The Brexit deal is 95% done. But the other 5% represents the most difficult bit – Northern Ireland.
Theresa May has updated the House of Commons on progress, raising as many questions as she provided answer. She explained that as far as the government is concerned, it is essential that any deal does not prevent businesses in Northern Ireland from selling into Great Britain. Some commentators have said it may be significant that she did not say it is also essential that businesses in Great Britain have similar access to the NI market.
Rumours in Brussels suggest that the negotiations are now focused on the potential for the whole of the UK to stay in the Customs Union – at least while negotiations proceed on the nature of the future trade relationship – and that NI stays also in the Single Market. It is possible that the NI arrangement could be permanent.
Some businesses believe that this might mean that NI could have a very good Brexit – getting the best of both worlds – through membership of both the UK internal market and the EU’s single market. That might generate significant inward investment from businesses wanting access into both markets.
The DUP has said it is against any such deal, if it damages the integrity of NI’s place within the UK market, or changes its relationship within the constitution of the UK. So that seems to present a blockage to a Brexit deal – and the chance of a deal are still probably only around 50-50. It may be that the only way for the prime minister to achieve a majority in the House of Commons is if a large number of Labour MPs defy their party whip to vote with the government, to balance out the loss of right wing Conservative MPs and the DUP.
The most vocal of the DUP’s politicians criticising the UK and Irish governments has been former NI finance minister Sammy Wilson. He claimed that Leo Varadkar has made himself a “laughing stock” in Europe by warning of a possible threat of renewed conflict in Ireland if there is a hard border. This was after Varadkar showed other EU leaders a copy of the Irish Times, which featured a picture of a bomb attack on the former customs post at Newry.
In the mean time, businesses in GB and NI are warning of the economic damage already being inflicted by Brexit. In a poll, 80% of businesses in the UK said that investment has reduced because of Brexit. Some agri-food businesses in NI – such as Fane Valley – have warned that they might move some processing across the border if Brexit creates difficulties for them. A just published survey of large UK companies from law firm Pinsent Masons similarly found that more than a third of large UK companies expect overseas subsidiaries to switch to EU-based suppliers, away from those based in the UK; while around a quarter expect to reduce UK investment, with 15% moving jobs away from the UK.
The UK’s National Audit Office has warned that border customs arrangements cannot now be set-up in time for Brexit if there is no deal. This could lead to a surge in smuggling. While its focus is on the English ports, the message is even more relevant to the Irish border. And the NIAudit Office (NIAO) has added that “Northern Ireland is not well prepared for leaving the EU without a deal.”
Significantly, the NIAO indicated that NI is in a weak position to deal with any Brexit damage, which it hints might have already begun through lower levels of economic growth. Its report explains: “Growth in the NI economy has stalled over the last year. The economy is still around 6% smaller than it was before the recession struck 10 years ago. In contrast, the UK economy has grown by over 10% since 2008. This leaves the NI economy particularly vulnerable to any economic shock arising from the UK’s departure from the EU.”
In GB, the government is now considering the hiring of ships to bring in emergency supplies of medicines and food in the event of a hard, no deal, Brexit. This might sound like scaremongering, but it was in fact a story in the Financial Times, which reported that “a stormy meeting” of the Cabinet responded “in disbelief” to the briefing. Ministers were told that the Dover to Calais route may operate at only 12% to 25% of normal capacity in the early months after Brexit.
Within NI, concerns go beyond the state of the economy and the risk to food and medical supplies. There is an increasing focus on the rights of Irish citizens living in NI. The Belfast-based Committee on the Administration of Justice has lodged a complaint with the European Ombudsman regarding the threat to these rights. The CAJ is worried that earlier promises to protect the rights of Irish citizens in NI will not be honoured.
The latest Holywell Trust Brexit podcast features an interview with Brian Gormally, who is director of the Committee on the Administration of Justice. We also talk to Conal McFeely, chief executive of Creggan Enterprises, who is a member of the group of civic nationalists who have called on Taoiseach Leo Varadkar to defend the rights of Irish citizens living in NI.
In addition, we discuss with Catherine Cooke of Foyle Women’s Information Network, about the impact of Brexit on personal finances. Mortgage brokers have confirmed to us that people working in Northern Ireland are finding it impossible to obtain a mortgage to buy a property in Donegal – partly, though not only, because of Brexit.
The latest podcast is available at www.soundcloud.com/holywelltrust/holywell-podcast-brexit-focus-episode-11/s-EpG04