With permission, Mr Speaker, I will make a statement on the Government’s approach to implementing the Northern Ireland protocol as part of the withdrawal agreement with the European Union.
The protocol exists to ensure that the progress that the people of Northern Ireland have made in the 22 years since the Belfast/Good Friday agreement is secured into the future. The Belfast agreement is built on the principle of consent. It was ratified by referendums in both Northern Ireland and Ireland, and the agreement is crystal clear that any change in the constitutional position of Northern Ireland within the United Kingdom can come only if the majority in Northern Ireland consent to any change.
The vital importance of consent is recognised in the provision for any alignment in the protocol to be disapplied if Northern Ireland’s political representatives conclude that it is no longer desirable. Embedding that recognition of consent in the protocol was intrinsic to its acceptance by the Government. Therefore, for the protocol to work, it must respect the needs of all Northern Ireland’s people, respect the fact that Northern Ireland is an integral part of the customs territory of the UK, and respect the need to bear as lightly as possible on the everyday life of Northern Ireland.
Although there will be some new administrative requirements in the protocol, these electronic processes will be streamlined and simplified to the maximum extent. As the European Commissioner’s own negotiator, Michel Barnier, has spelled out, the protocol’s procedures must be as easy as possible and not too burdensome, in particular for smaller businesses. As is so often the case, but not always, Monsieur Barnier is right. The economy of Northern Ireland is heavily dependent on small and medium-sized enterprises. Subjecting traders to unnecessary and disproportionate burdens, particularly as we wrestle with the economic consequences of covid-19, would not serve the interests of the people of Northern Ireland, for whom the protocol was designed. The protocol text itself is explicit that implementation should impact as little as possible on the everyday life of communities.
In that context, it is important for us all to recall that the clear majority of Northern Ireland’s trade is with the rest of the United Kingdom, so safeguarding the free flow of goods within the UK’s internal market is of critical importance to Northern Ireland’s economy and people.
Today, we are publishing a Command Paper that outlines how the protocol can be implemented in a way that would protect the interests of the people and the economy of Northern Ireland, ensure the effective working of the UK’s internal market, and also provide appropriate protection for the EU single market, as well as upholding the rights of all Northern Ireland’s citizens. Delivering on these proposals will require close working with the Northern Ireland Executive, underscoring once again the significance of the restoration of the Stormont institutions in January. I would like to put on record my gratitude for the constructive approach that has been shown by Northern Ireland politicians, including the First Minister and Deputy First Minister, as well as by hon. Members from across this House.
I thank the Minister for advance sight of his statement and the Command Paper.
During the election campaign, the Prime Minister told Northern Irish businesses that if they were asked to fill in any extra paperwork, they should call him personally and
“I will direct them to throw that form in the bin”.
On 22 January, when the Prime Minister was asked in this House whether that meant unfettered access between Great Britain and Northern Ireland, and Northern Ireland and Great Britain, he said: “Emphatically it does.” But today, for the first time, the Command Paper states that there will be “some new administrative requirements”.
Checks on animals and agrifood will be a significant escalation of what currently takes place and will mean a border management system that is quite new in terms of its scope and scale. The document published today states that we will need to
“expand some existing entry points…to provide for proportionate additional controls.”
Will the Minister confirm what proportion of animal and agrifood products he expects will require additional physical checks? Will those checks take place at ports in Northern Ireland? Physical checks require a product to be taken off the lorry, opened, inspected, tested and quarantined until deemed legitimate. That is quite a burden. Can the Minister confirm that there will be physical checks, or, indeed, that there definitely will not be physical checks?
The document published today states that
“some new administrative process for traders,”
including
“electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”
I am grateful for the welcome that the hon. Lady gives to the approach that we are taking, and grateful also for her commitment and her party’s commitment to supporting the implementation of the protocol in a way that safeguards the gains of the Good Friday agreement.
The hon. Lady says that as a result of the implementation of the protocol there will inevitably be checks on not just animals but agri-food products, but, as she is aware, those checks already exist for live animals. Checks are already carried out in the port of Larne and the port of Belfast. We will of course exercise any new checks on agri-food products in a proportionate way, but in doing so we imagine that the proportion of goods that will need to be checked will be very minimal. Of course, because of the very, very high standards that we will maintain in this country on SPS—sanitary and phytosanitary—matters, people can have absolute confidence that the quality of goods that are being placed on the Northern Ireland market is of the highest level.
The hon. Lady asked about the cost of the checks. We will be working with HMRC in order to ensure that the checks are as light-touch as possible and integrated, for example, into the operation of VAT returns and other processes with which businesses are already familiar. We are confident that Northern Ireland’s businesses and HMRC can work collaboratively in the course of the remaining seven months before the transition period ends in order to have a system that is operational, light-touch, effective and unobtrusive.
The hon. Lady makes a point about tariffs. Of course, tariffs would apply only in the case of there being a zero-tariff, zero-quota free trade agreement with the European Union. The European Union is committed in the political declaration to securing such a zero-tariff, zero-quota arrangement, in which case the provisions in the protocol for the remittance of tariffs would not be required. I refer her to paragraph 27 of the Command Paper, which makes it clear that if it were the case that there were no agreement and that tariffs did have to be levied, the Government would
I am grateful to my right hon. Friend for his statement. Will he confirm that, as from 1 January 2021, Northern Ireland —that is, a part of the United Kingdom—will be required to abide by EU regulations on certain goods until at least 2024 and potentially indefinitely?
I am very grateful to my right hon. Friend for her question. Let me take this opportunity to pay tribute to her for her work during her time as Prime Minister to ensure that the position of Northern Ireland could be secured within the United Kingdom even as we left the European Union. It is the case that there will be EU regulations and aspects of the acquis that will apply in Northern Ireland until 2024, but of course she draws attention to a very important point. If the workings of the protocol are viewed by the people and parties of Northern Ireland as onerous, too much, intrusive and unacceptable, they have the opportunity to vote them down in 2024. That is why it is so important that we design an approach that can continue to command consent.
Today, we seem to be presented with another episode of Schrödinger’s border—one that is both there and not quite there, all dependent on what side of the EU negotiations a person happens to be on. UK Ministers have repeatedly said that there will be no border or any checks down the Irish Sea. We now know that that is not exactly the case, as we heard in the last response. From the very beginning, the possibility of that was crystal clear given what is in the withdrawal agreement and the need for a level playing field between the EU and Northern Ireland. We all know that there will be customs checks between the rest of the UK and Northern Ireland, so why do the UK Government not just acknowledge that fact? The EU has said that there must be the introduction of customs procedures and formalities in Northern Ireland for all goods traded between Northern Ireland and Great Britain.
There have been no discussions about this with the Scottish Government, even though we will be placed at a competitive disadvantage with Northern Ireland because of these arrangements. We would give our national right hand to have the arrangements and competitive advantage that Northern Ireland will have, so why can we not get some of this if Northern Ireland does not want it?
These negotiations need skill, guile and dexterity, and I think we have seen again today a Government who are singularly not up to it.
Skill, guile and dexterity are all virtues that we associate with the hon. Gentleman, so if he wants to join the Government negotiation team, he would be more than welcome on board. The point about customs infrastructure and customs checks is a misunderstanding on his part. We want to ensure, as he recognises in his question, that the people and businesses of Northern Ireland have the opportunity to benefit both from their secure position within the United Kingdom and from access to the EU market. Northern Ireland’s history, its traditions and its geography put it in a unique position, but the proposal that we put forward today means that there is no need for new customs infrastructure and at the same time Northern Ireland stays within the customs territory of the United Kingdom. I know that the hon. Gentleman is an enthusiast for border posts and would want to have them not just at Belfast but at Berwick, but my own view is that our United Kingdom is better off without them.
If we are correct to presume that any paperwork will be digital, can my right hon. Friend assure me that there will be compatibility between the IT systems of HMRC and those of the European Union in order to ensure that that system can work swiftly and smoothly? He mentioned consultation in his statement. We have been hearing in the Select Committee inquiry on this important issue of precious little engagement with the business community by his Department. May I urge him to sharpen his pencil and engage with the community to ensure that it is understood and that his Department understands that most businesses are mostly focused on dealing with covid and trying to survive?
We will of course work to make sure that IT systems are efficient and compatible and consult with business. In fact, my right hon. Friend the Secretary of State has a business roundtable this afternoon. Engagement with Northern Ireland’s citizens and its many small and medium-sized enterprises is critical to making everything work.
We all hope there will be an exit agreement with the EU, but if there is not, how will the Government stop goods, such as cars made in the EU, which in those circumstances would attract a 10% tariff, from entering Great Britain tariff-free via Northern Ireland? The right hon. Gentleman has told the House that goods would have unfettered access moving from Northern Ireland to GB. Would there in fact have to be checks if people tried to do that?
The way the UK and the EU seek to address “Ireland’s unique geographic situation” in the negotiations could have constitutional and practical implications for Northern Ireland’s status within the UK. Could my right hon. Friend reassure me that he can square that circle, or is it, on the current trajectory of the talks, an impossible objective?
That circle can be squared using an exercise of what I believe in the EU is known as variable geometry. The truth of course is that Northern Ireland’s position within the UK is constitutionally secure and unchanged.
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There are four steps we will take to ensure the protocol is implemented effectively. First, we will deliver unfettered access for NI producers to the whole of the UK market. Northern Ireland to Great Britain goods movements should take place as they do now. There should not be export declarations or any other processes as goods leave NI for GB, and we will deliver on unfettered access for Northern Ireland goods through legislation by the end of this year.
Secondly, we will ensure that there are no tariffs on goods remaining within the UK customs territory. In order to ensure that internal UK trade qualifies for tariff-free status, there will need to be declarations on goods as they move from Great Britain to Northern Ireland, but these systems will be electronic and administered by UK authorities. It will be for our authorities to determine any processes that are required, using the latest technology, risk and compliance techniques to keep these to an absolute minimum.
That will also allow us to deliver on our third key proposal, which is that implementation of the protocol will not involve new customs infrastructure. We acknowledge, however, as we have always done, that on agrifood and live animal movements, it makes sense to protect supply chains and the disease-free status of the island of Ireland, as has been the case since the 19th century. That will mean some expansion of existing infrastructure to provide for some additional new processes for the agriculture and food sector, but these processes will build on what already happens at ports such as Larne and Belfast, and we will work with the EU to keep these checks to a minimum, reflecting the high standards we see right across the UK. There is no such case, however, for new customs infrastructure, and as such there will not be any.
Fourthly, we will guarantee that Northern Ireland businesses will benefit from the lower tariffs that we deliver through new free trade agreements with third countries. This ensures that Northern Ireland businesses will be able to enjoy the full benefits of the unique access that they have to the UK and EU markets.
These four commitments will ensure that, as we implement the protocol, we give full effect to the requirements in its text to recognise Northern Ireland’s place in the UK and in its customs territory. As we take the work of implementation forward, we will continue to work closely with the First Minister and the Deputy First Minister, with Northern Ireland MPs from across parties, and with the business community and farming groups that have provided such valuable feedback for our approach.
Of course, we have already guaranteed, in the “New Decade, New Approach” deal, that the Northern Ireland Executive have a seat at the table in any meeting where Northern Ireland is being discussed and the Irish Government are present. Alongside that, there will be a new business engagement forum to exchange proposals, concerns and feedback from across the community on how best to maximise the free flow of trade, and we will ensure that those discussions sit at the heart of our thinking.
We recognise that there will be a wide range of voices and responses to our Command Paper. We will listen to these respectfully while we continue to put our own case with conviction at the Joint Committee. Our approach will of course continue to be informed by extensive engagement with businesses, politicians and individuals right across communities in Northern Ireland. We stand ready to work with the EU in a spirit of collaboration and co-operation so that a positive new chapter can open for Northern Ireland and its people in every community, and it is in that spirit that I commend this statement to the House.
will apply.
This is no small matter. Import declarations can require 40 separate data points, and Her Majesty’s Revenue and Customs has estimated that each declaration for shipment will cost between £14 and £56. Can the Minister confirm the number of checks and the costs of those checks to businesses? For the 1.8 million goods vehicles that crossed from Great Britain into Northern Ireland last year, that certainly adds up.
On tariffs, the Government have previously promised that there would be no tariffs on goods traded either way between Great Britain and Northern Ireland. Indeed, they have said that there will be no tariffs, fees or charges or quantitative restrictions. But today, for the first time, the Government have accepted that there will be tariffs on goods entering Northern Ireland. The Command Paper says that
“goods ultimately entering Ireland…or at clear and substantial risk of doing so, will face tariffs.”
So can the Minister say who will be levying or administering those tariffs, what “clear risk” means, and who will define it? Could tariffs be applied and later reimbursed, and if so, what would the timetable for that be? The Command Paper says:
“We will produce full guidance to business and third parties before the end of the transition period.”
That does not give much time for businesses to prepare for what could be quite profound changes.
The Minister says that goods moving from Great Britain do not need to be checked because the majority will remain in the UK. This is a hugely important point. Indeed, 70% of goods that flow from Great Britain are destined for the high street. I hope that a way forward can be found so that those goods can move freely. However, the Command Paper accepts that
“some new administrative process for traders, notably new electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”
will apply. So can the Minister confirm that that will include rules of origin checks, safety and security checks and import declarations, and if so, where and how will those checks take place? There is no mention in the document published today of a trusted trader scheme, which is surely essential for ensuring the free flow of goods without tariffs from Great Britain into Northern Ireland that we all want to see.
We welcome this statement, but it does expose the broken promises made by the Prime Minister. Today, for the first time, there has been an admission that there will be additional checks and that there will be tariffs on goods at risk of entering the single market. Even now, many fear that the Government are not willing to admit the full extent of those. We have seven months to get this right, and we must.
“make full use of the provisions in the Protocol giving us the powers to waive and/or reimburse tariffs on goods moving from Great Britain to Northern Ireland, even where they are classified as ‘at risk’ of entering the EU market.”
So there would be no additional costs for businesses.
The approach that we have taken, as the hon. Lady knows, is designed to ensure the maximum level of security for the businesses of Northern Ireland. If the protocol is implemented in line with our approach, that means that they will have unfettered access to the rest of the UK’s internal market and also free access to the EU’s single market. That is a great prize and one that I believe all businesses in Northern Ireland would want us to help them to grasp.