Northern Ireland

Businesses 'not ready for no-deal Brexit' - Invest NI

Invest NI
Image caption Before the Brexit referendum the Invest NI board did not adopt a position on leaving or remaining

The board of Invest NI, Northern Ireland's inward investment agency, has expressed deep concern at how unprepared many businesses are for a no-deal Brexit.

It has written to local political parties urging that "every possible step" is taken to avoid the scenario.

It warns no deal could "compromise" Northern Ireland's recent success as a location for international investment.

The letter followed a recent briefing from the Invest NI executive team.

That briefing disclosed many businesses "have not yet even begun to address the key business issues they could face."

It said that particularly applied to small and medium businesses.

The letter said it was "widely accepted" that in a no deal the most affected sectors would be agrifood, advanced manufacturing, life sciences construction and technology.

It said those sectors "comprise a substantial part of our local business base".

The letter goes on to address the political leaders asking them to "work collectively to ensure that the particular issues faced by our businesses are well understood, considered and addressed".

It adds a call that "every possible step is taken to avoid the consequences which a no-deal scenario would have on the Northern Ireland business base".

Before the Brexit referendum the Invest NI board did not adopt a position on leaving or remaining.

The chief executive of Invest NI has taken an optimistic view of Brexit.

Alastair Hamilton has previously told the BBC he was "excited" by some of the opportunities presented by leaving the EU.

He suggested said it would release his agency some from some of the state aid "challenges" of EU membership.

Image caption Kevin Kingston of Danske Bank said smaller businesses were particularly at risk from a no-deal Brexit

Meanwhile, a no-deal Brexit is the biggest risk to the Northern Ireland economy for a generation, the CEO of Danske Bank UK has warned.

Kevin Kingston said he was "gravely concerned about the challenges ahead, should a hard Brexit become a reality".

He suggested a lack of clarity around the issue is causing uncertainty among the bank's business customers.

Smaller businesses were particularly at risk, he said, adding there was about a 15% chance of a no-deal scenario.

"What we have seen is that larger businesses have been taking decisions to try to safeguard their operations, but the smaller businesses are far less prepared, making them the most vulnerable," said Mr Kingston.

"It is these businesses that are of course the lifeblood of the economy in Northern Ireland."

'Tough decisions'

Mr Kingston claimed a hard Brexit would have an impact on "a whole range of sectors and individual businesses right across Northern Ireland".

"That converts into lower economic growth and businesses making tough decisions about the number of people they employ and their investment," he said.

"That, inevitably, will have an impact on consumers in Northern Ireland and the financial affairs of people on the street."

Danske Bank in Northern Ireland made a pre-tax profit of £89m in 2018.

That is down almost 40% on the £148m achieved in 2017, although the 2017 performance was boosted by two major one-off gains.

Turnover in 2018 was up by almost 2% from £231m to £235m, reflecting growth in both lending and deposits.

Danske is the largest bank operating in Northern Ireland, with 42 branches and 1,400 staff.

Mr Kingston said 2018 had been a strong year for the bank's mortgage business, with new lending up 26% compared to 2017.

"Latest research indicates that Danske Bank is now providing one in four first-time buyer mortgages and one in five of all mortgages in Northern Ireland," he said.

He added that customers were continuing to do more digital banking, with a 35% annual increase in digital transactions.

The bank assumes that the local economy will grow by 1.2% this year, "assuming that Brexit occurs in an orderly manner".

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