brexit

The UK and EU have agreed on a new deal that has put an end to Brexit gridlock

The UK and EU have finally made a breakthrough in Brexit discussions regarding the controversial Northern Ireland Protocol. Rishi Sunak and EU Commission head Ursula von der Leyen have claimed the challenges arisen from the previous NI protocol, signed by former PM Boris Johnson, have all been addressed as part of the new Windsor Framework.

The new deal, which aims to reduce frictions on GB to NI trade flow, has been welcomed by the food industry. Many say it puts an end to the uncertainty that has impacted businesses across the UK and EU over the past couple of years.

So what exactly are the major changes to the protocol, and how will they affect food businesses?

Green lane and red lane system

The solution to trade from GB to the island of Ireland that many in industry and government have been calling for – known as the green lane and red lane system – is at the centre of the new framework.

This means British goods intended to stay in Northern Ireland will use the green lane, which will require less paperwork and little to no routine physical checks along the Irish Sea border.

Goods headed south of the border to the Republic of Ireland or onwards to other EU countries will use the red lane, and will be subjected to regular customs processes and have to abide by the bloc’s strict regulations.

The prime minister said this had essentially “removed any sense of a border in the Irish Sea”, but the nitty-gritty details around the necessary paperwork, how the checks will take place and how exactly they will affect supply chains are still to be determined.

So far we know businesses will have to register as a trusted trader under a new UK Internal Market Scheme (UKIMS) to use the green lane. This will drastically reduce the bureaucracy attached to the current SPS checks, including supplementary declaration forms and multiple certificates that businesses had to present for each load that arrived from GB.

A single supermarket truck that previously had to provide dozens, if not hundreds, of certificates can now instead make “a straightforward commitment” that goods will stay in NI, according to the Windsor Framework.

A wide range of retailers including supermarkets, hospitality businesses and suppliers – even those without physical premises in Northern Ireland – will qualify for UKIMS. The government also said it would keep its Trader Support Service, which helps companies trading with NI and the EU with their paperwork.

Plus, physical checks on green lane loads will not be carried out routinely, which should reduce the time hauliers spend at the border and increase the flow of goods into NI. All requirements have been scrapped for trade from NI to GB, including the requirement for export declarations.

Labelling changes

To make it easier to discern between goods staying in NI or heading to the EU single market, retailers will have to introduce new ‘not for EU’ labels on certain food products sold north of the border. This requirement will come at a cost for businesses, but the government has pledged to financially support them with the labelling change during the transition period.

It will also phase the rollout to give them time to adjust. High-risk products such as meat, dairy and other composite products will have to be labelled in that way from October this year. Label changes to other goods, including fruit, veg and fish, will be phased through to 2025.

As the phased labelling requirements come on stream, the government will scale back the current visual checks in place for GB goods arriving in Northern Ireland under the previous protocol, which it says are “not appropriate or necessary for UK internal market movements”.

“We have ensured these arrangements are future-proofed, with the ability to update and change these safeguards, including labelling requirements, where new technological solutions can support meeting the same objectives in more efficient ways,” the framework states.

Sausagegate is over and seed potatoes are back

Under Boris Johnson’s original protocol rules, a number of food products deemed high-risk by the EU – including fresh sausages – were to be banned from entering NI over fears they would accidentally circulate into the Republic of Ireland.

This deeply impacted trade in food products from GB to NI. And while bigger retailers such as M&S and Lidl were able to shift their supply chains and turn to local production for some of those goods, smaller businesses could not afford to do the same and simply chose to stop exporting altogether.

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GB foods deemed high-risk by the EU, including sausages, were not allowed in Northern Ireland under the previous protocol

With the new framework, Sunak and von der Leyen assured that food in NI would follow the same public health and safety standards as the rest of the UK, as they had agreed “strong safeguards” to protect the integrity of the EU’s single market. The government is therefore removing more than 60 EU food and drink rules in the original protocol, allowing goods available on the shelves in Great Britain to “again move smoothly to Northern Ireland”, it said.

The Food & Drink Federation’s head of international trade, Dominic Goudie, said this would “ensure Northern Irish consumers can continue to enjoy the full choice of quality UK products, without facing higher prices”.

Brexit bangers headache doesn’t bode well for the future of GB-NI trade

Similarly, there were strict EU requirements for inspection and certification of some plants entering NI from GB, such as seed potatoes and apple trees. Those have now been scrapped and all plants and seeds will move under the UK’s “plant passport scheme” just as with the rest of the UK.

“Quintessentially British products like trees, plants and seed potatoes will again be available in Northern Ireland’s garden centres,” Sunak announced on Monday.

This will see traders’ costs decrease from £150 per movement into Northern Ireland to £120 a year to be part of the UK-wide plant passport scheme – as it was pre-Brexit.

VAT and alcohol duties

Northern Ireland had to abide by EU rules for VAT and excise taxes under the original protocol. This has meant Northern Ireland has not been able to enjoy UK-wide tax and spend policies whenever they were incompatible with EU rules.

The Windsor agreement ensures new UK plans to tax beverages based on their alcoholic strength, which are due to come into effect this summer, are also implemented in NI. The government claims this will result in “cheaper pints in pubs and a clearer set of duties overall”.

The deal on VAT will also enable Northern Ireland to apply zero rates of VAT to the installation of energy-saving materials such as heat pumps and solar panels – all of which players across the food industry are expected to invest in as they aim to lower their carbon footprint.

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Northern Ireland will be able to enjoy the same rules on alcohol duties as the rest of the UK

Online shopping and data sharing

Plans to have GB businesses shipping parcels to online shoppers in Northern Ireland fill out a compulsory customs declaration have been binned too. This particular area of the previous protocol had the potential to cause massive disruption – given most online orders in Northern Ireland are fulfilled in GB warehouses – but the full effects on trade had not been felt as there was a grace period in place.

However, it still meant some businesses gave up on trading with the region due to how burdensome and costly those requirements were going to be in the future.

The new Windsor deal has swerved long-term chaos by making that grace period permanent, but logistics companies will still have to abide by strict requirements to share customs data with the government so as to “monitor and manage any risks of smuggling into the EU market”. This data-sharing process is due to begin in October 2024.

Stormont brake 

Perhaps the most politically sensitive aspect of the previous protocol was linked to the involvement of the European Court of Justice (ECJ) in rules applying to trade in Northern Ireland. Sunak and von der Leyen have tried to appease those most critical of the deal with the introduction of the ‘Stormont brake’, a legislative process that aims to give the Northern Ireland Assembly a greater say on how EU laws apply to Northern Ireland. 

Hardline Tory Brexiteers and Democratic Unionist Party members have been calling for such a process for months. If, as Sunak put it, the “brake is pulled” on any piece of EU law affecting trade of goods in NI, the UK government will have a veto. 

“This gives the institutions of the Good Friday Agreement in Northern Ireland a powerful new safeguard, based on cross-community consent,” the PM said. 

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At a glance: the key points behind the new Northern Ireland Brexit deal