Windsor Framework: Another Day, Another Problem

The Windsor Framework continues to create uncertainty for consumers, manufacturers and businesses across Northern Ireland.

Dr Steve Aiken OBE MLA said:

“Today, at a meeting of the Windsor Framework Democratic Scrutiny Committee, which continues to sit throughout the summer recess, I raised four items under other business. These are practical issues which the Committee should be examining closely and acting upon.

“First, there was some welcome news. Following discussions with the UK Government and, for the first time last week, HMRC, we received confirmation that the so-called ‘Alliance Tax’, the proposed €3 duty on parcels, or more accurately on each classification of items, will not apply in most cases. The vast majority of non-EU parcels will now come through warehouses in England and Scotland and will therefore be exempt.

“HMRC is confident that this will not be challenged by the EU or individual member states, although there remains uncertainty about the impact of the forthcoming administration charge. A sensible degree of caution is still required, but our teenage Emily in Paris fashionistas should be safe for now, at least until November.

“Unfortunately, the remaining issues are far less encouraging. The EU is engaged in a significant dispute with the United States over the Digital Markets Act, with the US threatening major retaliatory tariffs should the EU impose a €450 million fine on Google. Regardless of the temporary 10 per cent tariffs already imposed, there is a real risk of a wider digital trade dispute between the EU and the United States. Because of the provisions applying to Northern Ireland, we may find it difficult to avoid the consequences.

“Manufacturers are also increasingly concerned about steel tariffs, access to steel products and the bureaucracy facing local companies. In response to questions from Robin Swann MP in Parliament, the then responsible Minister, Sir Chris Bryant, said that the Government had the matter under control. Now, as Secretary of State, he has the opportunity to demonstrate that this is indeed the case.

“Finally, the Prime Minister has announced the removal of the 5 per cent VAT rate on domestic energy bills. It was immediately suggested that this could not apply in Northern Ireland because of EU rules preventing VAT on energy from being reduced below 5 per cent. Yet Annex III of the EU VAT Directive provides for special rates, including zero rates, to be applied.

“Why is no one in the UK Government properly examining the legislation that applies to Northern Ireland and making use of the derogations that other EU member states are prepared to use when it suits them?

“This was just another day in the increasingly complex world of the Windsor Framework. Given his previous experience, I hope the new Secretary of State will not be naïve enough to claim that Northern Ireland enjoys the ‘best of both worlds’.”