As Boris Johnson prepares to launch a new round of hostilities with Brussels with the publication of a command paper setting out demands for change to the Northern Ireland protocol, businesses have issued a warning of higher prices and less choice for customers in the province if the prime minister’s Brexit deal is implemented in full.
The latest warning, echoed by Marks and Spencer chair Archie Norman, comes ahead of government ministers unveiling their plans for the future of the agreement – which Britain is no longer happy with.
Brexit minister David Frost will outline a “new approach” under which the UK will demand the elimination of most checks on the Irish Sea customs border created in January.
The Tory peer – who negotiated the arrangements which he now says are “unsustainable” in the 2019 Northern Ireland protocol – will warn the UK is ready to suspend the deal if the EU does not make concessions.
Lord Frost is expected to say that the disruption of trade between Northern Ireland and the British mainland and transfer of supply chains to the Republic of Ireland since January mean that the UK would already be within its rights to invoke Article 16, suspending elements of the deal.
But he will not take that step – which could trigger retaliatory tariffs from Brussels – today, instead saying that the UK is seeking progress before the expiry of “grace periods” on the implementation of checks on chilled meats, parcels and supermarket supplies due to expire in September.
His approach is likely to infuriate Brussels, which insists it will not move outside the terms of the Northern Ireland deal laboriously negotiated in the years following hte Brexit referendum and hailed by Mr Johnson at the time as an “oven-ready” success.
Under the terms of the deal signed by the prime minsister – designed to avoid the need for a “backstop” arrangement which would keep the UK in the EU’s single market and customs union without creating a hard border on the island of Ireland – all goods shipped from Great Britain to the region must follow the EU’s rules for customs and agrifood products.
The new checks demanded by Mr Johnson’s protocol have added significant frictions to trade between different parts of the UK. There have been supply shortages of some goods in the province, with some businesses pulling out entirely due to the new Brexit bureaucracy.
EU officials say there is no ambiguity in the text and that the UK is acting like an unreliable partner.
And Labour’s Baroness Chapman of Darlington said: “The Prime Minister negotiated this deal just months ago and yet today communities and businesses in Northern Ireland are being subjected to another round of brinkmanship.
“The government and the EU must urgently find a sustainable way forward to reassure everyone affected by this political stalemate.”
In a letter to Lord Frost, M&S chair Mr Norman said “pointless” checks with the Republic of Ireland were “threatening” to its business there.
And he warned that when grace periods on applying more checks to Northern Ireland end in September, the chaos extending to that part of the UK could deepen.
He said new less flexible current customs and regulatory arrangements between the UK and EU, which were favoured by Boris Johnson’s government during talks, are “totally unsuited and were never designed for a modern fresh food supply chain between closely intertwined trading partners”.
Unlike most major countries that sit outside the EU, the UK has refused to sign up to single market or customs union rules – a decision which has made trade with the bloc much more difficult.
“There is no other outcome for consumers in Northern Ireland in the end other than higher prices, given the inflationary pressures being put on to retailers by the regulatory regime,” Mr Norman wrote.
“Being able to keep the show on the road, let alone growing, is going to be very challenging.”
The EU has proposed a temporary Swiss-style veterinary agreement to remove the vast majority of the checks, but the UK has rejected the idea.
The British government says aligning with EU rules in this area would be a breach of sovereignty, and ministers – who are fixated on doing trade deals with other countries – worry that aligning to this part of EU law would make it harder to sign agreements with countries like the US and Australia.
The UK is yet to explain how it will solve the problems while meeting the objectives of protocol.
