Wed 20th Feb 2019
February 2019: Neither Government, nor business, is ready for a no-deal exit
John Healy, President, Northern Ireland Chamber of Commerce and Industry
Northern Ireland’s business community, farming sector, trade unions and civic society were all united in their support of the Prime Minister’s draft withdrawal agreement.
At this key juncture in the negotiations it is important to reflect on the significance of supporting a withdrawal agreement that protects the interests of all parts of the UK and particularly Northern Ireland which carries with it the risk that any agreement reached has the potential to seriously destabilise the economic, political and social fabric of society here.
We therefore carefully considered the extra burdens and opportunities that a potential backstop creates for businesses and after reflection has come out strongly in favour of the deal agreed with the EU when compared to the ‘no deal’ alternative. Whilst not perfect, the draft agreement was indeed workable.
However despite its dismissal by Parliament, agreeing a withdrawal agreement is critical if we are to avoid ‘no deal’. In our view a messy and disorderly Brexit on 29 March 2019 would cause widespread damage to businesses and communities across the country. Neither Government nor many businesses are ready for a no-deal exit, and it must not be allowed to happen by default.
I was therefore delighted to host the Prime Minister at Allstate NI in Belfast last week, where NI Chamber, along with our colleagues across business, farming and civic society, ensured that the Prime Minister is fully aware of the challenges facing Northern Ireland in terms of the Border and the impact a ‘no deal’ scenario will have on the region.
The implications for Northern Ireland are starkly portrayed in a recent British Chambers of Commerce and NI Chamber Brexit survey where 2 in 5 of our members said that in the event of a ‘no deal’ they would plan to move all or some of their business to the EU. This is twice as high as the UK average (1 in 5).
Other key changes that businesses here would make, and in some cases are already making, in the event of a ‘no deal’ include revisions to investment, recruitment and export plans, again with a more significant impact on businesses here compared to the wider UK.
Some of our members are already suggesting that they are losing business from EU customers as those businesses seek stability in sourcing new suppliers within the EU. The current risk exposure from the potential of a ‘no deal’ scenario to Northern Ireland business is high.
We have also looked at the implications of introducing WTO terms and it is our view that, aside to our opposition of a hard border, the implications for certain sectors of our economy are too risky to justify, particularly in the short run before new trade deals are negotiated.
In very simple terms NI Chamber would like an outcome that means minimal disruption in how our members do business locally, nationally and internationally. Any agreement reached has to have this at its core because the business community is so fundamental to all aspects of society here.
We would therefore stress the urgency that the government agree a way forward over the coming weeks to provide some sense of security to the business community.