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Brexit was always fundamentally a project driven by issues of identity and sovereignty rather than economy, which is why no one can be surprised that the status of Northern Ireland remains the thorniest problem caused by the UK’s departure from the EU.
And as we enter the fifth month of the post-Brexit era, there is a sense of calm before the storm in the region where this Friday the Democratic Unionist party will elect a new leader following the defenestration of Arlene Foster last month — in significant part because of the political fallout from the Northern Ireland protocol.
Recall that the protocol requires all goods going from Great Britain to Northern Ireland to conform to EU customs and regulatory requirements, effectively leaving a limb of the UK in the economic orbit of the EU and creating a trade border in the Irish Sea.
It was a version of an arrangement that Theresa May said no British prime minister could ever agree to, warning that it would “undermine the UK common market and threaten the constitutional integrity of the United Kingdom” — and so it has come to pass.
So what now? Lord David Frost, the minister in charge of EU-UK trade relations, was in Northern Ireland this week talking to trade groups that have argued that they need more pragmatism and flexibility in order to reduce the impact of the protocol on everyday lives.
In his statement after the fact-finding trip, Frost warned that — in its current form — the protocol would not be “sustainable for long” and urged the European Commission to take a pragmatic, “risk-based approach” to goods moving from GB to NI.
It’s worth recalling that at the moment, since the UK unilaterally extended grace periods delaying the implementation of full border controls, those goods are not yet facing the full force of border checks — these will only start to phase in from October.
And yet logistics, retail, manufacturing and haulage businesses in NI are already issuing warnings that unless both the UK and EU show flexibility, then the problems they are facing are only going to grow.
Food and drink products — both for retail, but also for the hospitality industry, are the most obvious problem area since they attract by far the heaviest bureaucratic burdens caused by the need for export health certificates.
The UK government’s apparent hope, which is broadly supported by industry, is that modern supply chain data can provide the traceability needed to demonstrate that goods do not “leak” into the EU single market.
After meetings with Frost, Aodhán Connolly, director of the Northern Ireland Retail Consortium, argued in a statement that an “auditable and certified supply chain” could help to “remove friction” on these goods.
The problem is that these ideas don’t seem to be gaining traction in Brussels where diplomats say the commission remains “orthodox” — which is to say, it will show flexibility only within the letter of the current law.
The UK is investing money in the digitisation of trade processes but as the EU and the UK diverge over time, it’s not at all clear that the commission will ever view this approach as sufficiently watertight.
The EU has countered that the UK should agree to a Swiss-style veterinary agreement (aligning the UK with EU rules and thereby removing the need for a lot of the current checks) but Frost has rejected this on the grounds that the entire point of the UK leaving the EU was regulatory flexibility.
At the same time, a continuing row over fishing rights (which EU diplomats say Emmanuel Macron is now forcing on to the agenda of May’s European Council) are not helping the general deal-making atmosphere.
There is a kind of uneasy stalemate, but the problem is that, in Northern Ireland, time is not infinite. A survey this month of members by Manufacturing NI, the trade group that has been committed to implementing the protocol, shows business confidence in the deal ebbed between March and April.
The survey found that more than three quarters (77 per cent) of members found the protocol had a negative impact on their business, and those “struggling” with new border processes had gone up from less than a quarter, to more than a third.
As Stephen Kelly, the boss of ManufacturingNI, observes, those numbers are going in the wrong direction and are “worrying”.
Similarly, the numbers of businesses saying that both their EU and GB suppliers were either not bothering to deal with NI or are not preparing to have all increased from March to April — if things were settling you would want to see them trending in the opposite direction.
The EU takes the general view that the UK signed the deal and supply chains should just re-orientate, while that might be a reasonable position for governments to take for individual companies it is often not an option, says Kelly.
Meanwhile, the political climate looks likely to get tougher. Edwin Poots, the bookies’ favourite to win the DUP leadership contest, has vowed in his manifesto to “systematically undermine and strip away all aspects” of the protocol.
Poots has talked tough before, but his language (and the forcing out of Arlene Foster) speaks to the growing pressure within unionism to take a further stand against the Protocol.
As we enter the summer “marching season” when the region’s Protestant Orange Order holds traditional parades, there are fears across the political spectrum and in Dublin of a growing risk of street disturbances much greater than those we saw at Easter.
One senior DUP insider warned Brexit Briefing that “if something substantial isn’t delivered pre-summer” by way of reducing the burden of the protocol (and frankly given EU positions and Unionist fury it’s very hard to see what that might be) then the situation on the ground would almost certainly deteriorate.
For now, both sides continue to talk, and the word is that at a technical level relations are good, but given the substantive gaps between the sides the outlook is stormy indeed.
Brexit enabled the UK to introduce its new, points-based immigration system that prioritises high-skilled migration over low-skilled, so that it is now no longer legally possible to hire, for example, a foreign truck driver. They are not sufficiently skilled.
The result is that logistics and trucking companies are starting to feel a serious pinch, warning of an “acute” shortage of drivers, which has been masked in the first few months of this year by pandemic lockdowns suppressing demand.
But as hospitality and retail reopen with a bang, with pent-up lockdown savings ready to be spent, the UK’s 300,000-strong army of truck drivers is suddenly looking very sparse — not helped by the departure of more than 20,000 EU drivers going home.
And as the chart shows, the UK HGV driver population is hugely top-heavy, with 150,000 drivers over 50 heading into retirement and very little behind to follow. Perhaps young people don’t see the point of joining a profession many expect to be automated in a decade or so.
Right now, younger British workers, the industry says, aren’t that interested in the long hours, poor conditions and relatively low pay (for the lifestyle) that goes with the job — and it will be a test of Brexit in the medium term to see if those wages rise enough to change that.
Of course, one person’s pay rise feeds through into another person’s pay cut in the form of higher prices, but for this summer it looks as if wages might have to rise very sharply to get existing UK drivers that hold licences but aren’t currently actively driving to get back on the road. One to watch.
And, finally, three Brexit stories you may have missed this week