I must inform the House that the reasoned amendments have not been selected. Before I ask the Foreign Secretary to move Second Reading, I reiterate how important it is for Members who wish to speak in the debate to be here at the beginning to hear all the opening speeches, to stay in the Chamber for the vast majority of the debate and certainly for the winding-up speeches, and to be there in good time. It is very discourteous not to follow those rules, especially on an important debate such as this.
I beg to move, That the Bill be now read a Second time.
We are taking this action to uphold the Belfast/Good Friday agreement, which has brought peace and political stability to Northern Ireland. The Northern Ireland protocol is undermining the function of the agreement and of power sharing. It has created fractures between east and west, diverted trade and meant that people in Northern Ireland are treated differently from people in Great Britain. It has weakened their economic rights. That has created a sense that parity of esteem between different parts of the community, an essential part of the agreement, has been damaged.
The Bill will address those political challenges and fix the practical problems the protocol has created. It avoids a hard border and protects the integrity of the UK and the European Union single market. It is necessary because the growing issues in Northern Ireland, including on tax and customs, are baked into the protocol itself. Our preference remains a negotiated solution, and the Bill contains a provision that allows for negotiated agreement, but the EU has ruled out up-front making changes to the text of the protocol.
I congratulate the Foreign Secretary on her very patient and good diplomacy. Will she confirm that this very moderate measure is completely legal and essential to the peace and good will of Northern Ireland?
I will make a bit more progress and then allow some further interventions.
We continue to raise the issues of concern with our European partners, but we simply cannot allow this situation to drift. Northern Ireland has been without a devolved Government since February due specifically to the protocol, at a time of major global economic challenges. Therefore, it is the duty of this Government to act now to enable a plan for restored local government to begin. It is both legal and necessary.
This Bill fixes the specific problems that have been caused in Northern Ireland while maintaining those parts of the protocol that are working. It fixes problems in four areas: customs and sanitary and phytosanitary; a dual regulatory model; subsidy control and VAT; and governance. On customs and SPS, the Bill creates a green and red lane system. All those trading into Northern Ireland will be part of a trusted trader scheme. Goods destined for Northern Ireland will not face customs bureaucracy. Goods for the Republic of Ireland and the EU will go through four EU-style border procedures. All data from both the green and red lanes will be shared with the EU in real time as the goods depart from Great Britain. This means that the EU will have this data before the goods arrive in Northern Ireland, ensuring that the EU single market is protected.
I thank the Secretary of State for bringing this forward and for her comprehensive understanding of the position of many people in Northern Ireland. As someone who has had businesses contacting me for those who have openly stated that they are from a nationalist tradition and yet feel afraid to voice complaints to their own MP for fear of reprisals, I speak with confidence in assuring the Secretary of State that Northern Ireland as a whole needs this Bill not simply for cultural identity, which is imperative, but for financial viability for small businesses due to the effects of the EU’s vindictive approach to block VAT and state aid. This Bill really is long overdue.
I was talking about the data that we are sharing with the EU. I am pleased to say that we already have this system in place. We are giving demonstrations to businesses and the EU to show how it works, and I am happy to make those demonstrations available to Members of Parliament as well. Any trader violating the lanes will face penalties and would face ejection from the scheme.
I have an immense amount of sympathy with what the Foreign Secretary is saying, and it does seem to me as though the EU is not being particularly constructive in trying to get the solution that we all want to see. But many of us are extremely concerned that the Bill brazenly breaks a solemn international treaty, trashes our international reputation, threatens a trade war at a time when our economy is flat, and puts us at odds with our most important ally. Can she say anything to reassure me in my anxieties on these points?
As I said at the outset, our preference is for a negotiated solution, and we have sought that for 18 months, but as recently as last weekend the EU has refused to change the text of the protocol. That is why there is strong legal justification, as set out in our legal statement, for us taking this action. Our priority, as the United Kingdom Government, has to be political stability within our own country. While we put this Bill through Parliament, we will continue to seek a negotiated solution with the EU, and there are provisions in the Bill to deliver that. I would strongly encourage my right hon. Friend to raise this with the EU directly and to encourage a negotiated solution, because there is a solution to be achieved. We have laid it out very clearly with our red and green proposal, but we do need the EU to agree to change the text of the protocol. That is the fundamental issue that needs to be addressed.
I am grateful to the Secretary of State for giving way. The Government’s legal position prays in aid the international law doctrine of necessity, but the International Law Commission says that where a state has itself contributed to the situation of necessity, that doctrine cannot be prayed in aid. Given that the Prime Minister signed the withdrawal agreement, including the protocol, in the knowledge that it would give rise to precisely the difficulties of which the Government now complain—we debated it on the Floor of the House—does the Secretary of State not see that there is a pretty big hole in the legal advice she has been given?
We set out the case extremely clearly in the legal advice, and the doctrine of necessity has been used by other Governments in the past where there is a severe issue and the other party is unwilling to renegotiate that treaty. That is the position we are in with the Northern Ireland protocol. What I would ask the hon. and learned Lady and other Members on the Opposition Benches is this: given that the EU refuses to reopen the Northern Ireland protocol, and issues around customs and tax are specifically baked in, what is their solution for dealing with the real issues in Northern Ireland? We have looked at all the alternative solutions, and the only effective solution is this Northern Ireland Protocol Bill, in the absence of the EU being willing to negotiate a new protocol.
My right hon. Friend could also point out that the protocol itself contains provisions for it to be changed, and the EU refuses to contemplate using those provisions. May I also point out that at the time we signed the protocol, we did not know the shape of the trade and co-operation agreement, and it was reasonable to expect the EU to give mutual recognition of products and standards, including SPS standards, as it has with New Zealand, for example? The EU refuses to give us those provisions. The problems in the protocol would be much less if the EU had given us a better trade deal.
My hon. Friend is absolutely right that the protocol is not set in stone. That is why for the past 18 months this Government have sought to achieve negotiated changes to the protocol. In the absence of the EU being willing to change the text, the only way to resolve this matter is for us to legislate.
I am going to make more progress, and then I will take more interventions.
We fully understand and respect the legitimate concerns of the EU that the single market should be protected. Our solution does just that. The Bill will also establish a dual regulatory regime so that businesses can choose between meeting UK and EU standards. That removes the barriers to goods made to UK standards being sold in Northern Ireland and it cuts the processes that drive up cost for business. It prevents unnecessary divergence between two parts of the UK internal market. Anybody who trades into the EU single market will still have to do so according to EU standards.
The Bill will also ensure that the Government can set UK-wide policies on subsidy control and VAT, overcoming constraints that have meant Northern Ireland has not benefited from the same support as the rest of the UK. For example, at present people in Northern Ireland are not able to benefit from the VAT cuts on solar panels that the Chancellor announced in the spring statement.
These are essential functions of any 21st-century state, but they are especially important in Northern Ireland, where the UK Government play an outsized role in the local economy. We will maintain the arrangements in the protocol on VAT, which support trade on the island of Ireland while ensuring that Northern Ireland can still benefit from the freedoms and flexibility available in Great Britain.