1. Business
May 22, 2017

Here’s how Brexit is likely to impact Northern Ireland

By Callum Tyndall

The only UK country to have an actual border with the European Union, Northern Ireland holds a unique place in the Brexit process.

In spite of this, the country has been largely sidelined in the Conservative party’s discussions of their plans for departure from the EU.

With the Northern Irish Assembly’s discussion of Brexit plans on pause until after the election, and the English parties’ plans for the devolved powers still somewhat vague, what issues need to be considered for the country’s role in exiting the European Union?

A hard border

Aside from the change of speed signs to kilometres instead of miles, the border between Northern Ireland and the Republic of Ireland is currently near unnoticeable.

Long gone are the days of random checkpoints and army foot patrols to counter the IRA bombing campaign.

Yet this could soon change with the departure of the UK from the European Union.

The question of freedom of movement and trade hangs heavy over Northern Ireland’s part in Brexit, they are after all the only country in the Union to actually sit alongside a European nation.

Yet not only would the establishment of a hard border be potentially crippling financially, consider for example that the EU provides funding for cross-community projects between nationalist and unionist communities (Northern Ireland received £2.5bn ($3.2bn) in the last funding round), but the division caused by drawing up old lines can only be psychologically devastating.

Towards the end of last year, it was suggested the British Government may seek to extend UK borders into Ireland and establish the requirement that British immigration restrictions would be enforced at Irish docks and airports.

Aside from the ill fit with the Leave campaign’s notion of restoring sovereignty, the policy could serve only to reinforce the notion that Northern Ireland is considered a mere client state for Britain.

In historic terms, it is not so long since the end of the Troubles that saw Ireland torn apart internally.

The enforcement of a hard border could only negatively impact both sides.

Moreover, while it may be seen as a move to strengthen defence of the United Kingdom, it could ultimately serve to push the North towards consideration of reunification.

Impact on business

Financially, Northern Ireland is likely to take a hit.

With the cross-community funding as just one example, there is almost no way the British government can afford to plug the holes that will be left by the loss of EU funding.

In addition, no matter how well negotiated the Brexit deal is, the process of trade is probably going to undergo a change that will be less than beneficial to the current economic co-operation between Northern Ireland and the Republic.

Of particular consideration are the tariffs and custom checks that could come about as a result of the departure from the EU.

For example, 6m cases of Baileys are produced every year at manufacturing sides on both sides of the Irish border, with Baileys produced in Dublin sent north to be bottled before returning south for export.

The production chain for the liqueur involves roughly 3,000 cross-border journeys per year.

Yet Diageo, the makers of Baileys, have produced early figures that show delays of up to one hour for every truck journey between Ireland and Northern Ireland could cost the company up to €1.3m ($2.8m) in additional costs a year.

Those figures don’t even account for the tariffs that would pile up on top of the custom check delays.

Northern Ireland’s trade will be aided somewhat by the UK being their principle trading partner, but the cost that will be imposed by the shift in trade between north and south is going to be damaging.

In addition to trade however, the country may suffer from changes to corporation taxes.

After years of negotiation to receive permission to lower corporation taxes to gain an edge over Dublin and London, confirmation was provided that the rate could be cut by 2018.

And yet now, it appears that the UK is looking to cut its own corporation tax in EU negotiations, a move that would remove any benefit that Northern Ireland may have gained from its own cut.

Uncertainty ultimately plays a part in what may happen, as much is still up in the air, but as it stands it looks as if Northern Ireland’s finances may be in for tough times.

Public opinion

Northern Irish voters backed Remain by a 56 to 44 percent margin.

With the legacy of the Troubles still hard to forget, the concern is that divisions will spring up again with no small part played by politicians looking to capitalise on the uncertainty of the moment.

While the Republican representatives see this as a chance to push for reunification with the Republic of Ireland, Unionists seem to instead be looking to position themselves around a pro-Brexit stance.

Complicating the affair in general is that the country is headed into its fourth election in 18 months, having been left without a devolved government after talks stalled.

“This election is the worst possible thing to do,” said Institute for Conflict Research (ICR) director Neil Jarman. “You are having negotiations to bring the parties together and now you have elections pushing them apart. Nobody knows when, or how, to bring them back together.”

Left without a devolved government, departmental budgets have not been agreed and organisations such as the ICR have received funds for just four months.

The people of Northern Ireland face an uncertain future post-Brexit that is only being exacerbated by their politicians’ inability to come together and form a government.

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