Trade Diversion and Windsor Framework

Hilary Benn Excerpts

Tuesday 4th March 2025 Commons Chamber

[The Secretary of State for Northern Ireland (Hilary Benn)]

I congratulate the hon. and learned Member for North Antrim (Jim Allister) on securing the debate. The House, once again, has been left in no doubt but that he speaks about Northern Ireland’s trading arrangements with fervour and sincerity, as he did in the Westminster Hall debate in November, to which I responded, and in the debate on his private Member’s Bill in December, to which the Under-Secretary of State for Northern Ireland replied on the Government’s behalf. On the Windsor framework, his position is quite clear: he is opposed to it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Secretary of State has outlined that on a number of occasions, both he and the Under-Secretary have responded to issues that the hon. and learned Member for North Antrim (Jim Allister) has raised. He will be aware that I wrote to him about a month ago about the problems with horticultural industry trade between Scotland and Northern Ireland, but I have yet to get a response.

[Hilary Benn]

I can only apologise to the hon. Gentleman. I try hard to be punctilious about responding to correspondence. Those watching will have noted what he said, and he can, I hope, anticipate receiving a reply from me very soon.

For the Government’s part, I want to be equally clear. We needed to have a system in place for managing a unique set of circumstances. The system we have is the inevitable result of leaving the European Union. That is where this all began; if that had not happened, we would not be having this discussion. What did that result in? Two trading entities—the United Kingdom and the European Union—with different rules, but an open border between them. That is to be found nowhere else in the world. In other words, all of us together—everyone has to take responsibility for what they argued for, and for the consequence of that—faced the question: how do we deal with the unique situation of two trading entities with different rules having an open border between them?

[Jim Allister]

The way not to deal with it is to say, “We, the United Kingdom, will hand over part of our territory to EU jurisdiction. We will put it under the EU’s customs code, which will decree the rest of the United Kingdom a foreign territory. We will subject that part of our territory to having 300 areas of its law not made in the United Kingdom; law in those areas cannot even be amended in the United Kingdom. It will be foreign law imposed.” This could have been dealt with by mutual enforcement. We could have said, “We want to trade with each other, and we want to be neighbourly, so we will guarantee, on pain of criminal conviction, that anything we send into your territory meets your standards and vice versa.” Why did things have to be made complicated, at the expense of jettisoning Northern Ireland from the United Kingdom economically and constitutionally?

[Hilary Benn]

The hon. and learned Gentleman argues in favour of what he calls mutual enforcement, but that is not a credible basis for resolving the dilemma created by our leaving the European Union.

[Jim Allister]

indicated dissent.

[Hilary Benn]

The hon. and learned Gentleman may disagree. I am expressing the Government’s view, which is that it is not a credible basis. One thing is absolutely clear: the answer was never to try to wish the dilemma away and pretend that it did not exist. I am afraid that, at times, it has appeared as though that argument has been advanced.

The first go at trying to find an answer was the Chequers plan, which did not get support. The Northern Ireland protocol was the second go, but that was never going to work—I made that argument as an Opposition Back Bencher—so the Windsor framework was negotiated. There is no denying that the Windsor framework represents a huge improvement on the prospect created by the Northern Ireland protocol.

[Sammy Wilson]

The Secretary of State says that the situation is unprecedented, and that unique arrangements have therefore been put in place. The Government recently recognised that the flow of trade from the Irish Republic through Northern Ireland into GB could cause a situation where goods had to be checked to safeguard the GB market, yet they have been able to put in place arrangements, without all this elaboration, that do not require laws to apply to traders in the Irish Republic; they are simply checks away from the border. If the unique situation of trade from GB into Northern Ireland, which has a non-check border with the Republic, has to be dealt with through a labyrinth of regulations, why is it possible to avoid that in the other direction? If such arrangements can work from Northern Ireland to GB, why can they not work from GB to Northern Ireland?

[Hilary Benn]

The answer is this: as a sovereign country, it falls to us to decide how we check goods that arrive in our territory. For quite a period after our leaving the European Union, the last Government were not checking stuff coming across the channel, first, because there was nowhere to do the checks, and secondly, because they were concerned about delays, shortages and added costs for the consumer. They repeatedly put off implementing checks. At the same time, British exporters were experiencing the full impact of checks on the goods that they sent the other way, across the channel to Calais and the rest of the European Union. It is for sovereign countries to determine what checks they apply. The same truth applies to the European Union; it has a single market.

We are a responsible country. Some may argue that we should be irresponsible and say, “Well, this is not our problem; let us leave it to the EU to sort it out.” In the end, we had to have a negotiated answer to the question created by our departure from the European Union on the goods that cross that non-existent border. The one thing that almost everybody agreed on during the Brexit debates was that the border needed to remain as it was. That open border is important for a whole host of reasons, not least the extraordinary progress that Northern Ireland has made in the 26 years since the signing of the Good Friday agreement. The question, therefore, was: how does the EU ensure that goods that cross that border and come into the Republic, and go on to France, Germany or Greece, meet the rules? In exactly the same way, we would ask: how do we know that goods coming into the United Kingdom meet our laws? The only way to do that was with a negotiation.

[Richard Tice]

The right hon. Gentleman said that it is up to a sovereign nation to look after its own borders and determine its own checks. Does he accept that there has been trade diversion within the United Kingdom? If so, does he accept that it is within the Government’s remit to use article 16 or drop the checks to protect trade within our sovereign borders?

[Hilary Benn]

I have only just begun my remarks, but if the hon. Gentleman will bear with me, I shall shortly come to the point that he raises.

The Windsor framework protects the UK internal market, while, as I argued a moment ago, enabling the EU to be confident that its rules will be respected. The Government’s view and my view is that that was the responsible thing to do in the circumstances, because this Government support sustainable arrangements for Northern Ireland that respect its particular circumstances —indeed, they are unique—and its place in the Union, and that uphold the Good Friday agreement. The hon. and learned Member for North Antrim’s central argument this evening is that we should trigger article 16, the unilateral safeguard in the Windsor framework. To do that would be contrary to Northern Ireland having stable arrangements for trade, now and in future. It would disregard the benefits that the Windsor framework offers for businesses—indeed, the benefits that are actively relied upon by businesses, including those that are taking advantage of Northern Ireland’s unique access to the UK and EU markets—[Interruption.] The hon. and learned Member for North Antrim shakes his head, but I have met businesses that have told me how they are taking advantage of that dual market access. I meet businesses in my constituency that can see what Northern Ireland has got out of these unique arrangements.

Those benefits will be enhanced by the UK internal market “facilitations”—that is the phrase—that will come into force in the near future, and that will, on a durable and legally binding basis, support the smooth flow of goods across the whole of the UK when the next phase of the UK internal market system is implemented this year, without, for example, unnecessary international customs paperwork.

We have seen the benefits of negotiating a way forward. There is unilateralism, as the hon. and learned Gentleman argues, and there are the benefits of negotiation. In respect of agrifood and sanitary and phytosanitary measures, we have been able to lift the old ban on the movement of seed potatoes. Not all those problems have been solved—I am the first to acknowledge that—but it is an improvement compared with the situation before. We are now able to apply UK public health and safety standards to agrifoods on the basis of primacy for goods staying in the United Kingdom moving under the Windsor framework schemes. We have reached agreements with the EU on tariff rate quotas, enabling businesses from Northern Ireland to import steel and agrifood products under UK tariff rates.

We also have an active Assembly that is scrutinising the regulations and raising its views—[Laughter.] Well, I will come back to that point later on. Medicines for the whole of the UK are now authorised by the Medicines and Healthcare products Regulatory Agency, and we have ensured that Northern Ireland benefits from the same VAT, alcohol duty and other taxes as the rest of the UK.

All of those are undoubted benefits for Northern Ireland. They are benefits of the framework that supports Northern Ireland’s access to the two markets, and from which this integral part of the United Kingdom, which Northern Ireland is, uniquely benefits. This is possible because we have a lawful and sustainable agreement, in stark contrast to what the hon. and learned Gentleman has proposed as a way forward.

I would be the first to acknowledge from this Dispatch Box that the Windsor framework is not perfect. We all know that. Where problems arise with the practical operation of the framework, this Government and the EU have tried to show that we can work through them in a constructive and pragmatic way, because that is what we have to do. For example, having listened to businesses, we took a pragmatic decision to extend on the timetable for implementing the new arrangements on parcels. One of the consequences of doing that was that the introduction of the new, less onerous customs arrangement was put off, because the EU’s view was that we needed to do the parcels at the same time in order for the new customs arrangements to come in.

Another example is the horticultural sector, where, in the last month the restrictions on the movement of two species of plant were removed. If we are talking about trees, I think that takes it up to 23, including our beloved silver birch and, I am advised, a number of varieties of cherry tree that were sorted out at the end of last year.

On the question of the Stormont brake, we acted on the concerns that the Northern Ireland Assembly raised about the potential implications of the new rules on chemical labels, font sizes and so on by committing to consult on taking forward measures across the UK that will protect the UK internal market. I would just point out—because the hon. Gentleman looks slightly sceptical —that there is a high bar to be met for the Stormont brake. When I received the application as Secretary of State, I was under a legal obligation to consider the application under the rules of the Stormont brake, and I made the decision that I did. In the end, what the Government announced was moving towards the same outcome that those who had raised the concerns in the first place wanted, just by different means than they had sought. In the end, the Stormont brake process actually worked to achieve the outcome that the Assembly wanted.

[Jim Allister]

I think the Secretary of State should listen to himself. What he is saying to the House is that we should be grateful for some sort of dud mechanism to deal with the situation whereby the right to make laws in 300 areas has been gifted to a foreign power, and that people elected in Northern Ireland can have no say in those laws and cannot amend, move or bring them into effect. He says that we should be grateful that, in those 300 areas of law, we might be able to go to the EU and say, “Please, Sir, would you ever mind just making that a little better?” Really? Where is the sense of dignity from this United Kingdom, that we should so prostrate ourselves to a foreign unelected jurisdiction—elected by no one in the United Kingdom—allow them to make our laws, and then claim as a victory the fact that we have a right to go and ask them to make some changes? But the Secretary of State has failed to answer the question. There is trade diversion—what is he going to do about it?

[Hilary Benn]

I am not asking anyone to be grateful for anything; I am simply pointing out to the House the problem that was created in the first place when we left the European Union.

[Jim Allister]

It is punishment.

[Hilary Benn]

If I heard the hon. and learned Gentleman correctly, from a sedentary position he said, “punishment”. I could not disagree more. I would encourage him to reflect on what he has said, because I do not think that he acknowledges that there was an issue there that had to be addressed, and wishing it away was never going to work.

[Jim Shannon]

I am reminded of the wee song we used to sing in Sunday school many years ago:

“So high, you can’t get over it,

So low, you can’t get under it”.

The Stormont brake does not work because it is too high and too low; it is just not functional. In my intervention on the hon. and learned Member for North Antrim (Jim Allister), I referred to the HMRC cost. To give the Secretary of State an example, last week a business said that the HMRC charges have got to the stage where they are even more expensive than the goods the business is bringing in. There has to be something wrong when it gets to the stage where it is not the issue of getting the product across but the cost factor. Could the Secretary of State look at that, because there is something wrong with a system that ends up costing us more, when it did not cost that amount before the Brexit system came in?

[Hilary Benn]

If the hon. Gentleman wishes to provide me with further information about the particular example he has raised, I will of course look at it.

On trade, I have a slightly different set of figures from those that the hon. and learned Gentleman used. From 2020 to 2023, purchases in Northern Ireland from GB went from £13.4 billion to £16.2 billion—an increase of 20.7%. Sales to the year ending December 2023 from Northern Ireland to GB rose by 12.4%, to £17.1 billion. He used a phrase at the beginning of his speech—I hope I wrote it down correctly—the “natural inclination of trade”. I would simply observe that the inclination of trade is a consequence of decisions that individuals and firms make, and those patterns change over time depending on what they want to buy or sell and what the market itself looks like.

The point I was making, without seeking gratitude, is that in every one of the examples I have just given, the Government worked to resolve the challenges we faced, working with stakeholders in Northern Ireland and with the EU, in what I think is a constructive and mutually beneficial way. That is what a responsible Government do, including abiding by commitments in international law on the world stage. The hon. and learned Gentleman advocates triggering article 16. That measure refers both to trade and to instances where serious economic, societal or environmental difficulties are liable to persist. Given that most goods are flowing relatively smoothly between Great Britain and Northern Ireland, how can it be argued that we are facing those difficulties?

I would just make the point that if one goes to the port, the lorries come off and most of them go on their way—the goods are moving. That is in contrast to the argument that the hon. and learned Gentleman put towards the end of his speech, when he used the phrase “cripple” in relation to the Northern Ireland economy. I have seen no evidence that the Northern Ireland economy, which, by the way, has the lowest unemployment in the whole of the United Kingdom, is being crippled by the matters that we are discussing.

[Mr Campbell]

rose—

[Hilary Benn]

I will give way, but then I will make progress.

[Mr Campbell]

The Secretary of State is being very generous with his time. He just said most goods are flowing freely. Does he not agree that he should amend that to say, “In certain sectors, most goods are flowing freely, but in certain other sectors, they most certainly are not”?

[Hilary Benn]

It depends on the hon. Gentleman’s definition of “freely.” There are requirements that certain goods must meet. There is the retail movement scheme and the horticultural scheme, and certain paperwork and documents are required, looking forward to the customs requirements being reduced later this year—hopefully when the new arrangements come in—but the goods move, and I do not think that anyone in the debate can stand up and say that the goods are not moving in those circumstances.

As I have indicated, the Windsor framework represents a step forward. Although I respect the sincerity with which the hon. and learned Member for North Antrim makes his argument, I do not believe that current circumstances meet the article 16 test. Pulling that lever in the current circumstances would actually throw away the progress secured by the framework and damage the good faith that has been built up in taking the framework forward. We all need to remember that, not long ago, we had a Government who signed an international agreement and then set about showing that they had no intention of honouring it. That did extraordinary damage to the United Kingdom’s international reputation.

[Jim Allister]

rose—

[Hilary Benn]

The hon. and learned Gentleman has had quite a lot to say and I have given way to him three times, so I hope he will bear with me while I continue my remarks.

In the past, the idea that the UK would be a country that signed an international agreement and then reneged upon it would have been extraordinary to us all in this House, but that is what happened in very recent living memory, and it is why I put this point to the hon. and learned Gentleman.

The last Government negotiated the Windsor framework. I stood up in the House and supported it. The Opposition supported it at that time, and I voted for it because I genuinely believed that it represented a significant step forward. But if we do not honour the most recent agreement that we have signed with the European Union, why would it wish to reach agreement on what this Government are currently seeking, in particular on an SPS veterinary and agrifood agreement? This Government have come in saying that we want to do that, while the last Government appeared to say, “Well, the trade and co-operation agreement is all we want—we don’t want anything else.” This Government have a very different view: we want to negotiate an SPS veterinary and agrifood agreement, and that would help considerably with some of the issues that have been raised during the debate. The Government will continue to listen to the concerns of businesses and respond pragmatically.

[Carla Lockhart (Upper Bann) (DUP)]

I have listened intently to the Secretary of State’s contribution and I am somewhat bemused by some of what he said. He speaks of businesses in his constituency that are jealous of what Northern Ireland businesses have. What we have in Northern Ireland is increased costs, increased paperwork and impediments to trade. It is increasingly difficult for engineering, agrifood and horticultural businesses in my constituency. I have invited the Secretary of State to visit those businesses, but I am still waiting. I encourage him to come to Northern Ireland and listen to the businesses that are impacted by the protocol and the Windsor framework on a daily basis. I also heard today about two plants that have been added to the ever-lengthening list of plants that are not available to Northern Ireland, well whoop-de-do-da-day—how brilliant and great for Northern Ireland. When are we going to get real and address the real problems that exist with the protocol and the Windsor framework?

[Hilary Benn]

Kind though it is of the hon. Member to encourage me to come to Northern Ireland, as she knows I am in Northern Ireland on a very regular basis and a little while ago I had a meeting with her and two organisations, at her request. I meet businesses on a very regular basis. I met the Northern Ireland Chamber of Commerce and Industry Brexit working group and I always do my level best to respond to requests for visits from colleagues in the House of Commons, including the hon. Lady, but there are only so many hours in the day.

I wanted to point out that the independent monitoring panel, which I met for the first time yesterday, has started its work. Establishing the panel was a commitment made in the safeguarding the Union Command Paper. Its job will be on the basis of the evidence and it will be provided with data on the flow of goods between Great Britain and Northern Ireland to say whether the UK internal market guarantee is being met. The first six-month reporting period commenced on 1 January and will conclude on 30 June 2025, following which the IMP will publish its assessment and any recommendations. I commit to the hon. and learned Member for North Antrim, and all those who contributed to the debate, that I shall consider the report with the same attention to detail that he has shown in forwarding his argument today.

To conclude, this Government are committed to Northern Ireland. They are committed to the United Kingdom and to implementing the Windsor framework in a manner that is consistent with protecting Northern Ireland’s place within our internal market.

Question put and agreed to.