Could Northern Ireland ‘have its cake and eat it’ after Brexit?

Two years on from the EU referendum, the issue of the land border between Northern Ireland and the Republic of Ireland has become pivotal in the Brexit debate. With 25,000 people crossing the border every day, and nearly £3bn of exports from Northern Ireland to the Republic of Ireland in the last 12 months, the importance of securing an agreement to the Northern Ireland economy cannot be overstated.

The 1998 ‘Good Friday’ Agreement says that Northern Ireland citizens may be Irish or British citizens, or both. Our report argues that this extremely unusual capability of public policy in Northern Ireland to allow both one thing and the other at the same time could prove attractive to real estate investors for its flexibility.

It might, for example, allow Northern Ireland businesses to offer lower levels of friction in trade with the Republic of Ireland market than is available to the rest of the UK.

Belfast could also be presented in a much more favorable light to investors, including international investors. Investors will potentially begin comparing the returns and risks to real estate investment in Belfast more systematically to those in English, Welsh or Scottish cities of a similar size and with a similar real estate character. If Belfast is able to offer a higher resilience to Brexit than comparable UK cities then investment could be expected to rise as a consequence.

The report also finds that some of the main risks of Brexit for other parts of the UK are less likely to materialize in Northern Ireland, including significant migrant outflow leading to labor shortages. 7% of workers in Northern Ireland are non-UK EEA nationals, which is the highest percentage in any part of the UK outside London. But this includes Irish nationals – who, of course, the UK Government has committed to continue to allow over the border after Brexit under the pre-existing Common Travel Area arrangements.

For businesses in the Republic of Ireland, the relative ease of doing business in Northern Ireland compared with the rest of the UK might also cause them to refocus trade towards Northern Ireland and away from the rest of the UK, providing a further boost.

So there may now be a unique opportunity for Northern Ireland to ‘have its cake and eat it’ after Brexit. The Northern Ireland Assembly looks likely to be given a role in deciding precisely how to implement the final Brexit outcome. Recent history shows that the EU, the Irish Government, and the UK Government have all conceded that some issues are best decided locally. We think EU and UK negotiators are likely to be attracted to a similar approach to Brexit.

Read the report here.