I have written previously in this column on the Northern Ireland Protocol – a matter of surprise to some readers, who wonder why the issue should be of any concern to a North Wales MP.
However, the Protocol is a matter of concern to us all. Its existence means that the UK as a whole is prevented from taking advantage of the new regulatory and fiscal opportunities that Brexit presents.
The Protocol provides that Northern Ireland in effect remains part of the EU’s Single Market for goods, subject to regulations made in Brussels without reference to its political representatives.
That, in itself, is a constitutional atrocity. But the fact that part of our country remains subject to EU regulation inhibits the whole of the UK from seizing the opportunity to streamline its domestic regulatory system.
Furthermore, Northern Ireland remains subject to a raft of EU tax policy. Take, for example, the very live issue of VAT on energy. In April, the cap on energy prices will be lifted, meaning electricity and gas bills will increase. That is largely the consequence of global price pressures, as the world economy reopens post-Covid.
At Westminster, a number of MPs – myself included – would wish the Chancellor to reduce, or ideally scrap, VAT on energy bills. However, the EU has a minimum VAT rate of 5 percent on energy, which is the rate already applied in the UK. Any reduction in UK VAT could therefore not apply to Northern Ireland, which would be unfair and politically impossible.
This state of affairs cannot be allowed to continue. The whole of the UK needs to be freed from the dead hand of Brussels regulation, to enable every part of it to thrive.
Fortunately, the provisions of the Protocol itself offer the best prospect of a way out of the predicament. The Foreign Secretary, Liz Truss, is currently locked in talks over the Protocol with EU Commission Vice-President, Maroš Šefčovič. They are proceeding at snail’s pace, largely because Šefčovič is hobbled by a highly restrictive negotiating mandate and lacks the necessary discretion.
The UK has consistently made clear that unless the EU shows flexibility, it will invoke Article 16 of the Protocol, which is available if there is an artificial diversion of trade: manifestly the case in Northern Ireland, where onerous checks on goods from mainland UK have increased trade with the Republic at the expense of Great Britain.
Under Article 16, the aggrieved party may unilaterally set up “safeguards”, which in the case of Northern Ireland would probably mean abandoning the checks.
Invoking Article 16 would trigger a period of one month’s negotiation. The EU would thus be obliged to give Šefčovič a new negotiating mandate, creating the opportunity of a permanent fix of the Protocol.
It would be good to see the issue of the Protocol resolved by agreement. If, however, the EU remains intransigent, then the UK will be entirely justified in asserting its treaty rights and legal rights as a sovereign state.
