Business

Let's get a deal that works for all UK regions

Ibec's Fergal O’Brien (left) and Danny McCoy with the CBI's Angela McGowan and Carolyn Fairbairn

LAST month the CBI's Director General Dame Carolyn Fairbairn paid a visit to Northern Ireland to hear the views of businesses first-hand.

And what they said was clear - a deal with the EU is essential, the border must remain invisible and our unique geography, our history and our much-prized peace process must be taken into consideration.

Over the last two decades the Irish economy and Northern Irish economy have become intertwined; with goods and people able to move freely from north to south to the benefit of both. While the UK government has said time and again that there will be no hard border; the reality is that in the event of a no-deal Brexit local businesses will have to self-impose a barrier to trade or risk breaking the law.

It would freeze the flow of goods from north to south overnight, because without a deal there is no legal framework for the market to continue as it has. Goods cannot be sold into Ireland without certifications as doing so would leave both the seller and buyer open to lawsuits.

And it is this gap between government rhetoric of avoiding a hard border and reality, the legal default that is uniquely punitive for the Northern Irish economy. A de facto border between north and south would spring up on day one of no-deal.

Local businesses recognise the hard choices politicians will face over coming weeks and have two important new messages they want to them to hear.

First, a no deal outcome is the beginning of years of chaos: a swamp rather than a cliff-edge. It may appear to some like it will be a glorious, leap to freedom. But that's dangerously false. For thousands of firms it would mean extending the crippling uncertainty, years of negotiations against a backdrop of ill-feeling.

It would mean the same conversations, over and over, from the Northern Ireland border to rules and regulations, to payments that must be honoured. New barriers to trade; EU citizens in the UK and vice versa facing uncertain futures. Business contracts, flows of data, professional service companies which make up 80 per cent of the economy, and so much more, left in a state of legal limbo. And once we are in that swamp it will be hard to escape it.

The second message from business across Northern Ireland is that being prepared is not the same thing as being protected. Firms are doing everything they can to be ready for a no deal outcome. Where possible they are stockpiling and currency hedging, applying for EU registrations or moving supply chains and shipping routes.

Billions of pounds are being spent on preparation. But unfortunately, it is impossible to protect many businesses against the impact of no deal. You can put sandbags down against the floodwaters but that's all.

While many big businesses feel they have done what they can, the same cannot be said for smaller businesses. SMEs are woefully unprepared, with neither the time nor resources to take action

The evidence of no deal already affecting businesses is equally alarming. Contracts are already being lost to competitors weaponising uncertainty against UK rivals. Some local businesses who need to import from smaller firms in the EU are experiencing difficulties placing orders - because SMEs in Europe have no intention of becoming customs experts when they have a market of 500 million to sell to.

Without a deal, this economy will suffer badly. Leaving the EU with a deal will support economic growth and give Northern Ireland the opportunity to get back on its feet again. It will take the endless arguments off the front pages and bring oxygen flooding back to domestic opportunities and getting the local Executive restored.

Perhaps most concerningly of all, the UK's long-held reputation as a stable, common-sense place to do business is being openly questioned. As the world watches and the drama unfolds, slowly but surely more investors are looking elsewhere.

So, it's time to get back to what really matters and businesses in Northern Ireland have a clear and simple message for Government. Get a deal, accept that Northern Ireland needs to be treated differently and let's move on to creating an economy that works for all regions of the UK.

:: Angela McGowan is director of CBI Northern Ireland. Follow her at @angela_mcgowan

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