Northern Ireland is about to learn the cost of lies

“What is the cost of lies?” This is the question posed by Valery Legasov in the HBO mini-series Chernobyl, about the lies of the Soviet authorities in the lead up and aftermath of the 1986 disaster in what was then the Ukrainian SSR.

The British government has stated that it will not be seeking an extension to the transition period with the EU following the UK’s exit from the union in January. It therefore appears likely that Northern Ireland will be ringing in its centenary year at the very moment the new arrangements for trade with Great Britain are introduced.

The Northern Ireland Protocol will introduce frictions and costs to trade between Great Britain and Northern Ireland that do not exist today. The Business Insider has reported in this (paywalled) piece that many retailers, including a major supermarket chain, are considering pulling out of Northern Ireland as it will be no longer viable to do business due to increasing costs.

Should the UK and EU fail to reach a trade deal this year, this could make matters even worse.

Total purchases of goods in Northern Ireland were estimated to be £35.3 billion in 2018, with goods purchased from Great Britain comprising £10.4 billion. Around 70% of goods purchased from Northern Ireland are destined to high street retailers and supermarkets.

As this report from the NI Business Brexit Working Group makes clear, businesses have been distracted from preparing for the end of the transition period by the response to the coronavirus crisis. Business groups say that they “desperately need” more detail on how the new Irish Sea trade border will work.

A key issue is that there is still a lack of clarity on what goods are regarded as being “at risk” of entering the EU via Northern Ireland and will therefore be subject to additional checks (with associated costs). There are still substantial differences between the UK and the EU on this crucial point.

On the 19th of May the British government announced its new tariff schedule that will be introduced in January 2021 to replace the EU’s Common External Tariff. Of the 11,830 tariffs announced, only 3,963 remain unchanged, with the majority of the others being reduced (in some cases, the tariff has changed from being listed in euro to pounds).

However, many of the tariffs have only been reduced by a small amount. Take, for example, potato crisps. Currently, imports of crisps from outside the EU face tariffs of 14.1%. The new tariff schedule reduces the tariff, but only by 0.1%, to 14%.

The tariff has only been reduced by a token amount, but because there will be a tariff differential between the EU and the UK, these goods could be considered “at risk” of entering the EU, and may therefore warrant additional checks and costs when entering Northern Ireland from Great Britain. Tariff differentials will exist on a range of basic foodstuffs such as canned tomatoes (the new tariff will reduce from 14.4% to 14%) and onions (the new tariff will reduce from 9.6% to 8%).

The differences between the tariffs may be small, but the tariff differentials could cause an increase in costs of importing food from Great Britain to Northern Ireland, costs that will ultimately be paid by consumers in Northern Ireland through higher prices.

The British government has finally admitted that there will be checks on goods moving between Great Britain and Northern Ireland, after months of falsely claiming that there wouldn’t be.

The disgraceful refusal of the British government to agree an extension of the transition period, combined with its callous disregard towards businesses and consumers in Northern Ireland, has now raised the very real risk of food shortages and price rises in the middle of winter during a possible peak of new infections during a global pandemic.

Northern Ireland’s economy was already struggling before the Covid-19 crisis, and whilst there has been an encouraging fall in the number of new cases, the damage to the economy could mean that we face an economic depression, public health emergency and chaotically erected trade barriers all at the same time.

Whilst the coronavirus crisis could not have been foreseen, the dogmatic insistence on putting Brexiteer ideological purity over lives and livelihoods in Northern Ireland was a choice that the British government made.

Had the DUP not squandered the political capital that they were granted by accident following the 2017 general election, the current situation could have been avoided. Now the DUP’s position towards Brexit is unfathomable; a Schrödinger’s Brexit that is simultaneously an awful betrayal and a joyous triumph.

With talks between the UK and the EU seemingly at an impasse, the outlook is bleak for businesses and consumers alike in Northern Ireland, and it is ordinary people who will be hit the hardest by price increases for daily essentials.

In Northern Ireland, we are about to learn the true cost of lies.

 

 

Belfast Bulkers (31540963354).jpg” by Ross Geograph is licenced under CC BY-SA 2.0


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