It is time to stop the apocalyptic fearmongering over Brexit

EU importance to the Irish economy and the peace process in North is overstated

“Even with the UK outside the customs union, modern electronic customs clearing should make physical Border checks unnecessary.” Photograph: Alan Betson

“Even with the UK outside the customs union, modern electronic customs clearing should make physical Border checks unnecessary.” Photograph: Alan Betson

 

Irish opinion was slow to wake up to the possibility of a No vote in the UK referendum on EU membership and, in my experience, had a limited understanding of the political forces underlying British Euroscepticism. My own contacts with Irish business people prior to the referendum revealed complacency and a tendency to rely on bookies’ odds in favour of Yes. Perhaps not surprisingly, opinion has subsequently gone into a panic mode.

Apocalyptic views are still current. For instance, former taoiseach John Bruton recently said “Brexit will devastate trade flows, and human contact, within Ireland, with incalculable consequences”. Indeed, Bruton sees the consequences for peace on the island as so serious that they should arguably be the subject of a second referendum.

These deep fears stem from an anticipated need for the EU’s external tariff to be applied on trade with the UK, and for migration controls at either the Border with the Republic or when people leave Northern Ireland for Britain.

Conflict with UK

Brexit is widely seen as an historic break with Ireland’s past. A common view is that Ireland will have to develop much closer political and cultural links with its 26 fellow EU member states, which may lead to conflict with the UK. At all levels there is a feeling that Ireland may have to take the side of the EU in the upcoming negotiations.

This is not necessarily the view of the Irish Government, nor of senior officials who have been meeting British officials to plan a strategy for Ireland that will maintain free trade and free movement. Although pressures to behave like good Europeans may well intensify, the intention of the Irish Government, like the UK government, is to keep the land Border open. Neither see a serious danger to peace on the island.

Extreme negative predictions about the impact of Brexit stem from false beliefs about the importance of the EU in both economic progress in Ireland and political progress in Northern Ireland. Thoughtful commentators view the Irish economy as recovering in the late 1950s from its moribund state in which huge numbers of young left for a better life. Subsequent success is seen as based on a low profits tax and EU membership.

The importance of low profits tax is absolutely right, but there is much less statistical evidence that EU membership has improved the growth rate of Irish per capita national income. The annual growth rate was 3 per cent in the quarter century before joining the EU and has been 2.5 per cent in the 43 years since.

Beneficial impact

An accurate version of Ireland’s economic history is important. This is because, contrary to what we are continually told, EU membership does not seem to have had a noticeably beneficial impact on Ireland’s economic growth, even if this seemed to be the case during the great construction boom occasioned by overly low interest rates inside the euro zone.

Nor is it a sustainable argument that common EU membership was essential to the Good Friday agreement, as many began claiming during the referendum. The big external player in the peace process was the United States, even if the EU context did help nationalists in the North feel closer to the Republic.

The lesson is not that Ireland should back the EU against the UK. On the contrary, Ireland should ally with Germany and the Netherlands in arguing for continued free trade between the UK and the EU. This would greatly ease any pressures for Border controls in Ireland.

Just as there are only the lightest controls between Sweden, which is in the EU, and Norway, which is not, there will be limited need for visible controls at Dundalk or anywhere else. Even with the UK outside the customs union, modern electronic customs clearing should make physical Border checks unnecessary.

Point of control

Pessimists can, and do, argue the UK is likely to need border controls in Northern Ireland to prevent illegal immigration. If large flows of illegal immigrants do occur, the problem can be managed mainly though the UK’s systems of national insurance numbers for workers. Even if this system was circumvented, the obvious point of control is not at Northern Ireland’s porous southern Border, but at the limited number of exit points to Britain.

The DUP opposes such controls as a weakening of the ties between Northern Ireland and Britain, but border controls, if needed, will not represent any such weakening. Instead, they will be a practical solution to a specific problem, just as removing shoes and belts to board aircraft is a practical response to security threats for all modern air travellers.

Graham Gudgin is senior research associate at the Centre for Business Research, Judge Business School, University of Cambridge. He was formerly special adviser to first minister David Trimble from 1998-2002.

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