Chancellor: Improved EU relations is answer to trade diversion within the UK

Rachel Reeves says the Labour administration is continuing to implement the Tories’ Windsor Framework trade deal – but also “building on it” with a wider SPS arrangement with Brussels, which has yet to be agreed.

Her comments came in response to a question from the News Letter during her visit to Northern Ireland on Tuesday. Ms Reeves was asked about recent figures from the Federation of Small Businesses which showed that 34% of companies in Great Britain had stopped selling to Northern Ireland because of bureaucracy caused by the Irish Sea border.

Asked when the government planned to act to correct such trade diversion, the Chancellor reiterated the government’s commitment to the UK-EU deal.

“We are implementing the Windsor Framework, but we are also building on it with the deal that we struck with the European Union in May this year – that we’re now going on to implement.

“Those things facilitate more trade, and the flow of goods between Northern Ireland and the rest of the UK – and indeed between Northern Ireland and the European Union.

“We want to make sure that businesses here in Northern Ireland – and also businesses in the rest of the UK – have access to the markets here in Northern Ireland”, she said.

The Labour minister said that a “normalisation of relations” is “incredibly important” in a range of sectors, including food and farming.

That approach has largely been rejected by unionist parties on the grounds that it does not address the fundamental problem of the UK being in two separate regulatory zones for the trade in goods.

However, the UUP deputy leader Robbie Butler this week focused his criticism on the cost of the arrangements and argued that trade friction is “easing following the Government-EU reset deal”, but work remains to be done.

While a “strategic partnership” and “common understanding” between London and Brussels has been agreed, no deal has been reached and the current arrangements have not changed. Both sides will aim to strike a deal in which “the vast majority of movements” of animal and plant products between GB and the EU won’t need certificates or controls.