BREXIT WILL HAVE NEGATIVE IMPACT ON BORDER REGION

On Thursday the people of Britain and Northern Ireland will decide on whether or not to remain in the European Union, a vote which has implications for Ireland and the rest of Europe.

‘I would prefer Britain to remain in Europe. A British exit will create uncertainty,’ said Thomas McEvoy, head of enterprise in the Local Enterprise Office (LEO).

‘If Britain decides to exit, the economic impact on Ireland will be determined by the nature of the UK withdrawal. The larger the degree of access to the EU market negotiated by the UK, the smaller the effect on Ireland. We won’t know what that is until negotiations conclude, and it’s estimated there will be a two-year negotiating period. ‘So, we won’t really know the impact until some time in 2018.’ ‘Whatever deal is put in place between the EU and UK it is likely that Irish trade will suffer, especially local indigenous businesses and the agrifood industry.

‘If Britain exits, it will present a difficulty for the European Union which doesn’t want to create a moral hazard. Letting Britain out of the EU, on very favourable terms, will only encourage others to leave the EU.

‘ Therefore, European negotiators will be fighting hard to implement tariffs and administrative burdens.

‘Now, in that scenario, it’s going to make it very difficult for Irish business.

‘If you take a step back, at a macro level, it could present opportunities for FDI (Foreign Direct Investment) because the banks that go to London, who need to be in Europe, may end up looking at Dublin.’

However, Thomas points out those FDI issues don’t apply to the people his office caters for.

‘ The small business person in Co. Louth, who has a border a couple of miles north, is thinking, I’ve got to get my sales in in Sterling.

‘What if there is a tariff, extra customs, what if I need to route through Belfast to get to Scotland or England?

‘Suddenly, there are all these added barriers that could be put in place. That’s not going to help the small business, particularly one that wants to export.

‘So, from an indigenous and small business perspective, a Brexit is going to have negative implications.’

Thomas outlines what will happen if the decision is made to leave the EU.

‘Sterling is going to depreciate. It means that our exports into the UK are going to become more expensive.

‘ That means we are going to become less competitive in the UK, and straight off the bat, our products are going to become more expensive. And more than likely, that means less sales, and that’s a problem.

‘ The other problem is tariffs, and the extent of those problems won’t be known until the negotiations conclude.

‘Europe is going to play hardball, I imagine, and that might be alright from an FDI perspective but it won’t suit small businesses, especially those in a border location.

‘Recent statistics show we are less and less dependent on the UK than we were before.

‘But, if you strip out the FDI companies, and the larger companies that are in Dublin and Cork, and you look at the border region, and the indigenous companies in the border region, you will see that the vast majority who export are hugely dependent on the UK market, much more so than the national statistics would demonstrate.

‘So, I think we are going to be disproportionately adversely impacted by a Brexit.’

Nevertheless, there are lots of supports in place at the LEO to help businesses expand into Northern Ireland, or further afield.

‘We are about trying to encourage businesses to look beyond the local market.

‘ There are a whole range of supports to help someone sell into the six counties, everything from recruiting technology graduates to sales personnel. ‘We can also connect them to InterTrade Ireland.’ Thomas has advice for young people interested in a business career. ‘It is not as daunting as you might think. ‘ Talk to people who are in business, and talk to people who can help you.

‘Very often, it’s just about confidence, it’s about an attitude. If you have a strong commitment and a good idea, and you are driven, you are most of the way there.

‘It’s about having the energy, dedication and commitment to give it a go.

‘ There are a lot of trapped entrepreneurs working for someone else, who might be better off out on their own, and our job is to make that happen.’

The LEO can plug business people into the supports that DkIT and others provide.

‘What we are trying to do is ensure that we can engage with as wide a variety of small businesses as possible,’ Thomas added.