Northern Ireland Protocol

Lord Bruce of Bennachie Excerpts

Thursday 21st May 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I start by making one correction to what the Minister said yesterday. His allegation was that I was

“always critical of the role of Mr David Frost”.—[Official Report, 20/5/20; col. 1182.]

I was critical of the apparent lack of ministerial sign-off on major statements; of a key letter being signed by a “Sherpa”—as he calls himself—rather than by a Minister; and of the inability of parliamentarians to question our EU negotiator.

Today’s Statement, by contrast, is the long-awaited admission by Ministers that the Northern Ireland arrangements will indeed involve border checks between Great Britain and Northern Ireland, with additional checks, declarations on goods moving from Great Britain into Northern Ireland, and tariffs on goods at risk of entering the EU single market.

Nevertheless, the Command Paper leaves many questions unanswered. We had thought that the EU was expecting the UK to levy duties on all goods going to Northern Ireland, unless it could be established that they were not at risk, with the 70% on goods staying in Northern Ireland then being reclaimed. Can the Minister tell the House whether the EU now accepts the approach in the Government’s paper, that duties would be levied only on goods which pose a “clear and substantial risk” of entering the single market? Can he also explain how

“goods at risk of entering the EU’s Single Market”

will be decided? Perhaps he can reassure us that the paper’s promise to

“produce full guidance to business and third parties before the end of the transition period”

is simply a typo, and that such guidance will be available in time to become operational by 1 January?

With goods from Northern Ireland to Great Britain, the paper implies a very light touch. However, Welsh ports will be required to have additional infrastructure to make customs and regulatory checks—some “expansion” of infrastructure, in the words of the Statement—but without proper consultation with Wales, and perhaps not with Scotland, about arrangements which would need to be in operation by the end of the year.

Can the Minister also explain how, in practice, there will not be significant flows of goods from the EU single market into Great Britain through the backdoor of Northern Ireland, especially if, under either a deal or no deal, there are tariffs on goods coming from the EU into Great Britain—such as from France and Benelux —but not from Northern Ireland to Great Britain?

Talk, of course, in the paper of “light-touch” checks and the “latest technology”, neither of which exist other than on paper, naturally raises concerns. After all, we do not seem to have been able to create a rather simple track-and-trace app after 10 weeks of the virus, while “light-touch” seems to include an export summary declaration, with 45 entries for every consignment. Therefore, can the Minister outline what discussions have been held with importers and exporters, and tell us what confidence he has that business, and government checkers, will be ready for this in time?

Turning to how the Command Paper was drafted, we have been given to understand that the Northern Ireland Executive were not involved in its preparation. Is that the case? The other devolved authorities were similarly excluded, despite the impact on their ports and points of arrival, and on their hopes for an internal single UK market. As the Minister knows, we do not have a Welsh, Scottish or Northern Ireland Minister in this House. Does that reflect the low priority given to these areas, even as major policy decisions affecting them greatly are being taken? The absence of territorial Ministers in our House certainly makes scrutiny of their departments somewhat more challenging, even if today’s Statement clearly falls to the Cabinet Office.

For all the effects of Brexit, Ireland is surely the most sensitive and most important issue, not simply for trade but for how the people of Northern Ireland feel about themselves and for the vital importance of retaining all the benefits of the Good Friday agreement. On this, I am sure, the Minister and I will be in total agreement. Therefore, my plea today is for Ministers to talk more to politicians and businesses, and indeed to civil society in Northern Ireland, as well as in Scotland and Wales, to ensure that all parties have confidence in how we move forward with the protocol.

[Lord Bruce of Bennachie (LD)]

My Lords, given the duplicity of the Government, the Northern Ireland protocol has all the semblance of damaged goods. In particular, the repeated denial that it would involve the need for any new UK customs declaration or checks is revealed as the hollow sham that it always was.

In his Statement yesterday, Michael Gove tried to play this down, but the White Paper cannot be gainsaid. It says that

“there will be some limited additional process on goods arriving in Northern Ireland ... There will be no new physical customs infrastructure ... We will however expand some existing entry points for agrifood goods to provide for proportionate additional controls.”

It also says in relation to

“Belfast Port, Belfast International Airport, Belfast City Airport and Warrenpoint Port”

that:

“Expanded infrastructure will be needed at some of these sites for the purpose of agri-food checks and assurance ... we expect to request additional categories of commodities at Belfast Port, and to designate Larne Port for live animal imports ... further designations may also be required at other existing sites.”


This is a clear change of a radical nature. What costs and delays does the Minister expect it to cause? It cannot be done without time being taken to deal with these matters.

The Government choose to refer to the withdrawal agreement as a “deal” when it is no such thing; it is an agreement on the terms of withdrawal. When it suits, they choose to rely on the political declaration, although this is only a declaration of intent and needs to be judged against the backdrop of the Government preparing for a no-deal Brexit and, frankly, blaming the EU for it.

The Government also seek to present the protocol as temporary, dependent only on a vote of the Northern Ireland elected representatives to abandon it after 2024. In reality, it puts Northern Ireland in the unique position of effectively remaining in the EU single market and the UK customs union—a privilege which many businesses in Great Britain would no doubt love to have. Again, the Government seek to downplay the importance of cross-border trade to the Province, yet it is worth over £5 billion and for some businesses may be their chief revenue and profit earner.

If they import components from the UK and process them before exporting to the Republic, they will be liable to tariffs. This will present them with a clear difficulty. It will involve extra bureaucracy and require them to fill out import and export forms and train and possibly recruit extra staff and maybe use agents. All this will add substantial costs. The White Paper says that HMRC will provide help and guidance to businesses, but this is to help deal with a situation they currently do not face. This will come at a cost, so will the Government cover that cost?

The Government make great play of the benefit of lower tariffs that they hope to negotiate at some unspecified future date. Of course, while I appreciate the benefits of free trade, if this comes at the expense of tariff barriers with the EU, the net benefit may be at best limited and possibly negative. It may also be that we accept imported goods of lower standards, such as food products from the United States. This could compromise domestic producers in Northern Ireland. It is not a one-way street.

Depending on what agreement is reached with the EU, the dynamics of trade between the Republic, Northern Ireland and Great Britain could change. This would make issues of customs controls much more live. An incentive for Northern Ireland to become the bridge between the EU single market and the rest of the UK would clearly require more transparent customs controls, especially if there were divergence on tariffs and regulations.

The Government’s refusal in this context to consider an EU presence in Belfast raises questions of trust. Trust will be achieved if there is a comprehensive and mutually beneficial free trade deal. If there is a hard or no-deal Brexit, it is hardly surprising that the EU and the UK will look at each other with suspicion. There are many more questions than answers from this White Paper. As it stands, it does little to build trust with either the EU, the Republic or the business community of Northern Ireland. I hope the Minister can reassure all those bodies that it is being pursued in good faith and is entirely consistent with both the spirit and the letter of the agreement the Government signed with the EU.

[The Minister of State, Cabinet Office (Lord True) (Con)]

I thank both noble Lords. I had noted down to say that the noble Lord, Lord Bruce, had always been constructive in his responses, but I was a bit disappointed when he opened by accusing the Government of duplicity. The Government have been clear from the start that they will stand by their obligations under the protocol. The fundamental issue here is that the protocol exists to ensure that the progress the people of Northern Ireland have made in the 22 years since the Good Friday Agreement, which we all support, is safeguarded and maintained. That means, as both contributors from the Front Benches opposite acknowledged, that this matter must be dealt with delicately, recognising the interests of both groupings within Northern Ireland and addressing both the lawful and reasonable desire of the European Union to protect the single market and the UK’s requirement to protect our own internal market and the inalienable place of Northern Ireland as part of the UK customs territory.

I will try to answer some of the questions raised. I do not want to be diverted by the role of the outstanding Sherpa, Mr Frost. I repeat my comment about the criticism made by the noble Baroness, Lady Hayter, of his role, which she acknowledged and repeated today. Mr Frost is the appointed representative of the Prime Minister in these negotiations. I understand that he will come with the Chancellor of the Duchy of Lancaster next week to give evidence and be accountable to your Lordships’ House.

I think it would be fair to say, diplomatically, that the response was not entirely enthusiastic from the parties opposite. The noble Baroness spoke about border checks. We are in the business not of border checks, but of light-touch administrative arrangements that will enable and facilitate trade. It is in the interests of both parties in this negotiation. It is a negotiation and discussion on how we will implement the protocol, not how we will renegotiate it. It is not in the interests of anybody to see a heavy-handed system. Indeed, Monsieur Barnier himself said that it is important that the procedures of the protocol should be as easy as possible and not too burdensome, in particular for smaller businesses. I agree with that and I am sure that noble Lords opposite do.

The noble Baroness rightly asked about business. Many businesses want clarity. I assure her that there have been extensive discussions and consultation with business, but as she will know, the Government are now moving forward as we go into this stage of discussion to establish a business engagement forum on the protocol. We will set out details shortly, but it is obviously important as it goes forward that we draw on the experience of businesses in sectors right across Northern Ireland. The interests of business are fundamental. Again, I hope that the European Union and the United Kingdom would agree in implementing this that the burdens on business should be as light as possible and that neither party should demand excessive burdens.

The noble Baroness asked about unfettered access. I assure her that there will be unfettered access. That is the objective and intention of Her Majesty’s Government and we intend to legislate to achieve that for goods from Northern Ireland to the rest of the United Kingdom.

As far as smuggling and abuse of the system is concerned, such practices go on at present. They are normally addressed by market surveillance and effective, targeted action. I am sure that market surveillance will continue in the unlikely circumstance that the noble Baroness posits of some mass attempt to subvert legitimate trade.

We intend this to be a light-touch approach. The noble Baroness and the noble Lord were both sceptical on this matter. The forms that the noble Baroness referred to will be processes administered electronically and will be light-touch in action. We will be negotiating and discussing how those matters will be implemented in the joint committee and specialised committee, which were set up under the protocol to provide just these sorts of discussions.

The noble Lord, Lord Bruce, referred to the Government setting great store by the matter being temporary. A provision for consent was agreed by both sides and in consultation with parties on both sides of the border in the original protocol. The capability exists for the representatives of the people of Northern Ireland to alter the situation in four years if they wish to do so, but that matter is entirely for the Northern Ireland Executive and is not being pressed, as was implied in the Statement. Time will see. I hope that we will find an effective way of operating. I assure the noble Lord, Lord Bruce, that Northern Ireland will remain part of the United Kingdom’s customs territory and that bureaucracy will be kept to a minimum.

The noble Lord asked about the idea of an EU office in Belfast. Without wishing to be contrary, I have pointed out in this House that, in the context of wishing to maintain and protect the Good Friday agreement, a physical building of that sort might not be the most light-touch operation, but the British Government of course acknowledge their responsibilities within the protocol to satisfy everyone that the protocol is being complied with. If I might say so, the Belfast office is becoming a little bit of a totem on the side of those who wish to say that Britain is not acceding to its responsibilities. I remind your Lordships that such an office was not provided for in Article 12 of the protocol. How matters are implemented will continue, I hope, to be discussed constructively in the joint committee.

The Government are very grateful for the positive response—rather more positive than we have heard so far—from many people in Northern Ireland, the Northern Ireland Executive, our friends within Europe and many in the Republic of Ireland. They see the Government’s document as a reasonable, sensible and measured one, on the basis of which we wish to seek a sensible, balanced, workable and practical way forward. It is in that spirit that we will pursue discussions in the next few weeks.

Beyond Brexit (European Union Committee Report)

Lord Bruce of Bennachie Excerpts

Tuesday 12th May 2020 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, I do not believe that any rational person should want anything but a friendly, influential relationship with our neighbours. However, we have a Government who are ideologically committed to a hard Brexit, pushing for UK exceptionalism just as nationalists everywhere do.

We are now engulfed with Covid-19 matters. This can be neither a cover nor a scapegoat for a destructive version of Brexit. The EU has produced a negotiating proposal of 440 pages, but we have no idea what our Government’s response is. We now need practical steps for future engagement.

The agreed Northern Ireland protocol requires customs declarations for exports to Northern Ireland from the rest of the UK. Having denied this—the Prime Minister in particular—will the Government now acknowledge it and provide help and support to Northern Ireland businesses to help them handle the extra bureaucracy this will require?

The crunch of Brexit may be on the island of Ireland, but the rest of the UK is looking for positive answers on many other areas. For example, it has been mentioned that there is scope for continuing engagement in Horizon and Erasmus, involving contribution and access to funding. However, researchers and students want to know now what the Government propose. Will the Minister be able to tell us?

Our financial services have lost passporting rights, but they want optimal equivalence and a long-term understanding of how our financial services can still engage with EU customers. Can the Government give us any guidance on that? Professional and business services providers want to know if their qualifications will be recognised. A Joint Committee along the lines recommended by the committee has been established, but it is by no means clear how active or engaged it will be, or whether it will continue or transform after agreement is reached—assuming agreement is reached.

We need constructive relations between our Parliament, the European Parliament and the national Parliaments of the EU. Will the Government support the establishment of a parliamentary joint committee, as recommended by the EU Committee? The EU has said that it is prepared to include the UK in future meetings of COSAC. Do the Government support that? Please can we have some answers?

Income Equality and Sustainability

Lord Bruce of Bennachie Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, I wish to support the case for a universal basic income. The current crisis has shown the need for people to have access to basic funding, yet the machinery to deliver cash to many people does not exist. Many key workers on whom we now know a functioning survival economy depends—not just health and social care workers but delivery drivers, shop assistants and food producers—are all paid below average. Others, such as those on zero-hours contracts, those living within the cash economy and some self-employed people, are missing out altogether.

The post-Covid-19 scenario may be for higher unemployment and less job security. Work patterns are likely to change radically as more technical solutions are applied. It is true that new technologies may create new jobs, as some argue, but they may also make some jobs redundant. That will leave a small number of lucrative activities; some, but fewer, low-skilled and lower-paid jobs; and, overall, not enough employment to go round. We surely cannot contemplate a society were a small minority corner the jobs and opportunities, leaving the overwhelming majority behind. It is not only unfair but likely to prove politically unsustainable.

The scale of government intervention in the past two months shows that a universal basic income could be affordable. If it were set at between £50 and £100 a week, it would provide basic peace of mind and security, but not at a level that would deter people from joining the workforce if they could. It would also make people more willing to engage in consumption, and would therefore act as a stimulus to the economy. It certainly should not be buttonholed in any ideological category. It can be applied in a way that is economically and socially beneficial, right across society, and could sit alongside other targeted benefits. It could be funded through taxation in much the same way as child benefit, which is clawed back progressively, up to 100% from higher earners. A universal basic income would make a significant contribution to evening out income inequality. It is an idea whose time has come.

Budget Statement

Lord Bruce of Bennachie Excerpts

Wednesday 18th March 2020 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Bates, not least because I think his experience as a government Minister was a triumph of optimism in adverse circumstances.

It appeared it was becoming received wisdom that last week’s Budget marked the end of austerity and, worse than that, or more than that, the confirmation of the assertion that austerity was never actually required. It is argued by some—the noble Lord, Lord Hain, is not in his place—that it was a right-wing ideological choice which caused unnecessary hardship. I assert that that is contrary to any objective analysis of the facts of the past 12 years. In 2008, we had a global financial crash partly brought about by a combination of light and divided regulation and the creation of impenetrably complicated financial products riding a global market. The scale of that crash was such that it threatened the world economy. It plunged us into recession from which we have actually barely started to recover. Drastic, urgent action was required, and it is to the credit of the then Labour Government that they led a co-ordinated global approach by the world’s leading economies. Radical action was taken, and it was delivered, but there was a clear legacy. UK banks were more exposed than most, and the level of borrowing required to stop the rot led to an unsustainable current account deficit well in excess of 10%. So whoever won the 2010 election had to take strong action to bring the public finances under control. The manifestos of all the parties reflected that, although they seem to forget it. Labour, in particular, seems to have created an alternative narrative.

There is of course room to debate which measures were fairest and best and what was the right balance between tax, borrowing and spending, but to suggest that we did not have to do anything is simply preposterous and defying gravity. The fact is that the deficit was reduced to under 2% and, thanks to the Liberal Democrats, at the same the tax threshold was raised to £12,000, the triple lock was introduced to reinstate the real value of pensions, the Green Investment Bank was set up, the British Business Bank was established, we adopted an industrial strategy and we boosted research and skills through expanded apprenticeships. Frankly, I believe it was an era of calm and pragmatic government compared with the volatility we have suffered since.

Forward then from last week’s Budget to this week’s Statement. The Government have been forced to recognise the scale of the threat to the population, the NHS and the economy and have proposed record spending measures with more needed and likely to follow. Some of these measures are short term and will act as a palliative, others are longer term and many may prove irrelevant. What the Government call “wartime measures” introduced this week will immediately—indeed, have immediately—turned off the cash tap for thousands of businesses and social enterprises and millions of people, especially those working in the gig economy. I have seen emerging in this debate a recognition that now may be the time for something radical to be tried. It may be the time to look to a citizen’s income to give cash to everybody immediately to help alleviate their anxiety and deliver support to the economy. It is no good telling businesses to borrow money to maintain their activities if there are no customers, so people have to have money to spend, and while the social distancing is going on businesses have to have money to carry them through, but not money that will saddle them with unsustainable debt. As others have suggested, this can be done through the PAYE system or the benefits system; indeed, I suggest urgently that this is the time to do something really radical and forward-thinking.

At the same time, we have just had an announcement that schools will close across the UK from Friday until further notice. That will put further stress on young people facing the possibility of exams with no knowledge of how they are going to get through them, and a lack of teaching time to help them get the grades they need. As a very important aside—I speak on Northern Ireland issues for the Liberal Democrats—in the three years that the Province was without an Assembly or an Executive, the health service pretty well broke down. Waiting times were extended and staff were stressed out. What are the Government doing to ensure that Northern Ireland has the support that it needs in this weakened state to meet the crisis?

If you put all this together, it adds up to a sharp reversal of the current account deficit. The consequences will perforce shape the Budgets not only for the rest of this Parliament but beyond, as the Government will have to bring borrowing back under control. That will present a challenge for a Government who want to level up the regions. They have won seats off Labour, but those seats will expect better funding for local services and will not appreciate tax cuts for the well-off. It will present a further challenge—this is a really important point—if the consequences of the hard Brexit that the Government are chasing are to further depress an already traumatised economy and reduce tax revenues. Surely this is the moment to acknowledge that the forward trajectory does not need and cannot sustain a sharp disruption to our alignment with the European Union.

At the very least, it surely calls for an extension of the transition period so that we can concentrate on bringing Covid-19 under control before we conclude a future trade agreement, and we should certainly not cut ourselves off from health and security co-operation across the EU. Looking further ahead, we should also address the supply-side weaknesses and encourage investment in skills development in new sectors such as robotics, the digital economy, AI and, of course, climate change—from the sophisticated engineering for sustainable energy to the job-creating benefits of retrofitting older houses with low-carbon systems. Crashing on with the Cummings/Johnson disruption presents not just the economy but our whole society with a potential cataclysm that it may not be able to absorb, bringing about far-reaching and deeply damaging consequences for years to come. It is surely time to face reality.

Brexit: Financial Assistance for Businesses

Lord Bruce of Bennachie Excerpts

Wednesday 26th February 2020 Lords Chamber

[Lord Agnew of Oulton]

My Lords, as the Prime Minister’s spokesman said a couple of days ago, Britain will comply with the obligations set out in the Northern Ireland protocol but does not see that entailing new checks on goods.

[Lord Bruce of Bennachie (LD)]

My Lords, the Prime Minister has given the impression that he wants to get round the protocol, yet the government website tells businesses to prepare for checks at the border and for the costs of employing people to advise them on how to deal with customs. Indeed, the Institute for Government says there could be a hundredfold increase in the number of checks. Is it not the fact that “taking back control” means a massive increase in red tape, costs and potential delays? Do the businesses of this country not have the right to expect the Government to support them?

[Lord Agnew of Oulton]

I am not sure if the noble Lord is talking about Northern Ireland or the United Kingdom in general. We have intensively engaged with the 3,000 UK/EU-only high-value traders over the last 18 months—that is, £250,000 or more. They report a high level of readiness; 71% reported themselves ready in October, and that number is going up every month. Yes, there will be frictionality. When we went into the general election, our simple message was “Get Brexit done. Restore sovereignty to this country.” I know there are many noble Lords who are not comfortable with that but it is our direction of travel.