A Brexit result that Johnson did not foresee: bringing the Irish closer together | International exchange


IIt was supposed to be an agreement that no British Prime Minister could ever agree to, an Irish maritime border between Britain and Northern Ireland. Six months after Boris Johnson did just that, while denying the fact, the economic consequences become clearer.

Figures released by the Irish government last week indicate that a heavy toll on British trade may come on top of the political turmoil sparked by Johnson’s adherence to the Northern Ireland Protocol. Data shows evidence is starting to emerge of a deeper economic unity on the island of Ireland, at a time when shipments between Britain and Northern Ireland have been disrupted by border controls in the Brexit which the Prime Minister has promised never to happen.

With Northern Ireland effectively remaining a member of the EU’s single market, the value of goods sent to the republic soared to € 1.8 billion (£ 1.5 billion) in the first six months of 2021, an increase of 77% compared to the same period in 2020. Irish goods exports to the region increased by 40% over the same period, reaching almost 1.6 billion euros.

Meanwhile, Britain was subject to the full range of EU border controls for the first time in four decades, and trade fell as a result. Exports to Ireland fell 32% in the first six months after Brexit, while sales of Irish products in the other direction rose 20%, a sign that the republic is not suffering as much as it is. feared him disruptions to his greatest trade. partner.

At this point, it is difficult to say for sure that leaving the EU and the Northern Ireland Protocol will have a lasting impact on trade flows around the British Isles. The coronavirus pandemic is having a substantial impact and it is difficult to isolate the Brexit effect, as companies gradually adapt to the new rules in a period of flux.

Official UK-wide trade figures show that after a cataclysmic fall in trade in January, exports and imports with EU countries are steadily approaching normal levels, as Brexit disruptions and Covid are easing.

However, the first evidence remains uncomfortable for the government. If continued, Northern Ireland’s deepening economic ties with the republic – and weaker ties with mainland Britain – will raise questions about the region’s relationship with the rest of the UK . This is a question Unionist politicians are sure to raise.

What is more, serious questions must be asked about the level of information in the British political debate. There are no official figures from the UK government – at least not in public form – for trade between Britain and Northern Ireland. For the region’s trade with the Republic, the most recent UK government data is for 2019.

Embarrassingly, the figures published by Dublin offer the best insight. Without official data to inform the debate, Britain must proceed in the dark.

While much of the damage from Brexit is self-inflicted, Ireland’s snapshot suggests that another imbalance is at play, as a result of Brussels’ actions.

UK exporters were hit hardest by Brexit as they faced border controls from January 1 on shipments to the EU, while Irish and EU exporters to Britain benefited from a phased approach to controls that the UK government has opted for for a 12-month transition period.

Brexit supporters will cling to this lack of reciprocity, with evidence of its impact revealing in Irish trade figures. Yet our exit from the EU was triggered from London and executed on terms agreed to by Johnson’s government in its haste to tell a weary electorate it would ‘get Brexit done’.

In October, the UK will introduce new controls on animal products imported from the EU, before 100% controls are introduced from January.

UK retailers fear additional costs for the system will make matters worse as the country emerges from the pandemic, exacerbating problems with global supply chains and shortages of truck drivers. Ministers must take more proactive steps to address these issues.

Should the UK bet on blue or green hydrogen?

There’s a new energy rivalry in town, and it looks oddly familiar. It’s been a decade since the energy industry was fractured by the seemingly binary choice between fossil gas and renewables. The government appeared to reignite this old feud last week with its long-awaited hydrogen strategy.

In the early 2010s, those calling on the government to support fracking to fuel a new energy self-reliance were fiercely opposed by those who believed that onshore wind turbines held the key to a cleaner and better future. Neither of them wanted the other in their respective gardens.

Today, the focus is on hydrogen, a clean-burning gas that will be crucial to replace fossil gas in heavy transport, factories and refineries. But how to produce it? Once again, there is a choice between fossil gas and renewables – “blue hydrogen” derived from the old or more sustainable “green hydrogen”.

Whitehall is keen to play down the rivalry and appeared to avoid making a choice one way or the other, much to the anger of climate activists who say blue hydrogen – extracted from fossil gas, with trapping capture technology most, but not all emissions – could lock the UK into a fossil fuel future longer than the climate can afford.

Blue hydrogen reduces fossil gas emissions by 85-95% but cannot completely eliminate them. Green hydrogen is made from water and renewable energy, leaving only oxygen. On the road to net zero the winner should be clear, but green hydrogen has so far failed to capture the hearts, minds or spreadsheets of Treasury officials.

The burgeoning green hydrogen industry of small, disparate companies has a mountain to climb as the big oil giants behind proposed blue hydrogen projects if it is to prove it can reach the scale required.

But the government should reflect on the outcome of the latest quarrel. Fracking never took off, but the wind industry has become a big industrial success story despite David Cameron’s crackdown on onshore wind subsidies. The renewable energy industry has always exceeded expectations, and green hydrogen could do the same.

As the bids rise, Morrisons has more to do

Every little bit. ”Well, that was the mantra when Sir Terry Leahy was running Tesco, anyway. These days it looks like he’d rather shop at Morrisons because he’s facing an offer of 7. billion pounds from US private equity firm Clayton, Dubilier & Rice for the Bradford-based supermarket chain.

Last week CD&R announced rival contender Fortress putting an additional £ 300million on the table. At 285p per share, it offers an eye-catching 60% premium over the grocer’s share price before the auction begins.

At this kind of level, we could perhaps forgive shareholders for having their heads turned. Indeed, in a recent note, Shore Capital analyst Clive Black said that while the City was not awakening to the real value of stocks in unloved British supermarkets, it was not fanciful to suggest that ‘there would be none left on the stock market. . Quite a claim, given that Tesco and Sainsbury’s are still around.

If CD&R takes control and, as some commentators suggest, installs Leahy as chairman, it will reunite with former Tesco colleague David Potts, who has led Morrisons for six years. This is when the task of delivering the goods to a new set of shareholder CEOs will begin, with Potts expected – on a pay-as-you-go basis – to start delivering a much better financial performance.

CD&R has closed the door on some of the usual get-rich-quick schemes deployed by private equity when buying a company. Its long list of commitments includes the pledge not to engage in “hardware store sale-leaseback transactions.” However, city watchers know that promises made in auction battles may be empty.

The higher the price goes – Fortress is now “looking at its options” and wants shareholders to stay tight – the more leverage is likely to be involved in the final deal. But at the end of it all, Morrisons will still be the UK’s fourth largest supermarket, with a mountain to climb.

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