The ASTI dispute throws into sharp relief a number of elements of how we disorganize our state. Lets leave aside the mad Leninist concept of equal pay for equal work, and the Trotskyite raving of equal pay for equal work. At heart the closure of schools will result from the abdication of the state over decades towards a key obligation – to educate.
The budget last week was a bland and pallid affair, designed to try to create an illusion of prosperity, a Potemkin village of a performance. Thrupence here, a fiver there, a half percent somewhere else, it was devoid of any ambition other then keeping the FG/FF coalition, for that is what it is, in power. Touted as a budget to “Brexit proof the economy” it is in fact anything but.
Brexit is rolling along. With every passing day several things becomes clearer and clearer. It is clear that the UK government has no coherent approach to how it is going to manage the transition. It is clear that they have no clear unified achievable vision of that to which they will transition. It is clear that the level of delusion- that a UK in the wilderness of tariffs and non tariff barriers that is the WTO will somehow be wealthier and more attractive to the world than the present – is not decreasing. And it is clear that a hard Brexit , where they are outside the customs union and the single market in the WTO wilderness, that is where it is heading.
The consequence of this is a UK that , even if it hangs together, is rapidly becoming poorer. With sterling plunging to lows not seen since the early years of Queen Victoria the cost of imported goods and services is soaring. Meanwhile businesses are edging towards the door and demand for non-UK EU passports are at record levels. All this and a Scotland which seems keener than ever to depart. Our largest individual trading partner is undergoing a slow shuddering grinding stop. Meanwhile it remains unclear what status Northern Ireland will have in a post Brexit environment.
The budget misses an opportunity to truly Brexit proof the economy. This is all the more startling when one realises that there was a truly excellent publication on budget day on exposure to Brexit, published by department of finance and written by economists from the Irish Government Economic and Evaluation Service. This is a body that has been producing some very solid, cool, professional evaluations and analysis for some time now.
The report takes a sector by sector view of the economy, each sector’s exposure to the EU and the UK being evaluated, and summarized. Curiously the report, although published by the Department of Finance on budget day as part of the supporting package has a disclaimer “The analysis and views set out in this paper are those of the authors only and do not necessarily reflect the views of the Department of Finance or the Minister for Finance”. This of course robs it of impact – the Minister, in ignoring its broad thrust, as has been fairly broadly done, can say “well, sure that’s just expert opinion”. We know what views the Brexiteers hold on experts – its sad to see such being obliquely slipped into the Irish discourse. If it’s a department of finance paper then why is it not issued with the imprimatur of the Minister? If it’s a IGEES paper why is it published by the Department of Finance?
The report is fairly depressing reading. The greatest exposure is located outside Dublin, for manufacturing. Those sectors – Pharmachem , Food & Beverage, Traditional Manufacturing , Materials Manufacturing and Electrical Equipment – account for over 75% of total manufacturing gross value added and for close to 100k jobs. Leaving Pharmachem aside The department summarize by noting
“the exposed sectors are mostly Irish owned, regionally based, have relatively low profit levels and have a greater share of small medium- sized enterprises. In addition they have a relatively high multiplier and account for a relatively high share of employment in regions which have experienced a slower labour market recovery since the financial crisis period” . Brexit in other words has the potential to knock the stuffing out of a large chunk of the non Dublin, non MNC, slowly recovering sector.
Services are no better, with the largest exposed sector, Tourism and Travel, employing over 100k persons, and with 40% of its custom from the UK. While traditionally this has not been very sensitive to exchange rate movements, uncertainty around the CTA will not help here. More exposed, proportionally, is transport, employing 70k persons. A very useful analysis is given in the paper on the import side, where we find that some of the most exposed manufacturing sectors, exposed from an export perspective, are also import exposed. Currency movements cut both ways of course and when they cause export prices to rise they generally result in falling import prices and vice versa.
Some fairly clear suggestions emerge from the sectorial analysis. The issue facing these sectors are common – the lack of development of large markets outside the UK. A marketing and sales support scheme, with a large emphasis on up skilling SME foreign language capacity, an increase in digital marketing capacity, support for sectorial initiatives towards sectorial sales and marketing in the EU and overseas, these would repay massive dividends. We need to break the habit of the UK being first port of call for SME’s seeking to export. We didn’t see anything like that in the budget. On the import side two elements suggest. First, we need to shift imports from the UK to the EU. The import part of the supply chain relies on the UK in large part due to cultural and linguistic inertia. Its easy to find the part in Lancashire. Its not as easy in Liguria. Second, how do we get our goods to market? A large part of our exports to the EU go via the UK, as do our imports indeed. A UK outside the EU will pose , at minimum, enhanced non tariff costs, with transit lading requirements shooting up. A beefing up of Rosslare and Cork ports, incentives for increased freight traffic via these, much improved access to same and incentives for new direct links to the continent would greatly reduce our reliance on what will soon be a third country. Again, we see nothing on this in the budget.
Overall the budget was cautious on the macroeconomic front, but fails deeply and badly on the microeconomic front. If this is the best plan for Brexit proofing the economy, gods help us.
Published in Irish examiner.
So, having run on a campaign of “taking back control (of our borders)” the latest cunning plan to deal with its only actual EU border is for Brixitian to ….cede control of its border to another EU state. Yep.
This is cracked. Humpty Dumpty , sorry James Brokenshire , the Secretary of State for Northern Ireland, has suggested that in order to avoid a hard border at the actual legal border between the EU and Brexitian the Common Travel Area external border would be “the” UK border. Several thoughts come to me on this