The government’s proposed arrangements for the border between Northern Ireland and the Republic of Ireland would put the future of the Single Electricity Market in doubt. That is because it requires the SEM to be agreed by the Northern Ireland Executive and Assembly, along with other trade, not only as the UK exits the EU but on a regular basis in future. The proposal comes as Northern Ireland’s devolved government at Stormont has been out of action since January 2017 after power sharing arrangements collapsed. The suspension has put decisonmaking on hold.
The proposed new agreement provides for the creation of an ‘all-island regulatory zone’ that would eliminate all regulatory checks. But it adds that the zone, “must depend on the consent of those affected by it”. It says it is an “essential” that the Northern Ireland Executive and Assembly should have the opportunity to endorse any arrangements during the transition period and before they enter into force. They would have to renew consent every four years afterwards and if consent is not secured, the arrangements will lapse. “The same should apply to the Single Electricity Market, which raises the same principles,” it says. If consent is withheld, the arrangements will not enter into force or will lapse (as the case may be) after one year, and arrangements will default to existing rules.
The letter says that the backstop would probably lead to the UK being closely integrated with EU customs arrangements and would align with EU law in many areas. But, “That proposed future relationship is not the goal of the current UK government. The government intends that the future relationship should be based on a Free Trade Agreement in which the UK takes control of its own regulatory affairs and trade policy,” it says.
The offer proposal also offers a “New Deal for Northern Ireland”, with commitments to help boost economic growth and competitiveness to “support Northern Ireland through this transition”. That will include, “infrastructure projects, particularly with a cross-border focus”.