Will Sabre Rattling towards Ireland Work?

Things are not going well with the Brexit negotiations – and the Irish Border in particular is looking intractable. Are the Irish being unreasonable and will the sabre rattling of the ultra-Brexiteers towards Ireland go mainstream and prove effective?

From Tudor times right through until the 1970s the relationship between England and Ireland has often not been good. Things improved when both countries joined the EU in 1973 and even more so after the Good Friday Agreement in 1998. The EU provided a platform where both sides could deal with each other on a day to day basis and build up friendship and trust. Since Brexit however, there has been the near intractable issue of the Irish Border.

There is, on both the Irish and UK side, a supposed cast iron agreement that no hard border will return to the island of Ireland. The Irish are determined to achieve this. However, the UK finds itself in a trilemma with mutually contradictory red lines. There is a belief in Ireland, I think with considerable justification, that the Tories – and the zealous Brexit faction in particular – view Ireland as a low priority and would jettison it as collateral damage if it gets in their way of an ideologically pure Brexit. Consequently, the relationship between Ireland and England is rapidly deteriorating. Historically England has been in such a strong position economically that it could effectively bulldozer Ireland, but over the border issue Ireland now has such steadfast backing from the EU that the power dynamics are very different. The UK’s attempt to peel off Ireland by using the Serengeti strategy has not worked. The Irish position has been absolutely coherent and consistent.

As of the 8 Dec agreement  there are three options on the table:

  1. A comprehensive free trade agreement (FTA) for the entire UK equivalent to staying in both the Customs Union (CU) and Single Market (SM).
  2. A technological solution.
  3. Northern Ireland staying in the aspects of the CU and SM needed for the maintenance of an open border  with border checks on the Irish Sea to allow Britain to go its own way. (Also called the backstop and para 49 of the 8th Dec political text).

There is no doubt in my mind that option 1 is the best solution. However, this may be difficult to deliver politically. May has repeatedly ruled out staying in the CU and SM and wants a bespoke cakeist  deal. Other analysts however, particularly those with a London centric view, believe option 1 is still the most likely and May is playing a very clever game to isolate the extreme Brexit fanatics.

Option 2 has been repeatedly ridiculed by both Ireland and the EU. Steve Bullock of CakeWatch describes this as “unicorns in leprechaun uniforms flying on drones” and within the past week has been subject to systematic and forensic annihilation by the EU, as indeed has the UK option 1 proposals such as the  three  baskets  and  max-fac solutions.

Option 3 is the backstop solution, which, from get go, has always seemed to me the most likely outcome, and ironically that favored by the people of NI themselves, many who see it as a Hong Kong style solution which will reverse the relative economic decline as compared to the Republic. (In December both Nicola Sturgeon and Sadiq Kahn, within hours of the option becoming public were asking for something similar for Scotland and London respectively). There is the worry that the legal text, an attempt to put p.49 of the political agreement into a legally binding format has still not been agreed by the UK. Indeed May, presumably to appease the DUP, has stated that no PM could possibly agree to this.

The DUP are paranoid about any lessening of ties to Britain and, despite the fact that they were only voted for by about 36% of the NI electorate, are in a major position of power at Westminster and have an effective veto. The DUP are determined to block any solution which makes NI more different from Britain. It is  certain however, that Catholics will outnumber Protestants in NI within the next few years, probably by the time of the 2021 census. This could easily turn into a majority for a United Ireland unless the lack-luster performance of the NI economy improves. Indeed, in the case of  a hard Brexit a majority may exist already as shown in Fig 1.

Fig. 1 Majority for a United Ireland in the case of a “Hard Brexit”

 

The demographic “time bomb” is starkly illustrated in Fig 2. Sinn Féin is the major Nationalist party and the DUP the major Unionist one. It is clear the under 45s are much more likely to vote for a UI than the over 45s. For NI to survive as a separate entity Nationalists need to feel welcome. They value a totally open border, an Irish Language act, equality of esteem, liberal social policies and a thriving economy that benefits everyone.

The DUP meanwhile are failing at almost every level except one: they have blackmailed May’s government into providing £1bn extra for the NI economy and ensured, for example, that free school meals are not abolished in NI.  Sinn Féin is happy to play the long game and believe in Napoleon’s adage, Never interrupt your enemy when he is making a mistake. The DUP are good at tactics but appalling at strategy. It must be remembered also that the DUP believe that the EU is a Papist plot designed to destroy protestant Britain (and this is more sensible than many of their other 17th century beliefs)!

Fig. 2 Voting Intentions

 

For months there have been ridiculous statements about Ireland from both the Brexiteers and the right wing press. Some of my favorites are the Shut your Gob Leo headline in the Sun, Kate Hoey’s Trump like Mexican wall solution to the Irish border and Ian Duncan Smith’s fantastical suggestion that SF was influencing the Irish government position on the border. Such statements are totally counter productive and Naimi O’Leary of The Irish Passport podcast  reports a  moderate NI Unionist tweeting like the SF press office in response.

There is a worry, however, that the rhetoric is hardening as time goes on. There seems increasing desperation on the part of the Brexiteers that their solutions for options 1 and 2 are being systematically shredded by the EU and the hope of kicking the border can down the road indefinitely is being blocked. There is an increasing realisation that the road to Brexit passes through Dublin as well as Brussels. There is also some insight that the EU’s position on the border has been shaped to a very large extent by Ireland.  There also seems to be some surprise that Ireland isn’t doing what it is told (as the Irish Passport notes, knowledge of Ireland is remarkably poor in the UK, with many not realising it is a sovereign country in its own right). Ireland is not expecting gun boats up the Liffey as in 1916 but the use of trade and economics as leverage is possible. The Irish living in the UK also enjoy special status in that they are treated as non foreign and at present their status will not change after Brexit. The threat of treating the Irish as other EU citizens has not been seriously deployed yet but does provide some leverage in that there are c 300k Irish citizens in Britain.

Some threats are not taken seriously, however. The 18th  century head of the ultra-Brexit ERG – Jacob Rees Mogg (JRM) threat that: “If Britain trades on WTO terms, we could potentially slap tariffs of up to 70 per cent on Irish beef; that could bankrupt Ireland, who export £800million of beef to us every year” is comical. The £800million figure is probably the only credible thing in the sentence. As Ian Dunt states:

What Rees-Mogg forgot to mention was that this would have very severe consequences for the UK. Under the WTO’s Most Favoured Nation rules, countries are not allowed to discriminate on their tariffs. If you charge one country 70% on beef, then you must charge all countries 70% tariff on beef. So while Britain could impose such a poisonous tariff on its closest neighbour, it would be forced to live with that tariff on all beef imports.

This hardly chimes with JRM’s repeated claims of cheaper food and goods after Brexit.

What I think is deliciously ironic, and again shows a near complete ignorance of Ireland,  is that the Irish economy has moved on from the 18th century when the Irish economy was indeed dependent on food exports to Britain. The current situation is very different. As Fig.3 shows, in 2016, for example,  Bovine meat only accounted for 1% of Irish goods exports. About half of this (49%)  goes to the UK. Goods and services exports are of similar size for Ireland, therefore Irish beef exports to the UK are about 0.25% of all exports. This will naturally have a major impact on  cattle farming but to state it could bankrupt Ireland is simply silly and makes Rees Mogg look totally clueless.

Fig 3. Irish exports 2016 from the MIT OEC database

 

Ireland is also one of the very few countries with which the UK has a trade surplus in goods. Ireland exports c 12.5% of its goods to the UK but about 24% of its goods imports come from the UK. Ireland, after Switzerland and the UAE, is the country with which the UK had the largest surplus in 2017. The surplus with Switzerland is artificial, however, as much is in gold bullion (which largely transits the UK with very little added value) all Nissan cars exported from Sunderland to Europe are sold to Switzerland for Tax purposes. Exports to the UAE include substantial arms sales. In reality, therefore, Ireland may well the most valuable country with which the UK has a genuine trade surplus – which means that starting a trade war with Ireland is simply not a sensible option – except to a Brexit ideologue.

Considerably more worrying are comments from David Davis at a recent Commons Committee (when being questioned by Tony Connelly) which seemed to be a veiled threat.

It is not a very productive strategy. The Irish do not respond well to threats and any suggestion that Ireland should modify its position to suit the UK Brexit faction will be counter productive. Even if the Irish government were amenable it would be electoral suicide. The Irish are making considerable efforts to insulate themselves from a hard Brexit.  For example, in contrast to Dover, there is considerable work going on at Dublin Port, the most recent addition (after considerable  infrastructure upgrades) being the launching of the  Brexit Busting Super Ferry. If all the parking lanes on the 235m long vessel were laid end to end, they would stretch to almost 8 km, making it the world’s largest short sea ro-ro ferry.

As I mentioned above, one strategy the UK has not tried yet is to strip the Irish of their non-foreign status and treat them as other citizens of the EU. There are about 300k Irish born nationals in the UK and consequently they form one of the largest EU groups, although well behind the Poles at c. 1M, but probably similar in terms of numbers as the French. Reasons2Remain have recently produced an interesting graphic which shows the contributions to the British economy for various EU Nationalities. Unsurprisingly this shows that EU citizens of all nationalities are of immense benefit to the UK economy with £14.7bn paid in tax and £2.6bn claimed in terms of tax credits. Irish nationals contribute £1.9bn and only draw down £97m. The Irish on these statistics are 2nd only to the French in terms of net contribution to the UK economy.

Fig. 4 NI and tax contributions with tax credits and child benefits for EU/EAA citizens.

 

Indeed, in terms of economic performance the already lack-luster predictions of UK growth of c 1.5% pa seem optimistic, with the UK narrowly missing recession with a growth rate of only 0.1% in Q1 of 2018 and GDP actually falling in per capita terms. The last thing the UK economy needs is to make productive people less welcome. The Q1 figures for the Irish economy are not published yet but Brexit uncertainty, far from depressing the Irish economy, seems to have turbo-charged it. The headline growth rate for 2017 of 7.8% may be distorted by the oversized multinational footprint but the domestic growth is estimated to be 5% pa with similar predictions for 2018. Indeed, overheating is more a worry than recession. This is a mixed blessing, as in total contrast to 2008 the construction sector – particularly in housing – needs expansion and there may simply not be the capacity to do so.

Pretty much all parties in the Republic of Ireland support a United Ireland by constitutional means. As I’ve already noted, demography is such in NI that there will be a Nationalist majority within five years and an ever increasing majority after that. As part of the GFA a border poll can be called if there is the prospect of a majority for a United Ireland. A simple majority is all that is needed for NI to merge with the Republic. Hence I think a United Ireland is inevitable unless there is a miraculous reversal in economic fortunes between Ireland and NI. It is just a matter of time – probably between 5 and 15 years. The Republic is far richer, growing much faster, and creating 50 jobs for every one in NI. A hard Brexit will likely accelerate a United Ireland. Indeed, I know some NI people who voted pro Brexit precisely because they believed it would be very bad for the UK and hasten an United Ireland. It is by no means obvious that a hard Brexit would in the round be bad for Ireland. If the UK leaves the CU and SM then substantial FDI which might have gone in Britain’s direction may come to Ireland, more than offsetting the trade loss to the UK. Ireland is already extremely successful in attracting high value FDI. It is not what most Irish people would wish but the Irish will take any unexpected upsides to Brexit.

In conclusion then, sabre rattling towards Ireland will not work and indeed has been and will be counter-productive. In the long term, if indeed the UK leaves the EU, Ireland should be a very important ally. Far more is achieved by cooperation than belligerence. And England – or at least those ‘little Englanders’ who are such ardent supporters of Brexit – need to wake up and realise that their country is no longer powerful enough to ride roughshod over its smaller neighbour. Indeed, economically that particular boot may very well soon be on the other foot.

Comments

  1. Sean Danaher -

    Been looking up some of Paisley’s comments; too good not to share. The DUP don’t use this language any more.
    Paisley saw the Common Market as the “final manifestation” of the evil Roman Empire, the kingdom of the anti-Christ.

    in 1975
    I have found in this Common Market struggle the intense hatred of pro-Marketeers for the true Protestantism of God’s Word. . . . If you stand up and say, for religious reasons, you are against the Common Market, then you are branded as a bigot. You are branded as a traitor. You are branded as an extremist. . . . And I want to tell you that we are moving into a time of religious persecution, when these nations of Europe are going to insist on one church; one church for Europe and that church will be the Roman Catholic Church.

    And in 2000

    Knowing the Bible should make us realise that it is pure folly to want to join (via ecumenism) this final apostasy of Babylon which is Biblically and historically wrong. Rome is unchanging, unrepentant and arrogant without change. People are striving for unity with this beast as though it was something required as a necessity in this life and for the next. Such folly when our gracious Lord brought us out of such bondage in the Sixteenth century. . . . What folly to return.

    1. Ivan Horrocks -

      Priceless, Sean. The fact that he was still taking this view in 2000 is almost gobsmacking. No doubt his son and heir continues to spout such nonsence.

    2. Peter May -

      Would that be the same gracious Lord that the Roman Catholics believe in I wonder?

  2. Samuel Johnson -

    An excellent analysis. The latest figures for exports to and imports from the UK are 11% and 23.5% (from memory, change in former most notable). Physical exports to UK are mostly food-related, so, unless the UK is intent on a national hunger strike demand is inelastic. It’s unable to feed itself, with 27% of its food coming from the EU. Ireland’s imports from the UK can be substituted in most cases with goods from the rest of the EU.

    Much of existing trade depends upon convenience (common language, strong transport links, some banks operating in both Ireland and UK) as well as harmonised regulation. Ireland’s prosperity relative to large parts of the UK has made it attractive to many businesses and a source ready profit (Tesco is said to have called it Treasure Island, and must have raked in additional margins after the fall of sterling). The Irish market is one frequently targeted for higher markups because the Irish can afford it. This has drawn company after company, to the point that some Irish high streets look half British, with UK chain stores like Boots increasingly apparent.

    Thus, Ireland has continued as a source of easy money. Once it was rent the Irish peasantry paid for their own stolen land to English Lords. Now it’s profits to shareholders in multinationals. But in between the Irish acquired some agency they will not be relinquishing to their former masters. We don’t need them and never did. The Brexiters jibe we have surrendered one master for another, which is untrue and reveals their ignorance about how the EU works in general and of Ireland’s ability to leverage influence on both sides of the Atlantic.

    It may have escaped the attention of many in the UK but the first unionist from NI has just been elected to a seat in the Irish Senate. That’s historic and welcome, and hopefully a sign of further change to come. While the belligerent noises get attention real change comes along quietly. And has so often been the case, those who won’t like it have done most to bring it about.

    1. Sean Danaher -

      Samuel

      the 11% of total exports to the UK does not surprise me, looking at the figures I thought it was only a matter of time before it dropped below 10%.

      The cost of shopping in Ireland was exorbitantly high before 2008; I noticed it starkly every time I came home. Aldi and Lidl have helped but the likes of Tesco art still raking it in. The Irish GDP per capita is now over three times that of NI (though the usual warning must go with Irish GDP).

      The Unionist is Ian Marshall former head of the Ulster farmers Union and supported by both SF and the Taoiseach. To me this is a very welcome development.

  3. Peter May -

    What’s a Unionist from NI doing in the Irish senate? He or she is presumably elected in the republic? but wants union with Britain?

  4. Sean Danaher -

    Peter
    the Irish Senate is not constituency based but more panel based https://en.wikipedia.org/wiki/Seanad_%C3%89ireann. Samuel may know which of the various panels elected him. It is a bit like a democrat version of the House of Lords designed to bring in expertise in various areas.

    There is pretty much no one in the Republic who wants Union with Britain. As stated in the article however a United Ireland seems inevitable, probably sometime in the late 2020s or early 2030s. The Republic needs somehow to reassure and accommodate Unionists. Its going to very difficult for the more batty of the DUP members and Loyalists but very important for success. The last thing a UI needs is the return of violence. Know your enemy is essential to a successful outcome. Famous words from the 1916 proclamation:

    The Republic guarantees religious and civil liberty, equal rights and equal opportunities to all its citizens, and declares its resolve to pursue the happiness and prosperity of the whole nation and of all its parts, cherishing all the children of the nation equally, and oblivious of the differences carefully fostered by an alien Government, which have divided a minority from the majority in the past.

    The last bit refers to the standard colonial tactic of divide and conquer and is not really applicable today, but very relevant at the time. For many Loyalists however being British is their identity. Many of the unemployed working class ones have descended from making ships such as the Titanic to being unemployed and poorly educated. They are very similar to many of the rust-belt ex steel workers in the US and ex-mining communities in the North of England. The added tragedy is that they have been told from the cradle they are racially and religiously superior to the native Irish so it is even more bewildering why they have done so badly in the past few decades.

    Part of the demographic change is that premier NI University, QUB, is now very Catholic dominated. The Catholic schools tend to be very much better. Many middle class Unionists go to what they term the mainland to go to University, never to return.

    1. Peter May -

      Thanks, Sean. What an excellent electorate for the Irish senate. House of Lords (with which, I see it shares a common heritage) reformers please note – and patronage would be much reduced!

      1. Samuel Johnson -

        Marshall was a nominee of the Taoiseach (he may nominate two) and was elected to one of two vacant seats by members of the Dáil.

      2. Peter May -

        Many thanks for that. So nomination requires additional co-option? I presume he is an NI citizen (I know there is strictly no such thing – but just to get to grips with the intricacies..)

      3. Sean Danaher -

        All “NI citizens” are by right Irish and UK Citizens. To Dublin all NI Unionists are Irish by birthright. Indeed until recently it was the case that anyone born on the Ireland of Ireland was entitled to citizenship. There were scare-mongering stories of “birth” tourism which got very ugly and ended with a change in the constitution.

        Marshall was elected in the 4th count I think so PR (STV) seems to be in the DNA of the Irish system.

      4. Graham -

        And they have a united Ireland rugby union team which recently handed out a salutary lesson to an overconfident English team which was somewhat lacking in leadership, I believe. Not that there are any parallels.

  5. Sean Danaher -

    Graham
    I played rugby at school and my son is also very keen. What’s interesting in NI is that it is an almost exclusive Protestant/Unionist pursuit and the NI people were very subdued about the Grand slam. A St Patrick’s Day win in Twickenham was particularly sweet as was the comprehensive way the English were outplayed. In NI there was also a very high profile rape trial where two Ulster and Irish international players were accused, https://www.theguardian.com/uk-news/2018/apr/11/former-mp-naomi-long-tweet-almost-collapsed-ulster-rugby-trial.

    There is a lot of unpacking and analysis here. Even in my own case I feel no triumph when Ireland beats Scotland or Wales but definitely when we beat England.

    I’m sure it is true of every nation in that there are a mixture of types of people. For me one of the worse types are those who read and believe every word they read in the Daily M**l. To me this is an ugly form of Englishness and they seem to be in the ascendancy at present. Deeply depressing as I know so many wonderful English.

    To use a sporting analogy I think Ireland has its “A team” running things, with immense coherence of purpose across the government, parliament, civil service and diplomatic service. The UK (which looks sadly like greater England at present, I feel immense sympathy towards the Scots) in contrast to be charitable they seem to have a “D team” running things with an incoherent parliament and demoralised civil and diplomatic service. I can’t see it ending well for the UK, particularly England.

    In terms of Scotland I was pleased when the Scots decided not to leave the UK, for entirely selfish reasons as I thought England would become unbearable with a locked in permanent Tory majority. It was rather unfortunate timing for Scotland as the GFC of 2008 was still playing out which hit Ireland very hard. The argument that the UK banking crisis would have hit Scotland equally hard had not London been able bail the banks out seemed powerful. Alex Salmond certainly used to use Ireland as an exemplar, but very difficult to do so in 2014.

    1. Samuel Johnson -

      I was sorry when Scotland didn’t opt for independence and think they may yet do so after Brexit. Mainly because I lived there for 5 years in the 80s and got very weary of the blaming the English for everything. It gave me a different appreciation of the psychological benefits of Irish independence, and heaven knows the Scots have always been in a better position than Ireland was to make a go of it. It seemed to me that the better off Scots at the time (pre-SNP success) looked for protection from their too radical socialist compatriots. The Scots were cheated of a fair share of their oil which was blown on social welfare instead of being invested.

      Can’t disagree about the consequences for England if they left but a change to the voting system would resolve, surely. There’s always voting with one’s feet.

      For the Scots to be told that they could only stay in the EU by staying in the UK and then being dragged out by the English is a demonstration if ever they needed one of their inequality. They were also told they were too wee and too poor and couldn’t use the pound, which was, of course, nonsense. As you know well, Ireland pegged its currency to sterling for decades. And there was nothing to stop them doing so.

      Constitutional change must be coming for the UK!

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