Esmond Birnie: Brexit deal would leave NI with big disadvantages

Senior economist at Ulster University, Esmond Birnie
Senior economist at Ulster University, Esmond Birnie

A leading economist has spoken out against Theresa May’s Brexit deal, warning that it would lead to “substantial disadvantages” for Northern Ireland.

Dr Esmond Birnie, a senior economist at Ulster University and former Ulster Unionist MLA, also dismissed claims by business leaders that a no-deal Brexit could be “catastrophic” for NI.

Instead, low productivity and a lack of competitiveness are the biggest economic problems facing the region, he claimed.

His remarks came as Manufacturing NI chief Stephen Kelly today re-iterated his support for the draft EU withdrawal deal, adding that business leaders remained convinced it was in the best interests of the Province.

Earlier this week, the Government reluctantly published legal advice it had received from the attorney general regarding the Brexit deal – advice which provoked a backlash from unionists, with DUP deputy leader Nigel Dodds branding it “devastating”.

But Mr Kelly said business leaders had not been swayed by the legal opinion, adding: “It doesn’t change anything from our perspective.”

It was reported that, during an address at the Better Belfast business breakfast today, Dr Birnie said he understood why the business community had given its backing to the deal.

According to the Belfast Telegraph, Dr Birnie said: “It provides comprehensive legal cover for the process of leaving. It provides for the ‘extra time’ – the transition period March 30, 2019 to December 31, 2020.

“In the short term, Northern Ireland and Great Britain remain, in effect, in both the EU’s customs union and single market. In the longer term, NI remains in effect in both.

“Much of the status quo is retained – along with the stability and continuity that brings. So, at least from a short-term point of view, the draft withdrawal agreement appears advantageous.”

But he warned that there were “substantial disadvantages” in the agreement which would become apparent in the longer-term.

Expressing concern about Northern Ireland becoming a “rule-taker” from the EU with accountability absent, Dr Birnie added: “Since the 1970s, the Northern Ireland economy has been in a damaging mode of passivity and dependency.

“A mindset developed of hoping that outsiders would make the hard decisions and provide more hard cash.

“Becoming a special EU zone/protectorate for single market purposes might only reinforce that chronic weakness.”

He also described the prospect of a tariff barrier between Belfast and Liverpool as “a serious one”, adding: “The draft withdrawal agreement does provide for regulatory checks on goods coming from GB to NI.

“That flow is worth about £11bn. By comparison, NI’s imports from the Republic are worth about £2bn and those from the rest of the EU £2bn. Checks could lead to higher costs, then higher consumer prices.”

When asked if businesses were concerned about the prospect of increased checks on goods between NI and GB, Mr Kelly told the News Letter: “It is clear there will be some additional checks, but this is something which happens in other locations and doesn’t cause any real friction or add any costs. We are willing to accept some additional checks in order to ensure that we have a thriving economy after we leave on March 29 next year.”

The News Letter was unable to reach Dr Birnie for comment today.