The Irish food industry on both sides of the border in Ireland will be devastated if Brexit requires common external tariffs between Ireland and the UK, former taoiseachsJohn Bruton and Bertie Ahern have warned.
They said they expected the UK’s departure from the customs union would entail massive bureaucracy, higher costs and the re-imposition of customs controls on the border.
The two former Irish prime ministers, who were giving evidence to a House of Lords select committee inquiry into the impact of Brexit on Anglo-Irish relations, said they did not believe EU laws on the single market gave EU negotiators a great deal of latitude on tariffs.
Ahern, the prime minister from 1997 to 2008, said he did not know of a single person in Ireland who welcomed Brexit and highlighted how the imposition of an external trade tariff could cripple the food industry and undermine a 40-year trend towards greater economic integration between the UK and Ireland. “The complexity of this is a nightmare and we might as well as accept that fact,” he said.
Bruton, who was prime minister from 1994 to 1997, said new customs arrangements were likely to be “a smuggler’s charter” as people tried to take advantage of lower or higher tariffs on either side of the border. He warned: “Uncertainty is the enemy of commerce and legal uncertainty is even more the enemy of commerce.”
The relationship between the British and Irish food processing industries was critical since it was so interconnected, Bruton said, pointing out that 30% of the milk produced in the north was processed south of the border while 40% of the chicken produced in the south was processed north of the border.
He said: “The supply chain of the food industry is exceptionally interconnected and, if we get into a situation where the common external tariff has to be imposed, that will require us to introduce customs controls of some kind to collect that tariff and, on the UK side of the border, people would have to certify the origins of the produce.”
Ahern pointed out that the Tesco supermarket chain took 60% of its cheese and 84% of its chicken from Ireland. The two-way trade of milk is worth £1.5bn per year.
He said: “The inter-relationships are enormous. Tariffs could cripple a huge amount of the food industry; the bureaucracy would be enormous – the amount of people involved, the add-on costs of running that kind of system. My concern is people would start going elsewhere for markets and it would really work totally against the entire industry and that would be a huge loss.
“Groups like the Kerry Group are 40 years in existence and they have built enormous connections between Ireland and the UK generally. To set up a whole bureaucratic system with high tariffs would cripple the industry and that would be devastating.”
Bruton added that “a lot of busy lawyers” were going to make money when different standards on the production of goods and services started to apply on either side of the border. Other areas of difficulty he highlighted included Ireland’s integrated electricity market, fisheries policy, the EU open skies programme, cross-border university research and the disruption posed to EU institutions based in the UK.
Ahern rejected the idea that the Irish border could act as the border for the whole of the UK to prevent EU citizens making their way into the UK over the Northern Ireland border. The two men suggested landlords and employers might have to undertake checks at the behest of the UK government to ensure EU citizens had not entered the UK illegally through Ireland.
Ahern said it would be a huge concern for the Irish peace process if a border was established with customs posts. “It would have been easier if more thought had been given to this before the referendum had been initiated and during the referendum campaign itself,” he said.
Bruton warned that the UK debate on its Brexit negotiations might appeal to the people of Peterborough and Sunderland, but urged UK ministers to focus on what might be good for the whole of the UK.
The committee also heard from Lord Green of Hurstpierpoint, the Conservative former trade minister, who expressed fears that the economic and political ramifications of Brexit could be more serious for Ireland than for Scotland, adding that he did not believe there was any serious understanding of the scale of the problem in either France or Germany.
In a sign of the potential tensions between Ireland and the UK, the Irish government announced it would bid to host the European Banking Authority which, it said, would have to leave its London location after Brexit.
