Belfast Telegraph

The cost of Boris Johnson's Brexit deal to Northern Ireland

Potential £60 cost for GB to NI paperwork

Prime Minister Boris Johnson said the agreement was a
Prime Minister Boris Johnson said the agreement was a "great deal".
Jonathan Bell

By Jonathan Bell

The impact of Boris Johnson's Brexit deal with the EU could see a downturn in trade, business investment and consumer uncertainty because of a regulatory sea barrier down the Irish Sea, the UK Government's own impact assessment of the agreement has warned.

Firms could face having to pay costs of between £15 and £56 - or possibly more - for each declaration of goods moving from GB to Northern Ireland.

The true costs to NI business could not be estimated by government officials given the current lack of a need of paperwork for goods crossing the Irish Sea.

One business expert, however, said without knowing the detail or the true costs, the phrase "being sold a pig in a poke came to mind".

Brexit Secretary Stephen Barclay has said Northern Ireland businesses will be forced to fill out export declaration forms when sending goods to Britain. His admission led to claims the Government was breaching its commitments to allow "unfettered access" to the GB market for firms in Northern Ireland with new bureaucracy.

Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry said firms trading with the rest of the UK faced an extra administrative burden.

Dr Esmond Birnie of the Ulster University Business School, expressed his concern given there were no figures on costs for goods moving from GB to NI, costs on NI adhering to EU VAT rules, agri-food regulations and manufacturing goods regulations.

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"Perhaps understandably the Whitehall department pleads a lack of data or the fact that schemes have still to be operationalised," he said.

"However, the phrase about being sold a pig in a poke might spring to mind."

The Prime Minister described his agreement with the EU as a "great deal" which would include "light touch" measures on trade. He said the matters automatically dissolved if the Northern Ireland Assembly voted on it". The Foreign Secretary Dominic Raab described it as a “cracking deal” for Northern Ireland because it will allow “frictionless access to the single market”.

The Withdrawal Agreement has been tabled in parliament on Tuesday for its second reading. The DUP has said it will not back it in its current form.

It is next to impossible to calibrate with any confidence the potential impact. Government assessment

The Government's impact assessment, published on Monday evening alongside the Withdrawal Agreement Bill, does state the government could mitigate those "risks" to business through action to help companies cope with the changes.

The proposed Brexit deal effectively puts a border down the Irish Sea. Northern Ireland would remain aligned with the EU on goods, including certain laws for VAT on goods.  EU tariffs would be applied in NI except for goods moving within the UK.

The impact assessment examines the impact the protocol covering Northern Ireland and the Republic would have as well as other matters.

On Northern Ireland's new arrangements - should the bill be passed in Parliament - the document states there could be additional costs for business in Northern Ireland and the Republic, "but these are inherently uncertain in their nature and intensity, as such, these costs have not been quantified".

It says businesses will face "familiarisation" costs to adapt to the new processes.

There would be no tariffs imposed unless those goods concerned were heading for the EU but again some firms may face "familiarisation" costs as they adept to the new regime.

The paper states the government "may" also look to apply a system of reimbursements and waivers.

But for goods moving between NI and the Republic there will be no additional costs.

Northern Ireland Chamber of Commerce chief executive Ann McGregor added: "Whatever these forms turn out to be, it will be very different from what we have now – adding a further administrative burden to businesses and slowing down the on-time delivery model that many companies operate.”

Trade values

The 69-page, 327-paragraph impact assessment shows Great Britain is Northern Ireland biggest trading partner with a value of around £18billion - or 56% of NI trade. Around £5bn - or 16% - goes to the Republic which is NI's largest international trade partner, the paper says and another £3.6bn to the rest of the EU. Another £5.5bn, or 5.5% goes to the rest of the world.

It also shows £11bn in sales are made to the rest of the UK on an annual basis, with the biggest category being food, beverages and tobacco.

However, it states there is no detail on the number of goods that move from GB to NI and it is difficult to provide an estimate as there are "gaps in the data" given the current unencumbered trading arrangements between NI and the rest of the UK. It is not known, for example, how many businesses in GB trade with Northern Ireland.

A lot of the detail on the exact costs to Northern Ireland trade have not been estimated as the exact detail of how arrangements are to work are to be hammered out in a special joint committee of EU and UK officials.

However the impact assessment focuses on the movement of goods between GB, Northern Ireland and the Republic, "as this is where the majority of economic costs and benefits are expected".

It also examines the provisions for maintaining north-south cooperation on issues such as rights for people, the commons travel area, the single electricity market, safeguards and the consent mechanism.

Elsewhere it states:

  • State aid rules in Northern Ireland would be aligned to the EU with European Commission oversight.
  • There would be additional powers for the Northern Ireland Human Rights Commission and Equality Commission.
  • Special arrangements for agricultural subsidies, the details of which to be considered by the joint committee.
  • For fishing, the EU Customs Code is applied to and in Northern Ireland, but not to UK waters territorial adjacent to Northern Ireland and the Joint Committee examining products which are exempt.

The impact assessment warns of the potential disruption should the withdrawal agreement not be passed into law and the UK leave without a deal with the EU.

 “It is next to impossible to calibrate with any confidence the potential impact of this sort of scenario in advance, because of the lack of any relevant precedent,” the impact assessment states.

"The Bill is a vital tool in delivering a smooth and orderly exit from the EU," the impact assessment states.

It does state the UK Government will not introduce border checks for goods coming from the Republic into Northern Ireland - or implement the temporary UK tariff regime on EU imports moving across the Irish border.

"This regime is only temporary as the Government recognises that there are challenges associated with this approach," the documents states.

It also says in the event of a no deal the Government would "urgently" engage in talks to prevent a hard border.

"The UK Government has also committed unilaterally to not placing infrastructure, checks or controls at the border between Ireland and Northern Ireland under any circumstances."

All arrangements set out in the protocol are subject to ongoing consent of the Stormont Assembly and they lapse if consent is withheld.

And in no-deal scenario there would be no new costs for business between Northern Ireland and the rest of the UK.

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