Official Report: Minutes of Evidence

The Chairperson (Mr McGrath): I welcome Karen Pearson, the director of future EU relations in the Executive Office, and Andrew McCormick, the director general of international relations in that office. You are very welcome, and thank you very much for coming up to us. Hansard will record everything in the discussion today. We will pass over to you to give us some opening remarks and updates, and we will have some questions for you afterwards. Thank you very much.

Dr Andrew McCormick (The Executive Office): Thank you, Chair, and thanks for the chance to be with the Committee this afternoon. As you said, we will say a little bit about some of the key issues that we are dealing with and will then be happy to get into a discussion about all that.

I think that the First Minister and the deputy First Minister probably covered some aspects of preparations for EU exit at their first appearance a few weeks ago. I will say a word or two on the wider international relations side and then turn to Brexit. Karen can then supplement that with some extra points.

We have, as a devolved Administration, three overseas offices: Washington; Beijing, which is vacant at the moment because Tim Losty has come home with all that is going on there; and Brussels. Brussels is the largest office and the longest established. Those offices are designed to complement what Invest Northern Ireland does, although it has a much wider network of offices because promoting trade and investment is a wider economic function. Those three places were chosen because that is where the most important government-to-government relationships happen, and that is why that is appropriate to the Civil Service, as distinct from Invest Northern Ireland. My team also has responsibility for inward visits, and there has been a wide range of overseas visitors and a great interest in the region in the last few years. Lots of people have wanted to visit the border. That has been a major pattern, and we have hosted far more visits in the last few years than in regular times. They are always interested in economic issues, tourism and some of the specialised sectors that apply there.

The Brussels office does a lot to promote our interests and the Executive's issues there. Of course, that is of great interest at present. The team has done good work there to build and establish long-term networks that are of value to the region. We have good contacts with the Commission, the other institutions, the Parliament, member state delegations and some of the other regions that are represented. Brussels has offices from all over the world, because that is where they deal with the EU on a collective basis.

You mentioned the work of the Executive subcommittee. That was committed to being established in New Decade, New Approach. We have literally just come from the fourth meeting of that subcommittee. I am the secretary to the subcommittee. It has had a lot of briefings so far on trade, agriculture, the sanitary and phytosanitary issues, or SPS, as we call them, fisheries, justice and transport. I think that its work programme shows some of its forward-looking work.

The next phase and the big thing in the offing now are the negotiations between the UK Government and the European Union on the future relationship. There are two very different perspectives on that. We have seen the stall set out in the Prime Minister's Greenwich speech, and I think that David Frost's speech in Brussels was also quite important in signalling their opening negotiating position and a fundamental view of what they mean by independence and autonomy. Some quite important lines are being drawn. Just published, then, following the General Affairs Council on Tuesday was the final version of the European mandate. Again, it was interesting to see the way that evolved from a draft at the start of the month, with the initial version produced by the Commission, to what the Council of Ministers has now formally approved as the European mandate for that negotiation. So, there are large gaps and very material issues for us.

At the highest level, the European Union side is to look for an overarching agreement — what is called an association agreement. Countries like Georgia and Ukraine have that kind of agreement, as they are trying to get their way into the European Union. It is the first step in that, so it is natural to see that as a natural consequence of leaving, but one thing that that involves is overarching governance. In other words, if there is a dispute in one part of the agreement, you can then tackle it in another aspect of the agreement, so it is an overarching association agreement.

The UK Government's position, which has been clearly stated by Boris Johnson, is to say no to that. We will look for a free trade agreement and then for separate agreements on security, aviation, road transport and a whole range of other things, and then they will also just behave as a third country. They are saying, "We are independent. We will do our own thing, and, as a third country, we will apply for, say, a data adequacy agreement or an agreement on financial services". It is a very important thing for the UK economy, but they are choosing to be treated as a third country rather than bringing those into an overarching agreement. Those are technical points in a way, but I think that they are consistent with the psychology of what is going on here, as in the UK Government are taking a very assertive approach by saying, "We are now adopting this autonomy. Autonomy is what we are looking for. This is about making our own rules, making our own laws and taking back control".

In our world, the Executive's objective is to ensure that the outcome that we get from this whole process — there are many strands to it — is the best that it can possibly be. We are working as closely as we can with Whitehall Departments to at least make sure that the issues here are understood, and the extent to which we can influence that has been the task, especially in the last three years. Since Ministers have been back, there has been correspondence and meetings where they have made their points, especially focusing on the protocol and the way that it will be applied. It is a unique arrangement. It has a whole range of complex dimensions to it, and the objective is to get as good a resolution of all those issues as possible. Indeed, they went to the Joint Ministerial Committee (European negotiations) JMC(EN) towards the end of January, and that secured an agreement that there will be a political level of engagement on the development and application of the protocol that is consistent with what the UK Government committed to in the 'New Decade, New Approach' document, annex a, paragraph 11, which states:

That is a UK Government undertaking, and Ministers and, as I am well aware, the MPs collectively have been working on it before and after the return of Ministers. We are working very tightly. This is a very important time for these issues. The year ahead to the end of the transition period will fly, and there is an awful lot to be done to secure the region's interests.

The stakeholders have worked very effectively together with the political parties and MPs at Westminster, and they have been in this Building at least a couple of times this week, so they are doing a lot of really good work as a group to identify what is best to be done and where the biggest issues and concerns will be, because there are some very serious things that need to be addressed.

I am certainly happy to get into the detail of all that, what is going on, the withdrawal agreement and the application of the protocol and to deal with that in the questions. I will let Karen draw out some aspects of the official level governance.

Ms Karen Pearson (The Executive Office): I will say a few words about how we keep all this together across the Civil Service. Ministers have their own responsibilities and autonomy, and that needs to come together through the Executive subcommittee to get the best set of outcomes across the various negotiation strands that Andrew just outlined.

Our job in the Executive Office is much more of a coordination and strategy-setting role. We provide the secretariat to the subcommittee. Andrew is the secretary, and I am the deputy secretary. We also need to keep it together at a senior level across officials. We have a future relations board, which is chaired by the head of the Civil Service, and he checks in just to make sure that various work streams are on track. Work streams include things like justice, preparedness, finance, protocol on trade and other implementation issues, and we look across those as a whole.

As Andrew said, it is vital that we keep in touch with Whitehall, because it will be leading on the international negotiations, and we have to make sure that our very special interests are recognised in Departments. We liaise bilaterally, and Andrew and I then liaise with the centre Departments in Whitehall to make sure that they understand what we are trying to achieve. Andrew mentioned the Executive's bureau in Brussels, which is providing absolutely first-class access and support to us out in Europe. We very much look forward to keeping you up to date, Chair, as our work progresses this year.

The Chairperson (Mr McGrath): Thank you very much indeed for that input. It is appreciated. We will open up now to members. I will start with a few questions, and maybe you can help us to understand and get clarity about some concerns.

The more that we investigate and learn about the outworkings of Brexit, the more it appears to be quite a complicated spider's web in decision-making and investigations and then in accountability for the decisions that are taken. If there are decisions to be taken that will directly impact the North, who is taking them, and, just as importantly, what is the accountability in that decision-making process? In some respects, it feels like some of that — well, most of it — should fall to the Assembly, and, as a result, this Committee would hold it to account. The annex to the protocol that is being developed outlines some 300 different pieces of legislation that will be put in place, but, if there are changes to those protocols in any shape or form, we will not have any direct input to the changes that are made to that legislation. The question is this: what sort of input can we have, and, as those changes are made, how can we hold them to account?

Dr McCormick: I will make a start on that, and Karen can come in to help. The overarching governance of the withdrawal agreement is through a joint committee that is established by that agreement, and that will be based on very senior level representation from the UK Government and the European Commission. I think that the name of the person who will lead on the European side has just been identified, and Michael Gove will lead. That committee will have a number of decisions to take on the totality of the withdrawal agreement, because it affects a whole range of issues, as well as the protocol, but, at times, it will deal with specific issues on the protocol. The withdrawal agreement also creates a number of specialised committees, and there is one specifically dedicated to the protocol. There is an article in the protocol that defines what it can look at and what it can do, and that provides a basis for decision-making and the resolution of issues as they evolve.

Part of the issue here is that the protocol can define today those elements of the European legal system — the acquis, as it is called — that are relevant to making the protocol work. That can be defined, hence the 300 pages. That is the existing list, but the obligation that we have under the protocol is to retain what is called dynamic alignment. That is the very thing that the Prime Minister does not want for GB, but the protocol requires it here otherwise the single market will get distorted. So, there will be a need for that updating. Some things will be, by virtue of the protocol, legally obliged to be put in here, and there will need to be a provision for making secondary legislation to keep the statute book up to date. Throughout all the years of membership, because we have a dual legal system, as it were — a dual set of legislation — there is a need for European law to be translated into domestic law. The withdrawal agreement Act provides a new basis on which that can be done. Some bits affecting Northern Ireland will be matters for UK Departments, and that will be a matter for them to do at Westminster. Some bits will be in the devolved space and will, therefore, require a steady flow, I would imagine, looking ahead over the years, of updating regulations to maintain the operation of the protocol as intended.

On accountability, because most of that is already committed, there is an awful lot that is actually already settled. There are not so many big, strategic-level decisions that lie ahead for the joint committee. There is one that is very important, and that is the definition of precisely what is meant by the term "at-risk goods". A major part of the protocol is the requirement that EU tariffs are applied to those goods that enter Northern Ireland from GB, or, indeed, from the rest of the world, that are at risk of entering the single market. It is a matter of getting that defined and deciding how it applies.

The context for that will be set by what emerges in the higher-level negotiations. Whether there are tariffs at all is one consideration. If there is a zero-tariff agreement, that is not an issue, but, if there are tariff differentials, that becomes a very big issue and one that the business community is very concerned about and one that needs to be looked at. That is for the joint committee. There is no decision here. That is something that we will just have to accept and work with. The actual important bit is how we work with and alongside the UK Government and with Brussels to make that as sensible as possible. We need to look at volumes and flows and at how trade actually works in practical terms so that the decision makers are not taking things in the abstract but are informed by the real world and by what is really going on on the ground and, therefore, to the extent possible, can take account of all the practicalities. That is not formally part of the governance, but it is a vital part of the process. It is vital that we get across and deal with issues and engage and explain. It is for the business community to do that for itself and for that to be clear at UK Government level and in the Commission. Sorry, that is already a long answer. Is there more that needs to be said?

The Chairperson (Mr McGrath): There was a considerable amount of detail in that answer on how the decisions are taken. My query really is more this: is there an opportunity for scrutiny of those decisions, or is it the case that the joint committee and, if I heard you right, a subcommittee of the joint committee will take decisions that will impact here? Does the accountability for those decisions go through to Westminster, or, if those decisions impact here, through that joint committee, do Northern Ireland Ministers participate in those discussions, meaning that this place, therefore, holds some sort of scrutiny role? I mentioned the spider's web, and it feels that there are lots of different groups, subgroups and arenas where people are meeting to discuss things and potentially take decisions, but it is about holding those bodies to account, just as the Committee structure in the Assembly holds to account those who are taking decisions. Is there an opportunity for the Assembly to hold a scrutinising role for any of that decision-making process?

Dr McCormick: As you say, that goes to the extent to which Northern Ireland Ministers have a contribution to make to the formal decision-making process. The commitment in 'New Decade, New Approach' at annex a, paragraph 9 is that the:

That is the tip of the iceberg. What matters is what is done in preparation and how that is held to account after the event. Before the event will be the important bit.

One thing not yet defined are the rules of engagement and procedure, so it will be possible, for example, for those committees, before they take a decision, to issue a draft decision and allow it to be discussed in some formal process. That could come here or to our Ministers. That is only a possibility. It is a matter for them to decide, looking ahead, but where the principles of good governance are concerned, one would not like to deal with issues by surprise. If we look at the way that European legislation is made and the way that it goes through the Parliament and all those processes, we see that there is an extensive process before decisions are crystallised. It is in our interests to look for that and to maximise the opportunity for public consultation. That would then provide the opportunity for scrutiny in advance.

The Chairperson (Mr McGrath): I am trying not to keep going back and forward, but the points that we are raising are so important because they are potentially laying out the groundwork for the engagement of Committees and the Assembly, so I think we should get a good understanding of them.

Mr Sheehan: Chair, would you mind if I made a small point?

The Chairperson (Mr McGrath): Yes. Of course.

Mr Sheehan: You talked about input from the Executive to the meetings. Presumably, reports will then go back to the Executive subcommittee. Would it be possible for any reports from the subcommittee to be given to Committees — could they be given to this Committee? — together with the forward work plan so that we have an idea of where things are going?

Dr McCormick: There is definitely room for forward work planning to be shared in that space. There will probably need to be a distinction made between matters that remain policy under consideration, and, in that context, the subcommittee would work under the same rules of confidentiality as the Executive. To me, there is a value and a necessity in having engagement. Therefore, good practice would say that allowing there to be scrutiny and consideration of proposals before decisions are finalised is a good principle and one that will need to be evolved. We do not have a clear picture of what the higher-level rules of engagement will be, and that will determine what is possible at our level.

Ms Pearson: I think that that is fair. Matters are still evolving, to be honest, and we could not outline it to you precisely today and say, "This is going to happen in that format with this attendance". You have a very clear interest, and, as soon as we have clarity on that, we will make sure that we —.

The Chairperson (Mr McGrath): Maybe I can just add an appendix to that. If, for example, the Minister of Agriculture, Environment and Rural Affairs was going off to participate in some subcommittee of the JMC, would he go off and take independent decisions or would those decisions have to be agreed by the Brexit subcommittee before he went off to participate in the discussions in Brussels or Westminster? Therefore, as Pat said, would that mean that the decision would be taken by the Brexit subcommittee and scrutinised here, or will Ministers just go over there, take their decisions, make them part of their departmental thoughts and come back to the Brexit subcommittee and say, "I have made these decisions on your behalf"? Has that been discussed?

Ms Pearson: It would be —.

Mr Stalford: The Executive position.

Dr McCormick: Exactly.

Ms Pearson: Exactly. If it is cross-cutting, controversial or significant, the normal rules of the Executive would be the operating principle. We have to be mindful, though, that we have other Committees, ministerial autonomy and responsibilities, but they are starting with a collective aim of getting the best for the economy and citizens and discussing issues in a very open manner. I could not say to you that a Minister is bound to come back to the subcommittee on certain issues; it would depend on whether that is in the remit of the subcommittee. What we cannot do is prevent Ministers from doing their departmental business. That would be wrong. Equally, we have to aim for that collective discussion and maximum collective agreement around the Executive table.

The Chairperson (Mr McGrath): Yes. There will be individual and collective decisions, but it seems that there could be a lot of different and, at times, conflicting decisions that may not necessarily be taken with the full endorsement of everybody across Northern Ireland. That could lead to some interesting discussions further down the line.

Dr McCormick: It could.

The Chairperson (Mr McGrath): Moving away from that, has the schedule for initial engagement with stakeholders and other devolved Administrations and for looking at the North/South and east-west bodies been drawn up by the subcommittee? Have they set out their views on how they will engage with other people and places?

Dr McCormick: There are quite a few strands of engagement happening. There is not, as we speak, a formal forward look on those dimensions. What we have is very regular engagement with the other devolved Administrations and the UK Government. There are now a lot of regular quadrilateral conversations on an official level. The JMC (EN) is the main vehicle for that, and the First Minister and deputy First Minister went to that in Cardiff in January. That will need to engage more fully as the negotiations unfold.

If you have seen some of the comments made, for example, by the Scottish Brexit Minister, Mike Russell, in the Scottish Parliament last week, you would know it would be fair to say that things are not going all that smoothly. Is that a bit of an understatement maybe? There is a lot of tension between the UK Government and the other Administrations. We saw this, as officials, in the last three years, where the Scottish and Welsh Ministers were wanting better access and more advanced sight of proposals. There is a process there, but it needs to be improved.

Obviously, there is a hiatus in this at present, but there have been very good North/South working relationships between officials in the last number of years. Of course, as the North/South Ministerial Council (NSMC) comes back into full operation once there is a new Government in the South, that will be a very important stage. Indeed, the NSMC has been given some formal roles in the protocol. There was a very formal and distinctive important dimension to our work with colleagues in Dublin on that process.

Mr Nesbitt: Thank you both very much for your words so far. First, I want to talk about what happens to the powers and policies that are repatriated from Brussels to Westminster. Do they remain at Westminster to become UK-wide policies, or are they devolved for policies to be designed in Belfast, Cardiff and Edinburgh? Specifically, on fisheries, what happens when we come out of the common fisheries policy?

Dr McCormick: I will deal with the general issue and give Karen some time to think about the specific example. That was dealt with in one of the important clauses in the earlier piece of legislation. I have forgotten the formal title, but it is the withdrawal Act from 2018, where the UK Government took a power to, if they so judged it necessary — this was the breach of the Sewell convention that caused great objections in Edinburgh and Cardiff — they could retain a repatriated power and insist that it operate at UK level. The position of Edinburgh and Cardiff on that issue was to say, "No. That is not right". If something is under well-established practice — indeed, the Scottish and Welsh devolution settlement is actually a devolved matter, so that would include issues such as agriculture and state aid — it should automatically come to them or be dealt with only on a UK-wide basis if all four Administrations agreed that that was the right thing to do. That is a matter of the balance of power between London and now the three devolved Administrations. We have had a lot to do on the protocols, we have not actually had any specific discussions with Ministers on that issue, although it is a very significant one looking forward.

There is an argument, in some cases, for some repatriated powers to continue to operate consistently across the UK. It could be argued — I am not saying that this is our position; it is just a theoretical argument — on state aid, for example, if you are doing trade deals with third countries, you will be able to say, "Our state aid rules are the same across the UK". That could be argued. Otherwise, you are into saying to a third country, "In Scotland, it is this. In Wales, it is that. In Northern Ireland, it is the other". Both are possible. It is a political judgement about which is better. That is to be done case-by-case.

On fisheries, I am not sure of the precise facts.

Ms Pearson: No. We will have to write to you on that, if that is OK, Mr Nesbitt, but fisheries will be one of the big negotiating dynamics. The UK and the EU are going to start in very different places on that subject.

Mr Nesbitt: That is interesting because, on 3 February, the AERA Minister, Edwin Poots, told the Chamber, in response to a question that I put to him:

It sounds as if that is an inaccurate statement by the Minister.

Ms Pearson: I would not know, sorry.

Dr McCormick: Sorry. We are saying that we do not know. If the Minister has given an authoritative statement, he presumably knew.

Mr Nesbitt: Does he have the authority? Does he have the vires?

Dr McCormick: He is the Agriculture Minister, so, yes, fundamentally. I am not questioning his briefing or what he said.

Mr Nesbitt: We could, therefore, have the Irish fleet in the Irish Sea under the common fisheries policy, an English fleet under an English policy, a Scottish fleet under a Scottish policy and a Northern Irish fleet under a Northern Ireland policy: four policies, four fleets, one sea.

Dr McCormick: There is definitely a negotiation to be had on a fisheries agreement; that is part of what will be looked at in the negotiating process between the UK and the EU. I think that that is part of what was trailed in the Prime Minister's Greenwich speech. There will be a series of agreements, and they will want to secure a fisheries agreement. That would be an international agreement on behalf of the UK, so it would determine how this works out. Whether that includes, as Minister Poots has said, an element of discretion, or fuller discretion, of the devolved Administrations, that will have to be pinned down so that what those fleets can do will be defined in some way in an overarching agreement.

Mr Nesbitt: He is not saying an "element"; he is saying "full".

Dr McCormick: As I say, we are not the experts on fisheries.

Mr Nesbitt: I will move on. Last week, the Home Office published the points-based immigration policy. There is a salary threshold of £25,600 for those skills. We have heard Hospitality Ulster and the retail federation, on behalf of the large shops, say that that does not suit. We can assume that agri-food businesses and fishery fleets are not very happy. The immigration points-based system was based on a report from the Migration Advisory Committee (MAC), which was published in January this year. That committee acknowledged regional variations in the cost of living but were not prepared to recommend a variation in that minimum wage. Was it a failure on our part not to persuade them?

Dr McCormick: Going back to my time in the Department for the Economy, I know that officials have been consistently making representations, and Ministers will continue to make representations. We had meetings with Alan Manning and his team. This is an excepted, or reserved, matter; it is certainly not a devolved matter. All that a devolved Administration can do, therefore, is make representations, and representations were made by us as officials, and by Hospitality Ulster and a range of business interests. It is a matter of grave concern. I think that there is further argument and representation to be made by Ministers on the issue because Northern Ireland Ministers are not at all happy with what has been decided. It is a major problem.

Mr Nesbitt: The MAC report makes clear that there were representations from all sorts of bodies from Northern Ireland, and it acknowledges that there are regional variations. If you need £25,600 to live in London, you do not need it to survive in Northern Ireland, yet the Home Office was not prepared to give a regional variation on £25,600. That sounds like a failure to persuade.

Dr McCormick: It is a judgement that has been reached at a higher level by a Government who have the authority to make that decision. That is realpolitik.

Mr Nesbitt: There is another issue, not with low skills but with skilled jobs. Reference is made to the shortage occupation list (SOL). That comprises jobs that have skills for which we do not think that we have enough suitably qualified people and, therefore, ask for exemptions. There is a UK-wide SOL. Scotland has its own list; we do not. However, in May 2019, the MAC suggested that Wales and Northern Ireland should establish their own shortage occupation list. Why have we not done that?

Dr McCormick: Again, that would ultimately involve an element of political judgement.

Mr Nesbitt: Why would it involve political judgement?

Dr McCormick: This is what administration is all about. Important decisions have to be taken at a political level. Major representations were made. As officials, we did our best to make the points to MAC and to the Home Office as the office of state that makes those decisions. The Department for the Economy has a fuller and more detailed brief on the subject. We have not been dealing with this policy area in the Executive Office in the past number of months.

Mr Nesbitt: Andrew, on page 148 of this document, which was published in January this year, it is very clear:

Were you aware of that?

Dr McCormick: That is not our area of direct responsibility.

Mr Nesbitt: Whose area is it?

Dr McCormick: The Department for the Economy.

Mr Nesbitt: I have a written question in to the Department for the Economy and have not yet had a response.

Ms Pearson: It is fair to say that Ministers share all the concerns that you mentioned, Mr Nesbitt, about the impact on industries.

Dr McCormick: Yes, absolutely. Absolutely, yes.

Ms Pearson: They are concerned about it and do not think that it is necessarily the end of the matter and intend to make further representations.

Dr McCormick: Yes.

Mr Nesbitt: We will see what the Department for the Economy has to say about that. This is an opportunity to dive down onto the £25,600 salary, so it is an opportunity for our economy. These are skilled jobs, some of them in health. We need these jobs. Potentially, these are life-saving jobs.

Ms Pearson: We completely agree.

Dr McCormick: Yes.

Mr Nesbitt: Here we are, nearly in March 2020, and this recommendation was in May 2019. As you say, it maybe rests with another Department.

Mr Stalford: I serve on the Economy Committee, and the Minister, in her first appearance before the Committee, raised those issues that you raise and specifically mentioned the salary bar and how in Northern Ireland, with our circumstances, that salary bar should, perhaps, be reduced.

Mr Nesbitt: Did she make a commitment to a Northern Ireland-specific shortage occupation list?

Mr Stalford: No, she did not.

The Chairperson (Mr McGrath): Sorry, may I call for a bit of order? I remind you that everything is through the Chair. We have not devolved down into a laissez-faire conversation, so continue, please.

Mr Nesbitt: I am nearly finished, Chair. On 20 January, the Assembly declined to give consent to the UK Government to legislate on our behalf on the relevant parts of the withdrawal Bill. Potentially, we have a border down the Irish Sea, yet the aim, Andrew, of your department within the Executive Office, according to last week's briefing paper, is as follows:

Dr McCormick: Yes.

Mr Nesbitt: Given that there is a border down the Irish Sea that we did not give our consent to, and all the other issues I raised, do you accept that your aim has been a catastrophic failure to date?

Dr McCormick: Some of the decisions in relation to the withdrawal agreement are substantially above my pay grade. The outcome in October followed on from two and a half years of intensive negotiations on addressing the really difficult issue of the land border between this part of Ireland and the South. That was a bone of contention through the entire Theresa May Administration. First, you saw proposals for a Northern Ireland-only backstop, and then the UK-wide backstop that was built into her agreement, which was then catastrophically rejected by the House of Commons on several occasions. Then there was a further negotiation in October, in which there was no Northern Ireland voice at all as to what would be done instead.

That is what happened. The UK Government came to an agreement with the European Commission, and then the member states signed that off at the European Council in October, which created the protocol that is seen as a compromise. It avoids all that will be difficult politically and practically to deal with on the land border issues. It retains and protects the single market. If the outcomes of the negotiations are successful on the application and implementation of the protocol such that our trade is protected in various ways, there is still the possibility of a successful outcome for Northern Ireland. That is the responsibility that we and the Ministers now have. Given what has been settled and reached after many permutations and much examination of the possibilities, this was an incredibly difficult set of negotiations and is, you could argue, what brought down the May Government.

That is where we are. We cannot change that, and the Assembly cannot change it. It is what it is. That is a consequence of a much larger-scale negotiation.

Mr Nesbitt: Let me finish by putting it another way. Do you accept that the UK Government's negotiating strategy, while it may have been aware of a full understanding of our issues, was not informed by it?

Dr McCormick: There was no shortage of information or understanding.

Mr Nesbitt: "Informed" means you shape your strategy, and they did not shape the strategy.

Dr McCormick: What it does not necessarily mean is that the considerations arising from that set of information overrides what was the very determined approach by the Johnson Government that the UK would leave the single market and the customs union. The Prime Minister's colours are nailed to that mast firmly and clearly, as you heard in his Greenwich speech and in David Frost's speech in Brussels. They say, "We do not apologise for friction or autonomy. This is what independence means. We are going to be a separate country".

If you have an open land border, goods will move freely across it. There is no practical or politically acceptable way to change anything of that nature. The European Council, therefore, with the member states and the Commission, insisted that the single market be protected, and the UK Government agreed that. That is what happened in October. The protocol is the best that they could do to deliver that. It is absolutely, definitely informed by a good understanding of this region's interests. The Commission and the UK Government have attempted to find ways to make it as beneficial as possible.

Enormous challenges still need to be addressed, and it certainly does not involve Northern Ireland being subject to the full obligations of EU membership. Some key elements of European legislation affecting goods and regulatory regimes are required because the single market has to be retained. That is the way it is. In their judgement as the UK Government, the settlement that they reached is the best compromise that they could find. It is now up to us to work out the practicalities to secure the best possible implementation of that protocol in a way that serves our interests.

Ms Sheerin: Thank you both for your presentation. Every point that has been raised thus far proves my belief that the British Government do not really care about the North of Ireland, and their attitude demonstrates that.

I have a couple of questions. I touched earlier on a specific issue with Shauna Mageean. Near to where I am from, a firm is involved in parallel importation. You mentioned companies dealing with goods that will be deemed at risk. There is not much clarification as to what the arrangements will be, post the end of this year. The company that I am talking about imports goods from other EU states, repackages them in its base in the North and exports them to Dublin. It was Shauna's initial belief, and it was the company's understanding and mine, that it would not fall into the "at risk" category. However, it does not have clarification on that, and no one seems to be able to give such clarification. The company is left in limbo, and it cannot prepare.

Dr McCormick: If the components that are part of the company's supply chain come from the EU, there is no impediment. The land border is open, which means that they are not covered by the relevant terms of the protocol. Article 5 of the protocol deals with the movement of goods from GB to NI.

If, on the other hand, the supply chain that is relevant to the company's activities is in England, Scotland or Wales and its market is in the EU, that is, by definition, at risk, so it would almost certainly be caught if the components come from across the water. If the components come either from or through the South, article 5 of the protocol does not apply, so there would not be any risk.

Ms Sheerin: I hear what you are saying, so there should not be any change to its business model.

Dr McCormick: That is right. The debate was settled, after many swings of the pendulum, in a way that leaves the land border and the North/South supply chains open and working. There are potential issues with the association of goods and services. The protocol does not deal with services; that is a matter for the FTA negotiations between the UK and the EU. There is a lot of really important stuff for us to address in that context to ensure that we get not only the benefits of that FTA for service provision that is being traded in the rest of the UK and the rest of the world but the very close integration of many services firms, North and South, is protected. There is a lot of detail to work out, but the case you describe sounds OK to me.

Ms Sheerin: That is helpful; the company has not had clarification from any other body. The overview that you provided states quite explicitly on page 5 that the British Government had written:

The overview then refers to the JMC meeting at the end of January. Is there any further clarification on that?

Dr McCormick: That has been a very live topic this week. There has been a range of discussions involving the UK Government and the other devolved Administrations as the UK Government move towards the completion of their mandate for negotiations and their initial statement of their objectives. Those objectives have been stated in the Prime Minister's Greenwich speech, but more detail is required. That has been part of our engagement.

In answering your question, the safe space for me is to draw attention to what Mike Russell said in the Scottish Parliament next week — sorry, last week. [Laughter.]

It will be the same again. I was right the first time as well. [Laughter.]

He said very strongly that the devolved Administrations have not been respected fully — hardly at all, to be honest — in their dealings with the UK Government in preparing the mandate.

The JMC(EN)'s terms of reference state that that body exists to provide a forum for the negotiating mandates to be discussed and, if possible, agreed. Throughout the last three years, that never happened. At those meetings, in the absence of Ministers, Karen, David Sterling or I was usually the representative. At such meetings, the May Administration never once said, "Here is what we think we will do". That was never the case. I suspect that that was because they were having quite a lot of difficulties in their own team. That is what happened; it is a little bit better now, but not a lot.

Ms Sheerin: Will the Executive Office be involved in the phase 2 negotiations?

Dr McCormick: The undertaking has been that it will. At Cardiff, there was a discussion of modes and means by which there would be political engagement between the UK Government and the three devolved Administrations in preparation for the negotiations. As a minimum, we expect that, as the negotiations proceed and come towards a crunch decision, they will say, "What is your opinion on this point?". If there is any respect for the way the process should work, they should be asking that of the devolved Administrations in time for there to be discussion at Executive level and consideration, analysis and advice on the regional interest in the issue. That is what should happen. That would be good process, but I do not hold my breath.

The Chairperson (Mr McGrath): A number of other members have indicated that they wish to speak, and we are already over time. I ask members and our guests to consider shortening questions and answers so that we can proceed.

Mr Sheehan: Thanks, Andrew. Given Emma's point, for clarity, are you saying that the First Minister and deputy First Minister will not have direct access to the negotiations and to the British or EU negotiators?

Dr McCormick: They should be able to meet and influence the UK negotiators before they, in turn, go into the negotiation room. We are always able to have informal discussions with the other side. I use that term because they are the other side. It is up to the UK to propose and then bring back settlements. We have good contacts in the European Commission in Brussels. Michel Barnier was here last month and said that his door is open to us. We have always had the chance to meet the task force. We have good relationships with colleagues in Dublin, who, of course, are also technically on the other side of the debate as a member state. So, we have to be careful on those things. However, we do not have direct access. I doubt whether a Northern Ireland representative would ever get into the negotiation room.

Mr Sheehan: That is the point that I want clarity on. On all our priorities and the issues that are important to us — for example, avoidance of trade barriers; protection of the Good Friday Agreement and all its parts; implementation of the Irish protocol; efforts to keep down costs in east-west trade so that prices do not go up in Asda, Tesco and so on — we are dependent on the British Government negotiating on our behalf.

Dr McCormick: I would distinguish between the discussions on the trade agreement, which will, in turn, affect how the protocol is applied. They are, effectively, exclusive to the UK Government. I said earlier that there is some access to discussions on the protocol, including attendance at some meetings with the Commission, but that is on the limited range of issues that are for decision by the Joint Ministerial Committee. There is an awful lot that is not. We will have to see what we can do to engage with London and Brussels on those issues.

Mr Sheehan: On the protection of the Good Friday Agreement and all its parts, Richie Neal, who chairs the Ways and Means Committee on Capitol Hill, and Nancy Pelosi have both said that, if the Good Friday Agreement is not protected during discussions, there will not be any trade deal between the UK and the US. I presume that the British negotiators are aware of that.

Dr McCormick: I am sure that they are well aware of that fact. Again, through the office in Washington, we know and work with Richie Neal's team, as a friend of Ireland.

Mr Sheehan: Finally, following on from the discussion that Mike had with you on the immigration points system, has any assessment been carried out on how the implementation of that system will affect the economy here?

Dr McCormick: I think that the Department for the Economy has done detailed work in that area. We will need to check and come back to you, but it is bound to be part of its evidence to the MAC.

Mr Sheehan: Fair enough.

Mr McCann: The problem with coming in fourth is that there is very little left to ask. I want to emphasise the importance of the flow of information. We have responsibility for scrutinising the Executive Office. That flow of information allows us to do our job properly, and I hope that it will continue.

Dr McCormick: As part of our commitment to you, we have the forward look in our attendance here. We want to make sure that we give the Committee all the information that we can.

Mr Lunn: Thanks for your words of wisdom. All I am hearing here frankly, and not for the first time, is that the Civil Service is doing its best to work with the hand that it has been dealt. Political masters have quite frequently put their foot in it, made promises that they cannot keep and muddied the water by laying down red lines that cannot be maintained. That also applies to the Prime Minister and the Secretary of State. Mike has referred to it, and we are getting a bit of it in the Assembly as well. All that tells me that this timetable and deadline that we have cannot be kept. If we are being realistic about it, we need to be making all the preparations we can for no deal and the inevitability of WTO regulations coming in. What input will we have into the situation if there is no deal? What will be the effect of moving to WTO rules, perhaps for a number of years?

Dr McCormick: My take on that is that the risk at the end of this calendar year is the absence of a trade deal with the EU. The withdrawal agreement will still apply, so the protocol will be in place, and that is of some help. There are really serious issues in relation to the protocol, but, on the other hand, it does underpin some things that would be unique to here and not available to the rest of the UK, including access to the EU markets because the land border is open. Therefore, selling stuff into the EU without any tariffs or any other barriers to trade is possible, but it would not apply to elsewhere. We would have a lot to do though. There would be very major issues, and we would need to do a major contingency planning exercise to cope with the consequences. It is nothing like as serious as the contrast between EU membership and a no-deal exit, as was the risk either at March or October of last year, where we were in a really focused contingency planning mode.

Mr Lunn: Can I interject? You said that the protocol will still apply.

Dr McCormick: Yes.

Mr Lunn: It will have the effect that we will still be able to trade openly with Europe on a non-tariff basis.

Dr McCormick: Yes.

Mr Lunn: We left as one nation. Will the UK stand for this? Or will Europe stand for it?

Dr McCormick: Both have accepted that; it is what the protocol says.

Mr Lunn: That would be a huge relief to our businesses.

Dr McCormick: There is something good about that, but it still has some complications, and a no-deal scenario makes the application and implementation of the protocol more difficult. If the Johnson Government was to achieve a zero-tariff, zero-quota, free-trade agreement by the end of this year, it would make the protocol easier to apply. There still would be complications and lots to deal with, but at least it is still there and creates a floor under the risks we face that does not apply elsewhere in the UK.

Mr Lunn: We are in your hands.

Dr McCormick: Not just mine, thank goodness.

The Chairperson (Mr McGrath): OK, Andrew and Karen, thank you very much indeed for your presentation. We are somewhat clearer, and probably clearer about the complexities that we have to try to understand. I am sure that we will be seeing you regularly, and we will have more questions and a more in-depth understanding by the next time we meet. Thank you very much indeed for coming along today.

Dr McCormick: Thank you.