- Business owners on the border between the United Kingdom and Ireland are bracing themselves for an economic shock that could wreck their livelihoods.
- As the UK heads towards a chaotic exit from the EU, Business Insider met heads of a bakery, tractor firm, and accountancy in Northern Ireland about the threat to their businesses.
- They fear the return of checks on the border between the two countries could make their businesses unviable.
- UK Prime Minister Boris Johnson this week demanded the EU rips up the Irish “backstop” agreement which is designed to prevent the return of a hard border with Ireland.
- Visit Business Insider’s home page for more stories.
NORTHERN IRELAND – Business owners on the border between Nothern Ireland and the Republic of Ireland fear they could be just weeks away from an economic shock that could wreck their livelihoods.
The invisible border weaves between houses, crosses fields, and even runs between a church and its cemetery in Northern Irish villages in County Down and County Armagh, where Business Insider visited this week.
The border is the focus of a crisis which has pushed the UK and EU to the precipice of a chaotic break-up that could have serious ramifications for the entire European economy.
At the centre of the crisis is the question of how to keep this border between the two countries free of checks once the UK leaves the EU and the trade and customs rules that come with membership.
Under a deal agreed by the UK’s last prime minister, Theresa May, all of the UK would remain tied to an array of EU rules if a solution to the border problem is not found before the end of the Brexit transition period. Northern Ireland would stay fully-aligned with EU rules and regulations.
However, May’s successor Boris Johnson this week demanded that EU leaders rip up this agreement, something which both German Chancellor Angela Merkel and French President Emmanuel Macron have said they are unwilling to do until there is a workable alternative.
For businesses that operate in the border regions in Northern Ireland, this diplomatic stand-off could soon have life-altering consequences.
‘I honestly don’t know what the answer is’
Arthur O’Neill owns O’Neill Tractors, which has been based in Cullaville, County Armagh since 1985 . The company sells tractor parts and machinery to customers on both sides of the border. However, 90% of his customers are in the Republic of Ireland.
He told Business Insider that a no-deal Brexit would force him to relocate his entire company to the Republic of Ireland, as the border checks that would inevitably be required would make trading across the border too expensive to stay in Northern Ireland.
“Before the border disappeared, we had to go to Newry [a nearby city, 20 miles away by car] and spend a whole day waiting to get cleared before we could deliver to customers. If them days come back, we couldn’t do it,” he said.
“We couldn’t pay a truck driver £17 to sit in a truck all day waiting for clearance. It can’t happen.”
O’Neill said he has had no guidance from the UK government on how to prepare for a no-deal exit, bar one letter. “Where will the place for these claims be? We don’t know. Nobody will give us an answer,” he told Business Insider.
He said if the UK reverts to World Trade Organisation rules, export tariffs would “probably make the machines too expensive,” adding that customers south of the border “are saying they’re gonna hold off to see what happens with Brexit.”
O’Neill said uncertainty over the UK’s exit had forced him put his life on hold. “We have plans to open a new shop but that’s on hold now as we are not going to go ahead until we see what’s happening,” he told Business Insider.
He added: “It’s one of the biggest problems we have faced in a long time… We would like to be left how we are.”
‘Once you put tariffs and a border in there, it becomes almost an almost impossible task’
Michael Waddell runs McNamees bakery, a fourth-generation business based two miles away in Crossmaglen.
He told Business Insider that Brexit was posing the “biggest challenge I’ve seen since running the bakery” since he took over nearly two decades ago in 2000.
McNamee’s sells “everyday products for everyday people,” Waddell said.
It has one shop in Northern Ireland, and two in the Republic of Ireland. Its factory is north of the border, meaning its products regularly cross the seamless border in order to reach its shops in the south.
“I’m producing bread, cake rolls, and all those sort of things, and delivering them to our three shops, twice a day,” he told Business Insider on Wednesday. “To do that, I have to cross the border.”
However, stringent border checks on food products, in the event of a no-deal Brexit, would slow down this process dramatically. “It’s [currently] easy as shelling peas. Once you put tariffs and a border in there, it becomes almost an almost impossible task.
It’s [currently] easy as shelling peas. Once you put tariffs and a border in there, it becomes almost an almost impossible task.
“It will be one hell of a challenge.”
He said a no-deal Brexit would be an “absolute game-changer” for McNamee’s, with the company’s wholesale business bracing itself for tariffs of around nine per cent on products sold to the Republic of Ireland and the rest of the EU.
“Only this week that Lidl reminded their customers that they will liable for tariffs and any duties to be paid. I can imagine every other supermarket chain will follow suit. Where do we go from there?” he said.
“Can a company like ours absorb nine per cent costs while supplying multiple major retailers? No.”
The company has looked at stockpiling bread in warehouses as a means of preventing a shortage of products in a no-deal Brexit. However, warehouses on the island of Ireland have been booked up by major supermarkets since July 2018, Waddell said.
“I’ve got nowhere to put my bread at the moment – and haven’t for months.
“I know a cold store warehouse which has 3,000 pallets of ice cream sat in it and it’s been there since this time last year.”
He said: “It [McNammee’s] has put pay packets into the pockets of people in this town for 80 years. Through good days and bad days, in an area that was synonymous with The Troubles. It would be tragic to see a business that has survived all of that to be destroyed or fundamentally changed by something like Brexit.
“I honestly don’t know what the answer is. We will have to wait and see what happens.”
‘I was speaking to one unionist farmer a fortnight ago, and he said his business will be gone’
Bernard Boyle runs Boyle & Co Accountants, based in Forkhill village, Armagh. Many of his clients are farmers who operate near the border between Northern Ireland and the Republic of Ireland, and trade across it daily.
He told Business Insider that some of his clients believed a no-deal Brexit would destroy their livelihoods.
“Any major detrimental impact on the finances of farmers in this area which is loss-making means those farmers aren’t going to farm anymore,” he said.
The UK government has said it will not apply tariffs or checks to goods entering Northern Ireland from the Republic of Ireland in the event of a no-deal Brexit. However, farmers fear EU tariffs and checks on goods going the other way will be too expensive to sustain.
“There are protestant farmers with large farms in the north whose businesses are going to be decimated. I was speaking to one unionist farmer a fortnight ago, and he said his business will be gone,” Boyle said.
The feeling here among the vast majority of people is they never expected to feature in the debate because British Tory politicians couldn’t give a toss about the border and this border area.
“There is going to be an ecological and environmental fallout as well, as why would they [farmers] continue looking after the land?
“The EU has pumped a lot of money into this area over the years, money that has been spent on making farming more efficient and more environmentally-friendly.
“That could all be undone in quite a short period of time.”
Boyle said that the area hadn’t been visited by any government ministers since the Brexit vote in 2016.
“The feeling here among the vast majority of people is they never expected to feature in the debate because British Tory politicians couldn’t give a toss about the border and this border area,” he told Business Insider.
“It’s an itch they’re catching at the moment but if the situation changed, and they weren’t dependent on the DUP, they would drop it straight away. They have no interest in this area whatsoever.”