Northern Ireland Executive faces further challenges

14 January 2020

On Thursday, Tánaiste Simon Coveney and Secretary of State for Northern Ireland Julian Smith published the long-awaited deal entitled ‘New Decade, New Approach’ which saw the return of devolved government to Northern Ireland after three years.

The DUP’s Arlene Foster resumed her role as First Minister on Saturday. Significantly, the results of the inquiry into the Renewable Heat Incentive (RHI) scandal – the botched scheme which ultimately brought down the last administration – are due to be published in coming weeks. Michelle O’Neill of Sinn Féin will hold the position of Deputy First Minister. Former MEP Diane Dodds takes up the Economy Ministry, while Conor Murphy of Sinn Féin becomes Minister for Finance. It was the prerogative of Sinn Féin and the DUP to ‘gift’ the Justice Ministry to Naomi Long of the Alliance Party.

On Monday Boris Johnson visited Northern Ireland where he called the compromise a “great step forward”. Taoiseach Leo Varadkar also met with the new powersharing Executive, a day before calling a general election in Ireland. The achievement in brokering this historic compromise is a significant win for the Irish government which has successfully placed the interests of Northern Ireland at the core of discussions throughout Phase I of Brexit.

The Deal

The biggest sticking point in the negotiations had been Sinn Féin’s call for a ‘standalone’ Irish Language Act. The deal includes a provision for an act, an Irish Language Commissioner, and legal recognition for the Irish language. The proposal also includes vaguer provisions to ‘enhance and develop’ the Ulster Scots/Ulster British tradition which proved more palatable for the DUP. The deal focuses on improving public services, such as the health system, and reforming the education and justice systems. The sustainability of the Stormont institution has also been given attention in order to avoid the repetition of such a political stalemate in the future. The petition of concern – which effectively gave one party a veto on legislation – will also be reformed to require cross-community support. Furthermore, the parties will commit to using the mechanism only in exceptional circumstances. Following the RHI scandal, there are additional transparency measures for civil servants, special advisers and ministers included in the deal.

There was little fanfare from party leaders when announcing their successes at the weekend, recognition that the hard work has only just begun for the new Executive to deliver on forgotten promises and regain confidence from their disenchanted electorate. Arlene Foster told the resumed Assembly, “it’s time for Stormont to move forward and show that ‘together we are stronger’ for the benefit of everyone”.

Both Sinn Féin and the DUP will be relieved to have avoided an early Assembly election, having been punished at the polls in December, losing votes in the UK General Election to Alliance and the SDLP. The brokers of the deal – Simon Coveney and Julian Smith – have been praised for their endurance and fairness in bringing the parties back to the Executive table.

For Northern Ireland, Brexit is unlikely to be ‘done’ anytime soon: MLAs and business groups now face the challenge of influencing the trade negotiations and mitigating the potential damages to the region. In this regard, the creation of a Brexit sub-committee is not only welcome but is urgently required to address these issues.

The Withdrawal Agreement

The Withdrawal Agreement Protocol on Ireland/Northern Ireland contains the wording: “nothing in this protocol prevents the UK from ensuring unfettered market access for goods moving from Northern Ireland to the rest of the UK’s internal market.” Indeed, in the ‘New Deal, New Approach’ document, the UK government commits to legislating for unfettered access for goods moving from Northern Ireland into Britain by the end of the year. But clearly it is unable to make any promises on goods flowing in the other direction.

The Protocol further points to the shared aim of avoiding controls at the ports and airports of NI, to the extent possible regarding the applicable legislation and regulatory regimes. Yet whether this will be possible depends upon the outcome of the free trade negotiations between the EU and the UK.

Northern Ireland will be part of the customs territory of the UK and could benefit from future trade deals struck by London, but the reality is more complex. No customs duties shall be payable for goods brought to NI from another part of the UK, unless the goods are at risk of being moved into the European Union, whether themselves or forming part of another good after processing. It is on this point that lack of clarity around the practical implications of this policy remains. Goods will be considered ‘at risk’ unless it is established that the goods will not be subject to commercial processing in Northern Ireland and fulfil the criteria established by the Joint Committee. The Joint Committee will establish the criteria taking into consideration the final destination and use of the goods, their value and nature, and the nature of the movement, as well as the incentive for undeclared onward-movement into the EU.

The Withdrawal Agreement ticks many boxes and will ensure no hard border on the island of Ireland, but its implementation also poses challenges. The uncertainty around goods potentially entering the EU Single Market via Northern Ireland remains, and if implementation of the Protocol and protecting the Single Market prove problematic, other EU member states may raise objections in the months ahead. The Joint Committee will oversee the practical working arrangements of the Protocol and certainly their work will be demanding.

Article 16 of the Protocol provides for safeguards which could be implemented by either the UK or the EU should the protocol lead to serious economic, societal or environmental difficulties or to diversion of trade. As such, the preferred word to describe some aspects of the arrangement might be a ‘fudge’. Very soon, the consequences of the Withdrawal Agreement for East-West trade, and movement of goods into the Irish – and therefore EU – market will become apparent. Time will tell whether Northern Ireland will benefit from the UK’s future free trading relationships, and how much strain the increased bureaucratic burden of UK-NI trading will put on its businesses.

The Stormont deal is titled ‘New Decade, New Approach’. Indeed, Brexit and all its ramifications have incentivised the parties to take a new approach to working together. Whether it will be enough and in good time remains to be seen.