No-deal Brexit - putting a price on the long-term damage that faces Britain's reputation

By Jim Power
Business Correspondent

As the Irish Government puts together legislation to deal with the potential fallout from a no-deal Brexit, the situation in the UK becomes more farcical by the day.

Donald Tusk made a fair point a few weeks back when he queried as to what part of hell is reserved for the Brexiteers who ploughed ahead without any plan or notion as to how the UK might disentangle itself from a legal and economic arrangement that has prevailed since 1973.

The notion that the UK could exit easily and painlessly was always ridiculous, but those who voted for and pushed Brexit had as much understanding of how the world works as a Catholic priest has about marriage.

It is becoming more apparent, by the day, that the toll being taken on the UK economy could be quite serious.

Nissan, Toyota, BMW and Ford have already made significant announcements about how a no-deal Brexit will impact on their activities in the UK.

This week Honda announced that it was ceasing manufacturing in Swindon by 2022, with the loss of 3,500 jobs.

While Honda has made it clear that this decision was not motivated by Brexit, the truth is that when decisions are being taken about where to locate mobile manufacturing investment, why would one want to invest in a country that is walking away from free access to a market of 500 million people and a trading bloc that has, and is continuing to, negotiate trade deals with many other third countries.

Furthermore, the farcical nature and behavior of UK politics over the past three years would not exactly entice investment in the jurisdiction.

The future of car manufacturing in the UK is now under serious threat.

Over the past couple of years I have generally believed that the UK would eventually do a deal with the EU and that at that stage, the UK economy would rebound strongly as the paralysis caused to business investment and consumer behavior by the intense uncertainty would dissipate.

However, with just 35 days to go to the exit date, we are no nearer a resolution and the damage being inflicted is becoming more permanent in nature.

It is hard to know what Theresa May’s strategy is, or indeed if she has one at all. Perhaps she will take it to the wire and then present parliament with a choice between her withdrawal agreement and a hard Brexit.

If that is her strategy, then it is a very risky one that could backfire very badly.

The resignation of the seven Labour MPs from that dysfunctional party due to a combination of anti-semitism and the party’s handling of Brexit is too little too late.

The dysfunctional leadership of Jeremy Corbyn has been very obvious over the past couple of years, and he has always been strongly anti-EU.

Why it took those seven until now to stand up and walk away from the party is anybody’s guess.

More bizarrely, Mr Corbyn has just re-admitted that radical left firebrand from my youth, Derek Hatton, to the party.

Then three brave Tories jumped ship to follow the Labour renegades.

One could not make it up, but it does not bode well for the UK and its reputation.

Only a fool or a charlatan could claim wisdom on what happens next, but the long-term damage to the UK economy and, more particularly, its reputation as a place in which to live, work, invest and do business, remains to be seen.

From Ireland’s perspective, the shenanigans across the Irish Sea, makes us look positively sane and sensible at this juncture.

In a few weeks, Ireland looks set to become the only English-speaking country in the EU; Malta aside.

Cork will be the second largest English speaking city in the EU and Waterford will be the fifth largest.

That surely will mean something positive for us?

Last week, the CSO published merchandise trade data for the full year, and it makes for pleasant reading.

Overall merchandise exports expanded by 14.8%, with sales to the eurozone expanding by 20.5%, and the region accounted for 35.8% of our total exports.

Mind you, the increase of 38% in exports to Belgium does show how exports of pharmaceutical produces through that country distort the picture.

Exports to the UK declined by 2.2%, and the UK’s market share for Irish exports declined to 11.4%.

However, for food and live animal exports, the UK still accounted for 36.8% of total export sales from the sector.

Therein lies the challenge, particularly given the comments by Michael Gove this week in relation to the imposition of tariffs on agri-food imports into the UK in the event of a no-deal Brexit.

Most Read in Business