Road Vehicles (Type-Approval) (Amendment) Regulations 2025

We have seen some very stark consequences already. The best-selling car in Northern Ireland, the Vauxhall Corsa, cannot be sold in Northern Ireland as things stand; it can be sold in the rest of the United Kingdom, but it cannot be sold in Northern Ireland. Renault, Citroën, Peugeot, Fiat, Jeep, Alfa Romeo, Vauxhall, Nissan and Jaguar Land Rover are not dual-approved. BMW is making dual-approved cars, but they are still Great Britain-designated when leaving the factory. This industry in Northern Ireland supports 17,600 employees. If we keep on the present course, job losses will be an unavoidable reality, consumer choice will continue to be greatly restricted and the costs for consumers—including hard-working families in Northern Ireland—will rise sharply.

This is not theoretical; it is already happening. The National Franchised Dealers Association of Northern Ireland has given oral and written evidence to the Northern Ireland Assembly’s Committee for the Economy on a number of occasions, most recently just last week. Its message, as it stated to Members of the Assembly —who, by the way, unanimously agreed across all parties that this was a serious and important issue that needed to be addressed—was one of profound frustration. It expressed exasperation at the degree to which the free flow of vehicles within the United Kingdom is being obstructed. It said in its evidence last week that there has been little meaningful progress in identifying a workable solution; that sentiment is shared in the Northern Ireland Assembly and by elected representatives in Northern Ireland.

The Government have given assurances, but action to remove the fundamental problem has been lacking. Businesses and customers cannot operate on the basis of promises that something may be done at some unspecified point in the future. Action is needed now or at the start of next year; otherwise, we are going to face immense problems. It is simply not logical or defensible that Northern Ireland should be excluded from the UK-wide car market, which accounts for 2 million units per year; the Northern Ireland market accounts for 45,000 units a year. We are old that this system exists to protect the EU single market, yet the reality, according to the evidence given to the Assembly, is that, in the first 10 months of this year, only six vehicles moved into the Irish Republic. That is the scale of the so-called risk.

This system is doing so much damage to consumers in Northern Ireland, whom it is designed to protect. It is destroying the UK internal market and, with it, reducing competitiveness, undermining consumer choice and placing livelihoods in jeopardy. Consumers will increasingly and inevitably turn to Great Britain, where there will be greater choice and lower prices, to purchase vehicles. Manufacturer incentives and deals that are available on the mainland are not, and will not be, accessible in Northern Ireland, exacerbating the trend. Why should citizens in Northern Ireland be disadvantaged in this way? Sales at Vauxhall, one of the leading manufacturers in terms of market share, are up by 16% in Britain and down by 59% in Northern Ireland. That is not market fluctuation; that is structural failure.

With all of this, I fear that Northern Ireland is becoming increasingly marginalised. Our consumers are viewed as less valuable and attractive and are increasingly inaccessible within the manufacturers’ supply strategies. Car dealers and franchises in Northern Ireland will no longer have access to the UK unsold stock pipeline, as vehicles will be produced primarily to GB standards. This will fundamentally change the ability of local dealers to source and supply vehicles competitively.

Market distortion is inevitable. Great Britain-based dealers will pre-register vehicles and actively market them into Northern Ireland, or consumers will simply travel to England, Scotland or Wales to access better value and wider choice. That is not a functioning internal market, which is the Government’s obligation to uphold under the internal market Act.

It will also become increasingly difficult for dealers to sell new electric vehicles, particularly as compliance requirements tighten. Dealers will be forced to stockpile EU-compliant vehicles to maintain availability, creating significant additional cost burdens. Meanwhile, consumers in Northern Ireland will be excluded from the very consumer offers targeted at clearing unsold pipeline stock across Great Britain.

The EU, and thus Northern Ireland, is due to adopt new emissions standards in the coming years in respect of plug-in hybrids, as well as applying the new general safety regulation phases 2 and 3. This will drive divergence between Great Britain and Northern Ireland new car markets even more. They will also increase benefits-in-kind taxation costs in Northern Ireland. These costs are based on different utility factor categorisations allocated by the EU to Northern Ireland and by the UK Government to Great Britain. This is expected to work out to some £4,000 extra for a Northern Ireland consumer of a new car compared to the rest of the United Kingdom.

The NFDA asked last week: why is it acceptable, under the Windsor Framework, for consumers in Northern Ireland to have less choice and yet pay higher taxes than the rest of the United Kingdom? The Government have spoken about future equalisation measures, and I have no doubt we will hear that again today. However, that provides little comfort for customers standing in showrooms today, or after the Christmas holidays and in the new year, or for dealers, who face the immediate prospect of the problems that these measures create.

The Government say that there is no technical impediment to manufacturers dealing with dual-type approval. They say that it is legal for them to do it, but permitting something and making it legal is very different from the actual practice of businesses, which of course want to operate within the law, but they operate on the basis of what makes sense commercially. Manufacturers are not taking guidance from government officials; they are, naturally and inevitably, pursuing separate type approvals wherever it gives them commercial advantage—that is what is happening. As I said, sometimes cars are made dual approved, but on leaving the factory, they are designated as either EU or GB type approval. The reason given by manufacturers for pursuing single-type approvals is that they are restructuring their internal engineering processes and systems on the assumption of progressive divergence between EU and GB standards over time. That is the commercial reality they are preparing for. Even those manufacturers who have opted for dual-type approval do so only as an interim measure, expecting future divergence and prepared to adapt their approvals accordingly. They will move away from EU standards if they believe there is a commercial benefit in doing so.

As I said, the Government will say that we need not worry about all this because we will converge with the EU and adopt its standards. However, that is not sufficient to meet the here and now; it is not sufficient to meet will happen in the next six months to a year. In reality—according to the evidence given to the Northern Ireland Assembly Committee for the Economy—we are not going to have 100% convergence in any case, so manufacturers will always say that they are going to build according to the GB regulations; it is a far bigger and more profitable market compared with doing something to accommodate the 45,000 sales in Northern Ireland. Some manufacturers have indicated that they will exit the Northern Ireland market entirely, as the volume simply does not justify the cost and complexity of operating under these incredibly complex conditions.

We are going to have restricted consumer choice, increased prices compared with the rest of the UK, higher benefits-in-kind taxation, differing vehicle specifications, customer confusion, reduced stock availability and prolonged delivery times. The Government must now acknowledge that this is unsustainable. It is not protecting trade but suppressing it. It is not safeguarding jobs but placing them at risk, and it is eroding Northern Ireland’s place within the UK internal market.

Of course, it is right that Northern Ireland should not be in any way in difficulties over this. It is aligned with the United Nations, but in one or two cases—type approvals and so on—one or two elements seem to have been missed, so that Northern Ireland is out of sequence with the rest of the United Kingdom on certain of these regulations. Is not one of the answers to this to try to make sure that the United Nations umbrella is more available in order to oblige the manufacturers to make sure that the markets are equal and there are not these disparities, which are often taken for commercial reasons, due to the size of the relevant markets?

I happen to be in favour of alignment when it comes to standards in motor cars—I think it makes sense—but I am disappointed that the separation between one part of the UK and another in these regulations is both unfair and biased in such a way that it deprives one vital part of the United Kingdom of the opportunity to have commercial success in relation to what is undoubtedly a very useful United Kingdom enterprise.

“keen that Northern Ireland consumers have access to the same vehicles and models … as in Great Britain, and a key part of that is ensuring manufacturers can dual-approve vehicles to both the GB and EU type approval schemes”.

Having talked to the dealership, I note that it cannot understand and finds it totally inexplicable that the same standards in the EU and GB do not exist. The Secretary of State further states:

“Our goal is to ensure that the regulations that apply in the UK work well for businesses and to address practical issues where we can. We are working closely with manufacturers to ensure that UK-wide approvals for vehicles are available, and are considering what more we can do to smooth processes and fix any issues that may arise”.

I ask my noble friend the Minister: what further progress has been made in relation to this issue, as the Department for Transport has overall responsibility? In fact, the Secretary of State for Northern Ireland says in that letter that

“we continue to monitor regulatory activity in the EU and have recently adopted consistent rules for the design of rear registration plate space on vehicles. The Government intends to make announcements shortly on its intention in regard to a number of other EU regulations, including the Euro 6e emission standard”.

I ask my noble friend the Minister if he could advise us on that.

I will ask some other questions. Has the Department for Transport considered the delay in procuring cars, as they have to comply with certain regulations, and the impact on the local economy? Like the noble Lord, Lord Dodds, I was told that there are problems for Jaguar Land Rover, Nissan, Renault, Vauxhall and Citroën. People want to access such cars. They have used them traditionally, and they want to continue to use them, because they are cost effective.

What impact will this delay in the provision of certain EU car models to Northern Ireland have on our local economy? The noble Lord, Lord Dodds, has already amplified that, but we want a solution to that, and we always have to remember that. I am clearly somebody who wants to see a route back to membership of the EU. I support the Windsor Framework but, where there are obstacles and challenges, they should be resolved and the Government should work directly with the EU as part of the reset in order to try to achieve something that is meaningful, practical and pragmatic. Last week, a BBC story emerged out of the Northern Ireland Assembly economy committee in relation to this issue.

Undoubtedly, we need the challenges, delays and lack of knowledge among businesses around the Windsor Framework to be resolved as quickly as possible. In that regard, I ask the Minister to outline when these issues around new car sales and approvals will be resolved, and to outline what discussions have taken place with the European Union to ensure that this happens.

Furthermore, when will we receive responses to the recently published reports, which dealt with the challenges and fissures in the system? One, the Independent Review of the Windsor Framework, was produced by my noble friend Lord Murphy; one, Strengthening Northern Ireland’s Voice in the Context of the Windsor Framework, was produced by our Northern Ireland Scrutiny Committee; and the third was produced by the Independent Monitoring Panel. They dealt with the challenges, difficulties and issues that need to be resolved. I agree that there may need to be a delay in the transition to this, in order to ensure that those difficulties can be resolved, but we must all remember that with Brexit came divergence and that it is difficult to achieve convergence in those circumstances.

Of course, what we are also seeing—I know that there are noble Lords who will be happy about this—is the Government falling again for the European Union’s strategy of keeping part of the UK in the EU, in effect, then giving the EU the leverage to undermine our leaving the European Union across the whole UK and working towards what I imagine this Government would like to do but cannot quite do yet because it was not in their manifesto: bringing the whole of the UK back into line with the whole of EU law.

Part of the rationale for many people, in voting to leave the European Union, was that they would be able to produce goods more cheaply as a result of not having to bow to the EU’s excessive bureaucracy requirements. Having reflected on this, car manufacturers have concluded that the economic gains to be had from fully exploiting the Brexit pricing benefits in the 2 million-unit GB market are worth more to them than the loss of not being able to sell some of their cars in the much smaller Northern Ireland market.

More worrying, of course, is the fact that this will have an effect—indeed, it already is having an effect—on jobs in the motor car sales market. When any of us who come from Northern Ireland speak to the garages selling the various types of vehicle that have been mentioned—some of us have already done so, I think—they all say that they are already beginning to look at redundancies. This will lead to a very serious situation, quite apart from the fact that people are losing choice in terms of what kind of car they want.

The Government need to move quickly on this. If they think that it is necessary for GB producers to have the same type of regulations as Northern Ireland is going to have to have—or that we are being told we will have to have, because of the Windsor Framework and being left in the European Union—they should be doing that very quickly indeed. I know that they are not going to do this, but I would prefer it if they said, “Sorry, European Union, that’s not what we’re going to do. We’re going to align Northern Ireland with GB. So what about the Windsor Framework? That’s just too bad. You’re being far too pedantic over this, and it’s not necessary”.

We are now seeing more of a move towards getting alignment. It is fair enough if people want to have that, but let us have it for the whole of the United Kingdom and not drip by drip, with little bits here and there. I know that the Minister understands the pressure that will be put on people and garages in Northern Ireland, especially in terms of sales. I hope that he will look at this matter and give a commitment that the Government will speed up the changes and get a move on—or, at the very least, postpone the date of 1 February, because that is less than three months away and will be ruinous for so many people. I ask the Minister to respond to those questions—plus the questions put by the noble Baroness, Lady Ritchie, and the noble Lord, Lord Dodds —because we need answers and we need action.

In these debates on Windsor Framework regulations, we often have justifiable criticism about the lack of consultation with the relevant sectors. However, paragraph 7 of both Explanatory Memorandums states:

“All the trade associations representing vehicle manufacturers supported the proposal, highlighting the importance of aligning with international standards”.