Brexit might be seen as a lower priority
As the coronavirus crisis continues to dominate everyone’s thoughts, you’d be forgiven to think that Brexit might be seen as a lower priority.
The UK Government’s paper on the Northern Ireland Protocol last month provided a much welcome indication about the UK Government’s plans – but there are still many questions that need to be answered.
The Protocol was the compromise that avoided a no deal exit, it is vital now that the EU and UK work together to protect the peace and prosperity of those who will be impacted by it - the businesses and consumers of Northern Ireland.
The Protocol is only one part of the jigsaw, and companies will have their heads in their hands about the worrying lack of progress following the latest round of talks. Anxiety is mounting amongst the Northern Irish business community that, let’s face it, has little resilience to spare.
As we’ve begun to take the first tentative steps into the recovery phase, every decimal point of economic growth has to be fought for.
With limited growth plaguing Northern Ireland’s economy for years, long before this current crisis emerged, the task is more urgent than ever before. The bottom line is getting a good Brexit deal for our economy is essential. That’s why businesses across the UK expect negotiators on both sides to approach talks with a determination to deliver.
Negotiation by videoconference is far from perfect, preventing the kind of side-line conversations that can help smooth differences in formal talks. Even more limiting is adhering to rigid negotiating mandates. Unless the dynamic shifts in this latest round of accelerated talks, it looks like both sides will stay trapped in a holding pattern, with no trade deal a real possibility at the end of the year, when the transition period is scheduled to end. For businesses, jobs and economic confidence in this most challenging of years, that would be a shocking outcome which must not come to pass.
For many Northern Irish firms fighting to survive, the idea of preparing for a chaotic change in trading relations with Great Britain in seven months is beyond them. They aren’t remotely prepared. Stockpiles built to weather a Brexit storm are long depleted and supply chains are fragmented by an unprecedented global pandemic. Many NI businesses, especially smaller ones, have burned through cash reserves they would have otherwise used for rainy days. On top of this, the support from the Jobs Retention Scheme and rates relief will be coming to an end for many businesses.
The net impact of no deal would be higher unemployment at a time when we will be fighting for every job. Significant losses, particularly in our manufacturing, retail and hospitality sectors, would simply be devastating for local communities and our economy. For everyone’s sake, the Protocol taking effect in a cliff-edge scenario is not the answer. What is more, Northern Ireland will not benefit from the proposed flexibilities on post-transition border controls on goods, announced last week by the UK government.
So, what needs to happen now?
Political leaders across Europe have shown in recent months that what previously may have been thought of as impossible, is not. They need to use that determination and leadership to find a route through in the talks. This must continue, building upon the conversation yesterday between UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen.
The global pandemic could end up claiming many jobs in Northern Ireland, and possibly millions across these islands. The stakes are higher than ever before. Walking away with no deal would be a major block to recovery. It would worsen inequalities, damaging regional and national growth. Many businesses are not – and cannot – prepare for the impact of no deal on top of what is happening.
The UK Government has repeatedly ruled out an extension to the transition period, which means firms therefore have no choice but to plan on that basis. But that means a deal is now the only acceptable option.
A good deal with the EU with a sustainable agreement on the implementation of the Protocol is necessary for renewal. As businesses start to get up and dust themselves off, and as we shift from revive to recover, a recovery plan that reaches all parts of Northern Ireland is essential. Every opportunity for growth must be seized, particularly to support young people and kick-start demand.
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