Mr. Michael Gallagher:

We began the report in August and I will go through the main conclusions, why we did it, who was involved and what we believe it tells us. It is a very early look at what the implications might be for the cross-Border region. We put together a team from Queen's University Belfast, Ulster University, Trinity College Dublin and ourselves, with two research teams from Derry City and Strabane District Council and Donegal County Council, and we began to gather all the information. One might think there is a lot of information out there but when one goes looking for that information it is not always available in a useful form. We wanted to determine how interconnected is the region and to this end, we looked at the region at a subregional level within Northern Ireland and the Republic of Ireland.

The Northern Ireland Statistics and Research Agency, NISRA, in the North and the Central Statistics Office, CSO, in the Republic have two different reporting structures but we think the population is approximately 350,000, of whom very many move across the Border on a regular basis for work, leisure, health care, education and many other things. Electronic data from counters on three roads between Derry and Donegal give an indication of the magnitude of this interconnectedness, with 50,000 journeys. There are approximately 12 crossings in total, not all of which are as big as those three, but it gives some idea. Over the course of a week there are some 300,000 crossings. If there was a delay to that it would be significant.

We also began to engage with key stakeholders, the chambers of commerce and those involved in manufacturing and agrifood on both sides of the Border and we got two different perspectives from these. The initial reaction in Northern Ireland was that the weakening of sterling was a good thing. The weakening of sterling is not about Brexit - it is about a number of different things in the world of currencies. Sterling may remain at its current level or it may not but the problem is there is a sense of contentment among people in Northern Ireland involved in retail and tourism in that, having been told they would go off a cliff edge, it does not actually look too bad. On the Southern side there was an immediate impact on tourism after some six weeks, solely as a result of the exchange rate.

We asked people what the impacts might be and we found a great many of them, which I will take members through. Labour market impacts for people in Northern Ireland were stark and the health sector, in particular, sources a lot of labour from the Republic of Ireland. In particular, many staff members of Altnagelvin hospital commute from Donegal and are worried about the future. The hospital worries about how non-EU staff will be affected and whether they will want to be in the National Health Service. There is evidence already, across Britain and Ireland, that health service professionals are making plans to leave Britain. There are worries about both access and more specialist staff as well. On the southern side, Letterkenny hospital has similar worries about locums travelling North and South, especially about the recognition of their qualifications. People are quite quickly coming up with answers to questions of how Brexit will affect them. People who live in the Republic of Ireland and send their children to the North for education in its large urban centres are wondering whether they will be able to continue to do this. In Donegal, they are worried about large-scale emigration to Northern Ireland and what that might do to the population and the housing market in Donegal. We estimate that between 2,000 and 5,000 people live in Border settlements in the Republic that have grown up since 2001. These are only a couple of miles from Derry and most of their populations are former Northern Ireland residents. The interconnectedness can be seen in traffic and in people moving for health and education.

It also can be seen in terms of trade. We have a large number of food manufacturers located within Derry who export throughout the Republic and vice versa, with bread makers in Donegal who export to Britain and Northern Ireland. They are wondering what the future relationship will look like and how it might impact on them. We also spoke to the port authorities in Derry to get some indication of the frequency of vehicles leaving the port. One business told us it had 40 lorries crossing the border at Bridgend per day. We are beginning to get a picture of what the difficulties might be.

An area of interest for Donegal, though less so for Derry, is fisheries. We had long discussions around the fisheries sector and there are real worries in Killybegs about how it will be affected in terms of access to fishing grounds. I am sure the committee has heard representations from fishermen there on this issue. Those involved in fishing in Northern Ireland cannot wait for this to happen because they think they will have unfettered access to their own fishing grounds. There is a real issue around food processing. We have already heard about milk processing and we have a very large processing plant just over the Border beside Strabane, the LacPatrick Dairy in Artigarvan, which has just invested €40 million and is worried about how it will be affected. The vast majority of milk producers in the Republic have their plants in Northern Ireland and this company has plants in Coleraine and Monaghan.

While they are not in as difficult a position as others, it demonstrates the complexities involved. When we spoke to them, they gave us the example of milk which can cross the Border five times in terms of the beginning of one process to the end of another. What will that look like if we end up with WTO tariffs which might be 30% to 40%? It would make things very difficult for those businesses.

Obviously, the overall context relating to Derry and Strabane is that the area is just coming out of recession. We had been in the position of having a plan whereby we thought that if we did certain things we could improve the economic proposition and competitiveness of the region but out of the blue has come Brexit. Quantifying the overall impact for Donegal, there will probably be 7,000 fewer jobs in 2030 than there would have been on the basis of the projected growth rates. There will probably be approximately 2,600 fewer jobs in Derry. It is much worse overall in Derry because the job growth potential was much lower to begin with. We will have approximately the same number of jobs in 2030 as we had at the peak in 2007. Mr. Kelpie will conclude by setting out what we think we can do. We have a plan.