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The economic mischief wrought by Brexit takes many forms and it will do damage even if it is cancelled. Firms in the UK and in its European neighbours have deferred long-term investments over the last few years but firms and Governments have also spent money which will be a total write-off if there is no Brexit, or will prove to have been too little if the outcome is a no-deal crash-out.
It is lamentable that so many businesses have been placed in this position by the failure of the UK political system to offer any clarity, more than three years after the referendum decision.
The Westminster session will re-commence on 9 September but there is no guarantee of a definitive outcome even then – there could be a stand-off and another reprieve before B-day at the end of October.
More likely is a no-deal crash-out, for which adequate preparations will not be in place since nobody was sure it was going to happen.
Whatever the outcome, the reputation of the UK for purposeful public administration has been diminished
Of course, the UK government has a perfect entitlement to withdraw from the European Union and the rights and wrongs are entirely a matter for the UK. But to envelop the business community in the UK itself and in neighbouring European countries in a fog of uncertainty and cost, was avoidable. Whatever the outcome, the reputation of the UK for purposeful public administration has been diminished.
A clear path for withdrawal was never put before the electorate and the Whitehall civil service has been placed in an impossible position by the politicians, still bickering over the form that Brexit is to take or whether it is to proceed at all.
Almost 500 members of the House of Commons voted, at the end of March 2017, to trigger Article 50, in effect giving notice of resignation from the EU two years later.
Failing a withdrawal agreement, the default was a no-deal crash-out and the MPs cannot claim to have been unaware of this.
For Irish businesses, there is not much consolation in a ringside seat as the drama plays out
There was no guarantee at the time that any agreement would be reached given the UK government’s red lines and the incompatible ambitions for frictionless trade and departure from the single market.
For Irish businesses, there is not much consolation in a ringside seat as the drama plays out.
If no-deal is the outcome, business firms (and the Irish Government) will be blamed by the public for inadequate preparation.
If there is a reprieve the bills will tot up for preparations that will not have been necessary. The chief executive of Dublin Port, Eamonn O’Reilly, was filmed last week against the backdrop of new customs posts being constructed on scarce land, for which he could have found more productive uses.
In The Irish Times, Simon Carswell reported that firms operating warehouses around Dublin were short of capacity. They have been reluctant to spend money providing space for extra inventory over the expected B-day surge, since it could end up surplus to requirements. Who can blame them?
A UK civil service report leaked last Sunday predicted food, medicine and fuel shortages after no-deal, with major disruption to cross-channel shipping and the risk of empty supermarket shelves, exacerbated by panic buying.
The day after we vote to leave, we hold all the cards and we can choose the path we want
The minister for no-deal planning, Michael Gove, did not deny the accuracy of the leak, insisting that better, but undisclosed, preparations had been made since the report’s completion.
Gove assured voters in April 2016 during the referendum campaign that: “The day after we vote to leave, we hold all the cards and we can choose the path we want.” The choice has absorbed 1,147 days since 24 June 2016, the day after the referendum and has still not been made.
In a no-deal crash-out, there will be a hard border in Ireland but there will also be severe disruption to the far more substantial east-west trade between Ireland and Britain.
The EU members (all of them, not just Ireland) will be required to install tariff collection systems and customs checks, controls on animal movements and a new VAT system – the UK, with no deal, becomes a third country, no different from Russia or Brazil, without an agreement and there is only one agreement on the table.
Should there be the predicted chaos after a crash-out, blame will have to be allocated and the current Tory government has been auditioning for the role
This has been rejected in three votes by the House of Commons, on the last occasion despite the support of several members of the current cabinet, including Boris Johnson.
Should there be the predicted chaos after a crash-out, blame will have to be allocated and the current Tory government has been auditioning for the role. The candidates are the previous Tory government of Theresa May, for inadequate preparation, the bureaucrats of Brussels, for failing to deliver the deal (frictionless trade for a non-member) sought by the UK and Leo Varadkar, for declining to believe in yet-to-be-invented invisible border technology. All three are in with a shout.
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