Steve Baker – 2024 Statement on the United Kingdom Internal Market

The statement made by Steve Baker, the Minister of State at the Northern Ireland Office, in the House of Commons on 1 February 2024.

I beg to move,

That the draft Windsor Framework (UK Internal Market and Unfettered Access) Regulations 2024, which were laid before this House on 31 January, be approved.

It is the view of the Government and, I believe, of the overwhelming number of right hon. and hon. Members across the House that the Union ought not be reduced to matters of the law or the constitution alone. Ours is a thriving economic, cultural and political Union whose health is insured, in no small part, by the free flow of trade across it. Enhancing that economic aspect of the Union is the purpose of this second set of regulations before the House today.

The views of businesses and traders on the progress that we have made are also important in the context of today’s debate. I am pleased to confirm that the early reaction from business has been promising. The view of a collaboration of 14 key Northern Ireland industry bodies was clear yesterday in saying that they welcomed the agreement.

The Government are clear that the old protocol created unacceptable barriers within our internal market, and I invite anyone to consider the full implementation of the old protocol against what we have achieved in the Windsor framework. The Windsor framework takes major steps forward, and I acknowledge that this is first and foremost an achievement of the Democratic Unionist party and also a great achievement of my right hon. Friend the Secretary of State.

The framework restored the functioning of the UK internal market by ensuring the smooth flow of trade within the UK, and disapplied a range of EU laws, including ensuring that Northern Ireland benefits from the same VAT and alcohol taxes as the rest of the UK. Members of the House can also be encouraged by the smooth functioning of the framework since October 2023, when the first phase of arrangements came on stream, supporting trade between Great Britain and Northern Ireland. I should just say that colleagues did ask me how it was going. I said, “Have you seen any news on it?” Of course, no one has; it has been going very well, and I want to thank and congratulate all those officials here and in Northern Ireland who have made that possible.

These regulations go further in that aim to strengthen our UK internal market now and in the long term. Following the agreement of the Windsor framework, the border target operating model sets out that we will begin phasing in checks and controls for Irish goods and non-qualifying goods moving from the island of Ireland to Great Britain from 31 January—indeed from yesterday. This is a powerful demonstration of Northern Ireland’s integral place in the UK’s internal market, and it rebuts incorrect claims that it is instead a member of the EU single market. The reality is that third country members of the EU single market will now have full third country processes applied, while Northern Ireland’s businesses will have full unfettered access to their most important market in Great Britain.

Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)

The Minister is absolutely right. Perhaps the most powerful illustration of the change that we have secured is to consider what will happen now on the ferry route between Dublin and Holyhead as a result of these new arrangements. A Northern Ireland haulier using that service will board the ferry, travel to Holyhead, leave the ferry and travel straight out of the port and on to their destination, with no customs procedures and with full unfettered access. In contrast, a southern Irish haulier arriving at Holyhead will be subjected to full UK customs procedures at the port before they can proceed. Does he join me in welcoming Northern Ireland’s restoration fully within the UK internal market?

Mr Baker

Yes. The right hon. Gentleman is absolutely right in what he has just set out, and I do join him in that. It is a proud day for me, as it is for him, and I join other Members in congratulating him on his courage in bringing all of us this far.

As a result of these regulations, we now have guarantees for Northern Ireland goods moving to the rest of the UK, via Dublin. This unfettered access is future-proofed, regardless of how rules evolve in either Northern Ireland or Great Britain. These regulations will more squarely focus the benefits of unfettered access on Northern Ireland traders. The regulations tackle avoidance of the rules and ensure that, for agri-food goods to benefit from unfettered access in avoiding sanitary and phytosanitary processes, they must be dispatched from registered Northern Ireland food and feed operators. We will also expressly affirm through these regulations that export procedures will not be applied to goods moving from Northern Ireland to other parts of the UK’s internal market.

John Redwood (Wokingham) (Con)

It has been said that maybe 80% of goods moving from GB to NI will be able to use the internal market lane. Why will 20% not be able to do so, and why would the UK Government, who I was told were in charge, not want to ensure that practically all goods use the internal market lane?

Mr Baker

With great respect to my right hon. Friend, with whom I have gone a very long way in this cause, he might like to revisit the text. The point is that the 80% of goods going on that route are staying in Northern Ireland; they are UK goods. The other 20% are goods that are going on to the European Union. That is the point: 80% is UK internal market trade, and 20% is trade going on to the European Union.

Sir Jeffrey M. Donaldson rose—

Sammy Wilson (East Antrim) (DUP)

Will the Minister give way?

Mr Baker

I will. I cannot say that I am astonished; this is the important moment.

Sammy Wilson

Does the Minister accept that all the statistics show that it is not true that 20% of the trade that goes through Northern Ireland goes to the Irish Republic? In fact, it is about 0.1% to 0.4%. Much of that trade, which will go through the red lane, consists of goods going into Northern Ireland, either to warehouses or to manufacturers in Northern Ireland. They might never go near the Irish Republic. They might stay in Northern Ireland, go back to GB, or go to the rest of the world, yet such products will still be subject to checks going into Northern Ireland.

Mr Baker

I would not accept that. I am not in a position to set out the statistics, and I do not doubt that the statistics need some work applied to them. It pains me to say this, as I have always regarded the right hon. Gentleman as a great friend—he and I have walked a long way together on this and I have always regarded him as an ideological bedfellow, both on the Union and on Brexit—but as his group leader, the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson), said earlier, we voted for, and fervently supported, the protocol Bill. We said that we were willing to have a red lane in order to safeguard the legitimate interests of our friends and partners—and family members, as the Irish ambassador Martin Fraser said. This was always a family dispute, and we were always going to get through it.

Our friends in Ireland, and indeed in the EU, have legitimate interests, which we should have the humility to respect. Even if we had acted unilaterally as a single united Parliament, ridden roughshod over any international negotiation and just done what suited ourselves with the protocol Bill, we would have implemented the red lane. I am afraid that I will part company now with anyone who says otherwise. We would rightly have implemented the red lane, even acting unilaterally, out of respect for the legitimate interests of our friends and trading partners.

Sir Jeffrey M. Donaldson

Will the Minister join me in welcoming the announcement on Tuesday of agreement on a joint legal text that will significantly change the status of goods coming from the rest of the world into Great Britain and travelling on to Northern Ireland? The effect of that change, which is part of the arrangements and the published Command Paper, will be that some 4 million goods movements between Great Britain and Northern Ireland will now be moving out of the red lane and into the UK internal market system. That is this party delivering, and securing real change that ensures that more goods flow freely between Great Britain and Northern Ireland, save for those going into the EU or that are at risk of doing so because they are part of a manufacturing process for goods being sold to the EU.

Mr Baker

I strongly welcome that intervention. I thought that the right hon. Gentleman was going to mention the draft joint agreement on tariff rate quotas. For a while I was concerned that TRQs needed to be applied to Northern Ireland so that Northern Ireland could share fully in the benefits of free trade agreements with the rest of the world.

I hope to return to this later, but in case I do not have the opportunity to do so, I want to say what an extraordinary situation Northern Ireland is now in. Northern Ireland is not in the single market. I draw everyone’s attention to page 4 of the Command Paper, which sets out checkmarks comparing Northern Ireland with Ireland, as a member of the EU, and with Norway, which is a member of the single market through the European economic area but is not in the customs union or the European Union. Northern Ireland really has the minimum of EU law compatible with unfettered—or privileged, perhaps—goods access to the EU market, and consistent with having an open, infra- structure-free border.

I wonder at people who thought that we could leave the European Union and establish a hard border, or do absolutely nothing about the border. We were always going to leave the European Union and have special arrangements in relation to Northern Ireland. This is a moment of great feeling for me, because before the referendum vote, I and other colleagues set up a committee of Eurosceptics to consider how we might deal with these issues. I confess that we did not have the SPS and customs expertise to proceed. That then became the great story of this battle.

If the United Kingdom had united in accepting the result of the referendum, if this Parliament had united in going forward with resolve to further our own interests as an independent nation state outside the EU, but crucially with the humility to respect the legitimate interests of our friends and partners, and if from the beginning we had had united resolve and clarity of vision, I do not doubt that in a spirit of friendship and good will—the kind that exists today between Ireland and us, and between the European Union and us, thanks to the work of the Secretary of State, the Prime Minister and others—we would have been, as we are now, in a totally transformed position to make our way forward as friends, respectful of their interests and resolved on ours.

That is not what happened. The House does not need me to rehearse it. It has taken eight years of drama for us to arrive at this moment, when we have reduced EU law to this extent and put in place a red lane to protect the legitimate interests of Ireland and the EU. That is something that we should all be very proud of, after everything that we have faced and all the risks that could have put us in a far worse position.

Paul Girvan (South Antrim) (DUP)

I totally understand the need for a red lane to ensure that goods going into the Republic of Ireland are checked, but there is a business in Northern Ireland 98% of whose sales are into Northern Ireland. The stuff all comes to it in one container. Maybe 2% of that load might make its way into the Irish Republic as part of a service agreement with another dealer. I am talking about a major firm in my constituency that has an all-Ireland approach. That means that the red lane applies to every single item, even though 98% of its stuff is used in Northern Ireland, Scotland or England. It is a main distributor, and it will end up having to put all its goods through that. A job of work might need to be done to try to ameliorate its problems.

Mr Baker

The hon. Gentleman is right that a job of work will need to be done; I assure him that my right hon. Friend the Secretary of State has just said that of course it does. I am grateful that we will be doing that further work in a spirit of good will and co-operation through the joint committee with the European Union. If the hon. Gentleman drops an email to my Northern Ireland Office address, I shall be glad to visit the firm with him, bringing officials, and we will see whether we can move further to assist it. I need to find out more about its exact circumstances.

My goodness, that was a long series of interventions. This legislation ensures that we can avoid any unnecessary gold-plating in the implementation of new arrangements through new statutory guidance on section 46 of the United Kingdom Internal Market Act 2020, setting out how public authorities should have special regard to Northern Ireland’s place in the UK’s internal market and customs territory, and the need to maintain the free flow of goods from NI to GB. We will take a power through the regulations to issue such statutory guidance, and public authorities will be required to have regard to it. Those changes to the law will help to ensure that public authorities take every proper effort to prevent new barriers to intra-UK trade. In doing so, they will maintain and strengthen the health of the UK internal market in the long term.

Jim Shannon (Strangford) (DUP)

One issue that greatly vexes those in my party is that farmers in my constituency, and in others, have said that vets now cost even more, as they have to source medicines and devices from an acceptable source. The Command Paper suggests that the issue has not been resolved but will be worked on. Is that a firm demand on the Government, or is it just another working group that will talk about things? My hon. Friend the Member for North Antrim (Ian Paisley) has been at the fore on this. We need a person on that committee to push things forward. If we have a solution through the committee, we need a timescale for delivery.

Mr Baker

We understand that point and we are listening to the hon. Gentleman and others. We are resolute that of course Northern Ireland must have proper access to veterinary medicines, and will be glad to work with him and others. He will appreciate what the priorities are and have been, and we will certainly continue to make pursuing veterinary medicines a high priority. I am personally resolute on the issue and look forward to pursuing it.

The regulations must be seen in the context of the overall package agreed between the Government and the DUP. The passage of these regulations demonstrates the Government’s commitment to taking forward that whole package and to maintaining the participation and trust of the whole community in Northern Ireland’s political processes and the Stormont institutions going forward.

If I may touch on what the hon. Member for Foyle (Colum Eastwood) said earlier, I, my right hon. Friend the Secretary of State and the whole Government are completely committed to the Belfast/Good Friday Agreement in all its dimensions. As I said to one nationalist politician—about a year ago now, if I recall—it is perfectly possible to be a Unionist and support the Belfast/Good Friday Agreement in all its dimensions, just as it is possible to be a nationalist or a republican and support the Belfast/Good Friday Agreement in all its dimensions. It is the beauty and the triumph of the agreement that we can all support it and move forward.

I am trying to say this as gently as possible: I can understand a degree of discomfort from the hon. Gentleman, because this is a big breakthrough for Unionism. A Unionist Conservative Government have agreed to do Unionist things with the Democratic Unionist Party, and that is something I am very proud of. However, that does not in any way diminish our impartiality, or our commitment to governing or seeing to the government of Northern Ireland in a proper manner.

Colum Eastwood (Foyle) (SDLP) rose—

Mr Baker

Before I give way to the hon. Gentleman, may I just say that I think, after the experience of the last eight years—perhaps the last 14—I need defer to no one in my vociferous commitment to democratic self-determination.

Colum Eastwood

The Minister says he supports the Good Friday agreement in all its parts. Does he support the bit that says that the Government should be rigorously impartial?

Mr Baker

Yes, I—[Interruption.] I do not quite hear the comment from the leader of the DUP.

Sir Jeffrey M. Donaldson

Not on the Union!

Mr Baker

It has long been said that this is the Conservative and Unionist party and we have long been understood to be a Unionist party. This agreement is entirely consistent with both our Unionism and our full respect for all dimensions of the Belfast/Good Friday Agreement. We will continue to govern in a spirit of good will and impartiality.

Sir Robert Buckland (South Swindon) (Con)

Will my hon. Friend give way?

Mr Baker

I will, but after I have given way to my right hon. and learned Friend, I will make progress and finish so that other colleagues can have their say.

Sir Robert Buckland

I have listened carefully to the interventions from the hon. Member for Foyle (Colum Eastwood) and the concerns that he and others will have about the scrapping of the legal obligation with regard to the all-island economy. Is the point not that while, as a UK Government, we have to uphold the rules that apply within our United Kingdom and the promotion of our own internal market, that does not detract from the access to the single market that Northern Ireland businesses will continue to enjoy? That is the compromise that has been reached here. Therefore there is not a binary either/or choice; the hon. Gentleman’s concerns can largely be met and continue to be met in a way that is fully in accordance with the Good Friday/Belfast Agreement.

Mr Baker

I agree with my right hon. and learned Friend, who demonstrates his expertise.

I look forward as much as anyone to the re-establishment of the Assembly and the Executive, and along with that the re-establishment of the north-south institutions. They are much needed and I look forward to their work. I do not mind admitting that I find myself able to work constructively with politicians of all political parties in Northern Ireland, and I am glad to do so.

Let me return, in concluding, to what is at stake in this process. I firmly believe that all parties in this House and all parties eligible to form part of an Executive want Northern Ireland to work. I have seen what unites political leaders in Northern Ireland: a real determination to make life better for their constituents—and, my goodness, on a wide range of fronts that is necessary—and to allow Northern Ireland to grasp the opportunities of the future—and what opportunities they are. I elaborated on some of the things Northern Ireland has before it right now. If we combine the institutional arrangements before Northern Ireland with the very substantial financial package to transform public services and deal with the public finances, and if Northern Irish politicians reach out and grasp the opportunity now before them, they can make Northern Ireland a beacon to the world—a beacon of prosperity and, I hope, of reconciliation. These regulations are part of that process and I commend them to everyone in the House.