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On Monday 27 February 2023, UK Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen unveiled the new ‘Windsor Framework’, heralded as a “decisive breakthrough” on the issues that had beset the Northern Ireland Protocol.
While there are still a number of steps to take before the deal is finalised, this announcement has provided relief and optimism for many sectors which have contended with additional costs and ongoing uncertainties and as this issue remained unresolved.
Overview of the Windsor Framework
The Windsor Framework is based on three pillars:
- Delivering smooth-flowing trade within the UK: As expected, the UK Government has confirmed that a system of green lanes and red lanes will be at the heart of its plan to ease the flow of trade from Great Britain to Northern Ireland. A new green lane will allow goods destined for the region to be free of “burdensome customs bureaucracy”. Sunak asserted that the new framework “removes any sense of a border in the Irish Sea”.
- Protecting Northern Ireland’s place in the Union: The NI Protocol has been amended to allow Westminster to make VAT and excise changes now apply across the whole of the UK. The deal removes onerous pet requirements and delivers a “landmark” settlement on medicines, whereby drugs approved by the Medicines and Healthcare products Regulatory Agency (MHRA) will be available in Northern Ireland.
- Safeguarding sovereignty for the people of Northern Ireland: Sunak declared that the only EU laws applying in Northern Ireland are the “minimum necessary” to avoid a hard border with Ireland. The Windsor Framework will introduce a new ‘Stormont Brake’, with a clear process through which the Northern Irish Assembly can apply a brake on changes to EU goods laws, after which the UK Government may use a veto. Von der Leyen added that there are also mechanisms intended to avoid the Stormont Brake being deployed, involving extensive consultation with stakeholders in Northern Ireland before changes are made to EU law, as well as consultation with the EU on planned regulatory changes by the UK.
Impact on logistics
Sunak stated that the Windsor Framework ensures that “customs bureaucracy will be scrapped. It means food retailers like supermarkets, restaurants and wholesalers will no longer need hundreds of certificates for every lorry”.
While it remains to be seen to what extent the Windsor Framework will ease the pressures experienced by the logistics industry in carrying goods between Great Britain and Northern Ireland, it has introduced simplified rules and procedures for entry of certain goods, including labelling and the requirement for physical inspections. With the latter set to apply to only 5% of all consignments of retail goods from 1 July 2025, it is hopeful that a more streamlined process will soon become a reality.
The technicalities will take some time to make their way through in practice, but this is welcome news to the logistics industry which has been plagued by costs, confusion and prohibitive paperwork when trying to move goods between the two nations. We may see an increase in cover sought for ‘new’ contracts for the movement of goods between Great Britain and Northern Ireland. However, insurers and hauliers alike should not proceed on the basis that there are no restrictions in place; the current framework will take time to unpick and for new mechanisms to be put in place.
Comment
Von der Leyen declared the new agreement marked “a new chapter” in EU-UK relations, and confirmed she was happy to commence work immediately on the UK joining Horizon Europe (an EU scientific research initiative). Sunak added that the agreement has positive implications for cooperation on Ukraine, illegal migration and reducing energy dependence on Russia.
These positive statements have been met with almost universal approval, something that has been in short supply during the previous rounds of negotiations.
'Agreement' is a strong word to apply in the context of Northern Ireland. Whilst the progress made is positive, whether this results in the return of devolved government in Northern Ireland does remain to be seen. The people of Northern Ireland have had no political say in the present changes proposed, yet they have been closest to the impact of the Protocol, unaided by the vacuum which is Stormont. Further developments are awaited with cautious optimism.
Political persuasions aside, the logistics, food, motor, health and life sciences sectors (amongst others) will be hopeful that this development is the start of a less painful trading process, and will allow for future growth and innovation. For insurers, the anticipated reduction of further delays and the additional costs incurred of trade and transport across the Irish Sea will hopefully result in a reduction of both the volume and value of associated claims.
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United Kingdom