Recommendation 8

The Protocol means Northern Ireland occupies a unique position among the four nations of the UK: with its feet in both the EU single and UK Internal Markets, it is attractive to some investors; while the bureaucracy involved in maintaining that stance may deter others - the two subsidy control regimes currently in place being one example of this. The Protocol also means that new free trade agreements are bound to have a different impact on Northern Ireland compared with the rest of the UK. Imports from third countries to Northern Ireland may still attract tariffs, EU regulations will still apply there (even if the UK’s own rules change in future) and EU rule of origin provisions will apply to Northern Ireland if both the EU and UK have an agreement with the same third country. We are therefore surprised that the Government did not make an assessment of the effect of the Protocol on its recently negotiated agreements, and by their description of the figures in those assessments as “relatively ballpark.” Investors and existing businesses crave certainty. Therefore, we ask the Government to clarify how it plans to manage regulatory divergence between Northern Ireland and Great Britain, and what plans it has to leverage Northern Ireland’s unique position as part of the UK Internal Market and the EU Single Market, including its approach to resolving subsidy control complications, to benefit the local economy and inward investment prospects. To provide businesses with a clear idea of how future trade agreements will affect their sectors, the Government must also (a) incorporate the effect of the Protocol into detailed and precise economic impact assessments and (b) include for each agreement an explanatory memorandum setting out where it expects the provisions of the Protocol to take precedence over the provisions of the agreement. All of this is subject to change pending UK-EU negotiations and the NI Protocol Bill.