Businesses in Britain could decide it is economically unviable to continue operating in the north if flexibility is not shown in Brexit negotiations on goods crossing the Irish Sea, a report has warned.
The House of Lords EU Committee said such a scenario would “undermine Northern Ireland’s economic model, its future prosperity and, potentially, its political stability”.
It warned that with just seven months to go until the Northern Ireland Protocol kicks in at the end of the Brexit transitional period, time is running out to provide businesses with certainty.
A deal reached in talks last year will see the north follow EU rules on agriculture and manufactured goods to preserve a single regulatory zone on the island of Ireland and avoid a hard border.
However, this means checks will be needed on some goods entering Northern Ireland from Britain, with the government so far pledging only that bureaucracy will be kept to a “minimum”.
The Lords report warned that unless the joint committee of EU and British officials adopts a flexible definition of goods at risk of ending up in the Republic, checks could have a “serious detrimental impact”.
Lord Kinnoull, chair of the House of Lords EU Committee, said it warned back in 2016 of the danger of Northern Ireland becoming collateral damage of Brexit.
“The government and the EU now urgently need to work together to provide clear guidance and a proportionate approach to the application of the Protocol. Failure on either side would threaten Northern Ireland’s prosperity and stability.”
A UK government spokesman said its proposals will deliver unfettered access for Northern Ireland businesses to the whole of the UK market, ensuring there are no tariffs on goods remaining within the UK customs territory and no need for customs infrastructure in Northern Ireland.
“We are committed to implementing our obligations under the Withdrawal Agreement and have set out the approach that will guide us as we do,” he said.
SDLP minister Nichola Mallon said she will put a proposal to the executive today to ask the British government for a Brexit extension: “The clock is ticking down on Boris’ Brexit and the simple reality is that there isn’t enough time to prepare our businesses and communities and our economy from its impact.”
