Commitment to rebuilding trust needed to resolve NI Protocol issues

A renewed commitment to rebuild trust and dialogue and to repair damaged relationships is urgently needed to address the problems Brexit and the Protocol have presented for Northern Ireland, a House of Lords Committee says.

The House of Lords Protocol on Ireland/Northern Ireland Committee has published its follow-up report into the socio-economic and political impact of the Protocol, analysing developments since the publication of its introductory report in July 2021. The Committee's findings are informed by evidence from the five largest parties in the Northern Ireland Assembly, the UK and Irish Governments, business representatives, academics and civic society representatives.

The Committee finds that the Protocol has had a "feast or famine" economic impact. On the one hand, the most significant negative economic impact of the Protocol has been on East-West trade between Great Britain and Northern Ireland. This has been felt in terms of increased bureaucracy, staff resources, cost and delivery times, as well as restricting the ability of businesses to respond flexibly to supply and demand impacting product availability and costs for consumers.

There has been a disproportionately negative impact on SMEs, and there remains a concern that businesses in Britain will withdraw from the Northern Ireland market. There is also widespread concern within the business community about the impact on Northern Ireland of increasing regulatory divergence between the UK and EU.

On the other hand, businesses stressed the Protocol's beneficial impact for Northern Ireland firms able to benefit from or reliant on North-South trade on the island of Ireland and/or trade with the EU, as well as providing locally sourced goods previously supplied by GB-based suppliers. Industry representatives have stressed the importance of the Protocol for sectors of the economy such as the dairy and meat processing industries that are dependent on complex cross-border supply chains on the island of Ireland, and the damage that would be caused to these sectors should access to the EU Single Market be lost.

Businesses have called for the UK and EU to agree a number of mitigations and solutions, including:

• addressing the definition of goods 'at risk' of moving into the EU Single Market
• the need for proportionality in the application of rules and controls on movement of goods from Great Britain to Northern Ireland
• proposals for green and red lanes supported by an enhanced trusted trader scheme and audited supply chains
• the continuation of the various grace periods and derogations unilaterally extended by the UK
• making permanent the UK's Trader Support Service and Movement Assistance Scheme
• a UK-EU SPS/veterinary agreement.

While there is some support for the concept, there is widespread concern among business about the practical feasibility and implications for cross-border supply chains of the Government's proposals for a dual regulatory regime.

The Committee welcomes the progress that has been made towards resolving issues around the supply of medicines to Northern Ireland, but the pharmaceutical industry has stressed that a number of issues remain outstanding which the UK and EU need to address together.

The Committee reports that business representatives have repeatedly stressed the damaging economic impact of continued political uncertainty over the Protocol, and, notwithstanding their acknowledgement of the economically beneficial impact of the continuation of the grace periods, their concerns over the economic implications of unilateral action. The Committee will scrutinise the Northern Ireland Protocol Bill and the EU's response in the autumn. Without prejudice to the views of individual members on the Bill, the Committee stresses that a mutually agreed solution is the best outcome. Yet this requires flexibility and compromise on all sides, on the basis of a renewed commitment to work together, constructive engagement and trust, to put Northern Ireland's interests first.

Lord Jay of Ewelme, Chair of the Protocol on Ireland/Northern Ireland Committee, said:

"The Committee's engagement with businesses trading in and with Northern Ireland has demonstrated that, while much uncertainty remains, the economic impact of the Protocol is gradually becoming clearer. The situation was described to us as 'feast or famine', whereby businesses able to take advantage of the Protocol benefit, while those dependent on trade with Great Britain lose out.

"Business representatives have put forward a number of mitigations and solutions to ease the practical impact of the Protocol, and many of these proposals remain unchanged since the Committee's July 2021 introductory report.

"At that time, we stressed the need for dialogue to resolve the issues arising under the Protocol in the interests of the people of Northern Ireland. It is a matter of deep regret that, in the intervening twelve months, the state of political dialogue in relation to the Protocol has deteriorated further.

"There is an urgent need for a reset of dialogue. We therefore call on the UK and the EU, together with the political parties, and stakeholders in Northern Ireland, and the Irish Government, to make a renewed commitment to work together to put Northern Ireland's interests first, participate together in constructive engagement, rebuild trust and engage in effective relationship-building.

"As one of our witnesses told us, those who negotiated the Belfast/Good Friday Agreement were able to do so because of their ability to appreciate the perspectives of others and willingness to work together and take risks to achieve a common goal despite historic differences. Such a courageous approach is needed now."

The full report from the committee can be found here.