The View from the Chair, Tina McKenzie - August 2020

Press Releases 4 Aug 2020

A New Deal watershed

As Shakespeare wrote, There is a tide in the affairs of men which, taken at the flood, leads on to fortune….with a similarly well-turned warning about failure to act when opportunity presents itself. Currently, three tides are converging in Northern Ireland, creating a political ‘full sea’ - with potential to bring either ‘fortune’, or ‘loss and misery’. The first tide is the imminent conclusion of the Transition Period, after which we will be subject to unique arrangements arising from the Ireland/NI Protocol. The second is the related, and much-vaunted, ‘New Deal’ of which Prime Minister Johnson made much in his letter to Jean-Claude Juncker in October 2019. The third arises from the commitment of the Government to usher in a new form of freeport in locations across the UK.

Each ‘tide’ stems directly from the UK’s decision to leave the EU but, whether ‘Leaver’ or ‘Remainer’, business owners must now focus on making the best of the situation in which they find themselves. They recognise the power of these forces to do good; or to do harm, so it is clear that it must be taken at the flood if we are to go forward to economic and societal fortune. But it is equally clear that failure to do so would see us lose many ventures - both literal and metaphorical – with financial cost being only one part of the damage done. It’s incumbent upon all of us to ensure that this vast change to our trading arrangements brings opportunity rather than damage. The application of these three ‘policy tides’ must be undertaken with a spirit of generosity and imagination – akin to an economic Good Friday Agreement – where the prize was so great that everyone stretched themselves well beyond their natural limits. The prize is no less important this time, as we can ill-afford any of our population to spend “the voyage of their life bound in shallows and in miseries”.

The recent UK Government consultation on freeports looked at them in isolation from the Protocol and New Deal. Yet, developed with imagination, they could draw Northern Ireland closer together in a spirit of economic and industrial cooperation and deliver on our long-held ambition to grow the local economy, reduce our reliance on subvention, and become an economic powerhouse once again.

If we start from the point of view of fairness, then it is reasonable to expect that, of the ten freeports the Government proposes, one should be in Northern Ireland. But in such a small regional economy, a single freeport would risk creating major distortion, so the ‘fairness argument’ starts to re-emerge, quickly tinged with deep-seated contests around East and West/ Urban and Rural/ Unionist and Nationalist.  What if, instead, we designate the whole of Northern Ireland a single freeport, with each seaport and airport functioning as secure access and egress zones? With our university and college campuses well dispersed, the opportunity to link our innovation, knowledge transfer, manufacturing, agri-food and exporting businesses into the heart of a whole-NI freeport starts to offer real potential – all underpinned by a brand new Regulatory Compliance Certification Service. A further attraction of this approach is that it would have no implications for the border on the island of Ireland; it would not change from its current form, as the secure zones would provide the controls within the freeport, rather than at its fringe.

The NI Protocol relies on the ability to monitor products moving through Northern Ireland, so a compliance certification process is already envisaged. With little adaptation, this could quickly form the basis for underpinning compliance within a pan-NI freeport. A world-leading system for the agri food sector, using block chain, DNA sampling, geo-fencing and other regulatory controls, is currently being trialled in Northern Ireland, which shows that we have the capability to guarantee compliance to whatever standards are required, with scope to roll it out well beyond agri-food. The high regulatory compliance standards needed to serve both the NI Protocol and operate a freeport could, instead of being negatives, be used to give us a strong competitive edge as we build on our reputation for quality and product integrity.

The Protocol will bring benefits - but it will also add burdens, which must be counterbalanced. That is where the New Deal has a part to play. If that New Deal were to include a pan-NI freeport, reduced Corporation Tax, and a world-class regulatory compliance certification service, it would not only meet the commitments of both Brussels and Westminster but it would let us use our niche geographical and political position in ways that would give us a transformative advantage. As a package of measures, this New Deal would let Northern Ireland shine a beacon to attract global businesses through its portfolio of excellent market access to the UK and EU, freeport status to facilitate easier trading, a strong manufacturing and heavy industry base, a skilled work force, excellent universities and colleges, and a competitive taxation system.

That, in summary, is the rising tide in our affairs that we must take at its approaching flood if we are ensure the future prosperity of Northern Ireland; misjudge it and we could be swept aside.