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Restoring devolution in Northern Ireland

By SEC Newgate team
15 February 2024
Public Affairs

By Allie Renison

Even for the weariest of cynics, the restoration of the Northern Ireland Executive provides some much-needed relief at a time where civil servants are beyond stretched just trying to keep some basic semblance of infrastructure and public services running.

Some politicians and others are still arguing about the extent to which the deal makes any real changes to the Windsor Framework -the issue that the DUP collapsed power sharing over in the first place- and that the vast bulk of Brexit- induced checks and documentation on moving goods from Great Britain to Northern Ireland remain. Rather than expend any further energy on what is merely presentational and symbolic, it is worth being aware of the more noteworthy end of the spectrum of these changes.

Firstly, a larger share of goods will now likely be able to make use of UK free trade agreement in NI, particularly in relation to using UK rather than EU tariff rate quotas. Secondly, a new Act of Parliament will be brought forward to prohibit the UK from making a ‘future agreement with the European Union which has an adverse effect on the operation of the United Kingdom’s internal market’. 

Thirdly, and perhaps most consequently when taken together, a range of measures have been been announced that will give greater effect to monitoring and tracking divergence between UK and EU legislation - the latter of which Northern Ireland is still subject to and obliged to follow under the Protocol to the two’s overarching Brexit deal. One of these is around the operationalisation of the “Stormont Brake”, which allows in theory the NI assembly to block the application certain updated EU laws. The other is a commitment from the UK government to bring forward legislation requiring Ministers to assess whether bills have an adverse effect on NI’s place in the internal UK market.

Additionally, a long-planned but much-doubted new border control post will now not be built at Cairnryan. The port on Scotland’s west coast acts as the biggest gateway and transit points for goods moving within the UK across the Irish Sea and has never had the space for the infrastructure that a BCP would necessitate (particularly for plant and agri food products), and so spot checks “behind the border” to police EU-originating goods will suffice instead. It remains to be seen however how sustainable this approach is as the Government finally brings in import controls for EU goods necessitated by its Brexit approach that have been delayed for four years. 

But perhaps the biggest substantive mover in the deal to restore devolution in Northern Ireland is the funding pot that comes with it. In truth, for all the noise about the lingering Brexit dynamic inherent in the Protocol and Windsor Framework squabbles that underpinned both the Assembly and Executive’s collapse and return, it is funding for a much starved and stretched set of public services in NI that really moved the dial. 

One could argue in parallel that it was recent industrial pay disputes and strikes within those services which helped move the DUP and other parties back to the negotiating table with HMG. And funding arrangements are not entirely divorced from the speed at which those parties moved to divvy up the various departmental and ministerial allocations for a new NI Executive. Sinn Fein, who with Michelle O’Neill will now occupy the role of First Minister for the first time ever, also have secured most of the top economic ministerial roles - infrastructure, economy, and finance. The Scottish Government is perhaps unsurprisingly already asking about a similar enhanced set of funding arrangements from the Treasury. 

The funding deal however comes with some strings attached; HMG’s Treasury has offered to write off nearly £600 million pounds of Stormont debt, but Northern Ireland’s Executive needs raise at least £113 million in revenue and produce a plan to deliver sustainable finances. The contentious issue of raising tuition fees in NI could be in the mix, as is the thorny consideration of water charges – which unlike the rest of the UK are not collected in Northern Ireland. Michelle O’Neill has already sought rule these out, but previous estimates suggest they could generate in excess of £300 million. A middle way on a model instead of the full removal of rate relief could yet emerge.

However, cracks between the Executive and Westminster as well as Whitehall, asserted most stridently by Sinn Fein ministers, are already starting to emerge over the exact approach to overall revenue raising. And while Northern Ireland’s devolved government have in recent days announced a £668 million pay agreement for the public sector, it remains to be seen whether industrial action in NI will cease entirely going forward.

With UK parliamentary elections on the horizon, the return of the legislature and consequent executive in Northern Ireland is both welcome and not entirely a shock after several years of stalemate. Businesses and other stakeholders with an interest in NI now have a firmer footing on which to engage policymakers closer to home than just Westminster, but the relationship between the two layers of government will continue to be of paramount importance.

This is particularly relevant as various iterations of major UK and EU initiatives like a carbon border adjustment mechanism develop and come into existence. Indeed, stakeholders have already been calling for the restoration of the Executive to pave the way for a wider all-island energy strategy to pave the way for more investment and innovation into the path to Net Zero. And with the implementation of the Windsor Framework giving more clarity and substance to the NI Protocol, an opportunity to fully leverage it could be in sight as Belfast, Westminster, Brussels, and Dublin move towards more substantive engagement.

Northern Ireland may often be caught in the middle, but it is better placed to navigate its way out with its political representatives in place.