The British Chancellor of the Exchequer George Osborne has warned that Brexit would cause a “profound economic shock” in Northern Ireland and lead to an “inevitable” hardening of the border.
Brexit is short for "British exit" referring to the possible withdrawal of the United Kingdom, Great Britain and Northern Ireland, from the European Union in a referendum to be held on June 23.
Osborne, in a two-day visit to Northern Ireland and the Republic last week, also cited a new analysis to suggest a UK vote to quit the EU would cost thousands of jobs in the North.
Leaving the EU would result in a “negative spill-over effect” in the south, he added.
Taoiseach Enda Kenny last week encouraged Irish people living in Britain to register to vote in the referendum.
Kenny, calling on the substantial number of Irish people making up the British electorate to vote, said Ireland’s wish was that Britain would stay as a strong member of the EU. If Britain left, Ireland would be one of the worst affected countries, with customs controls being re-established at the border.
Kenny’s call followed a statement in April by U2 frontman Bono, appearing before a U.S. Senate sub-committee, that America should be “very nervous” of the possibility of Britain leaving the EU.
Osborne backed Kenny’s assertion. He said that crossing a customs border, documentation and other delays could increase transaction costs of trade by up to 24 percent of goods’ value.
Supporting British PM David Cameron’s campaign for the public to reject Brexit and remain in the EU, Osborne said that a leave vote 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,” Osborne said.
A vote to leave would result in house prices in the North dropping by £18,000 sterling by 2018.
“At the moment, Northern Ireland is among the best regions of the U.K. when it comes to creating jobs. It’s a great success story that I am confident we can build on if the U.K. remains in a reformed EU,” Osborne said.
“But if the U.K. 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.”
He also questioned whether the current free movement of people across Ireland under the Common Travel Area arrangement between the UK and Ireland could be maintained.