Loyalists take part in an anti-Northern Ireland Protocol rally in Portadown. Brian Lawless/PA Wire for the Belfast Telegraph
The Northern Ireland Protocol piles up problems for businesses with a warning many firms will go bust as costs spiral and there’s discontent on the streets
David Cameron used to say the Brynglas tunnel on the M4 into Wales was like a foot on the throat of the economy. Choking the M4 with long tailbacks as the motorway went from three to two lanes. You could say the same about the Northern Ireland protocol as the newly installed border between the province and the rest of the UK is having a disastrous effect on business. The Conservative Government may have got Brexit done – but they have certainly ‘done’ Northern Ireland.
The BBC’s Emma Vardy interviewed James Allen, this spring who is the MD of Allen Logistics whose trucks pass backwards and forwards across the Irish Sea. He said: “We have had to use our own initiative to learn and adapt in a very short space of time. We have spent countless hours on the phone explaining the processes to customers.”
Hauliers now pay between £50 to £350 extra per pallet on average with each pallet having to be checked amounting to an extra four hours in turn-around time. Logistics UK estimate each truck spends an extra hour at the border posts and half have suffered cancelled deliveries or major delays. Stena Line Ferries said that freight traffic is down by a third while traffic along Scotland’s A74 to Stranraer is also down. It all adds up to a crisis in the making as Loyalists in Belfast take to the streets and the threats of violence increase. The main reason for the anger is a sense of betrayal as Boris Johnson promised there would be no border but reneged on his promise when he signed the deal with the EU.
Northern Ireland is not a basket case as many believe with huge bailouts from Westiminster. Scotland, Wales, The North West of England, Cumbria and the Midlands all consumer far more in Government hand-outs than the province while trade with the Republic has helped business communities on both sides of the border.
Discontent is growing among Loyalists who feel betrayed by the Government
The crisis that is building will only lead to one result and that is economic gloom for many sectors in Ulster. Speaking to Emma Deighan of the Belfast Telegraph Belfast-based Baker Tilly Mooney Moore warned that from July 1 — the date when the UK government will gradually reintroduce some of the insolvency-related rules that had been suspended because of Covid — many businesses could face collapse.
The firm said in a comment to Emma that Northern Ireland has seen a relatively modest number of insolvency cases filed during 2020/21 so far, largely due to financial assistance provided by the Government and the Bank of England to help businesses survive the pandemic. It said these measures may have extended the life of businesses that would not have survived under normal economic conditions, thereby creating so-called ‘zombie’ companies.
Ian Carrotte of ICSM said the rest of the UK was also liable to see a rise in insolvencies once the props of furloughing were kicked away. He said the province was on a par with Devon and Cornwall when it came to the size of the economy so there are far fewer insolvencies. He said: “With the problems of imports across the Irish Sea business is being squeezed and with Covid’s restrictions it is a recipe for disaster. My advice to firms trading with zombie firms in the province is to stop giving credit – as just as in the rest of the UK, insolvencies will rise later this year.”
Because of the grants and furlough scheme available to business during the pandemic overall insolvencies are down compared to the last two years but the economic has taken a massive hit. Ian Carrotte said sooner or later the country will have to pay for the £372bn cost of Covid-19 – and Northern Ireland will take the biggest hit – meaning there’s more than just economic problems to come on the streets of Belfast.
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk