David Frost says he understands why businesses are abandoning trade with Northern Ireland because his Brexit agreement has made it “too much trouble” to carry on.
The negotiator of the deal – which created a border in the Irish Sea – admitted he had not fully foreseen the “chilling effect” of the punishing new red tape, which has left smaller firms facing higher costs.
There are “companies in Great Britain who decide that it’s all too much trouble, reasonably enough – can’t be bothered to engage with the process,” Lord Frost acknowledged.
“They are often SMEs [small and medium-sized enterprises] and micro-businesses. Dealing with this is a significant call on their time and they decide it’s just not worth it,” he told a parliamentary inquiry.
“That’s why you are seeing some of the trade diversion and supply-chain issues to Northern Ireland that we’re seeing.”
The admission came ahead of Lord Frost unveiling a new “approach” to the Northern Ireland protocol next week, sparking fresh tensions with the EU.
The government insists that the recent three-month truce over the sale of chilled meats and availability of medicines has failed to solve the crisis caused by the protocol.
Brussels has been accused of “intransigence” in the ongoing talks and of a “lack of understanding of the sensitivities in Northern Ireland”.
Questioned by a Lords committee, Lord Frost refused to set out what his new approach might entail – beyond the aim to make goods “flow as freely as possibly between Great Britain and Northern Ireland”.
The Brexit minister also:
* Claimed that increased cross-border trade between Northern Ireland and the Republic of Ireland is “a problem” he wanted to discourage.
* Revealed he expected £500m to be spent on trader support services, saying: “That is the cost of the protocol.”
* Rejected the EU’s insistence that there is no alternative to the protocol, pointing to a future consent vote at Stormont, and asking: “Then what is that vote about?”
* Argued it would be “inconceivable” to press ahead with protocol-style arrangements after a no vote, warning: “The politics would be quite significant at that point.”
The comments came as the fishing industry accused Tory MPs who had hyped the potential gains from Brexit of going “very quiet” as those benefits failed to materialise.
The National Federation of Fisherman’s Organisations protested that nothing was now heard from even the “most vociferous supporters” on the Conservative benches.
Peter Hain, the Labour former Northern Ireland secretary, warned that Lord Frost had lost the trust of unionists, nationalists, the EU and the Dublin government, saying sarcastically: “That’s a pretty successful negotiation, isn’t it?”
The EU accuses the UK of failing to abide by the protocol – by introducing checks at Northern Irish ports and by supplying data on cross-sea trade – but London blames an over-zealous implementation.
