Agenda item

Shane Murphy and Wendy Lecky, Department for the Economy, to discuss the Northern Ireland Trade and Investment Data Under 'No Deal' Paper – Published 10th July, 2019 on the following link -




            The Chairperson welcomed to the meeting Mr. S. Murphy, Head of Analytical Services, and Ms. W. Lecky, Economist, representing the Department for the Economy.


            Mr. Murphy presented an overview of the Northern Ireland Trade and Investment Data Under 'No Deal' Paper (copy available here) which had been published on 10th July, 2019. He reminded the Committee that the paper did not represent the NICS’s view on matters of policy around EU Exit, it simply set out the evidence for stakeholders to use.


            He advised that Northern Ireland (NI) faced a broad range of direct and indirect impacts in the event of a ‘no deal’ exit.  He advised that the impacts were interconnected, for example, businesses and jobs depended on the totality of NI’s internal and external trade. He pointed out that it was difficult to set a limit to the impact of Brexit on Northern Ireland and suggested that, due to the wide range of interconnections, the NICS’s assessment remained that a ‘no deal’ would have a profound and long-lasting impact on NI’s economy and society.


            He reported that the Department had published various reports on Brexit analysis and highlighted that, following the publication of the aforementioned ‘No Deal’ paper, it had compiled a range of relevant economic related statistics and had published a summary of the available economic information throughout the 11 council areas (available here).


            He outlined the risks and impacts of a ‘no deal’ Brexit, which included:


·        An increase in unemployment;

·        Consequences for both NI’s competitiveness in the all-island economy and NI’s place in the UK internal market;

·        The impact of EU tariffs and non-tariff barriers potential impact might result in many businesses no longer being able to export to the Irish market, leading to a major reduction in NI’s exports to Ireland; and

·        Analysis of import volumes and commodity prices showed that NI businesses would have increased vulnerability to low cost non-EU imports in the GB or NI market, in particular, for the agri-food sector.


            He stated that ‘no deal’ therefore placed pressures on NI’s access to the EU and UK markets, leaving businesses with very limited options and the NI economy would face an absolute reduction in exports and external sales, with tradable services being similarly exposed.


            He highlighted that pressure on businesses to change behaviour to remain viable or the exploitation of differentials by organised crime groups could also see an increase in smuggling and had the potential to change behaviours and attitudes in communities, which, over time, would significantly an impact on the culture of lawfulness in NI.


            He advised that there would also be an impact on households, such as risk of food price rises, job losses and a risk of downward pressure on wages and investment. He stated that NI’s Foreign Direct Investment (FDI) attractiveness would be negatively impacted and pointed out that, across all of these risks, it was clear that the majority of businesses did not consider themselves to have a mitigation plans in place, and the NI economy had already showed worrying signs which meant it would be poorly positioned to absorb any shocks from a ‘no deal’ Brexit.


            He emphasised that the Department had been engaging with Businesses in relation to Brexit Readiness but they had found it increasingly difficult to get feedback for its Policy research, therefore, it would appreciate if the Committee could endorse engagement between local businesses and the Department for the Economy. 


            During discussion, Members raised concerns in relation to job losses and wages, the reliability of the data in the report, the effect of tariffs on SMEs, currency exchange rates, food availability and affordability, the agri-food sector, financial and cyber services, FDI, banking, data access, the potential of a recession, illegal exporting and importing of goods, business preparedness and tourism. 


            During further discussion, the representatives answered a number of questions from the Members in relation to the economic impact and mitigation measures of a ‘no deal’ Brexit, the consequences of negotiation strategies, hard border exports, baseline growth and research into economic modelling for NI and south unification.


            Mr. Murphy explained further the impacts of tariffs on the economy and the effect on businesses and the long term economic modelling scenarios (e.g trade frictions at different cost to the economy). He highlighted that the Civil Service had set up a group in relation to mitigation measures and its findings would be published.  He stated that it was difficult to put a timescale on the long term effects of a ‘no deal’ Brexit across all of the aforementioned impacts. He advised that data access was a concern and his colleagues were researching this. 


            He expanded on the issues in relation to job growth, and confirmed that InterTradeIreland was due to publish its research on the potential impact of illegal importing and exporting.


            He highlighted that there were schemes available to help businesses prepare for Brexit and InterTradeIreland funding Vouchers were available to help prepare for Brexit and suggested that Members should encourage local business to avail of these.


            Ms. Lecky advised that the Executive Office had set up a multi-agency group to deal with vulnerable groups and the Council had a representative on this. 


            The Chairperson thanked the representatives for attending and they retired from the meeting.


            The Committee noted the information which had been provided and agreed that representatives from the Department for the Economy be invited to attend a future meeting to discuss the impact of Brexit on the transfer of data, financial data access, and cyber services.