UK willing to legislate on post-Brexit trade arrangements for N Ireland

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The UK government is willing to legislate to address the concerns of Northern Ireland’s biggest unionist party over the impact of post-Brexit trading arrangements on the region which have led to nearly two years of political paralysis.

But speaking at Westminster on Wednesday, Prime Minister Rishi Sunak said all sides must work “day and night” to strike a deal to stabilise crippled public finances and restore the Stormont executive.

During three days of talks at Hillsborough Castle, leaders from all the main parties in Northern Ireland rejected London’s offer of a £2.5bn package for the region, whose finances are deeply in the red. Public services falling into crisis and pay strikes by public sector and transport workers are looming.

But London said talks would continue in a bid to thrash out a deal.

The Democratic Unionist Party, the region’s largest pro-UK political force, triggered a political crisis in February 2022 and collapsed Stormont to demand changes to post-Brexit trade rules. It says they harm the region’s place within the UK and its ability to trade with Britain.

DUP leader Sir Jeffrey Donaldson called on Sunak during Prime Minister’s Questions in the House of Commons to “amend the UK internal market act and both guarantee and future-proof NI’s unfettered access to the UK’s internal market in all scenarios”.

Sunak said London “stands ready to legislate to protect Northern Ireland’s integral place in the UK and the UK internal market” and could do so “at pace”. But he insisted that this would be “alongside” a deal to restore Stormont.

He gave no details of what the legislative changes might be.

Northern Ireland secretary Chris Heaton-Harris said in a statement after the third day of talks with parties ended without a deal that “we will be continuing our dialogue with the parties . . . over the coming days”.

No venue has been decided and no deadline set.

Heaton-Harris said London’s £2.5bn offer was “fair and generous” but added: “A number of points have been raised which require further clarification, including the need for firmer proposals from the parties for how a restored executive plans to deliver the transformation of public service.”

Analysts say the deal on offer — which includes cash for public sector pay and an updated, needs-based assessment underpinning a £15bn annual grant from London, will not prevent future crises.

“The package has got all the elements you need, just not enough money in all of them,” said Ann Watt, director of think-tank Pivotal.

An independent report into the education system — commissioned after the last long shutdown of Stormont in 2017-20 and released on Wednesday — highlighted the urgency of fixing finances. With no executive in place, budgets are set by London and administered by civil servants in Belfast. Swingeing public sector cuts have been made.

The report found education budgets had fallen by £145mn over the past 11 years despite a 7 per cent rise in student numbers, an 11 per cent drop in per-pupil funding in real terms.