Over the last few weeks, hopes have been rising that a way could be found out of the political deadlock that has paralysed the N Ireland Assembly over the last two years. Those hopes were cruelly dashed on 18 December, but the fact that the discussions had reached such an advanced stage gives hope that a solution may be closer and reachable in the New Year.

A Historical Recap

The Belfast Good Friday Agreement (GFA) of 1998 brought to an end 30 years of ‘The Troubles’ through a delicate piece of negotiation which carefully balanced the competing goals and interests of the Unionist and Nationalist communities in N Ireland.  A key element of the Agreement was the removal of all border infrastructure between N and S Ireland (which for the Nationalist community was a very visible reminder of the division of the Island of Ireland).  Another crucial ingredient was the creation of a Power Sharing Executive (PSE) for N Ireland. Under this part of the Agreement, the largest Political Party in Northern Ireland would hold the position of First Minister, with the second largest holding the position of Deputy First Minister.  The Agreement ensured that in practice, there was very little difference (other than status) between the two roles.

For 24 years, the largest political party in N Ireland was the Democratic Unionist Party (DUP) who accordingly held the position of First Minister, with Sinn Fein holding the position of Deputy First Minister.

Brexit and N Ireland

In the 2016 referendum, N Ireland voted by 56:44 to remain in the EU, with the Unionist community broadly supporting Leave on the basis it would solidify N Ireland’s position within the UK.  The UK left the Customs Union and the Single Market as part of the Brexit deal with the EU.  In theory, that should have pulled N Ireland out of both entities as well, re-creating border infrastructure between N and S Ireland. Brexit (requiring a border) collided with the reality of the GFA (abolishing the border), creating a circle which was impossible to square. In the end, the UK government placed the border between the UK and the EU in the Irish Sea, effectively cutting the N Ireland economy off from the rest of the UK and enabling companies to trade more easily with the Republic of Ireland than with GB.

What Has Changed?

DUP concerns over post-Brexit trading arrangements with the rest of the United Kingdom led to the resignation of the First Minister in February 2022.  And Unionist perceptions of abandonment were reinforced by the May 5 2022 elections, in which for the first time, Sinn Fein won the largest number of seats, meaning they could name the First Minister, with the DUP appointing the Deputy First Minister (DFM).

The DUP refused to take up the position DFM and government in N Ireland has been stalled since February 2022, with the institutions effectively being run on auto pilot by civil servants since then. This situation has led to a fiscal crisis, with the public sector suffering significant underfunding – transport staff, teachers and health care workers have all staged strikes in recent months over pay, causing widespread disruption across N Ireland. Education budgets in N Ireland have fallen by £145mn over the past 11 years despite a 7% rise in student numbers – an equivalent to an 11% drop in per-pupil funding in real terms.

The UK Government recognized that something needed to be done to reduce the trading frictions between the UK and N Ireland and began negotiations with the EU to amend the N Ireland Protocol (the part of the Brexit deal that dealt with N Ireland). The result of this engagement was the Windsor Framework (WF), which adjusted the operation of the Northern Ireland Protocol and came into effect on 1 October 2023.

The WF has helped, but not wholly calmed, Nationalist fears.  Products being traded into N Ireland from the rest of the UK now go through a red or a green lane – depending on whether the good is intended for consumption in N Ireland.  Goods not destined for the Republic now bear the words ‘not for EU’.  This provision created a distinction between goods for sale in N Ireland and those for sale in the rest of the UK – a distinction the UK Government dealt with by requiring all goods in the UK not destined for export to carry the same wording. 

So Everything is OK Now?

Not entirely.  Despite the improved trading arrangements brought in by the WF, the Unionist community continues to have concerns about its continued inclusion within the UK and the way that current EU and possible future EU legislation treats N Ireland as part of the EU (as the CBAM does for example) could undo the partial progress the WF has achieved.

Earlier this week, hopes were raised that a deal to re-start the Stormont Assembly was within reach, with the leader of the DUP commenting that it was ‘time for decisions’ and the UK Government offering a substantial injection of additional funding (£2.5 billion) into N Ireland to help solve the fiscal crisis. PM Sunak was apparently on standby to fly to Belfast to oversee its signing.

However, in the vent, continued DUP reservations about Northern Ireland’s future place in the UK led to demands for strengthened legislative guarantees – specifically a Bill amending the 2020 UK Internal Market Act (a piece of legislation that paved the way for post-Brexit trading rules for Northern Ireland).  The DUP also argued that the proffered financial package was insufficient and rejected any link between additional and a DUP return to the N Ireland Assembly.

Whilst (in common with other political parties in N Ireland) Sinn Fein agree that the funding package is insufficient to address N Ireland’s deep-rooted fiscal problems, they have called on the DUP to resume cooperation, failing which they argue the UK government should govern Northern Ireland in partnership with the Republic of Ireland – anathema to the Unionists. For his part, PM Sunak has said his government “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 that any legislation had to be “alongside” a deal to restore Stormont.

So It’s All Doomed?

Not necessarily. The search for a compromise that will allow the N Ireland Assembly to get back up and running will continue after Christmas.  But time is not unlimited. Westminster returns from its Christmas break on January 8 and within 10 days, if the Stormont power-sharing executive has not re-started, the UK Government has a legal obligation to call fresh elections.  Since new elections are unlikely to create any positive change to the political deadlock in N Ireland, that outcome will only add to the sense of aimless drift in N Ireland.

However, the fact that a deal seemed so close earlier this week suggests that the shape of a compromise deal has emerged: more legislation in the UK to meet Unionist concerns and additional funding (up to £5 billion) to tackle N Ireland’s decaying public services.  Perhaps 2024 will begin with some positive news after all.

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Photo of Thomas Reilly Thomas Reilly

Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.


Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.

Ambassador Reilly was most recently British Ambassador to Morocco between 2017 and 2020, and prior to this, the Senior Advisor on International Government Relations & Regulatory Affairs and Head of Government Relations at Royal Dutch Shell between 2012 and 2017. His former roles with the Foreign and Commonwealth Office included British Ambassador Morocco & Mauritania (2017-2018), Deputy Head of Mission at the British Embassy in Egypt (2010-2012), Deputy Head of the Climate Change & Energy Department (2007-2009), and Deputy Head of the Counter Terrorism Department (2005-2007). He has lived or worked in a number of countries including Jordan, Kuwait, Yemen, Libya, Iraq, Saudi Arabia, Bahrain, and Argentina.

At Covington, Ambassador Reilly works closely with our global team of lawyers and investigators as well as over 100 former diplomats and senior government officials, with significant depth of experience in dealing with the types of complex problems that involve both legal and governmental institutions.

Ambassador Reilly started his career as a solicitor specialising in EU and commercial law but no longer practices as a solicitor.