While the final form that Brexit will take is still up in the air with just five months to go, the effects on the Irish economy when Britain leaves the EU will be very challenging. And it is likely that the UK economy will take an even harder hit.
However, Brexit and the resulting disruption to our lives could turn out to be the least of the problems unleashed by political and constitutional change in our neighbour.
Brexit was conceived as a priority by English politicians, and it was carried in a referendum by an English majority, which narrowly outweighed the majorities in Scotland and the North who favoured Remain. The referendum on Brexit has let the English nationalist genie out of the bottle.
The result of such a narrow victory in England is that, whatever the eventual outcome, there will be a large number of very cross people in the UK who are completely dissatisfied with the outcome: the referendum has unleashed a veritable English civil war of words.
The anger of disappointed “Remainers” will be periodically stoked as the consequences of Brexit become apparent. Should the “Remainers” eventually win through, the Brexiteers will be even more furious.
This continuing trench war will further undermine the union that is the United Kingdom: Scotland and the North will be absent from this debate. The result will pose great challenges for Ireland.
Crusade
The English proponents of Brexit forgot that the North was part of the UK when they set out on their crusade. It has been the unfortunate role of the Irish Government to have to remind the UK continuously that it is a union that includes Northern Ireland. Telling the UK government that it has a duty to protect the interests not just of its English citizens but also of those in the North rubs salt in the wounds.
The role of Northern Ireland in the Brexit process – in particular, the conditional DUP support for the current Conservative government – will not be forgotten. In wielding its balance of power so aggressively the DUP may have won a skirmish but is likely to lose out in the long term. A future Conservative government will feel no gratitude for the humiliation of having to bend occasionally to the DUP’s will, while a Labour government, which would likely have many “Remainers”, would be even less well disposed to the North.
While Ireland and the “Border” could eventually be held responsible in England for aspects of the Brexit calamity, the direct economic consequences of a souring in Anglo-Irish relations will be limited and eventually forgotten. Not so the economic consequences for the North.
The Northern Ireland economy is completely dependent on the transfers it receives from London. These amount to around 25 per cent of regional GDP. It is treated much more generously than the northeast of England.
Transfers to the North
This anomaly will be particularly striking for a future English government struggling with the costs of Brexit. Under these circumstances there is a very real danger that transfers to the North will be cut radically by a future parliament, with some of the saving redirected to the equally poor northeast of England. The consequences of this would be a severe drop in incomes in the North.
Fintan O’Toole in his column in this paper last weekend highlighted the possibility that the North could find itself orphaned by the UK. As well as resulting in a massive rise in unemployment north of the Border, it would be hugely destabilising to Northern Irish society.
A break-up of the union by a departing Scotland could carry grave risks for the North
For the Republic, an orphan Northern Ireland on its doorstep would be a nightmare.
The political logic of an independent Scotland is now much stronger than four years ago, although the economic costs for Scotland of such an outcome would be greatly magnified by Brexit.
If, however, the UK was reduced to England, Wales and Northern Ireland, the exceptional generosity of transfers to the North would stand out even more, thus increasing the likelihood that mainland politicians would choose to slash the subsidy or cast Northern Ireland adrift.
Grave risks
A break-up of the union by a departing Scotland could carry grave risks for the North, and further destabilise a fragile Northern Ireland entity. That would certainly not be in the Republic’s interests.
So while we escaped from the UK a century ago it is not in our interest to see any further break up of the union. In seeking a stable neighbour for our future the Irish Government finds itself the last real supporter of the union of England, Scotland, Wales and Northern Ireland.
