Cabinet differs over post-election plan for Northern Ireland Protocol

Mon 9 May 2022
Posted by: Noelle McElhatton
Trade News

Foreign secretary Liz Truss faces Cabinet opposition to her plans to rip up the Northern Ireland Protocol – the agreement setting out unique trade and customs procedures for post-Brexit trade between Great Britain and NI – according to news reports.

Truss is pressing for the UK to override the protocol as she resumes talks with the EU.

However, cabinet sources have told The Telegraph that chancellor Rishi Sunak and Michael Gove, the levelling up secretary, favour a different approach.

Gove wants a “slightly softer approach and talking for longer”, while Sunak is concerned unilateral action by the UK could cause a trade war with the EU that would worsen the cost-of-living crisis.

Unilateral action

According to the Times, ministers are preparing to take unilateral action to override parts of the Northern Ireland Brexit deal “within weeks”, claiming that it is crucial to restoring power sharing in NI.

However, a law enabling such action is thought not to be part of the Queen’s Speech tomorrow (Tuesday 10 May).

Sinn Fein emerged as the largest party in last week’s NI Assembly elections with the DUP losing ground.

DUP leader Jeffrey Donaldson has said he will refuse to join a new administration until the Protocol is scrapped.

The DUP has said the protocol is damaging NI’s economy and has demanded fundamental changes to the protocol, reports the BBC.

These include no checks on goods going from Great Britain to Northern Ireland and giving the people of Northern Ireland “a say in the making of the laws that govern them”.

Talks resume

Truss is due to talk to Maros Sefcovic, the European Commission vice-president in charge of the talks, within days but is understood to be pessimistic about the chances of progress. 

Any unilateral decision to override the protocol would probably trigger retaliation by the EU that could involve suspending parts of the Trade and Co-operation Agreement (TCA) that allows unrestricted trade between Britain and the EU.

Speaking after the election, Dominic Raab, the deputy prime minister, said the results made it clear that fixing the Northern Ireland Protocol “cannot be put off”, reports Sky.

He added that stability was being “imperilled” by problems with the protocol, which governs Northern Ireland’s post-Brexit trading arrangements.

Lewis cajoles DUP

Northern Ireland minister Brandon Lewis is meeting with the DUP today to encourage them to enter power-sharing with Sinn Fein without a resolution to ongoing issues with the protocol.

Politico reports that Lewis is still talking up chances of deal.

Asked on ITV News if Britain is preparing to suspend parts of the deal, Lewis said: “Our focus is on resolving the issues with the protocol, ideally we want to do that by agreement with the European Union.”

According to the Telegraph the Queen’s speech tomorrow will not include mention of legislative measures to suspend the protocol and will feature “anodyne” language that ministers will try to resolve the border issues.

EU tariffs

UK businesses have warned the government about the “horrific” economic impact of provoking a trade war with the EU, reports the Independent.

The EU Commission is prepared to take retaliatory trade action if Downing Street tears up its commitment to uphold the Protocol, including putting tariffs on British goods.

“Tariffs would be a huge step backwards,” said Shane Brennan of the Cold Chain Federation. “They would add significantly inflationary pressure to costs at all levels, through to the end consumer.”

Barrie Deas, chief executive of the National Federation of Fishermen’s Organisations, also warned that a trade war would cause “considerable” harm.

“A trade war hurts everyone on both sides of the Channel. It will affect prices in restaurants in France, as well as in Britain.”

US interest

A spokesman for the US Government has said political leaders in Northern Ireland should “take the necessary steps” to re-establish power sharing, reports the Telegraph.

Ned Price from the Department of State said: “Critical and immediate challenges concerning the economy, health, and education are best addressed through the collective efforts of a devolved government chosen by, and accountable to, its people.”