Brexit Focus: What would city centre look like without cross-border spend?

Paul Gosling. 1111Jm03
Paul Gosling. 1111Jm03

Walk around Derry city centre and it seems as if it is constantly changing.

On the positive side, a new hotel is being built, another recently opened and some of the beautiful buildings on Shipquay Street are being renovated.

The downside is that well-known city centre businesses - Harry’s restaurant, the Bishop Street post office and Samara’s - are closing, others are rumoured to be in the process of doing so, and what should be prime retailing streets contain an unhealthily large number of charity shops.

Yet it seems these are the positive times. The devaluation of sterling following the Brexit decision - it is worth about 11% less now than before the referendum - led to an increase in cross border shopping from the Republic. A new Economic Eye study from accountancy firm EY reports that the fall in value of sterling had a positive impact on both tourism and retailing in Northern Ireland’s border areas.

“We estimate that cross border shopping to NI over the last year is back to 2010 levels, in the region of €418m [£367m],” says EY.

That spending has assisted many retailers to cope with weak demand from hard pressed Northern Ireland residents. So what would our city centre look like without that cross-border spend?

We have little idea at present what type of border we will have post-Brexit - and whether it will be a practical impediment to trade.

There are a third of a million cross-border vehicle trips every week at our three main border crossing points - those between Derry and Bridgend, Derry and Muff and Strabane with Lifford.

Not only would physical checks cause problems for cross-border commuting, it would also disrupt trade in the retailing and hospitality sectors.

There is also a major concern about the impact on one of our most important, but seldom spoken about, local assets, the Londonderry Port. Last year it had a turnover of £8.6m, with 50% of its sea imports coming from elsewhere in the EU and 40% of its trade re-exported to the Republic by road.

But the biggest threat is perhaps to the agriculture sector, which accounts for about 30% of our region’s businesses.

As is frequently commented, much of Ireland’s food produce is subject to frequent cross-border travel during the production process. Some 69% of Northern Ireland’s agri-food exports go to the Republic.

Arguably even more worrying is the extent of our farming sector’s reliance on the EU’s Common Agricultural Policy subsidies, which are responsible for 87% of Northern Ireland farm income.

While the UK’s food minister Michael Gove has put forward policies to continue farming subsidies, our local farming sector may receive smaller subsidies in the future.

Then there is international investment in and around our city.

According to a joint report published last year by Derry City and Strabane Council and Donegal County Council, “as much as 70% of FDI [foreign direct investment] is at a ‘medium or high’ risk”, because most investment is intended to serve an EU-wide market.

The two councils believe, though, that there is positive news, which is that some European Union funding will continue to flow to the north west region through a likely Peace V programme.

This possibility is discussed in the latest Holywell Trust Brexit podcast in which the chief executives of Derry City and Strabane District Council, John Kelpie, and Donegal County Council, Seamus Neely, are interviewed.

Neely says he is “optimistic that EU funding can continue” for the region, while Kelpie refers to there now being “an opportunity to shape new funding streams” that more precisely meet the strategic needs of the region, including our skills deficit.

Neely stresses that the north west is “a single functional economic area”. That will remain the case even after Brexit, whatever type of border we have.

*The second Brexit podcast can be found online by searching for the Holywell Trust.

The podcast is now available at