Practicalities rather than Politics
This originally appeared as comment from Manufacturing NI Chief Executive Stephen Kelly as part of Insider's Top 100 NI Manufacturers
Stephen Kelly, chief executive of Manufacturing NI, explains what’s been happening behind the scenes as businesses prepare for a ‘deal or no deal’ Brexit and how this will affect the manufacturing sector in Northern Ireland.
“Overall, the cumulative impact from a ‘no deal’ scenario is expected to be more severe in Northern Ireland than in Great Britain, and to last for longer.”
…there is an expectation of disruption to closely interwoven supply chains and increasing costs that would affect the viability of many businesses across Northern Ireland... This could result in business failure, and/or relocation to Ireland with knock-on consequences for the Northern Ireland economy and unemployment.”
A stark warning from the “Implications for Business and Trade of a No Deal Exiton 29 March 2019”paper published by the UK Government on Tuesday 26th February 2019.
Against that backdrop, the existential threat posed by a potential No Deal Brexit, it is all the more extraordinary that Northern Ireland’s manufacturing firms have continued to create more wealth and work as demonstrated in the Insider Top 100 list.
In the past few months, a community has found it voice. Reluctant, yet determined, Northern Ireland’s business community has united as never before to make sure it is heard and the consequences of crashing out of the EU are understood.
Some had been frustrated that Northern Ireland’s businesses and their representatives have been too quiet, but we haven’t been idle. We have studied options, provided evidence, advice and analysis and built our networks. We have been active in engaging directly with negotiators, challenging and in making it clear that whatever agreement was made that it must be workable.
And, whilst not perfect, this Withdrawal Agreement is workable. 94.4% of our firms, when surveyed, agree.
No deal is ever perfect and if a better deal is struck then, as now, we will study it and give our view. But, as things stand, the default is no deal, crashing out and the resulting consequences outlined in the Government’s report.
All of Northern Ireland’s business, trade and agricultural bodies, the s and indeed community and voluntary sector agree that ‘No Deal’ is not an option.
Business, by necessity, focuses on the practicalities rather than the politics. A pragmatic approach driven by the reality of having to pay wages this Friday and every Friday up to and beyond 29 March.
A new trade, veterinary and customs relationship cannot be agreed until the UK leaves the EU. But to get there, a Withdrawal Agreement is required. If the cost is the comfort of the ‘Backstop’ in order secure the transition period for the whole of the UK and for these negotiations to continue to the next, more productive phase then we believe that is acceptable and workable.
For instance, alongside colleagues in retail and logistics, we have calculated that only 9 loads per day would require checking on ferries between GB and NI – that’s just 1 vehicle for every 3 ferry sailings. Indeed, as many loads go unaccompanied, it means just 4 drivers would be stopped daily.
Any issues or gaps in the Agreement are not insurmountable.
The costs of Brexit will be borne by our manufacturing community through managing migration, origin certification, customs costs and delays and potentially tariffs and non-tariff barriers. HMRC estimate that would add £16bn per year, every year, to UK firms (too big a number of print on the side of a bus!).
For NI, this is an estimated £400m per year, the equivalent of 20% of profits from the sector. With added costs and complexity coming hurtling at us, our manufacturers in NI and across the UK need a deal to remain competitive. No deal is simply not an option