Theresa May finds new friends in Brussels as mood darkens at home
Business Week: housing, foreign construction workers, and the banks also in the news
UK prime minister Theresa May: the real challenge will be getting a majority of MPs in the House of Commons to back her deal. Photograph: Adrian Dennis / AFP
UK prime minister Theresa May travels to Brussels this weekend where it is hoped the withdrawal deal agreed with EU negotiators will get political approval from European leaders, but – in truth – the real test lies ahead.
Despite some posturing in Spain about the status of Gibraltar, and some resentful murmurings from other member states over concessions to the UK, the deal is expected to be rubberstamped by EU leaders eager to draw a line under this chapter of Brexit.
They are also expected to sign off a draft text on how the future relationship between the UK and the EU will look after Brexit. The 26-page declaration is the first step to sketching out how the two sides will relate in future, on trade, security and other areas.
For May, the real work will begin on her return from Brussels. Somehow, the prime minister must convince a majority of MPs in the House of Commons to back her deal or it will be dead in the water. It looks like an impossible task.
Her recently-departed Brexit secretary Dominic Raab said the deal was worse than remaining in the EU, with the UK bound by rules it will have no say in, before predicting that “inevitably” parliament would “vote this down”.
Then there’s the DUP in Northern Ireland. The party, still seething at the deal it perceives as a threat to its union with Britain, abstained in a budget vote against May’s government during the week to “send a message” to the prime minister.
“We had to do something to show our displeasure,” said the party’s Brexit spokesman Sammy Lee, who – with all the usual fire and brimstone – vowed to “defeat this deal”.
On the bright side for May, her residency at 10 Downing Street appears secure, at least for now. Moves to topple her last week faded as hardline Brexiteers in her party failed to muster the requisite support to force a vote of no confidence in her leadership.
Also, the EU is rowing in behind her as she seeks to face down the dissidents in her party. There was even a commitment to explore the use of technology to avoid a hard border in the North, something Dublin has previously dismissed as “unworkable”.
Meanwhile, Taoiseach Leo Varadkar said the Government and the EU may end up having to negotiate a Brexit “no-deal deal” with London if the agreement cannot be ratified. “It certainly could be a disastrous few weeks,” he said.
To make matters worse for the North, aerospace company Bombardier is to cut nearly 500 jobs from its operation there, with fears growing for the group’s remaining workforce there.
Calls for affordable housing as winter descends
The Economic and Social Research Institute (ESRI) this week warned the Republic would need an influx of foreign workers to meet housing targets, and cautioned that the shortage may, in the short term, add to rental pressures and housing demand.
The number of new homes built this year is expected to be about 19,000, but demand is put at closer to 30,000. Collen Construction managing director Tommy Drumm said he goes overseas to recruit, but that the boom-bust nature of the sector was proving a turn off.
Indeed, the OECD warned of just that possibility if the current pick-up in housing triggers a “surge in credit growth”. It said rising property prices were becoming a concern for competitiveness “and for housing affordability for low-income households”.
That might explain why Central Bank of Ireland executives are resisting calls for a change in mortgage rules to make it easier for banks to manage the extent to which they offer borrowers exemptions from lending limits.
Nonetheless, affordable housing was identified as the “key ask” by the president of the American Chamber of Commerce in Ireland, Barry O’Sullivan. He told the organisation’s annual Thanksgiving lunch that it “has to be a priority”.
ISME, the lobby group for small and medium-sized businesses, also got in on the act, describing the cost of housing as “a material threat” to the Republic’s social prosperity, and warning that this was feeding through into increased wage pressures.
One development that won’t be affordable to most people is Kennedy Wilson’s new Capital Dock scheme in Dublin’s south docklands. It is likely to set a new benchmark for apartment rents in the city, with two-bedroom units advertised at €3,300 a month.
Meanwhile, Irish listed housebuilder Cairn Homes is seeking permission to build 107 apartments at its high-end scheme at Marianella in Rathgar, Dublin 6, on a site where it previously had permission for 22 houses.
Ulster Bank on the move
It was Ulster Bank’s turn to announce it is to up sticks and move to a new location, following on from AIB’s news last week that it will be leaving its headquarters in Ballsbridge.
Ulster Bank is preparing to quit its headquarters on George’s Quay in Dublin 2 after more than two decades. Staff in the complex will be split between its old College Green base and Leopardstown, almost 10km south of the city centre.
It is a time of some flux for many of the banks, with the Central Bank set to pile pressure on them to get to grips with mounting cybersecurity, Brexit and other risks related to their outsourcing arrangements.
“Supervisors have observed a lack of awareness of the scale of outsourcing arrangements and the consequent level of third-party dependencies within many regulated firms, particularly at board level,” it said.
Staying with the Central Bank, it suggested that a rebound in the profitability of Irish banks in the past five years could ultimately attract new entrants to the market. It’s just weeks since ECB president Mario Draghi highlighted the “quasi-monopoly” of the State’s banking sector.