By Amanda Ferguson
BELFAST (Reuters) - Damaging border controls between Northern Ireland and the Irish Republic are inevitable if Britain votes to leave the European Union this month, UK Chancellor George Osborne warned voters in the province on Monday.
Ireland and Britain have allowed the free movement of people across their border for most of the past century, but Osborne said checks on people and goods would be unavoidable if the border becomes an external border of the EU in the wake of the June 23 vote.
That would hit the 3.6 billion pounds ($5.2 billion) of annual trade in goods and services that go to the Republic of Ireland, 37 percent of Northern Ireland's total, he said.
"It is ... inevitable that there would be changes to border arrangements. Leave campaigners who suggest this is not the case are simply not being straight with people," Osborne said in a statement ahead of a day of campaigning in Northern Ireland.
The dismantling of military border posts was a key aspect of a 1998 peace deal that ended three decades of violence between Catholic nationalists seeking a united Ireland and Protestant unionists who wanted to keep Northern Ireland British. Over 3,600 died in the conflict.
Some Irish nationalists have warned that the return of border posts could destabilize the peace process and the largest nationalist party Sinn Fein has called for a referendum on a united Ireland in the event of a Brexit.
Secretary of State for Northern Ireland Theresa Villiers, one of several members of the British cabinet campaigning for Brexit, has said repeatedly that there would be no need to erect border controls.
But Osborne dismissed such claims as "nonsensical."
"You can't say 'we want to have control of our borders' as they keep claiming and then say but its not going to effect anything to do with the borders," Osborne said in an interview with BBC Radio Ulster.
In addition to the border, Northern Ireland's dependence on European Union subsidies for agriculture and funding as part of its peace process made it particularly vulnerable and Brexit would shrink the economy and increase unemployment, Osborne warned.
"If the UK votes to leave, every credible independent voice agrees there would be a profound economic shock," Osborne said.
Northern Irish leader Arlene Foster, a member of the anti-EU Democratic Unionist Party, has described warnings of severe damage to the economy as "scaremongering."
(Reporting by Amanda Ferguson; Writing by Conor Humphries)