Brexit backstop replacement plans ‘could mean small NI firms go bust’

Small businesses in Northern Ireland could go bust under the burden of extra costs and administration created by proposals to replace the Brexit backstop, an expert panel has been warned.

The Alternative Arrangements Commission was in Belfast to present its recommendations for overcoming the main sticking point in the Brexit process.

The non-governmental panel, set up by think tank Prosperity UK and chaired by Conservative MPs Greg Hands and Nicky Morgan, brought together business representatives, academics, customs and technology experts to examine ways to keep the Irish border open if the UK leaves the customs union and single market post-Brexit.

Last week they proposed a range of solutions, including a sophisticated trusted trader scheme for customs declarations, mobile regulatory inspection teams operating away from the border and the formation of a new UK/Ireland single zone for food standards.

Panel members faced a number of challenging questions as they presented their proposals to an audience at Ulster University on Wednesday.

Mary Meehan, who represents manufacturing companies in her role as deputy chief executive of Manufacturing NI, raised concerns that the proposals would swamp traders in red tape.

Afterwards, she said: “There’s are a lot of shortcomings and gaps within the report and I think there’s still a lot of work to be done in that report.

“Extra bureaucracy and extra costs could mean jobs at the end of the day and at Manufacturing NI we need to protect the jobs within the manufacturing sector.

“Potentially some of our businesses could go out of business with these additional margins that could be put on.

“If you look at the agri-food sector in particular that work on single-digit margins and whose supply chain is so interlinked on a cross-border business – 70% of companies have supply chains across the border – when you consider those working within single-digit margins, companies simply couldn’t sustain that additional cost.”

Mr Hands said the proposals were a way of avoiding a no deal – a scenario which he said would have a much more severe impact on businesses in Northern Ireland.

“Alternative arrangements can be done,” he said. “They are possible, feasible and practicable.

“These are a set of proposals that we think offer the basis of what could be an agreement on Brexit. What we are trying to avoid here is a no-deal Brexit which I think would be a very considerable burden for businesses in Northern Ireland and across the two islands.

“That’s what we are trying to avoid and that is what the report does in trying to set up a different way of solving the problem and issue of the Irish border.”

Panel chairman Shanker Singham highlighted that one of the proposals was the establishment of a Government fund to help financially support businesses who had to increase their administrative capabilities.

He said the arrangements could also be implemented with the use of existing technology.

“Media often says it’s all about technology – it’s not all about technology,” said Mr Singham.

“Technology is not the driver for the solution, but it’s equally absurd to say technology plays no role at all.

“Technology has a component – it supports the technical and administrative processes we are talking about.”