Brexit disruption 'could destroy some Northern Irish businesses' in wake of pandemic

Northern Irish businesses could collapse unless they are given at least six months for the "Herculean task" of adjusting to the new UK-EU trading relationship from January because Covid-19 has hindered their ability to prepare, a retail body has warned.

As part of the Brexit "divorce" deal, the UK agreed a Northern Ireland "front stop" that leaves the province following EU rules on customs, state aid and VAT and requires a customs border to be created in the Irish Sea.

Last month, the UK admitted for the first time there will be post-Brexit checks on trade between Great Britain and Northern Ireland although Michael Gove, the Cabinet Office minister, insisted they would be "minimal".

With less than a month until the deadline for asking for an extension to the Brexit transition period, the Northern Ireland Retail Consortium (NIRC) has cautioned that the additional costs and administrative burden of new export certificates and customs declarations could not only make some products unviable but cripple businesses.

This week, the British Retail Consortium warned that the failure of the UK and EU to reach a comprehensive trade deal would have a worse impact on Northern Irish businesses than Covid-19.

Aodhan Connolly, the consortium's director, said: "Not only has Covid-19 removed our ability to prepare...it's also proven how wonderfully efficient but amazingly fragile just-in-time supply chains are and that they are very susceptible to consumer behaviour and delays.

"This is not just a macroeconomic or business problem. It’s a standard of living problem for households across Northern Ireland." Of all the UK regions, Northern Ireland has the highest levels of indebtedness and the lowest levels of savings.

Last year more than 425,000 lorries arrived into Northern Ireland's three ports. Under the new protocol, the Freight Transport Association calculates that each load of farm food products would carry a £290 cost in terms of certification, identification and documentation checks, on top of labour costs to complete the paperwork and the cost of installing compatible computer systems.

Mr Connolly warned that Northern Ireland could become a "back door" to the EU single market for supply chains attempting to circumvent new frictions.

The lobby group called for better engagement from Boris Johnson’s government, which members said paled in comparison to engagement under Theresa May, as well as for more "generosity of spirit" from the EU side, particularly on issues such as the proposed "trusted trader" schemes.

Calling for an adjustment period of at least six months after the new protocol is imposed, Stephen Kelly, a trade expert at the NIRC, said: "The standard period for training customs administration officials is about two years. The longer we leave this, the longer the adjustment period that's going to be required."