The objectives of the Protocol on Ireland/Northern Ireland agreed between the UK and the EU in 2019
are to protect the Belfast (Good Friday) Agreement in all its dimensions; to respect Northern Ireland’s
integral place in the United Kingdom, its internal market and customs territory; to uphold the essential
state functions and territorial integrity of the United Kingdom; to avoid a hard border on the island of
Ireland; and to help protect the EU’s Single Market.
It is now widely accepted by all parties that the current operation of this Protocol does not fully support these objectives and that changes are needed if the current situation is to improve. It is clear, including from recent polling, that a large majority across Northern Ireland shares that perspective.
The Command Paper we published on 21 July outlined comprehensive and lasting solutions to the
current difficulties. We decided then that the right route was to prioritise negotiated change to the
Protocol rather than, at that point, use the Protocol’s Article 16 safeguard measures. I and my team
have engaged in detailed negotiations with the EU Commission on this basis in recent months.
There has been some progress, but not as much, and not as quickly as we had hoped. Although we
have worked with the proposals put forward by the Commission in mid-October, they do not solve the
problems, and even in some aspects take us back from the current unsatisfactory status quo.
The main area of progress has been on medicine supply to Northern Ireland. I believe that our
proposal to remove medicines from the Protocol is still the most straightforward solution, given that
the provision of health services is an essential state function and that Northern Ireland medicines are
overwhelmingly sourced from elsewhere in the UK. But we have been willing to look at the EU’s
preferred option, pursuing unilateral amendment of its own laws. The EU’s proposals, published
today, follow on from discussions between our teams. They could constitute a constructive way
forward, and we are willing to look at them positively, but as we have not been able to scrutinise the
texts in the necessary detail we are not yet able to make that judgement with full confidence.
There has been much less progress in other areas. The burdensome customs and SPS arrangements
for goods moving between Great Britain and Northern Ireland have had a chilling effect on trade,
increasing costs and discouraging firms from trading within their own country. It is vital to get the
arrangements in this area right, given the overwhelming importance to the Northern Ireland economy
of links with the rest of the UK. We have argued consistently that the simplest solution is to put in
place substantively different processes for goods which all sides agree will stay in the UK and those
which do not. These should cover not only goods moved directly, but also the increasing proportion of
goods moved by parcel, and other kinds of movements such as pets, livestock, plants, and seeds. The
proposals made by the EU in October constituted a step forward but, based on what we have heard to
date, our expert analysis does not support the ambitious public claims made for them. Overall, it is not
possible to envisage an agreed solution which does not deliver significant change in this area.
Nor have we managed to have a constructive discussion about the regulatory burdens being faced by operators in Great Britain looking to place manufactured goods on the market in Northern Ireland.These burdens will get worse over time as UK and EU rules diverge.
We have had some limited discussions on subsidy control. The Protocol’s provisions in this area,
leaving Northern Ireland subject to EU state aid rules, were agreed in 2019. Since then, the UK and the
EU have agreed entirely new subsidy control rules in our new free trade deal and we have brought in
an entirely new national subsidy control regime. The rules need to evolve to reflect this new reality.
Northern Ireland businesses are facing unjustified burdens and complexity, and the Government
cannot deliver aid to Northern Ireland, for example for Covid recovery support, without asking for the
EU’s permission. We need to find more appropriate and proportionate arrangements that reflect the
low level of risks posed to the single market in practice by subsidies in Northern Ireland.
There have been relatively constructive discussions on VAT and excise policy, but we have not yet
found a way of ensuring that Northern Ireland can properly benefit from its place in the United
Kingdom’s VAT and excise area in the same way as other parts of the UK.
Finally, a solution is needed on governance. As the EU’s preferred way forward on medicines
illustrates, neither Northern Ireland nor the UK more broadly gets any say on the way EU legislation is
imposed on Northern Ireland. This remains a fundamental issue of democratic accountability. Nor is
it reasonable or fair for disputes between the UK and the EU relating to the Protocol to be settled in
the EU Court of Justice, the court of one of the parties. The Withdrawal Agreement already provides
for the use of an independent arbitration mechanism instead, and the simplest and most durable way
forward would be to agree that this should be the sole route for settling disputes in future.
Overall, with the potential exception of medicines, I do not believe that the negotiations are yet close
to delivering outcomes which can genuinely solve the problems presented by the Protocol. The EU’s
proposals only cover certain areas and would not do enough to ease the burdens faced by people in
Northern Ireland; or to create the conditions for genuinely cross-community support.
Our preference would be to reach a comprehensive solution dealing with all the issues. However,
given the gravity and urgency of the difficulties, we have been prepared to consider an interim
agreement as a first step to deal with the most acute problems, including trade frictions, subsidy
control, and governance. Such an agreement would still leave many underlying strains unresolved, for
example those caused by diverging UK and EU rules over time. It would therefore be inherently
provisional by nature and would accordingly need to include mechanisms for addressing outstanding
issues and resolving new concerns as they arise. The UK has proposed a number of possible ways
forward, but regrettably it has not so far been possible to make progress even on what the core
elements of an interim agreement might be.
It is disappointing that it has not been possible to reach either a comprehensive or worthwhile interim
agreement this year. A solution needs to be found urgently early next year. For as long as there is no
agreed solution, we remain ready to use the Article 16 safeguard mechanism if that is the only way to
protect the prosperity and stability of Northern Ireland and its people.