CBI warns UK government against Northern Ireland Protocol | North Ireland

The UK’s main business lobby group has warned the government that its threat to override the Northern Ireland Protocol is forcing businesses to think again about investing in Britain and dragging down the economy .

The Confederation of British Industry (CBI) has said immediate talks with the EU, rather than political grandstanding, are needed to resolve the standoff over the protocol, which governs post-Brexit trade between the EU , Northern Ireland and Great Britain.

Boris Johnson’s government is preparing to launch new legislation on Monday that would give ministers the power to scrap parts of the protocol, despite intense criticism from businesses and opposition MPs and the threat of retaliation from Brussels.

Tony Danker, chief executive of the CBI, said reaching a deal was in the interest of the UK economy as businesses and households grapple with soaring costs of living and the looming risk of recession.

“I don’t think it’s time to get noticed; I think it’s time to make a deal,” he said. “I am a firm believer that Europeans are inflexible. At the same time, our steps – which could come on Monday – to take unilateral action in response are of no use. »

The head of the lobby group, which represents 190,000 businesses across the UK, said renewed uncertainty over Brexit sparked by the dispute over the protocol was hurting the UK economy. Last week, the Organization for Economic Co-operation and Development (OECD) predicted that the UK would be the second worst performing G20 country next year, after Russia.

“We’re seeing global companies bypassing the UK right now,” Danker said. “They look at the UK and think [there is a] combination of a little bit of Brexit worry again, some of those OECD numbers, and we see global companies thinking, “Maybe not the UK to invest in right now.”

However, Danker said he believed there was a “very firm landing zone” for a deal that would satisfy UK, EU and Northern Ireland businesses.

A UK government spokesperson said: ‘The protocol as it stands undermines Belfast [Good Friday] agreement and power sharing.

“Our legislation will solve the problems. We have always preferred to resolve this issue through talks, but the EU has so far been unwilling to change the protocol, which is necessary to provide the necessary solutions for Northern Ireland. Our aim has been and will continue to be to preserve peace and stability in Northern Ireland.

The CBI also released a sharp drop in growth for Britain’s economy in its latest economic forecast, following a bruising week for Johnson’s personal authority, in which he faced a vote of no confidence of more than 40% of its own deputies.

Reflecting a hit to household incomes due to the squeeze on the cost of living, the lobby group predicted UK GDP would grow by 3.7% this year, down from a previous estimate of 5, 1%, and only 1% in 2023, revised down from 3% before.

With inflation reaching the highest levels since the early 1980s, airports struggling to cope, nationwide railway strikes on the horizon and ‘Groundhog Day battles with the EU on the protocol, the CBI warned that there was a real risk that the economy would come a “distant second to politics this summer”.

As rival Tory factions scramble to reset the government’s economic agenda with their own preferred policies, Danker said ministers needed to step up their level of engagement with the economic challenges facing Britain.

“The economic ideas we should be discussing should be about what should boost business confidence and investment. It’s not about what’s more conservative,” he said.

With less than 40 days to go until Parliament begins the summer recess, the CBI said there was an urgent need for the government to announce measures to support businesses facing soaring costs, staff shortages and job losses. supply chain bottlenecks.

Rain Newton-Smith, the CBI’s chief economist, said the war in Ukraine, Covid, continuing tensions over supply chains and Brexit had ‘proved to be a toxic recipe for UK growth’ .

Despite an increase in exports in other advanced economies, the CBI expects a weak recovery in global trade in Britain, with UK exports still 10% below pre-Covid levels by the end of 2023.

“In the context of the rising cost of doing business and continuing pressures on the supply chain, it is in everyone’s interest to ease trade flows. It’s not just about lowering non-tariff trade barriers in Europe and signing free trade agreements,” she said.

“Post-Brexit regulatory reforms to support growth, innovation and sustainability can boost competitiveness. But a divergence for the sake of doing so could introduce more bureaucracy and friction, undermining that mission.

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