Not going to be as good as it is today…

“Our aim is to keep things as much as they are…. but even in a really good Brexit outcome, it is not going to be as good as it is today”

Those were the words of Taoiseach Leo Varadkar addressing several hundred attendees at one of the Getting Ireland Brexit Ready events held at Dublin’s Convention Centre last month.

Individuals and companies across the business, agri-food, fisheries and tourism sectors attended the workshop and were briefed on various measures that businesses should consider putting in place to prepare for Brexit.

Acknowledging that the outcome of Brexit is still uncertain, the Taoiseach and Tánaiste Simon Coveney said that while they were both hopeful that a deal could be reached, the Irish Government is putting in place a contingency plan for a no deal Brexit. And that plan would feed into the EU’s contingency plan, and Ireland “won’t hold back on expenditure”. The Taoiseach said that new parking and checking areas were being developed at Dublin Port with similar plans for Rosslare Port and Dublin Airport.

The Taoiseach urged businesses not to bury their heads in the sand saying now is the time for nominating one person in their business to get a handle on what Brexit means and what challenges the business might face.

The Tánaiste said that every effort is being made to avoid a hard border on the island and he is hopeful that border checks infrastructure will remain a thing of the past. Mr Coveney also said that he felt that there was a general “misunderstanding in London” about the border issue in Ireland. He said that if both the North and South of the country do not operate the same trading rules and standards, it would be difficult to operate the all-island economy that we have been enjoying for many years; greatly helped by the EU’s Single Market and Customs Union.

When questioned about whether EU cooperation with Ireland on Brexit would come at a price, especially since the UK is Ireland’s biggest ally on matters such as digital tax, the Taoiseach said Ireland was working hard to build new alliances in the EU. “Without the UK, Europe is going to be different. We’re losing a partner and like-minded country. So what we need to do is strengthen alliances, and have been working hard to do that,” the Taoiseach said.

NEXT to shelter against Brexit risk

NEXT plc, the major clothing retailer has set up an Irish subsidiary to reduce the effects of a no deal Brexit. Going forward, Irish stores will receive stock directly from its German warehouse rather than via an operation in the UK. This would mean that any potential customs duties and border checks in place after Brexit would be avoided.

In the half year results to July 2018, NEXT plc said “There are significant challenges involved in preparing for a no-deal outcome and we would not want to understate the work we are doing to prepare for this eventuality. However, we do not believe that the direct risks of a no-deal Brexit pose a material threat to the ongoing operations and profitability of NEXT’s business here in the UK or to our £190m turnover business in the EU.”

Interest rates

The Bank of England Governor Mark Carney has suggested that if Brexit goes smoothly, faster rises in interest rates could be expected. However in the event of a disruptive Brexit, the Bank was unsure whether rates would need to rise or fall in response.

No deal yet on financial services?

The EU’s chief negotiator Michel Barnier responded to media reports that a deal had been reached between the EU and the UK on giving the UK access to the EU’s financial services market after Brexit. Mr Barnier said the reporting was “misleading” and issued a reminder that it would be up to the EU whether to recognise the UK’s financial services as equivalent. Equivalence would make it easier for non-EU companies to operate in the EU’s Single Market but is generally not as generous as having full passporting rights; which the UK currently enjoys as part of the EU.