Politicians and business leaders have expressed concerns that Ireland faces serious economic upset after Theresa May outlined her vision for a hard Brexit.
The British prime minister stressed that she was prepared to prioritise free travel between Britain and Ireland when her negotiations begin with the European Union begin later this year, but her emphasis on leaving the single market — and her hint about leaving the customs union — caused concern in Ireland about tariffs and other trade restrictions.
Irish MEPs sought assurances yesterday from Michel Barnier, the EU’s chief Brexit negotiator, that Ireland’s voice will be heard once formal negotiations begin.
Mrs May stressed in her speech at Lancaster House in London that maintaining open borders between the two islands will be an important priority for the UK. “There has been a common travel area between the United Kingdom and the Republic of Ireland for many years,” she said.
“It was formed before either of our two countries were members of the European Union. And the family ties and bonds of affection that unite our two countries mean that there will always be a special relationship between us.
Advertisement
“So we will work to deliver a practical solution that allows the maintenance of the common travel area with the Republic, while protecting the integrity of the United Kingdom’s immigration system. Nobody wants to return to the borders of the past, so we will make it a priority to deliver a practical solution as soon as we can.”
One government source described the challenge of protecting the economy while adjusting to such fundamental changes to the political landscape as a Gordian knot. “We are going to have to war-game everything that was said today,” the source said. “We are under no illusions about how difficult this will be. It’s quite clear that this is looking like the hardest of hard Brexits.”
In the Dail the taoiseach said he had spoken to Mrs May on Monday evening and reiterated Ireland’s priorities in relation to the economy, trade, the border and the common travel area. “In her comments she included the issues of importance which we discussed last night, in particular the common travel area, and stated her willingness to look at the most effective practical outcome of the border situation,” Enda Kenny said.
“Once Article 50 is triggered there is a two-year period, and this may not be concluded in that time. If it is not concluded there will have to be a process of transition.”
Micheál Martin, the leader of Fianna Fail, pressed Mr Kenny on whether the government was arguing for short and medium-term measures to protect the economy from Brexit shocks.
Advertisement
“By any yardstick or assessment her speech constitutes an agenda for a very hard Brexit and very difficult negotiations ahead,” Mr Martin said. “Essentially Britain will be out of the single market and out of the customs union as we know it. No matter what gloss one puts on this, it can mean tariffs on goods and services between Britain and Ireland and between Britain and the European Union.
“This changes the nature of our response to Brexit.Despite the reference to the common travel area between Ireland and Great Britain there was not much in the speech on the Irish perspective or the future of Ireland’s relationship with the United Kingdom.
“We will need transitional state-aid capacity to enable companies to survive the threat of Brexit by diversifying, and so that they withstand the undoubted dislocation that exiting the single market and the customs union will have on trade between indigenous Irish companies and Britain. Have we put that on the table?”
The taoiseach said there had been no opportunity to push for assistance from Europe because talks cannot begin until Article 50 is invoked, formally starting exit negotiations.
“A number of countries, including Ireland, mentioned these in the discussions we had at the European Council but we could not make a definitive claim, application or proposition in this regard until the clarity that is now emerging was given by the British prime minister,” Mr Kenny said.
Advertisement
“We will contribute strongly to these and we will give the matter serious consideration because of the difficulties that will apply and the many economic reports that have indicated that Ireland will be one of the countries most adversely affected by a hard Brexit.”
Gerry Adams, the Sinn Fein leader , expressed concern about the effect on the Good Friday Agreement of Mrs May’s commitment to end the UK’s role in the European Court of Justice.
“The decision to leave the single market and the customs union sets Britain on course for a hard Brexit,” Mr Adams said. “The economic and political implications of this for the people of this island are significant.
“Mrs May set the future of the border and any arrangements with the island of Ireland in the context of Britain’s determination to control immigration and defend its borders. It is difficult to see how this can be accomplished without significant changes to the current border arrangements.”
Mrs May’s speech was also met with widespread concern from business groups, which called on the government to outline policy responses to lessen the impact on Irish companies.
Advertisement
Danny McCoy, chief executive of Ibec, described her remarks as “combative” and said that leaving the single market and customs union would “seriously disrupt” trade between Northern Ireland and the Republic.
“A return to World Trade Organisation rules would be a significant economic shock to the economy and would hit Irish exporters hard,” Mr McCoy said.
Bodies such as the Small Firms Association, the Irish Exporters Association and Chambers Ireland also urged the government to implement policies to reduce the impact of sterling’s devaluation and help businesses open up new markets.
A delegation of Irish MEPs met Mr Barnier in Strasbourg yesterday. Nessa Childers, an Independent MEP, described the content of Mrs May’s speech as a “scorched-earth policy” while Brian Hayes, a Fine Gael MEP, urged the EU to respond by outlining its own position.
Mr Barnier gave the group a commitment he would consider the matter.