Leaving the EU is a good time to reshape the Northern Ireland economy
Following the decision of the UK electorate on 23 June 2016 to leave the EU, the Government of the United Kingdom has undertaken a great deal of work to prepare the country for triggering Article 50 on 29 March 2017.
Before the vote last year, Northern Ireland civil servants had pulled together a preliminary view on what might happen if Leave was to win the day. This seemed to be more concerned with the impact on the Republic of Ireland than on the opportunities presented to Northern Ireland if such an event should occur. Since then, other than a letter to the Prime Minister, as far as is publicly visible, the Northern Ireland Executive appears to have done little of anything in preparation.
It is time to stop talking about ‘re-balancing’ the Northern Ireland economy. The UK decision to leave the EU means there is no better time than the present to take action to gain best advantage of the opportunities that lie ahead; time to tip the scales in favour of private sector enterprise and exports. As a UK regional economy Northern Ireland faces issues around productivity, economic inactivity within its workforce, and an overbearing public sector.
In a new report, “An Agenda for Northern Ireland after Brexit”, local Northern Ireland business and the Global Britain think-tank have collaborated to offer a policy framework of what needs to be addressed constructively and positively by all levels of government in Northern Ireland. Most importantly, Northern Ireland needs focused leadership from the Executive.
There is no evidence that there will be significant physical or tariff barriers to trade along the border – who in the UK or Irish Governments, or even from Brussels is suggesting otherwise. Talk about threats to the peace process is both irresponsible and wrong. That is not there are not challenges ahead for the Northern Ireland economy, but many existed with or without Brexit. Priorities going forward need to focus on:
- Committing to a restructured economy that favours a vibrant private sector rather than an unproductive public sector.
- Tackling issues of uncompetitiveness.
- Providing companies, particularly SMEs, with the support to grow profitably and to access new markets.
- Fostering a culture of enterprise and entrepreneurship.
- Offering low business taxes.
- Encouraging effective research and development.
- Improving efficiency in the agricultural sector.
- Developing a positive strategy for fisheries.
But alongside these challenges are significant opportunities to start taking action in addressing those priorities.
Leaving the EU will bring added opportunities for the Executive to make progress tackling long-standing economic problems by taking advantage of new free trade agreements. This will mean encouraging private sector development and the local economy’s potential to trade globally, focusing on SME exports and growth.
In the event of tariffs being introduced by the EU, our Executive should aim to support local businesses displace EU imports into Great Britain, especially in food produce and particularly in the South East of England.
With new UK trade relationships outside the EU, Northern Ireland’s “international outreach” operations need to reflect new where the economic demand is, and redouble its efforts with new trade offices in targeted markets. The Executive needs to be alert to emerging markets and prepare to signpost effectively any “trade push” by the UK Government, after Brexit takes place.
There may be some restrictions on migrant labour in the future, so this would be a good time to address issues with the competitiveness and productivity of the Northern Ireland labour supply. The Executive will need to place greater attention on improving skills and education for Northern Ireland’s workforce, as part of a wider strategy to target economic inactivity.
Now is also the time to lobby the UK Government to agree a strategy addressing how Northern Ireland agriculture can be more sustainable and efficient in the longer term. This must include lifting the regulatory burden on farmers by applying an “advocacy first, regulation second” approach and by placing emphasis on scientific evidence, rather than alarmist urban opinion. Similarly with our fishing industry, the Executive needs to focus on what is required to lift the burden of regulation on Northern Irish fishermen that industry representatives say are out-dated and ineffective.
If Northern Ireland is to become truly prosperous and provide genuine opportunity for all communities it should regard leaving the EU as a springboard to establishing new export markets that will expand its private sector, creating new jobs and generating more tax revenues.
Northern Ireland’s biggest customer, the home market in the UK, has a growing economy. Foreign Direct Investment is not slowing, and investment is undiminished.
The message of this report could not be clearer. Get organised, and get out there with the trade delegations and commercial offices targeting new global opportunities. Tell the world that, outside the EU, Northern Ireland is more open to business than ever before.