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40,000 Northern Ireland jobs at risk in no-deal Brexit, say Stormont officials

The impact of a no-deal Brexit on Northern Ireland would be devastating, a civil service assessment warns.
The impact of a no-deal Brexit on Northern Ireland would be devastating, a civil service assessment warns.
Jonathan Bell

By Jonathan Bell

Around 40,000 Northern Ireland jobs are at risk in a no-deal Brexit, there will be an increase in costs for businesses and consumers and hundreds of millions of pounds lost to the economy, a civil service paper warns.

Stormont officials laid out the devastating impact leaving the EU without a deal would have on Northern Ireland in a wide-ranging data paper which examined business activity. It states there would be "profound and long-lasting impact".

The report comes a day after the Irish Government warned of how devastating a no-deal would be for its economy.

Business representatives here said it demonstrated again the need for a deal with the EU.

The paper states it is intended to be used as "evidence for stakeholders to use" and is not a view on policy surrounding the UK's decision to exit the EU.

It says the majority of businesses have no migration plan in place and the economy is already showing "worrying signs" it is poorly positioned to absorb a no-deal "shock".

While parliament has voted against the UK leaving without a no-deal both contenders for the Tory leadership have refused to rule it out.

The Department for the Economy says in a no-deal Northern Ireland faces a broad range of "direct and in-direct" impacts.

"The most striking element of the impacts is how interconnected they are," the paper states.

"In the same way as businesses and jobs depend on the totality of NI’s internal and external trade, businesses depend on the entire framework of current trade and transport conditions.

"That all these changes will happen at once, in a way that is not mitigated by a settlement between the EU and UK, makes it very difficult to set a limit to the impact on NI."

It says it is unable to put a limit on the impact a no-deal would have. Those identified include:

  • Sharp increase in unemployment - 40,000 jobs at risk because of their reliance on EU exports
  • Severe consequences for Northern Ireland's competitiveness on an all-island basis.
  • Irrespective as to if there are border controls or not, business will not be able to export to the Irish market. EU tariffs could reduce export to Ireland by around 11% equating to a hit of £100m to £180m.
  • Increased vulnerability to low-cost non-EU imports in the local market or in GB. Particularly in the beef industry.

It says Northern Ireland would therefore faces "twin pressures" on access to the EU and UK markets leaving business with "very limited" options with an "absolute reduction" in exports and external sales.

Meanwhile those businesses exporting services face an increase of 14.5 percentage points in costs. While in the ICT sector could be hit with a 24 percentage point increase in costs.

That could equate to a £120m hole in the economy.

It says pressure on businesses could lead to increased criminality, such as smuggling.

"The impact on communities – particularly in border regions – is difficult to quantify, but any increase in non-compliance or evasion would change behaviours and attitudes in communities, which, over time, will significantly impact on the culture of lawfulness in NI."

The report states that while a reduction in prices may appear good news for the consumer it will likely only be on a small number of products. And likely with an drop in the value of sterling prices are likely to increase.

The attractiveness for the region for foreign direct investment would also be hit.

"Across all of these risks it is clear that the majority of businesses do not consider themselves to have a mitigation plan in place, and the NI economy is already showing worrying signs which mean it will be poorly positioned to absorb any shocks from a ‘no deal’ Brexit," the report added.

"These factors could exacerbate the impact of other exit impacts. There will be further impacts in a ‘no deal’ exit that are either difficult to identify or difficult to quantify."

Northern Ireland Retail Consortium, director Aodhan Connolly said the report made for stark reading but should come as no surprise.

"The NIRC, Manufacturing NI and Freight NI have for many months now said that a no-deal would be a disaster," he said.

"It is the biggest threat to our economy since the Troubles. With at least 40,000 jobs at risk or 5% of the employees in NI, it is clearer than ever that we need a deal.

"It is hugely unhelpful that people still are wasting time on promising implementation periods that can’t happen without a deal or technology that has not be proven to work. Our economy cannot be anyone’s experiment and it cannot be sacrificed for the sake of  party politics. This isn’t just about the economy, it is about jobs and families. For their sake we need this to be about people not politics.”

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