Trade Diversion and Windsor Framework

Robin Swann Excerpts

Tuesday 4th March 2025 Commons Chamber

[Jim Allister]

Perhaps in a moment.

We also see that in the purchase of goods figures that NISRA reports. It has given us figures from 2020, contrasting them in a table with those for 2023. The year 2023 was only the beginning of things getting difficult, as the Irish sea border did not in effect come into place until October 2023 because of the grace periods. However, those NISRA figures show that Northern Ireland’s purchases of goods increased from 2020 to 2023—of course, it was a period of inflation—by 24% from GB, but by 50% from the Republic of Ireland, meaning twice the growth rate in the buying of goods into Northern Ireland that would previously have come from our integrated United Kingdom economy.

The Office for National Statistics business insights and conditions survey states that 13.1% of currently trading manufacturers based in GB had sent goods to Northern Ireland in the past 12 months. That was at the end of 2024. But in January 2021, 20% of manufacturers in GB were sending goods to Northern Ireland. So, in just those four years there has been a dramatic fall in the number of manufacturers supplying goods to Northern Ireland. It has nearly halved in four years. The ONS data for 2024 tells us more: 11.7% of companies tell us they have stopped trading with Northern Ireland. Why? Because of the bureaucracy, because they have to make customs declarations, because they have to have them checked, and because they have to employ extra staff to do all that. Many companies, particularly in smaller sectors, have simply said that they are not going to do it.

[Robin Swann (South Antrim) (UUP)]

Will the hon. and learned Gentleman give way?

[Jim Allister]

In a moment, perhaps. I need to make sure I get through what I need to say.

It is beyond doubt, I would respectfully say, that there has been trade diversion. Back in September, the Road Haulage Association gave evidence to a parliamentary Committee of this House. It told the Committee that 30% of haulage lorries that take goods to GB are returning empty. Why? Because GB companies have stopped supplying. Now, that is an incredible thing to contemplate. Trade works on the basis that you take goods out, and then you fill your lorry and bring goods back. That is how you make it viable and how the economy works. That 30% of lorries now returning to Northern Ireland are returning empty is an incredible indictment of the operation of the protocol.

And things are getting worse. The EU regulation on general product safety now puts more burdens on companies selling into Northern Ireland, because they have to meet enhanced EU product safety regulations. I have mentioned the craft sector in this House before. Recently, 11 suppliers in that niche market stopped supplying Northern Ireland. It will get worse, because the partial border is coming and they will have to do more paperwork and make more declarations about sending simple parcels from GB to Northern Ireland. Tesco has slides that it shows to its own suppliers stating that they should now buy from the Republic of Ireland because it is easier to supply from there than from GB. The same is happening in veterinary medicines and in every sector.

Why does that matter? It matters for a very pertinent political reason. The whole idea of trade diversion and the whole purpose of the protocol was and is to build an all-Ireland economy: to dismantle the economic links between Great Britain and Northern Ireland and enhance links with the Irish Republic, thereby creating stepping stones out of the United Kingdom into an all-Ireland for Northern Ireland. That was the determination that lay behind the protocol.

We do not need a protocol to govern trade. It is demonstrable that if we can organise trade through Northern Ireland to GB without border checks in the Irish sea, and if, as the Government now say is possible, we can do it with checks away from the border, then equally we could do it in the other direction, through mutual enforcement. That would mean recognising that if we are going to export from one territory to another, our manufacturers must produce goods to the standards of the other, and we would enforce that by making it a criminal offence to do otherwise. That is the essence of mutual enforcement. It would work, but it is not allowed to work, because the political agenda of the protocol is to ensure this reorientation and realignment.

We are told that we now have Intertrade UK, but it has no staff and no budget, in comparison with InterTradeIreland, which has more than 50 staff and a budget of £6.5 million a year and is active across the whole area. Intertrade UK has been set up as a shadow, but it is not able to compete in any sense.

This Government have allowed the economy of Northern Ireland to drift out of the United Kingdom. I believe those who are protocol enthusiasts want that to happen. Now it is happening, the onus is back on the Government to do something about it.

--- Later in debate ---

[Jim Allister]

The right hon. Gentleman is absolutely right. Business is like water: it follows the easiest course. When we were an integrated part of the UK economy, the easiest and cheapest course was to do the greater bulk of our trade with GB. That, historically, has been our basic supply market for our raw materials and everything else. However, when a fettering of trade is imposed, naturally, business will follow the easiest route. The easiest route now, sadly, is to cease trading from GB and accentuate trading with the EU, and most particularly the Republic of Ireland.

The United Kingdom was built on two pillars, according to the Acts of Union. The first was a political union, with article 3 establishing this House as one sovereign Parliament for the whole United Kingdom; the second was an economic union, through article 6, which established unfettered trade between and within all parts of the United Kingdom. That was what article 6 said—that there should be unfettered trade. But along came the protocol, which fettered trade, leaving the Supreme Court with no choice but to accept that the protocol had therefore subjugated article 6. The very foundation of our economic union, article 6, which says that there shall be unfettered trade, is in suspension. It is no wonder that the consequence of that fettering of trade is a diversion of trade.

[Robin Swann]

I thank the hon. and learned Member for giving way. It is on that diversion of trade that I wish to speak. He and most Northern Ireland MPs will know of the fantastic Colemans Garden Centre in my constituency of South Antrim. It supplies quite a number of people across Northern Ireland who have had difficulty in getting plants and fruit brought across from their main supplier, McIntyre Fruit, in Scotland. Just before this debate, the manager of Colemans Garden Centre told me that he had been in contact with Stuart McIntyre who said that he had just picked up a contract to supply a firm in Japan. He said that, bureaucracy-wise and administration-wise, it is easier for a supplier in Scotland to supply into Japan than it is to supply across the 14-mile stretch of water into Northern Ireland.

[Jim Allister]

That is the absurdity of where we have got to, and it has been accentuated by our subjection to the EU’s general product safety regulations. Those regulations provide that if a company is supplying into Northern Ireland from outside the EU—in other words, from GB—it must have an agent resident within the EU. The company must complete the paperwork on the origin of its goods and on the customs declarations, and it cannot do so without employing an agent within the EU. Anyone who knows anything about business will know that that is added cost that will cause many businesses to say, “Northern Ireland is not a huge market to start with, so I shall just not bother with it.” That is what all our businesses in Northern Ireland are suffering from.