Business

Brexit could wipe £1.3 billion off Northern Ireland's GVA and cost 14,000 jobs

Dole queues could lengthen following a Brexit, the Treasury has warned
Dole queues could lengthen following a Brexit, the Treasury has warned Dole queues could lengthen following a Brexit, the Treasury has warned

A UK exit from the European Union could wipe more than £1 billion off the worth of Northern Ireland's economy and spark massive job losses and lower house prices, the British Treasury has said.

It issued a warning to voters claiming the UK would plunge into a self-inflicted recession if a so-called Brexit was backed by the electorate.

The analysis described as a "shock scenario", a lowering of overall GDP by 3.6 per cent after two years with a 10 per cent drop in house values.

It also said £1.3bn would be knocked off the north's GVA figure. Most recent statistics put Northern Ireland's GVA at £34.4bn in 2014.

There would be 14,000 jobs lost over the period including by 2,000 young people.

Meanwhile, Treasury officials predicted house prices would fall by £18,000 on average by 2018.

It is the latest salvo of figures from the remain camp in the EU referendum debate.

The worst case scenario would also see overall public sector borrowing rocket by £24 billion under the shock scenario, and £39 billion in a 'severe shock' situation.

British chancellor said the economic impact was "too high a price to pay".

Treasury offices said the UK could be left in economic limbo for up to a decade as a new deal with the EU did not have to be concluded during the two-year post-Brexit "divorce" period.

This would mean either the UK remaining an EU member under terms agreed by the other nations in the block, or reverting to World Trade Organisation status, fuelling "repeated and persistent increases in uncertainty" for the economy.

Under the Treasury's 'severe shock' scenario, average real wages would fall by 4 per cent while the value of sterling would fall by 15 per cent.

Inflation meanwhile would be boosted by up to 2.7 per cent.

Mr Osborne said Brexit would have a negative impact on wages and jobs.

"The Treasury's analysis finds that real wages will fall by almost 3 per cent in the first two years compared to where they'd be if we remain in the EU," he said.

"To put that in perspective - that's a pay cut worth almost £800 a year to someone working full-time on the average wage.

"Within two years, at least half a million jobs would be lost.

"That's 80,000 in the Midlands, over 100,000 jobs across the North, over 40,000 jobs in Scotland, over 20,000 in Wales, almost 15,000 in Northern Ireland."

TUC general secretary Frances O'Grady said the forecast "gives us half a million good reasons to stay in the EU. Job loss can be devastating, especially if you have to look for work in the middle of a recession. Brexit is too big a risk for working people to take."

Arron Banks, co-chairman of the Leave.EU campaign, dismissed the Treasury report as "laughable and beneath contempt".

"Loose talk of a Brexit of Mass Destruction is a painfully transparent exercise in buck-passing, but if it spooks the markets it may just become self-fulfilling - yet another example of the gross irresponsibility and clueless ineptitude which characterises our self-appointed expert caste, whose members would sink without a trace if they had to survive in the business world," he said.