Government's ‘political approach' to NI Protocol leaving businesses in dark

• Read the summary
• Read the conclusions and recommendations
• Read the full report: Unfettered Access: Customs Arrangements in Northern Ireland after Brexit

Under the Protocol, NI will be part of the UK's customs territory but will continue to follow EU customs law and regulations on goods in order to avoid a hard border on the island of Ireland. This has the potential to create significant trade disruption if EU and UK laws diverge.

The report underscored businesses' anxieties about the lack of detail on the processes that they will face trading across the Irish Sea. Time to prepare for new customs arrangements is narrowing and this, at a time when resources are stretched by Covid-19 which itself is challenging many business models and plans. Business needs to know what it is they are preparing for or they will be faced with delays and costs that could make them unviable. The report sets a 1 October deadline for the Government to provide details of the processes and documents required for trade between Northern Ireland and Great Britain.

The report comes amidst the backdrop of growing concerns within the Cabinet of the state of the UK's readiness for its post-Brexit border plans. A letter by Liz Truss leaked to press last week, after the agreement of the Committee's report, highlighted concerns that the dual tariff system needed to manage the Protocol may be delayed, and as a result HMRC planned to apply the EU tariff on all goods.

The Government's Command Paper on implementing the Protocol came under heavy criticism during the Inquiry. The Committee suggests that the paper does not sufficiently recognise that achieving its stated aims requires negotiation, and creates new barriers to free trade within the UK internal market. It confirmed goods moving from Great Britain to Northern Ireland would attract "new administrative requirements and associated costs", warning that "Northern Ireland businesses will trade at a competitive disadvantage with other UK firms" with the people of Northern Ireland facing higher costs of living and reduced choice as a result. In order to prevent any disincentive to trade the Committee said the Government must commit to covering all the costs to business for complying with the protocol.

Even in areas where the Government has more control over customs arrangements, namely on goods entering GB from NI, it is not entirely in its power to provide promises of  'unfettered access'. The Committee notes that achieving this would need the EU to waive their own rules for exit summary declarations, something the EU has indicated it will not agree to. The report states the Government must set out how it will facilitate unfettered access if it is unable to secure export declaration waivers.

Chair's comments

Chair of the Northern Ireland Affairs Committee, Simon Hoare MP, said:

"Political process must not trump the interests of the people of Northern Ireland.

The Government may be able to wait until the wire for clarity on customs arrangements, but business cannot. Those trading across the Irish Sea have been told to prepare without knowing what to prepare for. It's now time for them to get that clarity, and they must have it by the 1 October.

If not, business will not have time to prepare for the realistic prospect of friction and delays to products moving between Great Britain and Northern Ireland. This will increase their costs, with an accompanying increase in the cost of living.

Such frictions would be incompatible with the notion of  'unfettered access' touted by Government ministers. It would put Northern Ireland at a competitive disadvantage compared with the rest of the UK and would damage business confidence at a time when it has seldom been lower.  If this happens, business must be reimbursed for the cost of complying with the Northern Ireland Protocol.

Coronavirus has taken a heavy toll on business and the economy which will only get heavier as the looming recession bites. There is no need, and no reason, to add insult to injury for political gain.

The Government needs to stop gambling with the future of business and of the people of Northern Ireland. Instead, it must set out detailed and realistic proposals on how customs processes will work and which goods will be affected. Unfettered access was promised, but it looks less and less likely that it will be delivered. Northern Ireland is part of the UK, and it must not experience particular disadvantage because of Brexit."

The Committee also examined how the implementation of the Northern Ireland Protocol will be scrutinised. You can read more on this in the report.

Further information

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