Ms Kerry Curran:

I will first touch on the extension of the grace period in order to make sure that I cover all of the points about which the Chair asked. Some businesses will, obviously, not have to take on an additional burden straight away on top of all of the other changes that are taking place. Those businesses will be welcoming the additional grace period, depending on the direction of travel of their trade. At some point, however, those requirements will come in and will be an additional burden on top of the administration, paperwork and potential costs that businesses are experiencing. We can see in the very latest statistics the impact on trade of the changes that have already taken place. It is definitely going to be difficult for businesses when the extra requirements do come in and I think it is going to be important that we have the right business supports in place to make as many mitigations and easements for businesses as possible.

The Chair also raised the issue of the drop-off in trade with Great Britain. There is an awful lot happening here. It is a very complex picture and it is not one that has just emerged since 1 January 2021. The latest all-island business monitor was a survey of businesses across the island of Ireland in January and February 2021 and, as a part of that, 22% of businesses in Ireland have told us that they have been directly impacted by Brexit. Many businesses are being impacted by Covid-19 and Brexit, as Mr. Nelson referred to in his opening statement. There is a great deal going on aside from the impact of Brexit. Changes have been taking place since the result of the Brexit referendum. When we look at the changing pattern of trade between Ireland and Northern Ireland and Ireland and Great Britain, we have seen a considerable uptick in cross-Border trade on the island of Ireland since 2015 and 2016. The latest figures from the Northern Ireland Statistics and Research Agency, NISRA, on imports from Ireland relate to 2015 to 2018. The Northern Ireland official data show that imports of goods from Ireland to Northern Ireland have increased by 30%. The trade in the import of services from Ireland to Northern Ireland has increased by 36% in that short time period. Although the 2018 figures are the most recent available for cross-Border trade, we can see from the CSO data for 2019 that there was another significant uplift in cross-Border trade during 2019. Exports to Northern Ireland were up by 7%.

Last year was significant and impactful for businesses with the impact of Covid-19 but, that notwithstanding, exports to Northern Ireland fell by only 4.9%. That is significantly less than the fall in trade between Ireland and Great Britain. While there have been losses and changing trade patterns between Great Britain and Ireland, those Irish businesses are also reorienting their sales to sell more in Northern Ireland because of the unfettered access resulting from the Northern Ireland protocol.

Many changes are taking place and even taking into account the very difficult year of 2020, from 2016 to 2020 the CSO's trade statistics show that there has been an increase in exports overall from Ireland to Northern Ireland of 26%. There is a lot going on there. Whether that will persist as easements are found will definitely be a mixed picture. It will very much depend on the sector in which goods and services are being traded. There are different reliances in Ireland's imports and exports in supply chains and in export routes between Great Britain, GB, and Northern Ireland. InterTradeIreland conducted research on this in 2018. The same sectors on which Irish firms are reliant for imports and exports to Britain are slightly different from those sectors that we are more reliant on for cross-border trade. The nature of easements which are potentially to be introduced for the food sector and phytosanitary regulations and checks will all come into play. The nature of UK divergence, particularly on the regulatory side, for the likes of the chemical sector and pharmaceuticals will have a big impact on how those trade routes and supply chains adjust in the coming months and years. It is not an easy picture.

On current Government supports, now is a good time to consider whether the supports that are in place are the most appropriate now that we are seeing the picture emerge of business impacts. Our latest all-island business monitor asked businesses about the supports they availed of but also the supports that they would like to see. It is quite a broad picture, which is mixed up with the impacts of Covid-19 as well as Brexit. Businesses are looking beyond the supports that are available from the likes of InterTradeIreland, the local enterprise offices, LEOs, and Enterprise Ireland. They are looking for bigger stimulus packages and support from the Government, they are looking at tax relief, infrastructure investment and investment in new areas of growth, in order that we can start to look beyond the immediate impacts of Brexit and Covid-19 to how we can help them to become more competitive in the longer term. A review is always helpful to ensure that we are on track with the right supports. I expect there will be need for some additional supports as businesses really come out of lockdown and Covid-19 and take on the full impact of all the changes in the trading environment.