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Peer2Peer Finance News | September 20, 2017

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Northern Ireland’s SMEs welcome soft border plans

Northern Ireland’s SMEs welcome soft border plans
Kathryn Gaw

BUSINESSES across Northern Ireland and the rest of the UK have welcomed the government’s plans for a soft border post-Brexit.

Bodies such as the Federation of Small Businesses (FSB) and the Confederation of British Industry (CBI) have spoken out in favour of the newly-released proposals, repeating their belief that a soft border between Northern Ireland and Ireland is the highest priority for small- and medium-sized enterprises (SMEs) in the area.

Read more: Post-Brexit trade doubts weigh on small UK firms

“Avoiding a hard border between Northern Ireland and the Republic is crucially important,” said the FSB’s UK chairman Mike Cherry. “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.”

These comments come after a new policy paper was released yesterday by Whitehall, proposing an “unprecedented solution” for the border between Northern Ireland and the Republic after Brexit. The paper emphasised that there should be no physical infrastructure (including customs posts), CCTV cameras or number plate recognition technology along the 300-mile border.

“This paper suggests that the UK government is going in the right direction, but there’s a way to go before businesses are reassured that trade will continue smoothly after Brexit,” said Josh Hardie, the CBI’s deputy director general. “It’s welcome that the UK government has recognised in this paper that an interim period will be crucial to providing clarity for companies on the island of Ireland. This matters for jobs and investment for both European countries as well as the UK.

“Uncertainty weighs particularly heavy for firms and families in the region. Companies are making long-term investment decisions now and need to see much more detail on these proposals in the coming weeks.”

Read more: Treasury plans new fund to support UK start-ups after Brexit

According to recent data from the Northern Ireland Office, more than 80 per cent of all firms in Northern Ireland are small or medium sized and engaged in local business rather than international trade. Many of these firms rely on cross-border trade, and there have been fears that a hard border would require them to declare their import and export businesses online.

“What’s needed now is a pragmatic approach on all sides – this is an issue of mutual interest,” added Hardie. “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.”

There has been speculation that a soft border could actually benefit these local businesses, and a number of fintech firms have been eyeing up offices in Belfast. Situated just 30 miles north of the border, a Belfast base would offer easy access to the European Union, while allowing companies to maintain their UK residency.

However, the government has yet to confirm any firm details regarding the border, or how it might affect small businesses.

“There is still a long way to go before agreement is reached with the EU,” said Wilfred Mitchell, FSB policy chair for Northern Ireland. “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.”