What Brexit could mean for Irish consumers

There is going to be a lot of talk about “Brexit” over the next 12 months or so, and the impact a British exit from the EU would have on Ireland.

Much of the talk will focus on big picture stuff. That’s hardly surprising, given just how big the picture is. Some €1 billion of goods and services are traded every week between here and there, making the UK Ireland’s largest export market.

There are 200,000 people employed here as a result of UK export activity, and nearly half of everything made by Irish firms ends up on the UK market, while virtually all of our energy – 89 per cent of our oil and 93 per cent of our gas – is imported from the UK.

The UK is the only country we share a border with, a fact that prompted Tánaiste Joan Burton to raise the “abhorrent” spectre of border controls being re-established between the Republic and Northern Ireland if Britain does leave the EU.

"Not that many years ago, there were customs posts and security checkpoints on the border between Newry and Dundalk," Burton told the annual congress of British trade union GMB.

“These days, motorists can pass freely from North to South. Workers can move easily between the two parts of the island. The all-island economy has benefited hugely from the Good Friday Agreement and the framework of our joint membership of the European Union.”

Of course, trade between the Republic and the UK will continue no matter what happens in the referendum, and the notion that passport controls would become a feature of the Border crossing between North and South if the UK voted to leave the EU seems highly unlikely and alarmist.

So, what difference would the exit by the UK actually make? Would Irish consumers even notice? “There would almost certainly be numerous specific impacts on consumers,” says Noelle O’Connell, the executive director of the staunchly pro-EU European Movement. She runs through a list of “unforeseen consequences that would grow out of the tangled legislative situation” that could result from a British exit.

Your phone bill

In 2005, making a four-minute mobile phone call to Ireland while on a Roman holiday would have cost you as much as €5, while someone in Malta was expected to shell out €9.76 for a call of the same length.

If you had the temerity to answer your phone while in Rome and speak to someone for a few minutes, it would have cost up to €4, while doing the same thing in Malta would have set you back €8.

Not any more. One of the best examples of consumer-friendly EU legislation are the caps on mobile phone charges that have been rolled out since 2007, which prevent consumers from accruing large bills.

But those caps we have grown accustomed to could disappear overnight, particularly if the big operators get the merest hint that they could take a few extra bob from us. “With the potential exit of the UK from Europe, Irish consumers living in Border counties, or travelling, even briefly, through Northern Ireland or the rest of the UK, will find themselves with no legislative come-back should a hugely inflated data-driven bill arrive on their doorstep from a UK phone provider,” O’Connell warns.

Consumer protection

Despite a shocking euro-to-sterling exchange rate, nearly half the cars parked in Northern Ireland’s shopping centres last year were registered in the Republic. Anyone who shops across the Border can do so secure in the knowledge that they enjoy all the same rights that they get at home.

“This army of Irish shoppers who arrive over the Border could find themselves in a no-man’s land, where the EU consumer legislation that has been relied on if a product is faulty or below-par is no longer recognised by the merchant,” says O’Connell.

“Relying on UK legislation, which may involve frustrating red tape such as a UK address for the purchaser, is not what Irish consumers will want to hear when food, drink or planned purchases aren’t up to scratch.”

Car insurance

A question mark will suddenly hang over car insurance. As it stands, all Irish motor insurance companies are subject to EU directives, particularly the Third EC Directive on Motor Insurance 1992, which says all motor insurance policies issued in an EU member state automatically covers the policyholder to the minimum third- party cover required of any other country in the EU.

This means when you cross a border, you are automatically covered, to the minimum legal third-party cover of that country, without any obligation to inform your insurance company. But if the UK was no longer governed by EU directives, where would that leave the Republic’s drivers?

The duration of cover allowed under the Third Directive, and the coverage that is offered, depends entirely on your insurer, “but a Brexit could cause substantial trouble for those who find themselves involved in a fender bender, or worse,” says O’Connell.

Traveller rights

European legislation guarantees the rights of travellers who find themselves stranded or otherwise hung out to dry. This is specifically the case when it comes to air travel. A huge number of Irish flyers use UK airports to connect to North America, Asia, Australia and beyond. In the case of a mishap, these Irish consumers would find themselves in a weakened situation if Britain were no longer in the EU.

Without the specific EU legislation directing airlines to look after the needs of their passengers, the possibility of shrugging staff and being told to look after yourself and “keep the receipts” is quite possible. In addition, the quick-flow “EU citizens” gates would disappear, potentially lumping Irish flyers in with the rest of the world and meaning stopovers in the UK would become a far more arduous affair.

Price disruption

According to O’Connell, any altered legislative situation “would take time to sort out” when it comes to importing and exporting goods. As it stands, Ireland still imports about 50 per cent of its agrifood imports from the UK.

“While there is the possibility of a new, free-trade arrangement between the UK and Ireland being created to ease the flow, the spectre of tariffs, so long considered dealt with between the two states, could materialise if sticking points appear,” she says.

This means Irish consumers would be looking at a far less certain pricing environment in supermarkets, as we import heavily from a state that has opted out of a common set of legislation.

The online shake-up

Since June 2014, EU legislation has ensured that if, as an Irish consumer, you buy a product online, you benefit from more favourable consumer protection rules. This legislation outlines the need to provide essential information before concluding the contract, no unjustified surcharges for payment by credit cards (or other means), delivery within an agreed time, the return of unwanted goods and so on.

If the UK leaves the EU, the application of these strict guidelines for the benefit of Irish online shoppers will be in doubt. This could have a chilling effect on online trade, as the old insecurities about shopping for a product online might resurface. The fact that the UK may no longer abide by the EU’s data protection laws regarding storing personal information would be another concern.

Financial slow-down

Many Irish banks give guarantees for the amount of time it will take them to transfer funds to and from UK accounts. These are often given in the context of EEA (European Economic Area) payment. Bank of Ireland, for example, guarantees a transfer to a UK account in sterling within three days.

The prospect of this being pushed out after a potential British exit is possible, as Bank of Ireland states that “transactions outside the EU/EEA may take longer to process”. This means Irish customers looking to get funds to family or friends abroad could experience delays as service providers, including popular payment services such as PayPal, struggle to deal with the new banking arrangements.

The English language 

Another possible outcome is that English would become less recognised. As it stands, English, French and German are the official languages of the European Union’s institutions. Post Brexit, Ireland would be the only remaining EU state that uses English as a national language. This could pose problems for consumers looking for assistance or help with services abroad in English. “While it’s hard to see English fading from the world stage, the knock-on effect of the UK’s exit could see a reduction in the availability of English down the line for Irish holiday-makers and travellers in Europe,” says O’Connell.