Belfast Telegraph

We must ensure people are not left behind after probable no-deal Brexit

Economy Watch

We will need to provide support for workers who will lose their jobs in the event of a no-deal Brexit
We will need to provide support for workers who will lose their jobs in the event of a no-deal Brexit

By Paul MacFlynn, senior economist, Neri

It is now more likely than not that the United Kingdom will leave the European Union on October 31 without a withdrawal agreement or any negotiated settlement on future relations with the EU.

Some political event may transpire in the intervening period to stop this process but, as the weeks go by, that possibility is fading into insignificance.

It will be for historians in years to come to analyse exactly how we came to this state of play but, for want of a better phrase, we are where we are.

What this means is that the time for debates about the economic impacts of different exit deals is over. We need to move on. We need to start discussions on how we approach no-deal.

I have a great amount of sympathy for those who question whether a no-deal Brexit is something one can actually prepare for. Before her Damascene Brexit conversion last month, the Conservative cabinet member Amber Rudd noted that preparing for a no-deal Brexit was akin to preparing to drive your car off a cliff - you can put on your seat belt, but at the end of the day you're still driving your car off a cliff.

In reality though, we cannot be passive observers of this process. Furthermore, preparing for a no-deal outcome means admitting a few hard truths. Firstly, there will have to be some form of economic border on the island of Ireland. If there wasn't, then all of the negotiations of the last two years would have been meaningless.

There are, quite obviously, political difficulties in admitting this, but there is also a political danger in making promises about the border that cannot be kept. A border will be needed to protect the integrity of the single market and to regulate compliance in Customs and VAT.

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How will Northern Ireland firms adjust to this new reality? What supports can we legally make available to such firms? These are key questions but we will also have to grapple with the fact some firms will just not be able to adjust. Business models built around the current border arrangements may not be able to adapt irrespective of the amount of support offered. That means job losses.

How are we then going to provide support for those workers who lose their jobs? The government will probably promise an assistance programme in this area, but we need more concrete proposals. In the aftermath of a recession-type event, such as Brexit, creating new jobs is obviously the main priority of any government. However, job creation is not enough.

Workers who lose their jobs in recessions are often not the same workers who take up newly created jobs. In many cases, there is a skills or a location mismatch which means that a lot of people get left behind.

Given that a no-deal Brexit will be a conscious decision of government rather than an external economic shock, it is incumbent on government to ensure that appropriate job guarantee schemes are put in place to ensure that workers in Northern Ireland do not fall through the cracks.

This means identifying sectors and areas most at risk and having detailed conversations about how such schemes would operate. For example, food manufacturing is often cited as Northern Ireland's most exposed industry. The sector is concentrated in Mid Ulster, Northern Ireland's main manufacturing belt with clusters of large firms and SMEs across the region. Food manufacturing is also the only area of the manufacturing sector with a majority of female employees.

We don't need grandiose employment schemes with eye-catching logos and a never-ending round of press launches.

We need employment schemes which can address job displacement for female workers within the Mid Ulster region.

The real problem for Northern Ireland at present is that we need 12 months of no-deal Brexit planning and we have 12 weeks until a no-deal Brexit occurs.

The absence of a Northern Ireland Executive has been particularly unhelpful in this regard, but the Government's preparation for a no-deal Brexit hasn't been much better.

On the EU side there has been much more significant planning and the Republic's government has had no-deal legislation in place for some months now.

I have seen no document outlining a comprehensive plan for Northern Ireland is the event of a no-deal.

The Northern Ireland Civil Service have been doing their best to make contingency plans but they are limited in their authority to properly consult and make strategic policy decisions in this area.

Whatever political structure it is that currently governs Northern Ireland, it urgently needs to reach out to social partners and bring them into the process of no-deal planning.

There is too little time and the task is mammoth but the imperative remains.

Belfast Telegraph