FAILURE to resolve the impasse over the Protocol will make business conditions worse this winter, more than a dozen trade bodies around the north have warned.
The Northern Ireland Business Brexit Working Group has called on the British Government and the EU to redouble their efforts and strike a compromise after forecasts that UK inflation is on course to hit 18.6 per cent this winter.
Representing 14 major trade bodies here, the group said the protocol issue had become “dominated by inflexibility and intransigence”.
It comes as groups of retailers, hospitality firms and regional business groups issued a separate warning on Monday that the future of thousands of businesses in the north are under threat this winter without urgent government intervention on VAT.
The groups have published a joint action plan which includes calls for VAT to be reduced to 17 per cent and an extension of a rates holiday for businesses.
The NI Business Brexit Working Group said the scale of the economic challenge this winter “demands a swift resolution to the impasse”.
It said communities in the north have already experienced the largest fall in discretionary spending of any UK region.
The joint statement from the business groups said any outcome “must protect GB-NI consumer facing supply chains”, adding that: “This will require much more ambition than we have seen to date from the EU on the issues of SPS and parcels in particular.”
But the organsiations have repeated its warning to the British Government that proceeding unilaterally with the Northern Ireland Protocol Bill, particularly with the creation of a dual regulatory regime “will create a myriad of reputational, legal and commercial risks for many of our businesses”.
The statement also said the bill will harm the performance of the north’s exporters.
“Northern Ireland has been a top performing region in exporting goods since EU Exit, but that is now being put at risk.”
The statement said the need for an urgent resolution will become much more acute through the second half of this year.
“It remains our firm belief that through agreement, with ambition, flexibility and compromise from both sides, a balance between upholding much needed access to the GB market and protecting the EU single market is achievable. The EU and the UK, acting together, have a responsibility to deliver this.”
That warning emerged less than 24 hours after traders around the north spoke of “a critical juncture” for businesses, with thousands of firms threatened over the next months if no action is taken.
On a day when the Citi investment bank warned UK inflation could hit 18.6 per cent in January, a joint statement from Retail NI, Hospitality Ulster, the NI Takeaway Association and a dozen regional chambers of commerce around the north, said the surge in energy costs and inflation, alongside labour shortages, National Insurance increases and “sky-high business rates” are risking the business climate of Northern Ireland.
“Fears that many will simply go under in the next months without government assistance are keenly felt and we cannot continue on this path of destruction any longer.”
As well as extending the business rates holiday to April 2023, the groups have called for VAT to be cut to 17 per cent, with a reduced VAT rate for tourism and hospitality businesses and the removal of VAT from energy bills.
Extra money via the block grant to support a cut in business rates and setting up a new rural town and village infrastructure investment fund, is also on the list of demands.
“We are pushing customers away due to having to raise prices to keep pace with these rising costs, which is therefore having a detrimental impact on trade and consumer confidence,” continued the statement.
“Intervention is required by the UK Government, as well as the limited powers of NI Executive Ministers, to stave off the worst of this crisis on business owners and provide tangible support and resources that could keep trade viable.
“We call on both governments to consider our proposals and engage with the business community on how best to implement urgent actions that can alleviate these crippling pressures. It will support both businesses and consumers in this most pressing of times.”
