Brexit could cost North £1.3bn, says George Osborne

The British chancellor of the exchequer George Osborne will warn today that Brexit would cause a "profound economic shock" in Northern Ireland and lead to an "inevitable" hardening of the Border.

Mr Osborne, who begins a two-day visit to Northern Ireland and the Republic today, will also cite new analysis to suggest a UK vote to quit the European Union would cost thousands of jobs in the North.

He will also say that leaving Europe would result in a "negative spillover effect" in the South.

Mr Osborne will say the analysis indicates that a Leave vote on June 23rd would cause unemployment to rise in the North by about 14,000 over two years, while youth unemployment would rise by 2,000.

“The impact of the shock from leaving the EU and the free-trade single market, the largest in the world, could be equivalent to a £1.3 billion reduction to the size of the Northern Ireland economy by 2018.”

The British chancellor says a vote to leave would result in house prices in the North dropping by £18,000 by 2018.

Undermine ability

Mr Osborne will also state, in the event of Brexit, maintaining the Common Travel Area arrangement with the Republic “would undermine the UK’s ability to halt the free movement of people from other parts of the EU, as the Leave campaign proposes”.

Citing estimates by the Organisation for Economic Co- operation and Development (OECD), he will argue that crossing a customs border, documentation and other delays can increase transaction costs of trade by up to 24 per cent of goods’ value.

During a number of engagements over the next two days Mr Osborne will argue Northern Ireland is “particularly vulnerable” to an EU exit.

‘Relies on agriculture’

And he will refer to how the “region’s economy relies more heavily on agriculture than other parts of the UK, receives special funding from the EU as part of the peace process and shares a land border with the Republic of Ireland, which would remain an EU member state”.

“The economic impact would be even more significant because of the Border and customs checks that would have to be implemented,” the chancellor will say.

“At the moment, Northern Ireland is among the best regions of the UK when it comes to creating jobs. It’s a great success story that I am confident we can build on if the UK remains in a reformed EU.

“But if the UK votes to leave, every credible independent voice agrees there would be a profound economic shock that would hurt people’s jobs, livelihoods and living standards . . . It is also inevitable that there would be changes to border arrangements. Leave campaigners who suggest this is not the case are simply not being straight with people.”

Mr Osborne’s visit comes as Downing Street renews their efforts to win over voters, after more than a week of debate – which focused largely on immigration issues – dramatically reduced the Remain side’s lead in the various polls.