It’s Business as Usual for Business (For Now)…

Jonny McCormick is a Senior Director at LanciaConsult where he supports organisations going through complex change. He’s also a lifetime politics nerd, bookworm, and aspiring runner. You can follow him on Twitter.

The dust is settling on the recent General Election. And, for Northern Ireland we potentially, possibly, might not have an election until 2027. When was the last time we had to store our Polling Station signs for so long?!

I thought I’d share a few reflections on what the shifts in NI’s political landscape might mean for business. The brief answer is: not much in the short term.

Mid to long term there are two significant shifts that I can see jockeying for attention over the course of this mandate.

The TUV and Jim Allister: A Potential Disruption

Jim Allister unseating Ian Paisley Jr felt very much like a local “Portillo moment”. The House of Paisley is no longer representing the seat they’ve held for five decades. My crude analysis is that this result is more a case of the DUP losing the seat rather than the TUV winning the seat.

General disaffection with the DUP was their biggest challenge going into this election. Political scandals, and a growing dissatisfaction (especially amongst working class unionist communities) with the terms of the “Safeguarding the Union” agreement that restored Stormont. Additionally, the DUP have been under increasing pressure in many of their key constituencies and failed to broker several important “agreed candidacies” as they have in previous elections.

Of course, it’s not just the DUP’s lack of appeal, Jim Allister has an important personal brand and has leveraged this to great effect going into the latest election.

Allister is going to Westminster with an almost singular focus: remove the NI Protocol.

Whilst, Allister is one person, and one party he is doggedly effective at pursuing his agenda. If he’s able to rabble-rouse others to get behind him the consequences for businesses in Northern Ireland would be serious:

1. Trade Barriers: Allister’s objective to dismantle the Northern Ireland Protocol would reintroduce trade barriers between Northern Ireland and the EU. This would complicate supply chains, increase costs, and delay the movement of goods, further disrupting businesses that rely on smooth cross-border trade.
2. Regulatory Uncertainty: The TUV’s stance would lead to a divergence in regulatory standards between Northern Ireland and the EU. Businesses would face the challenge of navigating two sets of regulations, increasing compliance costs and creating operational complexities, particularly for those operating in sectors like agriculture and manufacturing.
3. Investment Deterrence: Political instability and the potential rollback of the Protocol might deter foreign direct investment. Investors seek stable environments, and the uncertainty surrounding the Protocol’s future could make Northern Ireland less attractive compared to other regions with more predictable regulatory landscapes.

Personally, I don’t think any of the above is particularly likely with Allister alone. Although, I think the DUP could get on this train quickly as they reflect on their post-election prospects. They have a few years before contesting another election, but that’s not a huge amount of time to curry favour with the electorate who are already looking elsewhere. And, they’ll be going up against a potentially reinvigorated UUP who will be buoyed by Swann’s elevation to the green benches.

Sinn Fein and the case for reunification

More likely, and therefore more interesting, is Sinn Fein’s consolidation of its position of NI’s largest party across all three levels of government.

Their forbearance for a referendum on NI’s position in the United Kingdom will expire over the course of this mandate. They have a window to get a referendum, and that window is open now.

What would a referendum mean for business:

1. Political and Economic Uncertainty: A referendum on reunification would introduce significant political and economic uncertainty. Businesses would need to prepare for various outcomes, including potential changes in currency, legal frameworks, and market dynamics. We’ve seen the immediate aftermath of Brexit and how very little preparation sent a ripple through the economy. The same could happen here. Businesses should be pushing for maximum certainty on exactly what people are voting for in a referendum, rather than allowing an open-ended question.
2. Cross-Border Operations: For businesses operating on both sides of the border, reunification could simplify operations by creating a single jurisdiction. However, the transition period could be complex, involving changes in taxation, employment law, and regulatory compliance. Arguably, there could be a “UK Protocol” in place in some way, but that would very much need commitment from both governments (and both would be unlikely to give it in advance of an outcome).
3. Consumer Confidence: The political process leading to a referendum and its aftermath could impact consumer confidence and spending. Businesses should prepare for fluctuations in demand and consider strategies to maintain customer loyalty during periods of political transition.
4. Civil Unrest: Whilst not an explicitly business-related issue it has an impact. It’s hard to see how a border poll happens without civil unrest. It can be too easy to say “we’re past that” in Northern Ireland, but flag protests, riots over attendance at Bobby Storey’s funeral, and Lyra McKee’s murder at a riot in Derry weren’t long ago at all. And, without trivializing, the events that predicated these examples are far less consequential than a border poll.

__

For businesses in Northern Ireland, the recent election results underscore the importance of continuing to stay politically engaged either directly through lobbying or by using organisations like local or national Chambers of Commerce. The immediate environment might be stable, but if the last mandate which saw 5 Chancellors of the Exchequer, a global pandemic, and a lettuce outlast a Prime Minister taught us anything, it’s that stability isn’t bankable.

This is a guest slot to give a platform for new writers either as a one off, or a prelude to becoming part of the regular Slugger team.