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Northern Ireland would only just 'break even' in event of Brexit warns think tank

By John Mulgrew

Northern Ireland would make no net gain and its finances would only just break even in the event of Brexit, a think tank has said.

According to the Nevin Economic Research Institute (Neri), Northern Ireland would be worst hit of all UK regions if there is a vote to leave the EU.

Problem areas could include "further strain" on Northern Ireland's public finances, through the loss of farm payments from the EU.

It also says that the "attractiveness of Northern Ireland as a destination for foreign direct investment (FDI) poses a unique challenge".

The economic think tank has also estimated that Northern Ireland proportionally contributes as little as £270m each year to the EU.

But Neri says that between single farm payments, fisheries, business investment funding and money under the Peace scheme, Northern Ireland receives back around £370m each year.

"In the next five years Northern Ireland would on conservative estimates only 'break even' in the event of a Brexit," it says. However, it says the discussion around this is "clearly hypothetical".

Addressing concerns over manufacturing here, the report on the impact of a Brexit says "Northern Ireland is skewed towards sectors that have greater trade with the EU and are therefore more vulnerable to disruption from Brexit".

It also adds: "The wholesale and retail sector is Northern Ireland's largest employer and along with the tourism sector it could see the largest labour market impact."

It says the retail sector "provides employment to a large section of the population and it is likely that a disruption to EU trade, particularly with the Republic of Ireland, may cause significant uncertainty and possible job losses in the sector".

The report, written by Neri economist Paul MacFlynn, says that Newry, Armagh, Fermanagh and south Tyrone could also face a "disproportionate hit as they are border constituencies".

But while fears have been raised over the potential negative impact a Brexit could have on tourism here, the Neri report says as the industry is "quite domestically focused" the threat of disruption to visitor numbers "can be overstated".

Speaking about foreign direct investment, the report says there is "little doubt as well that this is an area of economic development that will be significantly impacted by Northern Ireland's continuing relationship with the EU".

"An exit from the EU could deprive Northern Ireland of inward investment by boosting the attractiveness of the Republic of Ireland as a location and reinforcing the peripheral position of Northern Ireland within the UK."

But it adds that leaving the EU could "lift existing restrictions on State aid".

Following an exit from the EU, the report says Northern Ireland is particularly vulnerable to disruption in agriculture, food production and "many areas of manufacturing".

It concludes by saying this "represents a disproportionate risk for Northern Ireland in the short to medium term".

"In the next five years Northern Ireland would on conservative estimates only 'break even' in the event of a Brexit," it adds.

Belfast Telegraph