Impact of no-deal Brexit would be ‘more severe’ in the North

The UK government has for the first time conceded that businesses in the North might not have enough time to prepare for a no-deal Brexit which could result in "business failure or relocation to Ireland".

The latest briefing document from the UK’s Department for Exiting the European Union also highlights that the “cumulative impact” of a no-deal scenario would “be more severe and last longer” in Northern Ireland than Britain, chiefly, it claims, because of the land border with the EU and the current political stalemate in the North.

The 15-page document sets out the UK government’s latest assessment of the implications for business and international trade if the UK were to crash out of the EU in March. It details the “negative effects” of a no-deal exit for the UK as a whole from border issues to increases in food prices, EU tariffs and a general economic slowdown.

The briefing document also specifically addresses how businesses in the North would be impacted.

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“In a no-deal scenario there is an expectation of disruption to closely interwoven supply chains and increasing costs that would affect the viability of many businesses across Northern Ireland.

“There is a risk that businesses in Northern Ireland will not have sufficient time to prepare. This could result in business failure, and/or relocation to Ireland with knock-on consequences for the Northern Ireland economy and unemployment,” it states.

Disruption

It also contains a stark warning about the immediate outlook for SMEs – which account for 75 per cent of all private sector jobs – and Northern Ireland’s agrifood sector, which the UK Government acknowledges is located in predominately border and rural areas in the event of a no-deal scenario.

“It is particularly vulnerable given its reliance on cross-border supply chains in the production stage and in finished products,” the document states.

It also confirms that the government intends to “shortly publish further details on its immediate, temporary, arrangements for trade between Northern Ireland and Ireland in a no-deal scenario”.

The UK Government’s latest official Brexit communication also reiterates its commitment to avoiding “a hard border between Northern Ireland and Ireland in any scenario” but it stresses that the British government “would need to work urgently with the Irish Government and the EU to find any sustainable longer-term solution”.

Aside from the immediate impact on the North’s economy and business community, a no-deal Brexit would also, according to the UK Government’s latest assessment, cause “disruption” for the single electricity market (SEM), cross-border cooperation on areas such as crime and security, and create the potential for “community tensions to be heightened”.