Monday 21 October 2019

Richard Curran: 'Small chance of a Brexit deal died with Boris's coarse bluster'

British Prime Minister Boris Johnson. Photo: PA Wire
British Prime Minister Boris Johnson. Photo: PA Wire
Richard Curran

Richard Curran

British prime minister Boris Johnson has been roundly criticised for his contributions to what was a pretty heated and toxic debate in the House of Commons on Wednesday. The inflammatory nature of the debate and the language used by Johnson could have significant consequences. It may not be just another day of drama and vitriol in the British parliament.

It could even signal the death knell of any possible compromise deal on Brexit ahead of the EU summit next month. As the discussions slowly moved toward distinct arrangements for Northern Ireland in recent weeks, as the "landing zone" for a deal, there were always three big questions.

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Would Johnson throw the DUP under a bus by pressing ahead with a Northern Ireland-only backstop? If he did, would he get this amended deal through the House of Commons? And, was there enough time to develop, negotiate and agree a legally operable alternative to a Northern Ireland-only backstop which would achieve the same, or practically the same, aims?

Johnson has not thrown the DUP under a bus but has no doubt encouraged the party to explore some alternative arrangements, built on the premise that there can be distinctive aspects to the North's departure from the EU. Those talks haven't really gone anywhere because the gap between both sides has been too wide.

Even if the gap began to close through some movement on both sides, there simply isn't enough time now to construct a functioning alternative scheme with the same benefits as a Northern Ireland-only backstop.

So if Johnson wants a deal before October 31, he will have to throw the DUP under a bus by agreeing to a Northern Ireland-only backstop. Johnson does not want to enter a general election without solving Brexit first for lots of reasons, including that he doesn't want to face Nigel Farage's Brexit Party, which will split the hard Brexit vote.

This is where his intemperate language at Westminster comes in. Even if he ditched the DUP and went for a Northern Ireland backstop, there are questions now about whether he would get such a deal passed in the House of Commons.

He would need the support of at least 20 Labour Party MPs and after the ill feeling and toxic nature of his parliamentary contributions during the week, many now question whether he could secure those votes.

His only available avenue to delivering a Brexit deal has probably closed off.

That means the future of Brexit and the Border will come down to the outcome of a British general election likely to be held in the coming months, following a request for a Brexit extension.

It will be a Brexit election and if Johnson wins, we will see a no-deal crash-out. If Jeremy Corbyn ends up as prime minister, who knows what we will see?

The talks about a single-island regulatory regime for food, and whether it could be extended to other products, now look dead in the water. There is neither time nor Westminster support for Johnson to get it through, even if it could be negotiated.

Brexit has become a kind of paralysis and the only date that matters is the day the next prime minister is sworn in after a general election. The impact of a no-deal Brexit on the Irish economy is pretty extreme. The ESRI has warned that we could see a contraction in the economy of 1pc next year.

Without a hard Brexit, perhaps through a transition period or the British calling it all off, the economy would be likely to grow by about 3.3pc. Put in real-money terms, this means instead of Irish GDP growing by about €11bn next year, it would contract from this year's figure by about €3.4bn.

Even allowing for the fact that Irish GDP is a questionable measure of real underlying economic activity, this analysis still suggests a very rapid and painful shift into reverse.

The most vulnerable sectors (small business, tourism, agriculture and food, and fishing) will all disproportionately hit the rural economy around the country.

We are spectators and casualties of a no-deal Brexit. Who should we hope wins the British election when it comes? Johnson and his new mandate for a painful crash-out, or Corbyn, who is ambivalent about Europe and whose stated economic plans include nationalisation of several industries, and would require £26bn (€29bn) per year in new taxes to implement?

It is some choice.

Postman Pat turns the corner

An Post looked like it was heading into the eye of the storm just a couple of years ago. It was benefiting from the growth of online shopping with home delivery, but contracting postal revenues and too many rural post offices were stealing all the headlines.

This week, my postman showed up in a brand new van with new branding livery for An Post all over it. Not only was the van new, it had a longer axle so it could carry more parcels and packages as the company gears up to compete more with courier firms.

The next day, I went into a bank (a rare enough occurrence these days) to buy a sterling draft. The bank doesn't do sterling drafts any more (not for amounts under £500) and I was directed to the post office to get it.

Reasons to go into a bank branch are getting fewer all the time. Also this week, An Post announced that it would benefit from a new international postal tariff arrangement which will be worth another €30m to the company over the next five years.

The business has been dealing with rural post office closures and announced a year ago that 159 of them were to close. It has also announced the closure of its Cork mail centre, with the loss of 240 jobs.

In April 2017, it secured a stamp price increase from 72 cent to €1, a 38pc hike. It worked for the company, which has put up prices on international stamps and packages since then.

Chief executive David McRedmond has helped put the company on a more secure footing, with profits of €40m last year. He has also restructured the business, which seems to be yielding results.

RTÉ management may look on enviously at the turnaround and wonder what a price increase (in the form of a licence fee rise) might do for the national broadcaster. Then again, they'd settle for having the €20m of uncollected licence fees flow in.

Peloton back-pedals after IPO

If you are a fitness fan, you may have heard of Peloton. It is an American company that sells $2,000 (€1,830) exercise bikes and $4,000 treadmills for US homes.

Not only do punters fork out for the equipment, around 500,000 of them pay up to $40 per month to access live workout videos on a 21-inch TV screen in front of the machine.

The business floated on Nasdaq on Thursday, having been priced at $29 per share, the top of the mooted price range. It valued the company at $8.6bn.

It has 'expensive fad' written all over it. Management took out a 21-year lease on a studio in New York to make the live videos. It also took out a 16-year lease on a new headquarters that hasn't even opened yet.

Its losses jumped four-fold last year to $196m. It is being sued for $300m by music rights firms, which claim they are not receiving enough royalties for music played in the videos.

Chief executive John Foley had cashed in $31m in share sales before the float.

The IPO is a real test of sentiment toward billion-dollar tech companies.

Stocks like Uber have been trading below their IPO price. Peloton opened around $27 on Thursday, below the $29 per share price set on Wednesday.

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