The negotiator of the deal – which created a border in the Irish Sea – admitted he had not fully foreseen the “chilling effect” of the punishing new red tape for smaller firms facing higher costs.
There are “companies in Great Britain who decide that it’s all too much trouble, reasonably enough – can’t be bothered to engage with the process,” Lord Frost acknowledged.
“They are often SMEs [small and medium-sized enterprises] and micro-businesses. Dealing with this is a significant call on their time and they decide it’s just not worth it,” he told a parliamentary inquiry.
“That’s why you are seeing some of the trade diversion and supply-chain issues to Northern Ireland that we’re seeing.”
The admission came ahead of Lord Frost unveiling a new “approach” to the Northern Ireland Protocol next week, sparking fresh tensions with the EU.
The government insists the recent three-month truce over the sale of chilled meats and availability of medicines has failed to solve the crisis caused by the Protocol.
Brussels has been accused of continued “intransigence” in the ongoing talks and of a “lack of understanding of the sensitivities in Northern Ireland”.