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.
Politics latest: Tory MPs told to be in Westminster on Monday amid Brexit deal speculation
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.
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.
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.
Read more:
What are the DUP’s seven tests for changes to the NI Protocol?
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”.
Read more:
What do we know about the deal being discussed by the UK and EU?
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.
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?
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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?
World
Trump 2.0, conflict in Ukraine to end and China challenging global world order – what can we expect in 2025?
What will 2025 mean for Gaza, Ukraine, trade wars and African tech? Our foreign correspondents set the scene for trends that will shape their region.
From elections in the EU to a bombastic Trump presidency to climate disruption, 2025 is shaping up to be a bumpy year.
But it’s not all bad news…
Immediate, dramatic change promised for the United States
by Mark Stone, US correspondent
Never mind the coming year, the coming month could be extremely consequential.
Donald Trump will become America’s 47th president on 20 January – Inauguration Day – and he has pledged immediate, dramatic change.
A year ago, I had lunch with a senior Trump adviser. We pondered a Trump victory.
The adviser projected that a victorious Mr Trump would sign numerous presidential “executive orders” on Inauguration Day.
With a sweep of the presidential pen on a pile of papers on the balcony of the Capitol building literally moments after he takes the oath of office, Mr Trump would, the adviser predicted, undo as much of Biden’s legacy as possible and set the direction of America for the four years ahead.
Whether he signs orders at that moment or in the days after, Mr Trump has said he will “make heads spin”.
Donald Trump has his eye on fresh tariffs and radical immigration policies. Pic: AP
Even before inauguration, Congress will confirm or reject Mr Trump’s administration picks. We’ll discover if controversial choices like Pete Hegseth for defense secretary or Kash Patel to head the FBI make the cut.
Domestically, prepare for radical new immigration policies. The mass deportations he has promised will be subject to legal battles but expect Team Trump to fight hard.
There’ll be mass pardons for those involved in the Jan 6th protests / insurrection / riots – divided Americans choose their descriptor dependent on their politics, and he’ll probably go after those who tried to take him down.
Then, the international ramifications of Trump 2.0: Ukraine, the Middle East, the climate agenda, trade tariffs.
On climate – the expectation is that Trump will (again) withdraw the US from the Paris climate commitments, thus rendering America no longer beholden to carbon emissions reductions targets.
On Ukraine, he has said he could bring peace in 24 hours. We will, finally, see what that looks like and the extent to which it benefits one side or the other.
On the Middle East, Mr Trump has said there will be “all hell to pay” if the hostages are not released from Gaza by the time he takes office. How does that threat play out? No one knows.
There’s a chance that the combination of traits which define Donald Trump – unpredictable, transactional, threatening, spontaneous – will produce outcomes that look attractive at least in the short term; deals that Biden couldn’t get or wouldn’t take.
Brace for a month and a year of huge consequence.
Europe: Big beast elections, while some cosy up to Trump / political turmoil and turnover
by Adam Parsons, Europe correspondent
The year will start with both France and Germany, Europe’s two biggest beasts, facing political uncertainty.
The focus will first be on Berlin – Friedrich Merz is likely to end up as Germany’s chancellor, moving his country more to the right.
He, like a growing number of European politicians, will say his priority is controlling migration. The far-right AfD could well ride that same wave to come second.
France’s parliamentary gridlock means the country’s politicians will stumble on in a constant foul mood. Another election looks certain.
Edouard Philippe, who served as French prime minister under Macron, will start positioning himself to replace Emmanuel Macron as president.
Look out for Giorgia Meloni to grow from “just” being Italy’s leader to becoming Europe’s conduit with Donald Trump. Another person on the up is Kaja Kallas, the former Estonian PM who is now head of foreign affairs for the EU.
Italian leader Giorgia Meloni may be further on the up. Pic: AP
Tensions between Serbia and Kosovo will remain high, and look out for flashpoints in Moldova and Nagorno-Karabakh. Hungary will cause more diplomatic mischief.
Bulgaria will adopt the Euro, Romania will finally elect a president. Oh, and journeys between the UK and the EU will become clunkier as the new ETIAS travel permit scheme is launched.
The Middle East: anything but predictable
by Alistair Bunkall, Middle East correspondent
If the extraordinary events of 2024 taught or reminded us of anything, it was that the Middle East is anything but predictable.
2025 is likely to be a year of consolidation for Israeli PM Benyamin Netanyahu and Israel after the military gains of the past twelve months and unexpected downfall of Bashar al Assad over the border in Syria.
But the hostage situation remains an unresolved and deeply painful situation for Israelis, and time is running out if Donald Trump’s reported demand for a Gaza ceasefire is to be realised before his inauguration on 20 January.
Despite recent optimism around negotiations, differences remain between Hamas and Israel. But a ceasefire remains likely and the best way to release the 100 hostages that remain in captivity.
Any truce will probably be temporary, however, and there is every indication Israeli forces will remain in Gaza for the foreseeable with calls for a permanent occupation growing amongst far-right Israeli politicians.
There is little hope of imminent respite for the Gazan people with no “day-after” plan proposed. And unless the humanitarian situation in Gaza improves dramatically and rapidly, Israel’s international reputation will continue to suffer as the International Court of Justice considers accusations of genocide.
The recent escalation in attacks by the Iranian-backed Houthis in Yemen have caused little material damage to Israel but have created new uncertainty on another front.
Netanyahu is surely tempted to strike a weakened Iran, both to deter the Houthis and degrade the country’s nuclear programme, but might be dissuaded if he doesn’t get support from the incoming US president.
That temptation might become too great however if Tehran attempts to accelerate its nuclear programme as a way of making up for the loss of its ally Assad in Syria and the degradation of Hezbollah in Lebanon.
The elderly Iranian Supreme Leader’s health and authority has been the source of much speculation in recent months so that will be something to keep a close eye on.
Syria’s new leaders will need to stabilise the country and bring together the various religious and militant factions otherwise the euphoric optimism seen after Assad’s overthrowing risks a new civil war.
And finally, both Trump and Netanyahu have expressed their hopes for a Saudi-Israel normalisation deal and it would certainly be a huge boon to the latter as he eyes re-election in 2026.
But as long as the war in Gaza continues, Riyadh is unlikely to gift Bibi that historic agreement, certainly not without considerable concessions for the Palestinian people, which Netanyahu is unlikely to concede.
Trump will challenge China and China will challenge global world order
by Nicole Johnston, Asia correspondent in Beijing
The momentum in China-US competition could really pick up the pace next year if Donald Trump puts his trade threats into action.
Before Americans went to the polls, Trump threatened to impose a 60% tariff on all Chinese goods, which could spark a global trade war and economic meltdown.
Since the election, he has said he’s planning an extra 10% on top of existing tariffs on Chinese products.
Beijing is bracing for trouble and is already engaged in retaliatory trade action with the US. Watch this issue heat up next year.
The US is expected to increase tariffs on Chinese chips next year as competition heats up. Pic: FeatureChina via AP
Diplomatically, while there are efforts to turn the fraught UK-China relationship around, it’s likely spying allegations and accusations of Chinese political interference – which Beijing vehemently denies – will continue to test both countries.
UK Foreign Secretary David Lammy visited Beijing in 2024 and Chancellor Rachael Reeves is expected to come in January.
In Asia and around the world, the growing power of China remains a major issue. Its influence is reaching deep into “Global South” countries. Many are open to Chinese overtures for trade, tech and diplomatic support.
In the middle of this great global reshaping, China, Russia, North Korea and Iran are challenging the US-led “rules-based” global order.
Keep an eye on how these countries help each other, diplomatically, militarily and economically.
They may have little in common. But they all have a desire to see an alternative to the hegemony of the West.
Fighting in Ukraine will finally cease next year
by Ivor Bennett, Moscow correspondent
I predict the war in Ukraine will end in 2025. Or perhaps more accurately: the fighting will stop and the conflict will be frozen.
Both sides have recently indicated a willingness to make concessions in order to achieve a peace agreement.
Ukrainian President Volodymyr Zelenskyy told Sky News he’d be willing to cede territory, while Vladimir Putin said Russia was ready to compromise.
It’s a dramatic shift in tone, brought about by the election of Donald Trump. Talks and a deal feel inevitable.
Whatever the outcome, Russia will present it as a win.
Pic: Reuters
I think the Kremlin will hope to conclude negotiations before 9 May, which marks the 80th anniversary of the Soviet Union’s victory over Nazi Germany. The aim will be for a double celebration.
But the problems won’t end there for Vladimir Putin. With surging inflation, a sliding rouble and weak productivity, the economy will be the next battle.
In Africa, more protests, more climate disasters and more tech
by Yousra Elbagir, Africa correspondent
The year is ending with building protest movements in Mozambique, Angola and Kenya. Crackdowns on anti-government demonstrators have led to deaths that are fuelling further dissent.
The El Nino weather phenomenon drove drought to new levels in southern Africa this year and propelled a cyclone season that started early with the deadly Chido in Mayotte.
Although El Nino dissipated in the summer, many countries will continue to suffer its impacts next year due, including in the form of severe food shortages.
Africa already bears the brunt of climate change, and with the planet getting hotter still, cruelly more extreme weather is on the way to batter homes, health and livelihoods.
Not all news is negative, though.
Tech innovation in Africa is expected to continue as young people find ways to survive and thrive in tough job markets and rising costs of living.
Riverdance is marking 30 years with a new generation of dancers who were not born when the show made its debut.
The interval act from the 1994 Eurovision Song Contest became a global phenomenon and continues to inspire Irish dancers worldwide.
The Riverdance opening night in February 1995. Pic: Riverdance
Lead dancers, Anna Mai and Fergus Fitzpatrick, are siblings from County Meath who grew up dreaming of touring with Riverdance.
Fergus said: “It’s a dream come true to be able to be a lead dancer in Riverdance.
“It’s even more special to be able to have family on the road with you.
“Travelling, getting to do what you love and to see these amazing places, while taking care of the iconic show that is Riverdance.”
They are deeply conscious of the show’s legacy and take pride in following in the footsteps of Irish dancing giants.
Anna Mai said: “We absolutely feel the responsibility and we take that challenge completely positively, and we see it a bit more as an honour, rather than a heavy weight.
“Riverdance was here before either of us were born, so we know that the legacy was created, we’ve never known life without Riverdance, and we take it on as a responsibility, as something to pass through to new generations.”
Fergus Fitzpatrick leads the thunderstorm. Pic: Riverdance
Lorcan Murphy was one of the original cast, propelled to unexpected stardom when the show hit the road in 1995.
“When people say what’s your best memory, I say the All Blacks asked me for my autograph,” he recalled.
“I think it’s meant to be the other way around!”
He has never forgotten the moment Riverdance took the world by storm, with a spellbinding fusion of music and dance.
He said: “It broke rules. I think the thing about Riverdance is that it doesn’t have to conform to the rules and balances that were in place beforehand.
“Everything carried a purpose to it, culminating in that incredible night where it was nothing but electricity from start to finish.”
To date, the various casts have produced 70 marriages, and 130 “Riverdance babies”, three of whom have now performed themselves.
The new generation will take Riverdance to new audiences, with an anniversary tour opening in the United States in January.
Riverdance will come to the UK in August, performing across 30 venues until the end of the year.
Have you ever dreamed of flying in an unmanned drone, from city to city?
It sounds like the stuff of fantasy, but in China pilotless passenger drones are a reality.
You can’t catch them like a taxi just yet. But a company called EHang is waiting for the government to approve a commercial licence to start operating short flights around the city of Guangzhou.
EHang’s vice president, He Tianxing, says: “We believe the future must be an era of low altitude, and every city will gradually develop into a city in the sky.
“All human beings aspire to have a pair of wings, and everyone wants to fly freely like a bird.”
Currently, the battery of the two-seater EH216-S allows it to fly for about 25 minutes.
There is no pilot and the craft follows a pre-programmed route.
Sky News watched it take off from the company’s headquarters in Guangzhou, fly over a port and land again.
Its blades whizzed noisily, but it appeared to fly effortlessly, leaving those on the ground itching for a ride on board.
EHang’s first model was called EH184. “It looked like an octopus, very cool, but more importantly people saw a drone that could carry people,” Mr He says.
He Tianxing, vice president of EHang
This is part of what China calls its “low-altitude economy”. This refers to making money from passenger and delivery drones at an airspace of elevations of up to 1,000 metres.
The government is handing out financial incentives and licences to develop the sector.
Inside a driverless taxi in Wuhan
Wuhan’s different vision for public transport
More than 600 miles away from Guangzhou, the city of Wuhan has a different vision for its public transport.
It’s betting on driverless taxis and has a pilot programme operating around 400 in the city, reportedly aiming to reach upwards of 1000.
The process goes like this: order the car with an app on your phone, it shows up within minutes, you punch in a pin and away you go.
A driverless taxi on the road in Wuhan
US fears over Chinese technology
With no driver at the wheel, it veers seamlessly through the traffic. Occasionally it was a bit jerky. But overall, it was a relaxed novelty drive through the city.
But the technology behind it is so intelligent and sophisticated that the US is moving to ban Chinese and Russian driverless technology from the country.
The US says it is necessary for national security, because the censors and cameras inside the cars can collect critical information.
China though is not worried. It has millions of customers at home.
Speaking earlier this year, Chinese premier Li Qiang said: “We will consolidate and enhance our leading position in industries like intelligent connected new-energy vehicles… and the low altitude economy.”
Read more: ‘World first’ driverless bus service in Scotland axed
On the streets of Wuhan, Mr Kim is catching a driverless taxi for the first time with his young daughter and believes in its reliability.
“We don’t worry because we trust it. It can show how high-tech our city has become,” he says. “We are proud of it.”
But taxi driver Mr Deng is less convinced.
“It’s certainly not as convenient as cars operated by people, because we can react on site,” he says. “If there’s no driver, the roads will be paralysed.”
China is steering its high-tech industries into a bold new world and pushing the boundaries of how we travel.
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