In July I tabled a motion in Parliament to annul the Road Vehicles (Type-Approval) (Amendment) Regulations 2025. I am pleased that a number of parliamentarians joined me in taking that stand and very much regret that our government has so far denied the democratically elected House any debate on the matter but welcome the fact that the House of Lords has been afforded this opportunity and will be debating the regulations later today.
The challenge facing new car dealers in Northern Ireland is not the huge amount of paperwork they have to complete in order to move vehicles from Great Britain to Northern Ireland, nor the challenge presented by having to pay customs duties and then fill in cumbersome duty reimbursement scheme forms.
It is rather more profound.
From 1 February 2026 it will be illegal to sell many additional new GB cars in Northern Ireland if they have not been manufactured to EU Vehicle Type Approval standards, as mandated by EU law. In that sense the regulations relate to an impending border that will give effect not to the challenge of increased border frictions but an absolute border barrier.
In response to this one might say, as the Government said initially, that the solution is for car manufacturers in GB to ensure that the cars they make meet both EU and GB Type approval legislation.
Here, though, we engage with the fundamental problem with the ‘legal solutions’ provided by the Windsor Framework and the failure of government to understand that in the real world, businesses do not act simply because it is legal to act. They act because it is legal and because doing so affords them an opportunity to make money.
It might be entirely legal to manufacture cars in Great Britain, so they meet GB Type Approval and NI Type Approval, but does it make economic sense?
In order to answer that question, we must reflect on the fact that part of the rationale for Brexit was that the UK would be able to produce goods more cheaply as a result of not having to bow to the excessive requirements of EU bureaucrats. Having reflected on this, car manufacturers have concluded that the economic gains to be had from fully exploiting the Brexit pricing benefits in the two 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 45,000 unit NI market.
When the National Franchised Dealers Association’s (NFDA) presented to the Stormont Economy Committee on 2 July, they made four key points.
First, they highlighted the fact that the imposition of EU Vehicle Type Approval standards on NI would make the same new car purchased in Northern Ireland up to £4000 more expensive than in Great Britain from 1 February 2026.
Second, they pointed out that the imposition of EU environmental standards from 1 February would make it significantly more expensive to tax new cars brought in Northern Ireland than in Great Britain.
Third, they explained that this was having the effect of terminating the UK internal market for goods as it relates to new cars, replacing it with a GB Internal Market for new cars and an NI/EU Internal Market for new cars.
Finally, they pointed out that the only solution was to recreate the UK internal market for new cars by making the GB Vehicle Type Approval regime, the UK Vehicle Type Approval regime.
However, on 17th July the Government, in responding to problems arising from the imposition of the Irish Sea New Car Border which I had raised with the Secondary Legislation Scrutiny Committee, stated:
‘The Department recently wrote to manufacturers to reassure them that GB regulations will be maintained to be aligned with those in the EU to ensure vehicles can continue to be sold UK wide. … The Department has made a commitment to an explicit presumption of alignment because this is in the interest of the UK in terms of breaking down barriers to trade with our largest trading partner, in a predominantly export focussed industry, and protecting the UK internal market.’
This statement has profound implications both for UK citizens in Great Britain and in Northern Ireland.
In the first instance, it represents a complete U-turn on the policy of the previous government in relation to Vehicle Type Approval which, while not opposed in principle to having a Vehicle Type Approval Regime that may reflect that of the EU in some respects, where doing so makes sense, was very much focused on seeking to exploit the freedom of not having to submit to the excesses of EU bureaucracy. It means that not only will consumers in Northern Ireland now find new cars increasing in price by as much as £4000, and that taxing those cars will also become more expensive. These cost increases are now government policy for the whole UK.
In the second instance, it presents an entirely unworkable solution for NI car dealers because the Government clearly does not have the stomach to impose all the requisite EU standards on Great Britain in one go. It is doing so in increments which is where Road Vehicles (Type-Approval) (Amendment) Regulations 2025 come in. We are now on our third set of these regulations this year.
This is no help for Northern Ireland car dealers because unless the UK Government imposes all the EU requirements on GB Vehicle Type Approval immediately, it will still be in the interests of car manufacturers to make sure that many of their vehicles are produced to the less bureaucratic GB Vehicle Type Approval Standards.
It is hard to reconcile the Government’s incremental approach in these regulations with their obligation to uphold Northern Ireland’s place in the UK Internal Market, as set out in Section 46 of the UK Internal Market Act, when they could simply replace the two divergent Vehicle Type Approval Regime with a common UK-wide regime.
Last week the National Franchised Dealers Association’s followed up their 2 July presentation to Stormont, explaining that a number of key manufacturers have now announced that it is not worth their while producing cars in GB to the EU Vehicle Type Approval standards and that they have decided to stop selling new cars in Northern Ireland. They explained that this will have, and is already having, a devastating effect on the Northern Ireland new car sales market. It means significantly less choice for people wanting to buy new cars in Northern Ireland, that the cars that are available will be more expensive to buy and tax, and that the new car sales businesses in Northern Ireland are now looking at significant job losses.
The NFDA acknowledged that the Government has stated its intention to bring the GB Vehicle Type Approval fully into line with that of the EU Vehicle Type Approval regime but because they are doing so gradually it will do nothing to save the Northern Ireland new cars sector. In this context they said that the Government must act immediately to extend the GB Vehicle Type Approval regime to Northern Ireland so that whatever standards apply in GB, also apply in NI. In this context the UK single market can function whether the resulting UK Vehicle Type Approval framework is to EU or UK standards.
These extraordinary developments place in sharper focus than anything hitherto, the stark nature of the EU’s strategy to undermine Brexit. By keeping part of the UK in the EU (and it would not matter what part of the UK it was, Wales, England, Northern Ireland or Scotland) they make it impossible for the country to function unless the rest of it falls into line with the EU. We can respond either by meekly bowing to the EU, or we can call out this audacious strategy for what it is, an attempt to humiliate the UK by dividing us into two and then using that division to nullify Brexit to the greatest possible extent. I am clear that this is a key moment of decision in the history of our nation that requires us to come together from all corners of the United Kingdom to demonstrate the determined resolve and self-believe that will not compromise on our integrity in any sense of the word. If we demonstrate this kind of conviction politics rather than the dismal irresolution that has sadly informed our statecraft since 2017, then we will discover that we have more cards to play than our remain establishment would like us to believe and the means for securing a much better future for us all.
A Moment of Decision – The Car Border and what it means for us all
