Brexit

Irish Border Town Businesses Will Suffer Without a Sensible Brexit Deal

We need our leaders to make border considerations a priority.
Irish Border Town Businesses Will Suffer Without a Sensible Brexit Deal
Image credit: Shutterstock
Guest Writer
Chartered Accountant at Seagate
10 min read
Opinions expressed by Entrepreneur contributors are their own.

Brexit. It's everywhere you look. More than two years on from the EU Referendum, it's all we are talking about; yet we are still no closer to truly understanding what it all means.

The latest indications coming from the U.K. government are that there is a very real risk that we leave the European Union in March 2019 without any form of deal. Should this happen, the economic impact is surely unprecedented.

Related: U.K.-Based Entrepreneurs Are Sleep-Walking Into Brexit

We hear the debate in Parliament, and in the media, framed along the lines of trade deals, free movement of people and "taking back control." The debate is impassioned, and both sides of the argument are becoming ever more entrenched in their views. Add in the not-yet-concluded repercussions of the apparent Vote Leave law-breaking, and quite honestly you've got a complete mess for the government to navigate in little more than half a year.

Yet, in the mainstream media, and among those entrusted with delivering Brexit (whatever it means) there is worryingly little discussion of the actual impact it will have on the region of the U.K. that actually shares a border with another EU country. Boris Johnson, one of the leading figures behind the Leave campaign, described the border issue as "politically charged," and both his remarks and the follow-up responses by Theresa May show worryingly little understanding of the practical problems at hand. Northern Ireland shares a 310-mile-long border with the Republic of Ireland (more than three times the length of the England-Scotland border), and the impact of Brexit will be felt along every mile without careful consideration.

There will be an undoubted consequence for Belfast, Coleraine and other Northern Irish cities and towns, but it will be the cities and towns positioned close to the border where the impact will be most keenly felt. What follows is only a brief discussion of potential impacts.

Cross-border workers

A significant number of individuals cross the border (in both directions) for work every single day. Leaving aside the inconvenience of any form of border checks (manned or unmanned), there is no absolute clarity on the strength of the right to even work across the border in a post-Brexit world. Income taxes are different on both sides, and even if the right of employment remains (as it surely will), it's hard to imagine anything other than increased administrative burdens at the very least. Not to mention potential repercussions for those falling foul of any new self-assessment requirements.

Our border towns rely on the ability of the workforce to cross the border freely. Employers in Derry/Londonderry, for one example, draw on the local talent pool from both county Derry and county Donegal (and take in graduates from higher-level education authorities from both sides of the border such as University of Ulster (in Northern Ireland) and Letterkenny Institute of Technology. Employers must be able to guarantee continued uninhibited access to their cross-border employees. Many small businesses simply will not survive without it.

It is estimated that up to 30,000 people cross the border every day. The work required to protect the ability to continue to do so once the U.K. leaves the EU cannot be underestimated.

Related: How Will Brexit Affect the Sale of My Business?

EU nationals in the workforce

Border towns rely heavily on the tourism and hospitality sectors (as indeed do other parts of the country), and a large portion of the workforce in this sector originates from other EU member states. Securing their guaranteed right to stay is first and foremost (which seems to have been agreed, but must form part of any exit deal also), but even when this is secured there remains the concern about future availability of workforce. Turnover in the hospitality sector can be high; if the pool of prospective employees dries up, many of our hotels, restaurants and bars will struggle to fill their roles with the right people. Businesses which already struggle in an uncertain economic climate can ill afford to add time to the recruitment process.

The counter-argument, of course, is that it opens the labor market for "locals" -- regardless of your perception of the availability of employment for those born in Northern Ireland, reducing the talent pool for local businesses can't be anything but a negative for them.

Away from tourism and hospitality, many other sectors of our economy rely on the skills brought by migration. Some of the most highly skilled individuals working in research and development for our large multi-nationals are here thanks to migration, for example. Health care is another that will feel the effects most keenly, and recent reports seem to suggest that the National Health Service is far from prepared for a no-deal Brexit. The potential impact could be negated if we were well-prepared in the training of new doctors, nurses and other health-care professionals -- but the delays in approving the new medical school at the Magee campus of the University of Ulster show how long it might take us to react to anything in this country. And that's before we even discuss the fact that, since January 2017, Northern Ireland has not had a functioning executive. Do we really trust our politicians to take the decisions needed to protect the healthcare sector in the event of no deal?

Border checks

Since the Good Friday Agreement, very few of us will have crossed the North-South border and experienced any form of border checks. Those of us who remember before 1998 will recall the disruptive nature of checks along the border. Leaving aside the obvious inconvenience of even a smoothly operating checking process, it is clear that any such checks will bring with them security risks. These would naturally bring increased inconvenience; but more than that, they bring a very real risk to the safety of both those employed to carry out such checks and members of the public who need to cross the border every day.

Supporters of Brexit will point to the ability to use technology to circumvent the need to employ physical checks. Some have even pointed to the operation of the border between the U.S. and Canada as an example, completely ignoring the fact that it is illegal to cross the U.S.-Canada border without a security check! Katie Daughen, head of Brexit policy at the British Irish Chamber of Commerce said it best: "The technology [the government] are relying on is either untested or does not exist." Once again, we are almost six months out from the date on which the U.K. is scheduled to leave the European Union, and we are no more clear on the border solution than we were in June 2016.

Around 6,000 heavy goods vehicles cross the border every single day. If/when we leave the Customs Union, every one of those vehicles becomes a customs nightmare without a deal firmly in place. The U.K. government insists that it doesn't want a border on the island of Ireland, as does the EU, yet neither will want goods crossing into their jurisdiction unchecked. There is a very real risk of serious impact; even if physical checks aren't required on the border, you have to assume that the administrative burden of declaring goods crossing the border will fall on individual companies. Anyone who has experienced trying to implement change (particularly driven by regulatory or legislative requirements) within a company will appreciate the length of time this takes -- a solution cannot be implemented overnight if a deal is not reached.

Related: Why I'm Moving My Company From the U.K. to the Continent

Our identity

Those of us who live within a short distance of the border will happily attest to the fact that, regardless of whether you are unionist or nationalist, the sense of identity and belonging does not begin and end at a point on the road. For example, the citizens of Derry do not feel that they are crossing a major border when they visit Donegal (and vice versa). To us, they feel like one and the same place. I have no doubt that those in County Down and Dundalk will feel the same.

These border communities rely heavily on the ability to cross freely (and regularly). Families are spread across the border as if it didn't exist. To impose a change on the nature of the border is to change these communities beyond recognition. It simply cannot happen.

Tourism

While the impact of a border on the hospitality sector is discussed above, it's worth reiterating that the tourism sector across the island of Ireland relies heavily on the ability of visitors to freely cross the border. For one example, there are many Game of Thrones tours which take foreign visitors across the border multiple times to visit filming locations north and south. Tourism Ireland estimated in 2016 that there were over 10 million foreign visitors to the island, generating revenue of €5.3 billion -- this supports almost 300,000 jobs north and south.

Brexit alone is unlikely to seriously risk Ireland's reputation as a tourism hot spot worldwide, but such a vital sector to our economy can ill afford to run the risk that administrative or security concerns will impact foreign visits. In such a scenario, it is inevitable that Northern Ireland will be the region to suffer the most; an economy propped up on the public sector and tourism will not be able to cope with any significant reduction in overseas visitors.

Related: Why London's Tech Community Is Thriving, Despite Brexit

The border economy

Tourism is just one area that will be impacted in border towns. The economy in border areas relies heavily on both sides of the divide. There are countless retail units positioned close to the border, which draw on footfall from north and south. In the event of any form of hard border, this footfall will decrease. Once this does so, businesses are at risk; with this, comes inevitable job loss. The retail sector in Derry and Donegal makes up about 16 percent of the economy in terms of employment, according to the University of Ulster -- cross border retail brings risk and opportunities to both (depending, for example, on the currency exchange rate), but imposing a long-term burden on trading will weaken employment for all.

The six areas above are far from the only areas of concern to those living in towns and cities along the border, but they show the breadth of impact that any form of hard border might bring. The "Irish border problem" is clearly on the agenda for those tasked with negotiating Brexit, but it should be an absolute priority for all our politicians. With little over half a year until the cut-off date, we have no clarity on the future of the border on this island.

It's time that we put pressure on our politicians to put our concerns at the top of the agenda. The lack of a functioning executive in Northern Ireland is hurting us on a daily basis, but the risk of greater pain to come is high. We are told that "Brexit means Brexit," but without absolute clarity on what it means for those of us sharing a border with the EU, we cannot risk crossing the line with no resolution.

The Irish border element of Brexit is the biggest risk Northern Ireland has faced since the Good Friday Agreement. The time for leadership is now.

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