Northern Ireland news

Research shows protocol insulates north from worst impacts of cost-of-living crisis as British minister declines to speculate on reasons

The protocol is insulating the north from the worst ravages of the cost of living crisis, according to research

NORTHERN Ireland's economy is expected to fare better than Britain thanks to the effects of the protocol, according to new research.

The Resolution Foundation thinktank and academics from the London School of Economics said the UK's withdrawal from the EU is exacerbating the cost of living crisis but that the north will be spared its worst impacts due to the post-Brexit trade arrangements.

The research was published less than 24 hours after a British cabinet minister said it was "not yet clear" why the north's economy was outperforming all regions in Britain bar London.

Europe Minister James Cleverly told a House of Lords committee on Tuesday that he "didn't particularly want to speculate without having a look at the figures".

"Some of the elements we know to be true is that the public sector in Northern Ireland is proportionally larger than in many other parts of the UK," he said.

"That is perhaps more resilient to the economic shocks we're seeing globally and across the UK."

However, the Resolution Foundation suggests that the protocol is primarily responsible for ensuring Northern Ireland is less impacted by Brexit than Britain, with economic contraction in the region forecast to be 0.7 per cent compared to the UK's overall 1.3 per cent.

Even with the protocol removed, the research indicates that the north will fare better than most of Britain, with what it terms the "output shock" increasing to 1.1 per cent – 0.2 percentage points less than the UK average.

The Resolution Foundation research said the average worker is on course to suffer more than £470 in lost pay each year by 2030 after rising living costs are taken into account.

Th researchers said Brexit was damaging UK competitiveness in the face of pandemic recovery, war in Ukraine and soaring inflation.

“A less open Great Britain is expected to be poorer and less productive,” it said.

Sinn Féin MLA Caoimhe Archibald said the research highlighted "once again that Brexit is a disaster economically".

"The growing weight of economic evidence reflects the experiences of local businesses, that the protocol provides important protections and gives businesses in the north with the unique opportunity to access both the British and EU markets," she said.

"In the middle of a cost of living and inflation crisis, we need to maximise these opportunities to create jobs and prosperity."

SDLP Brexit spokesman Matthew O'Toole said the Resolution Foundation research "revealed the truth that Brexit is visiting huge damage and disruption to the UK economy" and that the protocol was protecting the north from the worst impacts of the UK's vote to sever ties with Brussels.

"It isn't perfect, and we all want to see GB to NI impacts smoothed out, but the real economic opportunity must not be sacrificed at the altar of Tory/DUP lies and extremism," the South Belfast MLA said.

Mr O'Toole also questioned the Europe minister's explanation for the north's stronger economic performance.

"Having traded on misleading distortions about the supposed economic devastation being wrought by the protocol, and been proved wrong by all independent data, Tory ministers are now grasping for alternative explanations," he said.

"While it is true that the public sector always makes up a higher percentage of Northern Ireland GDP, the Indexes of Services and Production which came out last week clearly show stronger private sector activity in Northern Ireland than the UK as a whole."

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