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What does the Conservative victory mean for business in Northern Ireland

As the dust settles on the General Election result, it is a good time to consider what it will mean for businesses and the economy in Northern Ireland. Many issues on which General Elections are fought are now devolved, such as health; infrastructure; and business rates.

In consequence, on these areas, the Westminster government really only has power over England, and it is up to the devolved administrations in Scotland, Wales and Northern Ireland to decide the local policies they wish to bring forward. The result means that not only has the Westminster log-jam been broken, but that the uncertainty which business famously eschews has removed.

As a direct corollary, that means Northern Ireland has the same Secretary of State as was in office before the election, which means the planned talks to restore devolution can continue with no loss of momentum. It is imperative that these political negotiations to restore Stormont yield a positive resolution so we can begin to tackle the many outstanding issues over which the Northern Ireland Executive has responsibility.

In other areas where policy is applied on a UK-wide basis, the Conservative commitment not to increase National Insurance, Income Tax and VAT is welcome.  Similarly, their response to another key FSB ‘ask’ – to increase the Employment Allowance, will help small firms with employment costs and ensure that no small business employing up to four people on the National Living Wage will pay Employer’s National Insurance Contributions. This could be a real boost for employment, so FSB will keep a watching brief to ensure the Government keeps to its manifesto promises.

The key issue on which this election was fought was Brexit, with the Conservative message of ‘Get Brexit Done’ contrasting strongly with Labour’s ambition to renegotiate a new deal which would be put it to the people along with the option to remain in the EU.  The Liberal Democrats wanted to cancel Brexit altogether.

With a sizeable Conservative majority, the Prime Minister will bring back his so-called ‘oven ready’ Withdrawal Agreement Bill and, in all likelihood, will have little difficulty navigating Parliament. Against this backdrop, it is vital that our local MPs press for the verbal commitments that the Prime Minister has made on frictionless trade within the UK Single Market to be adopted into the written text that will enshrine the basis for trade within these islands.

However and whenever the Withdrawal Agreement Bill passes Parliament, Brexit is far from over. The revised Withdrawal Agreement is extremely light on detail about how the new Northern Ireland trading arrangements will operate regarding the movement of goods between Great Britain and Northern Ireland, with much of the decision-making left to the new UK-EU Joint Committee which will deliberate during the transition/implementation period which is due to end in December 2020.

This will be in parallel with wider discussions about the UK-EU future trading relationship, which will also influence Great Britain to Northern Ireland trade. Government documents from HMRC, Treasury and the Department for Exiting the EU have caused significant concern regarding how the Northern Ireland arrangements may work, with reports of high administrative cost and complexity which would restrict trade and the availability of goods.

What we have read in these documents has jarred significantly from what has been said by the Prime Minister on the campaign trail. In order to provide clarity the UK government must begin to speak with one voice. Given the power which will reside in the UK-EU Joint Committee, the UK should ensure it engages proactively and urgently and that Northern Ireland is effectively represented. A light-touch approach which keeps administration at the absolute minimum should be advanced, and common-sense should be applied to defining what goods are considered ‘at risk’ of entering into the EU.

Given the new Northern Ireland arrangements are due to come into force at the beginning of 2021, this leaves little time to dot the “I’s” and cross the “T’s” on the practicalities, let alone provide small businesses with adequate time to prepare for what comes next. If more time is needed to ensure the arrangements are optimal, then an extension of the transition period should be considered. Substantial resource was committed by government to assist with potential ‘no-deal’ planning, so we expect a similar approach to be taken for the outworking of the Northern Ireland protocol, with the necessary financial and administrative support provided.

Just as the EU Single Market has its ‘four freedoms’ which are underpinned by legal protection, the UK Government should ensure Northern Ireland firms and consumers can participate fully in the UK Single Market, and not be excluded or have a ‘semi-detached’ status. The Northern Ireland business community was clear in its rejection of tariffs being charged on trade with the Republic of Ireland, it is similarly unacceptable to consider tariffs being payable on domestic trade and supply chain activity within the UK. As the Withdrawal Agreement is implemented FSB will do our utmost to engage and influence wherever we can to ensure the new arrangements are manageable for small businesses and do not create new barriers to trade within these islands.