Leaving without agreement will cause chaos: Hain

A former Northern Ireland secretary has warned a no deal Brexit will “cause chaos” on the island of Ireland.

Lord Hain made the comments in a speech to the British Irish chamber last night.

His speech comes after the DUP and the EU’s chief negotiator Michel Barnier expressed doubt on whether a deal on the Irish border can be agreed.

Lord Hain (right) said the risk of a no deal was very real and would cause chaos to businesses, farmers and citizens on both sides of the Irish border.

“No deal means no soft landing and no soft border,” he said.

“This is particularly clear in terms of trade which, in the event of ‘no deal’, will be on World Trade Organisation (WTO) terms,” Lord Hain said.

The agri-food sector remains one of the most vulnerable markets in regards to the fall-out from Brexit.

The UK was the Republic’s single largest trading partner for the agri-food sector in 2017, with exports to the UK totalling £4.55bn — 38% of all exports -— while imports totalled £3.5bn.

In his speech Lord Hain spelled out his concerns of the extra red tape a no deal would bring. This includes cross-border traders having to sign up to a register as well as submitting the value and classification of goods before transport.

Hauliers would also have to complete several declarations on every consignment exported and imported across the border.

He warned that WTO terms also meant all goods will be subject to trade tarrifs.

“For example, the movement of dairy products constitutes almost 15% of trade from Northern Ireland into Ireland. These would be subject to effective tariffs of around 64%, taking into account both ad valorem (charged as a percentage of the value of the goods), and unit-based charges (by quantity or weight).”

Lord Hain said if the British or Irish authorities failed to enforce these rules “they would essentially be leaving a gate swinging wide open for smuggling”.

“The idea that a country would simply refuse to fulfil its duties with regard to customs facilitation is bizarre. “Smuggling not only means losses to public revenue; it causes harm to legitimate traders, poses risks to consumers, and funds criminal activity.

“If the UK or Ireland decided to turn a blind eye to the traffic of goods across their borders, they would essentially be leaving a gate swinging wide open for smuggling. The unavoidable point is that a no-deal scenario would cause most harm to the Irish border region.

“It is beyond ironic, then, that the prospect of a no-deal is made so much more likely by the dispute over the so-called backstop for managing the Irish border.”

He added that after a no deal, the current systems in place across the EU to ensure the smooth movement of goods would no longer apply. “This means that excise duties and VAT will have to be paid on entry to the other jurisdiction — another layer of bureaucracy for traders to manage,” he said.

He said there were methods available to ease the burden of customs bureaucracy, but they needed time and resources to develop and roll-out. “None of this has happened so far,” he said.

Other concerns included the security of electricity supplies across the border, and a suggestion from the UK government that Northern Ireland drivers may need to carry a ‘green card’ for insurance while driving in the Republic.