Why is Northern Ireland’s economy powering ahead of Britain? Because of Brexit.
This week saw an IMF report indicating that Brexit has ‘drained life out of UK economy’.
According to the IMF, the UK’s economy only grew 0.1% in 2023, and will only grow at 0.7% by the end of this year.
In comparison the average for advanced economies will be 1.8%, while across the world it will average 3.2%.
But there is one part of the UK that is seeing economic improvements surging ahead of the rest of the UK.
Mark Magill, the Principal Economist at Ulster University and its Economic Policy Centre, set out a series of tweets this week showing how Northern Ireland is faring in terms of jobs and wage growth over the last week.
- Mark Magill on X: Northern Ireland, the outlier amongst UK regions. Part 1. NI records the fastest y-y job growth amongst UK regions for the second consecutive month – significantly outperforming other regions. (1/4) … [Bar Chart]
- Mark Magill on X: Northern Ireland, the outlier amongst UK regions. Part 2. The sequel you’ve all been waiting for. Annual median monthly wage growth in NI at 11.2% significantly outstripping the UK (3.6%). (2/4) … [Bar Chart]
- Mark Magill on X: Median monthly pay in NI is now the 5th highest amongst the 12 UK regions. (3/4) … [Bar Chart]
- Mark Magill on X: Wage growth in NI has been higher than the UK through H1 of 2024. Potentially public sector pay deals playing a role. Tightest labour market in the UK recording the highest wage growth is a logical outcome. Though the scale of this month’s increase is hard to explain. (4/4) … [Bar Chart]
These are not just dull statistics. Remember, economic figures like this affect all of us because they dictate how much money there is available for governments to fund services like hospitals, doctors, schools and house building.
Other recent economic data has also seen strong growth in the first quarter of 2024.
So, what could explain this turnaround in Northern Ireland’s economic fortunes compared to the rest of the UK?
That it still effectively remains in the EU’s single market cannot be overlooked. Even former Prime Minister Rishi Sunak was hailing it.
As Professor Thiemo Fetzer of the Department of Economics at the University of Warwick has pointed out, Northern Ireland’s economy has barely been affected by Brexit compared to other parts of the UK.
But this situation came about for two reasons.
First, like Scotland, Northern Ireland voted to ‘Remain’ in the EU – albeit by a lower percentage than Scotland.
Secondly, as a co-sponsor of the Good Friday Agreement, the government of the Republic of Ireland argued in favour of a special deal for Northern Ireland because of its ‘Remain’ vote. By doing so it brought in the full weight of the EU to support Northern Ireland’s pro-EU position:
- EU ready to assist Ireland in no-deal Brexit scenario – Juncker – RTE, 6 February 2019
- We’ve got Ireland’s back on Brexit, vows Barnier – Times, 9 April 2019
- Tusk expresses ‘strong and ongoing’ solidarity with Ireland amid Brexit talks – Belfast Telegraph, 19 March 2019
In contrast Westminster ignored Scotland’s ‘Remain’ vote – a stance that didn’t go unnoticed with people in Scotland.
This was despite the Westminster party politicians promising before the 2014 referendum that Scotland would be treated like an equal partner in a UK that was in the EU.
As the then Taoiseach, Leo Varadkar, said in 2019 of Ireland being an EU member:
“…Ireland for the first time is able to act on equal terms to its larger and more powerful neighbour…”
As the latest economic statistics from Northern Ireland and the experience of Ireland with the EU show, equal partnership is best for Scotland as an independent country whether it be the economy or democratic accountability.
This article was produced by the SNP’s Research and Rebuttal Unit.