My Lords, I am grateful for the patience of the Committee on this trio of groups. Clauses 7 to 10 are at the real heart of the proposals, which links to the comments from the noble Baroness, Lady Ritchie, before about trying to understand how the Government will really manage the situation that they want to put in place with the dual regulatory regime.
The dual regulatory regime may be fairly neutral, but it of course means that Northern Ireland will be perpetually part of the EU single market. Clause 7 suggests that a trader can choose to operate under the EU law system or under a UK system, as the Minister referred to on an earlier group. That EU law system would be under separation agreement law.
My first question is genuinely a probing question: there may be a good reason for it, but what impact will the Retained EU Law (Revocation and Reform) Bill have on the implementation of EU regulations in this regard? I do not know what effect the mechanism for updating, as proposed under that Bill, will have on separation agreement law under this Bill. Do we have to legislate for any changes when it comes to the EU changing its regulatory approach?
Is this going to be a dynamic system where we will automatically update domestic statute if the EU changes its approach? If it does, then we are back to square one from our colleagues from the Democratic Unionist Party, who have been railing against that, but we will in effect be in a worse position because this is automatic updating of domestic legislation for another set of statutes from another power, which none of us will have any say over. I find this hard to believe and would be grateful if the Minister were able to say that this is not going to be the case.
The questions now relate to the green and red channels—the dual regulatory system. I would like to know from the Minister: who will operate them? The Delegated Powers and Regulatory Reform Committee says in paragraph 42 in reference to Clause 9:
“This is the frankest admission by the Government that policy is so embryonic that it has not yet been consulted on. And yet Parliament is being presented with a major Bill on the subject. Legislation has preceded policy development rather than vice versa. Nor is it remotely credible to say that it is not possible for these matters to be put on the face of the Bill. Why should the Bill say so little, with so much left to regulations?”
Perhaps we can get clarity for business on the dual system. The Government say that businesses will be able to choose. I would be grateful to know how. Will they have to fill in a declaration? What default system will be in place if they ship products without a declaration? Will they be prohibited from shipping to Northern Ireland if they have not declared what their route is? How will they know what status their GB or EORI classification gives them? We have been led to believe that if they operate under the Trader Support Service with an EORI classification, this process is already streamlined. Will there be a Trader Support Service for both the separate routes now?
The noble Lord, Lord Dodds, asked a valid question: for how long will this scheme operate? If the Government felt it was necessary that there was a Trader Support Service for a scheme which operated under EU procedures and regulations, and they are proposing that they will still be operating under EU regulations—under the dual regulatory system—so will a Trader Support System operate permanently? At what stage does a business choose? Is it for each consignment, or will the business have to choose at what stage of production it opts for each of the routes? What if it wants to use a UK route but also needs an EU conformity assessment? Will there be a public register of who is operating, and how will it be monitored? Who will have access to the data, and is this going to be a public mechanism for which routes certain enterprises choose to operate? The latter questions are vital, I think, because it has to be known, as it may well be challenged under a legal system, and what will that legal system be?
Clause 10(1)(d) relates to the use and import of goods. Is the choice for the seller or for the purchaser? This is fundamental if it is to do with east-west trade, so can a purchaser from Northern Ireland determine that their supplier uses the UK route, or is it the supplier who says, “I am very sorry but I have opted for the EU route, so this the situation that is going to have to be received, and the good that goes into the market has to have the EU mark on it”? I do not know, so I would be grateful for clarity.
Michael Ellis, the Paymaster-General, told the Committee in the Commons that the choice of using a route is completely voluntary, but Clause 11 means that it could be compulsory. Why? Which is it? Is it voluntary for businesses, or could it be voluntary until a Minister says it is compulsory? I think this is a breeding ground for utter confusion: an entire system being established at the outset, only for there to be a broad regulation-making power, which could be put in place without consultation—there is nothing in the Bill that states there will be consultation—to say, “All of your choices that you have been making for this, we have now said that you have to use this particular route.”
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What does “classes of goods” mean in Clause 11(1)(a)(i)? I do not know what “classes of goods” are. It is not WTO language. Is it using WTO classifications of certain products? What kinds of exceptions are envisaged in Clause 7, as this power is so broad it can alter them all? I simply do not know the point of spelling out in primary legislation Clauses 7 and 8 when Clause 9(2) can simply amend them by regulations. We are making primary legislation in one clause, only for that to be completely changed by a negative instrument in another. It is utterly pointless.
The difficulties facing businesses trading east-west are not unique to Northern Ireland. The Public Accounts Committee report had indicated that the Food Standards Agency, for operating under what may well be a UK route, no longer has access to the EU’s Rapid Alert System for Food and Feed. Because the whole island of Ireland is a single SPS area, I do not understand how the UK route, operating under a single SPS area, without the EU’s Rapid Alert System for Food and Feed, will not have to have interaction with EU rules. I hope the Minister will be able to clarify that point, because I do not know.
The same applies to chemical safety for imports. The Health and Safety Executive no longer has access to the chemical safety data underpinning the EU’s registration, evaluation, authorisation and restriction of chemicals—REACH—process. We have debated REACH many times, but this is so significant for the Northern Ireland economy. I do not know, if you are supplying anything with links to REACH, whether you can choose between the two distinct routes, or is this going to be the area where it is a blend of them both? Is this going be a new orange route, where you choose between the green and red? A purple route? I do not know where it is going to be.
So, how efficient will this be if this is to do with reducing bureaucracy and costs, and is better than what has been proposed through the EU scheme for an “express lane”? I simply do not know, and given the fact that the Government seem to be keen now on having differing regulations on agriculture—for example, on gene editing, or allowing deals for banned pesticides to potentially be used which are not able to be put on to the EU market—I do not know how the two routes are going to interact, regardless of whether they opt to go on a route or not.
This is so fundamental because—the Minister knows that I have raised these questions before, about conformity marking—any good that goes through either of these
routes is going to have to have a UK conformity assessment—UKCA—mark or a CE mark or a UKNI mark, if qualifying Northern Ireland goods are placed on the market in Northern Ireland. It is still not clear how this is going to operate, but the Government are indicating that from January 2023 this new scheme will be put in place. I hope that there will be some answers to these questions, which are being asked by businesses, and fundamentally the Government have to provide these answers before we complete the scrutiny of this legislation, because otherwise we simply do not know what we are giving the Government authority to do. I beg to move.