very important. We are told that they will be produced, I think he said, “in due course”. However, we are now almost at the end of 2020. The new definition for unfettered access for qualifying goods comes in on 1 January and we have yet to see the anti-avoidance measures. We were promised that this would be in place before the end of December. We need to see those very soon so that we can examine them and ensure that only Northern Ireland goods benefit from unfettered access. As has been said, it would be entirely wrong if, along with the other disadvantages that Northern Ireland may now face as a result of the protocol, this advantage of unfettered access was extended to competitors in the Irish Republic or elsewhere in the European Union, who would be only too willing to take advantage. The anti-avoidance measures must be effective, they must work, and the Government must ensure that proper enforcement measures are in place. I would like to know what mechanisms HMRC will have in place to find out who is trying to benefit and what steps and powers it will have.
Clear guidance then needs to be given to Northern Ireland businesses so that they are clear about what products qualify and there is no ambiguity. There needs to be clear messaging to producers in the rest of the United Kingdom about the right of unfettered access for goods coming from Northern Ireland. I have already heard of competitors of businesses in Northern Ireland, in the agri-food sector in particular, lobbying people in Great Britain to warn them off Northern Ireland produce, saying, “This could be contaminated with produce coming from outside and it may not be lawful”. There needs to be clear guidance from the Government in Great Britain on this as well. Clear guidance also needs to be given to Irish businesses to the effect that if there is an attempt to use Northern Ireland as some kind of back-door mechanism to the Great Britain market, that will lead to severe consequences and action will be taken, as opposed to one line in the Finance Act setting out how that is unlawful but without any means of enforcing it.
The idea behind these regulations is welcome in principle, but there are questions that need to be answered about goods going through Irish Republic ports that will also benefit from unfettered access, and questions about the anti-avoidance measures. We are now very late in the day in seeing them, and I would welcome more detail being spelled out on when they will come and how effective they will be at policing these regulations.
My Lords, I thank the Minister for the explanation of these stage one, stop-gap regulations. From my perspective, I support unfettered access for businesses from Northern Ireland to Britain. I also do not want any borders, whether in the Irish Sea or in the island of Ireland, because they would act as impediments to business and the free flow of people and would have—shall we say?—the capacity to undermine our very delicate political relationships and infrastructure. We must be careful about that.
I see the regulations in the context of a Brexit I did not want to happen, but it is here. It creates barriers and impediments to political, economic and social development at a time when businesses are having to deal with the difficulties and challenges presented by Covid. They need assistance and a streamlined system that does not involve any extra costs or burdens, either administrative or financial, when they are transporting goods to Britain, either via Northern Ireland ports or from ports in the Republic of Ireland. Like the noble Lord, Lord Dodds, I would like the situation of Northern Ireland products and produce imported or exported to Britain via ports in the Republic of Ireland to be clarified.
Notwithstanding all that, there are several questions I would like to ask the Minister about the complexity of these regulations. The Minister and the Explanatory Memorandum indicate that further legislation will be produced in this area and that this is simply a temporary, stop-gap measure. He referred to the regulations, which will last about six months, as avoiding disruption. What will be the nature of the new regulations and when are they likely to be brought to the House for discussion and affirmation? There are suggestions that this legislation is a bridge to a longer-lasting regime— something that the Secretary of State said in the other place. What is that longer-lasting regime? What will be the content, nature and scope of that legislation?
Suggestions have also been made that work is ongoing with the devolved Administrations—I think the Minister referred to that. What is the nature of that work? What discussions have taken place with the Northern Ireland Executive and specific Ministers dealing with economy, finance and the First and Deputy First Ministers? Has the Minister for Infrastructure been involved in such discussions, as having responsibility for transportation? If so, what was the outcome of those discussions, or have they mainly been at official level? Is the Northern Ireland Executive expected to bring forward subsequent legislation in relation to this issue?
I come to the thorny issue of agri-foods, already mentioned by the noble Lords, Lord Hain and Lord Dodds. How will standards of agri-food products emanating from Northern Ireland be dealt with, as they will still have to comply with EU standards? Will there be costs and administrative burdens involved? If they are unfettered, surely there should be no costs.
I come to the issue of processing, the matter raised by the noble Lord, Lord Hain. What are Northern Ireland processed goods? Can the Minister provide us with a definition? The dairy industry is largely all-island in Ireland. If milk is produced in the Republic of Ireland and processed in Northern Ireland for cheese and other dairy products, does the definition of qualifying Northern Ireland goods apply to such products, in the light of the protocol and agri-food requirements? In fact, the dairy industry is largely owned by companies based and headquartered in the Republic of Ireland.
Penny Mordaunt said in the other place that these regulations were
“no more than a stopgap to a longer lasting regime”—[Official Report, Commons, Delegated Legislation Committee, 10/11/20; col. 7.]
which would be accompanied by further anti-avoidance measures that would be introduced in a timely manner. What is the nature of those anti-avoidance measures? Will they deal with the issues of competition and tax?
Like the noble Lord, Lord Dodds, I would like to know what the role of HMRC is in such transactions. Can the Minister provide an update on the UK-EU discussions that are seeking to find solutions to or flexibilities over the types of goods that can come into Northern Ireland from Britain for supermarkets? I appreciate that that is not in the remit of these regulations but the Minister will recall that this matter bedevils suppliers in Northern Ireland, particularly supermarkets. Perhaps this issue would be better dealt with at the supermarket level rather than by the JMC, but it would be good to have an update because the agri-food industry and our general retail businesses require certainty and it is only a few weeks until the end of the transition period.
My Lords, I thank the Minister for his helpful explanation of the SI. It seems that we get a new SI on Northern Ireland practically every day, appearing in its design to take into account the withdrawal agreement and the protocol. I must remind noble Lords that nobody in Northern Ireland consented to the protocol, which was written with the aim of stopping any kind of trade border between part of the United Kingdom and the Republic of Ireland and putting in instead a trade border between one part of the United Kingdom and another, in the Irish Sea.
Words almost fail me sometimes as to how, given that the referendum vote was that the UK as a whole should leave the European Union, our Government allowed themselves to be taken in by an Irish nationalist lobby—and others—who used and distorted the Belfast agreement as their weapon to get their way on this. However, I accept that, now that some of the ramifications of the protocol are clear, the Government are trying to alleviate some of the major problems as much as they can. The internal market Bill is a step forward, of course; it is a pity that your Lordships, perhaps reluctantly, removed some of the clauses that absolutely would have ensured unfettered access for business in Northern Ireland.
This statutory instrument seeking to define qualifying Northern Ireland goods needs to be seen in the context of that internal market Bill. I very much agree with a number of the questions already asked by noble Lords and look forward to the answers, but can I ask the Minister a few simple ones? Indeed, he will probably think that they are very simple. Can he define again the limited exceptions for very high-risk goods? Who will decide what is a high risk? What other international obligations, apart from the much-mentioned movement of endangered species, are covered?
Repeated assurance has been given. I quote Command Paper 226:
“Trade going from Northern Ireland to the rest of the UK: this should take place as it does now. There should be no additional process or paperwork and there will be no restrictions on Northern Ireland goods arriving in the rest of the UK”.
However, it is now clear that companies in Northern Ireland will need to complete new paperwork and comply with new reporting requirements, which will increase costs and represents a significant departure from how companies trade at the moment.
Can the Minister say how long he thinks a lorry has to wait at Larne at the moment before it can get on board to go to Scotland and how long he estimates it will take after 1 January? Why are we building such expensive structures at Larne and other ports if, as has been said, there is to be little paperwork and new burdens to take on? While of course much of the extra burden on business will be covered by government money that has been allocated, it is taxpayers’ money, the people’s money. People who voted to leave the EU did not expect their money to be spent on trying to keep part of the United Kingdom in the EU, leaving in name only.
Under the protocol, the VAT rules of the EU will still apply. For example, if the UK Government decide, as many of us would like them to, to reduce passenger duty, can the Minister assure me that no one can stop that being applied in Northern Ireland? Finally, the command paper says that the UK’s approach to the Northern Ireland protocol is a consensual and pragmatic one. Does the Minister believe that the European Union has taken a consensual and pragmatic approach? If he does not think so, does he agree that it is absolutely crucial that those clauses that were taken out of the UK Internal Market Bill by your Lordships’ House are brought back by the other place and put back in?
My Lords, it is a pleasure to follow the noble Baroness, Lady Hoey. I was one of her constituents in Kennington for many years. We may not see eye to eye politically, but she always speaks with great conviction.
As other noble Lords have said, the commitment to delivering unfettered access was included in the New Decade, New Approach agreement and in that context from these virtual Benches we can give qualified support to this statutory instrument. There remain, however, as many other noble Lords have also indicated, a number of areas of concern. Today is the last day of November. In exactly one month’s time, the transition period will come to an end. On 1 January, it is clearly vital that businesses can continue to function, but the lack of clarity at this stage does little to provide us with a sense of confidence. It is also frustrating that so many of these decisions are coming so late in the day that there is an inevitable feel of “mend and make do” rather than a measured and thorough consideration of the issues involved.
In debating this SI, we already know that it will be replaced by more detailed proposals next year and by additional orders before the end of this year. In his speech, the Minister confirmed that unfettered access will be given effect in two phases. This SI represents the first phase and is the political equivalent, as the noble Lord, Lord Hain, said, of a sticking plaster. It is to ensure that continuity is maintained and disruption avoided at the beginning of next year. As a result of this approach, many questions remain unanswered, as other noble Lords have indicated this evening.
For example, one area of concern is that of processed goods coming from Northern Ireland which have components originating from outside the region. Can the Minister confirm whether this approach to qualifying goods will have wider implications for the UK’s approach to rules of origin with the rest of the world? As the noble Lord, Lord Hain, spelled out so clearly, it remains unclear how non-qualifying goods will be determined and how they will be distinguished as they move from Northern Ireland to Great Britain. Can the Minister say what will be the operating model for this process? What mechanisms will be put in place to distinguish between Northern Ireland goods and goods from the rest of the EU, including from the Republic of Ireland?
The House of Lords EU Committee has also raised concerns that Northern Ireland could become a “back door” for EU products entering the UK market without checks. Can the Minister say how they intend to prevent this from happening in reality? The Minister will know there is particular concern in the food and drink sector that cheaper or non-authentic versions of quality products may be able to reach the UK market in this way. In the debate in the House of Commons, Penny Mordaunt stated that anti-avoidance measures will be
“introduced in a timely manner”,—[Official Report, Commons, Delegated Legislation Committee, 10/11/20; col. 7.]
but declined to give a more detailed timetable. Perhaps I may therefore repeat the question put by the noble Lord, Lord Dodds of Duncairn, on the anti-avoidance measures. Given, as I have said, that tomorrow will be the first day of December and the deadline for the end of the transition period is fast approaching, can the Minister shed further light on when these anti-avoidance measures are likely to be introduced?
My Lords, I also thank the Minister for introducing this SI. There are a couple of issues I would like to raise, although we will support it when it goes through the House.
First, there is that funny thing that this SI relates to the internal market Bill, which, as the Minister knows better than most, has yet to complete its passage through the House. Indeed, looking at the post-Report version of the Bill, which is some 51 pages long, compared with the original 57, it is far from being a ready-cooked product. However, I have to say to at least three noble Lords in the Committee that I have every reason to believe that, if the original clauses are reimposed in the Commons, they will promptly be taken out again by your Lordships’ House.
Be that as it may, as the noble Lord, Lord Dodds, and the noble Baroness, Lady Suttie, said, we have been told that the anti-avoidance measures which are to accompany this are due to arrive here “in due course”, but we do not know when that will be. Brandon Lewis said that they would
“be in place by the end of the year”,
which gives us just a month to get them done, although for some of us that includes Christmas. It is fairly obvious that, if anything that happens to be in Northern Ireland—other than things subject to customs controls—can enter freely into GB, the temptation to use the no-checks entry points as a back door will be attractive to some, either on competition or quality issues, or perhaps for worse reasons. That would be especially worrying if it was a way of avoiding tariffs. I know that the National Crime Agency has warned about the risk, alongside the Police Service of Northern Ireland. That is especially important in the light of another point I wanted to make, which has been mentioned by other noble Lords.
The definition which this order seeks to capture is not only temporary but unclear. The Government say that they will come up with a more refined definition in due course, but there is no explanation of why they have been unable to do so, and it is very hard to imagine how they will enforce something that is so temporary. My noble friend Lord Hain set out some examples of where the definition is grossly inadequate, and I think that few of us will forget his little pig, born in the Republic of Ireland, slaughtered in Northern Ireland, made into sausages in the Republic and packaged in Northern Ireland. I look forward to the Minister’s answer as to whether, tasty as it may be, it is a Northern Ireland or a Republic of Ireland sausage.
Fourthly—and the Minister will know of our concerns in this matter—to say that everything on sale in Northern Ireland can be sold anywhere and everywhere in GB risks undermining the devolution settlements, which in certain areas allow for and indeed welcome divergence. If higher-emission vehicles, plastic bags, peat pots or single-use plastic forks can be sold in Belfast, the Minister is telling us they must be sold in Bangor, even if the Welsh Government have decided to the contrary. We remain committed to using the common frameworks mechanism for sorting out these issues. Can the Minister explain whether this order would trump anything decided by the common frameworks process?
I also ask the Minister what assessment the Government have made of the risks of counterfeit—or, as has been mentioned, lower standard goods—being placed on the market in Great Britain, possibly at considerable consumer detriment, if they only have to be placed in the market and not even actually sold and therefore checked in Northern Ireland. Given that the Government seem to have prioritised flow over control, in the words of my noble friend Lord Hain, this risk is real. I assume that our trading standards inspectors could do nothing if goods arrived legally but unchecked in Great Britain.
We know that Northern Ireland businesses are already concerned about the January deadline, with representatives from retail, manufacturing and farming saying that they will simply not be ready for the new Irish sea border and need a further transition period. Manufacturing NI has called for a grace period in which the UK and EU could “provide comfort” that goods could keep moving. The Northern Ireland Retail Consortium said that business was being given only six weeks to implement changes which would normally take two years, and it needs some sort of phase-in period. That is even more the case with the lack of clarity in the definition included in this order and, as we have said, the lack of any indication of anti-avoidance measures.
Can the Minister outline his response to how such businesses feel about this order and detail the involvement of the devolved Administrations with its preparation, given the concerns that I have that it would undermine the devolved settlements, forcing anything sold in Belfast to be sold in Wales, say, despite its laws to the contrary? Perhaps he could supply that timetable for the anti-avoidance measure, which the Northern Ireland Secretary said would be done by the end of this year.
The fundamental response to the noble Baroness is that Northern Ireland by the will of its people is an integral part of the United Kingdom of Great Britain and Northern Ireland. Therefore it behoves the United Kingdom Government to secure that position, and we will seek to do so. I would be surprised if the other devolved Administrations actually wished or intended to place obstacles in the way of the movement of goods from Northern Ireland. I would be astonished to think that that would be the political intent or desire of any Government within these islands.
I repeat that this regulation, as the noble Baroness and several other noble Lords have alluded to, and as I said in my opening speech, is part of a programme or set of measures that includes the UKIM Bill. I know what the noble Baroness said—that, if the UKIM Bill returned, attempting to provide a guarantee of unfettered access, she would advise your Lordships simply not to discuss it again but to throw it out. In my humble submission, it is not part of the role of the revising Chamber, which your Lordships’ House is, to simply throw things out that are sent to us by the elected House without even considering them or considering detailed amendments in Committee. To do it once is bad, but to do it again on something as important as unfettered access would be strange.
I was asked a number of questions. We got straight into sausages, which seemed very much a subject of concern. I remember the first time I ever went to Londonderry-Derry, so long ago that Doherty’s sausages were all the rage in those days, and I enjoyed them. I had long experience at university of sausages made in Northern Ireland. To answer the question on definition, which is what this statutory instrument is about, in this first phase, any good such as a sausage in free circulation in Northern Ireland will qualify. We are working closely with Northern Ireland traders and the Executive, as I said, on the second phase definition. That will focus the benefits of unfettered access specifically on NI traders.
I do not know how to stop this phone ringing, but if noble Lords can bear the sound, I will continue. The first-phase approach provides certainty for businesses at the end of the year, which is what they have been asking for.
On circumvention, we are bringing forward anti-avoidance provisions that will deter traders from routing their goods via Northern Ireland to GB. I will come back to this point, which was raised by a number of noble Lords.
I turn to goods that are simply packaged in Northern Ireland, when the product is from the EU. Again, this definition is about providing certainty to NI traders and guaranteeing unfettered access to their largest and most important market at the end of this year. So, in the first phase, these goods will qualify—but we are, as we have discussed, working on the second-phase approach, to be introduced in 2021, which will focus the benefits of unfettered access on Northern Ireland businesses. The noble Lord, Lord Dodds, asked when we will have that further definition. I can say to him that it will be brought forward “very early in 2021”; that is what I am advised.
I was asked whether I could confirm that the approach we have taken is intended to align with the broader phased approach to the EU-GB border. Again, I hope that this will be the case, but I have not had any firm advice on that. The new anti-avoidance measures will come this year via a finance Bill that will be brought forward in the coming weeks.
I turn to enforcement and accept what a number of noble Lords have said: that goods will move. Enforcement mechanisms will be behind-the-border compliance and monitoring, which will in no way disrupt NI-GB trade.
The point about goods routed via the Republic of Ireland to GB from Northern Ireland was made by the noble Lord, Lord Dodds, and others, including the noble Baroness, Lady Ritchie. We do recognise that the priority remains having a regime in place that focuses its benefits on Northern Ireland traders and ensures that they enjoy those benefits, however they move their goods, whether directly or via the Republic. So, from 1 January, we will ensure that tariffs will not be due on qualifying goods moving via Ireland. Anyone can move qualifying Northern Ireland goods from Northern Ireland via the Irish Republic to Great Britain without needing to pay customs duties on entry to Great Britain, and goods will not need to be moved under transit for this to be the case. I should note that of course, it is not for the UK Government to say what processes the Irish Government should choose to apply in those circumstances.
I was asked about engagement with the Northern Ireland Executive. We have engaged extensively, including at First Minister and Deputy First Minister level, and they are supportive and understanding of the phased approach. There have also been extensive discussions at official level, and via ministerial engagements such as in JMC (EN) and the quad talks, led by my right honourable friend the Paymaster General.
I was asked how in the agri-food area “Northern Ireland processors” would be defined and what would happen when a GB business moved, say, a carcass from Great Britain to Northern Ireland for deboning and processing under customs supervision, therefore not needing to comply with full import formalities on entry into Northern Ireland, before being returned to Great Britain to be placed on the market there. The product will not be in free circulation in Northern Ireland, so it would not meet the definition in Section 3(1)(a)—but it would clearly be a good that should benefit from unfettered access protections. That is why the second limb of the qualifying Northern Ireland goods definition ensures that these goods are able to return to Great Britain, enjoying unfettered access during that movement.
I was asked about the role of HMRC, which will administer the anti-avoidance provisions and compliance regime, along with Border Force, as the authorities with responsibility in that space. As I have said, this will not involve disruption to NI-GB trade but will be entirely behind-the-border compliance activities. No new infrastructure is required in Northern Ireland to administer unfettered access or the qualifying regime.
I was asked more than once by noble Lords why we are phasing. The first-phase definition, as I sought to explain in my opening remarks, is focused on minimising disruption on 1 January: that is what Northern Ireland traders have asked for. As I have said, the second-phase definition will be brought forward early in 2021 and will focus on the benefits of unfettered access for Northern Ireland traders, in line with their expectations.
The Government have acknowledged, and I have acknowledged, that the process is taking a good time, and noble Lords will know—this has been referred to in our discussion—that negotiations and contacts are still taking place this week in the Joint Committee. We all fervently hope that those discussions will have issue soon, but, clearly, we are seeking to keep Northern Ireland traders and the Northern Ireland Executive alongside, so far as we can.
I repeat the fundamental point that I began with: the undertaking for unfettered access was given by Her Majesty’s Government. It is subscribed to by the European Union, as the noble Lord, Lord Dodds, said, and it is enshrined in the New Decade, New Approach document. Surely, we should all agree. I have heard agreement in this debate on the principle of unfettered access, so I look forward—hopefully—to all noble Lords present lending their support to that commitment in the UKIM Bill when it returns. I commend these regulations.
Committee adjourned at 7.07 pm.