The senior civil servant running Northern Ireland’s public services has said that the region could collapse if there was a no deal Brexit.
David Sterling, the head of the Northern Ireland Civil Service, told an event in Brussels that many local firms might find it “impossible” to continue to trade normally if there were faced with tariffs at the Irish border.
Addressing the European Policy Centre think tank, Mr Sterling outlined the challenges preparing for Brexit without elected ministers.
Mr Sterling revealed the only “ministerial direction” he had to guide the civil service’s approach to Brexit was a letter in 2016 written by then first and deputy first ministers, Arlene Foster and Martin McGuinness, to Prime Minister Theresa May outlining issues relevant to the region.
He said: “Despite its brevity, it has been enormously helpful to us as civil servants because, in the absence of ministers, it has given us a basis on which to engage with Whitehall departments on the way forward.”
‘Negative consequences for our economy’
He added: “I cannot stray into political territory, however you will not be surprised to hear that we have deep concerns about the risk that no deal is agreed and there is chaotic exit from the EU.
"Under such a scenario, costs for our businesses could significantly increase or create what might just be impossible for many firms, particularly in our agri-food supply chains, to trade normally in this era of 'just in time' processing and manufacturing.
"In the life cycle of many goods they have to cross the land border many times.
"Our research has shown that two-thirds of cross-border trade involves supply chain activity.
"How would this work if they had to make Customs and VAT declarations each time?"
Mr Sterling said there were one million cross-border deliveries a year.
He said: “Nearly 75% of these deliveries are made by small businesses and the majority are low-value exports.
"All of which points to a limited ability to absorb additional costs.
"In the event of a no-deal scenario, we assume that WTO tariffs would apply and this would have negative consequences for our economy."