50.The Protocol guaranteed “unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.” ‘Unfettered access’ is not a legal term, and it can be understood in different ways. Even within the UK market, businesses currently accept certain costs and administrative requirements associated with the movement of goods, such as checks on live animals moving from Great Britain to Northern Ireland. The Command Paper stated that:
Trade going from Northern Ireland to the rest of the UK…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.
51.Businesses shared their understanding of what would constitute unfettered access. The Dairy Council for Northern Ireland took it to mean that “the flow of goods from NI to GB can continue as at present, with no impediment that would reduce the competitiveness of NI dairy products.” Businesses generally accepted that additional documentary checks on movements of goods from Northern Ireland to Great Britain, such as exit summary declarations (which the Government had at one point suggested would be required), would not be compatible with the promise of unfettered access. The Northern Ireland Business Brexit Working Group said that “it will be essential for the UK government to negotiate something bespoke for NI when it comes to the requirements for exit summary declarations between NI and GB.”
52.Several contributors to the inquiry expressed the view that for their businesses “unfettered access is not just about one-way movement.” The Northern Ireland Business Brexit Working Group explained that many businesses in Northern Ireland need access to the UK market to source raw materials or components for processing, with the finished product in some cases being re-shipped to the UK. Wesley Aston of the Ulster Farmers’ Union highlighted that the text of the Protocol did not guarantee unfettered access in both directions:
In terms of defining what unfettered access is, this is primarily NI to GB trade. It is not necessarily the other trade flow you mentioned, which is GB to NI. That is one where Europe is clearly saying, “Sorry, we have our rules.” That is not just about tariffs. It is about SPS [Sanitary and Phytosanitary, i.e. animal and plant health and safety] controls, and the UK Government do not really have any gift in that respect. That causes us real concern in any event, anyhow.
53.Witnesses were clear that unfettered access should mean the absence of not only formal processes and declarations, but new compliance costs for businesses that could affect competitiveness. The Dairy Council for Northern Ireland stated that “the notion of ‘unfettered access’ must include recognition of the additional costs NI dairy companies will have in getting products in to the GB market as a consequence of the additional documentation and checks that will be required.” Anne Donaghy of Mid and East Antrim Borough Council noted that small businesses are especially sensitive to additional costs:
Even a light-touch digitalisation of the system will add cost and burden on small businesses. Many of our SMEs are fewer than 10 people. How do you start to find a resource within that to complete the declaration and complete the paperwork? It will be very difficult to get the skill base and resource to do so.
Some businesses would bear these costs directly, while others would employ the services of professional customs agents. The Freight Transport Association reported that the average cost charged for completing a basic export declaration was £26 and that businesses could also face additional administration costs, IT costs, training costs and other one-off costs in order to meet the new requirements. The Northern Ireland Business Brexit Working Group added that non-compliance could entail further costs. It noted that incorrectly completed exit summary declarations are currently subject to a £300 fine. Goods could also be denied passage, which would result in further costs. Other concerns include write-offs due to the perishability of goods and negative effects on animal welfare arising from delays on livestock movements.
54.The Dairy Council for Northern Ireland raised further concerns about the proposals for defining “qualifying Northern Ireland goods,” noting that any requirement for checks to verify this status may not be compatible with the commitment to unfettered access. It added that Northern Ireland goods must not be discriminated against in the market in Great Britain.
55.In practice, we expect ‘unfettered access’ to mean the absence of new regulatory barriers, costs or administrative requirements to businesses moving goods from Northern Ireland to Great Britain. Benefits would accrue from the same being true for movements in the opposite direction.
56.The Government must ensure that Northern Ireland businesses do not face new up-front or ongoing costs in order to move goods from Northern Ireland to Great Britain. Such costs would not be compatible with the Government’s commitment to unfettered access.
57.All the definitions of “unfettered access” discussed in the previous section [see paragraphs 50 to 56] were predicated on the assumption that unfettered access means no new declarations to move goods from Northern Ireland to Great Britain. Importantly, the Command Paper promised “no additional processes or paperwork” for those movements. That included no import declarations or entry summary declarations on goods entering Great Britain from Northern Ireland, and no export declarations or exit summary declarations for goods leaving Northern Ireland for Great Britain. The paper acknowledged that a small number of goods will be exempt from those arrangements and that some goods will be subject to new procedures when leaving Northern Ireland, such as movements of endangered species and goods moving under certain customs procedures. However, those special cases will apply to “minimal volumes” of trade.
58.The Government’s commitment to waive the requirement for import or entry summary declarations can be met unilaterally. Once the transition period ends, the UK will have the right to determine the conditions under which goods can enter its territory, and it could waive these requirements on goods entering Great Britain from Northern Ireland. However, other customs formalities cannot be waived by the UK unilaterally, such as the requirement for export declarations or exit summary declarations on goods leaving Northern Ireland, because those declarations inform the customs authorities that goods are to be taken out of the EU’s customs territory. Those declarations are requirements of the Union Customs Code, which continues to apply in Northern Ireland under Article 5 of the Protocol. The Command Paper argued that the requirement for export or exit summary declarations should be waived, and that the UK and the EU should agree on this approach in the Withdrawal Agreement Joint Committee (WAJC). The Government argued that:
it makes no sense for Northern Ireland businesses to be required to complete an export or exit summary declaration as they send goods directly to the rest of the UK. Self-evidently goods being sent away from the Single Market cannot create a back door into it; and any such goods subsequently leaving the UK would be subject to both exit and entry checks anyway en route to their new destination.
However, the EU indicated that it would not agree to such an approach. Michel Barnier, the Head of the EU’s Task Force for Relations with the United Kingdom, commented that “some of the objectives set out in this Command Paper—such as avoiding exit declarations on goods moving from Northern Ireland to Great Britain—are incompatible with the legal commitments accepted by the UK in the Protocol.” When we raised the EU’s objections to the Command Paper with the Chancellor of the Duchy of Lancaster, he reiterated that exit summary declarations “will not be required.” He did not say whether that is because the Government believes that the EU Commission will ultimately agree to the approach set out in the Command Paper, or whether it believes that exit summary declarations will not be required in any case.
59.It is unclear whether the Government believes that the agreement of the WAJC is necessary or merely desirable to avoid the imposition of export or exit summary declarations on goods leaving Northern Ireland. There has to be a suspicion that the Government sees its Command Paper as just that, a command, rather than a proposal which requires negotiation and agreement. The UK’s approach depends on the EU granting waivers from export declarations and exit summary declarations. While the Government’s interpretation is desirable, it is ultimately a matter for the EU whether it grants that concession. We note that such declarations will be required under the Protocol if the rule is not waived, and that this would be incompatible with the commitment to unfettered access.
60.The Government must set out, in a timely fashion, how it will facilitate unfettered access if it does not secure a waiver from export declarations and exit summary declarations in the Joint Committee.
63 HM Government, , 18 October 2019, Article 6(1)
64 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, , 20 May 2020, pp. 9
65 Dairy Council for Northern Ireland ()
67 Northern Ireland Business Brexit Working Group ()
68 Northern Ireland Business Brexit Working Group ()
69 Northern Ireland Business Brexit Working Group ()
71 Dairy Council for Northern Ireland ()
73 Freight Transport Association ()
74 Northern Ireland Business Brexit Working Group ()
75 Dairy Council for Northern Ireland ()
76 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, , 20 May 2020, pp. 9
77 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, , 20 May 2020, pp. 9
79 HM Government, , 18 October 2019, Article 5(3)
80 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, , 20 May 2020, pp. 10
81 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, , 20 May 2020, pp. 10
82 EU Commission, , 5 June 2020
Published: 14 July 2020