On 1 January 2021, the Northern Ireland Protocol, agreed by the United Kingdom and the European Union as part of the Withdrawal Agreement, will take effect. The Protocol was conceived as a way of preserving a frictionless north-south border on the island of Ireland, thereby respecting the Belfast/Good Friday Agreement. Its success will be measured by how well it avoids the emergence of new barriers to trade between Northern Ireland and other parts of the UK. The commitment that Northern Ireland shall have ‘unfettered access’ to the rest of the UK internal market, and the associated commitments to protecting that market, is fundamental to this aim. A failure to meet these commitments would have profound consequences for the Northern Ireland economy—for businesses, for consumers and for investment. We therefore decided to hold an inquiry into how trade between Northern Ireland and other parts of the UK would work under the Protocol.
The Protocol sets out the customs status of Northern Ireland and specifies areas of EU law, including the Union Customs Code, that will continue to apply there. However, some matters remain undecided. Important decisions, such as the question of which goods should be subject to EU tariffs on entering Northern Ireland, are delegated to the UK-EU Withdrawal Agreement Joint Committee. The Joint Committee, and its specialised committees, will also play an important role in the application and oversight of the Protocol for as long as it remains in operation. We therefore recommend that information about the work of these committees be made available to the UK Parliament and the Northern Ireland Assembly, so that their decisions can be properly scrutinised. Mechanisms must be established to enable Northern Ireland businesses, representatives and others to engage with these bodies. We also emphasise that the Joint Committee must be a constructive forum for genuine problem-solving, in which the interests of Northern Ireland, and protecting the gains of the Peace Process, are the key concerns.
Other aspects of trade between Northern Ireland and Great Britain will depend on how the UK Government implements the Protocol. The Government’s Command Paper of 20 May, The UK’s Approach to the Northern Ireland Protocol, sets out its preferred approach, but questions remain about how the process for moving goods across the Irish Sea will change from 1 January and what the new requirements on businesses will be. We are clear that UK businesses trading across the Irish Sea must not face new up-front or ongoing costs, as these would not be compatible with the Government’s commitment to unfettered access and to maintaining Northern Ireland’s integral place in the UK internal market. We recommend that the Government:
We note that some aspects of the approach outlined in the Command Paper will require agreement by the EU, such as the proposal that Exit Summary Declarations on goods leaving Northern Ireland for Great Britain be waived. We call on the Government to clarify which aspects of its approach will require agreement from the EU and to explain how it will ensure unfettered access if it does not secure such agreement.
The Protocol presents a number of practical challenges, compounded by the shortage of time available and the added pressures that the Covid-19 pandemic is placing on both government and business. Making the Protocol operational in the next six months will require rapid action to:
This work is of critical importance and needs to be properly scrutinised. We recommend that the Government shares its assessment of the challenges involved and provides opportunities for parliamentary scrutiny between now and the end of the transition period.
We highlight that business is faced with a demanding timetable if it is to be ready for the changes the Protocol will bring. Many key decisions have not yet been taken, and as a result many businesses do not yet know what preparations they need to make. This problem has been compounded by unclear and inconsistent communication by the Government in the months following the publication of the Protocol and a lamentable lack of engagement with business. We therefore urge the Government to:
Finally, we recommend that the promised Business Engagement Forum is established immediately, and that this is used to inform and consult business on the implementation of the Protocol both now and beyond the end of the transition period.
Published: 14 July 2020