Time is running out to explain how a border in the Irish Sea will work

When a junior Northern Ireland Executive minister let slip that the UK government had finally agreed to publish its plans for implementing the Northern Irish protocol, a key detail emerged: the government has reportedly conceded that there will be physical checks at ports of entry.

In February, I wrote that the failure of the UK government to acknowledge the extent, or even the existence, of the additional checks and processes required by the protocol was hampering preparations for its implementation – and there was a real risk that there would not be enough time to prepare by 31 December, when the transition period ends. Three months of preparatory time have since been lost and a global pandemic has absorbed significant amount of government time and resource. It is welcome that the UK government have accepted the reality, but there is also a real risk that new border checks won’t be ready.

An upcoming Institute for Government report will set out in detail the full scale of the task ahead to ensure the protocol is operational by the end of the transition period, but the government has questions to answer immediately.

What sort of physical border checks will be built?

To avoid the need for border infrastructure on the island of Ireland, once the transition period ends, Northern Ireland will need to apply a number of EU rules on goods. This means that new processes will be required on goods moving from GB to NI to ensure they comply with EU standards. The most extensive will be on food: products of animal origin, such as meat and butter.  

New infrastructure, including specialist facilities, will need to be built in Northern Ireland to conduct physical and paperwork checks. But the DUP agriculture minister has said that he will oppose any plans to build border control posts.

Against the backdrop of deeply sensitive political disagreement, the UK government should set out how it intends to ensure this work is completed – and how it will be paid for – especially in the face of opposition from the Northern Ireland Executive. 

How will new customs processes work?

As well as new infrastructure, there will be new paperwork for customs. Goods entering Northern Ireland from Great Britain will need paperwork such as customs declarations – containing information on the goods themselves – and safety and security declarations to assess the risk that any goods entering Northern Ireland might be breaking EU rules. This will require the UK government to scale up existing systems for customs administration, both in training existing staff and hiring additional customs officers, particularly in Northern Ireland. Best estimates suggest that training can take up to six months, so the UK government should set out its recruitment plans imminently.

How will tariffs work?

In the eventuality of the UK and the  EU failing to agree a zero-tariff trade deal, the protocol states that goods moving from GB to NI will be subject to EU customs duties unless it can be proved that they are not ‘at risk’ from moving from NI and into the EU. The UK-EU Joint Committee – which oversees the Withdrawal Agreement – will be responsible for determining the exact criteria by which goods will be judged

For those goods that are required to pay the EU tariff, the protocol allows the UK to reimburse customs duties or waive customs debt (up to state aid limits). If it intends to take advantage of this flexibility, the UK needs to explain how it would work. Will traders have to pay the tariff upfront and wait for their refund – which could have significant cash flow implications? Or will HMRC effectively lend the money to traders and then write it off?

Similar ideas were floated in 2018 as part of Theresa May’s Chequers proposals. At that time, the chief executive of HMRC said such a system wouldn’t be fully operational by 2021. There are now just seven months to go before the end of the transition period. The UK need to explain what has changed and how it expects to meet such a tight timescale.

How will the government ensure that business is ready to comply with any new requirements?

The UK government will also need to explain what any business involved in GB-NI trade will need to do to prepare, and the kind of information that traders might need to submit. This will be a new process with no international precedent – businesses need clarity now if they are to be ready by the end of the year. The UK government should also set out how it will support businesses, with the costs associated with this preparation.

In the run up to previous Brexit deadlines, business readiness was a major problem in no deal preparations. The UK government predicted that 30%-60% of traders, and only 5-20% of small and medium-sized businesses, would be ready. Similar levels would have the potential to cause major disruption to Northern Ireland trade.

How will preparations for the border be affected by the coronavirus crisis?

Governments and businesses are now preparing for a major upheaval of the trading system amid the global pandemic. Government capacity in all four parts of the UK is concentrated on bringing the country out of lockdown. Most businesses will be focused on staying afloat, not thinking about how to adjust to new customs procedures. Any UK government plan for implementing the protocol must take into account the context in which such work will need to take place.

There is much to be done to ensure that a new system of border checks is up and running by the start of next year. Time is running out to prepare.