UK Internal Market

Rupa Huq Excerpts

Tuesday 22nd July 2025 Westminster Hall

[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.

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[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.

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[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.

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[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.

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[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—

[Dr Rupa Huq (in the Chair)]

Order. We now adjourn until September.