Welcome to the Northern Ireland Affairs Select Committee. Today we are looking into the operation of the Windsor framework. I would like to thank Anne-Marie, Nichola, Neil and Jennifer for coming today. Could you introduce yourselves and say who you are?

Good morning. My name is Anne-Marie Murphy and I am the director of strategy and emerging markets at the Consumer Council for Northern Ireland.

Good morning. My name is Nichola Mallon and I am head of trade and devolved policy at Logistics UK. We are a trade association with over 20,000 members across the UK, which are global, national and regional businesses that move freight by road, rail, sea and air.

I am Neil Johnston, the director of the Northern Ireland Retail Consortium, which is part of the BRC. We have over 200 members, about 100 of whom are in Northern Ireland, including every one of the big supermarkets, all of which operate in Northern Ireland.

I am Jennifer Pheasey, director of public affairs at the Horticultural Trades Association. We have members in the four nations of the United Kingdom and they deliver for gardens and green spaces. They are typically retailers or garden centres, landscapers, manufacturers, suppliers and growers.

What difference has the Windsor framework made to the movement of goods from GB to Northern Ireland? What are the remaining challenges that you would like the Government to address?

The Windsor framework is an improvement on the Northern Ireland protocol, but there are some remaining challenges in terms of the movement of goods from GB to NI. There is a consensus within our membership that the Windsor framework was to some extent oversold. It created a misperception that all the challenges under the Northern Ireland protocol had been removed. That has created two effects: it has contributed to a lack of awareness, particularly among GB businesses, of the requirements that must be met under the Windsor framework; and, to some degree there, is a reluctance among some GB-based businesses to trade into Northern Ireland because of the administrative burden and cost of meeting all the necessary requirements.

For us it was, as Nichola says, an improvement. However, it has become more and more difficult in recent times. We perhaps started from the wrong place. Basically, we have an overly bureaucratic approach. We have successfully achieved what we were required to do—we have high levels of compliance at the moment—but it is very difficult. Due to the nature of our businesses, what is in the back of the trucks is highly diverse and regularly changing. It is not like you can get this right once and be done. It is a never-ending saga. From our members’ perspective, particularly if you take the likes of Asda, Co-op, Sainsbury’s and Iceland, there is no real reason why a product going into a Co-op in Northern Ireland—they do not have stores in the Republic—should be any more likely to end up in the Republic of Ireland than if it were going into a Co-op in Dorset or anywhere else. They are being required to fill in a vast amount of paperwork. What is retailing about? The BRC often says it is about offering good prices, value and choice, but a lot of it, particularly in food retailing, is about the trust and integrity that people place in these companies, yet we do not quite see that level of trust in a proper trusted trader scheme. We are not Del Boy and Rodney. We are not trying to get our goods secretly over the border into the south. We should be respected to be able to comply with that. In the case of Marks & Sparks and Tesco, which have big operations in the Republic of Ireland, they have invested heavily in track-and-trace technology. They should be relied upon, without vast levels of inspections and paperwork, to be able to deliver that. As Nichola says, it is better than before, but we have achieved a lot and we need to move forward in that spirit. Perhaps we can look at ways to lessen the load going forward.

For the horticultural sector, the sentiment and ambition of the Windsor framework was welcome, but the gulf between headlines and the commercial reality is quite significant. There were two small steps forward in the Windsor framework for us. One was the ability to trade seed potatoes from grower to grower. That is not from grower to garden centre or direct to consumer. That was a small development but certainly not an unlocking of the seed potato trade. The other one was the introduction of the Northern Ireland plant health label scheme, which presents some administrative easements if you are able to guarantee your movements will stay in Northern Ireland and not move into the south. That still comes with a significant amount of burden. There have also been some headlines at various times around the prohibited plants list. Fundamentally, the challenge we have is that Northern Ireland is within the EU’s plant health area. The Windsor framework does not change that. Many of the challenges that we face in terms of compliance, delays, checks, inspections and so on will not be addressed until we see a change there. The Windsor framework does not touch that. Many of the challenges that have been outlined by Neil and Nichola are very much experienced by the sector.

What improvement will the introduction of the UK internal market scheme after 31 March bring, compared to the present, Nichola?

That will facilitate green-lane movements from a customs perspective. From speaking to our members, if you are moving one or two commodities and it is a very regular journey—there is no real variance—you will benefit from the internal market movement information scheme. That is certainly the case. The challenge comes if you are moving vast quantities of different commodities that change on a very regular basis. When we speak to our members about their appetite to avail of the simplified processes from a customs perspective from 31 March, they say it is very much in the “too hard” box. There are challenges. From the logistics industry perspective, we are very concerned in respect of the changes to parcel movements from 31 March. Currently, parcels move under the waiver—there are no new requirements—but from 31 March there are significant new processes that will be required if you are moving consumer parcels, and particularly if you are moving business-to-business parcels. We have been working with HMRC, which has improved its communications of late, but there is a need for a much greater awareness campaign in the last remaining number of weeks, to raise awareness and help with preparedness.

I would echo that. We have great concerns about 31 March. Given the complexity of what is being moved, we have a situation where one of the supermarkets is filling in tens of thousands of customs declarations at a cost of £1.5 million. If you replicate that across the sector, it is a significant burden. Although we are assured by members that they are in a position to go, it is highly likely that we will notice problems on 31 March.

Neil, you say checks under the retail movement scheme increased in 2024 and led to additional delays. Why is that, given that the percentage of goods subject to identity checks has decreased?

That is a very good question. We would like to know. As I said, we have not got to a situation where we have a proper trusted trader scheme. People are still subject to checks. Nearly all the supermarkets have had either attempts made to send trucks back to Scotland or trucks actually being sent back, which in my mind should never happen. We do not have a situation where the level of checks has been reduced; in many cases, it is increasing. Nichola may have more evidence or actual detail on that. We have seen a large number of checks. Statistically, it seems to be very hard to get a grip on the actual percentage of checks. Certain members seem to feel the heat more than others, despite the fact we were assured that nobody would be put on the naughty step and that a failure to comply one week would not mean you would be singled out going forward. It is disappointing, particularly because, as I suggested at the beginning, the risk of any of these products going astray from supermarkets that do not have southern premises is negligible. Why we have to have this level of checks is certainly a question that we are asking repeatedly.

Some of our members report a very positive experience of moving under the Northern Ireland retail movement scheme, but we have other members—large household names—that are experiencing a high percentage of checks. I would echo Neil’s comments. It would be appreciated if we had more detail around why vehicles are stopped. That would assist with businesses’ understanding and preparedness. Some of our members have goods that qualify for the NIRMS route, but they are choosing to continue to go down the red lane. Why? They report that it is easier in many ways, it is much more predictable and, of course, they have the additional choice of serving both the EU and the Northern Ireland market. I would emphasise Neil’s point around having a more trusted approach to checks. Where we can, we need to maximise that. Certainly, our members are working tirelessly to ensure they are compliant. When a lorry is held up at the port, that has significant knock-on consequences. It has consequences for the depot that the lorry is due to arrive at, which then subsequently distributes to different stores and online shops, for example. It has knock-on effects for that driver in terms of their scheduling and it also has knock-on effects for logistics operations, because they have to work as efficiently as possible and keep all vehicles moving. It does have challenges.

Ms Murphy, this question may be specific to you. What, if any, have been the main benefits or challenges reported by consumers in Northern Ireland in relation to the framework?

Consumers are not aware of what exactly is causing them difficulties, whether it is EU exit, the Windsor framework or the implementation. We have done research on this over the last four years, as included in my written brief. The key areas of concern for consumers and what they are really invested in are price increases, the economy of Northern Ireland, maintaining a frictionless border on the island of Ireland, the introduction of customs checks and what that might mean for products getting to them, and whether this will increase the cost of products. In a recent pulse survey that we did in December, there were concerns from consumers about product availability, delivery and delay. That is the main area of concern. Food prices and the availability of food products are the largest areas. It is not helped by the fact that the last four years have been one of the most complex economic environments that consumers have had to deal with. It is very hard for them to unpick exactly which issue or complexity is resulting in the problems they are having. Largely, our research shows us that when it comes to EU exit, the majority of them are saying that food affordability and availability are being impacted by the EU exit, the Windsor framework and the outworkings of this.

Can we explore those concerns a little bit? Are they concerns for the future? Are they concerns now? Are you able to identify certain strands where the concerns around availability are manifesting themselves, or where they fear they may?

Certainly, they are a concern now both from a price perspective and with certain products being available or the choices on shelves. Food prices are an issue that consumers are most concerned about for the future. It is also worth while saying at this point that parcel movements and being able to get products from Great British suppliers is another area of concern for consumers. We are seeing that through an awful lot of our research. The categories that are causing them concern are home and furniture; garden plants and seeds; clothing and footwear; health and beauty products; and technology and entertainment. There is a wide range of areas that are causing concern for consumers and where consumers are not able to get retailers to deliver to them. It is also worth while to mention at this point that, as I am sure you are all aware, Northern Ireland has a very high percentage of microbusinesses with under 10 employees. Oftentimes, they react in exactly the same way as consumers when it comes to their understanding of the arrangements and their capacity to deal with them. That is also an area of concern for those businesses not being able to buy from suppliers in Great Britain. What they do about that is also an area of concern.

Has there been any sort of rejigging of the supply chain in terms of transport logistics in order to try to ameliorate that?

I am not best placed to answer that. I am unsure.

Anecdotally, we pick up that supply chains have changed. The challenge, though, is economies of scale. If you are looking to source on the island of Ireland, for example, you are not able to avail of the same economies of scale you would be able to if you were sourcing from the GB market. Certainly, we are picking that up from some of our members.

I would echo that. There are certain products that have come through the south, but largely it is those big GB-based operations and massive economies of scale. What we have lost in all this is that, once upon a time, we had a British and Irish market for food. Ireland, north and south, benefited hugely from that, as did the rest of the UK. We do not have that now. Supermarkets have looked at bringing things in through the Republic, but they are about 20% or 30% more expensive. It is basically a complete non-runner.

For horticulture, we are over 90% SMEs, so we have seen many supply chains diverted. Last week, one garden centre based in Northern Ireland said to me, “I just want to get plants that I have been getting for many years from my own country, and I cannot.” We have seen, therefore, businesses looking to invest elsewhere. They have looked to set up hubs in the EU, whether that is in Dublin or on the continent. That is diverting investment and jobs that could and should be here.

In addition to supply chain responses, one of the business models that is under a lot of pressure is groupage for logistics. That is quite a unique model, in the sense that you are moving multiple different loads for different consumers. The administrative and cost burden is much more significant. That is under challenge, which is concerning from a logistics point of view and for the sole traders and the SMEs that groupage serves. One of the things that we have been discussing with HMRC is the possibility of a trusted haulier scheme for groupage movements, for example, which would enable the haulier to have more time to get all the information it needs to keep the goods moving. If we could get movement on that, that would be a considerable easement in terms of the pressures in the logistics industry.

On that wider point, you have mentioned HMRC and that slight change of approach. What are you picking up as the stock answer, if you will, from HMG? Is it, “We are having evolutionary discussions about the next steps with the EU so just bide your time,” or, “We going to pat our head and rub our tummies at the same time and try to finesse Windsor as well”?

From the logistics point of view, HMRC has definitely improved its communications in the last number of months. It has been holding a series of webinars on the changes. It has been holding a series of roundtables in GB, which is important. We have been asking for that, and that has been an improvement. Certainly, we have picked up a change in tone. The UK-EU reset that has been spoken about has led to a more positive approach to things. Looking at the bigger picture—and there are very big issues in the geopolitical space and the trading space—our industry is concerned that Northern Ireland is not forgotten about and that, where we can, we find easements and we try to reduce friction and ensure there is a smooth flow of trade.

Rest assured that Northern Ireland is never forgotten about. Chair, can I turn to dual market access? Back in the day, many of us trumpeted this as a unique proposition which, if exploited and understood well, could deliver some significant benefit. Has business benefited from that dual access, or is it a process?

At this stage it is difficult to say. We have noticed that there is increased activity within Northern Ireland in terms of looking to sell on the basis of Northern Ireland’s USP. For example, Invest NI has established a dual market access forum, which Logistics UK sits on. There are still a couple of issues that we need to focus on. First, among some EU member states and globally, there is at times a lack of understanding that Northern Ireland is part of the EU single market. It is still considered not to be. That creates barriers and we lose opportunities for trade. There also needs to be better partnership working between the Northern Ireland Executive, the UK Government and the EU to sell the unique market access that Northern Ireland has. Logistics UK would be supportive of the Institute of Directors’ call for the EU to establish a Northern Ireland economic envoy, much like the role that Joe Kennedy played from a US perspective. On the issue of organic products, we have some members who are moving organic products from China to Northern Ireland and then distributing them much wider across the EU. Government need to be working with industry to understand, yes, what the barriers are, but also what the opportunities are and then to build on that. To date, the focus has very much been on compliance with the Windsor framework. That continues to be a big priority for our membership, but we need to all put our shoulder to the wheel now in terms of realising the economic and trading opportunities.

Good morning, everyone. Clearly, we are not in the EU single market, but we align to EU single market rules on goods, which is particularly important for logistics. Some of those EU folks who believe we are not in the single market are right. In fairness to all four of you, you come to an occasion like this and, from each of your different perspectives, you are asked to reflect on that which has come and give us some of your aspirations for that which is to come. This is a moving feast. The Windsor framework brought forward changes and they all had different implementation dates. On parcels, for example, the first aspiration was 31 October. HMRC was not in the right place. It was not communicating well. The delay was welcomed broadly by business, but the date of 31 March is still not guaranteed. If it is not 31 March or 1 April, it could be 1 May. That seems to be the direction of travel. In different ways, you are all highlighting issues that you have come across that you see as barriers. It is right that those are explored. Have you all engaged with Lord Murphy’s review?

Not as yet, no. The NI Consumer Council is well embedded whenever it comes to Northern Ireland Government Departments, UK Government Departments and the EU. I expect we will engage with it, and we would be happy to do so because we have a lot of very valuable consumer and microbusiness research, which will be really pertinent, but not as yet.

Not as yet, no, but we stand willing to participate in that review.

We have exchanged emails, but nothing as yet. If I carry on from your point, you mentioned the parcels and 31 March; for me, July and phase 3 labelling is much more pressing on the horizon.

In fairness to colleagues, both issues are going to come up.

We have not engaged as yet, but we are working with Government through the horticultural working group to see what opportunities there are to ease further some of the challenges that I have set out already.

I encourage you to do so at this stage.

Our understanding is that the 80% internal market guarantee was based on data that HMRC had about movements. In respect of the guarantee and the independent monitoring panel, we are still waiting on the publication of detailed terms of reference. We welcomed the appointment of the three members and the recent meeting with the Northern Ireland Secretary of State, but it will be important to start to see some of the detail in terms of the panel’s role and remit and how issues such as the internal market guarantee will be enacted.

We should do anything that can be done to ease trade and maximise the movement of goods from GB to Northern Ireland. It is our biggest market, so we are keen to work with the independent monitoring panel. We are very keen to work with Intertrade UK. We are also keen to see how all that interfaces—how all those organisations or bodies work together to ensure not only that there is meaningful engagement with industry but that we are addressing barriers where possible and maximising the opportunities.

Where we are at the moment is like a swan on a lake. The reason why the consumers have not noticed anything is because Nichola’s members and my members are paddling furiously to comply. We have achieved a lot. I do not want to be overly negative. We have had a lot to achieve and a lot of hurdles to overcome, but we have succeeded in doing that. It is going to become more and more difficult, particularly, as I mentioned before, the phase 3 labelling. For some branded products, we cannot tell suppliers to brand them for Northern Ireland. To my mind, the Government have not really been clear on how they are going to resolve that problem. They say they have taken the powers to require those producers to label for Northern Ireland, but it is not very clear how that will happen. Come July it is highly likely that there will be gaps on shelves. Household products that people are used to having on the shelves in Northern Ireland may well disappear. I hope not. We have had this before with phase 1 and phase 2. We will try to keep that to an absolute minimum, but there may be products that disappear come the end of July. Part of the reason for that is that getting guidance from the Government has always been a case of too little, too late. We understand the reasoning behind that—to try to get the guidance finessed and agreed with the EU, where possible—but it means that, for example, there are many shelf-stable products that are in supply chains now that will still be in supply chains at the end of July, so there is no prospect of them being properly labelled “Not for EU” by 31 July.

I would like to see it engage with Government. At the end of the day, it is for Government to set the parameters of how we ensure that consumers in Northern Ireland still have the same broad range and value of products that consumers in GB have.

We are slightly different because we are handling SPS goods that are typically subject to a significant number of checks. We have the NIPHL scheme. There are different ways that you can move plants: you either move it with the NIPHL scheme, which means you have to guarantee that it will stay in Northern Ireland; you can move it with a phytosanitary certificate, which is essentially a kind of red-lane approach where you do not guarantee where it will end up; or there is a small easement around moving parcels under 2 kg, but that still requires a phytosanitary certificate. One of the key issues that we have, and why we potentially have not seen the NIPHL scheme being taken up so much, is the definition of when a good becomes a Northern Ireland good. This is a good example of where greater guidance and information around these various schemes or initiatives would be really helpful. To explain that issue, a grower may sell a small plant to a grower in Northern Ireland; we do not know how long they will grow it for, and then we need a definition of when that becomes a Northern Ireland good and therefore is able to travel freely. For us, there are quite a few things that would make this easier, but a key priority would be to have greater guidance and definitions, which would enable a greater take-up of some of the schemes that may have slightly easier admin burdens. Going back to your initial question, there are lots of different challenges on the table for us to work on. We need to understand and navigate all these different nuances and bodies, which are really quite complex not only for us sitting in a national position but for individual businesses, especially if you are an SME. Just understanding all this is really challenging.

I want to ask about the new parcel requirements from the end of this month, which you have already touched on briefly, Nichola. How prepared are businesses and carriers for that? How has the communication about the new requirements been?

We welcome the delay to 31 March, or a slightly later date than that, if that is what transpires. We remain concerned about the level of awareness, particularly for business-to-business parcel movements, because new processes have to be put in place. Either the sender or the receiver has to be UKIMS authorised. There are restrictions on the movement of some SPS goods. For example, if I am ordering pet food online or an afternoon tea set from Devon, that will not be able to move through the UK carrier scheme. There are a lot of new processes. In Northern Ireland, we have found that our members are very switched on. They have been following this over the last number of years. We still think there is more work to be done in terms of raising awareness among GB businesses. As I say, HMRC has been carrying out a series of roundtables to do just that. This is the aspect of the Windsor framework that really comes into people’s lives because of the rise in e-commerce. Certainly, our members are spending a lot of time engaging with their GB customer base and GB hauliers and making sure they are aware of what needs to be done from the go-live date.

In contrast to Nichola, who represents the smaller ones, my guys are the bigger guys. They are shifting a huge amount of material, whether it is Sainsbury’s, Next, Marks & Sparks or Amazon. Amazon is a member. They all say they have their processes in place and are quietly confident. I personally will believe it when I see it, because it is very complex and because of the number of parcels being moved and the number of people supplying in. I am sure the companies think they have everything, but they are reliant on what is coming into them. “We shall see” is the answer.

If I could add to that, HMRC has said its approach will be one of pragmatism, education and support. We have been engaging with HMRC to ensure that that pragmatic approach is translated into operations on the ground through Border Force and so forth. We are being reassured that there will not be any changes; it will all be risk-led and intelligence-led. It is very important that the policy approach and operations on the ground are aligned.

Anne-Marie, I am sure the NI Consumer Council has heard from a lot of very small businesses and recipients who have faced challenges so far. How do you think people are prepared for it? How have the communications been?

The difficulty about this is that Northern Ireland consumers will be on the receiving end of these arrangements. It is going to be a grandmother sending a gift to her grandchild in Northern Ireland; it is going to be a business sending something to a consumer in Northern Ireland; it is going to be a consumer in the UK returning a product to a business in Northern Ireland. There are three different processes already. Our parcels and online shopping research has already identified that there have been some difficulties in relation to delivering to Northern Ireland, which has been either businesses deciding that they are not going to deliver to Northern Ireland because it is too difficult, or mistakes in the process. It is not going to be business as usual from 31 March. Although we do not have any evidence that that is going to impact parcels adversely, we really believe that monitoring needs to be done. Royal Mail has recently consulted on the changes to its terms of service, which mean that if a parcel coming to Northern Ireland from GB does not meet the data requirements, they reserve the right to stop it or not deliver it, and so on. Monitoring that, ensuring those processes work and testing those processes is really important to ensure the recipient sitting in Northern Ireland gets their parcel. There is a lot of work to be done. We have worked with and spoken to, and speak regularly to, the Royal Mail, HMRC and the Post Office. We have a statutory remit when it comes to post. They are all reassuring us that the processes are in place and they are ready. That is where we are at, but we will continue to work in the space with them.

Jennifer, did you want to add anything to that?

Yes. The mail-order situation for plants, bulbs, seeds and so on is basically zero. You cannot really send anything, because the requirements essentially mean that the consumer needs to be a professional operator to receive the parcel. Even sending something very small, such as a couple of packets of seeds, would require a phytosanitary certificate. It is just not commercially viable to spend that time doing that. I spoke to one online retailer in the horticultural sector, who said to me they estimated they would need to add a surcharge of £10 per parcel to cover all the admin burdens. That is just not going to be paid for the value of goods that are being sent. By the time you have gone through all the certification, it would also potentially mean it would take two to three weeks for it to arrive. That is not what consumers expect or should have as a service-level agreement. They should expect a much quicker service, as we do now. For us, the mail-order issue is one of the key challenges in our sector. We would really like to work through that and see whether there might be an opportunity, potentially under the NIPHL scheme, to see some potential easement or to look at how we might be able to work with that scheme, which has a slightly lighter admin burden, to send direct to consumers. At the moment, it needs to go from a professional operator to a professional operator. The other option is that you invest and set up a hub in Northern Ireland. As we have talked about already, you would export to yourself and then distribute. That would be a huge investment. Given the size of the market and the types of businesses and SMEs we are talking about, it is just not an option. There is no quick win within this space, but we hope to keep working with Government to see what might be possible.

Looking to the bigger wins, for those challenges that your businesses are facing, and the others you have discussed with us today, how would an EU-UK veterinary and SPS agreement mitigate or change that for you?

That would be a completely different context. It would very much be a case of starting from somewhere completely different. It would definitely remove the need for a lot of the checks.

Could you quantify it?

It is very difficult to quantify. It is certainly not a silver bullet, because there would still be a lot of other requirements. In addition to that—we have not touched on this—there is EU divergence in other areas. It would certainly be a positive step. I would like to say that we could remove all the “Not for EU” labelling—a lot of that is a huge burden to my members—and vastly reduce the admin and bureaucracy. It would certainly be a significant step in a positive direction for my members if there were an SPS agreement.

It would be extremely welcome. We would be looking for an SPS agreement that addresses GB-NI trade for plants, seeds, bulbs and so on, but for us the fundamental point would be that it would have to include recognition and respect for each other’s plant health regimes. That would ultimately unlock many of the challenges that I have outlined. We do not want to see at-border checks. Our products are perishable. Any delay adds damage, risk, cost and so on. That is one thing we certainly would like to see removed. Furthermore, we need to remove things like phytosanitary certificates. Nobody is benefiting from that. It is feeding paperwork and admin burdens. Quite often, biosecurity risks and concerns are brought up with us. We had national measures in place when we were members of the EU to address some of the risks around pests and diseases. We are an island. All EU member states have those measures. We would hope that we would still be able to have a robust system of biosecurity here. Biosecurity is absolutely a top issue for our businesses—of course it is. We hope to be able to find a negotiated SPS arrangement that could achieve minimal admin burdens and have a robust biosecurity system.

Unfortunately, we went through a few years where senior politicians enjoyed saying, “We do not care about the rules. The rules are really boring. All this red tape is stifling businesses.” That undermined confidence in biosecurity and other standards and rules, certainly for Britain. Nichola, would that affect your members?

Logistics UK would be very supportive of a comprehensive SPS agreement, because it would reduce or remove the friction on the movement of those goods from GB to NI. We are a UK-wide trade association, so it would also address the friction on GB-EU movements, which is crucially important. We still have issues around customs, which our members have to engage in. That is a separate matter, but certainly on SPS movements it would lead to a reduction in the friction on trade.

I want to come back in to emphasise that, as Nichola says, it is not just GB to Northern Ireland: it is GB to EU, and it is also EU into GB. I probably should emphasise the integrated nature of particularly the food supply business. The Republic of Ireland and Northern Ireland are huge suppliers of food to GB. There is obviously not a problem from Northern Ireland into GB, but anything that can ease the movement of food throughout these islands would certainly be beneficial.

Consumers want affordability, choice and access. If that is the outcome of that, we will welcome it.

I want to pick up on the “Not for EU” labelling. You have spoken about this Neil, saying that products already in the supply chain are not properly labelled, and that there are gaps on shelves of household products. What impact has the “Not for EU” labelling requirements for goods moving from GB to Northern Ireland under the retail movement scheme had on businesses so far?

It has been a huge imposition, because you have essentially got a situation where suppliers have to have separate print runs for labelling. The requirements in shops for posters and edge-of-shelf labelling as well are quite burdensome. We said from the outset that none of this was necessary and that all the monitoring and control of the supply chains could be done by our members. We did not need the labelling, and it is not a requirement that we think should be there. We could monitor all these products without all of this. As someone who grew up on the border and goes home very regularly, it strikes me as unnecessary to see “not for consumption in the EU” in a shop in Castlederg, when you are three miles from the border. Thankfully, the good citizens of Castlederg and Donegal clearly pay no attention to this, so what purpose does it serve to tell somebody not to eat the sausage roll they buy in Castlederg in Castlefinn? It is slightly crazy. In terms of cost, you are having to run separate logistic chains, and wrap pallets in plastic that says “Not for EU”, including over the top of the of the cage, to put them in the truck, to send them to Northern Ireland, when there is no risk for that truck. I regularly see a 40-footer from the Co-op that has come from the north of England—it reaches Castlederg mid-morning. There is no danger of these products going into the Republic commercially. They have been taken into the Republic in large scale by consumers. It has just been a huge imposition. To date, though, largely because it has been on supermarket own-branded products, which supermarkets can control, in phase 1 and phase 2, and it has been rolled out gradually, the consumers have seen very little change on the shelves. It has been a huge imposition on my members and on their suppliers, but thankfully consumers are probably largely unaware to date. Come July, there are a vast range of products that come under phase 3, and quite a lot of those are branded products, so the suppliers would make the decision. You could be a GB yogurt supplier or even a French cheese manufacturer—ironically, it has to put “Not for EU” if the cheese has been sent into GB and then on to Northern Ireland. It is an administrative and financial burden that members could do without, as could consumers. All this is adding to cost.

Nichola, do you have anything to add?

No. Neil has covered it. The only point that I would make is that there was a situation where there was the anticipated decision to extend the “Not for EU” labelling GB-wide, as well as Northern Ireland, so that it was UK‑wide labelling. That was due to take effect on 1 October, and it was only on 30 September that there was confirmation that that was not to proceed. The lack of clarity and the last-minute confirmation of decision making did cause a lot of frustration across our membership. I wanted to add that to what Neil said.

Thank you very much for those comprehensive answers. In fact, your answers were so comprehensive that you have already answered some of my questions. Neil, you said that, in your opinion, consumers have so far seen little change in terms of products on the shelf. Anne-Marie, from the perspective of your organisation, have you noticed? Have you had any reports so far of changing availability of products because of that “Not for EU” labelling? Would you concur or differ with what Neil has said about what may come in July?

The only thing we have asked over the last while about “Not for EU” labelling is whether consumers have noticed it or not. We did that over the last two years because it surfaced as a new output from the Windsor framework. There has been a marginal improvement in consumers noticing that, I think from the high 40 per cents to the low 50 per cents, but it provides us with no information as to whether there is any effect on product availability. We have not aligned our research to “Not for EU” labelling and general product availability. That may become clearer later on. It was purely and simply just about their awareness of that as a concept and construct that they are seeing in the supermarket.

Thank you. Would anyone else like to pick up that particular issue of availability, or do you feel that has been adequately covered?

That has been covered. With the parcel changes there is a nervousness that we may see some temporary withdrawal from the Northern Ireland market as people are getting used to new processes and businesses do. When you have additional processes and requirements, that increases your cost of doing business. If you look at the logistics industry, on average it operates on a very tight profit margin, at about 2.5%, so it is about the ability of our industry to continue to absorb costs. We have the necessity of crossing the Irish Sea, which is an additional cost not faced by some of our GB-based counterparts. You have the Windsor framework requirements, and there is obviously the increase in the employer’s national insurance contribution as a result of the Budget. All these things are adding to the cost of doing business, and we are very mindful of the Northern Ireland consumer. The Northern Ireland consumer has the lowest disposable income compared to anywhere else in the UK, but costs have to be picked up somewhere, and inevitably, to some degree, it will be passed on to the consumer.

Nichola has very comprehensively listed the costs, other than packaging costs. We have directives coming in at the end of this year, and retail estimate it will cost about £2 billion to address those. It is just the cumulative burden of all this, in GB in general, because, again, retail has very small margins. There are a lot of costs coming down, such as national insurance, and then in Northern Ireland, in addition to that, you have Windsor framework costs. It is difficult.

Could you restate that figure? What does that £2 billion figure directly relate to?

We estimate that the EPR directives—the packaging directives—coming in in the autumn will add £2 billion to the cost of doing business. It is a new arrangement for dealing with waste. The industry does not object to any of these things in isolation; I emphasise that it is the cumulative burden of all these things at this time. It is very difficult to keep prices down if your costs are rising.

Nichola, you mentioned the frustration that businesses felt with the one-day announcement—September into October—that the labelling rules were not going to be extended across GB. The Government said they would monitor the supply of goods from GB into NI and then might look again at UK-wide labelling. Are any of you aware of the monitoring regime the UK Government have in place to check that homework, if you like?

I am not aware of the specifics of it.

I think that is something they want to discuss with us. I am not clear in my mind how this is going to work. I believe the Government have taken the powers to basically force a GB supplier to do “Not for EU” labelling. I am not a lawyer so cannot say how that is going to work out and how that is supposed to be monitored. I do not think it is the job of my members to report to Government about certain suppliers. Are we supposed to dob them in? I am just not sure how this is supposed to work.

You are not aware of anyone from the UK Government asking for that information to be shared.

I am not aware of anyone from the UK Government asking for that information, but I think it is intended that we will discuss with them how we would envisage that going forward.

This is an important conversation. Earlier, Neil, you helpfully highlighted the disproportionality of a lot of the arrangements. It goes back to that initial suggestion that everything was at risk of onward transit and potentially harmful to the single market, if it was moving from GB to NI. Everything then has been working back from that point. On labelling itself, the commitment in the Safeguarding the Union Command Paper was to be UK-wide, so that there was not a divergence of trade and an inhibition to supply into the Northern Ireland market. It was very clear. The Government did indicate that that is not what they wished to do. But they have not passed the legislation yet to assume the power. More particularly, they have not discussed anywhere what the trigger point is, and the trigger point can only come after they assess the information. They say it is because industry, which you represent, Neil, were saying that they just did not want it in GB, and that it was a burdensome thing. They are blaming industry, saying, “That is why we are not proceeding.” Can you reflect on whether that has happened?

To be fair, BRC are not in favour of GB labelling because requiring other members that do not operate in Northern Ireland, such as Morrisons and Waitrose, to GB label seemed the definition of using a sledgehammer to crack a nut. There is, unfortunately, a lot of that going on here. GB labelling was perhaps the British Government’s sledgehammer to solve the problem of how you ensure that Northern Ireland is supplied. Nobody has worked out the way of cracking this problem.

A lot of your members did very easily adapt their best-before-date printing, which is outside of the labels but printed on the labels.

That is largely what it has done.

That is quite a simple process.

That is relatively simple. If you pick up a tub of margarine, it will be printed along the side. If you pick up cheese or whatever, it will be, as you say, where the best-before-date is. That is where that is done. But if you were to incorporate that and say, “We have ‘Not for EU’ labelling across the whole of the United Kingdom,” a lot of BRC members would say, “We do not need to do that; we do not supply Northern Ireland.” Other members would say, “Why can we not just supply Northern Ireland without this labelling?” It goes to the point that we did say not to go down this “Not for EU” labelling route to begin with.

The disproportionality point, which you started with and to which I referred, is the sort of thing that I think Lord Murphy needs to hear about, if there are these wider conversations with the EU.

It has always been our position that we did not need to go down the road of labelling, because you reach these conundrums. If you want to ensure that all relevant products under phase 1, 2 and 3 in Northern Ireland are “Not for EU” labelled, how do you ensure that when you are imposing a situation on suppliers in Britain and in continental Europe whereby, for a very small run of their product, they are going to have to label it differently? It is an administrative and cost burden.

I am very aware of the cumulative burden and cost, which will then be passed to the consumer. Do you have any figures? What does this actually look like? You have broken it down when you have been speaking around packaging, recycling and the labelling, but do we have any figures? Is there any kind of evidence out there of what it is going to cost the consumer?

No, not really because, first, my members are quite circumspect about sharing what they regard as commercially sensitive information. Also, to be honest, at the moment the considerable costs of complying with the Windsor framework are just being sucked up centrally by those businesses, and they happen to be large businesses. I am very conscious that I am representing very large businesses here. There are a lot of other businesses for which this would be a massive cost. We have people in all those companies—all those big retailers—who are pretty much dedicated to solving these problems and working on these problems on a weekly, if not daily, basis. There are considerable costs but, unfortunately, I do not have a figure for what it looks like. As Gavin points out, if you just put “Not for EU” on the label, that is fine. But it is about doing that twice. Quantifying the cost of having two separate runs is very difficult.

It would be quite interesting to have a case study of a smaller business, where you have national insurance contributions, packaging, recycling and labelling. I just wondered if that work would be useful in a policy sphere. Nichola, could that be done?

I am sure you could get an anonymised case study. As Neil said, members are reluctant to share commercial information, but there definitely is a need to be monitoring the cost impact on businesses and the consumer. The question is whether that is a role that will be looked at by the independent monitoring panel. Who will be looking at it? From our perspective, we are not clear what organisation is looking at what. Yes, we can go around our members and we can get anonymised case studies, but we need someone up in the helicopter looking at the wider economic picture.

I agree, but it would be a very useful tool to have and very powerful for the Government to see that.

On that point, as I say, I am regularly on calls with all the representatives of those supermarkets and with DEFRA. They all work very collegiately and very co-operatively with DEFRA. They then go out of the room and are vicious rivals of each other. We have to remember that. The supermarket industry is probably one of the most competitive industries. They keep their figures very close to their chest, although they work very collegiately to try to solve problems too.

That is understood.

I have two short questions, both to Ms Pheasey. The first is on the plant health label scheme. The Committee will make some recommendations and observations back to Government, based on what we hear during these sessions. What two improvements would you like to see that would make it operate better?

One of the key challenges of the NIPHL scheme has been around communication and actually understanding it. It is complex. We think there is a significant opportunity, and we are very willing to work with Government to engage with all of those in the supply chain who need to understand what is required of them, whether they are the exporter or the importer. There is absolutely a communications piece on the NIPHL side of things.

Is that principally targeted to nurseries?

No. That would be to growers and garden centres as well—the full supply chain. Talking to my members, communication and understanding complexity, as you have heard from others, are absolutely key things that we would like to see much more support for. The second thing around the NIPHL scheme would be to look at whether we can do something around consumers. At the moment, it is for B2B. Is there something we can do with that scheme around consumers? I do not know if that is possible within the legal framework, but that is something we would certainly like to explore.

By that, you mean direct mail order.

We would love to be able to resume mail order from GB to NI consumers.

Could you just give us a word or two on your assessment of the progress of the horticulture working group, specifically with regards to trying to resolve outstanding issues in relation to the movement of plants GB to NI?

I absolutely can. The horticultural working group stems from an initial interaction between HTA and its members, and the Cabinet Office and Northern Ireland Office, where we were setting out some of our challenges and frustrations, particularly around mail order but also the other issues we have talked about. That group has been relatively slow in terms of its progress, partially because of when it fell within the political cycle and the election, but in September last year the Northern Ireland Secretary, Hilary Benn, reconfirmed that that group would continue, which was very welcome, and it has done. It is relatively slow-moving, and that is frustrating for many of those involved, but we are very welcoming of that group, and it does have a work programme going forward. However, it is constrained by the legal framework, particularly in relation to the question around the prohibited plants or high-risk plants. This is a separate process run by the European Food Safety Authority. A dossier needs to be submitted. That is done by DEFRA—by APHA—jointly with industry representatives. They submit a dossier about a plant or species that they would like to be removed from the list. It can take up to two years. I think a couple of birches came off the list in February. It had taken just under two years to get those progressed. I can happily provide the latest list, in terms of what is still on there. We have made some progress—that list is coming down—but that is separate to the horticultural working group. That is run through a different process.

Can I probe? I entirely take the point about the disruption of the general election and the dust settling and so on, but how often has the working group met? I took away from your first answer to my question that it is intending to meet but has not.

It has met several times. The momentum has started as of the last month or so. We met a couple of weeks ago, and we will meet again at the end of April. We will meet roughly every two months. That is the intention now, but it is constrained given the legal parameters in which we are operating.

“The Lord of the Rings” is a good example of a place where trees can uproot themselves, walk across the border and cause trouble over there.

It is a work of fiction, Gavin.

Are you aware of any other plant that is capable of doing that?

Groot.

I assume the answer is no. You are right about the torturous process around declassification or the removal of individual species. There was considerable lobbying by the Woodland Trust, who plant trees throughout the United Kingdom. Ordinarily they would have got their trees for Northern Ireland from Scotland, and that is problematic at the moment. They make the point that they would rather have Scottish trees in Scotland, Welsh trees in Wales, English trees in England, and Northern Irish trees in Northern Ireland. They are in the process of creating a nursery. People often say it is because of the European Union, but they say they just wants trees from a local area growing in a local area. The Woodland Trust lament the fact that they cannot get trees from Scotland—although they are happy because they want Northern Ireland ones—but they can get them from Amsterdam and other parts of Europe, where biosecurity is a real issue and disease spreads quite considerably. Is that something the working group have considered? Has the working group taken evidence from people like the Woodland Trust, who are happy enough not to get them from Scotland, because they want indigenous trees in indigenous areas, but really struggle with the disease that is spread by the trees they can get from Amsterdam, for example.

We have not. The dossiers relating to prohibited products is looked after elsewhere, so there is a separate working group. The horticultural working group really stems from some of the more commercial challenges. The people and businesses we have around the table are typically within our space, so we have not had connections with the Woodland Trust. The horticultural working group is currently run jointly by DEFRA and the Northern Ireland Office, with DAERA now involved. I am sure they are listening to this, or it could be taken back to them to consider how they could look at some of those other issues as well.

We have really got into the weeds, as I expected we might in this session. There is a great deal of detail here, so maybe we could step back slightly. Are there particular policy areas or sectors in which divergence between GB and NI laws might have a significant impact? As you think about the whole framework, what are the policy areas or sectors that you are most concerned about when it comes to divergence?

The unknown aspect of divergence is probably causing the biggest amount of frustration and anxiety. Businesses obviously expend all their energy running their business, and they do not have the bandwidth to be following the minutiae of regulatory divergence between the UK and the EU. It is an issue that we will bring up on an ongoing basis if there is not some form of regulatory alignment. Within that, one of our asks is for the publication of a regulatory divergence register, written in very plain English, so that industry could follow to see where divergence is emerging, what that means for their industry and what they need to do to comply. We think that would be extremely helpful.

I would echo that and say that although to date we have lived with and tackled the problems of the Windsor framework with great success, we just do not know where we are going in terms of divergence and timelines. For example, on the EUDR—on deforestation—the EU has put its process back, but it is coming down the road. The UK Government are going to do something in that field but we just do not know, and we could have a situation where, essentially, they are tandem processes. The EU is doing something but we are not too sure about the timelines. We do not get very good sight of those, and then the UK Government are saying, “We are going to do something on that and possibly align,” but it is really not too clear when and to what extent that will happen. The deforestation regulations encompass a wide range of products, so it would pose a huge administrative burden, on top of an existing huge administrative burden, to comply with deforestation regulations.

On the EU deforestation regulation, we have, as I said, multinational organisations, and they have whole teams working on EU deforestation because of the range of products that it applies to. It is requiring significant resource. They have the resource to do that, but it is hugely challenging for smaller operators and traders.

So the deforestation regulations are a particular concern. Are there any other areas where you are especially concerned about the impact? I get that there is a general concern.

The carbon border adjustment mechanism is another, as is the emissions trading scheme, which the EU has to try to reduce maritime emissions. The UK Government have just closed a consultation on extending the UK emissions trading scheme to domestic maritime. That is another area of potential change and additional cost. As I said, we have to cross the Irish Sea in terms of servicing the Northern Ireland market. That would be another live example.

Before we move on, are there any other policy or sectoral areas that you are most concerned about, in respect of divergence?

It has happened in practice with the general product safety regulation for consumers. That happened in December, whenever that EU regulation came in. The Consumer Council does not proactively monitor regulatory divergence. We are a very small organisation, and we do not have the legislative experience to do that, but whenever those sorts of things come in—like general product safety regulations—there is potentially an immediate consumer impact. We saw that in December. An example is a lot of crafters in Northern Ireland immediately not being able to get goods from crafting businesses and microbusinesses in the UK. We work with Government Departments—with the likes of DBT and the Office for Product Safety and Standards—to talk about these things, but oftentimes you do not see the actual impact until divergence has happened.

As I said at the beginning, BRC has approximately 200 members; about 100 of those have shops in Northern Ireland. There are quite a number of them that do not, but quite a number of them sell products into Northern Ireland but do not necessarily have a retail base there. Under GPSR, they would be required to have a registered office and everything in Northern Ireland, but I have no means of knowing how many of them have decided that doing that is not worth the candle. They are mainly large businesses selling considerable amounts of goods, so they may well make the effort, but they are large businesses and they can do that. But there may be others. It is very hard to get any grip on this.

On the burden of expectation around additional paperwork and so on, how easy is it for businesses to understand which new or updated EU regulations are likely to apply in Northern Ireland? Nichola, you mentioned a regulatory divergence register, and the Federation of Small Businesses NI has suggested an office for regulatory divergence.

It is hugely challenging for businesses to monitor this, follow it and then adapt, so they need to have assistance. We have a role in doing that, as trade associations, but it can be so vast and complicated that it is challenging. It is certainly daunting for business, and it is not easy to navigate at all.

People can perhaps be aware that something is going on down the line, but they do not really know how it is going to be applied and how the UK Government will respond. There are great unknowns in it. Even if you are aware that something is changing, you are not aware of the practical implications.

Do you think this is especially the case for smaller businesses, such as the crafting businesses we just heard about? I recognise, Neil and Nichola, that you represent larger entities. Should the burden for the divergence and communication about that fall more heavily, and proactively, on statutory bodies, to make sure that small businesses in particular, but all businesses, know what the divergences are?

Yes, absolutely. If you take the issue of CBAM, I know that other business representative colleagues in Northern Ireland have been trying for some time to find out who is the competent authority in Northern Ireland. When you are aware of an issue, it is not always clear what the competent authority for it is. We need clarity on that as well.

On occasions even the competent authority has not been aware that it is the competent authority.

It is the incompetent competent authority.

A lot of our smaller members would be reliant on the trader support service to assist with customs submissions. It is a free service. We have talked about the cumulative costs and administrative burdens, so they rely on the free service. Logistics UK welcomed the extension of the contract, and we have engaged with HMRC as it sets out to procure a new service from January 2026, but we have been clear that we would like to see improvements in the new service. We would like it to be more user-friendly, for example, and for there to be greater reassurances around UKIMS and EORI numbers, because we have members who are contacted about movements that they did not make because their details have been used by someone else. There are issues around that that need to be resolved. We would love to see improvements to the service that would reduce the burden on the haulier. Very often, the haulier may not have direct contact with the buyer or the seller, but they are the go-to person when anything is missing, and there is a great degree of burden on them. The other issue we would like to see addressed is that trying to use TSS to process groupage movements can be cumbersome. We would like to see better facilitation of groupage movements as well.

I endorse that. I think Nichola covered nearly all of it there. We would like to see the continuation of a scheme—a funded scheme—to try to lessen the cost burden. A lot of my members would do a lot of it in-house, but that is not to say a lot of them do not also rely on TSS.

Yes, absolutely. We have had feedback that it is quite cumbersome—to use Nichola’s word—to work with them because of the amount of information required. As with the picture I painted earlier, there are multiple actors involved, and you are having to deal with more while dealing with your own paperwork, plus the people with your hauliers. It paints a picture of the complexity of it and the amount of information you have to share. A common frustration I get is that you are often repeating the same information for these systems, and they do not talk to each other. There probably is something around whether all of this is fit for purpose, from a technology perspective, and I think we would probably find that it is not.

To come back on that, one of my colleagues from Marks & Spencer had an article out about this a few weeks ago, whereby he was describing how they take young people into their business and then tell them that they need to go backwards in history and get their pens and papers out to comply with slightly archaic processes, to deal with the Windsor framework in general. This definitely could be made better through technology. We are taking photographs of seals on the back of trucks. Those trucks are all GPS tracked, yet we are taking and uploading photographs, and compiling vast amounts of paperwork. I have often said it is a 20th-century solution to a 21st-century problem. In fact, it may not even be a 20th-century solution. We really are doing this in a very archaic fashion, which is making life worse for everybody.

We believe digital solutions have a positive role to play. Neil has talked about the very manual, cumbersome process of drivers having to take photographs of seals. Technology is advancing in the area of smart seals, which would give you clear visibility right throughout the supply chain. It provides that security. Our members are keen to explore that as a potential option, but they are reluctant to invest if it is not going to be a form of technology accepted by both the UK and the EU.

Thank you for your time Anne-Marie, Nichola, Neil and Jennifer. It has been a very interesting session.