Dublin offers a better quality of life than the UK. But can its economy withstand Brexit?

The incredibly picturesque Samuel Beckett Bridge, in Dublin. Image: Salim Darwiche

Dublin was recently ranked 34th out of 231 global cities on the Mercer Quality of Life Survey 2017It ranked higher than London, which came 40th, and every single other city in the UK and Ireland.

The city’s strength is wide-spread, and spans culture, the economy and the environment. Noel O’Connor, Consultant at Mercer Ireland, remarked that Dublin offers “an excellent choice of consumer goods, lower levels of air pollution, and a stable political and strong socio-cultural environment”.

As such, the Irish capital continues to be an attractive option for businesses seeking a base in north-west Europe, at a lower cost of living than London or Paris.

Indeed, the Irish economy as a whole has enjoyed strong growth in recent years. Last year’s 5.2 per cent growth rate meant that Ireland remained the fastest growing economy in the European Union for the third consecutive year.

Twilight for Dublin? Image: Hans-Peter Bock.

Growing pains

However, the UK’s decision to leave the EU may have already begun to hurt Ireland. Consumer spending growth slowed to 3 per cent in 2016, down from 4.5 per cent in 2015, with a significant dip in the second half of the year. Export growth was the joint lowest that Ireland has seen since 2008, at just 2.4 per cent.

The terms of the trade deal between Britain and the EU are yet to be agreed. Pat Leahy, political editor of the Irish Times, argues that the worst possible outcome would be no agreement between the Britain and the EU, meaning that World Trade Organisation rules (including tariffs of up to 50 per cent on agricultural goods) would apply. “Such an outcome would have the potential to devastate Irish exporters to the UK,” he says.

At a time when export growth is already slowing, this is bad news for the Irish economy. While Ireland’s main export market is the US, with whom it traded €26bn of goods and services in 2015, it still relies heavily on exports to the UK. However, it is worth noting that in the same year, Irish exports to Belgium exceeded the value of Irish exports to the UK.

Such a large trading relationship with the US means that the Trump administration’s preference for protectionist trade policies is of course another significant threat to the Irish export market.

Nobody's quite sure about the big stick but it looks cool. Image: Robzle.

The Home Front

On the domestic front, the outlook is far more promising. The Economic and Social Research Institute is hopeful that the renewed boom in the construction sector could bring Ireland to full employment (defined as a level of unemployment below the post-crash low of 5.6 per cent) by the end of 2018.


The ESRI report found that the housing market is now the main driver of growth in the domestic economy, and emphasised the importance of managing this growth in a sustainable way. Dr. Kieran McQuinn, the report author, commented: “We’re treading a fine line between driving the economy to produce more houses and pushing it into overheating territory.”

Danny McCoy, chief executive of the Irish Business and Employers’ Confederation, is also optimistic about the prospect of domestic growth acting as a shock absorber against uncertainty in trade relations with the US and UK. He said:

“The economy is now facing some major external threats… [but] we are facing those threats from a position of economic and fiscal strength…

We must use that position of strength to take more decisive steps to relieve competitiveness pressures which are within our control, by massively ramping up investment in infrastructure, R&D and education.”

Another gratuitous picture of Dublin. Image: Doyler79.

Invest to be the best

While Ireland is now running a budget surplus, and there are signs of strong domestic growth, it is understandable that industry leaders such as McCoy are calling for increased capital investment to protect against external shocks. Directly after the UK triggered Article 50 last month, industry leaders called on the Irish government to exert as much influence as possible to ensure that key exporters receive the best deal possible.

Paul Kelly, director of Food Drink Ireland, said: “The agri-food sector exports €4.1bn of food and drink to the UK and accounts for 43,000 Irish jobs. Agri-food is the Irish sector most exposed to trade disruption, and the Irish Government must do all within its control to ensure minimum impact to the free flow of goods.”

Despite these calls, the fact remains that, as just one of 27 EU states, Ireland has limited influence over the final outcome; this despite the significant implications for trade, immigration and the north/south border.

While the forecast for the export market is fairly bleak, the domestic economy and national budget are both strong. As this Irish writer can confirm, Dublin remains one of the best cities in the world.

Want more of this stuff? Follow CityMetric on Twitter or Facebook

 
 
 
 

Budget 2017: Philip Hammond just showed that rejecting metro mayors was a terrible, terrible error

Sorry, Leeds, nothing here for you: Philip Hammond and his big red box. Image: Getty.

There were some in England’s cities, one sensed, who breathed a sigh of relief when George Osborne left the Treasury. Not only was he the architect of austerity, a policy which had seen council budgets slashed as never before: he’d also refused to countenance any serious devolution to city regions that refused to have a mayor, an innovation that several remained dead-set against.

So his political demise after the Brexit referendum was seen, in some quarters, as A Good Thing for devolution. The new regime, it was hoped, would be amenable to a variety of governance structures more sensitive to particular local needs.

Well, that theory just went out of the window. In his Budget statement today, in between producing some of the worst growth forecasts that anyone can remember and failing to solve the housing crisis, chancellor Philip Hammond outlined some of the things he was planning for Britain’s cities.

And, intentionally or otherwise, he made it very clear that it was those areas which had accepted Osborne’s terms which were going to win out. 

The big new announcement was a £1.7bn “Transforming Cities Fund”, which will

“target projects which drive productivity by improving connectivity, reducing congestion and utilising new mobility services and technology”.

To translate this into English, this is cash for better public transport.

And half of this money will go straight to the six city regions which last May elected their first metro mayor elections. The money is being allocated on a per capita basis which, in descending order of generosity, means:

  • £250m to West Midlands
  • £243 to Greater Manchester
  • £134 to Liverpool City Region
  • £80m to West of England
  • £74m to Cambridgeshire &d Peterborough
  • £59m to Tees Valley

That’s £840m accounted for. The rest will be available to other cities – but the difference is, they’ll have to bid for it.

So the Tees Valley, which accepted Osborne’s terms, will automatically get a chunk of cash to improve their transport system. Leeds, which didn’t, still has to go begging.

One city which doesn’t have to go begging is Newcastle. Hammond promised to replace the 40 year old trains on the Tyne & Wear metro at a cost of £337m. In what may or may not be a coincidence, he also confirmed a new devolution deal with the “North of Tyne” region (Newcastle, North Tyne, Northumberland). This is a faintly ridiculous geography for such a deal, since it excludes Sunderland and, worse, Gateshead, which is, to most intents and purposes, simply the southern bit of Newcastle. But it’s a start, and will bring £600m more investment to the region. A new mayor will be elected in 2018.

Hammond’s speech contained other goodies for cites too, of course. Here’s a quick rundown:

  • £123m for the regeneration of the Redcar Steelworks site: that looks like a sop to Ben Houchen, the Tory who unexpectedly won the Tees Valley mayoral election last May;
  • A second devolution deal for the West Midlands: tat includes more money for skills and housing (though the sums are dwarfed by the aforementioned transport money);
  • A new local industrial strategy for Greater Manchester, as well as exploring “options for the future beyond the Fund, including land value capture”;
  • £300m for rail improvements tied into HS2, which “will enable faster services between Liverpool and Manchester, Sheffeld, Leeds and York, as well as to Leicester and other places in the East Midlands and London”.

Hammond also made a few promises to cities beyond England: opening negotiations for a Belfast City Deal, and pointing to progress on city deals in Dundee and Stirling.


A city that doesn’t get any big promises out of this budget is – atypically – London. Hammond promised to “continue to work with TfL on the funding and financing of Crossrail 2”, but that’s a long way from promising to pay for it. He did mention plans to pilot 100 per cent business rate retention in the capital next year, however – which, given the value of property in London, is potentially quite a big deal.

So at least that’s something. And London, as has often been noted, has done very well for itself in most budgets down the year.

Many of the other big regional cities haven’t. Yet Leeds, Sheffield, Nottingham and Derby were all notable for their absence, both from Hammond’s speech and from the Treasury documents accompanying it.

And not one of them has a devolution deal or a metro mayor.

(If you came here looking for my thoughts on the housing element of the budget speech, then you can find them over at the New Statesman. Short version: oh, god.)

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason.

Want more of this stuff? Follow CityMetric on Twitter or Facebook