Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

There is now no doubt as to how serious the circumstances are in which we find ourselves with respect to Brexit and the prospect of Brexit without a trade deal. The so-called bulletproof backstop - the guarantee that no matter what, there would be no hard border on the island of Ireland as a result of the UK's departure from the EU - was traded in by the previous Government for a withdrawal agreement the UK Government is now violating. We have heard media reports of the Secretary General of the Department of Foreign Affairs and Trade saying the avoidance of a hard border after Brexit is now not guaranteed, while Donald Trump's special envoy to Northern Ireland, Mick Mulvaney, has warned against the dangers of creating a hard border.

With respect to the UK's Internal Market Bill, which seeks to allow the UK to break the agreement it has made, the Northern Ireland Secretary, Brandon Lewis, confirmed in the House of Commons that the Bill will break international law. There has been significant reaction and fallout from this, not least from within the UK itself, where some of the strongest opposition to this has emerged. We should differentiate, when we are talking about the actions of the UK Government, between the UK Government and the British people. They are not the same and, in fact, some of the people who will pay the greatest price for Brexit are the British people.

We should also recognise there has been strong opposition from within the UK. Jonathan Jones, the Treasury Solicitor, resigned from his position in protest; Richard Keen, the Advocate General for Scotland, resigned in protest; Amal Clooney resigned her position as the UK's special envoy on media freedom in protest at the legislation; Theresa May, the former Prime Minister, said it would cause untold damage to Britain's standing in the world; Tony Blair and John Major, in a joint article, described the legislation as shameful; while outside of the UK, too, there has been strong opposition.

The US presidential candidate, Joe Biden, has spoken out against it strongly and Nancy Pelosi, the Speaker of the US House of Representatives, said there would be no chance of a US-UK trade deal going ahead if the UK altered its withdrawal agreement with the EU. There is a decent prospect that Joe Biden will be elected in the presidential election and his priorities for concluding trade deals are likely to be quite different from those of the incumbent. He may well value a trade deal with the EU over and above one with the UK. In addition, the Northern Ireland Assembly has passed a motion opposing the Internal Market Bill and the Scottish Government has threatened to fight the Bill's provisions in the courts. Maroš Šefčovič, the EU Commissioner in charge of the implementation of the agreement, has confirmed that the Commission is studying all legal options on the table in case the UK fails to back down on passing the Bill, and national governments throughout the EU have stated they increasingly believe that the UK Government does not want to reach a deal with the EU.

While the prospects of a zero-tariff, zero-quota free trade agreement, which is strongly in the interests of Ireland, the EU and the UK, are not looking as positive as we would all have hoped, it would still be a mistake to conclude, based on the previous erratic behaviour of the UK Administration, that a deal will definitely, or will definitely not, be done. We simply do not know at this point. There is, of course, every prospect that the latest negotiating tactics by the UK Government are part of a strategy to run down the clock to secure a bare-bones, zero-quota, zero-tariff agreement, with minimal commitments on the part of the UK. That is what it has always sought. What is happening at this stage is having a considerable impact on the UK. Research from the Centre for Competitive Advantage in the Global Economy shows that the areas that voted for Brexit in the largest numbers are the areas with the greatest poverty in the UK. The former industrial areas are already being hit hardest by Brexit, and worse, unfortunately, will follow. The City of London also has the potential to lose a significant amount if its access to the EU for its financial services market is hit. We also know that investment in the retail section of UK equity has hit an historic record low due to Covid-19 and Brexit. Some €15 billion worth of costs will apply to UK businesses due to the bureaucracy of the customs declarations that will have to be done, and that is before any tariffs are applied. There will be significant economic fallout for the UK and it is the British people, and in particular those in the midlands and the north of England, who will pay the heaviest price for this. In that regard, I welcome the comments from the Minister about the establishment of a consulate in northern England.

In respect of the arguments about state aid, it is worth remembering that the Tory Party has, historically and especially in recent decades, been dead against state aid or any government support or intervention. It is quite a recent argument, therefore, that it is making. In fact, the EU state aid rules, if they were adopted and adhered to by the UK, would be quite beneficial for the UK. They are really about channelling subsidies into productive areas such as research, decarbonisation and the training and upskilling of workers. It is very much, therefore, in the interests of the UK to agree to a set of principles that would mirror those of the EU. The EU state aid rules are also very much about preventing governments, local or national, from embarking on a race to the bottom by competing for investors through subsidies. They also impose transparency and reduce cronyism. They are absolutely in the UK's interests. In these negotiations, we must not lose sight, as the Minister noted, of the importance of a level playing field in other areas, including workers' rights and responding to climate change.

That is especially important in the context of continued reports we get from the UK of sweatshop labour conditions in some areas, with clothes manufacturers paying as little as £3.50 per hour due to the lax enforcement of employment laws and the minimum wage.

If one was to take a cynical view of the negotiating tactic being adopted by the UK Government, one might think that it is seeking the frictionless entry of goods from the UK to the European Single Market on a zero tariff and zero quota basis, without a level playing field on workers' rights and environmental protections and that the strategy of the UK Government to put the focus on the UK Internal Market Bill and state aid is a distraction from that. That said, at this point we must do everything in our power to prepare and step up preparations, as I know the Department is doing, for a no trade deal Brexit. It is good that there has been engagement from the Department with transporters and ferry companies but I strongly urge the Minister and the Department to take as much of a hands-on approach on that as possible and to really get into the detail of that. For the first few months, regardless of whether there is a deal or no deal, and especially if there is no deal, it is of crucial national importance to our economy, businesses and exporters, particularly in the context of Covid-19, that everything is done to ensure strong alternative direct routes are in place.

It is welcome that the research done by the Economic and Social Research Institute, ESRI, shows that the parts of the Irish economy that are most exposed to Covid-19 do not correspond directly to the parts of the economy that are most exposed to Brexit. Nonetheless, we are facing a double shock and hit on this. It is imperative that all the work that can be done on that is completed.

My party, the Social Democrats, supports the efforts of the Irish Government and the European Union negotiating team to secure a trade deal. That has to remain the objective. It is of key national strategic importance to us, the entire European Union and the people of the UK. With that said, we must be prepared for all possible outcomes in the coming weeks. The preparations for a no trade deal Brexit must be stepped up and I know work is ongoing on that, which I welcome and support.

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