Belfast Telegraph

Home News Brexit

No-deal Brexit could cost Northern Ireland £5bn a year, says CBI

Theresa May
Theresa May
Jeremy Corbyn
Nigel Dodds
CBI NI director Angela McGowan
Suzanne Breen

By Suzanne Breen

A no-deal Brexit could leave Northern Ireland's economy almost £5bn less productive by 2034, according to a CBI study published today.

The business group warned that the region would be among the parts of the UK most exposed to the fallout.

The predicted drop in output represents more than annual public spending on hospitals, GP surgeries and other health services here.

The CBI said that such a significant forecast shortfall would hit people's jobs, livelihoods and living standards.

"Manufacturing activity is particularly important in Northern Ireland, and the agri-food sector, which employs thousands, is likely to be severely impacted as it is particularly exposed to the risk of higher tariffs and trade costs," it said.

"With 57% of Northern Irish goods exports going to the EU, any increased trade friction, added costs or delays would hit the region particularly hard."

CBI NI director Angela McGowan said: "CBI members across Northern Ireland are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the Northern Irish economy will pay the price."

If the UK fails to secure a deal with the EU, by 2034 real Gross Value Added (GVA) - the measure of value of goods and services produced here - could be 9.1% lower than under the UK's current arrangements with the EU, according to the Government's own analysis.

The CBI used that analysis to calculate the £5bn annual lost output.

Ms McGowan said the deadlock would only be broken by a genuine attempt by all MPs to find consensus and compromise, not stick to "rusting red lines" and political conditions.

She said: "Like the rest of the UK, Northern Ireland is not - and cannot be - ready for no-deal.

"The projected impact on our economy would be devastating, and while business will do all it can to reduce some of the worst aspects, a no-deal scenario is unmanageable.

"The message from the CBI to our politicians is clear: we must see compromise or the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in Northern Ireland for decades to come. It's time to put prosperity before party politics and dogma."

But TUV leader Jim Allister questioned the CBI's credibility on Brexit predictions and said it had "cried wolf so often" its warnings carried little credence.

"Who told us failure to join the euro would be catastrophic? The CBI," Mr Allister said.

"Who told us voting for Brexit would be catastrophic? The CBI.

"Yet, now we find the UK is the third-fastest growing economy in the G7, with the IMF forecasting increased growth - not much sign of that Brexit recession."

Mr Allister claimed that the CBI's assertion that 57% of Northern Ireland exports went to the EU ignored the fact that "by far most of our sales go to Great Britain and in comparison only a small proportion to the EU". He accused the CBI of ignoring "the centrality" of the British market to Northern Ireland's economy. He said urging support for a backstop would "strangle" Northern Ireland's economy by putting a border in the Irish Sea.

Last November analysis produced by departments across Whitehall claimed that Brexit under Mrs May's original deal could reduce the UK's GDP by up to 3.9% over the next 15 years. But leaving without a deal could deliver a 9.3% hit to GDP over the same period. It was claimed that the UK would be poorer in economic terms under any version of Brexit, compared with staying in the EU.

The document did not put a cash figure on the potential impact on the economy, but experts claimed that 3.9% of GDP would equate to around £100bn a year by the 2030s.

The Government has refused to take a no-deal Brexit off the table and Eurosceptics insist doing so would seriously weaken London's bargaining power with the EU.

Belfast Telegraph

Popular

From Belfast Telegraph