The Protocol has created a “feast or famine” economy in Northern Ireland, according to the House of Lords report

The Northern Ireland Protocol has created a “firm or famine” economy in the region, with some businesses struggling while others thrive, according to a parliamentary report.

The House of Lords committee investigating trade arrangements in the Irish Sea after Brexit found that companies involved in trade with the rest of the UK were hampered by additional red tape, while those more focused on doing business with Ireland and the EU benefited from it.

The committee stressed the urgent need to resolve the issues raised by the protocol and called on the EU and the UK to resume negotiations.

The committee’s report comes amid a breakdown in ties between London and Brussels over the UK government’s controversial plan to pass legislation in Westminster that would authorize ministers to unilaterally tear up most of the protocol.

Peers said the two sides need to rebuild trust and repair damaged relationships and recommit to finding an agreed solution. They said an “amicable solution” was the best outcome as they pushed for compromises.

The protocol was agreed by the EU and UK in 2019 to avoid a hard land border on the island of Ireland.

This was done by moving regulatory and customs processes to the Irish Sea and introducing new controls on goods shipped from the UK to Northern Ireland.

Whilst companies transporting UK goods into the region face additional red tape, the Northern Irish companies involved in sales to the EU can do so without restrictions, giving them a potential advantage over competitors in the rest of the UK .

Lord Jay of Ewelme, Chair of the Ireland/Northern Ireland Protocol Committee, said: “The Committee’s commitment to companies trading in and with Northern Ireland has shown that the economic impact of the Protocol is beginning to become more apparent, although much remains there is uncertainty.

“The situation has been described to us as ‘feast or famine’, with companies able to take advantage of the protocol while those dependent on trade with the UK lose out.”

In preparing its report, the Committee sought evidence from the five largest parties in the Northern Ireland Assembly, the UK and Irish governments, business representatives, academics and civil society representatives.

Peers said the sea border has created more bureaucracy, putting additional pressure on companies’ human resources, higher costs and longer delivery times.

They said the agreements would have a “disproportionately negative impact” on small and medium-sized enterprises (SMEs).


A border officer returns papers to a transport driver after checks at the Department for Agriculture, Environment and Rural Affairs (DAERA), Northern Ireland Point of Entry (POE) Belfast Port Site

The committee said there remained concerns that UK companies would eventually decide to exit the Northern Ireland market.

In examining the companies benefiting from the protocol, the committee highlighted the complex-dependent dairy and meat processing industries cross-border supply chains on the island of Ireland.

They said these sectors would suffer if access to the EU’s single market were lost.

The committee identified a number of solutions that were endorsed by the business community in Northern Ireland.

These include a requirement of “proportionality” in the application of rules and controls for trade in the Irish Sea and a different treatment of UK goods whose final destination is Northern Ireland compared to those destined for onward transport to the EU .

One of the UK’s favored decisions is the creation of a dual regulatory regime where companies can choose to comply with either EU product standards or UK regulations.

The committee said there was “widespread concern” among businesses about the practical feasibility and impact of this proposal on cross-border supply chains.

The report is a follow-up to an introductory report published by the Committee 12 months ago.

Lord Jay added: “Business representatives have proposed a number of mitigations and solutions to ease the practical implications of the Protocol and many of these proposals remain unchanged since the Committee’s July 2021 introductory report.

“At the time we stressed the need for dialogue to resolve the issues arising from the Protocol in the interests of the people of Northern Ireland. It is very unfortunate that the state of political dialogue in relation to the Protocol has continued to deteriorate over the past 12 months.

“There is an urgent need to restart the dialogue. We therefore call on the UK and the EU, together with Northern Ireland’s political parties and interest groups and the Irish Government, to recommit to working together to put Northern Ireland’s interests first, to engage together in constructive engagement and restore trust and engage in effective relationship building.

“As one of our witnesses told us, those who negotiated the Belfast/Good Friday Agreement were able to do so because they were able to assess each other’s perspectives and were willing to work together and take risks to achieve a common goal despite historical differences. Such a bold approach is needed now.” The Protocol has created a “feast or famine” economy in Northern Ireland, according to the House of Lords report

Fry Electronics Team

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