Business groups welcome government proposals for soft Irish border after Brexit

Alys Key
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Customs posts will be kept in the past under new proposals (Source: Getty)

There will be no customs posts on the Irish border after Brexit, under proposals put forward by the UK government today.

Read more: UK to call for transition to frictionless Northern Irish border post-Brexit

The proposals

In a position paper, the government has proposed that the movement of people and goods should not be subject to a "hard" border between the UK and Ireland.

The paper says that the government will aim to avoid "physical border infrastructure" like customs posts.

Smaller businesses, farmers and individuals are set to be exempted from customs checks under the proposals, in recognition of the everyday movement over the border.

A time-limited interim period also forms part of the plan,with the government proposing to agree on this at the earliest possible date.

The government also said that it would help to fill the gap left in Northern Ireland "peace funds" by the UK's withdrawal from the European Union. The existing EU funding, which fosters peace projects and attempts to prevent a return to violence, is set to be stopped in 2020.

Read more: Former government aide James Chapman to launch new anti-Brexit party

How business reacted

Business groups largely welcomed the proposals, while also calling for greater certainty.

Mike Cherry, chairman of the Federation of Small Businesses (FSB) said: “Small businesses in Northern Ireland must be able to continue to have access to the workers and skills they need, including those who travel across the border for work every day. There must also be easy trade across the border, especially for goods which criss-cross it in the production process. This is in the interest of the UK economy as a whole.”

Wilfred Mitchell, FSB's policy chair for Northern Ireland, added: "There is still a long way to go before agreement is reached with the EU. Businesses want some certainty as soon as possible, so we are pleased to see firm proposals as the negotiations move to the next stage, and where the Northern Ireland land border is firmly on the agenda".

Allie Renison, head of EU and trade policy for the Institute of Directors said: “While the prioritisation of an interim solution for maintaining a shared external tariff is extremely important, alongside a wider association with or replication of the EU’s Customs Union, it cannot be stressed enough how important it is for the UK and EU to reach early agreement on regulatory alignment for a transitional period to address all of the other issues which would warrant new customs controls. The Government crucially acknowledges the need for this on measures relating to agri-food – particularly importance to the all-island economy – but this will apply to many other sectors as well."

Read more: David Davis: The smooth and orderly route to a new customs arrangement

Josh Hardie, director-general of the Confederation of British Industry (CBI) said that the paper demonstrated a move in the "right direction" but that it was far from providing certainty for businesses wanting to take goods across the border.

“Until a future UK-wide customs system is in place, it is difficult to see how any guarantees can be given about the absence of physical borders or checkpoints. While proposals for exemptions on smaller firms are welcome, this raises a number of questions about how the system will be monitored and enforced.”

Meanwhile, Ian Wright CBE, director general of the Food and Drink Federation (FDF) said that the news was good for the food and drink industry.

"Nearly a fifth of UK food and drink exports go to Ireland, with more than a third of Ireland’s reaching the UK," he explained. "FDF therefore welcomes the Government’s commitment to preserve a seamless, frictionless, open border with the Republic."

Read more: The UK's trade deficit has increased again

How Ireland reacted

The Irish government said the publication of the proposals was "timely and helpful".

In a statement, Merrion Street said: "The emphasis on the priority areas identified by the Government, including the Common Travel Area, the Good Friday Agreement, North/South cooperation and avoiding a hard border, is welcome.

"Protecting the Peace Process is crucial and it must not become a bargaining chip in the negotiations."

How Northern Ireland reacted

DUP leader Arlene Foster welcomed the paper, saying: "It is clear the Government has listened to voices in Belfast, Dublin, Brussels and London about how the United Kingdom's only EU land border could be managed after we Exit the EU."

But Sinn Féin Brexit spokesperson David Cullinane said the proposals were a "cynical" attempt by the British government to gain better terms with the rest of the EU.

“It is trying to use the special and unique situation of Ireland as a bargaining chip for concessions towards a wider, ‘frictionless’ customs union between Britain and the EU," he said.

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