Table of contents
On 11 September 2023, the House of Lords is due to hold a debate taking note of two reports from the Protocol on Ireland/Northern Ireland Sub-Committee. The first report, a ‘Follow-up report’ on the Protocol on Ireland/Northern Ireland, was published in July 2022. It looked at the socio-economic and political impact of the Northern Ireland Protocol, analysing developments in the year since the committee published an ‘Introductory report’ on the operation of the protocol. The committee’s follow-up findings were informed by evidence from the five largest parties in the Northern Ireland Assembly, the UK and Irish governments, business representatives, academics and civil society representatives.
The second report to be discussed in the debate is the committee’s report on ‘The Windsor Framework’, published on 25 July 2023. The Windsor Framework is an agreement reached between the UK and the EU in February 2023, which amended the protocol. The committee’s report focuses on the implications of the Windsor Framework for Northern Ireland.
This briefing summarises the committee’s findings in both reports, the government response and other recent developments.
1. Committee report on the protocol (July 2022)
1.1 Committee findings
In the ‘Follow-up report’, overall the committee found a “dichotomy” in people’s experience of the economic impact of the protocol. It heard that businesses reliant on trade between Great Britain and Northern Ireland, on which Northern Ireland’s economy has typically been reliant, had been negatively affected by increases in bureaucracy, staff resources, cost, delivery times and less flexibility to respond to supply and demand. The committee found widespread concerns within the business community about the impact on Northern Ireland of increasing regulatory divergence between the UK and the EU.
On the other hand, the committee said businesses trading with Ireland and the rest of the EU found the protocol had a beneficial impact for Northern Ireland. The protocol was particularly important for sectors reliant on complex cross-border supply chains on the island of Ireland, such as the dairy and meat processing industries. However, the committee noted that some people warned such benefits had arisen due to trade diversion rather than growth. The committee said the overall impact on the Northern Ireland economy therefore remained uncertain.
It also noted that the economic data necessary to conduct a comprehensive statistical analysis was not yet available. Witnesses had stressed it was difficult to distinguish the economic impact of the protocol specifically from other factors such as Brexit, the Covid-19 pandemic, labour shortages and the rising cost of living exacerbated by the war in Ukraine. The committee noted that different witnesses drew different, sometimes opposite, conclusions from the available data.
The committee reported that businesses had called for the UK and EU to agree mitigations and solutions to issues arising from the protocol, including:
- addressing the definition of goods ‘at risk’ of moving into the EU single market (‘at risk’ goods would be subject to full customs and regulatory requirements, including tariffs where they apply to EU-UK trade)
- proportionality in the application of rules and controls on movement of goods from Great Britain to Northern Ireland
- proposals for green and red lanes supported by an enhanced trusted trader scheme and audited supply chains
- continuation of the various grace periods and derogations unilaterally extended by the UK
- making permanent the UK’s trader support service and ‘Movement assistance scheme’
- a UK-EU sanitary and phytosanitary (SPS)/veterinary agreement
The committee urged the UK and the EU, together with political parties and stakeholders in Northern Ireland, and the Irish government to “make a renewed commitment to work together” on resolving the issues arising under the protocol. The committee described it as a “matter of deep regret” that in the year since its introductory report “the situation, if anything, has deteriorated still further”.
1.2 Government response
The government responded to the report in September 2022 and the response was published on the committee’s website in October 2022. The government agreed with many of the points raised in the committee report about the impacts of the protocol. For instance, the government said the protocol was “imposing disproportionate administrative burdens” on businesses moving goods within the UK. It also believed that “the benefits offered by the protocol in terms of facilitating North/South trade may have come at the expense of trade within the UK”.
Responding to the committee’s recommendations that it should work with the EU to resolve practical issues caused by the protocol, the government repeatedly stated that its preference was to reach a negotiated solution with the EU. However, the government argued there was “an absence of sufficient flexibility from the EU”. It said the EU had not moved beyond proposals made by the European Commission in October 2021, which the government did not believe would solve the problems in Northern Ireland. The government therefore said that “in the absence of any change in the EU position, and due to the serious nature of the issues that the people of Northern Ireland continue to experience”, it would continue with the Northern Ireland Protocol Bill as a solution. It said the bill would “give effect to revised arrangements which would address the issues the protocol is causing for businesses”, while maintaining the elements of the protocol that the government said were working.
The bill would have made some provisions of the Northern Ireland Protocol ‘excluded provision’. This would have meant they no longer applied in domestic law and much of the EU legislation listed in the annexes to the protocol would no longer automatically apply to Northern Ireland. It would also have given ministers delegated powers to make new law in connection with the protocol, such as on the movement and regulation of goods, replacing the EU law applicable under the protocol. The bill attracted criticism because of the wide scope of the delegated powers, and because it envisaged the non-performance of some of the UK’s international obligations. The government argued this was justified in international law by the doctrine of necessity, but many legal commentators were not convinced by this argument. The European Commission responded to the bill by pressing ahead with infringement proceedings against the UK. The House of Lords Library’s briefing on the ‘Northern Ireland Protocol Bill’ (5 October 2022) gives more detailed information.
2. Windsor Framework
2.1 Agreement of the Windsor Framework
Prime Minister Rishi Sunak and Ursula von der Leyen, president of the European Commission, announced on 27 February 2023 that they had reached agreement on a new way forward on the protocol, to be known as the Windsor Framework.
On the same day, the government set out an overview of the Windsor Framework in a command paper, ‘The Windsor Framework: A new way forward’. The government said the framework “fundamentally amends the texts and provisions of the original protocol to uphold Northern Ireland’s integral place in the United Kingdom [and] address the democratic deficit”. It said the framework “delivers a form of dual regulation that will work for businesses and consumers in Northern Ireland, based on the restoration of Northern Ireland’s place in the UK internal market”. It also said the framework “restores the delicate balance inherent in [the Belfast/Good Friday] Agreement, recognising the interlocking and interdependent nature of all three strands which the old protocol had disturbed”.
The European Commission said in its Q&A document on the Windsor Framework that the “practical and sustainable solutions” reached would “ensure legal clarity and predictability for people and businesses in Northern Ireland”. It also said they would “strike the right balance between flexibilities and effective safeguards for the protection of the EU single market”.
The UK stated it would not proceed with the Northern Ireland Protocol Bill. The European Commission confirmed it no longer had grounds for pursuing the infringement proceedings against the UK.
2.2 Changes made by the Windsor Framework
The Windsor Framework introduces new arrangements for checks on goods moving from Great Britain to Northern Ireland. These are sometimes referred to as ‘green’ and ‘red’ lanes, although this is not official terminology. The joint political declaration on the framework explains that:
This new way forward differentiates between goods that are at risk of moving to the EU single market, and goods that are destined for final consumption in Northern Ireland. Building upon this distinction, the new way forward sets up two ways for goods to move from Great Britain to Northern Ireland. From this perspective, goods at risk of entering the EU single market will remain subject to full EU customs and sanitary and phytosanitary (SPS) procedures.
Alternatively, for goods staying in the UK, trusted traders will be able to use new arrangements to move goods from Great Britain to Northern Ireland smoothly. This is in particular made possible by new data sharing arrangements, mostly based on standard commercial and transport data. Therefore, in most instances, controls would only be performed if a risk is assessed or abuse detected. Deliveries of consumer parcels are part of the overall solution.
Other key features of the Windsor Framework include:
- VAT: An EU limit on the number of reduced rates of VAT that can be applied to certain goods will no longer apply to Northern Ireland. The UK can apply zero rates of VAT on the installation of energy-saving materials in immovable property (such as heat pumps and solar panels) in Northern Ireland as in the rest of the UK.
- Human medicines: The UK Medicines and Healthcare products Regulatory Agency (MHRA), rather than the EU regulator, will regulate all human medicines placed on the market in Northern Ireland and all UK-approved medicines will be available for sale in Northern Ireland.
- Subsidy control: A joint EU-UK declaration clarifies the scope and interpretation of how EU state aid provisions in the protocol should apply to the UK. The government says this is “intended to give subsidy granters and beneficiaries clarity and confidence that the vast majority of UK measures will be subject to the UK’s domestic subsidy regime”.
- Stormont brake: A new mechanism to give the Northern Ireland Assembly the power to object to changes to EU laws that apply in Northern Ireland, subject to certain conditions.
The House of Commons Library briefing ‘Northern Ireland Protocol: The Windsor Framework’ (21 March 2023) contains a more detailed analysis of the framework’s provisions.
In June and July 2023, the government published some further details on how the Windsor Framework will work in practice in relation to the movement of goods, supply of medicines and subsidy control.
2.3 Implementing the Windsor Framework
The package of measures within the Windsor Framework is being implemented through a variety of means—there is not a single definitive text that contains the framework in its entirety.
The UK and the EU made some legally binding changes to the text of the protocol through a decision of the Withdrawal Agreement Joint Committee formally adopted on 24 March 2023. The Joint Committee decision was accompanied by a series of ‘soft law’ measures in the form of recommendations, joint UK-EU declarations and unilateral declarations.
Both sides have also legislated to implement aspects of the Windsor Framework within their own legal orders. The EU adopted regulations in May 2023 on public, animal and plant health measures, human medicines and tariff rate quotas on steel. The UK passed regulations to implement the Stormont brake mechanism in domestic law and has made other changes through regulations, such as on arrangements for parcels being sent from Great Britain to Northern Ireland and changing VAT rates in Northern Ireland on certain energy-saving materials.
The changes are being phased in from October 2023. From this point, prepacked meat and fresh dairy from Great Britain for sale in Northern Ireland will have to be individually labelled as ‘not for EU’ (although the government has indicated it will initially take a light-touch approach to enforcement). Requirements for all retail goods (with a few exceptions) to be individually labelled as ‘not for EU’ are not set to apply until 1 July 2025. Full details about the phasing in of the Windsor Framework arrangements are set out in a table produced by the House of Lords Protocol on Ireland/Northern Ireland Sub-Committee.
The Stormont brake part of the Windsor Framework will become operational only once the Northern Ireland executive and Assembly have been restored.
3. Committee report on the Windsor Framework (July 2023)
3.1 Committee findings
The House of Lords Protocol on Ireland/Northern Ireland Sub-Committee published a report on the Windsor Framework on 25 July 2023. The report looked in turn at all the areas covered by the framework. In each case, it set out an overview of the UK and EU’s respective positions on how the framework’s arrangements will work, and evidence the committee had received from business representatives, Northern Ireland experts and other stakeholders.
The committee said its intention was to scrutinise the Windsor Framework in an objective and evidence-based manner, reflecting the fact the cross-party membership of the committee represented a range of views on Northern Ireland’s constitutional position and on the framework itself. This included some members of the committee who support the Windsor Framework and some who oppose it or have significant concerns about it.
Overall, the committee concluded that “the Windsor Framework is an improvement on the Protocol on Ireland/Northern Ireland as originally negotiated”. Nevertheless, it said it was “evident that the Windsor Framework does not resolve all the problems with the protocol”. For instance, while some witnesses highlighted the benefits of the new green lane arrangements, the committee heard they would not be available to all businesses:
However, for some businesses, the processes under the Windsor Framework will be more burdensome than under the protocol as it has operated with grace periods and easements. While the green lane will benefit large retailers in particular, some retailers, and some other sectors, may have to use the red lane.
The committee had heard concerns from witnesses about the “technical and legal complexity of the Windsor Framework and the multiple documents and legal texts that form part of it”. Witnesses were also concerned about the “lack of operational detail” against “the backdrop of tight deadlines for compliance”. The committee said it would explore with stakeholders in the autumn whether the new guidance published by the government from June 2023 onwards has answered these concerns.
The committee found the solutions reached on VAT and excise were “pragmatic compromises between the UK and EU positions”. It believed the compromise on state aid “gives rise to some uncertainty”. While the pharmaceutical industry “strongly welcomed” the solution on human medicines, the committee said that an agreement on veterinary medicines “remains elusive and is urgently required”.
The committee found the new Stormont brake mechanism “divides opinion” between those who see it as an “innovative attempt to give Northern Ireland politicians a voice over the application of EU law to Northern Ireland” and those who believe it will have a “negligible impact” because of its “stringent conditions” and “limited scope”.
3.2 Response to the report
The government has not yet formally responded to the committee’s report on the Windsor Framework. However, the media has reported some comments from a government spokesperson in response to the report. The spokesperson said the Windsor Framework was “the best deal for Northern Ireland” which “cuts paperwork and checks compared to the old protocol, lifts the ban on products like seed potatoes and provides a durable, sustainable basis for the future”. The spokesperson said the committee’s report “underlines the importance of restoring the Northern Ireland executive and Assembly—it sets out at length how restored institutions would give Northern Ireland a greater say over the new arrangements”.
The media reported the spokesperson’s remarks in the context of comments by Lord Dodds of Duncairn, a DUP member of the House of Lords who sits on the committee. Lord Dodds argued the committee’s report highlighted a number of significant issues which “in our [the DUP’s] view justify our grave concerns about the Windsor Framework”. He said it was “clear that the Windsor Framework fails the seven tests set by the DUP”. This is a reference to criteria set out by DUP leader Sir Jeffrey Donaldson in July 2021, which he said the DUP would use to assess any new arrangements for the Northern Ireland Protocol.
4. Absence of fully functioning political institutions in Northern Ireland
The DUP’s position on the Windsor Framework continues to affect the restoration of political institutions in Northern Ireland. Northern Ireland has been without a fully functioning executive since February 2022 following the collapse of power-sharing over the DUP’s objections to the Northern Ireland Protocol. A scheduled Northern Ireland Assembly election took place in May 2022, but since then the DUP has refused to support the nomination of an Assembly speaker. Without a speaker in place, the Assembly cannot proceed to other business, including the formation of a new executive.
The UK Parliament has legislated several times to extend the period for forming a new executive and make arrangements for governance in the absence of an executive (for more information, see the House of Lords Library briefings on the ‘Northern Ireland (Executive Formation etc) Bill’ (1 December 2022), ‘Northern Ireland (Executive Formation and Organ and Tissue Donation) Bill’ (24 February 2023) and ‘Northern Ireland (Interim Arrangements) Bill’ (15 May 2023)). If no new executive is in place by 18 January 2024, the secretary of state must call another Assembly election. The legislation also gives the secretary of state discretion to call another election earlier than this if no new executive has been formed.
During the House of Commons debate on the Stormont brake regulations (which the government said it considered as a vote on the whole Windsor Framework deal), Sir Jeffrey Donaldson said that “improvements have undoubtedly been made” in the Windsor Framework. However, he argued it did not fully address the “fundamental problem of the continued application of EU law for the manufacturing of all goods in Northern Ireland”. Sir Jeffrey said that until a solution was reached that ensured the application of EU law “does not impede our ability to trade with the rest of our own country in the internal market of our own country”, he could not give the government a political commitment to restore the devolved institutions.
In July 2023, Sir Jeffrey reiterated there could be “no solid basis for an executive and Assembly” until the government “take steps to protect Northern Ireland’s place within the UK internal market”. He had been seeking assurances from Chris Heaton-Harris, the secretary of state for Northern Ireland, that the government would legislate on this point. Mr Heaton-Harris said he looked forward to bringing forward legislation that would enable Sir Jeffrey to give him a date when the DUP would go back into the Northern Ireland executive. In August 2023, Mr Heaton-Harris said talks with the DUP were “half way there”. He said it had been “difficult” to find a legislative fix that would satisfy the DUP’s concerns, but that there had been progress.
At the time of writing this briefing, the government has not brought forward new legislation, and power-sharing remains suspended.
Cover image by Simon Walker/No 10 Downing Street on Flickr. Image cropped from original aspect ratio.