The proposed agreements arising from the UK-EU summit in May this year included commitments and proposals to address common challenges across the two economies, in addition to achieving some key areas of progress for the UK.
Some of these developments will have specific impacts in Northern Ireland (NI) and could serve to overcome bureaucratic challenges that have emerged and impacted on local businesses in recent years.
These include reducing checks on agrifood products moving from Great Britian (GB) into NI from alignment of SPS (sanitary and phytosanitary) requirements. These developments could unlock a key resource that is in short-supply at small businesses – time.
The business community in Northern Ireland is largely dominated by small businesses. In 2024, almost nine in ten businesses here were classed as micro businesses, which are firms that have fewer than ten employees. In reality, what this often means is that employees carry out multiple functions in the day-to-day operation of the business.
There is little likelihood that someone in a small or micro business will be employed with a sole focus on policy developments or customs administration. So, when there are developments that lead to increased bureaucratic requirements - as has been the case post-Brexit and with the implementation of Windsor Framework policies - these are often managed by a small team of employees who also have their day-to-day workload to manage too.
Upskilling to understand continually changing requirements, filling in forms, dealing with errors or complexities are time-consuming activities that take away employees’ time from other key areas of the business.
Added to this, the complexity and confusion regarding GB-NI trading in specific sectors has led some NI businesses to find alternative suppliers outside of GB, which meant disruption to supply chains and more time needed to find alternative options. It also reduced the choice available to both businesses and consumers.
But developments that could reduce this bureaucratic burden, whether it is the reduction in paperwork needed or reducing the frictions to trade that may re-open some supply chains could provide respite from the increasing administrative burdens that have fallen on businesses in the last few years.
The UK and NI Governments have focused in recent times on how to improve the growth and productivity outlooks for the small businesses that dominate our economy, and how to improve their appetite for expanding and exporting. This can be best achieved in the long-term in an environment where carrying out business is as seamless as possible.
Specifically for Northern Ireland, the story of operating with a lower rate of productivity and innovation compared to both UK and international peers is an old one, with some research suggesting that the pace here is slower because there is a lack of technological development, adoption of successful management strategies and continual upskilling.
Improving across these measures could be hugely beneficial for small businesses in Northern Ireland, particularly as an increasing number of experts suggest that the gap between productivity and growth prospects of small and large businesses could increase as small businesses are left behind in the race to invest in and adopt the latest technology.
But operating in an environment where time, and cost, pressures have increased for carrying out day-to-day operations means businesses are now in a more difficult position when it comes to focusing on longer-term strategies, or having time to research the latest management or skills developments that may help their business.
This is where the commitments resulting from the UK-EU summit could signal progress. Policy moves to enable small businesses to use some of their time differently could create positive spillover effects in terms of providing space to innovate, to improve networks and skills or, importantly, to rest.
The removal of trade frictions in the agri-food sector, and the reduction of red tape between GB and NI trade, show both governmental recognition and prioritisation of a local issue that has been widely cited as a time-consuming measure that has been impeding growth and competitiveness.
Should this be the first step in acknowledging that there are areas in which trade could become more seamless with our biggest trading partner (sales to GB account for more than half of all sales outside of Northern Ireland), it could signal a move towards a less bureaucratic system that could favour a wide range of sectors.
In addition, any cost savings, particularly in an environment where wider business costs have increased following the autumn Budget announcements and given upward inflationary pressures, could provide further benefit to businesses of all sizes.
As always, the proof of success is in implementation and delivery. The commitments arising from the summit will likely take months before coming into effect. And in the meantime, the path of bureaucratic administration may still be backwards before it goes forwards, as additional labelling requirements that were due to come into force at the start of July are still expected to be required.
But what we are optimistic about is the acknowledgement, prioritisation and the immediate materiality of the proposed measures, and how they may be the starting point of a reset that continues to provide practical solutions for businesses, to not only to see lower trade-related costs, but to allow their time to be used more effectively.
This article was published in The Irish News on 10 June 2025.
