Northern Ireland will become an “overseas territory” of the European Union under the Brexit divorce deal, ministers have been warned.

Ulster Unionist Lord Empey claimed the protocol that requires EU customs rules to be applied to goods entering Northern Ireland is a “dagger pointed at the heart of the union”.

Speaking as peers considered regulations linked to post-Brexit product safety, Lord Empey claimed: “I have to say the Government has been consistently refusing to accept the fact that what it has done with the protocol is turn Northern Ireland virtually into an overseas territory of the European Union with its own set of discreet pieces of legislation.

“And it’s still leaving the regulatory regime in the hands of Brussels, we’re still subject to state aid rules when Great Britain will not be, and we have a huge pile of problems arising in the next few weeks where every tin of baked beans that comes into Northern Ireland will have to be notified to the authorities in advance and is subject to inspection.

“How under these circumstances can the minister maintain that we’re in any sense on an equal footing with our colleagues in the rest of the United Kingdom?”

Peers approved regulations which implement the protocol in respect of product standards, including details of a new product conformity marking – the UK(NI) mark, and ensure unfettered access for certain Northern Ireland goods to the rest of the UK.

Replying for the Government, business minister Lord Callanan said: “Under unfettered access, qualifying Northern Ireland goods can be placed on the Great Britain market without the need for further approvals.

“This means goods that are valid on the Northern Ireland market will be valid on the rest of the UK.

“We’ve been clear that unfettered access will not cover goods travelling directly from Ireland or the rest of the EU being imported into Great Britain.

“Northern Ireland businesses will need to label goods that it’s placing in the market in the rest of the UK with their own common contact details, in common with UK businesses placing goods from outside of the UK on the GB market.”