Saturday 20 October 2018

Contingency plans in place for a worst-case Brexit

Justice Minister Charlie Flanagan. Photo: Justin Farrelly
Justice Minister Charlie Flanagan. Photo: Justin Farrelly

Shona Murray

Prevailing instability in the UK has heightened concerns with the Irish Government that there will be a hard Brexit, according to senior sources.

The Cabinet is holding a special Brexit-focused meeting in Kerry tomorrow at which contingency plans for the worst-case scenario on Brexit will be signed off.

"The parliamentary arithmetic is mad in London, with no majority for anything unless they get into cross-party alignment which also looks unlikely," a source told the Irish Independent ahead of the meeting.

They said that, with the continued disarray with the Tory party, the risk of a "no deal/ bad deal" remains a strong possibility.

A consensus is growing that an appeasement of the differing view points within the British parliament and the Tory party is proving nigh on impossible.

An agreement among extreme Brexiteers, who want the UK cut away completely from the EU particularly in the area of regulations and customs in order to cut trade deals elsewhere, and so-called sensible Brexiteers, who would be happy to remain within the single market, is far from likely.

With time elapsing fast and still no solution in sight there is no more time to allow for any further "fudge", the source said.

They said there is no level ground emerging in Westminster.

"They are all so hopelessly divided, so at the end of the day one side will have to lose and one win," they added.

But if the Good Friday Agreement and the British government's commitment to ensuring no Border is erected between the Republic and Northern Ireland is to be honoured, then the UK has to stay in the customs union, and in the single market.

"Either way one lot is going to be p****d off," said the source.

Although the prospect of the UK crashing out of the EU with no deal would be catastrophic for the UK, the initial, relative show of unity within the Tory party on the white paper proposals earlier this month appears to be in decline more and more every day.

UK Prime Minister Theresa May acquiesced yesterday to a critical amendment demanded by Brexiteers in the highly Eurosceptic European Research Group (ERG), which would ensure British customs officials could not collect duties or VAT on goods on behalf of the EU unless there was a reciprocal arrangement.

So far there is no consideration being given by the EU to offer such an arrangement and it appears to be an attempt to scupper a crucial element in Mrs May's white paper proposals.

"The plan was designed to tie her hands but some of it could backfire and they'll end up with no deal," said the source.

Justice Minister Charlie Flanagan last night claimed that the refusal by Sinn Féin MPs to take up their seats in Westminster had "plunged the British PM into the clutches of the hard Brexiteers" after Mrs May's government narrowly won the knife-edge vote by 318 votes to 285.

Brexit plans being prepared by Irish officials will be announced by Tánaiste and Foreign Affairs Minister Simon Coveney, although he said some information will be withheld because of market sensitivity.

More than 500 full-time customs and veterinary officials will be hired to undertake the complicated administrative burden if no withdrawal deal is agreed between the EU and the UK.

This will have to be factored into October's budget and be ready to be enacted by the end of the year, as the possibility of the UK leaving without signing a withdrawal agreement and a transition deal is also now possible.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business