UK exit threatens Irish trade, says Cable

The “nightmare scenario” of the UK exiting the European Union would create a “green wall” trade barrier across Ireland, UK business secretary Vince Cable warned at a conference in Dublin yesterday.

Mr Cable said it would be “completely wrong” to believe that a UK departure would benefit the Irish economy.

“I think the exact opposite,” he said at the British Irish Chamber of Commerce event, adding that the trade relationship between the two countries,which sees almost €1 billion in goods traded weekly, rests upon the “assumption of a single market”.

Mr Cable said that while an EU departure was “very highly improbable” for the UK, it had become a “scenario possibility” in the wake of prime minister David Cameron’s speech on Wednesday promising a referendum on the issue.

He said the Republic “might conceivably gain opportunistically from an odd investment” but that this must be set aside in light of the bigger picture.

“I think it would be bad for both countries,” Mr Cable said, acknowledging that it could be especially negative for the North, which would be operating outside the EU in the event of a UK exit from the union.

He declined to “dramatise” the problems created for the business climate in the North as a result of the referendum proposal but admitted “it doesn’t help them”.

Mr Cable acknowledged the issues surrounding the dominant public sector in the North, identifying trade with the Republic as the best way for the private sector to flourish.

Considerable uncertainty

He told delegates at the conference that the EU debate was “enormously important” and accepted that Mr Cameron’s move had created considerable uncertainty. The business secretary worked hard to play down the likelihood of the UK leaving the EU, saying all three main party leaders in his country were in favour of retaining EU membership, while recognising that the union needs “a substantial amount of reform”.

He highlighted the Common Agricultural Policy and the EU’s layers of bureaucracy as being particularly ripe for change.

“It’s very obvious in the case of the UK where we need to be,” he said, acknowledging, however, that Irish experience proved that referendums were not always predictable.

“The die is now cast and we will minimise the areas of uncertainty that have been created,” said Mr Cable. “I think it’s virtually certain that we will remain in the EU.”

Mr Cable said bilateral relations between Ireland and the UK had improved greatly over recent years, in part because of the two countries working together at EU level.

“We’ve also been through a very difficult shared experience in economic terms.”

He said there was “a lot of admiration for the way Ireland has dealt with that crisis”, adding that the end of the debt crisis was in sight.

The conference, which attracted 300 attendees, was the first such event organised by the chamber since its inception two years ago. The event continues today on the theme of innovation and competitiveness, with addresses from Welsh first minister Carwyn Jones and deputy first minister of Scotland, Nicola Sturgeon.