NAIVE TO HOPE OUR TAX RATES AREN’T PART OF BREXIT DRAMA

AS the curtain goes up on the final act in Brexit, appeals to de-dramatise the situation sound sadly credulous. The stakes are enormous. To pretend otherwise is to be deluded. Seán O’Casey, who knew a lot about the theatre, said: “All the world’s a stage and most of us are desperately unrehearsed...” Even at this late hour, we are nowhere close to a final script for Brexit, let alone rehearsals.

If lines are being fluffed, and cues missed, it is because getting the main actors to stay on the same page seems nigh on impossible.

On the very day the Salzburg Summit began in Austria, Tánaiste and Foreign Affairs Minister Simon Coveney said it was “verging on irresponsible journalism” to report that Ireland could have to increase its corporate tax rate in exchange for the European Union’s support on the Border issue.

Surely he has not forgotten that opposition to our corporation tax was fomenting in Europe long before Brexit was even on the table. Ironically, it was the British who were our strongest ally in resisting EU harmonisation on rates.

So it is either naive or misguided for Mr Coveney to be blaming the media for carrying stories based on reliable sources suggesting some EU countries will seek to take advantage of our vulnerability to do a tradeoff on tax for their support.

When it comes to denial, we have form on matters pertaining to Europe. We well remember how a decade ago the then government insisted there was no bailout. Then one morning we woke up to the arrival of the Troika.

The point is there is nothing to be gained and everything to lose by downplaying the threats or minimising risks.

Surely Mr Coveney is not so callow as to believe that to avoid the UK crashing out with no deal some will press for advantage in return for their agreement or support.

European Council President Donald Tusk pointed out yesterday that negotiations are entering their decisive phase.

To think our tax rate of 12.5pc – which has made us so uniquely attractive to multinationals – is not being eyed up enviously by some of our EU rivals is simply illusory.

Mr Tusk has told UK Prime Minister Theresa May that part of her Chequers plan “will need to be reworked and further negotiated”. He also stressed that while there was “more hope” there was “less and less time” to reach a deal. So the gloves are off.

There are good reasons for believing part of the British strategy is to use the Border as a bargaining chip to gain concessions so when it comes to finalising a deal, they will have a last play. We simply cannot afford to flinch.

The EU’s chief negotiator Michel Barnier has stated it is “ready to improve” its offer on the Border, while Mr Tusk has signalled he will call a summit of European Union leaders in mid-November in a bid to finalise a deal.

Ireland is caught in the middle and must be braced for all eventualities. A pre-disposition towards expecting a soft landing did not serve us so well a decade ago.

A pre-disposition towards expecting a soft landing did not serve us well a decade ago