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Northern Ireland economy could shrink by 9% over Brexit labour shortage, businesses warn PM

Agriculture is one of the industries which could be hit hardest by labour shortages (stock)
Agriculture is one of the industries which could be hit hardest by labour shortages (stock)

By Michael Sheils McNamee

Northern Ireland's business groups have warned Brexit-inflicted labour shortages could shrink the economy by more than 9% over the next 20 years.

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The warning is made in a letter to Theresa May, signed by representatives from 21 major business groups in Northern Ireland, which highlights the local necessity of migrant labour.

The projection is drawn from research by CBI, one of the UK's largest business groups, and finds GDP could decrease by 9.1% by 2041 due to a lack of labour from the EU and internationally.

The number of EEA workers in the United Kingdom has dropped by 26% since the Brexit referendum in 2016.

"Migrant labour is crucial to the success of the local economy," the letter states.

"It fills gaps in both low-level and high-level jobs and is particularly relevant to key sectors such as agri-food, hospitality, healthcare, manufacturing, construction, education and digital industries – hence the wide interest from the various signatories to this letter.

"There is also a critical co-dependence between low-skill labour and higher skilled jobs across many industries and often low-skilled jobs act as the lynchpin for entire supply chains."

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The letter addresses a number of issues raised in a recent report from the UK Migration Advisory Committee, which called for the cap on high-skilled migrants to be scrapped, as these workers make a positive contribution to public finance, and for EU workers to be subject to the same visa restrictions as workers from elsewhere.

"In an economy as fragile as ours this is simply unthinkable, but the impact of labour shortages is already evident," the letter says, noting Northern Ireland's aging population as another aggravating factor.

The letter says it backs the committee's recommendation to remove the cap on the number of skilled workers, but said there was "no justification" for a £30,000 salary threshold placed on those wishing to emigrate into the United Kingdom - saying it would "damage Northern Ireland's economy".

"We require regional flexibility for Northern Ireland to be developed through consultation with industry as soon as possible, with minimum salaries and quotas adapted in line with our specific regional needs," the letter says.

Talks between London and Brussels over the final shape of the Brexit agreement are heading for a crunch stage, with a summit set to take place in Brussels next week, with the post-Brexit customs arrangement yet to be agreed.

The Government is expected to outline its position on the backstop for Northern Ireland in the coming days.

There has been push back from the DUP to any deal that could potentially place economic barriers between Northern Ireland and the rest of the United Kingdom.

On Tuesday, DUP leader Arlene Foster said she would have to see a legal text of a 'hybrid-backstop' which has been proposed.

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