House of Lords hears concerns that retailers may desert Northern Ireland due to Protocol complexity

Wed 29 Jul 2020
Posted by: William Barns-Graham
Trade News

northern ireland protocol

The government’s plans for post-transition trade between Great Britain and Northern Ireland came under intense scrutiny in the House of Lords yesterday (28 July), amid fears the administrative burden of the NI Protocol could prove too much for British retailers.

Under the NI protocol – which is part of the UK’s Withdrawal Agreement – British businesses will be required to make customs declarations to send goods to the region.

From January, supermarkets and other food retailers will also have to complete checks on chilled and fresh food.

Tough choices

Aodhán Connolly, director of the Northern Ireland Retail Consortium, told the Daily Update today (29 July) that retailers will be faced with a “very simple economic equation”.

They will have to evaluate if “the new costs are higher than the profit margin” they could make in the region and if they are, doing business in Northern Ireland will become “unviable”.

“That’s why we have been asking the UK government to be ambitious and propose mitigations such as a certified and auditable supply chain with a green channel,” he said.  “But we also need some generosity of spirit from the EU to allow the exemptions needed for mitigations to happen.”

“Quite simply, Northern Ireland households have half of the discretionary income of GB households and cannot afford the cost rises that come with trade friction,” he added.

Lords grilling

The House of Lords EU committee yesterday (28 July) grilled the Northern Ireland minister, Robin Walker, on the government’s plans for implementing the Northern Ireland Protocol when the UK ceases to trade under EU rules on 31 December 2020.

Former Conservative chancellor Lord Lamont challenged an apparent inconsistency in the Protocol whereby Northern Ireland is promised ‘unfettered access’ to the rest of the UK, but businesses are required to complete exit summary declarations on all goods leaving the region.

Could Tesco leave NI?

Lord Kerr – the architect of the Article 50 clause that allowed the UK to initiate proceedings to leave the EU – said he was “very concerned” that the additional paperwork will see leading supermarkets stop trading in the region.

“Are you talking to the big stores?” he asked. “Are you talking to the Tescos, who have an operation in Northern Ireland but all the extra costs of this, and all the [extra] bureaucracy. [This] may make it to them seem just not worthwhile?”

‘Light touch’

Walker reiterated the government’s hopes for the system of checks on goods moving the Irish sea border to be “light touch”.

However, he said the details of the Protocol had yet to be agreed by a joint UK-EU committee chaired by Michael Gove and the European commission’s vice-president Maroš Šefčovič.

Details of a border operating model for Northern Ireland will be published in the “coming weeks” he said. The paper had been expected on Monday (27 July).