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Brexit customs deal 'could cost Northern Ireland importers up to £500m a year'



Expert: Dr Esmond Birnie

Expert: Dr Esmond Birnie

Nigel McDowell/Ulster University

Expert: Dr Esmond Birnie

A customs partnership with the EU could saddle Northern Ireland importers with £500m of annual upfront costs, MPs have been warned.

In order to avoid a hard border in Ireland, it has been suggested that the UK might be prepared to consider a customs partnership with the EU that would see it collect tariffs on the EU's behalf on goods arriving by sea to Northern Ireland.

Importers that retained those goods within Northern Ireland and did not transport them on to the EU would be potentially eligible to claim back the duty paid.

Dr Esmond Birnie, senior economist at Ulster University, has estimated the potential upfront duty costs on goods moving from Great Britain into Northern Ireland could be £500m a year.

Appearing before the Brexit Committee in Westminster yesterday, Dr Birnie said: "Businesses would be up-front out of pocket, as it were, for a considerable sum of money.

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"Then there would be a degree of administrative burden on their part to retrieve that money.

"We all know the difficulties which the business community have faced in terms of the apprenticeship levy, a system whereby most businesses pay into a pot and then, if they can, are required to draw back.

"The business community, both in Northern Ireland and here in Great Britain, have been extremely unhappy about how that has worked.

"I would envisage similar problems in a tariff rebate-type system. It would be fiendishly difficult to administer.

"There would be a cost (to government) in terms of setting it up and a cost to business in terms of their cashflow."

Roger Pollen, from the Federation of Small Businesses Northern Ireland (FSB), told MPs that the system could potentially work if there was no movement of money required and the tariff and rebate cancelled themselves out in one transaction.

"If that was a process that could be done in a simple transaction that would show tariff paid and tariff due to be reclaimed, and you would complete the transaction so there was no actual movement of money, just reconciliation, then people (FSB members) (feel it would be) manageable," he said.

"It comes down to level of detail. What will actually be behind that sort of transaction? If it is as seamless as that, then it is something people will deal with and take in their stride."

Meanwhile, Ivor Ferguson, president of the Ulster Farmers' Union, told the committee that livelihoods would be ruined if there was not an "orderly and managed" EU exit.

Mr Ferguson painted a bleak picture when asked what the consequences of a no-deal would be for his industry.

"Right from the word go, we realised that a no-deal would be catastrophic for our farming members," he told MPs.

"It would be catastrophic across all sectors of farming and, indeed, for the agri-food business in general. Of course, the agri-food business and farming is the biggest sector in Northern Ireland, so it would have a detrimental effect even on the Northern Ireland economy."

He said the potential for significant tariffs on goods moving into the Republic of Ireland was the most concerning threat, highlighting that 30% of milk and 50% of lambs produced in Northern Ireland go south.

"What would it mean for us? It would mean market failure and it would mean bankruptcy for a fair percentage of farmers," Mr Ferguson said of a no-deal.

"Obviously, you can understand it is a place that we just don't want to go."

PSNI Assistant Chief Constable George Clarke warned that while the dissident threat had been severe for a decade, there could be a potential further upsurge after Brexit.

He said the UK's exit from the EU could serve as a "clarion call" for the violent extremists. "They have a potential to rally," he said. "There is a potential for opportunities to exist for them to carry out their terrorist crimes and activities depending on what (border) infrastructure, for example, would look like."

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