Dishevelled Boris Johnson returns to face Commons rebellion

Business Week: also in the news was Budget 2020; ECB stimulus; and the Bernard Shaw

 

UK prime minister Boris Johnson arrived on the steps of Government buildings this week with the tail of his shirt hanging out, and with the look of a man in need of a comb, and maybe even some paracetamol.

It was his first face-to-face meeting with Taoiseach Leo Varadkar since taking office, and his host greeted him warmly at the door flanked by Irish, EU, and – unlike at the Élysée Palace in Paris last month – British flags.

Varadkar, donning a green tie, reminded his guest that the “stakes are high” and that the people of “this island ... need to know their livelihoods, their security and their sense of identity will not be put at risk as a consequence of a hard Brexit”.

Varadkar spoke in calm and measured tones as Johnson fidgeted, looked around, gesticulated with his arms, and at times held his head in his hands.

When his turn came to speak, Johnson assured those assembled that he wants to reach a deal with the EU, before raising more than a few eyebrows with the suggestion that the problems at the Border could be solved when you “strip away the politics”.

It was really no more than a flying visit, and Johnson was back in the House of Commons that evening to trigger the five-week suspension of parliament.

Opposition MPs staged a protest, and signs reading “silenced” were held by some Labour MPs. One, Lloyd Russell-Moyle, seemed to try to grab hold of speaker John Bercow at the point he was requested to lead MPs to the House of Lords.

Johnson was dealt a blow just two days later as Scotland’s highest court ruled he acted unlawfully in the suspension. While Downing St is to appeal that to the Supreme Court, Johnson faced accusations of having lied to Queen Elizabeth about his motives.

Then, with rumours swirling that Johnson could even decide to ignore legislation requiring him to seek a Brexit extension if he can’t agree a deal by October 19th, Bercow intervened.

He said the notion was “astonishing” and that not obeying the law “must surely be a non-starter ... We, parliamentarians, legislators, cannot in all conscience be conducting a debate as to whether adherence to the law is or isn’t required”. You would think.

Back home, Minister for Foreign Affairs Simon Coveney said checks near the Border in the event of a no-deal Brexit would not be permanent, but would be required while talks on the matter continue with the UK.

One solution, the return to the Northern Ireland-only backstop mooted by Johnson, was rejected by the DUP before Johnson himself seemed to row back on the idea, although nobody can be sure how serious he is either way.

The budget Minister for Finance Paschal Donohoe will deliver in a little over three weeks is likely to be his last before Fine Gael go to the polls.
The budget Minister for Finance Paschal Donohoe will deliver in a little over three weeks is likely to be his last before Fine Gael go to the polls.

Brexit to torpedo giveaway budget

The budget Minister for Finance Paschal Donohoe will deliver in a little over three weeks is likely to be his last before Fine Gael go to the polls for a general election, but the likelihood of a no-deal Brexit is likely to deny the Government the usual giveaways.

Donohoe had previously talked of preparing two budgets, but he this week dispensed with that and said it would be based on a no-deal scenario. That means there will be no personal tax cuts, and reduced social welfare increases.

Donohoe said the €2.8 billion spend could increase if he decides to borrow more, while the vast majority of no-deal supports is to be funded through borrowing. Indeed, the State’s budgetary watchdog warned Brexit could leave a major hole in the coffers.

The Irish Fiscal Advisory Council (IFAC) went as far as to say spending may have to be cut, or taxes may need to be raised, as a “large budget deficit” could emerge in the wake of a no-deal situation due to falling taxes and rising unemployment-related costs.

IFAC also strongly criticised the Government’s use of corporation tax revenue, which has been running well ahead of projections since 2015. It said the transient revenue had been used to address systemic shortfalls, and for unplanned spending.

Separately, Donohoe said he was taking seriously a warning former Central Bank governor Patrick Honohan that billions of euro pouring into the public purse from corporation tax could end abruptly like a “supernova explosion”.

A report from the International Monetary Fund this week suggested nearly two-thirds of Ireland’s inward investment is “phantom”, designed to minimise companies’ tax liabilities rather than finance productive activity.

Meanwhile, inflationary pressure in the economy remained weak with the latest official figures showing prices rose by an average of 0.7 per cent in the 12 months to August. This was marginally higher than the 0.5 per cent recorded in July.

The ECB approved fresh stimulus measures on Thursday to prop up the ailing euro zone economy, cutting rates deeper into negative territory and re-launching an extended bond purchase scheme.

The Bernard Shaw pub in Portobello is to close.
The Bernard Shaw pub in Portobello is to close.

The end is nigh for the Bernard Shaw

There was much soul-searching amongst Dublin’s hipsters this week as profitable Dublin pub the Bernard Shaw announced plans to close at the end of October, along with its neighbouring Eatyard.

The owner, Bodytonic, which runs several other bars, markets and festivals, said the matter was out of its hands. The precise reasons for the move are not known, although the bar has had difficulty with planning authorities in recent months.

Staying with commercial property, developer Johnny Ronan will make a third bid to increase the height of Salesforce’s new European headquarters at Spencer Dock next week with the submission of a new planning application to Dublin City Council.

Finallky, Kennedy Wilson is looking to increase its foothold in Dublin’s lucrative rental market yet again with an ambitious plan to build 232 luxury apartments on the site of the Leisureplex bowling alley in Stillorgan.

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