Boris Johnson has confirmed he will press ahead with legislation to override the Northern Ireland protocol, despite warnings from Brussels that it will breach the UK’s international legal obligations and a plea from the Bank of England not to spark a damaging trade war with Europe.
But the risky move looked unlikely to break the deadlock over the formation of a new power-sharing executive in Northern Ireland, with the Democratic Unionist Party (DUP) insisting that it wants “decisive action” from the PM before it will drop its boycott.
Foreign secretary Liz Truss spoke by phone on Monday evening with European Commission vice-president Maros Sefcovic and US House of Representatives speaker Nancy Pelosi, ahead of a statement to the Commons on Tuesday in which she will set out the government’s plans to legislate.
It is understood that the bill – not set to be tabled for another few weeks – will grant London unilateral powers not only to relax checks on goods heading to Northern Ireland from mainland Britain, but also to remove all European Court of Justice (ECJ) involvement in border issues and to vary VAT rates in the province without agreement from Brussels.
A senior EU source told The Independent that both the ECJ and VAT provisions are likely to breach the terms of the Brexit deal negotiated and signed by Mr Johnson in 2019.
And Labour’s shadow Northern Ireland secretary Peter Kyle warned it would have knock-on effects on the UK’s ability to forge trade deals in the rest of the world and to generate the economic recovery needed to get the country through the cost-of-living crisis.
“There’s a crisis of trust and goodwill and it is poisoning negotiations between the UK and EU and poisoning the relationship that the UK government has with political parties in Northern Ireland,” Mr Kyle told The Independent.
“To pull out of our international obligations will put a wrecking ball through any attempts to build new trade deals around the world, it will torpedo future relations with the EU and it risks a trade war that will profoundly damage Britain’s ability to get the economy moving and get money into people’s pockets when they most need it.
“The current course of action is gambling with the ability for people to put food on the table in the middle of a cost-of-living crisis.”
Senior Conservatives warned against a move which would permit Brussels to retaliate with tariffs on UK exports.
The chair of the Commons Northern Ireland committee, Simon Hoare, said that the risk to the UK economy was “very strong”, warning: “No time is a good time to be breaching an international treaty. But doing it during a cost of living crisis is the worst of times.”
In a scathing rebuke to Ms Truss, he added: “This silly sabre-rattling and reputation-fluffing by the foreign secretary, who is trying to be the new Iron Lady, has got to stop.”
And Treasury committee chair Mel Stride said: “It’s important that we try and resolve this without some form of trade war... our economy would not be well served by this.”
Giving evidence to the Commons Treasury committee, Bank of England governor Andrew Bailey made clear that a clash with Brussels over trade would not be welcome at a time of soaring inflation and rising interest rates.
“We’d love not to have another shock please, but we’ll see,” he told MPs.
Visiting Belfast for talks with Northern Irish parties on Monday, Mr Johnson insisted that he did not want to “scrap” the protocol, but it needed to be “fixed”.
“We would love this to be done in a consensual way with our friends and partners, ironing out the problems, stopping some of these barriers east/west,” said the prime minister, who was booed by protestors as he arrived at Hillsborough Castle.
“But to get that done, to have the insurance we need, we need to proceed with a legislative solution at the same time.”
The president of the European Council, Charles Michel, warned that “the only way forward” on the protocol was engagement between EU and UK and cautioned against undermining European cooperation at a time of war in Ukraine.
“Any unilateral action by UK on the protocol – which would undermine its international legal obligations – is clearly not welcome,” he said, following talks with Irish premier Micheal Martin. “All the more so in these difficult geopolitical times.”
Mr Martin said there had been an understanding that this month’s elections to the Northern Ireland assembly would be followed by a “renewed focus on talks” between the UK and the EU, which he described as the “only way to resolve this issue”.
Mr Johnson urged parties in Northern Ireland to “roll up their sleeves” and get to work on the bread and butter issues of interest to voters, something which has been blocked by the DUP’s refusal to nominate a deputy first minister to work alongside Sinn Fein’s first minister designate Michelle O’Neill or to participate in the election of a new speaker for the assembly.
But DUP leader Sir Jeffrey Donaldson made clear that the tabling of legislation on the protocol will not be enough to persuade his party to restore the executive.
Speaking after talks with Mr Johnson, Sir Jeffrey said: “The tabling of legislation is words. What I need is decisive action. And that means I want to see the government enacting legislation that will bring the solution that we need. But let’s see what the government are prepared to do.”
Sinn Fein president Mary Lou McDonald said she had received “no straight answers” from Mr Johnson, who she accused of colluding with the DUP to block the appointment of an executive with a nationalist first minister.
“This impasse is entirely coordinated between themselves and the DUP, and if the DUP are acting shamefully in holding back government, well then the British government is behaving even more shamefully,” she said.
Ms McDonald said that she told Mr Johnson that the path of unilateral legislation from Westminster was “wrong”.
“It seems to us absolutely extraordinary that the British government would propose to legislate to break the law,” she said. “It’s an extraordinary proposal and one that would amplify the bad faith with which the Tory government has conducted itself from [the] beginning of the entire Brexit debacle.”
Sir Jeffrey retorted that any suggestion that the UK government was on the DUP’s side in the power-sharing stand-off was “for the fairies”.
