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Stark Brexit warning: Be under no illusion about how bad no deal will be for Ireland

Massive hit on ROI finances - 55,000 jobs lost

Leo Varadkar
Leo Varadkar

By Kevin Doyle

A disorderly Brexit will “have profound political, economic and legal implications” for Ireland, the latest update on contingency planning states.

It also warns of further political instability in Northern Ireland. Irish Government ministers were briefed on Tuesday on the heightened fears that a no deal Brexit on October 31 will lead to widespread disruption for businesses and consumers.

They were provided with a report that states: “There should be no illusion – a no deal Brexit would result in far-reaching change on the island of Ireland.”

In the immediate aftermath of the UK’s exit from the European Union, there will be a loss of up to 55,000 jobs. The country’s finances will suffer a €6.5bn impact in the first year.

“A no deal Brexit will be an unprecedented event, bringing with it disruption and severe negative economic impacts.

“However, it is clear that the impacts would be very damaging and in the first year following a no deal Brexit it is predicted that the growth rate would be almost 3 per cent lower than currently projected,” the document warns.

It sets out a number of areas of “significant” concern including:

  • Disruption to Anglo-Irish trade due to delays at ports;
  • Delays to transit of exports and important through landbridge, with knock-on impacts on wholesale and retail supply chains;
  • Closure of businesses due to increased costs, tariffs and currency movements, in particular in the agri-food, fisheries, manufacturing and tourism sectors;
  • Political instability in Northern Ireland;
  • Disruption to all-island economy.
  • Loss of access to fishing landings and displacement of other EU fishing activity into Irish waters.

Although the report does not mention the Conservative Party leadership race, there is a strong belief the change of Prime Minister in the UK has increased the likelihood of a no-deal Brexit.

The Irish Government notes that the EU is willing to look again at the Political Declaration on the future relationship should the UK move on its red lines. But it reiterates the long-standing position that the Withdrawal Agreement, including the backstop, cannot be renegotiated.

“In a no deal scenario, it will be impossible for the UK to maintain the current seamless arrangements with the EU across the full range of sectors, from justice and security cooperation, to transport connectivity, to trade flows and supply chains,” the contingency report says.

It adds that there will be “negative effects in a number of sectors and among smaller and medium-sized businesses, and it will be widely felt on a regional basis”.

“The impacts will be felt most notably in many exporting sectors, including agri-food, indigenous manufacturing and tourism, as well as in importing sectors, especially those characterised by just-in-time supply chains, such as parts of the retail sector.”

The report sets out a number of actions taken by the Irish Government in recent months, including the funding of new infrastructure, staff and ICT systems at ports and airports.

Work at Dublin Port involved nine projects, across eight sites to deliver 13 new inspection bays, documentary and identity check facilities, office facilities and parking for up to 128 HGVs.

Around 400 additional Revenue staff have been recruited and trained for customs facilitation and checks; nearly 190 Department of Agriculture, Food and the Marine (DAFM) staff have been trained for import controls;  and the HSE has 59 additional for Brexit-related activities.

The period between now and Halloween will be used “to strengthen and refresh these preparations”.

The plan says Budget 2020 will be used to make provision for targeted funding for the sectors most affected in the event of a no deal Brexit.

A new phase of the Government’s Brexit communications campaign, which will include a call to action to businesses operating in exposed sectors to take the necessary steps to prepare for a no deal Brexit, will also be launched.

There will also be “ongoing  engagement” with Member States and with the European Commission, on key outstanding issues, including on potential supports for Ireland and affected sectors.

Irish Independent

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