Northern Ireland Protocol: Rishi Sunak has so far kept his Brexit talks trump card under wraps – this is what could be in the deal and why it could face trouble ahead
Enemies are circling, Brexiteers are already pronouncing it dead, and the DUP are warning it undermines the Union.
But as opponents line up to try and assassinate Rishi Sunak’s forthcoming deal with Brussels to rework Northern Ireland’s post-Brexit future, Sky News can reveal that Number 10 is yet to play its trump card.
Despite weeks of headlines and column inches about the talks, Downing Street has so far kept under wraps what some believe is perhaps the biggest negotiation win.
Far from giving ground to the EU, they think they have turned the tables and forced a concession.
In short, Westminster will set VAT rates, taxation and state aid policy in Northern Ireland, not Brussels.
Mr Sunak has made addressing the disparity over VAT a priority ever since his last budget as chancellor, when Northern Ireland could not benefit from his decision to slash the tax on solar panels and other energy efficient purchases elsewhere in the UK because it must follow EU single market rules.
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Downing Street is unwilling to reveal any change is coming publicly, insisting that “intensive” negotiations are still under way, giving them nothing yet to announce.
However, Sky News understands that the concession by Brussels is likely to feature at the heart of the reform package.
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Image: DUP Leader Sir Jeffrey Donaldson
Some MPs have been alerted to the likely inclusion of this change, it is welcomed privately by senior DUP figures, and it is understood to be one of the three major changes at the heart of the Sunak deal with Brussels. The DUP’s only reservation is that they want to see the legal text to check the concession is as described.
It is not clear, however, whether it will be enough.
After months of official negotiations, what some see as basic errors – and an information vacuum – may have allowed too much of a head of steam to build up behind the opposition.
As a result, it is now unclear whether the changes hammered out with Brussels since December will ever be implemented.
Mr Sunak is facing splits amongst key allies over how and whether to proceed, with warnings that he’s not strong enough to face down his party and growing anxiety in Brussels that the first prime minister they have trusted since Brexit may be about to let them down.
The next few days could end up being the most consequential of his premiership.
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‘Collapse of Good Friday Agreement absolute catastrophe’
What is in the forthcoming deal?
The patchwork of measures and agreements to change the Northern Ireland Protocol have been prepared in utmost secrecy.
Taken together, those involved say it required the EU to change its negotiating mandate and agree to alter the text of the Protocol – something Brussels said was not possible during the premierships of Boris Johnson and Liz Truss.
Under the Sunak proposals, three key changes to that arrangement are likely to be agreed.
The first has been well trailed: businesses that have signed up to a “trusted trader scheme” will be allowed to avoid all checks when moving goods from the GB mainland to Northern Ireland.
In exchange, the EU will be able to access “real-time” UK data on trade flows across the Irish Sea. The handful of companies who are not signed up to the trusted trader scheme would have to continue labelling and filling in paperwork as at present.
The second – known as the “Stormont Lock”, first mentioned in The Sunday Times – is designed to go some way towards addressing concerns that Northern Ireland will remain subject to EU single market rules under the jurisdiction of the European Court of Justice as the price of avoiding border checks between the North and the Republic.
Image: Rishi Sunak leaves the Culloden Hotel in Belfast, after holding talks with Stormont leaders last week
It is very complicated, but essentially it will give Northern Ireland some of the rights also enjoyed by Norway – which is also out of the EU but in the single market, so it has a say on the rules being imposed by Brussels.
Under the terms of the proposed deal, the EU will have to give the UK notice of future EU regulations intended for Northern Ireland. The Joint Ministerial Committee will then be able to lodge an objection, which may then result in the EU voluntarily choosing to disapply the regulation in Northern Ireland.
Alternatively, the Speaker of the Stormont Assembly could put the issue to a vote, which could delay when the forthcoming regulation comes into force. If the EU decides to take legal action because of a failure to implement the rule, then a Northern Ireland court would have to rule on the issue first, resulting in further delays.
This movement is likely to be welcomed by some. But this is arguably the biggest area of compromise for Brexiteers and unionists, since it does not give the outright veto on future EU regulations, which is something the DUP want.
The third change is the one revealed at the start of this article: that control of the so-called level playing field of measures, like VAT rates and state subsidy policy, will revert to Westminster. For constitutionalists, this will be seen as an important change.
Almost complete for some time, according to sources, none of this package has been formally briefed to the parties or the public.
Number 10 insists that negotiations are live, but other government sources suggest there is almost no activity still going on, and the principles of the agreement are settled even if there is some haggling on wording still to do.
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PM ‘won’t sell anyone out’
How the deal was done
Mr Sunak came into office wanting to establish a reputation for sorting out problems, particularly the poor relations with the EU and – to a lesser extent the US – over Brexit.
The PM wanted to ensure President Biden turns up in Northern Ireland for the 25th anniversary of the Good Friday Agreement this Easter, meaning he needed to do a deal to ensure the Stormont Assembly was back up and running by then.
For this to happen, the PM needed the DUP to agree to a deal on the Protocol, and then go back into powersharing with Sinn Fein in order to form a government.
So, one key objective throughout these negotiations has been for Mr Sunak to get the hardline unionists on board. It was always a tall order, but it was one he chose to attempt. But it is on precisely this issue that Number 10 took an extraordinary – and some think reckless – gamble.
Despite needing the DUP onside, they decided not to talk to them personally. They decided that they did not want them involved in any way in the negotiations or feeding in thoughts, fearing this would make the talks unmanageable, so they were shut out.
Senior DUP sources tell me there were “no backchannels” to try and scope out what they needed, which they said was a contrast even from the Theresa May era.
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Sunak and Starmer clash over Protocol
Instead, the UK negotiating team were told to look up the DUP’s seven tests for a Northern Ireland Protocol replacement – which feature prominently on their website and in speeches by leader Sir Jeffrey Donaldson – and find a solution to each one. One insider described it as the “spreadsheet approach” to the issue.
“We assumed that if you solve the problems in the seven tests, the DUP would be on board. That was certainly the presumption all the way along,” said one government source.
Then in an extraordinary moment three weeks ago, government sources started briefing the newspapers that the deal had successfully answered every one of the DUP’s tests, but without offering an explanation of how or why.
This entire approach flabbergasted the DUP. The tests were drawn up 18 months ago, in another political environment. They range from the broad – number four is “Giving NI people a say in their laws” – to the specific, such as number five, which states “No checks on goods between GB/NI”.
They were devised after conversations with the Johnson government, and were not designed to have a binary answer. Whether the tests were met was to be judged by the DUP alone.
Yet now the government was briefing journalists that the DUP’s concerns had been soothed, and their objections dealt with, without even telling them how.
“These tests weren’t designed to be used in that way”, said one senior DUP member. “If we’d known they were going to assume this level of importance we would have rewritten them and sharpened them”, they said.
Meanwhile, the DUP baulking at the tests has caused huge anger in government. Privately, some accuse the party of game playing and moving the goal posts. The DUP retort that if the goal was to get them on side, they should have opened a dialogue with them in person.
This move worsened the politics, although both sides also acknowledge that however badly Number 10 may have handled this, there was perhaps no deal ever to be made that satisfied both the DUP and the EU.
The trouble is, Downing Street only now appears to be grappling with this outcome afresh, with Brexiteers rowing in behind the DUP to make clear they are going to oppose the deal outlined.
So what next?
It is unclear how the prime minister will proceed. He has three options: press ahead, fully renegotiate or abandon his plan.
If he presses forward in the face of DUP and ERG opposition, he could face trench warfare in the Commons, whether or not any deal is put to a vote.
Mr Sunak would try to become the first Tory PM since 2010 to take on the Eurosceptics and not lose – as David Cameron did ultimately in 2016, then Theresa May did in 2019.
Alternatively, Mr Sunak could fully resume the negotiations, which despite the rhetoric, are mostly on pause at the moment.
However, the EU is unlikely to give more, and cannot bow to the DUP demand that Northern Ireland is no longer bound by future EU rules – for fear of destabilising member states and Norway, which is also in the single market but not the EU.
Or Mr Sunak could abandon the reforms, which would make clear the limits of his power and raise questions about whether he was running a “zombie” regime locked in coalition with truculent and weary Tory MPs.
If he does not do a deal, he will also have to decide whether to press ahead with the Northern Ireland Protocol Bill, which would give the UK government unilateral power to rip up the Northern Ireland section of the original Brexit treaty.
Image: Rishi Sunak speaks during PMQs
Sky News understands that this is facing 90 amendments in the House of Lords, meaning that it is all but impossible to get through without resorting to the Parliament Act – the legislative nuclear option to override a veto by peers.
It is understood the PM is arguing against this in sessions with MPs, suggesting that a bitter parliamentary fight over the passage of the bill would reduce leverage with the EU rather than increase it as the ERG claim.
Mr Sunak has no easy options.
Once he is done with this, the next fight will be over legislation on migration, which some Tories believe will fail unless it goes further than is permitted by the European Convention on Human Rights – something that would enrage the EU all over again. The parade of Tory MPs raising this issue today in PMQs alone made clear the scale of the fight on that.
Meanwhile, within weeks, the privileges committee inquiry into whether former PM Boris Johnson lied at the despatch box will begin, with televised hearings raking over the wounds of one of the most painful episodes of recent Tory history.
The prime minister may have calmed things down, but there are toxic challenges ahead. Can he prove he’s not running a lame duck administration, or will it get worse?
The presumption in Westminster is the next general election will take place in the back half of next year.
But it only takes 37 Tory MPs to defy the PM and vote in a confidence vote alongside the opposition to trigger an election. Could things get that heated?
To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.
It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.
But this year in particular has poignant significance for Iranians.
The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.
Image: Iranians gather ahead of Ashura
We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.
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Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.
Image: Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israellaunched its attacks and, instead of condemning them, the US joined in.
“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.
There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”
Image: ‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News
A woman was dismissive about the US president.
“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
Officially Iran is projecting defiance, but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”
Image: Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again
But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.
For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.
Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.
In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gazaon Saturday morning.
The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.
GHF didn’t say exactly when the incident happened but claimed Hamaswas behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.
“Today’s attack tragically affirms those warnings.”
Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.
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Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”
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The aid group did not provide specific evidence that Hamas was behind the attack.
The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.
According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.
Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.
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Contractors allege colleagues ‘fired on Palestinians’
GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.
Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.
It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
Hamas has said it has “submitted its positive response” to the latest proposal for a ceasefire in Gaza to mediators.
The proposal for a 60-day ceasefire was presented by US President Donald Trump, who has been pushing hard for a deal to end the fighting in Gaza, with Israeli Prime Minister Benjamin Netanyahu set to visit the White House next week to discuss a deal.
Mr Trump said Israel had agreed to his proposed ceasefire terms, and he urged Hamas to accept the deal as well.
Hamas’ “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defence Forces inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.
But the source told Sky News: “Things are looking good.”
Image: A woman cries after her son was killed while on his way to an aid distribution centre. Pic: AP/Jehad Alshrafi
Hamas said it is “fully prepared to immediately enter into a round of negotiations regarding the mechanism for implementing this framework” without elaborating on what needed to be worked out in the proposal’s implementation.
The US said during the ceasefire it would “work with all parties to end the war”.
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A Hamas official said on condition of anonymity that the truce could start as early as next week.
Image: An Israeli army tank advances in the Gaza Strip, as seen from southern Israel. Pic: AP/Leo Correa
But he added that talks were needed first to establish how many Palestinian prisoners would be released in return for each freed Israeli hostage and to specify the amount of humanitarian aid that will be allowed to enter Gaza during the ceasefire.
He said negotiations on a permanent ceasefire and the full withdrawal of Israeli troops from Gaza in return for the release of the remaining hostages would start on the first day of the truce.
Hamas has been seeking guarantees that the 60-day ceasefire would lead to a total end to the nearly 21-month-old war, which caused previous rounds of negotiations to fail as Mr Netanyahu has insisted that Israel would continue fighting in Gaza to ensure the destruction of Hamas.
The Hamas official said that Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.
Speaking to journalists on Air Force One, Mr Trump welcomed Hamas’s “positive spirit” to the proposal, adding that there could be a ceasefire deal by next week.
Image: Palestinians dispersing away from tear gas fired at an aid distribution site in Gaza. Pic: AP
Image: A girl mourns the loss of her father, who was killed while heading to an aid distribution hub. Pic: AP/Jehad Alshrafi
Hamas also said it wants more aid to flow through the United Nations and other humanitarian agencies, which comes as the UN human rights officer said it recorded 613 Palestinians killed in Gaza within a month while trying to obtain aid.
Most of them were said to have been killed while trying to reach food distribution points by the controversial US- and Israeli-backed Gaza Humanitarian Foundation (GHF).
The spokeswoman for the UN human rights office, Ravina Shamdasani, said the agency was not able to attribute responsibility for the killings, but added that “it is clear that the Israeli military has shelled and shot at Palestinians trying to reach the distribution points” operated by GHF.
Image: Palestinians carry aid packages near the GHF distribution centre in Khan Younis. Pic: AP/Abdel Kareem Hana
Ms Shamdasani said that of the total tallied, 509 killings were “GHF-related”, meaning at or near its distribution sites.
The GHF accused the UN of taking its casualty figures “directly from the Hamas-controlled Gaza health ministry” and of trying “to falsely smear our effort”, which echoed statements to Sky News by the executive director of GHF, Johnnie Moore.