No silver tech bullet for new British leader to swerve Brexit

As the winner between the two Tory leadership candidates is announced, Brexit remains the key battleground for the next UK prime minister.

No silver tech bullet for new British leader to swerve Brexit

As the winner between the two Tory leadership candidates is announced, Brexit remains the key battleground for the next UK prime minister.

To the consternation of those of us on this side of the Irish Sea, Boris Johnson and Jeremy Hunt have repeatedly tried to “out-hard” each other.

Johnson’s tough do-or-die talk and his willingness to drag the UK out of the EU without a deal at the end of October has sent a chill down many Irish spines.

How much of this posturing is playing to the crowd, or rather, to the 160,000 or so Conservative Party members who will choose the winner, is hard to tell.

Optimists will dismiss the grandstanding as a temporary push to win over the Tory base, which will then melt into more grown-up diplomacy once the keys to Number 10 are secured.

However, the risk of the UK’s next leader being boxed into a no-deal Brexit on October 31 is rising.

From the Irish perspective, the UK’s political pantomime is both a distraction and a danger.

The dangers are two-fold. Firstly that Irish businesses, which have prepared carefully for a messy Brexit, take their eyes off the ball in the crucial final months.

Then there’s the political risk that a cornered prime minister Johnson might take an 11th-hour, nuclear option to deliver the Brexit he has promised the British people.

Ireland’s Brexit preparations have been thorough. It has also pushed back against the more unicorn thinking being espoused by the prospective prime ministers — that technology can provide a magical answer to preventing reimposing a trade border in Ireland.

While a digital solution allowing businesses and drivers to complete customs declarations online would be a huge help, it will be no silver bullet.

The sheer complexity of modern supply chains in which products can move back and forth several times even during assembly would make this a monumental undertaking.

The UK’s past experience with Vat carousel fraud has shown that systems designed to make cross-border business more efficient are easily abused by criminals. We have every reason to expect the same kind of problems to emerge with virtual customs technology.

My own company, which helps businesses and individuals, in Ireland and around the world, moves millions of euro across international borders every day, and knows well the risks that come with convenience.

We invest continually to make our controls as robust as our customer experience is efficient; any digital customs regime will need development to achieve both these goals.

None of us should drop our guards during the current hiatus in UK-EU negotiations.

As for the political risk, much of this stems from the fundamental difference in the way Brexit is viewed in the UK and Ireland.

For many UK voters and politicians, Brexit has morphed into an ideological battle for the soul of Britain, while in Ireland it is viewed as a threat to business and jobs that needs a pragmatic solution.

That pragmatism could be put to its sternest test during the final countdown to Halloween if the new man in Downing Street decides the best way to break the Westminster deadlock is to seek a concession from the EU on the backstop.

Ireland could come under pressure from EU leaders to give ground.

If it’s a choice between that and a chaotic no-deal — and the very hard border that the backstop is designed to prevent — the Government will need to reflect carefully on which course to take.

However, with the final shape of Brexit likely to be decided in the next three months, everything is still to play for.

Ireland’s priority is, and always has been, the prevention of a hard border rather than the backstop per se. It remains to be seen whether the UK government can conjure up a viable alternative to the backstop — a compromise deal that works for both the EU and UK while ensuring no hard border on the island of Ireland.

- Ruth McCarthy is CEO of Fexco Corporate Payments

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