Rishi Sunak, the original choice of the elected political professionals of the British conservative party (and not its unelected membership) finally won out after the UK’s disastrous flirtation with an uncosted fiscal package - (see our Editorial assessment in the July edition of Finance Dublin).
He may also be a lucky general, as factors swing in, as on the cards from several quarters, as analysed in our cover story, such as the fall in gas and oil prices, and evidence as 2023 proceeds that recession gives way to growth again.
But the British PM and his nation will still face an existential toxicity at the heart of his reality- Brexit.
There is a symmetry between the history of these islands (Britain and Ireland) spanning the last 100 years.
One hundred years ago Ireland.left an economic and political union and embarked on a period of economic autarky that lasted for over 30 years until it was (had to be) ended in the 1950s. The recovery began for Ireland when it was discovered that trade and the widest possible world markets are essential foundations for economic prosperity. Now Ireland, compared with its British sister, is 4th in the world in terms of GDP per capita, the UK 24th.
For Britain to really recover from its economic malaise, it has to surmount Brexit, i.e. effectively rejoin Europe economically.
Of course on the face of it that is not going to happen anytime soon. The British people do not take naturally to accepting dictates from others (except from the Americans, perhaps), as Tony Blair recently perceptively observed in a podcast. However Europe could begin to make moves along a road of reconciliation. There are straws in the wind, notably Macron’s Prague meeting in September. Being comrades in arms in the Ukraine war is also helping to rebuild trust.
A first step could be re-entry to the Single Market. Norway is such a case. It has the benefits, although it is a rule taker, and cannot set or influence the rules.
It might be hard for Europe to accept some softening of that status, but some concessions, shared with all single market members, could provide a basis for first steps in easing the lines of hard Brexit. It would also help if Ireland stood firm on the principle of global multilateralism, and optimal sovereignty within the EU - a model that Ireland has quietly and effectively followed in tax matters (see this month’s Irish Tax Monitor).
Another route away from the Brexit toxicity could lie in Northern Ireland. Right now Irish-Northern Irish-British relations are set on another collision course over the Protocol, and the faux lines of sectarian confrontation over the issue effectively encouraged by the outmoded St Andrew’s Agreement, which should now be seen as no longer fit for purpose. This agreement, a set up done in 2006, institutionalises NI’s politics along extreme sectarian lines, effectively ensuring the dominance of the two most extreme factions in NI politics (the DUP and SF, themselves both minority parties in NI) with less than 25% of the vote.
The disfunctionality of this has been recently highlighted in a submission to the Seanad by John Cushnahan, former leader of the Alliance Party and FG MEP, and recently endorsed as worth serious consideration in a column by Stephen Collins, former political editor of the Irish Times in that newspaper.
The recently published NI census figures and this year’s Assembly election has underscored a new reality in NI - there are three self identified nationalities there - British, Irish and Northern Irish. It should therefore not be surprising in this light that the party results in the Assembly election reflected that reality. The British-Irish dialogue with Rishi should start here, and not from the arid and toxic politics of the Protocol, another blind alley that the Truss regime was set to lead us down. A new beginning, not just for Ireland, but the UK too.