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Business has been left in the dark over Northern Ireland’s future

Business has been left in the dark over Northern Ireland’s future

Port of Belfast. The Northern Ireland Affairs Committee says it is essential that the Government meet its commitment to providing ‘unfettered access’ for Northern Ireland goods

4 min read

Businesses will soon face new requirements that make it more complicated and costly to trade across the Irish Sea. But with just a few months to go, too many important questions remain unanswered

On 1 January, businesses trading between Northern Ireland and Great Britain will see the way in which they do business change overnight. As the Brexit transition period ends so the Northern Ireland Protocol takes effect. For businesses that trade across the Irish Sea, this is the biggest change in a generation. 

The Northern Ireland Affairs Committee’s new report on customs arrangements after Brexit shows that businesses have been left in the dark by the Government’s approach with little engagement or consultation as to how the political vision of the Protocol can translate into business usage.

Businesses will face new requirements that make it more complicated and costly to trade across the Irish Sea. With 46% of goods leaving Northern Ireland coming from, and 49% of goods entering Northern Ireland going to, the rest of the UK, it could place a brake on the Northern Ireland economy where it is most exposed.

During our Inquiry, businesses told us that it is essential that the Government meet its commitment to providing ‘unfettered access’ for Northern Ireland goods. The Government’s Command Paper published in May expressed that ambition but turning aspiration into reality will require the EU to waive the requirement for exit summary declarations, which Michel Barnier has said that the EU will not do. Without such agreement by the EU, it is not clear how the Government can keep its promise on unfettered access. The Inquiry picked up a nuance that because it was called a Command Paper the Government saw it as just that, a command rather than a negotiable proposal.

Businesses also emphasised the importance of being able to move goods freely in the other direction, from Great Britain to Northern Ireland. Here we know that there will be changes to the way in which trade works. As the Government’s Command Paper acknowledged, new declarations will be required, and expanded infrastructure will be needed at points of entry to Northern Ireland. This means costs, which will ultimately be passed on to Northern Ireland’s consumers adding to the cost of living at a time when the economic effects of Covid continue to be felt and fear of a major recession looms large.

It also affects business confidence and has the potential to disrupt fragile supply chains. In our Report, the Northern Ireland Affairs Committee warns that this puts business in Northern Ireland at a competitive disadvantage to other parts of the UK. We have therefore recommended that the Government should compensate business for the new costs that it will incur.

All this is made doubly challenging by the political imperatives of Brexit, which mean the new arrangements must be up and running in less than six months’ time. Perhaps the most worrying thing we learned in our inquiry was how little engagement there had been with businesses, many of which are only now receiving information about what they may need to do to be ready.

Furthermore, business has important questions that remain unanswered. Before business can prepare, it must know what it is preparing for. With the already compressed timescale further disrupted by Covid-19, we urge the Government to set out exactly what preparations businesses need to make no later than October. 

The challenges for Government are daunting, with new infrastructure, IT platforms and thousands of new staff all needed by the end of the year

The challenges for Government are no less daunting, with new infrastructure, IT platforms and thousands of new staff all needed by the end of the year. It emerged last week that the International Trade Secretary has raised, with Cabinet colleagues, concerns about the deliverability of the Protocol. Business representatives in Northern Ireland have described the task as ‘Herculean’. We recommend that the Government updates Parliament to allow those crucial projects to be scrutinised. 

The Northern Ireland Protocol was created to reconcile the demands of Brexit with the need to uphold the guarantees of the Good Friday Agreement and to protect the gains of the peace process.  It was therefore right that the Government looked east-west rather than north-south to meet the challenges presented by our only land border with the EU.

Whatever new arrangements are required, close working between the police of Northern Ireland and the Republic will be needed to ensure that new opportunities for smuggling and other illegal activity are not created. Experience tells us where a large percentage of the proceeds of such activity goes.

Brexit presents unique challenges for Northern Ireland as it provides the buffer between two single markets. Politics will dominate the coming weeks as the final scramble for a much-needed Deal reaches its climax.

In all of that, we cannot afford to let business in Northern Ireland down and we hope that the Government responds positively to our report.  

Simon Hoare is Conservative MP for North Dorset and chair of the Northern Ireland Affairs Committee 

 

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