Culture, Tourism, Europe and External Affairs Committee

Meeting date: Thursday, January 31, 2019

Official Report 563KB pdf

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Article 50 Negotiations

Agenda item 2 is an evidence session on the article 50 negotiations. The committee will take evidence from Dr Katy Hayward, who is a reader in social divisions and conflict at Queen’s University Belfast, and Tony Connelly, who is the Europe editor of RTÉ news. I welcome you both to the meeting. Thank you very much for coming to give evidence. Your evidence session is, of course, particularly timely, given recent events in Westminster.

Since the votes on the amendments in Westminster this week, Donald Tusk has reiterated his earlier comments that the backstop is part of the withdrawal agreement and that the withdrawal agreement is not open for renegotiation, and other European leaders have made comments of a similar nature. However, the message that is coming out of the United Kingdom is that there is a possibility of negotiations. What are your views on that? Do you think that this is a matter of someone blinking first?

Thanks for the invitation to speak to you today.

People in Brussels have been watching the process closely. The vote was quickly followed by what seemed to be a co-ordinated response from the European Union. There had been contacts throughout the day, similar to what happened with the meaningful vote a few weeks back, and the response was to send out a clear signal that the withdrawal agreement would not be reopened, that there was scope for some movement on the political declaration and that a request for an extension to article 50 would be favourably received. That was the key message from Donald Tusk, and it was carefully prepared.

The feeling is that there is again a mismatch between Westminster’s interpretation of what happened and that of Brussels. The idea that the vote on the Brady amendment gave Theresa May a precise or stable mandate is contested in Brussels, because people there think that the amendment is vague and does not spell out what the alternative arrangements on the Irish border would be, which means that it has allowed different constituencies in the House of Commons to interpret it to their own ends.

Of course, the message from the EU, which goes back to when it concluded the withdrawal agreement, is that there is no point in its taking the risk of renegotiating or opening up the withdrawal agreement if that will simply falter in the House of Commons, which, in turn, would open the EU up to further requests for renegotiation. Brussels will only ever consider something that it is sure will get a clear mandate in the House of Commons, and it feels that the amendment will not deliver that and that it will be picked over by the different groups in the House of Commons. That is the view of the Irish Government, as well.

Dr Hayward, because you have been travelling, you might not have had an opportunity to hear the interview with Jeremy Hunt on this morning’s “Today” programme. He said that the UK Government will focus on proposing two things to the EU. One involves demonstrating unconditional support for the Good Friday agreement; the other is a promise that the UK will not use the Irish border as a back door into the internal market. What do you think the chances are of the UK convincing the EU of those things?

Thank you for allowing me to appear before you today.

It is good to hear Jeremy Hunt emphasising the Good Friday, or Belfast, agreement, because, of course, that is why we have the protocol in the first place. The dual commitment of avoiding a hard border and protecting the Good Friday agreement has been there since the beginning. It is also good to hear him talk about that because we have not heard much mention of the Good Friday agreement in the debates in the House of Commons, with regard to the backstop in particular. A core focus of the debate has been on the question of unilateral withdrawal and a time limit.

The question is, what backstop are people particularly focusing on? There are two elements to the backstop, of course. The protocol in its fullness protects the Good Friday agreement and maintains the conditions for north-south co-operation. That is done through two elements: the all-UK arrangements in relation to customs, which involve being part of the single customs territory, and the Northern Ireland-specific arrangements.

On the question how we go forward or what Theresa May might be particularly keen to get from her requests to the EU—I would not call them negotiations—what particular aspect of the backstop is she looking at? Is it the all-UK or the Northern Ireland-specific arrangements? If it is the all-UK arrangements, that will have knock-on effects for east-west relationships and the movements between Great Britain and Northern Ireland, which would raise concerns for businesses in Northern Ireland in particular about the implications for the east-west movement of goods.

There is a complexity in the backstop and its layers that is completely overlooked in much of the coverage of the debate, which tends to focus on trade and the UK’s capacity to have free-trade deals in the future.

Since the vote on the amendment earlier this week, there has been a return to a lot of talk about technological solutions. In Belfast in July last year, Mrs May said:

“no technology solution to address these issues has been designed yet, or implemented anywhere in the world”.

To your knowledge, has there been any advance in technology since last July that would enable a solution that is based on technology to be on the table?

Technology is used to facilitate customs in particular. A lot of the evidence that has been put forward on how technological solutions might help the movement of goods on the island of Ireland is about making customs declarations and ensuring that the process of customs facilitation is as smooth as possible.

What technology cannot do is look inside the goods in vans that cross the border to see what is in them. There are processes for scanning goods, but they do not relate to the quality or the nature of the products inside a van, for example. When it comes to the real challenge of facilitating the movement of goods across the Irish border, technology fails at the first hurdle, not least because it requires physical infrastructure.

Concentrating on having technological solutions without physical infrastructure relies on having technical checks or inspections away from the border. For that, feet would be needed on the ground at some point to inspect what is being moved across the border, and there is a risk in that, if we consider the points that the chief constable of the Police Service of Northern Ireland made. The customs officials who made those inspections would become a target, as would the police who protected those officials, and there would be an escalation of the security risk, which we saw at the beginning of the troubles.

Tony Connelly’s briefing this week went into a lot of interesting detail on the customs arrangements. Do you have a view on the technological proposals?

In the no-deal planning that the European Commission is currently undertaking, it is looking at all the potential ways of mitigating delays at Dover and Calais, for example. Obviously, the question of contingency planning at the EU level is very sensitive. Although it can talk openly about trying to manage potentially chaotic situations at the ports that connect Europe to the UK, it cannot talk openly about the Irish border because of the political commitment to no infrastructure and no hard border.

From conversations that I have had, I know that the realities of the options that are available to mitigate the delays at Dover and Calais, for example, are being looked at. A consignment of goods that is going from Toulouse to Manchester, for example, can be pre-cleared. A barcode scan takes place. While a truck is travelling to Calais, the authorities could do their risk analysis to see whether any red flag needs to be raised with the consignment. If it looks okay, it can be green lighted at Calais. That process should happen in reverse, as well. However, a declaration still has to be filled in and presented, and, if there is a problem or a random inspection, manpower, infrastructure and space are needed for that.

The question is then how that can possibly be transposed to the Ireland land border. Flows can be managed at ports, which are presumed to have a set of infrastructures and the presence of staff and officials, but a 500km land border with 200 crossing points is of a different order of magnitude.

10:00  

Transit is being looked at to mitigate the situation. To begin with, that was a bit confusing for me, because I thought that transit simply involved passing through a third country when going from one member of the single market to another. However, transit would facilitate much more frictionless movement through customs for a consignment. It involves an authorised consignee and an authorised consignor. Larger companies that have the resources can register with customs authorities for pre-scanning at the point of departure and at the point of arrival, which obviates the need for checks at the border.

From the Irish perspective, the problem is that only big companies can afford the authorised consignee and consignor procedure. It requires going to a financial institution to get a bond, which is needed under the common transit convention to prove that goods will not be sold in transit and that customs duties, VAT and excise duties will be covered.

Transit might be a small mitigating factor in relation to technology and what can be done at the Irish border, but it is marginal and would not be suitable for the thousands of small and medium-sized enterprises that go back and forth across the border constantly.

We will move on, because a number of members wish to ask questions.

I am interested in the witnesses’ thoughts on the effect on the future of all three strands of the Good Friday agreement. Dr Hayward mentioned east-west relations and north-south co-operation, but one issue throughout the process has been that the Northern Ireland Assembly and Executive have not been functioning. In the debate in Britain, the representation of Northern Ireland has often boiled down to the Democratic Unionist Party, which represents not all of Northern Ireland but a section of the community there.

The Good Friday agreement was never designed to deal with such a situation; it was designed for something different, which it has achieved and is achieving. What is the situation doing to the future of the peace process that the agreement underpins?

That is a good and important question. In the simplest terms, the Good Friday agreement was about having a good and trusting relationship between the UK and Ireland. In the past, that relationship was distrustful and wary; EU membership helped to create trust and respect in that relationship.

The relationship between the UK and Ireland underpins the Good Friday agreement. We must be honest that we have had several difficulties with the implementation of the peace process and with levels of trust and co-operation among the political parties but, throughout that, the relationship between the two Governments has sustained the process.

Added to that is the importance of the devolved institutions. You are right to highlight the fact that the Assembly has not sat for two years. For most Irish citizens in Northern Ireland, having representation through the Assembly meant that they were able to feel comfortable and confident about being part of the UK.

At the moment, we have a perfect storm in relation to the agreement, even if we set Brexit aside. We do not have the devolved arrangements and the relationship between the two Governments is publicly fraught. The more disagreement that we hear in their discourse and in relation to the levels of common ground between them, the more that undermines the stability of the agreement itself. All that is before we even get into the questions of changing opinions on the possibility of a border poll and so on.

From the very beginning, the referendum has caused enormous difficulties between the Irish Government and the DUP. The initial reaction to the referendum prompted the Irish Government to seek solutions, get conversation going about the impact of Brexit and get national consensus on it. It recommended an all-island civic dialogue. However, there was a bit of a breakdown in communication and the DUP felt that it was being bounced into that. Even within days of the referendum, there were very sharp exchanges between the DUP and the Irish Government. Things got off to a bad start.

In August 2016, just after the referendum, a joint letter from Sinn Féin’s Martin McGuinness, the late Deputy First Minister, and the DUP’s Arlene Foster, the First Minister, set out an analysis of the challenges that Brexit posed to the island, the peace process and Northern Ireland. That was really the last time that there was any cross-party consensus between the two sides, and things have drifted apart ever since then.

Ironically, that has been a problem for Theresa May and her negotiating team. When the withdrawal agreement was concluded, there was a lot of outreach by the British Government to businesses not just in the UK, but in Northern Ireland. It invited—in a high-profile way—a series of business organisations to Downing Street. However, the politics had become so polarised that it could not get the Ulster Unionist Party to support the withdrawal agreement. The DUP has a different relationship with the British Government, and it opposed the agreement from the start. The Ulster Unionist Party had been a lot more open to Theresa May’s direction of travel in relation to the negotiations, but any attempts by her negotiating team to get its agreement failed. Because the backstop had become an orange and green issue, it simply could not come forward publicly to support it.

There is a real polarisation in Northern Ireland politically and socially, and the space to promote the withdrawal agreement, the backstop and so on now has to be occupied by business organisations and civil society.

On the east-west strand, bilateral relations between the two Governments are quite simple when they are both inside the one tent of the European Union. If the UK leaves in March or, more likely, June—or whenever it may be—those relationships will become quite different. There will be occasions when the UK Government cannot deal directly with Dublin and will have to go through Brussels. How will that affect the east-west strand?

Famously, the first time that a British Prime Minister ever met an Irish Prime Minister was after both countries joined the European Economic Community in 1973. There had been no bilateral contact for 50 years before that. It is true that Brussels has provided a relaxed, spacious forum for ministers from both sides to get to know each other across a whole range of issues. In fact, the Irish and British Governments have always shared a lot of policy goals. They have had the same approach to taxation, the digital single market and the general liberalisation of the EU’s single market. No longer having that is a loss to the Irish Government.

If I am not mistaken, the withdrawal agreement provides for more structured contact between both sides if the backstop comes into effect, to make sure that dialogue is facilitated. The withdrawal agreement between the UK and the EU envisages an overarching joint committee and there is the potential for Northern Ireland ministers or officials to get involved in specialised committees and have some kind of ownership of the way in which the backstop is being handled.

On bilaterals, the committee will know about the mapping exercise that was done for north-south co-operation, which identified 142 and then 156 areas. There was concern that they could not be sustained after Brexit. They have been looked at in detail, and areas that can be supported bilaterally have been identified.

There is an element relating to the common travel area in particular that is cranking up the bilateral relationship between the two Governments in order to formalise in law things that have previously depended on common EU membership or informal arrangements. Looking at strand 3, the British-Irish Council and the British-Irish Intergovernmental Conference will have quite a lot of substantive detail to relate to each other on the common travel area, reciprocal healthcare arrangements and so on.

The document that the clerks have helpfully provided to us for today’s meeting includes the UK Government’s document of 9 January, “UK Government commitments to Northern Ireland and its integral place in the United Kingdom”. The UK Government reminds us that

“The principles of the Joint Report”,

which goes back to December 2017,

“have also been endorsed overwhelmingly by Parliament and enshrined in the EU Withdrawal Act 2018.”

It goes on to say that the joint report

“recognised that arrangements would be required to guarantee the absence of a hard border”

and the withdrawal agreement then looked at what that should look like and came up with the backstop.

Paragraph 43 of the joint report states:

“The United Kingdom also recalls its commitment to the avoidance of a hard border, including any physical infrastructure or related checks and controls.”

That is the joint report, and it is enshrined in the UK’s legislation, thus far. The UK legislation also says that when ministers are exercising powers under the withdrawal act, they must have regard to the joint report.

I am sorry; I am a lawyer by trade and I cannot help myself.

There is so much going on, but the UK Government has legislated to enshrine the principle that there should be no hard border. Leaving to one side everything that is going on at EU level, surely it would need to amend the legislation at the domestic level because the joint report says that there should be no hard border. Irrespective of what the EC says or what is going on in Brussels, that is what the UK Parliament has said, or am I misunderstanding something? With your detailed knowledge of the daily intricacies of this, can you say how what I have said sits with what is going on at the moment?

That is well spotted. We are only guessing at what the alternative arrangements that the Brady amendment refers to are. We heard Jeremy Hunt on this morning’s “Today” programme talking about the UK committing to the Good Friday agreement and protecting the single market.

You can also see from briefings and from what Theresa May said in the House of Commons that the UK is looking again at technology. There has always been a bit of a belief among people such as David Davis that you can avoid a hard border by having infrastructure but not having it at the border. The checks would be done away from the border. That might be how the UK is going to try to thread its way through this.

As Katy Hayward said, the backstop and the Irish protocol are not simply about a specific set of physical checks for customs; they are about a whole range of other things that need protection, especially if you are going to protect north-south co-operation and what is called the achievements, benefits and commitments of the Good Friday agreement, which are a much more abstract set of accomplishments and areas of potential for the future.

It is hard to see technology being the answer. The EU and the Irish Government will say that the withdrawal agreement and the political declaration commit them to looking for, exploring and exhausting technological solutions, but those do not yet exist and because of that, we have the insurance policy of the underlying backstop.

10:15  

Ms Ewing is right to note that point. There is also a House of Lords amendment that emphasises the importance in the UK’s withdrawal act of avoiding a hard border. The question is how that is defined. Even in what is in the withdrawal act and the protocol, in particular about addressing the unique circumstances, maintaining the necessary conditions for continued north-south co-operation, avoiding a hard border and protecting the agreement, there is a lack of definition. What does it mean to avoid a hard border? There has been a year now in which we have seen differences between the EU and the UK as to what each understands a hard border to mean.

I would argue that people in the Irish border region in particular would tell you what a hard border means, not least because they have had experience of what was very much a hard border in the past, but also because, for many people, there is a tight connection between those checks and controls and the peace process. That is something to bear in mind.

In the protocol there is an interpretation of those principles to avoid a hard border and protect the agreement, which is very much based in law. It is the back-up solution, so the EU is saying that that is not what it wants ideally and that it hopes that there will be alternative arrangements, based on the future UK-EU relationship. The EU will consider those alternative arrangements and that is why we need the transition period.

We must acknowledge that there are certain things about avoiding a hard border and protecting the agreement that cannot be addressed technologically. A significant portion of trade across the border is in agri-food and we cannot have technological solutions for dealing with that. For example, entering animals into the single market for breeding or slaughter requires that they go through a border inspection post. As Tony Connelly has noted, that is not a small procedure, but is something that involves veterinary certificates, documentation and the ability to allow others to check and inspect and so on. At the moment, those inspection points are at the sea and air entry points, but not at the land entry point.

How do we avoid having checks at the border other than having legal arrangements relating to regulatory standards in certain areas? That is what the protocol mentions. It requires huge flexibility on the EU side and some degree of flexibility on the UK side, too. If we are being realistic and are going to uphold the principles, there will be a compromise in the end that will require some flexibility on both sides. Technology will not get us away from that.

Thank you. I appreciate that the border check issue is just one of many important elements pertaining to the Good Friday agreement. I would have thought that the phrase

“or related checks and controls”

would be the problem in relation to not adhering to what the UK Parliament passed in May 2018. However, it seems that changes of mind are happening quite frequently.

The withdrawal agreement is an international agreement and the UK Prime Minister, no less, signed up to it, yet now, some weeks later, the Prime Minister has supported the Brady amendment—it was not just a back-bench amendment, but an amendment that she indicated that she supported—and, in effect, said that she is not doing what she signed up to.

I would have thought that that would raise trust issues. If we assume that something will happen and we will go on to discussions about future trading arrangements, what trust will there be in somebody who has signed up to an agreement—which other parties have taken in good faith—but who comes back and says, “I did not really mean that”? That is very serious for international relations.

Another issue is that if the UK goes back to Brussels to say, “You have got to open this up,” that could have consequences in other areas. There has already been a bit of murmuring about that: “You want to open up this deal? Let’s open it up again and look at fisheries, for example.”

Do you have any comments on those two strands?

Whenever such things happen, those kinds of remarks and positions will automatically prompt the Irish Government to say, “This is why we need a backstop. This is why we need an insurance policy,” because trust is central to this issue. It happened after the joint report was signed in December 2017, when the secretary of state for Brexit, David Davis, said soon after that it was not legally binding.

The EU has a slightly more legalistic approach: article 50 sets out the negotiations, we have come to the end of those negotiations, and the treaty has to be ratified by the UK according to its constitutional requirements. The EU has always known that the House of Commons would have to ratify the treaty. At a panel discussion in Brussels on Monday, Sabine Weyand, the deputy chief EU negotiator, drew a stark contrast between the EU’s approach—in which, after every negotiating session, the article 50 task force negotiators brief officials from all 27 member states on the state of play through a working party that has a regular meeting in Brussels, even if that means that they might contradict what they have said the day before because of an objection or whatever—and the British approach, which is handled by a very small, tight circle of people, with information not being shared with the rest of the system.

Quite.

With regard to trust in Northern Ireland in the British Government, I will not labour the point too much, but it is notable that business communities, trade unions and civic leaders have come out in support of the withdrawal agreement and the protocol. That is unprecedented in the past 20 years, at least; it does not happen very often in Northern Ireland, particularly given the political environment. They have had a high public profile and done their best to have a profile outside Northern Ireland and the island of Ireland to say that the protocol is important and would bring benefits. It was encouraged by the Prime Minister, who wanted to show support in Northern Ireland for the withdrawal agreement. The fact that she then supported the Brady amendment to replace the protocol risks undermining people’s sense of confidence in the future of the fundamental relationship of trust between non-political citizens in Northern Ireland and the UK Government.

Indeed. Every issue involves many other issues, all of which are very important.

I sometimes wonder if the best thing would be to show Tory MPs the Brian O’Driscoll documentary on the united Irish team, which was shown the other week. It was brilliant piece of television that showed what the troubles were really like, even in that context; the team plays in Dublin on Saturday.

With regard to Annabelle Ewing’s question, I presume that the Irish Government is now taking no deal really seriously after what happened on Tuesday night in the House of Commons.

Yes, it is. There has definitely been a change of tone in the Irish Government’s pronouncements of the past few days. There has been exasperation and much sharper analysis from Simon Coveney, the Minister for Foreign Affairs and Trade, about Theresa May wanting to have it both ways.

The question of no-deal planning is distinctly sensitive for the Irish Government. On one hand, what do you do on the border? On the other hand, there is the huge exposure of particular sectors of the Irish economy to the UK market, and what that means.

The Government has been publishing contingency plans. It has been hiring extra customs officials. There is the same vulnerability that you get in the UK, whereby people challenge whether the Government is properly prepared. Those same vulnerabilities exist in the Irish system. The Irish Government was caught last week, in a sense, when the issue of the Irish border and no deal came up; the Irish Government was forced on to the defensive a little bit about not planning for a hard border—the European Commission seemed to contradict that by saying that there would have to be checks on the Irish border in the event of no deal. It has been a difficult week for the Government.

Has it managed to resolve things by squaring the lines between Brussels and Dublin?

It did its best. The problem was that what happened not only appeared to put Dublin at odds with the European Commission; it also prompted Michel Barnier, the chief negotiator, to make some comments to Le Monde that his team had been looking at decentralised paperless checks away from the border in the context of the withdrawal agreement, but that template was not for the Irish border but for minimising checks on the Irish Sea. That was seized upon by the leave campaign and Conservative back benchers as proving that the backstop was a hoax and simply a ruse to trap the UK in a permanent customs union. That in turn put the Commission somewhat on the back foot.

The overall picture that I get from talking to officials in Brussels and Dublin is that yes, of course the EU has an obligation to its internal market; it has obligations under the World Trade Organization to define its external frontier. That problem will have to be solved somehow. The Government is not going to send customs officers up to every single border crossing on day 1 of no deal, but it will have to sit down and work it out with the UK.

The Irish Government’s strategy has been to try to forcefully remind the British Government that it has solemn obligations under the Good Friday agreement to ensure that there is no hard border.

Ms Ewing referred to the joint report. The Irish Government believes that the British guarantee of no hard border, as enshrined in the joint report, is a guarantee that survives whether there is no deal or not. It believes that the UK, as a democracy that respects international law, is morally and politically obliged to ensure that the Good Friday agreement is not undermined by border infrastructure.

What do you think that that means in practice?

That is the question. The view in Dublin is that it means getting back to the backstop and regulatory alignment. The issues and the dilemma at the Irish border are fairly binary. You are either in one customs regime or you are not. If you have two regimes that are in different legal systems next to each other, you have to have checks, and those checks have to happen somewhere. The way to avoid those checks and support the Good Friday agreement is to have some kind of alignment in the future.

In the context of your discussions with contacts in the Brussels machinery, do you think that the very clear and carefully co-ordinated responses that were made straight after what happened the other night in Westminster will hold for the next month, whatever the heck might happen in the House of Commons, for example? I notice that the Prime Minister is not on a plane to Brussels today; rather, she is meeting back benchers. That seems to be far more important to her than talking to the Irish Prime Minister or any other leader. I presume that Europe will absolutely hold the line now, so it will be a matter of having either no deal or the agreement that has already been reached. There can be as much language as we like in political agreements, but there will be no change to the withdrawal agreement, will there?

10:30  

On the basis of the signals so far and two years of fairly unrelenting solidarity with Ireland, we would have to say that that will not really change. That is not to say that member states are not worried about a no-deal situation, that questions are not being raised and that private conversations are not being had about how we can get out of this and whether anything can be done, as everybody wants to avoid having no deal. The problem is that we always get back to how far the EU could push the envelope in a way that would not leave it exposed if the concession were rejected again by the more hard-line elements on the British side.

There are reports that no pressure will be put on Ireland, but maybe the Taoiseach, Leo Varadkar, will take a step to get everybody out of the mess. However, because things are so binary, it is hard to see what step he could take. He could talk about a review clause and say that we could have a legally binding codicil or protocol that says that we promise to look at technology when it becomes available, but we will still need to have the underlying safety net or first rung—

The backstop.

Exactly.

It is clear that, at the moment, there is no planning for a hard border if there is no deal. UK Government technical notices say to look to the Irish Government, and things are still undefined for Northern Irish businesses. The Irish Government is contingency planning, but not in relation to the border, as Tony Connelly said, and there is a lot of contingency planning being done in the EU, but not specifically in relation to the border. If and when that point is reached, I think that the EU will work closely with Ireland to not put it under undue pressure. However, there is, of course, the recognition that checks and controls will be necessary if we have a no-deal situation. Leaving a wide swinging gate into the single market and, indeed, into the UK could not last for long.

It is worth noting that, in this period of great uncertainty, the people who are most affected are those in the border region. The level of integration between the UK and the EU27 is, of course, most direct and material in the Irish border region. In trying to find certainty, businesses simply go to the other side of the border or decide not to develop the business across the border. Therefore, there is the re-entrenchment of the back-to-back development that there was in the past, which had such a negative impact in the border region.

We are already seeing the impact of Brexit and a negative economic effect in Northern Ireland in particular.

Last night, Barclays made an announcement on moving vast amounts of its UK operations to Dublin. The Dublin economy must be booming on the back of some of the things that are happening, particularly in financial services.

There has not been the stampede that some people expected. Certain sectors have followed a pathway, and companies that already had a presence in Dublin have simply expanded. Obviously, there are well-documented infrastructural and housing limitations in Dublin that people are trying to sort out, but there is, of course, a potential upside there.

I am sorry that I missed part of the witnesses’ contribution. Is there absolute unity in the Irish Parliament on the Taoiseach’s position?

Yes, I think that there is universal support in the Irish Parliament and political system for the Government’s position on the backstop. There is resistance and criticism from the Opposition on no-deal planning, as you would expect, but there is strong support across the board, which poses a risk and keeps pressure on the Taoiseach not to step back at all from the Irish red lines. Theresa May is not the only leader who has to make those considerations.

If we get into a no-deal situation, with tariffs, and if there is enormous disruption to the agri-food trade, there might be a groundswell of questioning about why the Irish Government was so devoted to the Northern question for so long and why we have ended up in this situation—I do not think that we can exclude that possibility. However, for the moment, politically, the Government’s priorities are broadly supported.

In the context of the dynamics in the Dáil Éireann, if the Taoiseach were to roll back from his position, would the Government’s future be put under significant pressure, or does the Government have the majority that enables it just to charge on?

Well, there is a minority Administration, with confidence and supply arrangements, so the Government is under pressure not to step back from its position.

Are the Government’s coalition partners more robust in saying that the Government cannot step back from its red lines, or are they pretty much in the same position?

I think that it has been difficult for Fianna Fáil, the coalition partner, to find its true position on the issue, in a sense, because its instinct is to challenge the Government at every point. Fianna Fáil appointed a new spokesperson on Brexit, Lisa Chambers, and she has taken quite an assertive line against the Government on its bilateral relations with the UK. She has made a consistent critique of the Taoiseach, in saying that the backstop arrangements unnecessarily alienated back benchers and the Eurosceptic constituency, and there should have been more outreach to the UK.

However, I think that that line of attack has run out, a little bit. At the moment, everyone is fixated on avoiding no deal and on ensuring that the Government holds its line on the backstop.

Do you want to add anything, Dr Hayward?

No.

That is okay.

The Northern Ireland Assembly is not sitting at the moment. What impact has that had?

Tony Connelly mentioned the letter of August 2016 from Foster and McGuinness that set out the key priorities that all the parties could speak to, in the context of their manifesto commitments, including the need to address the unique circumstances of Northern Ireland and avoid a hard border, as well as the need to avoid friction east to west. That is not to say that there are not huge differences between the political parties and their positions on Brexit and the union.

An example of the difference that not having an Assembly has made is that committees have not been sitting to consider the issues, and the whole question of Brexit has very much become polarised as a point of difference between green and orange, rather than consideration being given to the detail of what Brexit actually means for Northern Ireland and the setting out of common interests in Northern Ireland.

In the absence of the Assembly sitting, there have been some extraordinary levels of co-operation between political parties. The so-called remain parties—Sinn Féin, the Social Democratic and Labour Party, the Alliance Party of Northern Ireland and the Green Party in Northern Ireland—have come out with several joint statements to raise concerns and to offer support for the protocol. The issuing of joint statements has not been noticed much elsewhere, but it is really significant.

I am conscious of the wider question of what is happening in the UK and the way that that has been approached by London and Westminster—the role played by devolved Governments and Executives and the consideration given to them in all of this—but having a sitting Assembly probably would not have made much difference. It primarily makes a difference in Northern Ireland.

It is with trepidation that I ask this about the role of the people in the north. Politicians have the arrogant belief that the Parliament is the voice of the people at times, but, although the Assembly is not sitting, you said that people have not been excluded from having their voice heard—or have they? If you are saying that it does not really matter whether the Assembly sits, we might all be wondering why we are here.

I am not saying that at all. Looking back at how the situation has been approached during the past couple of years, particularly the dynamics since the election in 2017, attention has focused on Westminster, particularly on what happens in the House of Commons and the arithmetic in Parliament, which has perhaps surprised some of us.

Fundamentally, it would have been far better for the Good Friday agreement and a sense of leadership and common purpose within Northern Ireland if the Assembly was up and running, because now we cannot separate the risks and uncertainty, or note what is happening among dissident republicans and so on. The sense of uncertainty and whether the Assembly will get up and running at all soon has been exacerbated by all this. All those things create a maelstrom of uncertainty that undermines people’s confidence in the peace process more broadly.

Finally, what is the public perception of the role of the DUP? Before the meeting started, there was mention of bizarre statements such as Sammy Wilson saying that people could go to the chip shop if there was no food, but I find some of the language and rhetoric that it has come out with really frightening. How is that reflected in the views of the DUP’s constituents?

The DUP is confident in its support base. Most particularly, if it sees and identifies a threat to the union and has a platform or position based on a sense that the threat is real and vital, it will continue to get unequivocal support from its traditional support base. We also ought to recognise the Ulster Unionist Party, which campaigned to remain and has come out with serious concerns about the withdrawal agreement. Among the unionist communities in Northern Ireland there is anxiety about the situation, and the DUP is confident that its position will garner support from its traditional supporters. It is worth noting where many of them live; some are in the border region, but the majority are not.

There are three comments that I would like to put on the record. Mr Connelly mentioned Sabine Weyand earlier. She said:

“There is no negotiation between the UK and the EU. That is finished.”

The Dutch Prime Minister, Mark Rutte, said:

“Given that whole set of circumstances, the present deal is the only deal on the table”.

Guy Verhofstadt said that

“the backstop is needed because of UK red lines”.

Those three quotes are extremely strong, bearing it in mind that I am a Scottish National Party member and my party disagrees with the withdrawal agreement. The three statements are very clear. Is there any way in which the UK Prime Minister can get herself out of the chaotic situation that she has created?

10:45  

It will be very difficult for her to avoid another scenario in which the headlines the next day are about humiliation, rejection and so on. She has potentially set herself up for that. The view in Brussels is that, because of the way in which she has manoeuvred the withdrawal agreement through the House of Commons to a position where she thought she could try to get a mandate to look at the backstop again, she has become a hostage to the DUP and the European research group. That means that she will have to have a maximalist approach to any changes to the backstop or to legal protocols that will be added, which in turn will face a lot of resistance at EU level.

As I said, the instinct in Brussels and among the member states, which gave that very co-ordinated response, is to let the shock of that response filter into the UK system, sit tight for a while, say to Theresa May that they are waiting for her proposals and that the ball is in her court and so on, and see what she can bring forward.

There is no doubt that there is strong concern about a no-deal Brexit—that is worth emphasising. If there are creative solutions that could get everybody out of this predicament, of course they will be explored. Again, however, we get back to the problem of the binary nature of Britain’s exit and what that means for the Irish border. The mixed interpretations of the Brady amendment suggest that there is very little room for manoeuvre or for a happy ending to this particular gambit.

It is very unlikely—in fact, almost impossible—that they will look again at the Northern Ireland-specific arrangements. As is noted in the unilateral commitments paper of the Government, it is really a domestic question as to how to avoid possible east-west friction. It is notable that the draft withdrawal agreement and the draft backstop that we saw early last year quite clearly included those Northern Ireland-specific arrangements. What has changed is the UK-wide, UK-EU single customs territory, which was a huge and remarkable achievement on the part of the British negotiators. Up to that point, the message from Brussels had been one of significant resistance to such a thing, because it gives the UK quota-free, tariff-free access to participation in the customs union with no financial obligations. If we were to see any tweaking of the withdrawal agreement, I would expect it to be related to that, which would have knock-on effects for east-west friction. If that were to come back into question, it is worth noting that the Prime Minister would not be able to come to Parliament with something that is done and dusted by 13 February—I would be very surprised if she could do that, as that would be substantive change.

Your answers lead on to a second area of questions about trust; they follow on from Annabelle Ewing’s questions.

The backdrop of the whole crisis has not been pleasant, by any manner of means. Annabelle Ewing mentioned the December 2017 joint report and the UK Government’s unilateral commitment paper that was published in January, but we have the situation arising from the vote on Tuesday night in favour of the Brady amendment, so the Prime Minister has been extremely inconsistent about her position. In December 2018, the Conservative MP Priti Patel suggested that food shortages should be used as leverage against the Irish Government. It all comes back to trust and trying to build a positive negotiating position. How can the EU27 genuinely think that the UK is serious, when past events prove otherwise?

That is a major issue. My instinct is that Theresa May’s options are so limited that she is entirely focused on doing whatever it takes to get the agreement across the line in the House of Commons—to win ugly, to use the American football metaphor that has been mentioned. Trust is of secondary importance to that.

Theresa May must have factored in that the EU will not deliver the changes that she is looking for. There has to be a calculation that, if she is not going to come back until 13 or 14 February, there will be just six weeks left until the end of March and the options on the table will get even more stark. It will be her deal, or no Brexit, or no deal. In that environment, there could be a second push for an extension to article 50. That in turn could alarm the Eurosceptics into thinking that they might lose Brexit, leading them to say, “Okay, we didn’t get the changes to the backstop that we need, but we are now confronted with perhaps delaying or, even worse, losing Brexit, so we’ll bite our lips and sign up to the withdrawal agreement.” That has got to be a calculation by the Government. It has perhaps put the issue of trust to one side at the moment.

Before Dr Hayward responds, I have a further point to put to Tony Connelly. Trust should be important, because this is only the first part of a UK-EU situation that will be there for some time to come.

Absolutely. I do not disagree with you that trust is the sine qua non of any negotiation. The point is lost in Westminster that the withdrawal agreement is just the start. Theresa May’s predominant argument on how the withdrawal agreement will be applied is that a free-trade agreement will be done quickly, which will obviate the need for the backstop. The EU’s view, however, is that removing the backstop is not time limited but events limited; it will be governed by what is in the trade agreement and how close the alignment is. The same dilemma will be there, because unless the UK is prepared to sign up to a treaty with very close alignment, there will still be friction at the Irish border.

It is also worth noting that, if the withdrawal agreement is approved, there will have to be a lot of legislation over time to give effect to the backstop and any checks that might have to be made to goods that are going from east to west. When that legislation has to go through, there will be, at every turn, potential guerrilla warfare in the House of Commons.

You are right: trust will be important.

I have two points. I have concerns that the backstop is considered to be the future relationship. The point that this stage is just the divorce and the future trade negotiations are still to come is, unfortunately, missed by many, especially in the coverage on the backstop.

This is an aside, but it is worth remembering just how long it took for the relationship of trust to build between the British and Irish, first at official level and then between politicians. That was a decades-long process. If you listen to anybody who was involved in the negotiations for the Good Friday agreement, the Anglo-Irish agreement or the Sunningdale agreement, you realise just how much effort goes into building those relationships of trust and how easily they are broken by public statements. Aside from all that, we would be concerned about the damage that has been caused by some of the discourse used at this time.

Tavish Scott mentioned the economy. Notwithstanding the measures taken by Barclays and other elements in the financial sector, what is the forecast for the wider Irish economy in 12 and 24 months?

The European Economic and Social Research Institute in Dublin has done quite a bit of forecasting; Copenhagen Economics also did a big report early last year on the potential outcomes of a soft Brexit and no deal for the Irish economy. I do not remember the exact figures, but a 3 to 4 per cent hit on gross domestic product is predicted, if not more.

The problem with the Irish economy is that it is lopsided in favour of pharmaceuticals and hi-tech industries. A lot of those exports go beyond the UK. The sectors that are very dependent on the UK market are socially and geographically vulnerable sectors where there might not be a lot of other employment available. Take the beef industry for example. It sells 270,000 tonnes of beef to the UK every year. That high-value market is worth €4 billion to the Irish economy. It cannot be replaced overnight.

The beef industry is doing its best to make inroads into the European market, and the EU-Japan free-trade agreement will offer additional opportunities, but proximity to the market and the freshness of the product are very important factors. That is the concern.

It is worth noting that north-south trade is €3 billion a year and Irish-UK trade is €30 billion a year. That highlights the fact that the Irish Government’s primary concern has been avoiding a hard land border and recognising how closely that is tied to the peace process. That weighs far beyond the economic costs. However, if you look at the issue purely in economic terms, trade across the Irish Sea is significantly more important for Ireland.

We move to Alexander Stewart. Thank you for your patience, Alexander.

Not at all, convener.

If a no-deal Brexit occurs, do you think, or do you believe, that there is scope for many deals between the EU and the UK and that those might allow the border to remain open?

The EU’s official position on no-deal Brexit is to issue contingency notices to member states. It has been ramping up meetings between the European Commission and member states and issuing guidelines. Those are governed by six principles, and any measures must be unilateral, in the EU’s interest, short term and comply with EU law.

There is real concern in Brussels that there is a self-fulfilling prophecy in the UK that, because all sides want to avoid no deal—faute de mieux—they will come together and make sure that the skies do not fall. At EU level they are legislating for a change to EU aviation law, so that flights can take off from and land in the UK. There are strains among member states that would like those contingency plans to be a bit more generous, so that things can keep on flowing. However, you then run the risk politically of proving the Brexiteers right that no deal is not a problem, so it is a very delicate balancing act.

11:00  

On the Irish border problem, the optimum solution, according to the EU27, the Irish Government and the European Commission, is a negotiated settlement, including the backstop and the Irish protocol. If that falls away as a result of no deal, they are left to pick up the pieces. Michel Barnier was quoted in Le Monde talking about paperless, decentralised checks and so on. They would be forced into a situation where they would have to look at mitigating solutions, but they would mitigate to only a small degree.

There are also all the other ambitions of the protocol in preserving the Good Friday agreement, the all-Ireland economy and the hearts and minds achievements, if you like, of the peace process, whereby people can live their lives feeling that the border does not exist or is irrelevant. It is therefore not just about trade, but about study, healthcare and people feeling that they can go back and forward across the border and just live, function and operate as if it was not there. The piecemeal solutions that people might have to grasp at in a no-deal situation will certainly not take care of that whole thing. That is why the Irish Government and the EU see the situation as a much more holistic matter than as one of simply piecing together mechanisms that might fit.

It is worth acknowledging that significant progress has been made in relation to the common travel area and bilateral arrangements to try to ensure continuity and certainty for citizens, particularly frontier workers on the island of Ireland, bearing in mind that that relates just to British and Irish citizens. The arrangements are in relation to social security payments, for example, or issues such as the cross-border rail service and the train drivers’ licences, so that they will continue to be recognised.

Progress can be made on that aspect, but nothing can be done on customs and trade, which cannot be bilateral because those are EU competences. Most particularly, the EU will be obliged under WTO rules to ensure that tariffs are paid and quotas are applied according to the EU common external tariff. That is what will happen at the Irish border in a no-deal scenario.

Earlier in January, Dr Hayward, you said:

“If the UK leaves with no deal, the bare facts are that Ireland can do little to stem the ripple effect of profound uncertainties.”

Are you aware of any softening in the position of the Irish Government, or of it being put under pressure by any EU member states to soften its position? I know that some individuals have expressed quite strong views, but they are just individuals.

Tony Connelly would probably be able to speak to that much better than I can. However, as far as I understand it, there has been no pressure on Ireland to soften its approach with regard to a hard border. As people such as Jean-Claude Juncker are continually saying, Ireland’s border is the EU’s border and a common concern. More generally, the EU feels a responsibility towards the Irish peace process and it is felt as a personal responsibility by people such as Michel Barnier. It is not a matter of the EU blinking at the last minute and leaving Ireland exposed or being forced into making concessions, because for the EU there is a point of principle about not just certainty and legal frameworks, but a small member state being respected and protected, and membership meaning something.

There are other member states, such as Cyprus and Spain, that have very specific concerns that are reflected in separate protocols in the withdrawal agreement. The question that therefore has to be asked is, “If the EU were suddenly to abandon Ireland, how would those countries feel?” I suppose the solidarity and the unity that have been there from the beginning are such that the stakes are quite high for the first person to break ranks in that solidarity. Okay, the Polish foreign minister was quoted two weeks ago as proposing a five-year limit on the backstop; that echoed a previous Polish intervention in a general affairs council in July, in which it asked whether it was right that the EU might have to choose between no deal and Ireland. In July, that had the effect of stiffening the resolve of the other member states; many that had not intended to speak on the Irish question spoke about the importance of protecting the Irish position. There was the same effect two weeks ago.

That being said, countries have to look at their economies, voters and industries and I have no doubt that questions will be asked. It is unlikely that it will come to pressure on Ireland, given the way in which the issue has been managed so far. However, this is the situation that the Irish Government has always feared and always wanted to avoid: holding the parcel when the music stops.

I was struck by Dr Hayward’s point about the obligation on the UK and Ireland to enforce WTO rules. In Tony Connelly’s weekly briefing, he made an important point:

“It is also the case that between 15-20% of the EU budget comes from duties collected on imported goods. If a country is in breach of its obligations, either in collecting that duty or ensuring the safety of products coming in, they are subject to ECJ court action and potential fines.”

Do you think that there is enough understanding of that post-no-deal scenario by the UK?

I am sure that those who are involved in customs and so on in the UK understand it very well. The UK has been taken to the European Court of Justice for the flooding of the single market through Felixstowe of undeclared Chinese clothing and footwear worth billions of euros; that is a reference point for people who talk about the importance of future checks and controls between Ireland and the UK.

The question is also whether member states are fully aware of that scenario. In a no-deal situation, there may be a temptation at Calais to wave traffic through, and what would happen then? Member states are obliged to operate the European Union’s “Union Customs Code”, but French or Belgian customers officers do that, not EU officials. The law says that they have to ensure an adequate level of control. What that would mean with regard to discretion in the first week of no deal is hard to say, but it would become a political problem for the EU if it suddenly started chasing countries for not making sure that they were collecting tariffs and duties.

We have not heard it spelled out at the highest levels what no deal would mean. I hear often that it means that we could decide not to enforce a border. Indeed, the document “A Better Deal”, which seems to be the basis for the Malthouse compromise, is in essence an agreement not to have a border. Of course, it does not work that way. If we turn a blind eye, not only would we allow things to come into our jurisdiction that could bring risk to consumers and so on, but we would let down businesses that are adding the costs that are required to move goods across the border. We would undermine legitimate businesses.

We had that experience in the Irish border region in the past and saw the damage that was caused. There is a risk of undermining legitimate businesses and of the growth of a black market if we have a no-deal scenario or, indeed, a hard Brexit.

You wrote in The Irish Times recently about the Malthouse proposal:

“If this was a primary school project, it might be quite sweet to think that good intentions could substitute for international law and dispute-resolution mechanisms.”

Could you say a little more about that?

That article was published this morning. It was about the document “A Better Deal”, which purports to offer technological solutions to avoid a hard border, basically as an alternative to the protocol in the withdrawal agreement. Put simply, that document could not in any way be offered as a substitute to the protocol in the withdrawal agreement. It is worth noting that, if it was implemented, it would entail significant checks and controls, including random checks and inspections of premises, which are exactly the kind of thing that the protocol is trying to avoid, because of the security risks and the implications for perceptions of the British state and authorities in Northern Ireland.

To finish off, I return to Tony Connelly’s article. In it, you talk about the global implications of a no-deal Brexit and abandoning the backstop. You refer to the Irish American lobby and quote Brian O’Dwyer, who was a Clinton White House attorney at the time of the Good Friday agreement. He said:

“We are prepared to bring that same kind of pressure if a post-Brexit UK seeks a trade deal with the United States without keeping an open border between the two Irelands.”

Basically, you are saying that abandoning the backstop and going for no deal will not only have a profound implication for future trade relationships with the EU; it could affect future trade negotiations with the United States and other countries.

Yes. That reference was prompted by developments last week when a European Commission spokesman said that there would be a hard border on the island of Ireland if there was a no-deal Brexit, which put the Irish Government on the back foot a little. The Taoiseach, Leo Varadkar, was in Davos at the time and, when asked about the issue in general, he made the point that, when the UK is pursuing its free-trade agreements around the world, it could be kind of hobbled by the fact that there is an unresolved border issue on the island of Ireland. He did not specifically reference the Irish American question, but I have looked into that and somebody drew my attention to that article and to the fact that the Irish American lobby could take a position on the issue.

In general, it is hard to say what a future UK-US trade negotiation would look like, given, shall we say, the very different personalities involved, but there is a belief that the issue could be a factor. One Irish official who I spoke to talked about Georgia having trouble negotiating free-trade agreements because of the disputed territories of South Ossetia and Abkhazia. There could be a similar problem for the UK. However, it will also be a problem for the EU when it pursues free-trade agreements if part of its territory—if that is the right word—is contested or has an ambiguous trading loophole.

That again comes back to the point that, even in a no-deal situation, all sides will have to come together if they are going to pick up the pieces and re-establish some kind of trading relationship. The dilemma of the Irish border will not evaporate if there is no deal.

I see that Dr Hayward is nodding.

Again, I cannot add to that.

But you agree with that, so the stakes are very high.

I thank both our witnesses for their evidence, which has been absolutely fascinating.

11:14 Meeting continued in private until 11:32.