So, alea iacta est.
Theresa May has played her hand and lost.
A Conservative majority government is now set to become a minority one, relying on the absence of Sinn Féin and the support of the Democratic Unionist Party.
Most commentators are now in agreement that while PM May will be allowed to form a government, her days as leader of the Conservative Party are probably numbered.
Furthermore, there seems to a be a consensus that the election result is a resounding rejection of a “Hard Brexit”.
“Here in Ireland, anything less than a Hard Brexit has to be seen as a good thing”
Defining ‘hard’
Now, it is difficult to say exactly what a Hard Brexit is, as one of the major criticisms of May during the election campaign was that she singularly failed to provide the level of detail necessary to reassure both supporters and critics.
In this context, no one really knows but most seem to think that a Hard Brexit would have meant leaving both the single market and the customs union with Europe. This has been seen by most within the business community as a bad thing.
It would certainly have left many Irish organisations, as well as multinationals, in an awkward place, both in terms of doing business with a Brexited UK and for those businesses that have Irish and UK divisions.
With this undermining of a mandate for a Hard Brexit, negotiated by a “bloody difficult” woman, speculation now falls back to the familiar model options of Norway, Switzerland, Canada, or even Turkey.
Might the UK now negotiate for something that might retain single market membership?
Free movement
Well, this brings back the old problem, which the Tories have been generally against and on which are unlikely, with DUP support, to change, namely free movement of people. Norway has full single market access, but also accepts free movement.
Switzerland has partial access but accepts free movement. Canada does not have full access, does not accept free movement but does have significantly reduced tariffs due to a specifically negotiated trade deal.
What does all of this mean for the tech sector?
Here in Ireland, anything less than a Hard Brexit has to be seen as a good thing, both in terms of doing business with the UK and situating businesses or business divisions there, but also in terms of the border with the north.
Easier dealings
With something less than a hard Brexit, the likelihood of easier dealings with the UK significantly improves. In terms of issues such as data sharing, anyone wishing to process the data of EU citizens would have to be GDPR-compliant anyway, and this is largely unaffected by the election result. However, with the prospect of a Hard Brexit receding, the likelihood of favourable conditions for cooperation across borders with the nations of the United Kingdom look a lot more favourable than heretofore.
While the influence of the DUP is likely to be felt more in other areas, their general pro-business stance, combined with that of the Conservatives, might see more competition for FDI between the north and the south, but that may not be a bad thing. A more developed NI economy, particularly on the tech side, would likely boost the island overall as a destination for tech companies, tech workers and tech start-ups.
Business people on the island of Ireland have generally shown an utter disregard for the border, and in light of the election results, that situation is unlikely to change significantly.
More favourable
While there is still much uncertainty in the days ahead regarding how a government will be formed and function, the overall picture would appear to be a more favourable outlook for both the tech sector and for Ireland than would have been the case with a strengthened Conservative majority.
One would simply hope that Leo Varadkar takes heed and doesn’t do something daft in sympathy.
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