Northern Ireland gripped by uncertainty over Brexit referendum

There are growing fears about what will happen if the UK votes to leave the EU

 Sinead McLaughlin: businesses in Derry are on “tenterhooks” about what is going to happen when  people in UK  vote on whether to remain in the EU. Photograph: Trevor McBride

Sinead McLaughlin: businesses in Derry are on “tenterhooks” about what is going to happen when people in UK vote on whether to remain in the EU. Photograph: Trevor McBride

 

Sunny weather, favourable exchange rates and an Irish bank holiday weekend usually combine to deliver a flurry of euro-spending shoppers who put a smile on the faces of Derry business-people.

But this week could be the exception, according to Sinéad McLaughlin, chief executive of the Londonderry Chamber of Commerce.

She says businesses in the city are on “tenterhooks” about what is going to happen in 17 days when across the UK people will vote on whether to remain in the EU.

For the 500 businesses that are members of the chamber the uncertainty triggered by the Brexit debate has, according to McLaughlin, already had a major impact on the city.

“Businesses are not investing. There is no confidence about the future, only increasing worry about what might happen,” she says,

Although McLaughlin agrees the EU referendum is crucial for Northern Ireland as a whole, she says the issue is accentuated in Derry.

“We’re already the most peripheral region in Europe, and if the UK were to leave the EU we’ll be even more isolated,” she says.

“Currently we have an invisible border with Donegal, but if Brexit were to happen, there is the very real possibility of border controls being introduced and the impact of that on both Derry and Donegal would be devastating: we may be two jurisdictions and two currencies but we function economically as one.”

Co-operation

McLaughlin believes that a Brexit would threaten current “cross-Border co-operation on health, the economy and education” in the region.

“People in Donegal and Derry can easily cross the Border two or more times every day – whether they are shoppers, business owners, workers or in education. What’s at stake here is the economy of the whole northwest of Ireland; it is not simply about Donegal or Derry as separate entities.”

Brexit supporters such as Secretary of State Theresa Villiers and her predecessor Owen Patterson argue that in the event of a Brexit there would not necessarily have to be big changes to current Border arrangements.

They say that if the majority of people vote to leave the EU, the UK would then ensure that the Common Travel Area agreement – which enables people to move freely between North and South – could continue to operate.

Villiers and Patterson also believe that Northern Ireland could continue to benefit from current trade arrangements with the Republic.

However, while visiting the North this week British chancellor George Osborne said it was “inevitable” there would be changes to current Border arrangements and there would likely have to be a remodelling of cross-Border trade agreements.

Export market

Latest research from financial advisory firm Davy highlights just how important the North’s “growing” business with the EU is to the local economy.

According to Alan Werlau, senior investment strategist with Davy, the Republic is Northern Ireland’s most important export market financially, while the vast majority of agricultural and manufacturing exports also go to the EU.

He says if the North were to find itself outside of the EU as a result of a Brexit then the impact for local businesses would be far-reaching and in some cases possibly terminal.

“Let’s say the UK leaves the EU and Northern Ireland is outside. Then the question is what level of tariffs could the EU impose on Northern Ireland exports to its member states – the EU’s key average tariff on non-EU imports is 5.3 per cent but the key dairy tariff is 42.1 per cent. Would the European Union impose these same tariffs on Northern Ireland’s goods and products?”

The reality of that for the North’s exporters is stark.

According to Werlau, membership of the EU is worth up to £80 million (€102m) to Northern Ireland each year – before factoring in the value of EU exports and the multiplier effect of EU funding.

He believes “the numbers speak for themselves” when it comes to the net benefits Northern Ireland derives from membership of the EU.

Aside from the crucial issue of how much EU trade is worth to the local economy, Werlau says there is also a real danger that people in the North may not generally be aware of how big a role membership of the EU plays in unlocking other funding, supporting important research and development projects, and attracting new foreign direct investment.

Economic argument

“There are a lot of EU flags on a lot of things – from the Belfast-Dublin Enterprise service to the Belfast Waterfront Hall – which secured £13.3 million from the European Regional Development Fund – to the Giant’s Causeway Visitor Centre, which also received £6.1 million of finance from the fund.”

However, Werlau also knows the Brexit issue is not “just an economic argument”.

“Some people may be willing to absorb the costs depending on their views but the economic consequences of the EU referendum could end up having a disproportionate impact on certain areas,” he says.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.