UK and EU urged to reset dialogue on the Protocol to rebuild trust and damaged relationships
27 July 2022
The Sub-Committee on the Protocol on Ireland/Northern Ireland has today published a follow-up report on the impact of the Protocol. The report finds that the Protocol is having a ‘feast or famine’ economic impact, whereby businesses able to take advantage of North-South trade benefit, while those reliant on East-West trade lose out. Businesses have put forward a range of mitigations and solutions, several of which are reflected in the UK and EU proposals. But a renewed commitment by the UK and EU, together with the Northern Ireland political parties and stakeholders, and the Irish Government, to rebuild trust and dialogue and to repair damaged relationships is urgently needed if the problems Brexit and the Protocol have presented for Northern Ireland are to be addressed.
- Report: Follow-up report (HTML)
- Report: Follow-up report (PDF)
- Inquiry: Follow-up inquiry on the impact of the Protocol on Ireland/Northern Ireland
- Sub-Committee on the Protocol on Ireland/Northern Ireland
The House of Lords Protocol on Ireland/Northern Ireland Committee has today published the its follow-up report into the socio-economic and political impact of the Protocol, analysing developments in the year 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 most significant negative economic impact of the Protocol has been on East-West trade between Great Britain and Northern Ireland, in terms of:
- Increased bureaucracy, staff resources, cost and delivery times.
- A disproportionately negative impact on SMEs.
- Concerns that businesses in Britain will withdraw from the Northern Ireland market.
- 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, the Protocol has been beneficial for North-South trade on the island of Ireland, in terms of:
- The Protocol’s positive impact for Northern Ireland firms able to benefit from or reliant on North-South trade and/or trade with the EU.
- 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.
- Business fears of 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, and
- a UK-EU SPS/veterinary agreement.
The report also finds that:
- While there is some support for the concept, there is widespread concern among business about the practical feasibility for cross-border supply chains of the Government’s proposals for a dual regulatory regime.
- Welcome progress has been made towards resolving issues around the supply of medicines to Northern Ireland, but a number of issues remaining outstanding which the UK and EU need to address together.
- 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 extended by the UK, 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.
The Chair of the Committee, Lord Jay of Ewelme 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.”