‘Have your cake and eat it’ – The Northern Ireland backstop that could kick-start a golden era
After months of tireless debate, a draft deal was shared this week, a document which confirmed that neither the UK Government or the EU, wants a ‘hard border’ on the island of Ireland.
Both the UK and the EU agreed a backstop is needed – something they both signed up to in December 2017. The EU proposed to keep Northern Ireland in the customs union and single market, but earlier this year, Theresa May rejected a proposed “common regulatory area” between the EU and Northern Ireland by creating a border down the Irish Sea. The Prime Minister declared at the time that: “No UK prime minister could ever agree to it.”
To help ease fears over the Irish border question, the Prime Minister recently suggested a backstop that would see the UK as a whole, remain aligned with the EU customs union for a limited time after 2020. Her proposal, published in June, contained nothing about single market regulatory issues.
While the politicians continue to debate, without exception, the businesses I speak with are confounded by the rejection of keeping Northern Ireland in the EU single market and customs union.
This week the Northern Ireland Secretary of State Karen Bradley met with key Northern Ireland business leaders in Belfast, where the Managing Director of the NI Chamber John Healy remarked; “Businesses have all along been looking for certainty and this deal that’s on the table is bringing some level of certainty to our thinking.”*
I believe that the draft deal would offer a ‘have your cake and eat it’ scenario, allowing Northern Irish businesses access to both UK and EU markets. This is a unique opportunity that business in Northern Ireland would readily embrace and could kick-start a golden era of economic growth. Particularly, in a period where we are seeing an on-going slump in the Northern Ireland economy, with recent figures from PwC showing the NI total economic growth of 0.8% to date, falling below even gloomy predictions in March, when it was estimated growth would reach 1%. Average UK growth was 1.3%.
With a population of 1.8 million people, Northern Ireland’s population is one of the youngest in Europe, with over half (53%) of the population under the age of 40. And, just like Scotland, Northern Ireland voted to remain in the EU by a majority of 56% to 44%. A survey taken in May 2018 found that this figure may now be much higher. It found that 69% of people in Northern Ireland would now vote to remain in the EU.
Northern Ireland has a strongly pro-business climate with a flourishing tech industry and strong agricultural and manufacturing network. As part of the UK, we benefit from the strength of the UK economy and its low inflation, low interest rate environment. Companies have ready access to a broad range of funding options as well as a developing venture capital market. We have also enjoyed the ease of doing business with the rest of Ireland via the single market and customs union that comes with EU membership. Figures show that over a third (35%) of Northern Irish exports go to the Republic of Ireland and were worth over £1 billion more than its exports to the rest of the EU combined. Simply put, any hard border has got the business community worried.
It is clear the concerns of many businesses are not being listened to in the ongoing political debate. To reject a deal on the basis of regulatory alignment feels illogical with so many existing differences already in the law between Northern Ireland and the rest of the UK, regulatory alignment doesn’t exist now – and it would be detrimental to Northern Ireland business, and business across the island, to assert that we absolutely need to have it.
*Source: Belfast Telegraph 16 November 2018