Friday 18 January 2019

John Downing: 'Our 10 biggest fears look likely to be realised as the deadline for Brexit looms'

Glum: The Christmas tree may be up at Downing Street but there’s precious little festive cheer for Prime Minister Theresa May. Photo: PA
Glum: The Christmas tree may be up at Downing Street but there’s precious little festive cheer for Prime Minister Theresa May. Photo: PA
John Downing

John Downing

Few, if anybody, anywhere, will admit to wanting a no-deal Brexit in which the UK just ends its 46-year EU membership with a shocking thud on March 29 next.

But almost nobody wanted to go to war back in 1914 either, but that is just what happened.

As things stand, if the UK cannot ratify the draft Withdrawal Agreement, a no-deal Brexit is what we will get.

Events this week nudged us all a little further on that path. Contingency plans published by the EU Commission on Wednesday offered little in softening the effects of a crash-out. Brussels still does not want to make a no-deal EU exit into an easy option.

Here is a flavour of the fallout from a no-deal Brexit.

1. JOBS: A hard crash-out Brexit would cost about 50,000 jobs in Ireland, the International Monetary Fund has predicted.

It would reduce Irish economic output by 4pc in under a decade. Moving from an EU border-free market to World Trade Organisation rules would make Irish agribusiness especially vulnerable.

The UK market would be open to products from places like South America where there are lower animal welfare, veterinary and other standards. The Taoiseach has twice in the last week insisted there would be no mini-Budget in 2019 but experts say State borrowing must increase to meet costs. Ireland may gain some jobs - but UK migrants may be chasing these and other work.

2. ENERGY: Householders and businesses face higher energy prices in the event of a hard Brexit. Ireland would effectively be cut-off from trading power with other EU member countries. Irish electricity is supplied from generators in the Republic and Northern Ireland, and high-voltage links with Scotland and Wales.

Ireland has no direct power links with the EU mainland. Most of Ireland's €5bn yearly coal and oil imports come via the UK. If there is no Brexit deal on energy, everything is likely to increase in price.

3. PORTS: Expect congestion at ports like Dublin and Rosslare. The Government plans to acquire more land to put some order on the inevitable queues.

But there would have to be plant and animal health checks on UK produce coming into Ireland as an EU country.

The problem may be even more acute at British ports, with special lanes already designated for queueing trucks in the hinterland of Dover.

Irish trade relies heavily on the so-called landbridge via Britain.

4. AIRPORTS: The Ireland-UK common travel area means travel between the two islands remains unchanged. But the EU Commission plans restrictions on UK airlines with implications for Irish travellers going via the UK. These can fly between UK and European cities.

But UK flight operators cannot fly on to other EU destinations, or take new passengers to a non-UK destination. Some UK airlines may seek ways around this. Companies with majority shareholdings in EU member states will fare better.

5. MEDICINE: UK health authorities have been stockpiling medicines for months. They import 370 million packs of medicine and blood products from EU countries every month.

A no-deal Brexit risks hefty tariffs under World Trade Organisation rules. Ireland gets much of its medicine supplies from, or via, the UK.

There is a risk that medicine could be dearer and/or harder to get. The Government insists the issue will be dealt with - but they have yet to say how.

6. THE BORDER: The EU Commission has notably avoided dealing with the Irish Border in no-deal Brexit contingencies published on Wednesday. Agriculture Minister Michael Creed believes that plant and animal health checks at Dublin and Rosslare will be enough to cover that issue.

But how other UK products would be dealt with going North via the Republic, or coming into the Republic via the North, has yet to be announced. There has long been an assumption that the EU would require border checks to protect its single market. That would be doubly tragic since the EU played a big role in making the Border invisible with the single market since 1992. One hopeful sign has been the EU's intention to continue peace funding for the North.

7. FISHERIES: A no-deal Brexit risks shutting out Irish fishermen from lucrative UK waters.

It is not widely appreciated in this country that one-third of all Ireland's fish in value terms are caught in UK waters.

That includes 60pc of mackerel and 40pc of prawns. Irish coastal communities would be devastated by the lack of some kind of workable arrangement on access to UK waters.

8. TRANSITION: The biggest overall loss would be the lack of any kind of transition period to allow Irish business, farmers and other affected sectors to gear themselves up for change. In the case of a Withdrawal Agreement, it was expected that nothing would happen after Brexit formally kicked in at 11pm on March 29 next. Changes would begin only in January 2021 - and many expected that grace period would be extended by another year.

A no-deal would send everything straight off a cliff, causing huge confusion and seriously damaging business people's and workers' morale and health.

9. COMMUNICATIONS: The EU is the long-time source for communications regulation across all EU member states.

After Brexit, information providers established in the UK and serving the EU cannot rely on UK regulations.

Equally, information providers serving the UK may face similar restrictions or regulation. There are implications for things like tariff regulation. The absence of some kind of arrangement risks major confusion.

10. PETS: The EU has a long-standing "pet passport scheme", with proof of identity and vaccination to avoid expensive and distressing quarantine periods. If there is a no-deal Brexit, this will almost certainly change. It's not entirely clear yet what the new regime may be.

This has implications for Irish pet owners who bring their animals into the UK jurisdiction and later want to travel similarly to mainland Europe. UK officials say they are seeking talks with the EU to get special listed status.

Ironically, this could cause the most immediately noticeable effects in middle England homes where voters were most enthusiastic about Brexit in 2016.

Irish Independent

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