UK Internal Market

John Hayes Excerpts

Tuesday 22nd July 2025 Westminster Hall

[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.

--- Later in debate ---

[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.