Michael Gove has faced grilling from Scottish ministers this week over the perceived lack of a level playing field in post-Brexit trade for Scotland and Northern Ireland.
Responding to questions from the Scottish Parliament’s Culture, Tourism, Europe and External Affairs Committee, the Minister in the Cabinet Office did not deny the possibility that Scottish companies choose to locate in Northern Ireland in order to enjoy duty-free access to the EU. via Ireland.
Scottish National Party MP Kenneth Gibson asked how the unique arrangements for Northern Ireland collided with the idea that there should be no separate Brexit deal for any of the UK nations.
Gove responded that these specific differences are due to the land border with the Republic of Ireland and the fact that to keep the spirit of the Good Friday Agreement alive, there should be no physical infrastructure at the border.
Scottish National Party MP Stewart Stevenson said he was still “confused” by what this meant for free trade beyond this border.
Gove explained that Scottish goods transported to Northern Ireland for consumption in the country would not be subject to tariffs, but if such goods had to be processed in Northern Ireland before being sent to the EU via Ireland , then there would be a tariff.
However, goods produced in Northern Ireland will have duty-free access to the EU via Ireland, with Gove insisting that it is the origin and destination of the goods that matters.
“There is no customs border, instead the goods are tracked and the customs systems know what the movement has been and are alerted to the tariffs to be paid,” Gove said – to which Stevenson replied ” it sounds like a recipe for chaos “.
Scottish National Party MP Christine Grahame has warned that Scottish businesses may seek to capitalize on the difference.
Gove said Northern Ireland remains an attractive place to live and work and any relocation would be due to a multiplicity of factors.
“It is certain that by being in Northern Ireland as a legitimate business you will avoid tariffs in the EU,” he continued, adding that this was crucial for the country to continue to prosper. in the future.
âWe have created a level playing field through the UK’s Internal Market Bill, and decentralization allows UK constituents to tailor policy to their citizens,â Gove said. “We all have the opportunity to take advantage of the new economic prospect that is opening up before us.”
A separate announcement this week saw the UK government urging traders to consider whether they should enroll in the new UK Trader Scheme (UKTS) to ensure traders do not pay tariffs on the movement of goods to Northern Ireland from Great Britain where these goods can be shown to remain the customs territory of the United Kingdom from 1 January.
The authorization allows them to declare themselves that the goods are ‘not at risk’ of entering the EU after entering Northern Ireland, which means that they will not be subject to EU tariffs on goods. goods sold or used by consumers, regardless of the outcome of the negotiations. in Brussels.
Later during the committee meeting, Gibson questioned the fact that Northern Ireland had received Â£ 400million from Westminster for Brexit preparations, while Scotland received less than half of it – what he described as a “per capita spending gap”.
“We’re keeping these things under review, but I don’t want to pit parts of the UK against each other,” Gove replied.
Scottish Conservative Party MSP Oliver Mundell complained about the Scottish National Party’s lack of transparency on how it was spending the Brexit transition money, arguing that it “was trying to be as disruptive as possible and to delay “desirous of creating division” preparations.
Gove agreed that “there has to be some responsibility for how it is spent”, but noted that generally the UK and Scottish governments have been able to work well together.
Responding to questions about the inability of Scottish businesses to properly prepare for what trade will look like next year, Gove said up to 80% remain the same – although he acknowledged that some sectors are more exposed to potential tariffs than others.
Gove called the ongoing negotiations between the UK and the EU “swift and fluid”, adding that there are still areas of significant difference, namely a level playing field, governance and fisheries.
“I remain hopeful that we will come to an agreement, but we have to be prepared for any eventuality,” he said, before refusing to attach a percentage to his confidence to get an agreement before the end of the period. transition on December 31.
Another question regarding recent US tariffs on Scotch Whiskey – which have resulted in a 30% drop in sales in the crucial US market – due to a dispute over Airbus and Boeing has received assurances from Gove,
“We are trying to see if progress can be made,” he said, adding that International Trade Secretary Liz Truss has spoken directly with her US counterpart.