Brexit: North ‘uniquely vulnerable’ in post-Brexit landscape, say business leaders

Checks at Border would represent an unwelcome return to the past, say local leaders

Customs or security checks at the Border “would  represent an unwelcome return to the past”,   business leaders in the North have warned.

Customs or security checks at the Border “would represent an unwelcome return to the past”, business leaders in the North have warned.

 

Northern Ireland is “uniquely vulnerable” to potential changes particularly new tariffs and rules as a result of Brexit which will deliver the “biggest political and economic challenge” that the North will face this century, business and academic leaders warned on Wednesday.

The leadership of Northern Ireland’s two universities and three of the largest local business bodies have come together on the day that the British prime minister formally sets in motion article 50 to set out what they believe could be the future landscape post Brexit and the specific challenges that the North will face.

“The final deal, constructed after two years of painstaking negotiation will, for better or worse, have direct and profound implications for Northern Ireland,” they warn.

Because of this the Confederation of British Industry’s Angela McGowan, Linda Brown of the Institute of Directors and Anne McGregor of the NI Chamber of Commerce say the North needs clarity from Theresa May on how it will be represented in the article 50 negotiations. The president and vice-chancellor of both Queen’s and Ulster universities – Prof Patrick Johnston and Prof Paddy Nixon – also back this stance. All argue that because the North is the only region of the UK that has a land border with an EU member state it is essential that specific measures are put in place.

“Keeping barriers to the flow of labour, goods, energy and services across the island of Ireland as low as possible is both economically and socially essential,” they said.

“Customs or security checks at the Border would be more of a barrier to trade – they would represent an unwelcome return to the past. We must always remember that peace and prosperity go hand and hand,” the five have cautioned.

The academic and business leaders also highlight how important cross-Border trade and free movement of labour is to the North – with 32 per cent of total exports from Northern Ireland destined for the Republic – and in particular emphasise that the local agri-food sector is heavily dependent on EU funding and barrier-free access to the Republic.

“Twenty-five per cent of Northern Irish milk and 36 per cent of Northern Irish lamb is processed at plants located in the Republic of Ireland,” the five warned.

Danske Bank economist Conor Lambe said: “The practicalities associated with Brexit will now start to be felt. For businesses in Northern Ireland, the future border arrangements with the Republic of Ireland remain a key feature of the upcoming negotiations. There will be no change to the current border for the next two years, but local businesses need to be thinking through the implications of some form of border control on their future operations and costs now. “

In Belfast on Wednesday the Northern Ireland Committee of the Irish Congress of Trade Unions (NIC-ICTU) said it would be concerned about the future of thousands of jobs in the North if the British government pursued a hard Brexit.

At a specially convened Brexit policy conference in Belfast the assistant general secretary of the ICTU, Owen Reidy, said that 58 per cent of manufacturing exports from the North currently go to the EU and 85,000 people work in manufacturing locally while 67 per cent of all service exports go to the EU and 350,000 people are employed in the service sector.

“Can anyone seriously expect that the hard Brexit being pursued by the UK government will have no impact on both of these important sectors if we are taken, against our will, out of the EU, the single market and the customs union,” Mr Reidy said.

Impact

The one-day conference will bring together representatives of 24 trade unions to hear how Brexit will impact on the economy, trade and jobs in the North and also discuss what plans are in place now that article 50 has been triggered.

According to the Federation of Small Business in Northern Ireland (FSB NI), current political uncertainty at home is only adding to small firms’ concerns about their future.

Wilfred Mitchell, policy chair of FSB NI, said local businesses that export and import “need confidence that they will still be able to do business on the same terms especially in relation to cross border trade with the Republic and the daily movement of people and products. Those that employ non EU citizens in their workforce will want early assurance they will remain and that hiring new staff will not mean a new system with extra costs and burdens,” he added.

But one investor in the North believes that the Brexit process could also deliver new opportunities.

Milestone

Patrick Graham is an investor with the Business Growth Fund (BGF), which was set up in 2011 to help back growing smaller and medium sized businesses across the UK. It confirmed on Wednesday that its total investment in the North had hit a £20 million milestone.

Mr Graham said the fund is actively working on a pipeline of new deals in the North and that the start of the Brexit process to take the UK out of the EU will not deter its plans to find more “ambitious entrepreneurial businesses” to back in the North.

“BGF is committed to continuing to invest during this period of uncertainty. Times such as this can lead entrepreneurial businesses to explore new ideas… consider new markets and push some boundaries,” he said.