This is a joint guest blog with Professor Katy Hayward of Queen’s University Belfast. Professor Hayward is an adviser to the Constitution, Europe, External Affairs and Culture Committee and a Senior Fellow of the UK in a Changing Europe.
The UK Government introduced the Northern Ireland Protocol Bill on 13 June 2022. According to the Foreign Secretary, the purpose of the Bill is to make ‘the changes necessary to restore stability and ensure the delicate balance of the Belfast (Good Friday) Agreement is protected’. The Democratic Unionist Party’s refusal to participate in a new Executive, new Assembly or North/South Ministerial Council following elections in Northern Ireland is being interpreted by the UK Government as evidence of ‘the strain that the arrangements under the Protocol are placing on institutions in Northern Ireland, and more generally on socio-political conditions’.
This blog provides an overview of the Northern Ireland Protocol Bill. A previous SPICe blog considers how disagreements over the Protocol on Ireland/Northern Ireland have affected EU-UK relations.
What is the Protocol on Ireland/Northern Ireland?
The Protocol on Ireland/Northern Ireland (“the Protocol”) is part of the EU-UK Withdrawal Agreement. It sets out special arrangements for Northern Ireland to protect the Belfast/Good Friday Agreement, to avoid a hard border on the island of Ireland and to protect the integrity of the EU’s single market. It came into effect on 1 January 2021 but is yet to be fully implemented.
What is the Northern Ireland Protocol Bill?
The UK Government introduced the Northern Ireland Protocol Bill in the House of Commons on 13 June 2022. Unusually, at the same time, the UK Government published a statement on its legal position on the Bill. It also published a policy paper outlining its proposed solutions to issues it perceives with the Protocol. The Explanatory Notes to the Bill set out the UK Government’s position:
the Government’s assessment is that the ongoing practical issues, as well as challenges to political stability in Northern Ireland, linked to the Northern Ireland Protocol, demonstrate that it is not meeting its original objectives. Without change, those issues pose significant challenges to the functioning of the Belfast (Good Friday) Agreement and the institutions it establishes, as well as to broader social and economic conditions in Northern Ireland. The Government’s assessment is that, while the preference is to find joint solutions, action is necessary to respond to the urgent and serious context in Northern Ireland and cannot await such an agreement.
The Bill provides the basis to amend the operation of the Protocol. The UK’s Foreign Secretary, Liz Truss MP, stated in the House of Commons that the UK Government’s preference remains “to reach a negotiated outcome with the EU” on changes to the Protocol but added that the EU’s proposals do not at present address the UK Government’s “fundamental concerns” with the Protocol.
What does the Northern Ireland Protocol Bill do?
The Bill, if enacted, will do two key things. First, it disapplies elements of the Protocol. The Explanatory Notes state: “the Bill ends the effect of – i.e. disapplies – specific areas of the Northern Ireland Protocol in domestic law”.
Second, it allows UK Ministers to disapply further elements of the Protocol and relevant parts of the Withdrawal Agreement in domestic law.
The Bill also provides UK Ministers with delegated powers to make “new law” in connection with the Protocol (i.e. the power to make new domestic law in place of what is set out in the Protocol).
The Bill disapplies the Protocol, and/or provides UK Ministers with the power to disapply it, in the following five key areas (each is explained in further detail below):
- The movement of goods
- The regulation of goods
- Subsidy control
- The governance of the Protocol
- VAT and excise
The movement of goods
The Bill proposes removing checks and paperwork for certain goods (including animals) moving from GB to Northern Ireland. Such goods are those which are destined to stay in the UK and which will not be moved into Ireland or the EU. The effect is that these goods would not be subject to the customs and other checks required under the Protocol. The Explanatory Notes to the Bill explain that this provision will, with others, provide:
the basis for the Government to administer a regime which provides different channels and requirements for goods depending on their destination. This will allow for significantly revised arrangements for goods moving and remaining within the United Kingdom. For example, UK-destined goods could be moved as part of a new ‘green channel’ arrangement; while goods destined for the EU could enter a ‘red channel’ and be required to meet full EU requirements, including customs requirements and the payment of duty, where applicable.
The regulation of goods
At present only goods which meet EU requirements can be placed on the market in Northern Ireland. The Bill introduces a dual regulatory regime in Northern Ireland for certain classes of goods, including manufactured goods, medicines and agri-food products. In effect, the Bill will give businesses a choice as to which regulatory regime (UK or EU) they follow for goods being supplied in or entering into Northern Ireland. Where EU and UK requirements are the same, products can comply with both regulatory regimes.
At present, Northern Ireland follows EU state aid rules in relation to measures which affect trade in goods and wholesale electricity between Northern Ireland and the EU. The Bill would bring Northern Ireland into the subsidy control regime that applies in the rest of the UK under the Subsidy Control Act 2022.
The Governance of the Protocol
The Court of Justice of the EU (CJEU) has a role in settling disputes over the Protocol. The Bill removes the jurisdiction of the CJEU in relation to the Protocol. The Bill also provides that in any proceedings related to the Protocol or Protocol related aspects of the Withdrawal Agreement, a domestic court or tribunal is not bound by decisions or principles of the CJEU and the court cannot refer any matter to the CJEU.
UK Ministers are given power, however, to make any provision considered appropriate in connection with this. This can include establishing a procedure under which a domestic court could make a preliminary reference to the CJEU on a question of interpretation of EU law where the court considers that necessary before it can conclude proceedings.
VAT, excise and tax
At present the EU’s VAT and excise rules for goods apply in Northern Ireland. The Bill would allow changes to VAT and excise rates (as well as other taxes) in GB to be reflected in Northern Ireland so that the UK has one regime for VAT, excise and other taxes.
UK Ministers would be able to make secondary legislation to disapply areas of the Protocol, or any related provision of the Withdrawal Agreement, for nine wide-ranging reasons or “permitted purposes”:
- safeguarding social or economic stability in Northern Ireland;
- ensuring the effective flow of trade between— (i) Northern Ireland and another part of the United Kingdom, or (ii) a part of the United Kingdom and anywhere outside the United Kingdom;
- safeguarding the territorial or constitutional integrity of the United Kingdom;
- safeguarding the functioning of the Belfast (Good Friday) Agreement;
- safeguarding animal, plant or human welfare or health;
- safeguarding biosecurity or the environment;
- safeguarding the integrity of the EU single market;
- lessening, eliminating or avoiding difference between tax or customs duties in Northern Ireland and Great Britain;
- securing compliance with other (non-Protocol/Withdrawal Agreement) international obligations.
The power to specify excluded provisions is exercisable whenever UK Ministers consider that it is necessary or ‘appropriate’ to do so for, or in connection with, one or more of these nine “permitted purposes”.
This applies to the whole of the Protocol with three exceptions. The exceptions are that UK Ministers are not given power to disapply articles 2, 3 and 11 of the Protocol, on:
- rights of individuals;
- common travel area; and
- other areas of North-South cooperation.
Powers for UK Minister to make ‘new law’
The powers for UK Ministers to make “new law” in secondary legislation are also wide-ranging: they can generally be used to make “any provision which the Minister considers appropriate in connection with” the relevant part of the Protocol.
These are so-called Henry VIII powers because Ministers can use these powers to alter primary legislation. The new regulations they make would be subject to the negative resolution procedure, which means that the UK Parliament does not have to vote in favour for them to be adopted.
Powers for Scottish Ministers
The Bill does not confer any delegated powers on Scottish Ministers. The Scottish Ministers are therefore not given any powers under the Bill to make secondary legislation. There would be power for UK Ministers to create such powers by regulations. UK Ministers may, by regulations, provide:
for any other power to make regulations conferred by this Act to be exercisable to any extent by a devolved authority
The Explanatory Notes to the Bill published on introduction did not set out the usual table which indicates the UK Government’s position on clauses which require consent under the Sewel Convention. The notes did, however, indicate that the UK Government anticipates seeking the consent of one or more of the devolved legislatures. A later version of the Explanatory Notes published as the Bill was brought to the House of Lords did, however, contain the usual table of clauses which require consent.
The Bill contains provisions which cover devolved or transferred matters. Where the Bill engages the Legislative Consent Motion process, the UK Government will write to the devolved administrations to seek consent to legislate in the normal manner.
Sarah McKay (SPICe) and Katy Hayward
This blog was updated to include a reference to a later version of the Bill’s Explanatory Notes on 27 September 2022.