Business Irish

Sunday 26 January 2020

Ireland should be on May day alert as Britain gets bolshie about Brexit

The new Prime Minister has shown her colours on Brexit – and it’s not pretty
The new Prime Minister has shown her colours on Brexit – and it’s not pretty
Richard Curran

Richard Curran

'Brexit means Brexit' is about all British Prime Minister Theresa May had to say for the last few months about the UK's future relationship with the EU. What on earth did that mean? Well last weekend we got the answer.

It means the UK will focus on restoring full control of its immigration policy and domestic laws over and above membership of the single market.

Her speech to the Conservative Party conference was full of rhetoric. "A truly global Britain is possible, and it is in sight," she said. "We don't need to punch above our weight because our weight is substantial enough already."

You could almost hear an Elgar composition playing in the background as she talked about how "we will be free to pass our own laws".

In examining the implications for Ireland we have to look at both aspects of Ms May's Brexit equation - immigration control and Single Market membership.

By controlling its immigration policy the UK is saying that if people from outside the UK want to visit or work in the UK they may have to go through a certain process.

EU citizens who want to visit will probably be able to avail of a visa waiver scheme, similar to what Irish people go through when visiting the US. Alternatively, Britain could abandon the idea of a visiting visa entirely for EU citizens. The scenarios here will emerge in the thick of the negotiations.

When it comes to someone from Poland, Latvia, or indeed France or Germany, wanting to live and work in the UK, they will most likely need a work visa.

So where does that leave Irish people? Someone living south of the border, but working in the North might need to apply for a work visa? The British government is on record as saying it wants to keep the free travel area between Ireland and the UK.

If it wants to extend that to work visas, it will confer a definite advantage on Irish people who want to work in Brighton or Belfast. How will the Polish or Latvian Prime Minister feel when their own EU citizens have to apply for visas and we don't?

And therein lies the rub. The Irish Government plans to push for the declaration of the North as a special case in relation to existing North/South political arrangements and the contents of the Good Friday agreement.

We don't know if this argument will wash in Europe. Perhaps for the sake of the peace process, EU leaders will allow exceptions when it comes to the relationship between the two parts of the island, but it is very difficult to say how far that distinctive relationship will be allowed to go.

There is no doubt that some kind of border is on the way back and it will be a giant step backwards.

Much of the negotiations around immigration policy will be taken up with figuring out how to deal with the Germans, French, Poles and Latvians currently living and working in Britain. And of course there is the counter issue of the British living in Spain and France. After Spain, Ireland has the second highest number of British nationals living on its shores. Some pragmatic deal will be struck there. But it could absorb a lot of time and political energy.

On the question of access to the Single Market the situation is even more up in the air. The UK might look as if it is about to commit some kind of economic Hari-kiri with the isolationist policy it is adopting. But in the long run there will be some advantages to the British going it alone.

They obviously feel confident they will get a good deal from the EU on the details of a new trading relationship - otherwise it would be Hari-kiri. We simply don't know if Theresa May and her Brexit ministers are over-estimating their place in the new economic world order. They are certainly playing a tough game.

Currently 30pc of all inward investment to the EU goes to the UK. That is likely to fall in a new complex arrangement around access to European markets. However, the British will be completely free to counter this loss of advantage with other investment incentives. Once out of the EU they will have no restrictions on what tax deals, grants and other inducements they can offer multinationals.

They will seek to make their offering extremely competitive despite possibly losing full access to the Single Market.

And of course nobody knows yet how the big European powers, like Germany, will respond to the possibility of losing the UK as a significant trading partner. Theresa May's government seems to be gambling on the fact that the EU will do a good deal on trade on foot of big investments already made by European companies in the UK.

The better the deal, the greater the chances Hungary, Austria or even Italy will consider leaving and reaching a similar accommodation.

The rhetoric coming from Brexit politicians doesn't inspire much confidence that they have a real grasp of the challenges that face them - especially when it comes to the North.

The DUP's Jeffrey Donaldson was on RTE radio this week suggesting that a farmer in Co Laois had more to be worried about from Brexit than a farmer in Co Fermanagh. His rationale is that a Fermanagh farmer, currently receiving 80pc of his income from the EU will have that income replaced with money from London on the back of all of the savings the UK will make from leaving the EU.

He may even be right for the first few years. But what happens after that? The power of the farming lobby in Brussels, which covers millions of farmers across the EU, is greater than the voice agriculture has in London. There will be no guarantees as to what that farming subsidy will be in a few years' time. Mr Donaldson also talked about the opportunities of making a post-Brexit economy work for Northern Ireland by citing possible trade deals that could be done with countries like Egypt and Brazil. Trade deals are two-way streets. If the UK wants to sell a lot of technology to Brazil, the Brazilians will want to sell a lot of their beef to the UK - not exactly music to the ears of the Fermanagh farmer.

Unfortunately Sinn Féin's incessant talk about a border poll has unionists spooked. After backing a leave vote, only to see the majority in Northern Ireland vote to remain, the DUP seems hesitant about engaging fully with the Republic on matters of common interest.

Irish ministers have perhaps the trickiest job of all in these negotiations. Firstly, direct Irish participation in the EU talks may well be minimal. Secondly, we have to lobby in the EU for the UK to get the best trading deal possible to reduce the impact on Irish exporters.

This could place us in conflict with central and Eastern European members who will feel aggrieved at possible work visa restrictions placed on their citizens who want to live and work in the UK. They will also want a slice of Britain's inward investment.

At the same time Irish ministers and civil servants will have to build an argument as to why Ireland/Northern Ireland is a special case in relation to the movement of people and goods, as well as entitlements to work in the North.

This really is just the beginning of a long process. But it couldn't have got off to a worse start.

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