Northern Ireland ‘less attractive to foreign investment’ outside single market

Northern Ireland would be less attractive for foreign direct investment (FDI) if it left the EU single market, a report has found.

The report, published by the Department of the Economy in Northern Ireland, says the region would experience a reduction of FDI-related job creation in any of the currently considered Brexit outcomes.

However, it would become more attractive to FDI and generate new jobs if it remained in the single market for goods and services, and the UK left.

The 47-page report also found that lowering the corporate tax rate to 12.5% in Northern Ireland would compensate for the negative effects of Brexit.

It concluded that the most damaging post-Brexit outcome would be a no-deal scenario, with a reduction of 3% per year in the number of FDI projects from 2019 to 2030, and a 3.6% cut in FDI-related new jobs.

Sinn Fein said the report confirms it is impossible to fully mitigate the impact of a no-deal exit.

Deputy leader Michelle O’Neill met senior officials at the Department for the Economy after the report was published to discuss economic development issues.

Michelle O’Neill
Michelle O’Neill

“They were clear that any form of Brexit will be damaging to the economy and to citizens’ rights,” she said.

“This week’s report from the department showed that foreign direct investment would fall under every Brexit scenario — giving the lie to those who boast that Brexit will bring economic opportunity.

“Brexit will bring only economic chaos to the North.

“In particular, a no-deal Brexit would be the equivalent of taking a wrecking ball to the economy. It would cause havoc to the agrifoods sector in particular, given its dependence on an integrated all-Ireland economy.”

The DUP said any chance of a no-deal Brexit lies with the European Union.

“It has been the EU’s stubborn insistence upon the backstop which created the possibility of a no-deal exit,” MP Sammy Wilson said on Monday.

Sammy Wilson
Sammy Wilson

“It has been left until a few weeks before an extended deadline before the EU has finally acknowledged its bluff.

“Perhaps the EU’s insistence on the backstop was the real driver for the comment reported from inside the European Union that ‘Northern Ireland was the price the UK would have to pay for Brexit’.

“If we finally leave those outrageous sentiments behind then we can make progress.”

On Monday, the European Commission released a statement warning that a no-deal Brexit was looking increasingly likely, and talks with Ireland to mitigate fallout were intensifying.

Irish premier Leo Varadkar refused to be drawn on the issue on Monday, but noted that it was a “statement of the facts”.