If the current government does accept the stripping out of Part 5 of the Internal Market Bill (that’s the breach of the NI Protocol bit) then the case for putting forward a robust UK subsidy regime grows even stronger.
https://twitter.com/bbcnewsnight/status/1325414576603672580
That is because Article 10 of the Protocol does have “reach back” effects into Great Britain. Any UK or GB subsidy or tax discount that could be said to have potential knock-on effects on NI/EU trade patterns in goods will be caught.
Examples: a UK corporation tax discount benefitting companies active in the goods sector in NI. A Covid-19 loan guarantee scheme applying to all UK businesses.
The current govt is now* alive to the real risk that at some point in the next year or so, the Commission (or a UK court) will insist on the govt notifying and getting Commission clearance for a plan of that kind, and being told it can’t implement the plan without such clearance.
(* it spent much of 2020 trying to ignore the issue in the hope that it would go away)
That is why it came up with the hare-brained and unconscionable plan to break international law to escape those consequences of what it agreed.
But if that plan is closed off by a combination of the House of Lords refusal to put up with it and pressure from the incoming US Administration, that leaves the govt with the real problem described above.
The *only* way it can escape that problem is to offer the EU a robust UK subsidy control regime, which is solid enough to persuade the EU to adjust or remove Article 10 on the basis that the UK regime will deal adequately and robustly with subsidies affecting NI/EU goods trade.
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