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When I reached agreement with the EU on our free trade deal, this time last year, I hoped that 2021 could be about making the UK’s new relationship with the EU work. Away from the noise, much is indeed working well. But one issue remains difficult and I have spent most of the year managing it — the Northern Ireland protocol.
Indeed, no one could have predicted a year ago how 2021 would develop. We saw the EU’s attempt in January to put in place a vaccines export ban across the land border in Ireland; their insistence upon interpreting the protocol as if it provided for a normal external EU border through the middle of the UK; the invocation of infraction proceedings against us that could by now have been before the European Court of Justice; and political turbulence including the departure of the longstanding first minister of Northern Ireland, Arlene Foster.
Economically, supply chains started to change and trade started to be diverted. Despite the £500m we committed to make the protocol work, we saw reductions in the supply of goods, discontinuation of medicines, and increased prices for consumers.
By the summer, the practical and political difficulties generated by the protocol were obvious to all. Fortunately, we managed to stabilise the situation by presenting, in our July command paper, a full and comprehensive solution to the problems.
We also decided then that the best way through, if we could achieve it, was to get a negotiated outcome rather than use the safeguards contained in Article 16 of the protocol. Since then we have been engaged in detailed talks with the EU about the way forward, including on the EU’s own limited proposals put forward in October.
Unfortunately we have not managed to make as much progress as I would have wished. With the exception of medicines, where we will look carefully and positively at the EU’s proposals now we have them, what Brussels has put on the table does not do enough to ease the burdens or cover the full range of problems faced by people in Northern Ireland.
The burdensome customs arrangements for goods moving between Great Britain and Northern Ireland need to be changed drastically, given the overwhelming importance to the Northern Ireland economy of links with the rest of the UK, far outweighing its links with Ireland.
The simplest solution is to put in place substantively different arrangements for goods that all sides agree will stay in the UK and those that will not, and to manage any risks arising in a collaborative way. The EU’s proposals do not do this and our expert analysis does not support the ambitious public claims made for them when they were published.
Similarly, Northern Ireland’s state aid rules need to reflect the reality that, since the protocol was signed, we have agreed entirely new subsidy control rules in our free trade agreement, and put in place a new and rigorous domestic regime. The rules in Northern Ireland should evolve to reflect this.
And a solution must be found on governance — the undemocratic ways in which EU laws are applied in Northern Ireland, and the role of the ECJ. I know sometimes people dismiss this as an ideological demand. But no solution can work if the European Commission can get the ECJ to sit in judgment upon any of our actions, as happened in March. That kind of hair-trigger response is not the right way to achieve sustainable solutions in Northern Ireland and it is anyway obviously unfair and unreasonable for disputes between us to be settled by the court of one of the parties.
We would prefer to find a comprehensive solution to these and the full range of other difficulties. But, given the urgency, we have been ready to consider an interim agreement covering the most acute problems — trade frictions, subsidy control, and the ECJ. We have proposed various possible ways forward, but so far we have not found consensus — even on the content of an interim agreement.
The situation remains highly problematic. A protocol that was meant to support the Belfast (Good Friday) Agreement is now undermining it. The Northern Ireland institutions are clearly at serious risk.
The most recent polling last week showed that 78 per cent of people in Northern Ireland want at least some change to the current arrangements.
As long as there is no agreed solution, Article 16 safeguards remain on the table. They may turn out to be the only way of dealing with the problems. But it is still better to find a negotiated way through if we can. Time is short. So the talks need to resume with renewed urgency in the new year if we are to reach an outcome that delivers for everyone in Northern Ireland. The UK will work for that.