JOE GILL: Benefitsin the Brexit mess

The aerospace giant Airbus made its views on Brexit unequivocal over the past couple of weeks. 

It is very unusual for large corporations to openly engage in highly sensitive political processes so the Airbus intervention is an important marker that sends signals Ireland would do well to listen to.

What Airbus has highlighted is the seamless supply chain that lives at the core of all large global companies. Having an ability to move products and data without interruption is critically important to cost competitiveness and efficiency.

Within the huge European single market and customs union, it’s the smooth mechanism that facilitates manufacturing and administration centres in different countries.

What is remarkable so far is the political response within the Tory party to the Airbus intervention.

The supposed pro-business party didn’t sanction senior cabinet minister Boris Johnson for his obscenity toward business.

The head of the Tories in Wales resigned after issuing a harsh statement about Airbus. In Wales, Airbus makes wings for its planes and employs thousands of people. Put yourself in the shoes of a UK business leader.

The Conservative Party, which is generally considered friendly to business, is sacrificing that reputation for an extreme Brexit.

All of this is sundering a relationship between big business and the UK that has evolved over many decades. I suspect it will take a long time for the political class in Britain to win back trust from major international companies, especially if a hard Brexit takes place.

Big companies like Airbus want a stable environment in which they can deploy capital that delivers returns over decades. Aside from the initial shovels in the ground for factory construction there are multiple investment phases taken over as many as 30 years.

Certainty no longer exists in Britain.

As the Brexit clock ticks down Ireland has to engage in a sophisticated marketing programme.

This country is wedded to the single market and customs union, the UK is not. Ireland’s political parties are committed more or less to the European project, the UK’s are not.

Ireland has a long-standing 12.5% corporate tax rate, while the UK policy is vague.

Joe Gill is director of corporate broking in Goodbody Stockbrokers. His views are
his own.


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