EU Trade Agreement: Economic Impact

The Government’s new strategic partnership with the EU will deliver a broad range of economic benefits for Northern Ireland. In particular, a new agreement on agrifood and plants will further smooth trade flows across the Irish sea, protect the UK’s internal market, reduce costs for businesses and improve consumer choice in Northern Ireland.

I am pleased that the agreement secured with our largest trading partner, the European Union, will make it easier for food and drink to be imported and exported. Will the Secretary of State assure me and my constituents that all future conversations with trading partners will continue to prioritise high welfare standards and food standards on both sides of the Irish sea?

I can happily give my hon. Friend that assurance. He will have noticed how in another context—the trade agreement reached with the United States of America—we said that we would uphold our food standards in that agreement, and that is exactly what we have done.

Which of the sanitary and phytosanitary and agrifood requirements does the Secretary of State expect to be removed on goods moving from Great Britain to Northern Ireland as a result of the SPS agreement with the EU?

Once we have negotiated the legal text and put our rulebook in line with current European arrangements, there will be: no need for SPS paperwork; no mandatory identity checks or physical checks on goods moving; no need for Northern Ireland plant health labels; an end to the ban on chilled frozen meats moving; an end to the ban on movements of products of animal origin imported to GB and then moved to Northern Ireland; and no onward paperwork or checks on agrifood moved for onward processing. That is why the SPS agreement in outline has been so widely welcomed in Northern Ireland.

I am pleased to say that the proposed SPS agreement has been welcomed by the Welsh farming community, including those in my constituency of Clwyd East. That is alongside the Ulster Farmers Union, the Federation of Small Businesses, the CBI, the Horticultural Trades Association, supermarkets including Asda, M&S and Iceland, and many others. Does the Secretary of State agree with me and with them that an SPS agreement would bring huge benefits for Wales, Northern Ireland and the rest of the UK?

It certainly would. It is a rare agreement that invites so much praise, certainly across the range of opinion in Northern Ireland. We all want to see it progress as quickly as possible, so we have got to turn it into a legal text and sort out our own legal rulebook. The benefits will then flow for businesses right across the United Kingdom.

The Windsor framework is causing untold damage to businesses in Northern Ireland. It cost one of my local businesses £86 to bring a box of simple ties from GB to Northern Ireland because of the parcels border, and used farm machinery is now subject to EU import procedures, with some having been turned back from the ports to Scotland in recent days. The latest FSB report confirms that small businesses are being hardest hit with red tape costs and uncertainty. Will the Secretary of State accept that the reset is not helping the here and now? Will he commit to meeting these industries and helping to sort out practical solutions?

On the agricultural machinery point that the hon. Member raises, if the machinery is coming into and staying in Northern Ireland, it can be brought in, subject to cleaning, with a plant health label that is relatively straightforward. Only if it might move into Ireland would it need to go through the red lane. I will make this general point: in 2023 Northern Ireland purchases of goods from the rest of the United Kingdom rose by 16.2%, and Northern Ireland is the fastest growing region in the UK.

With regards to agricultural machinery, I am sure that the Secretary of State is aware of a Northern Ireland farmer who took agricultural machinery from Northern Ireland to participate in a Scottish agricultural show. On bringing it back, it was rejected in Northern Ireland and sent back to Scotland because there may have been soil on the underside of a piece of agricultural equipment. Does the Secretary of State really think that that makes common sense?

It is the requirement of the Windsor framework, which the last Government negotiated, to address the basic problem of having two different systems and an open border. Everybody knows that agricultural machinery needs to be properly cleaned. If that is the case and the appropriate label, which is straightforward, is applied, there is nothing to stop the machinery moving back to Northern Ireland.

If the reset deal is supposed to bring an end to the SPS checks, when will the customs posts, which are there for the purpose of carrying out those checks, be demolished? Instead, the Secretary of State willingly presides over the ever-tightening EU noose on our economy, with agricultural machinery being the latest that has to kowtow to EU diktats. Meanwhile, trade diversion is rampant and the Secretary of State looks the other way. When will he stop acting as the Secretary of State for the EU and start acting as the Secretary of State for Northern Ireland?

I do not accept the hon. Gentleman’s characterisation. At some point, he has to acknowledge that following our departure from the European Union—this was the issue that the previous Government had to address—the United Kingdom has one set of rules, the EU has another and there is an open border. How do we deal with that? I am afraid that on mutual enforcement, the only idea I have ever heard him put forward is not a practical proposition. He needs to take some responsibility for the consequence of his own arguments.

The EU-UK deal was warmly and broadly welcomed across Northern Ireland to begin to unpick and undo some of the damage and friction created by Brexit, which was championed by some of those on the Opposition Benches. However, an FSB report out this week highlighted continuing problems, particularly for small businesses. Will the Secretary of State reassure businesses that there will be co-design and full consultation as the text and the outworkings of that very positive deal are brought through?

We will continue to consult as widely as possible in taking forward the agreement that has been reached and outlined with the European Union. There is help available for small businesses. It is important that it is as effective and easy to understand for those who seek to trade. I will look carefully at the report that the FSB has produced.

Regarding the EU trade agreement, what barriers is the Secretary of State aware of that currently hinder free and unfettered trade from Northern Ireland within the UK? What is the timescale for their removal?

Goods flow freely from Northern Ireland to the rest of the United Kingdom. Further, one of the great advantages of the trade agreements that have been negotiated with India, the United States of America and the European Union is, in the case of India, a significant reduction of tariffs on whisky, which will benefit producers in Northern Ireland, and being able to sell lamb into India. The deal with the United States of America will allow Northern Ireland farmers to sell their beef.

I call the shadow Minister.

Contrary to what the Secretary of State has just told the House, two weeks ago, the Federation of Small Businesses in Northern Ireland published a report suggesting that a third of small businesses that move goods between Great Britain and Northern Ireland have ceased supplying customers or partners either in Great Britain or in Northern Ireland. Under the Northern Ireland protocol, if the UK experiences diversion of trade, we are entitled to take unilateral action to safeguard our internal market. Will the Secretary of State tell the House whether he thinks that a third of small businesses ceasing trade in that way amounts to a diversion of trade? If not, perhaps he could tell us what would.

There are other small businesses that are able to trade perfectly—[Interruption.] The point that the hon. Gentleman needs to recognise is that if some small businesses manage to move their goods from GB to Northern Ireland, others can do so. In the end, it is a decision for an individual business where it chooses to sell its goods. It is the Windsor framework that applies now, not the Northern Ireland protocol, and I think he will accept that the Windsor framework represents a significant improvement on what was there before.

I call the Liberal Democrat spokesperson.

The Federation of Small Businesses has warned that small and medium-sized enterprises in Northern Ireland continue to face disruption under the Windsor framework and, more importantly and sadly, that the Government have failed to effectively communicate the supposed benefits of dual market access so far. If dual market access is indeed a competitive advantage, as so many people across this House think it can and should be, can the Secretary of State specifically identify what concrete benefits it is providing to Northern Ireland businesses right now? How does he respond to the growing criticism from firms across the UK who are burdened with red tape and the fog of uncertainty?

I was interested by that observation in the FSB report because, as the House will testify, I spend a lot of my time extolling the virtues of the dual market access that Northern Ireland has as a result of the Windsor framework. I meet companies as I travel around Northern Ireland who tell me about the benefits of it that they are feeling. I think we all have a responsibility to extol the virtues of dual market access because, in my experience, if businesses can see an opportunity that allows them to sell more products, they will seize it with both hands.