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Brexit would be challenging for Northern Ireland, says CBI's David Gavaghan


Worry: David Gavaghan

Worry: David Gavaghan

Worry: David Gavaghan

Northern Ireland companies will be left in a strange and challenging position if the UK votes to leave the European Union, the CBI's new chairman has said.

David Gavaghan warned that leaving the EU could drag the UK's economic performance back to levels seen during the worst of the recession.

Mr Gavaghan said an exit would also create "challenges in all sorts of areas in Northern Ireland".

Setting out his stall in his new role, he reiterated calls for a rise in university tuition fees and a push to increase the number of foreign students here.

But he said increasingly tighter restrictions imposed by Home Secretary Theresa May on students from overseas would have a "devastating" impact.

He added that both of the province's universities, but in particular Queen's University, "could see huge opportunities for foreign students".

Mr Gavaghan also raised issues with qualifications of school-leavers and said improving educational standards was "something business needs to get behind".

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The former head of the Titanic Quarter became chairman of the CBI, with former chairman Colin Walsh now vice-chairman.

Mr Gavaghan is also the man behind Aurora Prime Real Estate - a firm set up to begin investing and developing high-end office space in Belfast.

Its establishment no doubt struck a chord with Invest NI, which has warned that Northern Ireland could miss out on attracting investment because of a lack of office space.

Speaking about Northern Ireland's business landscape in the event of a Brexit, Mr Gavaghan said: "No one knows what leaving the EU will look like. The challenge is to set out what will happen if the UK leaves the EU.

"If the UK was to leave the EU, Scotland would have another referendum. That would then put Northern Ireland in a strange position."

Around 80% of CBI members surveyed in 2013 said they wished to remain part of the EU.

The CBI also claimed that most big companies based here wanted to stick with the status quo.

Mr Gavaghan said Northern Ireland "stood out" as one of the best places in the world for financial services firms. A number of such companies, including Citi, have back-office operations here.

Speaking about his new role in charge of the business body, Mr Gavaghan said he was "honoured and delighted to take up this opportunity".

"After a protracted period of stop-start government, we enter 2016 with a more positive and optimistic outlook," he added.

"In particular, the commitment by the Northern Ireland Executive to reduce corporation tax to 12.5% from April 2018 will be a game changer. (It will) drive business growth, potentially generating at least 30,000 additional jobs over the next 15 years."

Meanwhile, CBI Northern Ireland director Nigel Smyth said it was crucial for Northern Ireland to improve infrastructure to attract major businesses.

He also warned that the public sector alone "cannot be the future" and said: "We have to get back to revenue-raising, and you have to take it (some public services) outside public ownership."

Mr Smyth also told how the CBI was focusing on a range of strategies for growing Northern Ireland's economy.

They include areas such as outlining the vital importance of Northern Ireland's economic future as a member of a reformed EU, maximising the potential to create thousands of new jobs as a result of lowered corporation tax and "creating an ambitious plan to ramp up investment in infrastructure".