Any Brexit deal will hit every part of NI’s ‘weak’ economy, CBI warns

Any type of Brexit deal will touch on every aspect of Northern Ireland’s “already weak economy”, the head of a lobby group has said.

Angela McGowan, director of the Confederation of British Industry in Northern Ireland, said the ripple effect of a Brexit deal will hit business investment, productivity, competitiveness, and where and how Northern Ireland trades.

The CBI represents about 180,000 business across the UK and about 75% of the top 100 businesses, and hundreds of small firms in Northern Ireland.

Speaking at the On the Brink of Brexit conference in Dublin on Thursday, Ms McGowan said that Northern Ireland needed a deal that protects the all-island economy, the Good Friday Agreement, and one that gives unfettered access to Great Britain’s market.

“The deal is going to be a step forward and it has to be something that will recognise the unique circumstances of Northern Ireland will be in that,” she said.

“If we get a deal, we have only just begun, the discussions on services – 75% of Northern Ireland economy – will commence.”

She added: “In our view it will touch on every aspect of this already weak (Northern Ireland) economy.

“Investment, productivity, competitiveness, tariffs barriers, and it’s going to impact on trade and where and how we trade.

“The labour market will be impacted too, particularly with the UK Government’s stance on migration.

“The rural economy is often forgotten but in Northern Ireland it is quite important and this will have huge implications on rural and urban life balance.”

About 38,000 migrants left Northern Ireland between 2017 and 2018.

Northern Ireland has a huge dependence on migrant labour.

Ms McGowan said that some of the region’s biggest gains in productivity were when Eastern European workers moved to Northern Ireland.

“Since the financial crisis many of the job creations happened around EU migrant workers,” she added.

“Since Mrs (Theresa) May’s government transferred to the new administration they are a little bit softer on migration for Northern Ireland.

“Northern Ireland will have to be treated differently on this. Maybe there are solutions on an all-island work visa, which I think would work well for us.”

Martina Lawless of the Economic and Social Research Institute said that the UK is unlikely to replace the levels of trade in the integrated EU market.

She warned that if the UK opens up to world food imports, it would pose a major competitive challenge to Northern Ireland.

“Any deal involving changes in food standards is very problematic for cross-border flows – and technology is unlikely to help if standards diverge,” she said.

“The aim is to give some sort of special treatment for Northern Ireland but in a way that minimises the impact on Northern Ireland/GB trade, to minimise cost that the sea border checks might have and to keep trade as open as possible.

“But doing this without any checks or documentation anywhere is really not going to be able happen, particularly if the UK moves to complete free trade agreement.

“The EU will need to have the protection that it will not enter the EU market using Northern Ireland as a backdoor, either to skip over tariffs or avoid product standard inspections.

“That leaves Northern Ireland firms and those trading with Northern Ireland probably at the forefront over exposure as to what exactly Brexit will mean.

“The impact on Northern Ireland is very much on small firms, on frequent cross-border traders and agri-food sector, and that applies no matter what type of deal is agreed.”

Meanwhile, Michael Doherty, a customs and border consultant, told the conference that there will be an increase in opportunities for border smuggling if infrastructure re-emerges on the island of Ireland.

“I can categorically say that there is no technology currently in operation, nor do I see in the near future, capable of preventing  smuggling without infrastructure,” he added.