UK Brexit political mess will help Ireland tap new investment
The chaos that defines the UK’s Brexit process brings into sharp relief the relative stability on offer to investors and employers in Ireland.
While political turmoil hits confidence in Britain, current policies in the Republic favour investors. Maintaining that advantage will also mean facing down challenges from the rest of Europe.
Investment in the UK has to take into account two big issues.
A business thinking of investing in the UK to tap the British market must worry about the implications of further turmoil in the political system and the risks of higher taxes under a new British government. A business investing in the UK to access the vast EU market must calculate the risks to their goods and services of getting from the UK into the rest of Europe. The risks are high, in both cases.
In contrast, Ireland, and areas outside Dublin, in particular, have an enormous appeal. In many regions of the UK, commercial and residential rents are materially below the levels in Dublin.
If an international investor is considering setting up a new business in the UK which does not need a London base, it will focus hard on the costs of living for its employees.
And it is the cities and towns outside Dublin that offer good value, when compared with London costs.
There are other significant factors that determine whether or not to invest in Ireland, including market access, the tax regime, the availability of skilled labour, and quality transport.
This is where the Irish political system comes into play. That a significant majority of parties in the Dáil broadly support current policies contrasts starkly with the fissures in Westminster.
Take, for example, a large technology company on the US West Coast, which currently has no base in Europe. Ireland has scored well in attracting such companies in recent years.
In choosing a European base, it will seek a reliable, English-speaking staff.
Building a European base requires large amounts of money and time and involves taking risks.
Doing all that against the backdrop of uncertainty about market access and tax, as is the case in Britain, is a big risk.
But investing in a place where, year after year, a government sticks to its commitments to employers and does not deviate from pro-business policies, ticks a large box in investment decisions.
This is why we are witnessing a persistent run of announcements about new companies establishing in Ireland.
The news flow from the UK can only help.
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.
