Irish businesses look for UK election silver lining

Irish exporters and businesses with operations in the UK have signalled that there is a silver lining to Friday's shock election result. Speaking to The Irish Times, businesses have said that while short-term prospects aren't exactly positive, longer term hopes of a soft Brexit could now be realised.

"There's no way the UK can go forward with a hard stance towards Brexit," said Simon McKeever, chief executive of the Irish Exporters Association. "The immediate thing for Irish business is that sterling is weaker and that's not great." he said. However, he believes there is no majority in the UK supporting a hard Brexit and "in the longer term, that may well prove to be better for Ireland".

CityJet founder Pat Byrne also believes a hard Brexit is now in doubt. He said that while the election was a disaster from a Conservative point of view, it "calls into question the mandate for Brexit".

While he said he was waiting for a campaign to start for another Brexit referendum, he did concede that spending power in the UK could go down as a result of the election result.

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John McGrane, director general of the British Irish Chamber of Commerce, is considerably more negative, describing the election outcome as “an unmitigated mess”.

“The UK shot us in the foot last year and they’re finally shooting themselves in their own foot,” he said. Asked whether the result could lead to a softer Brexit, he said: “I think that’s wishful thinking. Nobody in the UK is talking about having another referendum, they’re talking about shades of Brexit.”

Mr McGrane believes the UK economy is entering very dangerous waters and referred to the election results as “yet another milestone in the catalogue of disastrous political activity that has led to uncertainty for British Irish trade”.

Despite some gloomy evaluations, in Lacpatrick dairies, a co-op with operations in both the North and the Republic, the mood was positive, particularly about the likely DUP involvement in Theresa May’s new government.

Farmer support

“They would have a lot of support from farmers,” he said. However, he too conceded that the vote brings considerable uncertainty.

Kerry Group, the Iseq-listed food giant, has substantial manufacturing facilities in Britain, although these primarily supply the domestic market, according to Frank Hayes, the company's director of corporate affairs.

Although Mr Hayes doesn’t see the UK election outcome as negative, he doesn’t present it as positive either.

“I don’t think the position has changed greatly. We have no information to bring any further clarity,” he said.

In terms of Brexit, Mr Hayes said Kerry Group was well prepared: “The issues involved remain uncertain and the outcomes remain uncertain . . . we have plans in place for the likely different scenarios noting that there could well be a number of effects.”

Leslie Codd, who runs Carlow-based Codd mushrooms with his brother Raymond, believes the result will lead to a "reconsideration of the whole Brexit question".

Mr Codd’s company, which has more than half of Ireland’s mushroom sales, has recently acquired a UK business, and said Friday’s result made him “slightly happier”. However, he pointed out that with a weaker exchange rate, Irish mushroom growers who export into the UK market may now consider placing more focus on their home sales.

Meanwhile, one senior source in the hotel industry said the underlying health of the UK economy was a more important factor in terms of British visitor numbers to Ireland than blips in the value of sterling.

“If that starts to falter, then we’ll see a slowdown but so far the underlying performance of the UK economy is very strong overall,” the source said, adding that a lot of visitors from across the Irish Sea were either staying with family or day trippers on business.

Ultimately, the result is seen as heightening risk by Aon, a company that provides risk management solutions. Ciara Jackson, the multinational company’s agribusiness and food service leader in Ireland, said, “it’s still so uncertain so it’s difficult to know how worried business needs to be”. But, noting the likelihood of increased volatility, Ms Jackson said: “We should learn not to be surprised at this stage.”