An influential parliamentary committee has called for the extension of grace periods on full implementation of the Northern Ireland Protocol and “renewed dialogue” between the UK and the EU.
A House of Lords report published yesterday (27 July), authored by the Lords Sub-Committee on the Protocol on Ireland/Northern Ireland, warned of a "feast or famine" economy in Northern Ireland created by the protocol, with some businesses thriving while others struggle, reports ITV.
In compiling the report – a follow-up to one published a year ago – the Lords Sub-Committee on the protocol heard evidence from businesses and politicians in Northern Ireland, the UK and the Irish Republic.
TSS importance stressed
The report noted business belief in the importance of the Trader Support Service, the UK government’s digital service automating customs checks on goods moving between GB and NI, and the Movement Assistance Scheme for moving agri-food goods, in facilitating trade between GB and NI.
Witnesses noted that both schemes have been “critical in providing certainty and simplicity, where possible, and affordability” and that SMEs in particular were reliant on the TSS.
The Institute of Export & International Trade is part of the consortium providing the TSS.
Report findings on protocol impact
- Increased bureaucracy, staff resources, cost, and delivery times, as well as restricting the ability of firms to respond flexibly to supply and demand
- A disproportionately negative economic impact on SMEs
- Concerns that British businesses will withdraw from the NI market
- "Widespread" concern among businesses about the feasibility of UK government proposals for a dual regulatory regime, contained in the Northern Ireland Protocol Bill heading to the House of Lords this autumn. The regime would allow businesses to decide themselves whether to comply with EU or UK standards
- ‘East-West’ trade between GB and NI had “been negatively affected” by the protocol’s arrangements
- More positively, the protocol has led to NI firms benefiting from North-South trade and/or trade with the EU
- The report noted the importance of the protocol for sectors of the economy dependent on complex cross-border supply chains, such as dairy or meat processing firms
Report recommendations
- Mitigation measures should be made permanent, including grace periods for the introduction of further EU regulations. Grace periods, designed to reduce the volume of checks on goods moved between GB and NI, were initially agreed between the UK and EU before being extended by the UK unilaterally
- A call to introduce a green customs channel for products destined only for NI and not the Republic of Ireland and for a UK-EU SPS/veterinary agreement
- Businesses giving evidence to the Sub-Committee called on the UK government to make the TSS and Movement Assistance Scheme permanent and to ensure that as many firms as possible are able to benefit from their support
- A call on the UK government to implement the promised tariff reimbursement scheme without delay
- The need for a reset of relationships between the UK and EU, and the UK government with its counterpart in the Republic of Ireland
Urgent need for dialogue
Lord Jay, chair of the committee, told the Belfast News Letter the protocol was “causing economic instability in the sense that traders who want to trade from Great Britain to Northern Ireland are finding it difficult to do so given the way the present arrangements are being implemented”.
The UK government and the EU, together with the Irish government, NI political parties and stakeholders in NI, now need to “make a renewed commitment to work together to put Northern Ireland's interests first”, Lord Jay said, as reported by The Irish News.
Ulster Unionist Party finance spokesman Steve Aiken said that the UK government and the EU must take note of the committee’s findings, as noted by the Belfast News Letter.
US encouragement
The call for a reset in talks comes as the top US diplomat in the UK spoke of the importance of finding a resolution to the current deadlock, according to the Evening Standard.
US Ambassador to the UK Jane Hartley said: “What we’re saying is please have conversations and get this dialogue going again.”
Northern Ireland Protocol Bill
In its report, the Sub-Committee said it intends to begin scrutiny of the Northern Ireland Protocol Bill, which has cleared the House of Commons, and the EU’s response to it, in September to inform the House of Lords’ debate on the bill.
The report concludes that “we stress that a mutually agreed solution is the best outcome. Yet this requires flexibility and compromise on both sides”.
