Photo: PA

Northern Ireland’s top-ranking civil servant has warned a no-deal Brexit would have a “profound and long-lasting impact” for the region.

David Sterling, the head of the Northern Ireland Civil Service, gave the warning in a letter to Stormont’s political parties, in which he said failure to reach a withdrawal agreement with the EU would bring about “grave consequences” for the province.

A “sharp increase in unemployment” and difficulty trading with the Republic of Ireland are among the potential consequences mentioned in the letter, which was obtained by BBC News yesterday.

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In particular, Sterling said Northern Ireland faced a “serious dilemma” in finding a way to continue its trade in agri-food products with the Republic. This trade could only continue if in the event of a no-deal Brexit if separate arrangements are put in place to collect tariffs and “fulfil other regulatory obligations”, he said.

EU regulations mean that in the absence of a trade deal, food products can only enter member states via a border inspection post, which does not exist at the Irish border. This could mean agri-food products from Northern Ireland could not be imported to the Republic as there would be “no legal basis” for this trade, Sterling said.

“In effect, there is currently no mitigation available for the severe consequences of a no-deal outcome,” he continued.

“These consequences do not arise from the possibility of checks or controls on either side of the land border, but would simply be the direct consequence of the legal position that would apply.

“This point is well understood by the business community.”

The letter came to light as talks continue in Brussels to try and resolve a deadlock on proposals for a backstop agreement to maintain an open border on the island of Ireland. With just over three weeks remaining until the UK is due to leave the EU on 29 March, the backstop remains one of the main points of contention between the two sides.

The letter reiterates some of the warnings Sterling gave when he wrote to Whitehall’s Northern Ireland Office two months ago, predicting an increase in smuggling and damage to Northern Irish businesses if no deal is reached. "We still await UK government planning assumptions on specific impacts at the Northern Ireland border," he said in the December letter.