Emerging insight into the implications of Brexit

As we live with the reality of Brexit negotiations, more analysis and insight is emerging on the implications for Ireland

As we live with the reality of Brexit negotiations, more analysis and insight is emerging on the implications for Ireland. Research among CIPD members shows that maintaining the free movement of labour between Ireland and the UK is extremely or very important for their organisation. Other key concerns are around the future of UK citizens in Ireland, increased cost base and/or pay pressure, the transfer of personal data outside of EU and the challenge of attracting talent from UK.

A number of reports were released in December 2016 which further explore the implications of Brexit on the Irish labour market.

Brexit: Ireland and the UK in numbers

The Central Statistics Office (CSO) has released a report entitled Brexit: Ireland and the UK in numbers.

There were 112,259 United Kingdom nationals in the State in 2011, representing 2.5% of the population of Ireland. The CSO estimate that 15,000 people commuted across the border each day, lower than previously estimated. There were 8,295 residents from Ireland who commuted across the border with Northern Ireland to work or study while 6,456 residents from Northern Ireland commuted across the border to work or study in Ireland.

Of the 79,300 immigrants who arrived in Ireland in 2016, 17% (13,800) arrived from the UK, though it is likely that only 4,500 were UK nationals. There were 76,200 emigrants from Ireland in 2016 and 16,600, or just over a fifth (21.8%) went to live in the UK.

The report also details the economic ties between Ireland and the UK.

Brexit - a view from the Chambers

The German Chamber of Commerce has issued a report entitled Brexit - a view from the Chambers, authored by Dr Volker Treier and Ralf Lissek in Germany and Brian Murphy of the Dublin Institute of Technology.

The main points cited relating to employment and the labour market are:

  • Almost 200,000 people in Ireland are employed as a direct result of Irish exports to the UK. This represents 10.4% of those currently employed in Ireland.
  • The damage that Brexit will inflict on Irish exports, as a result of increased transaction and compliance costs for business, has the potential to significantly raise unemployment. Some 16% of all Irish manufactured goods are exported to the UK, but that rises significantly in the agriculture, food and drinks sector, which would be hit hardest by the UK leaving the EU.
  • The report highlights the ESRI view that there is a risk of wage reductions as high as 5% in exposed industries. In a 'hard' Brexit scenario, where the UK decides to close or restrict the UK labour market for Irish emigrants, this will further increase unemployment rates in Ireland and, the ESRI suggests, this may also drive wages further downward.

Directors' survey on the implications of Brexit

The Institute of Directors’ (IoD) in Ireland and the UK published a report of a joint survey on the implications of Brexit. Irish and UK directors share common Brexit fears, with business leaders in both countries uncertain as to what will happen.

One of the highlighted themes in terms of the labour market relates the Northern Ireland. Ten per cent of IoD NI members think Brexit will have a 'very negative' effect on their access to cross-border (UK/Ireland) workers and a quarter (22%) think the effect will be 'somewhat negative'.

Access to EU workers (excluding UK/Ireland) is an equally considerable concern. One-fifth of IoD NI member think Brexit will have a ‘very negative’ effect of their access to EU workers (excluding UK/Ireland)and a third think the effect will be ‘somewhat negative’.

Only 3% think the effect will be positive.

All this points to the need for the Irish government to fight to maintain the free movement of labour between Ireland and the UK.

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