Protocol precarity prevents proper prosperity

Regional News 29 Apr 2022

Our MLAs need to show leadership and to find common ground if small businesses are to benefit from the unique opportunities arising from a sensible implementation of the Protocol, says Roger Pollen, Head of FSB NI.

Perhaps unsurprisingly, warnings over the need to instigate radical steps to resolve the ongoing NI Protocol dispute have sounded more loudly within Westminster circles in recent days. Frustration at the lack of progress in breaking the impasse has been deeply felt by many in the small business community for a prolonged period – but it doesn’t need to continue like that.

We urgently need to see political resolution – reached in partnership with business, rather than being done to it. This is a key priority for FSB. Although the competing ‘replace versus repair’ narrative has been resurrected by opposing sides in the current Assembly election campaign, the reality is that the opportunities that a sensible and pragmatic implementation of the Protocol could present for small businesses simply cannot be grasped whilst politicians insist on retaining binary positions without compromise to reach resolution.

The divide between the UK Government and the EU needs to be bridged, so both need to move beyond the notion that there are only two conceivable options available. Similarly, with the election less than a week away, FSB’s Manifesto call for our newly-elected representatives to work strategically together to help fix the challenges and problems that the Protocol poses will be a chief determining factor in breaking the logjam.

Some pessimistic observers might point to the dangers of getting caught in the ‘expectation versus reality’ trap, particularly in light of the stop-start nature of the Assembly during the past five years. However, a new Stormont Executive with a fresh mandate, were it to reach a consensus on changes to address the problems of the Protocol, could find itself in a position to exert disproportionate influence on both the UK government and the EU. This is an opportunity that our new cohort of MLAs must not squander.

As a priority, there must be radical reduction in trade frictions on the movement of goods between GB and NI. We’ve had sixteen months of operating ‘Protocol-lite’ - with grace periods allowing significant unrestricted movements of parcels and supermarket goods - and the Single Market demonstrably hasn’t collapsed as a result, so both sides should rapidly work out how to embed these pragmatic relaxations. A ‘Trusted Trader’ concept that can account for goods coming into Northern Ireland for use here, as opposed to those that pass through into the Single Market, could be central to this. The current level of bureaucracy on food, plants, animals and intermediate goods coming from GB for consumption in NI is unsustainable if the livelihoods of SMEs are to be protected. But the EU’s Single Market must also be protected, so mutual recognition by the UKG and the EU of each other’s procedures, alongside an urgent need for innovative strategies, will be key to delivering a breakthrough.

While business will always get on with doing what it does best, it cannot be independent of government, so political and regulatory uncertainty will see it unnecessarily diminished.  At a time when spiralling costs are eroding small business margins at a pace many have never before experienced, the need for a strong, united voice cannot be overstated. Our business organisations have come together to give leadership and a single consensus view; following the election, it is vital that our politicians similarly find their common ground.

Leaning into Northern Ireland’s unique position was central to FSB’s proposal from four years ago – pre-Protocol - to designate the whole region as an Enhanced Economic Zone, making it a hub of trading and manufacturing, based on an ability to access both the UK and EU markets to give businesses here a transformative advantage. The ingredients of this proposal are still entirely relevant, especially if the UK Freeport policy were to be applied to the whole of Northern Ireland. The opportunity to connect our innovation, knowledge transfer, manufacturing, agri-food and exporting businesses could transform our local economy, creating wealth, jobs and funding better public services.

However, no potential benefits or advantages arising from the Protocol can be realised until the destabilising uncertainty that persists around it is resolved. Our MLAs need to show leadership, to prepare, and to find common ground if they are to grasp the unique opportunity of dual market access. Failure to do so could risk Northern Ireland’s economy being badly damaged - suffering the worst of all worlds rather than enjoying the best of both.

Chances favour those who are ready to seize them and, post-election, it would be wise to heed the words of George S Clason; ‘Opportunity wastes no time with those who are unprepared.