Ignoring the minority could turn problem into crisis

When we met with the US political delegation last week at the conclusion of their visit to Europe, Congressman Richard Neil remarked that “the Protocol is not a crisis; it’s just a problem”.

Tina McKenzie, FSB chair of Policy and Advocacy
Tina McKenzie, FSB chair of Policy and Advocacy

When we met with the US political delegation last week at the conclusion of their visit to Europe, Congressman Richard Neil remarked that “the Protocol is not a crisis; it’s just a problem”.

In making this observation, he drew on references to the context in which the Belfast/Good Friday Agreement was eventually wrought.

The challenge with many long-running political problems is that they can become increasingly difficult to address and overcome and a problem left unresolved can drift towards crisis.

In the progress of the Protocol to date we have had dialogue, high drama, logjams and sticking plaster fixes, but we are still far from a settled resolution. As things stand, our members sit within a number of categories: those for whom the Protocol is working well; some who are protected from its worst impacts because of the grace periods; and others in service businesses where it has no real relevance. But a significant minority are really struggling to navigate the scale of customs declarations, compliance checks and increased staff and transport costs as a result of the new trading regime between GB and NI. The disproportionate impact of the Protocol on these businesses, which are mainly micro and small firms, has largely been overshadowed by the ‘good versus bad’ nature of the commentary around the dispute.

In the EU-UK political tug of war, the need to protect the Good Friday Agreement has been repeatedly used by both sides to justify positions and future intentions. That is not a great surprise. The delicate and interwoven balance it achieved is a perfect example of the ability to make the seemingly impossible a reality. One of the main tenets of the Belfast/Good Friday Agreement was that of the need to protect minorities, so it should be of great concern to all of us that the operation of the Protocol is seeing a significant minority of businesses being badly impacted. Protecting this group, who are suffering as a result of the deficiencies of the arrangement, should be at the forefront of everyone’s mind.

Business owners have become increasingly exasperated as the two sides of the negotiation appear to talk past each other. This has resulted in business groups collectively offering to participate in a tripartite conversation with the EU and UK so that a baseline can be established from which to move forward. The problems have been well mapped and articulated, but potential solutions appear and disappear against a backdrop of misunderstanding or mistrust. Proposals that will get the buy-in of both sides have exercised the minds of negotiators for far too long now, without having moved us very much further forward. 

If we look at the very basis of human movement as a fundamental reference point, opposing muscle groups must coordinate and become partners for us to move and function properly. Similarly, a coordinated push and pull in the political sphere could see the proposed improvements advocated by each side being harmonised to make the Protocol fit for purpose. Just as the Belfast/Good Friday Agreement made provision for a framework from which trust could evolve, the Protocol must move towards a situation where trust plays a significant part in reducing friction. Arrangements must evolve that reflect and protect the unique nature of business in NI and recognise the particular economic territorial situation here.

During a recent appearance before a House of Lords Committee, the Minister of State for Europe, James Cleverly, acknowledged that the “sticking point centres on the level of reassurance that the EU seeks about the integrity of the Single Market”. A ‘Trusted Trader’ concept, leading to a ‘green channel’ option for goods coming into NI for use here, as opposed to those that pass through into the Single Market, is one of the key proposals on the table. Business is already trusted to perform many functions – from retrospective tax and VAT returns, to product standards and much more – so with political good will, the concept of trusting business could be at the heart of giving the EU the assurance it needs around protecting its Single Market. Almost a year and a half into the operation of the Protocol and still with no settled state in sight, business is clear; there are solutions to the problems.

Vice President Šefčovič stated that the Protocol, “has the flexibility to work on the ground”. Our members welcome that spirit – especially the minority who are toiling under the worst excesses of its application – but they need to see it in action. We are calling on both the EU and the UK to step up the pace and resolve the problems by negotiation, soon.