What does Brexit mean for Northern Ireland?

24 Jun 2016 Nick Garbutt    Last updated: 24 Jun 2016

One less flag to fly ...

UKIP leader Nigel Farage wants the 24 June to be a public holiday, Independence Day. 

So apart from an extra day off work what are the implications of the vote to leave the European Union, across the UK and here in Northern Ireland?

Markets are in freefall and the Bank of England is standing by, ready to intervene. FTSE 100 companies lost £200 billion in share value within the first ten minutes of trading.  The pound fell so low that the UK is no longer the world’s fifth biggest economy – the currency collapse means that France now takes that slot. Suddenly the Remain campaign’s economic predictions don’t look like scaremongering any longer.

For Prime Minister David Cameron this was a gamble he did not need to take, and he has failed spectacularly. His position in untenable and he has already said he is to resign. Chancellor George Osborne will surely follow him into oblivion. The stage is set for Boris Johnson to take control.

The Tories have torn themselves apart. Is the rift now so deep and personal enmity so great that it will split? Time will tell but the nationalist right of the party is in the ascendancy.

What is remarkable about the result is that it defies electoral logic. People normally vote in their economic interests. To many in the Leave camp it suggests that sovereignty is more important than personal finances. Expert opinion was ignored. Big business and the political establishment are neither believed nor trusted any longer.

Before the vote Chancellor George Osborne warned that an emergency budget containing deep cuts would be necessary if the Leave campaign won. Is that still a prospect? The victorious Brexiteers will surely block any such move, but if markets and sterling do not recover remedial action of some kind is surely inevitable.

This poll represents a triumph for English nationalism and ironically poses a threat to the survival of the United Kingdom. Scotland overwhelmingly voted to remain. The SNP is already talking about a new referendum on its own independence. This time around Scottish nationalists will be much more confident of success.

Here Sinn Fein are renewing their calls for a border poll, given that a majority wants to stay in. Whether the Secretary of State agrees to that is very much a moot point, but the result will re-open old wounds in Northern Ireland and create instability.

Don’t expect the English majority to be overly concerned about that. After all one of the key arguments for Brexit was that we put in more money to Europe than we get out.  Under the Barnett Formula Northern Ireland is massively subsidised by the British Exchequer and it is surely only a matter of time before that becomes a matter for public debate in England.

We don’t know yet what the implications are for the border. But we are safe in predicting that the result is very bad news indeed for inward investment.  Why on earth would big business choose to locate here when it could do so over the border which is part of a much bigger market? And what will that mean for the apparent panacea of lower corporation tax. If that is lowered and inward investment does not follow we will be left with a big hole in our finances and further cuts.

The Democratic Unionist Party campaigned for Leave. The result is therefore a triumph for them. The victory, however, leaves the DUP with a massive challenge. It needs the new settlement to work and for the Northern Ireland economy to emerge the stronger from it. If it doesn’t it will be in the firing line the next time it goes to the polls. 

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