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The Briefing

AIKEN Weekly Digest – 19th February

AIKEN Weekly Digest – 19th February Banner

by Aiken PR

19/02/2021

A weekly round–up of the latest news relating to Covid–19 and Brexit, and the issues affecting our clients…

Thursday brought the news we were all expecting, though it probably did little to blunt the announcement that lockdown was to be extended. Restrictions will now run until 1 April, with a review on 18 March. There will be some change, with children in primary 1 to primary 3 back to school on 8 March. They will then resume remote learning on 22 March to enable the return of years 12 to 14, until the Easter holidays. Click and collect will also be permitted from 8 March for shops selling baby equipment, clothing, footwear shops and electrical goods. The parties of the Executive appeared to be in agreement on the move, but with governments in Dublin, London and a lot of Europe in fairly similar situations, this is to be expected. However, while the Taoiseach said last night that restrictions in ROI are likely to remain at Level 5 until the end of April, the Executive stopped short of extending the restrictions until the Easter holiday. It is possible that when the decision comes on the next extension, tensions within the Executive, or with constituent parties and their own stakeholders, begin to re–emerge. For the time being, the First Minister and Health Minister have already cautioned against making plans for Easter. The Executive is now expected to publish its pathway to recovery plan on 1 March. ROI will update its Living with Covid plan next week, while the UK will announce its ‘roadmap’ for easing restrictions on Monday. The plans are unlikely to serve as timelines for easing, though they may prove insightful in highlighting how much of a challenge we still face.

To Brexit and the ousting of Michael Gove as UK chairman of the withdrawal agreement joint committee as well as the partnership committee that will oversee the implementation of the Brexit trade deal will undoubtedly raise a few eyebrows in Dublin and Brussels. His replacement, David Frost, the former UK chief Brexit negotiator, took a hard line in talks with the EU and had a central role during the fallout from the UK’s Internal Market Bill. His appointment suggests, as we explored a few weeks ago, that the UK might be preparing for an antagonistic future relationship with Brussels. However, to what end, and specifically for Northern Ireland, is less clear. Frost, after all, played a central role in negotiating the agreements that binds us today.

If it is that the UK will look to water down the EU’s bureaucratic tendencies, while also meeting some of its own commitments around systems integration, then so much to the good. Yet, such a straightforward process is unlikely, and a cynic might say that in actuality, this ‘remedying’ might resemble a series of bombastic efforts to be seen as standing up to the EU. The issues to be overcome are complex and in triplicate. Perhaps not in Northern Ireland’s favour is that following the finalisation of the withdrawal agreement in 2019, the Conservative Party won a substantial majority. The approach breeds results, some might say. However, Great Britain is affected by many of the same issues as Northern Ireland in terms of trade, though not as uniquely, and would also benefit from effective solutions. Accordingly, the interests in London, Belfast, Dublin and, as a result of the latter, in Brussels, would appear to have some alignment in the cause of smoothing out the protocol. Equally, Frost’s appointment does help to bring order, scrutiny and Cabinet level representation towards EU relations from the UK which should provide consistency. Clarity and pragmatic solutions will be welcomed by businesses and individuals alike, but experience suggests that if it does come, it is unlikely to be without incident along the way.

Elsewhere, the phased withdrawal of the third largest lender in ROI, Ulster Bank, presents a headache for policy makers in Dublin. Pascal Donohoe, Minister for Finance, had made clear said a withdrawal by Ulster Bank from the Irish market would be “very serious” for the economy, employment and credit. The bank’s presence has been a source of speculation as to its future once parent company at the time, RBS, began scaling back operations overseas. AIB and majority state owned Permanent TSB are in negotiations over the purchase of Ulster Bank’s ROI loan books, but fears were expressed by the Oireachtas Joint Committee on Finance, Public Expenditure and Reform that part of the loan book could be sold to “vulture funds”. The sentiment was echoed by the Irish Farmers’ Association which stressed its members must be able to access a full service.

Access to banking services, potential for reduced competition and even a contribution to rising inflation are all impending policy challenges for Dublin. However, there could be ramifications for Northern Ireland also, even though Ulster Bank in NI was not part of NatWest’s review. Claire Hanna, SDLP MP for South Belfast, suggested it served as a “threat to around 600 jobs in the northern operation, they are backroom staff who administer daily for the southern operation.” Ulster Bank has told its NI staff there will be no new or compulsory redundancies this year as a result of the announcement.

NI

Health

  • The weekly number of Covid–19 related deaths registered in Northern Ireland has fallen for a third week. The NI Statistics and Research Agency (Nisra) said the virus was mentioned on the death certificates of 99 people, in the week to Friday 12 February. That is 27 fewer than the previous week, bringing the agency’s total to 2,673.
  • Northern Ireland’s health minister has played down the prospect of lockdown restrictions being eased in time for Easter. He said: “One of the approaches the executive made in the first wave was to follow the data, not the dates and that approach has been replicated in other jurisdictions. So the roadmap will set a trajectory that won’t be tied to dates and will be very clear about following the science.”


Vaccine

  • Northern Ireland’s Covid–19 vaccination programme has been extended to include carers and more people with underlying health conditions. The vaccine rollout will be divided between GP practices and the seven regional vaccination centres.


Business

  • Around 40% of business here have said they will need to make staff redundant if government coronavirus support is withdrawn at the end of April, according to a survey. Members of NI Chamber of Commerce and Industry have said extension of business support such as the furlough scheme is critical.
  • For those thinking of starting a family or a business, Northern Ireland is the best place in the UK for both, research reveals. Professional services firm PwC surveyed 4,000 people around the UK – and more respondents here than anywhere else said they would recommend the region as a good place to bring up a family.


Hospitality

  • Hospitality and business leaders in Northern Ireland have said they are “devastated” to learn the current lockdown restrictions will continue until after Easter. A joint statement was issued by the Chief Executives of Hospitality Ulster (Colin Neill), Belfast Chamber (Simon Hamilton), Londonderry Chamber of Commerce (Paul Clancy) and Retail NI (Glyn Roberts).


Housing

  • House prices have been tipped to continue to rise in NI during 2021 after a 5.3% year–on–year jump to an average of just under £148,000. The NI house price index said that the average house price here also rose by 3% between the third and fourth quarter of the year.


Environment

  • Northern Ireland tree buyers are cancelling orders for thousands of trees because of a post–Brexit ban on plants being moved from Great Britain. Under new rules, trees being sold from GB to NI are now subject to onerous new checks and controls.


Brexit

  • A Northern Ireland port operator has questioned whether businesses in Great Britain will be prepared for the end of Irish Sea trade border “grace periods”. David Holmes, chief executive at Warrenpoint Port, said the full impact would only emerge when the grace periods end.


Education

  • Northern Ireland’s education system is “divided, splintered and overly expensive”, according to an Ulster University (UU) research paper. The paper from UU’s Unesco Education Centre argues that “vested interests of the churches and the traditional political blocs” must be reformed.


ROI


Vaccine

  • HSE Chief Executive Paul Reid has said Ireland is “well on track” to complete 80,000 vaccinations this week. Mr Reid said the HSE is continuing to vaccinate according to the level of supply being delivered to the country and 50% of the Moderna vaccine delivery is “held back for dose two”.
  • The European Commission has said it had struck a deal for an extra 150 million doses of Moderna’s Covid–19 vaccine this year, nearly doubling the number of shots secured from the US biotech firm for 2021.


Public Finance

  • The Minister for Finance, Paschal Donohoe has said the public finances are still within the overall budget published last October. However, he said if current programmes to support incomes and businesses during Covid–19 are extended “well into 2021” then “much or all” of the contingency funds set aside will be used up.


Restrictions

  • The Tánaiste has confirmed that schools, childcare and ECCE programmes will reopen next month on a phased basis, but construction and other services will remain closed. Leo Varadkar also said the Taoiseach did not say there will be a nine–week extension to Level 5 restrictions, but that there will Level 5 restrictions into April.
  • The Cabinet has signed–off on primary legislation governing the introduction of a mandatory hotel quarantine for incoming passengers into the country. The legislation, which was evaluated during an incorporeal meeting tonight, sets out a financial penalty of €4,000, as well as a possible month in prison, for first–time offenders who do not adhere to the mandatory quarantine rules.


Business Support

  • The economy will “bounce back” sooner than many people think, the Tánaiste has told the Dáil, but he added that the pandemic will leave “many scars” including lost jobs and livelihoods as well as lost lives. The Minister for Enterprise, Trade and Employment said new financial supports will be put in place in the second half of the year for businesses hit hardest by the pandemic.


Eurozone

  • Business activity across the euro zone contracted again in February as lockdown measures to contain the coronavirus hammered the bloc’s dominant service industry, a survey showed, despite factories having their busiest month in three years.


Consumer

  • New figures from the Central Statistics Office figures show that consumer prices posted an annual fall of 0.2% in January compared to a drop of 1% a month earlier.


Travel

  • New figures show that passenger numbers at Dublin Airport declined by 78% to almost 7.4 million last year due to the impact of the global Covid–19 pandemic. More than half of all those who travelled through Dublin Airport last year did so in January and February, as passenger numbers increased by 2% to 4.1 million passengers the first two months of the year.
  • The Government is engaged in confidential talks with Aer Lingus about providing further financial supports for the airline. Tánaiste Leo Varadkar told the Dáil today that the State is already providing a lot of financial support through Ireland’s Strategic Investment Fund and through the temporary wage subsidy scheme.


Education

  • Minister for Education Norma Foley has said the hybrid plan for the Leaving Certificate is fair and that a decision had to be made despite teachers’ concerns about calculated grades.