Ms Pamela Arthurs:

In the first instance, I again thank the Chairman and committee for inviting me here today to discuss the theme, supporting communities and sustaining small rural business within the Border region after Brexit. I am accompanied by the chairman of the East Border Region, EBR, Councillor Aidan Campbell, from Monaghan County Council, and the vice chairman, Alderman Arnold Hatch, from Armagh City, Banbridge and Craigavon Borough Council.

Let me first briefly explain the organisation. The EBR, is a local authority led cross-Border organisation. It is one of the few genuinely cross-Border organisations on the island of Ireland, comprising three local authorities in Ireland, Louth, Monaghan and Meath county councils, and three in Northern Ireland, Newry, Mourne and Down District Council, Armagh City, Banbridge and Craigavon Borough Council, and Ards and North Down Borough Council. The east coast area between Dublin and Belfast is covered by the cross-Border organisation. The mission statement is simple but comprehensive, namely, to promote cross-Border economic development which benefits the people of the region.

The EBR was formed in 1976. It is one of the oldest genuinely cross-Border organisations and it has always worked under the backdrop of the European Union. The initial impetus for co-operation came from locally elected politicians on both sides of the Border who realised that there would be mutual benefit to working together. That was the case in spite of the hostile political climate at the time. However, it was only since the introduction of the EU INTERREG programme in 1990 that the EBR made a difference in that it had money for cross-Border co-operation. With our colleague organisations, the EBR has drawn down millions of euro for a host of projects which have benefited communities and small rural businesses along the Border corridor. Let us be honest: the majority of the Border corridor is rural. I have a brochure which outlines the scope of the current work. The projects we are working on reach a total budget of €91 million. They are all genuine cross-Border projects funded through the INTERREG programme and working on both sides of the Border.

The Co-Innovate project is one example of a project funded by the INTERREG programme. InterTradeIreland leads the large strategic SME project which will complete in 2022. The aim of Co-Innovate is to assist 1,409 small businesses in the Border region and west coast of Scotland. We all know the Border region is dominated by small rural businesses, especially micro business, which have fewer than ten employees. They require assistance not only to create new jobs, which is important, but also to sustain existing jobs. There is no doubt the myriad EU-funded projects which have been drawn down have significantly contributed to the growth of Border business over the past 25 years, but there is still work to be done.

Brexit will be a game changer. What Brexit has done is to highlight many needs which exist in the Border area as well as causing problems in the future. Small rural businesses have already been affected, especially in Ireland. The drastic fall in sterling after the referendum and the ongoing uncertainty around Brexit, which has dominated our landscape since the vote in June 2016, is not good for business. Coupled with the lack of a Government in Northern Ireland, it is evident that Border businesses are suffering. While the Irish Government has put in place measures to support rural business, the same opportunities do not exist for businesses in Northern Ireland.

I will now focus on what has been the local authority response to Brexit. In particular, given the absence of a Government in Northern Ireland, local authorities along the Border felt it necessary to articulate and lobby for the needs of the 1 million constituents of the Border region. The report, Brexit and the Border Corridor on the island of Ireland: Risks, Opportunities and Issues to Consider, was commissioned by the 11 local authorities which make up the Border corridor. The East Border Region facilitated the report. Copies of the report can be made available to members of the committee. The report clearly identified that the economy of the Border region currently lags behind the economies of both Ireland and Northern Ireland. It also outlines that the Border will be most detrimentally affected as a result of Brexit, that regional disparities exist along the Border and that areas most reliant on agriculture will suffer most. Also of note is that some farmers in Northern Ireland who receive 87% single farm payment are currently better off due to the decline in sterling because they receive their money in euro. The question is where this money will come from in the future. Some of the groups represented here today responded to a consultation by Westminster on a future UK prosperity fund to compensate for the lack of EU funding. Despite our efforts, the report hardly recognised the need to fund any cross-Border activity.

Mr. Dan O'Brien, chief economist in the Institute of International and European Affairs, IIEA, stated at a Brexit event in Dublin on 4 December 2018 that "whilst employment growth over all in Ireland is good, employment in the border region has faltered" since June 2016. That is a reflection of the damage Brexit has already done. Business in the region is less confident and more reluctant to expand as the future is so uncertain. Current developments at Westminster have compounded the problem. One can ask what local authorities can do. Local authorities on both sides of the Border have a duty of care to the citizens of the Border region. Local elected members in Northern Ireland are the only political voice at present. Border local authorities want to work with both Governments to develop and propose creative solutions for Border management post Brexit. We want to be part of the solution, not the problem.

Local authorities have an excellent track record and have been working on a cross-Border basis for more than 40 years. It is a long time in one way but in another way it is not very long in terms of cross-Border co-operation. That is despite the political problems at a national level.

To assist rural communities and business it is essential to address the structural weaknesses in the Border region. Intervention clearly is needed now. The report, Brexit and the Border Corridor, highlighted that. There is a requirement for upgrading infrastructure, both transport and broadband, as this would assist connectivity in the region. We also need ongoing business support measures to assist business prepare for and deal with the impact. Again, the Government is doing a great deal of work with businesses in the South, but in the North there is not so much. However, InterTradeIreland is in Northern Ireland. We need to focus on relevant skills levels in the region as well.

A Brexit transition programme along the lines of the EU Territorial Co-operation programme, INTERREG, would assist the Border region to start to adapt to the challenges of Brexit. This needs to be broad-based as Brexit will impact on every sector.

In respect of the continuation of EU funding programmes to assist the communities, Northern Ireland is not at a stage where it can do without the intervention. We have progressed by a long way, but work still needs to be done.

Mitigating risks, taking opportunities, or both, will mean by necessity defending some of what is in place, for example, the funding streams, but it will also mean that some things will have to change. The Border corridor, with its peripheral position, already lags behind, and we need to break the past patterns. New policy, new thinking and new methods of co-operation and partnership between local authorities and central government will be important as we cannot do it on our own, and this will be essential for Border management in the wake of Brexit.

The success of any future regime for the management of the Border will be judged not only on how well it answers the political and economic dilemmas caused to the region by Brexit, but also how far it allows the current level of co-dependence across Border areas to continue. Any solution must be bottom up, that is, coming from the people, needs-based, and driven and delivered locally. I thank the members and witnesses for listening.