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Lord Mandelson: Put simply, a Brexit will wreck the Northern Ireland economy

A vote to leave the European Union would have a disastrous impact on the province and jam a spoke in the wheel of progress made in the wake of the Good Friday Agreement, writes Lord Mandelson

Published 03/06/2016

Former Northern Ireland Secretary Peter Mandelson
Former Northern Ireland Secretary Peter Mandelson

It is without question that Northern Ireland has benefited from the UK and Ireland's shared membership of the European Union. Whether we talk of improved relationships north/south or improved relationships east/west, the European Union has played its part in helping to ease tensions and to bring to an end the violence of the Troubles.

For the Good Friday Agreement generation, the post-Troubles generation - some voting for the first time in this referendum - the European Union underpins future economic development across the island, both north and south.

In the past few days concerns about immigration have been exploited to make a case for exiting the European Union, but pulling out would wreck the economy.

Here in Northern Ireland that economic impact would hurt more than in any other part of the UK.

The single market is key to trade, jobs, investment and pay packets.

Although not everyone likes EU migration, it is manageable. What wouldn't be manageable are the economic consequences of being outside the single market.

The Northern Ireland economy has been on a journey and is being transformed. The open border with the Republic helps some 18,000 workers and 5,000 students cross every day for work or study - and that ease of movement works economically for tourism, too.

If the immigration promises of Brexiteers are to be met, some sort of hard border would have to be introduced - with all the physical, practical and political effects that would bring.

A hard border would dampen economic activity on both sides. Northern Ireland simply cannot afford this - it still has slower growth, higher unemployment and poorer educational outcomes than the UK as a whole and, of course, the agricultural sector here is larger.

The Executive has based economic development on attracting foreign direct investment and selling ready access to the EU single market via Britain and the Republic.

Of the foreign investment projects in Northern Ireland since 2010, 42% came from other European Union countries.

And in the last five years alone, EU countries generated £574m in inward investment.

That investment came to Northern Ireland because it is fully part of the tariff-free, uniform regulatory single market - not a region anchored alongside it, maybe within shouting distance but denied its privileges and advantages.

A significantly larger share of Northern Ireland's exports, goods and services has an EU destination compared with that of the UK as a whole. In 2104, it was 59% for Northern Ireland, in contrast with 44% for the UK.

For local manufacturers, such as Denroy Plastics, exports are competitive because they operate inside the single market - outside the single market they would face tariffs and regulatory barriers, making them and their products costlier and less competitive.

For the likes of Bombardier, access to EU research and development funding has brought significant benefit, as they develop key technologies through relationships with other European aerospace companies.

The Centre for Economic and Business Research (CEBR) shows that there are more than 20,000 manufacturing jobs in Northern Ireland linked to trade with the European Union.

The CEBR also shows that more than 3,500 additional manufacturing jobs would be created in Northern Ireland by 2030 as the result of a vote to Remain.

The European Union receives around 87% of Northern Ireland's farming, food and drinks exports, and in 2014 this was worth some £1.2bn to these sectors, sustaining some 72,000 jobs locally.

EU funding in Northern Ireland is estimated to be equivalent to more than 8% of GDP, which is significant - not least in the large agriculture sector - and there is nothing even close to a guarantee on offer that it would be replaced if the UK were to leave.

We won't remove ourselves from our own European home market without paying a huge economic price - and it's not a one-off shock, but a cumulative loss to the economy and to public finances, of which we will all be poorer as a result.

Northern Ireland continues to be heavily dependent on the public sector, and a smaller public sector spend by the Treasury would be felt more acutely in Northern Ireland than in other regions.

In the past the European Union has accommodated the UK, and through goodwill we have been granted special status on the likes of Schengen and the Eurozone.

That goodwill would inevitably evaporate if we were to vote Leave.

It is nonsense to suggest you can no longer be a member of a club while at the same time securing a preferential status to members who continue to adhere to the rules and to contribute financially.

Outside the EU there will be no better economic deal with Europe than the one we already have.

Socially and economically, Northern Ireland has made huge progress in recent years and, in many ways, it has been transformed, but still it remains economically vulnerable.

It would be a matter of huge regret to see a vote for Brexit exploit that vulnerability and, as a consequence, Northern Ireland fall well short of its future economic potential.

Lord Mandelson is a former Northern Ireland Secretary, Secretary of State for Business, Innovation and Skills and Secretary of State for Trade and Industry, as well as a former EU Commissioner for Trade. He is in Belfast today to speak at a ManufacturingNI event

Belfast Telegraph

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