 Welcome to the second event in the IIEA's Countdown to Brexit series. There will be a third next Tuesday, I'll tell you about that at the end. But can I first of all ask you to switch all your phones to silent? But please tweet if there's anything that strikes you about today using the handle at IIEA. This is really important. Everything is on the record today. Usually these events are off the record, chat-on-house rules, but everything is on the record. And that includes the questions you'll be asking. So let me now introduce the speakers. Next to me is Dachio Chialu. He's former ambassador of Ireland to the United Kingdom and also to the UN. And he's chair of the IIEA's UK group in the Institute. I also have to tell you that he was awarded a doctor, a delit from the Ulster University for his outstanding contribution to the peace process. Next to Dachio is Katie Hayward, who's reader in sociology at Queen's University Belfast. She has 20 years experience on the impact of the EU on the Irish border and the peace process. And yesterday Katie was giving evidence to the House of Lords EU Committee. Beside Katie is Edgar Morgan-Rott, Professor of Economics in the Business School at DCU, who's carried out extensive research on the implications of Brexit for Ireland. And he first flagged Brexit issues as far back as 2013 when he was with the ESRI. And finally we have Allie Rennison, who's head of EU and Trade Policy at the Institute of Directors in London, where she represents the voice of IOD members on EU policy matters to Westminster and Farthall and to the European institutions. But she also has responsibility for all IOD Brexit related matters in Northern Ireland. So we'll hear first from our speakers and there'll be an opportunity afterwards to ask questions. By the way my name is Martina Devlin. Over to you. Thank you Martina. I just want to really remind ourselves of a few basics about Northern Ireland in the current situation. And go back a little bit to John Hume. Hume argued for most of his life, not all of his life, that there were three elements essential for peace in Northern Ireland. One was the involvement of both communities in government in Northern Ireland. A second was a good relationship between a government in Northern Ireland and the government in Dublin. And the third was a good working relationship between the governments in London and in Dublin. And for those of you who are not quite as old as I am but older than some of the younger people here, you will remember that this process which led to peace in Northern Ireland took the two governments effectively about 25 years to bring about. It was a very, very long progress from the early 80s until the deal was done with the DUP in I think 2006. Brexit is one particular difficulty. Another difficulty is the absence of an executive in Northern Ireland and the absence of an assembly in Northern Ireland. It's sad to recall that Arlene Foster was the first minister in Northern Ireland to travel outside Northern Ireland without having the Deputy First Minister along with her. Before Arlene Foster, when Paisley went to America, when David Trimble went to America, they always took with them James Ballon and Martin McGinnis or whoever it might be. Arlene Foster broke that part. It's been complicated since by the fact that the only MPs taking their seats in Westminster are the DUP and one single independent unionist, Jack Herman's widow. The fact that since the last election in London or in the UK, the Tories are dependent on the DUP. Anybody who knows anything about Irish history will know that when a British government is dependent on any Irish party, be it the DUP, be it the official unionist as it was in the late 70s or indeed as it was the Irish party earlier in the 20th century, if a British government is dependent on Irish votes, it nearly always spells trouble. I think we are in trouble. I think the situation in the north is much more difficult than it's been for many years because of the absence of a government and because of the fact that the DUP are part of a coalition with the Conservative party. The relationship between the two communities and the relationship between the political parties in Northern Ireland really has not been as bad as it is now for a very, very long time. And there's an absence of trust and there is an absence of respect. The relationship between the government in Dublin and parties in Northern Ireland and particularly the DUP frankly is not very good and Brexit has cast a serious shadow about the relationships between the two governments in London and Dublin. The fact that the two governments over a period of 30 years or so built up such a good working relationship, a big factor in that was that we were both within the European Union and were not going to be within the European Union in the future. So I think what we need to focus on for the future is to try to ensure that there is a good working relationship and a good steady relationship between the governments in London and the governments in Dublin. Now I understand that moves are already in place trying to ensure that that relationship will be good after Brexit. I also understand that people in the DUP, particularly people like Arlene Foster, are beginning to look again at the possibility of a devolved Assembly and a devolved Executive in Northern Ireland. Because it is only with those two things and with a good relationship between a government in Northern Ireland and a government in the Republic that the future of this island can be assured. I'll leave it there and if you have any questions I'd be delighted to take them. Thank you. Oh thank you very much for that Davi. There's a bit of a shiver down the spine really, doesn't it? Can you cheer us up at all Katie? I doubt that very much. Thank you very much for the opportunity to be here. It's always a pleasure to come to the IEA. I'm going to try and keep to my five minutes by making four points and what I want to do is kind of give us some solid ground from which to think about the countdown to Brexit. Unfortunately that solid ground is a few points of truth or what I see as truth and people may wish to contradict me but they're illogical truths. They're not just uncomfortable but they seem illogical. The first illogical truth I want to highlight is the fact that Britain has not yet come to terms with leaving the European Union. That is both in the way that it's not to come to terms with the nature of the European Union itself so who it's dealing with on the other side and not in terms of the process even. So it's not at the stage of understanding that this is just the beginning of a very long process and that the future relationship is still to be negotiated and that the backstop for example is not the future relationship. I think that all the facts of that are still yet to come home. And also it's not yet come to terms with the implications of leaving the European Union. Martina mentioned yesterday in the House of Lords EU committee and some of the criticisms being made about the backstop in particular were essentially just spelling out what the implications are of leaving the European Union. So what it would mean to move goods from the UK into the EU after Brexit. I think the penny hasn't dropped on many of these points. The second illogical truth is that the prospect of an extension to article 50 is seen at the moment by many with huge responsibility at the senior level. Prospect of extension is seen as worse than that of a no deal. This is partly because it would give grist to both Remainers and Leavers thus further exacerbate the polarization that exists. And in many ways where we're at at the moment both Remainers and Hardline Brexiteers need to be sure of all hope if you like that they could get what they would like to see. And this is in order for the withdrawal agreements to be passed because of course withdrawal agreement is a necessary compromise. At the moment the 29th of March date is the only piece of concrete thing, the only concrete thing that we have at the moment. It's almost in new of a decision. The decision was made to leave on the 29th of March. That's essentially what she has to kind of be working from. And so to lose that at this stage would be a big loss for her before the trees are made. The third illogical truth is that the backstop despite the current situation in terms of what she is talking about, the backstop isn't the problem, compromise is the problem. And this is partly because if we look what happened when the withdrawal agreement was voted down, it came down through an unholy alliance of those who are very strong Brexiteers and those who are Remainers. I was in London at the time and I remember in Parliament Square those flying EU flags, those flying St George flags and Union flags. And they were all cheering the withdrawal agreement being voted down for their own different reasons. It's the compromise that is the real difficulty for getting withdrawal agreement passed in particular. And this is just a small point but the details of the backstop are never properly discussed. So the things that Theresa May would like to see or that constantly comes off as criticism in relation to the backstop are actually there already. The fact that the protocol can be amended up to four years after the transition period ends. The fact that already at the moment in the withdrawal agreement there is a binding obligation on both the UK and the EU to find alternative agreements. The review process is there and can be triggered unilaterally by the UK etc etc. The details of the backstop are not discussed. It's the point of principle about it being a compromise that's the problem. And then finally the fourth illogical truth is that even at the moment as May is placating the hardliners she will essentially come to rely on the centre ground. Most particularly she'll come to rely on Labour MPs in order to get the withdrawal agreement passed. The ERG, the European Research Group, the hardliners will not want responsibility nor will they want blame for the compromise that the withdrawal agreement is. They will be surprised if they vote down withdrawal agreement whatever form it takes. Labour now accepts a need for the backstop. We've heard that now at last from Jeremy Corbyn as well as Keir Starmer. Essentially with the prospect of a no deal it'll be those who want to be responsible who will come to the fore essentially trying to avoid a no deal. So responsible politicians will be the ones to grasp the nettle if you like and in many ways it will be ironically remainers who deliver Brexit for Theresa May. That's an interesting point isn't it, the irony of that? I was thinking all the time you could also call your four truths inconvenient truths couldn't you? We could have a competition for all the various adjectives before that word truth. Professor Edgar. Okay well there are a lot of inconvenient truths out there when it comes to Brexit. We've been very much occupied with the British response and will we get a vote in the House of Commons that will pass this withdrawal agreement or not. And it's of course important you know we may end up with a very messy withdrawal that will tarnish whatever future relationship there may be and so on. And of course at the moment Theresa May is supposedly looking for alternative arrangements to the backstop or changes to the backstop. Personally speaking and I would have said this going back to 2013 the issue is not an economic one the issue of the border on this island it's a political one. And as soon as you've changed the nature of the border that we currently have it becomes an issue for Republican hardliners. So once we become we have a real economic border we have a problem. So any technological solutions if they ever existed are not going to be going to get us over that particular issue. So I think we should actually stop thinking about that. And indeed we've spent far too much time thinking about what London is doing and not enough time about thinking about the sort of issues that we are facing. So we're continuously in the debate here it's all about will there be a deal will there not be a deal. At the end of the day it's very very very likely that the UK will leave the EU. And that means there will be a change relationship which Dahi mentioned earlier. There will also be a change relationship between us and the EU. And there will be a range of other implications. We will be no longer connected to the European electricity network for example. We have transport implications. We have implications on the island of Ireland in terms of transport. If there was a hard border with checks going from Donegal to Dublin via to border crossings is probably not optimal. We have to change priorities. And I think we need to start thinking a little bit more about those kind of changes that are going to come down the track anyway. The UK will have to sort out its own problem. The divisions that were talked about by Katie that are evident. And it's almost like a civil war currently without any actual fighting. But the positions are so hardened it's hard to see how we can get out of that. There's nothing that we can add to this. But we need to start thinking about what the implications are for Ireland. And I've already mentioned on the investment side. Do we need to build an interconnector to France for example at the cost of nearly a billion euros? Do we need to change or expand our port infrastructure? Will we need additional road infrastructure for example to Brussels? Will we need to build road infrastructure to Sligo and from Sligo up to Donegal rather than the way we're going currently through Northern Ireland? All very high cost implications. But we haven't really thought about that terribly hard. What about the political relationships within Europe? We will have definitely a change. The UK isn't there. We've often aligned with the UK not on everything but on many things. That's going to change. So I think that's something that we need to start thinking about with quite a lot of urgency. And those changes will come whether it's a crash out break search or a really soft break search. Those changes will come. Well that was pretty scary wasn't it? Especially that billion cost for the interconnector. Ali. Thank you very much for having me. I am definitely the outsider not just because of my accent. Although I would say that ever since the referendum Northern Ireland has been almost my second home. We have about 2,000 members all up and down Northern Ireland as well. I just briefly wanted to start off talking about state of planning and preparation. Northern Ireland but also GB generally speaking. Because I think it's important to understand why preparation isn't going as well as it could have been. And I think the main reason for that, the British Chamber of Commerce came out today with a list of 20 questions that I think encapsulate a lot of what we've been saying for the last couple of months. Is that there is a huge amount of information missing actually in a way more so on the UK government side even in the areas that they can control which make planning very difficult. Now there are some businesses, not just multinationals but there are some businesses that are just able to put the the sort of fiscal resource and the time into huge contingency measures and other businesses just simply don't have that kind of time and cost. One member said to me 50% of our time is taking up dealing with what I call known quantity issues on regulatory compliance and the other 50% is actually spent trying to keep our business afloat. So if you take for example a financial services company even a smaller one the profit margins tend to be a little bit bigger than necessarily some companies in manufacturing where you're dealing with single digit profit margins and not just shifting production but spending a lot on contingency measures that may not be necessary but could literally just wipe out the profit margin altogether and if you don't have a profit I know some people think profit is a dirty word but if you don't have a profit you don't have a business. So I think it may be preaching to the converted in this room but that's something that we are trying to get the message out is that without that kind of information, without knowing exactly what our tariffs are going to be on day one without knowing the exact detail of the changes to documentation requirements you may have heard a lot of discussion about around the Calais port chief a few weeks ago saying or he was reported as saying there will be no extra checks, well he didn't actually say that he said there will be no new checks apart from AgriFood which is obviously the most invasive type of check that you can have in terms of human intervention but I think the hauliers and the people who are in freight transport are very very clear about this point. I think the biggest scope for disruption particularly under a no deal scenario is from people not having the information ahead of time or sufficiently ahead of time to really change their trade management systems and therefore having the documentation completed incorrectly particularly that's an issue going outbound to the rest of the EU. In terms of the stats certainly from our membership and we never claim to be 100% representative of all businesses but basically only about 14% say they feel really really ready and the people we've kind of cross referenced because one in five of our members do think that no deal is fine they tend to be the businesses who have very few commercial links to the EU and it's interesting I think it's really important to make the point that links to the EU, commercial links to the EU were really not just about direct import and export and I don't even necessarily mean supply chains either 40% of our members employ EU nationals there's a concern about movement of labour there you have a lot of people who have or either the parent companies of a sort of EU subsidiary or vice versa we have lots of members who have customers who benefit from EU funding so there is a concern there there's lots of different ways in which you can have commercial links to the EU and basically what we found was 80% said that they had some form of commercial link 20% don't so we think so generally speaking that that 20% tend to be the people who were prepared for and sort of fine with that no deal outcome. That has been the one thing I think that's really united the business community not just in GB but in Northern Ireland in particular there are a range and a spectrum of views within the business community within sectors about Brexit itself about how to do Brexit but there was certainly in people talk about you know why hasn't the business community been speaking up I think it was easier to do around no deal than it was about the type of Brexit because there are so many different perspectives even within sectors as I mentioned about what kind of economic alignment you want to have we know that amongst our own membership basically there's a nearly three to one favour in preference of economic alignment against divergence but when you sort of peel back the layers and you ask the people who want that divergence what they either want to change or what they're concerned about for the future there are some businesses who have specific examples whether it's engagement around state aid constraints around enterprise funding for example people who've had bad experiences in specific sectors I just think it's important to highlight this because there are people who think that there are benefits from leaving the EU it's just a question about trade-offs that I don't think has necessarily happened in earnest at least in the public sphere around the UK and I think the question about what the UK's import tariffs should be under a no deal scenario really reflects and encapsulates that we've had no really formal consultation with businesses with business groups about what those tariffs should be and so suddenly we're sort of trying to have this rushed discussion about which sectors should deserve to be protected which sectors would benefit from that import reduction and even still that's really not happening in public it's happening behind closed doors and to me one of the biggest challenges or reasons where we are where we are is that the Prime Minister set out a speech the Lancaster House speech which talked about what the UK I think in my mind didn't want we didn't want the single market we didn't want customs union we didn't want the ECJ we didn't want free movement we didn't want to take EU laws we didn't want to pay money it then took another 18 months to actually set out what it is that we did want and I think in that time that vacuum has been built by a lot of noise around what the customs union single market are but you haven't had any really public discussion about those trade-offs from government and so I'm very hopeful if we get through this next stage Theresa May has talked about the fact that we will have this increased role for Parliament going into the next phase I hope that that actually comes to bear comes to fruition because there's a lot of businesses themselves unless you're a big corporate you don't really understand the intersection between EU regulatory all you know about EU regulation is when it's transposed into UK law and it hits your business so I think there is this expectation that businesses know all there is to know about what the customs union single market are actually when you start sort of peeling back the layers most businesses don't have time to do all the policy work that's what they have business organisations and membership so it's a discussion that we're still having with businesses to explain what the intersection of for example the customs union is with their trade flows with the EU and the last thing I'd say about that briefly is if you just look at the rollover question about what EU agreements will roll over there's a lot of businesses who don't think they use the customs union with Turkey and then you ask them what form they use and that tells you that they do so there's a big education lesson I think that still needs to happen and the government has to play a really big role on that Thank you for that