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Sammy Wilson (East Antrim) (DUP)
I beg to move,
That this House has considered barriers to trade in the UK internal market.
I am pleased to have been granted this debate. I do not have much luck securing debates in Westminster Hall, but I thought that perhaps nobody else would apply for a debate at the end of the last day before recess. I think I guessed right, so we have a debate on this very important issue.
This debate is about the disruption to the UK internal market. My remarks are not based on the political stance that my party has taken against the Brexit arrangements agreed by the last Government and continued by the present Government; they are based on a report by the Federation of Small Businesses, an independent body interested only in the concerns of its members, that does not look exclusively at Northern Ireland. Indeed, the report is based mostly on responses from businesses in England, Scotland and Wales—only 14% of responses came from businesses in Northern Ireland. The impact on the internal market is a UK-wide concern.
The report found that the Windsor framework is not protecting the market. There are considerable barriers, whether customs paperwork, European Union rules and laws applying in Northern Ireland, physical checks, delays in the delivery of goods, the labelling of goods not for EU use, or business-to-business parcels now being subject to customs procedures. As a result, many businesses have abandoned Northern Ireland. Indeed, the report highlights that 34% of small businesses that previously traded with Northern Ireland have now stopped, saying that the regulation has made it far too expensive to trade with Northern Ireland.
Some of the regulations are ludicrous. One business wrote that some of the requirements are little short of farcical. They have to state that their goods have not been imported from Iraq, even though they were made in Great Britain. Others have been told to fill in forms to make it clear that canes imported for use in road construction are not being used to torture anybody. Businesses find themselves facing that kind of nonsense, and as a result they are abandoning Northern Ireland.
Sir John Hayes (South Holland and The Deepings) (Con)
I congratulate the right hon. Gentleman on securing this debate. Is not the real problem, as identified by the FSB and articulated by the right hon. Gentleman, that there is an unholy alliance of Eurocrats and bureaucrats, of separatists and globalist corporates, who are acting in a way that is injurious to the interests of small and medium-sized businesses that trade across our United Kingdom?
Sammy Wilson
The right hon. Member is absolutely correct. I will talk about some of that bureaucracy later in my speech.
Fifty-eight per cent of businesses have faced significant or moderate difficulties, including rising transport costs, significant disruption to supplies, stock shortfalls, shortages, loss of sales and increased bureaucracy and costs, as well as the drain on their finances because of the payment of taxes and duties that take a long time to be repaid.
Of the companies surveyed, 61% said that they had experienced negative consequences as a result of the Windsor framework. Significantly, despite what the Secretary of State for Northern Ireland would try to tell the House, only 2% said there were any positive benefits. More worryingly, 56% either said that they are “not confident” or only “slightly confident” about what will happen with their trading relations with Northern Ireland, and 29% said that they are likely to have to stop supplying to Northern Ireland in the future. That is on top of those companies that have already stopped.
In fact, one company said that it was now more difficult to trade with Northern Ireland—that is, bring goods from GB into Northern Ireland—than it is to trade with Australia and the USA, which is why it would stop trading with Northern Ireland.
What has been the Government’s response to all this, as it is well known? I am pleased that the FSB has now independently verified what we have all known anecdotally, as constituency representatives. I suspect that the Minister will say, “Oh, but we are doing our best. We have put in support mechanisms. We have the trader support service, we have HMRC guidance.” I hate to tell the Minister that the survey shows that 78% of businesses say the support is either “poor” or “very poor”—in other words, useless. The report says,
“a similarly high proportion found access to the support difficult. Businesses frequently cited confusing or inconsistent guidance. As one NI manufacturer put it, navigating new customs paperwork via the Trader Support Service often feels like a ‘guessing game’.”
It is a joke of a system. The defence is, “We have put in support mechanisms.” Well, they are not working.
The second argument—and we have heard the Secretary of State make it repeatedly—is, “Oh, but you have other benefits. You have access to the dual market. You have the benefits of being able to sell into the EU, which companies in GB cannot do as freely, and to sell into the GB market.” We know now that the GB market is not accessible, and that supplies are not coming through.
As far as the dual market system is concerned, when businesses were surveyed, 88% said that the opportunities were not explained—they did not know what the opportunities were—and 64% said that they did not even understand what the opportunities were. They said that it seemed like the Government were making no effort to promote the great benefit that was meant to be the result of the Windsor framework. I suspect that the reason why the benefit has not been promoted is because, as many of the companies said, it is more in theory than in reality. There is no real benefit.
Of course, the latest argument is, “Well, the new sanitary and phytosanitary agreement with the EU will smooth it all out.” Every time I hear that argument, if I am at home, I look down into Larne harbour from my study window and see that, despite the promises that the SPS agreement will do away with a lot of these checks, there is a border post being built—I can see it clearly from my study window. £140 million is being spent on it, and only last night, the local council was asked to sign a memorandum of association to ensure that it supplies staff for that border post until March 2029.
Even if the SPS agreement were to do that, it covers only a very small part of the trade. All of the customs requirements, duty payments, checks, delays and parcel post will still be affected. EU regulations, affecting many businesses because the EU has different standards, will still apply.
The one thing I hope I do not get from the Minister today is the same complacency, disdain and “I couldn’t care less” attitude that Northern Ireland experiences from our Secretary of State, whose attitude has been little short of disgraceful. Pontius Pilate-like, he has washed his hands of it all. If anything, he acts more like an EU emissary to Northern Ireland than a Secretary of State for Northern Ireland. I can see that you are getting a bit uneasy, Dr Huq, but I notified the Secretary of State that I am angry at the way in which he has treated Northern Ireland, and he knew I was going to make these remarks this afternoon. In fact, I think I spelled them out to him.
Let us look at some of the Secretary of State’s comments. When my hon. Friend the Member for Upper Bann (Carla Lockhart) recently raised a statistic from the FSB survey in the House, his attitude was, “Well, if some of the businesses can trade with Northern Ireland, why can’t the rest of them? It is up to them to decide where they want to trade and where they don’t.” When someone who is meant to be standing up and fighting for Northern Ireland takes that kind of attitude, I despair about whether this issue is being taken seriously.
In a recent letter to me, the Secretary of State indicated that, as far as he is concerned, the main thing is to ensure that we “faithfully” pursue the Windsor framework because the EU is getting angry that some of the regulations may not be fully implemented. Here we have damaging regulations for Northern Ireland, and the Secretary of State’s response is, “Well, I have to stand up for the EU. Northern Ireland businesses? Let them paddle their own canoe.”
I know that others wish to speak, and I am pleased that so many have stayed on the last day. I do not want them to miss out, so this is the last thing. What do we need? I could go through many of the options that we have proposed and that the Government have dismissed, but I ask the Minister for one simple thing. All the paperwork, all the regulations, all the delays and all the checks are founded on one thing: that goods entering Northern Ireland from GB are regarded as at risk of going into the Irish Republic, contaminating its economy in some way and breaking EU rules.
Custard, the stuff we heat and pour over apple tarts or put into trifles, was deemed to be a dairy product, but it was not required to be labelled until phase 3 of the labelling requirements. However, the EU decided that perhaps custard should have been regarded as a product at risk, so it changed the labelling requirements. One of the big supermarkets had custard in its supply chain, and the EU bureaucrats decided that this custard must be hunted down—“We cannot have it coming into Northern Ireland and finding its way into the Irish Republic.” Lorries with mixed loads were stopped and searched. The offending custard was hunted down, discovered and exposed. That delayed the lorries, which did not reach the depot in time, so their goods could not be broken down and distributed to the various shops. It affected the supply chain and the supply of shops in Northern Ireland.
Here is the irony: the supermarket did not have any shops in the Irish Republic. The offending custard was okay one day, but not the next, because it did not have a label that it did not require the previous day. There was no evidence that anybody was dying from eating this custard in Northern Ireland or anywhere else, but the supply chains for a major supermarket in Northern Ireland were disrupted.
I am sure many Members could tell story after story about how the regulations are having an effect. What is it all down to? It is down to goods presenting a “risk”. What risk? We do not know. A simple change could be made so that goods are deemed at risk only once they leave Northern Ireland and go into the Irish Republic or elsewhere. The Road Haulage Association and Federation of Small Businesses have asked for that. It is not beyond the wit of man to ensure that happens. After all, all the companies that are selling these goods have VAT returns. HMRC trusts those companies at the end of the year to declare how much VAT they owe. If the goods have gone out of Northern Ireland, they do not have to pay VAT. Why can that VAT return not be used to follow the goods to where they eventually go? There is much disruption to trade, though not to all of it.
I am sure Members will talk about the inequity and constitutional implications of EU law applying to Northern Ireland, but one simple change can be made. Rather than kowtow to the EU, or be afraid that the reset with the EU might be disturbed if we ask for something simple, I ask the Minister to consider that one simple change, which many businesses have said would restore their ability to trade freely within our own market, selling goods that are not at risk. It would be of immense help to the small businesses that are the backbone of our economy.
Dr Rupa Huq (in the Chair)
We will now divide up the time left. If Members keep their speeches to within four minutes, everyone will get in. I call Jim Allister.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve with you in the Chair, Dr Huq. I congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this debate, which cuts to the very heart of what it should mean to be part of the United Kingdom.
If we construct, at a foreign institution’s behest, an internal international border within our own country and require customs checks and declarations, and the payment of tariffs on the movement of goods, it should be no surprise that we will hugely upset our country’s internal market. That is exactly what has happened. I would go further and say that that is exactly what was intended, as it was notoriously said in Brussels that the price of Brexit would be Northern Ireland. What we have evolving before our very eyes is the dismembering of the United Kingdom, as an object lesson to any other member state of what happens if they dare to leave the EU.
We have created a situation where, because Northern Ireland is in the EU single market and under its customs code, GB is in law decreed to be, within EU terms, a foreign country whose goods must be checked when they move to within the EU, which is how Northern Ireland is regarded as far as the single market is concerned. It should be no surprise that there will be disruption to the market as a consequence. It was the intention of the EU to build an all-Ireland economy as a stepping stone. That was the design, and the protocol is working in that sense: it is delivering what it was intended to deliver.
When we hear from the FSB report that 34% of businesses that previously traded with Northern Ireland have stopped trading, that inevitably means that trade with the Irish Republic—it was the purpose of the protocol to build an all-Ireland economy—is increasing. We have statistics from the Northern Ireland Statistics and Research Agency to show that, over recent years, purchases from the Irish Republic have increased by 50% in comparison with those from GB, taking account of inflation. We therefore have the protocol in action illustrated for us, and its intention to build an all-Ireland economy.
All that is set against a background where the Minister present today is under a statutory obligation, under section 46 of the United Kingdom Internal Market Act 2020, to secure and maintain Northern Ireland’s internal place in the UK market. It is supposed to ensure that goods can travel freely, but it does not and never will, because that is impossible to achieve.
More than that, with all the spin that attended the Windsor framework, we were told that we were protected under article 16. If there was any diversion of trade, we were told that the Government would step in and take actions permitted under article 16. Well, there has been diversion of trade—lamentable, demonstrable and huge diversion of trade—and what have the Government done? Nothing. They have simply run away, taken a blind-eye approach and refused to act under article 16.
Indeed, only a few weeks ago in a Delegated Legislation Committee, I had a Minister tell me that article 16 specifies that there has to be
“a massive distortion to trade.”—[Official Report, First Delegated Legislation Committee, 23 June 2025; c. 9.]
No, it does not; it refers to any diversion of trade. There has been a diversion, but there has been no action, which makes the Government wholly complicit in the dismantling of this Union and the divorcing of Northern Ireland economically from the rest of the United Kingdom. Unless and until that is addressed, this issue will not be settled.
The Government talk much about their great reset—well, they had an opportunity, and they did not take it. If they are going to align SPS rules, why did they not say to Europe, “We’re taking back sovereignty and control of SPS in Northern Ireland.”? That is not what the reset does; it retains EU sovereignty of SPS in Northern Ireland, and then makes a separate deal for GB. We are on the road to dismantling this Union, courtesy of this protocol—and that is why, as a Unionist, I will always hold out against it.
Alex Easton (North Down) (Ind)
It is a pleasure to serve under your chairmanship today, Dr Huq. This matter is crucial because it deeply affects British livelihoods, communities and the unity that we hold dear in the United Kingdom. To those who prematurely claimed or exaggerated that the Irish sea border was removed, I say, “You’re overlooking the harsh realities faced by many businesses in Northern Ireland.”
The numerous cases speak for themselves, and I will share several today. Only last week, four loads of food supplies were sent back in a 48-hour period from a port in Northern Ireland because of these regulations, affecting chilled and frozen foods. Recently, a lorry driver who owns a lorry-driving business mentioned that one sixth of his business is being negatively affected by the Windsor framework. The Secretary of State claimed that food supply and veterinary issues were resolved—that is clearly not the case. Why are food lorries being turned back from Northern Ireland ports?
I go shopping in a local supermarket in my constituency. In the last 10 days, I have been into that supermarket about half a dozen times. I have not even been able to get corned beef or doggy treats for my dog—my dog loves his doggy treats, and we have not been able to get them. Those are just basic items that face problems getting into Northern Ireland. That is why I stand firmly against any trade barriers between Great Britain and Northern Ireland. It was unacceptable then and remains unacceptable now.
This debate transcends commerce; it is about the integrity and unity of the United Kingdom. First and foremost, these barriers disrupt a legacy of seamless trade, which we have enjoyed for decades. They place additional costs and burdens on businesses in Northern Ireland. We take pride in our small, family-run businesses, which form the backbone of our economy. I implore the Minister to empathise with these businesses as they face challenges in sourcing or sending products across the Irish sea and become entangled in complex regulations that hinder rather than help. He should see it from the perspective of these businesses and ask, “Is this truly fair to fellow citizens in Northern Ireland?”
We are not just discussing inconveniences; these barriers are a chokehold on progress, strangling the local businesses that drive our economic growth. Moreover, these trade barriers threaten consumer welfare. Market constraints lead to limited choices, empty shelves and rising prices. British families in Northern Ireland face restricted access to diverse goods and are suffering unnecessarily. That is not the future that we envisioned for UK citizens. We cannot accept a future market that is marked by economic hardship due to artificial barriers within our United Kingdom.
These trade barriers challenge the essence of what it means to be united. They drive a wedge between regions that throughout our rich history have stood shoulder to shoulder. The resulting divide contradicts the very principle upon which the UK was built. It must not fracture our shared identity and values. While the intentions behind the protocol may have been good, the reality necessitates a reassessment of its impacts. I am reminded of the saying that the road to hell is paved with good intentions. Solutions exist and we must pursue them. The bottom line for any resolution must be the integrity of the UK and its internal market. Let us not be passive in the face of these trade barriers; instead, we must be diligent in restoring seamless trade throughout the United Kingdom.
Finally, Minister, given that these trade barriers are part of some 300 EU laws with zero democratic accountability in Northern Ireland, what is the timescale for their removal? We were told that we would get the best of both worlds; that is just not the case. When will this get sorted out?
Robin Swann (South Antrim) (UUP)
It is a pleasure to serve under your chairmanship, Dr Huq. I thank the right hon. Member for East Antrim (Sammy Wilson) for securing this debate.
I am sure that we will hear in the Minister’s response what the Government have done to alleviate some of these issues, but it is the practicalities that Members from Northern Ireland are actually asking about. I am sure that we will hear about Lord Paul Murphy’s report. He was commissioned to conduct an independent review of the Windsor framework. I am now aware that his report was handed to the Government on 9 July, so we have to ask, “When will we see it? When will businesses see it? When will trade and industry actually see what Lord Murphy has said?” I am sure that the answer we will get is that under domestic law the Minister has up to six months to publish the report and its recommendations. Why not publish it now? Why not let businesses and politicians see the challenges that lie ahead?
Two bodies were created at the time: the independent monitoring panel and Intertrade UK. Those organisations were launched with much noise and furore, and good people—genuine people—were appointed to them, but we have seen no product. We have seen nothing come from them with regard to the challenges, and the opportunities that people keep talking about but that nobody is prepared to put in writing.
With regard to the challenge that we currently face, the introduction of “Not for EU” labelling on 1 July, which has been touched upon, applies even to goods that will never leave the UK’s internal market, and adds yet another layer of complexity and cost. Businesses have been told that these labels will eventually be phased out, but the requirement to have them now still stands. For a large retailer, that may be a frustration, but for a small supplier or producer it could be the final straw.
That was evident in the FSB’s independent report. As the right hon. Member for East Antrim pointed out, this is an independent report commissioned by the FSB from GB suppliers providing goods to Northern Ireland. Those suppliers said that trade disruption is widespread, with 58% of those trading between GB and NI reporting “moderate” to “significant” challenges. Over a third of respondents—34%—have already ceased trading rather than deal with these new compliance issues.
Even major retailers are pushing back. We will hear about all those businesses and companies that make it work, but in June Stuart Machin, the chief executive of Marks & Spencer, called the implementation of these labels
“bureaucratic madness, confusing for customers, and completely unnecessary given the UK has some of the highest food standards in the world.”
If the chief executive officer of one of the UK’s most established food retailers finds the system hugely bureaucratic, says it is
“adding yet another layer of unnecessary costs and red tape”,
how can we expect small firms, often with just a handful of staff, to cope?
I am sure that the Minister will talk about the coming SPS deal, which has been mentioned, but the real challenge that the Government have to answer is: why are they continuing to introduce further bureaucracy and further checks? If this promised deal—this new relationship with the EU—is so positive, so genuine, and if we are so much in partnership, why do we have to introduce this? Why can we not put in place the extended grace periods we have often seen in the past for those businesses and organisations?
The FSB’s work on the framework was undertaken before there were further restrictions—before the restrictions on business-to-business parcels came into force on 1 May, and before the phase 3 labelling requirements on SPS products came into force on 1 July and from 1 September. Small businesses are asking us to establish something that actually helps. A back office, knowledgeable and with expertise, should be made available through an accessible, business-friendly route, rather than this bureaucracy. Dr Huq, I respect your time limits and will allow another hon. Member to speak.
Several hon. Members rose—
Dr Rupa Huq (in the Chair)
Order. We will move on to the first Front Bencher, Liberal Democrat spokesperson Clive Jones, at 5.8 pm, so the time limit is now three and a half minutes.
Jim Shannon (Strangford) (DUP)
It is a real pleasure to serve under your chairship, Dr Huq.
I thank my right hon. Friend the Member for East Antrim (Sammy Wilson) for his continued dedication to highlighting the absurdity of the Windsor framework and the need for an end to this disastrous mechanism. All hon. Members who speak in this debate have outlined and will outline the barriers that affect business across the whole of Northern Ireland. We are aware of the problems that we are raising, but I urge the Government to fully consider their impact. The Minister is a good man; he listens, and always tries to respond, so we look forward to his response on behalf of Government.
The Government will say that this is only a small additional bit of paperwork to do, and that businesses should be able to comply with the two-lane system and the administration, but the fact is that, while they could comply, it is more hassle, so at the system’s worst they are simply not complying.
I will give two examples that affect households throughout Northern Ireland. Morris & Son Ltd specialise in near-date sales and clearance lines that are cheaper and enable shops to pass on deals. Morris Ltd has said that the product margins on such products are too small to justify the time it takes to administer the additional protocols, when it can sell with no hassle on the GB mainland.
I do not say this to shame Morris Ltd, because that is not what this is about; the shame is on the current and the previous Governments for not rectifying the issue, but the losers are those on low incomes, who used to be able to get a good deal on short-dated stock. The constituents of every hon. Member in this House can take advantage of that, barring my constituents in Strangford and people in other constituencies of Northern Ireland. At a time when food inflation stands at 4.5%, and is predicted to be 5.1% by the end of this year, why should my constituents, and people across Northern Ireland, not be able to take advantage of those offers?
The hon. Member for North Down (Alex Easton) referred to dog treats: cheaper companies will not pay the vet fees to go through the shipments line by line. I heard Roger Pollen, from the Federation of Small Businesses, doing an interview at the end of June, in which he highlighted that 1,000 Marks & Sparks products have to be re-labelled, and 400 M&S items have been moved into the red lane—all that when Government had promised us that things would get easier, instead of getting worse. When M&S is struggling with the complexity, why would small retailers such as Morris & Son Ltd waste time and money? The fact is they will not, they are not, and my constituents are the losers. We were promised the rewards of a dual market, yet there has been no drive to entice business to come in and make the most of that supposed draw. The reason is that no one can actually quantify what the benefits are, and how we can assess them.
The Minister is a good man. We all know that. He always tries to be helpful. We have posed a lot of questions, and hopefully he can give us some answers. I urge him to go to the Cabinet to arrange a meeting with the EU to end this nonsense once and for all. Small businesses are crying out, and it is now affecting big business, which is where it gets even more difficult, but what is worst of all is that my constituents and all the other Northern Ireland constituents are paying more for their products than people on the mainland, and wondering why they are paying the price for Europe to maintain its death grip. End that death grip, Minister. Make the changes and end it soon, before small businesses are choked to death.
Carla Lockhart (Upper Bann) (DUP)
The protocol and Windsor framework continue on a daily basis to fail the people of Northern Ireland. The failure is not anecdotal; it is measurable, documented and deeply felt. I say this with sincerity: it is a bureaucratic burden, a constitutional compromise, and for many of our people and businesses, an economic noose.
The Secretary of State and the Government cannot continue to keep their heads in the sand, thinking that the problems that we highlight are all exaggerated and unimportant. Businesses, farmers, hauliers and animal health professionals are affected. Every sector is engaging more and more in highlighting the daily struggles associated with the framework and calling for help from the Government they pay their taxes to.
The reality remains that Northern Ireland is subject to EU laws in more than 300 areas—laws that we have no democratic say over, no way of changing, and that are creating burdensome and costly checks that no other part of the UK endures. The Windsor framework was sold as a solution. It was never a solution. It was a glossed-up version of the protocol with a new name, but it was the same poison. It raised hope among businesses in Northern Ireland, but has delivered dismay, frustration and additional costly trading barriers.
I have always been critical of the Government’s approach to Northern Ireland when it comes to Brexit, be it under the previous or the current Government. I never believed the spin and promises, because at every turn promises have been broken and there has been no desire to resolve even the most simple problems created by the Windsor framework.
I commend the FSB for its courage in producing an exceptional report. Many so-called industry leaders are all too often caught up in the spin and do not actually reflect their membership’s concerns. Yet the FSB’s latest report lays bare the truth: 58% of businesses face moderate to significant challenges, and more than one third have stopped trading with GB altogether, rather than deal with the mountain of paperwork. This is not frictionless trade. It is not the “best of both worlds”. It is best only for the EU.
Let me spell that out with real examples. A forestry business in my constituency urgently needed machine parts. They were delayed coming from Scotland via next-day delivery, leaving workers idle and costly machines unused. A children’s boutique was hit with a £205 duty and VAT invoice for delivery of goods from GB. We have also seen used agricultural machinery, visually clean and only road driven —immaculate—being turned away at our ports unless scrubbed to EU standards and accompanied by a phytosanitary certificate. One dealer has had to comply with four separate pieces of paperwork just to move a single tractor. Meanwhile, GB and Republic of Ireland dealers face none of that. An engineering firm supporting major Northern Ireland manufacturers said that its key selling point was rapid response. It is now impossible to say that, because of the delays and trade barriers.
In addition, we now have the blow to animal health. From January 2026, the Government are prepared to implement EU law in full on veterinary medicines, shutting out GB-based suppliers unless they jump through impossible hoops. Pet shops, farmers and even charities are now in the firing line.
This is death by a thousand cuts, and the Government are not even pretending to stop the bleeding. GB firms now say that it is easier to export to Japan than to Northern Ireland. The reality is that we have farmers who cannot move livestock; horticulturists who cannot bring in trees and seed potatoes; and families who no longer get parcels from GB retailers, because more than 90 major suppliers no longer deliver to Northern Ireland. There is every reason to act, the two main ones being that there are now economic implications, as per the FSB report, and there is clear diversion of trade. It is time for the Government to step up and act on behalf of the people of Northern Ireland and the businesses that are impacted.
Clive Jones (Wokingham) (LD)
As ever, it is a pleasure to serve under your chairship, Dr Huq. I thank the right hon. Member for East Antrim (Sammy Wilson) for securing this debate.
The majority of people in Northern Ireland voted to remain in the EU. The Conservatives’ botched withdrawal agreement has caused nothing but problems for the Northern Irish economy and has hit small businesses particularly badly. The Conservatives said that they had an “oven-ready” deal for leaving the EU, yet they left Northern Ireland in the deep freeze. The idea of dual market access under the Windsor framework was sold as a unique advantage for the people of Northern Ireland—businesses would be able to access both the EU single market and the UK internal market—but widespread dissatisfaction with the Windsor framework is becoming increasingly clear. Northern Ireland should be able to exploit dual access, but businesses are not being helped by the Northern Irish Executive, nor by the UK Government.
Clive Jones
I only have a few minutes, so I will not. Recent findings from the Federation of Small Businesses have highlighted severe challenges: despite Tory promises of “no more red tape”, many small businesses are finding trading between Great Britain and Northern Ireland laborious and costly. The Chartered Institute of Export and International Trade found that, between 2021 and 2023, since the Brexit deal, 2 billion additional pieces of paperwork had to be completed by exporters. That is nearly enough paperwork to wrap around the Earth 14.7 times.
The FSB report also makes it clear that businesses are not aware of the benefits of the dual market access. It is the Government’s job to add some clarity here. According to the FSB, only 14% of Northern Ireland-based businesses responding to its survey said that they understand and are benefiting from dual market access. The rest either lack sufficient understanding to benefit from it or have not been able to leverage it. Some 51% of respondents believe this opportunity is not being adequately explained or promoted by Government authorities. We have to ask why.
Does the Minister not agree that further clarity, communication and support from the Government would benefit businesses across the whole of the UK, and trade with Northern Ireland? We are right to ask why the Northern Irish Government is not doing more to help local businesses, especially small and medium-sized businesses. It is clear that Labour must take a more pragmatic approach with the EU and foster a closer relationship for the benefit of Northern Ireland, Scotland, Wales and England.
A closer relationship with the EU will also help solve the UK’s skills shortages, especially in Northern Ireland. According to a report by Ulster University’s economic policy centre, Northern Ireland needs more than 5,000 additional workers to grow its economy. Does the Minister not agree that a closer relationship with the EU and introducing a youth mobility scheme would be the perfect way to help solve that issue?
Not only would a closer relationship with the EU benefit Northern Irish jobs and its economy, but a new trade deal would boost the entire UK economy and provide revenue for our public services. A customs union with the EU would add up to £25 billion to the Government coffers. Labour say it wants growth, yet the Government shy away from a new deal with the EU that would cut the costly red tape that is holding so many small businesses back.
I am running out of time, so I will move to the end of my speech. Growth is possible for the UK, and, whether that is through a new deal with the EU or a fairer deal for our SMEs and industries, Northern Ireland deserves economic prosperity after years of economic neglect. The Good Friday agreement brought peace, but it did not bring prosperity, and the Conservatives’ Brexit deal has clearly not brought prosperity either.
Dr Rupa Huq (in the Chair)
I call the shadow Minister in His Majesty’s loyal Opposition, Andrew Griffith.
Andrew Griffith (Arundel and South Downs) (Con)
Thank you, Dr Huq. It is a pleasure to speak under your chairmanship. I congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this last debate before the summer recess on this important topic. The UK’s internal market, forged over centuries through the Acts of Union, is the bedrock of economic prosperity. We are indeed stronger together, and the United Kingdom Internal Market Act 2020 has provided what should be a robust foundation for economic cohesion and non-discrimination.
I accept that challenges remain, and we have heard about them today. I thought the example—the illustration —of custard, visual metaphor though that was, was important. I regret the imperfections of the Windsor framework, and this Government with their reset have the potential to use their equities to significantly improve some of those arrangements in the UK internal market, should they so wish. The right hon. Member for East Antrim drew attention to the work done by the excellent Federation of Small Businesses, highlighting the very real problems and concerns.
Sir John Hayes
My hon. Friend, with typical generosity, says that we are all trying to get this right. I established that that is largely true, with the possible exception of the EU itself. There are those in the European Union, stung by the wise decision of the British people to leave that awful body, who have never really accepted that decision and have made life as difficult as possible—both for this country and for the businesses described by right hon. and hon. Members in this debate.
Andrew Griffith
As ever, drawing on his extensive experience in this place, my right hon. Friend makes exactly the right point. We do not have time to revisit all the imperfections of the Brexit deal imposed upon us by a recalcitrant European Union, which turned out to be a very false friend.
We should hear from the Minister, and I want to afford him as much time as possible. But my party will of course support anything that removes frictions and reunites the territorial integrity of the whole United Kingdom. We want every small business to benefit from that frictionless relationship with the rest of the United Kingdom. Our Union depends on that single indivisible approach and the sort of practical solutions that we heard about, such as trusted trader schemes and utilising HMRC’s already extensive data collection and reporting framework to improve the operation of our internal market. That should be something that every Member of this House seeks to do. The Government have given up things like British fishing for 12 years; I hope that we continue to see in return some real progress on this issue.
I thank all hon. Members, and congratulate the right hon. Member for East Antrim on highlighting the issue. With your permission, Dr Huq, I will give the rest of the available time to the Minister.
Dr Rupa Huq (in the Chair)
We are going to leave a couple of minutes at the end for the Member in charge to conclude.
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
It is a pleasure to see you in the Chair, Dr Huq. I am grateful to the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), for giving me ample time to respond to the many issues that have been raised. He may be keen to take a phone call as a result of the shadow Cabinet reshuffle; maybe there is a promotion or relegation in the offing. I know that he has been keenly checking his messages all afternoon.
Justin Madders
He is staying in place.
I congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this debate. He referred to not having a great deal of luck in applying for debates; perhaps he is right that he has not faced as much competition because this is the last day before recess. But he is also right that this is an important issue. Given the number of Members here today, there are clearly things that people wished to raise. I want to address as many of the points as I can in the time that I have. If I do not get around to all of them, I will ensure that the relevant Minister responds.
I start by stating the current position. In January, we announced that we were reviewing the UK internal market, a move that would be quicker and broader than was required in statute. We published a public consultation on the operation of the UK Internal Market Act 2020, and at the outset of the consultation the Government made it clear that they would not repeal any part of the Act, as it contains important provisions relating to the Windsor framework and the unfettered access of qualifying Northern Ireland goods to Great Britain. It is important that we have that in the back of our minds when debating these issues.
Upholding Northern Ireland’s place in the UK internal market was a key manifesto commitment, and we are determined to fulfil it. At the time, the Government stated that they were not minded to weaken the protections offered by the market access principles in the Act. Those protections facilitate the free movement of goods, provision of services and recognition of professional qualifications, resulting in real benefits for businesses and people across the whole of the UK.
We recognise, however, the concerns—and hear them again today—about how the UK internal market has been operating in practice, particularly for businesses. The Minister for Trade Policy and Economic Security, my right hon. Friend the Member for Lothian East (Mr Alexander), made a written ministerial statement to the House last week with the Government’s response to the review and the public consultation. The review made clear that businesses across all sectors strongly support the UK Internal Market Act’s market access principles to avoid unnecessary barriers to trade.
Justin Madders
If the hon. and learned Gentleman does not mind, I have an awful lot of responses to get into, so I will not eat into that time with interventions.
The Department has been very much guided by businesses in developing the response to the review and the consultation, and in designing the changes and improvements we will make. We also believe that growth and prosperity are supported by devolution—a belief no doubt shared by hon. Members here. The outcome of the UK Internal Market Act review has been carefully crafted to ensure that unnecessary barriers to trade do not arise within the UK, while maximising the scope to realise the benefits of devolved decision making.
We want to work with the devolved Governments in Scotland, Wales and Northern Ireland to ensure that businesses and the Office for the Internal Market are more involved in discussions about the management of the UK internal market. We are confident that the changes we announced in our response to the review represent a more balanced and proportionate approach to managing the UK internal market than that pursued by the previous Government.
Our approach seeks to avoid the imposition of unnecessary new costs on businesses, while respecting devolved competence. Those reforms are part of our broader plan for change, which has shaped both the UK’s trade strategy and industrial strategy to make the UK the best place to do business, while respecting devolved powers and delivering prosperity across the nations. We are keen to work with devolved Government Ministers to implement those improvements as soon as possible and put in place the necessary changes to the UK internal market in an effective way for the benefit of all our citizens.
Hon. Members have spoken passionately, as we would expect, about the Windsor framework. I hope it goes without saying that this Government are wholly committed to the Windsor framework. It forms part of the withdrawal agreement between the UK and the European Union, and it supports the peace and prosperity brought about by the Good Friday agreement—one of the proudest achievements of the previous Labour Government. It also plays a vital role in ensuring the smooth flow of goods between Great Britain and Northern Ireland. That is why we supported the Windsor framework in opposition, and we continue to support it in government.
I recognise that the framework does not operate perfectly for everyone. Concerns raised by hon. Members today show that there is more to do in this area, but more than 10,000 traders have now signed up to the UK internal market scheme, and more than 1,100 operators are registered for the Northern Ireland retail movement scheme and Northern Ireland plant health label. Indeed, Northern Ireland is now one of the UK’s fastest-growing regions.
We also recognise the importance of ensuring that the right advice and guidance is available to businesses when they need it. We will continue to work on those issues. I heard what was said about the Federation of Small Businesses survey. We will speak to the federation and work with it moving forward—there were some pretty damning critiques from hon. Members today about what that survey found.
Our own surveys have found that customer satisfaction with the trader support service is running at 90%, so there is a significant disconnect between what our surveys are finding and what the survey from the Federation of Small Businesses has discovered. HMRC trade statistics published on 17 July showed that 11,400 businesses were associated with Great Britain and Northern Ireland customs processes in 2024. That was actually up 200 on the number for the previous year. I therefore suggest that the picture is not quite as apocalyptic as has been suggested by Members today, but we want to understand some more detail about why that survey showed such dissatisfaction with the current arrangements.
In taking forward commitments made in the “Safeguarding the Union” Command Paper last year, the Secretary of State for Northern Ireland has established the new body Intertrade UK. That body is independently looking at promoting trade across the whole of the UK, and at how we can guide and encourage businesses to trade more, invest more and grow more.
It is also important that we take the opportunity to look ahead at the broader benefits that businesses across the UK will yield from the common understanding that we are taking forward with the EU. This new partnership in agrifood, emissions trading, electricity and other issues, will remove barriers for businesses trading with our nearest neighbours. We hope it will also help smooth the flow of trade to the advantage of Northern Ireland, reflecting our commitment to the UK internal market.
On our commitments, I take issue with the comments made by the right hon. Member for East Antrim about the Secretary of State for Northern Ireland, who I believe is an honourable man. He is committed to Northern Ireland, and I do not accept at all the characterisation that he is disdainful or could not are less about Northern Ireland. Nothing could be further from the truth.
The right hon. Member for East Antrim also raised the issue of the duty reimbursement scheme. I understand there have been issues with that. We are seeing increased use of the scheme. HMRC processes claims quicker now than it previously did, with an average processing time of 14 days, but clearly there is more to do in that regard.
The right hon. Gentleman also raised the example of custard—clearly not a trifling matter, Dr Huq, if you will pardon the pun. The Northern Ireland retail movement scheme simplifies the movement of goods between Great Britain and Northern Ireland, based on UK food safety standards. In return, it was agreed that the “Not for EU” labels would be applied to some retail goods eligible to be moved by the scheme, but through the SPS agreement with the EU we will ensure that there is a consistent regulatory framework for SPS, and therefore expect “Not for EU” labels and checks to diminish significantly.
DEFRA is working closely with traders to ensure they are clear about where goods need to be labelled to be eligible for the scheme and has published detailed guidance to support that. Where possible, enforcement is proportionate, with only non-compliant goods removed, the rest of the consignment continuing on to its destination. The majority of NIRMS shipments pass into the Northern Ireland area without any issue or delay, but if there are specific examples of where things have gone wrong we would certainly be grateful to hear more detail and whether we can do anything more. However, we are making progress.
In terms of other issues raised, the hon. Member for South Antrim (Robin Swann) asked about Lord Murphy’s report. I can pass on to the Secretary of State for Northern Ireland the eagerness of Members to see that; I am sure he will be hearing those messages already. There is a commitment to publish the report in the UK Parliament and in the Northern Ireland Assembly. I am sure the Secretary of State will be keen to deliver that as soon as is practical.
I need to give the right hon. Member for East Antrim a moment to respond. I apologise for not having covered every issue that has been raised. To conclude, the Government are committed to protecting the UK’s internal market and delivering for all UK citizens and businesses. We need to work together to understand where the issues are so that there are no unnecessary barriers to the flows of goods and services. Like all members of this Government, I am committed to working with hon. Members from across the House to ensure that that is the case.
Sammy Wilson
I appreciate that the Minister has stepped in at short notice and is probably reading from the Government brief, but I am really disappointed. He talked about the review of the internal market and how the legislation was designed to uphold Northern Ireland’s position and ensure the free movement of goods.
I do not know whether the Minister has listened to what Members have said here today, but the free movement of goods is not happening. The internal market is being disrupted. He talks about ensuring that no more unnecessary barriers arise, but we have the labelling coming through now and the EU export control system coming through in September. We also have all the new EU legislation, which will impact on businesses and create different standards in Northern Ireland.
The Minister then put the cream in the cake by saying that the Government are committed to the Windsor framework, but the Windsor framework has been the cause of the issues raised in this report. All I can say is that this Government are going down the road of making sure they do not upset the EU—