Monday, June 27, 2022

Four key changes the UK wants to make to the Brexit deal on Northern Ireland

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From chicken sandwiches to VAT rates, the UK claims the Northern Ireland Protocol is hurting trade and the economy

Foreign Secretary Liz Truss is due to announce plans on Tuesday to unilaterally overrule the protocol by transposing the proposals into UK law.

Cutting red tape so products like eggs and sandwiches don’t face onerous checks to reach Northern Ireland, allowing the province more help to recover from Covid and giving the population more democratic say are among the desired changes to the Northern Ireland Protocol through Great Britain.

It will be a year away, but these are the main changes that will take place when it goes through Parliament:

Fewer checks and controls between Northern Ireland and the UK

At the heart of the government’s plans is a move to massively cut checks on goods traveling from the UK to Northern Ireland that face minimal risk of crossing the invisible border into the republic and into the EU.

To this end, the UK has proposed the creation of a ‘green lane’ for registered ‘trusted traders’ to ship their goods to Northern Ireland with minimal checking and paperwork.

A parallel “red trail” will be set up for goods whose onward journey to the Republic and thus to the EU is at risk. These goods are subject to checks and controls to protect the EU internal market from smuggling inferior goods.

The new agreements aim to end the situation where supermarkets such as Marks and Spencer have warned they will not be able to sell products such as chicken, eggs and sandwiches in Northern Ireland after the current grace period expires.

Ensure Northern Ireland can benefit from the same VAT cuts as the rest of the UK

In the spring statement, Chancellor Rishi Sunak announced plans to levy no VAT on the installation of green energy technologies such as solar panels, insulation or heat pumps.

However, he could not extend the policy to Northern Ireland as it is subject to EU rules requiring a VAT rate of at least 5 per cent.

The government wants to repeal that rule, arguing the province is being unfairly handicapped and unable to get the support it needs to recover from Covid.

Ending the role of the European Court of Justice (ECJ) in overseeing the protocol

The UK wants to end the role of the European Court of Justice as sole arbiter in disputes with the EU over the functioning of the protocol.

The Prime Minister’s former chief negotiator with the EU, Lord Frost, has argued that this is crucial as Northern Ireland has no method of democratic scrutiny or approval from the ECJ.

protective measures

The EU has so far refused to accede to the UK’s demands, arguing they will create a backdoor into the single market that risks being swamped by smuggling and undermining Europe’s duty-free and quota-free trading zone.

So the UK will write safeguards into legislation to convince Brussels that derogations are possible while protecting the single market.

This includes imposing higher penalties on companies that break the rules and smuggle goods into the Republic of Ireland from Northern Ireland.

There will also be an explicit UK pledge never to build border infrastructure between Northern Ireland and the Republic to avoid tension between the two sides.

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