The United Kingdom Internal Market Bill: Part 5 Contents

Chapter 5: Conclusions

89.The tensions inherent in the Protocol on Ireland/Northern Ireland were not hidden—they were apparent from the outset. The Protocol was then ratified by both the UK and the EU in full knowledge of these tensions.

90.The expectation must therefore have been that the two sides would, in good faith, negotiate a pragmatic compromise, providing proportionate safeguards to both sides, and meeting the objectives set out in the Recitals and in Article 1 of the Protocol, namely respecting the essential State functions and territorial integrity of the UK, addressing the unique circumstances on the island of Ireland, and protecting the 1998 Belfast/Good Friday Agreement in all its dimensions.

91.If the Government judges that the EU is not complying with the Protocol, or is not seeking to implement it in good faith, it will be fully entitled to invoke the arbitration and dispute resolution procedures set out in the Withdrawal Agreement. These procedures could ultimately result in the United Kingdom being authorised unilaterally to suspend relevant obligations under the Protocol.

92.Furthermore, if the application of the Protocol at any point gives rise to serious and persistent economic, societal or environmental difficulties, the United Kingdom will be entitled unilaterally to take appropriate safeguard measures under Article 16 of the Protocol.

93.We note also that the trade aspects of the Protocol are subject to a periodic consent mechanism. Should they no longer be acceptable to the people of Northern Ireland, there will be a democratic process by which they can be terminated.

94.In summary, the Withdrawal Agreement and the Protocol contain elaborate and multi-layered safeguards. The Government has offered no convincing explanation of why, rather than making use of these safeguards, it has chosen to address its concerns over the implementation of the Protocol by means of the United Kingdom Internal Market Bill.

95.The Bill itself would confer upon Ministers powers to make regulations that would breach an international agreement that the UK ratified as recently as January 2020. Indeed, clause 45 gives numerous examples of how such powers could be used. The Bill also confers upon Ministers the power to override provisions contained in the European Union (Withdrawal Agreement) Act 2020, which was enacted in order to give effect to that agreement.

96.On 8 September 2020 the Secretary of State for Northern Ireland told the House of Commons that the Bill “break[s] international law in a very specific and limited way”. But in the days following this clear statement there was considerable confusion over the Government’s legal position. The former Advocate General, Rt Hon Lord Keen of Elie QC, argued that the Bill was in fact necessary and lawful, to enable the United Kingdom to take unilateral action, as envisaged in Article 16 of the Protocol, in the event of the EU failing to act in good faith in implementing the Protocol. The Secretary of State has since stood by his original statement, although the Chancellor of the Duchy of Lancaster, in evidence to this Committee, appeared to echo elements of Lord Keen’s argument.

97.It follows that until the Government formally retracts the Secretary of State’s statement of 8 September 2020 and puts forward a coherent and consistent argument to support the lawfulness of the Bill, it is difficult to avoid the conclusion that Part 5 of the Bill does indeed contravene international law.

98.It is also clear from the Secretary of State’s statement, and his insistence that in making that statement he was acting on legal advice, that this breach of international law has been entered into knowingly. Indeed, the Bill strikes at the heart not only of the Protocol, but of the Withdrawal Agreement, in particular Article 4, which provides for the direct effect of the terms of the Agreement, and which was implemented in January 2020, by means of new section 7A of the European Union (Withdrawal) Act 2018.

99.We note also that the objectives set out in the Bill, which relate wholly to the UK internal market, reflect the commitment in Article 1(2) of the Protocol to respect the essential State functions and territorial integrity of the UK. But they fail to give effect to the balancing commitment in Article 1(3) to address the unique circumstances on the island of Ireland (including maintaining North-South cooperation and avoiding a hard border), and to protect the Belfast/Good Friday Agreement in all its dimensions. This is not to say that Ministers would ignore such considerations when exercising the powers conferred upon them under the Bill—but they would not be required to have regard to them.

100.We acknowledge both the Government’s continuing commitment to the Belfast/Good Friday Agreement, and its legitimate concern that a rigid interpretation of the Protocol, by creating barriers between Northern Ireland and Great Britain, could undermine it. Yet the Belfast/Good Friday Agreement is itself made up of three interlocking strands, supporting North-South, East-West and internal Northern Ireland relationships. All parties to the Agreement, including the United Kingdom Government and the European Union, have an obligation to maintain this delicate balance.

101.By focusing solely on Northern Ireland’s relationship with the rest of the UK, the Bill fails to reflect that balance, and we therefore consider that in principle, if not in intent, it could pose a threat not just to the Withdrawal Agreement (including the Protocol on Ireland/Northern Ireland), but to the maintenance of the Belfast/Good Friday Agreement.

102.As for the wider political context, at the time the Bill was introduced the Government alleged that the EU had not been acting in good faith, and in particular, that it had, by withholding third country listing for the United Kingdom, been threatening to prevent the transport of food from Great Britain to Northern Ireland. The Government has not answered our letter of 18 September, and it has not disclosed any evidence to support this allegation, which, if true, would constitute a grave and extraordinary breach by the European Union of the Withdrawal Agreement. Nor is it obvious how, in practice, the European Union could stop the movement of goods between Great Britain and Northern Ireland. Nevertheless, we welcome the Government’s confirmation on 23 September 2020 that progress has been made on the question of third country listing.

103.It is notable, though, that the Bill itself does not address the substance of the allegation made by the Government. It says nothing of the definition of goods not at risk of entering the EU Single Market, nor of tariffs or other charges that might be imposed on goods moving from Great Britain to Northern Ireland. There is a mismatch between the Government’s justification for introducing the Bill, and what the Bill actually does.

104.The Government has now published a statement saying that it would not seek to use the powers contained in the Bill unless the European Union were itself to be demonstrably acting in bad faith, and that it would in parallel use the dispute resolution procedures contained in the Agreement. This statement is reflected in the Government amendments agreed by the House of Commons, including new clause  56, which provides that a further resolution of the House of Commons will be required before a Minister can use the powers contained in Part 5. The clause provides no equivalent role for the House of Lords.

105.But the addition of this further domestic safeguard does not alter the Bill’s fundamental incompatibility with the Withdrawal Agreement. Nor does it alter the fact that rather than using the dispute resolution procedures set out in the Agreement, and retaining the option of emergency legislation as a potential last resort, the Government sought pre-emptively to use domestic legislation to overturn commitments entered into in the international sphere. On 1 October the European Commission duly launched infringement procedures which, in accordance with the terms of the Withdrawal Agreement, will fall to be decided by the Court of Justice of the European Union.

106.Whatever the substance of the disagreements that have arisen in the future relationship negotiations and in the Joint Committee, the Government’s pre-emptive action has, in effect, placed the United Kingdom in the wrong. In the process it has damaged the United Kingdom’s international reputation as a defender of the rule of law.

107.In summary, the Government has not disclosed any evidence that the EU has acted in bad faith; it has not explained why, if the EU has acted in bad faith, the Government chose not to use the safeguard, arbitration and dispute resolution procedures contained in the Withdrawal Agreement and the Protocol; and it has not explained why it chose instead, by publishing Part 5 of the Bill when it did, to take pre-emptive and unilateral action. In the absence of these explanations, we hope that the Government will, when the Bill is read a second time, indicate a change of heart, and undertake to table amendments to remove Part  5, while giving renewed and more urgent focus to the task of reaching an agreement with the EU both on the future UK-EU relationship, and on the implementation of the Protocol.

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