Even as the debate over the UK’s future relationship with the European Union continues to rise, the costs are already being felt. Studies have found that Brexit has already cost the UK around £80 billion since the 2016 vote, and the economic forecast continues to be gloomy.
Business leaders have long since cautioned against the risks of Brexit, threatening that lack of access to the EU would lead businesses to relocate to other countries in the European continent. Unfortunately, these predictions have been shown to be merited, with London – largely regarded as the business capital of Europe before the 2016 referendum vote – in particular suffering as a result of Brexit. As more and more companies leave, London’s status continues to falter, and it is unclear if even a full reversal of the Brexit process could halt the exodus.
However, while London struggles, numerous European cities have embraced the opportunity; Paris, Amsterdam, and Berlin are all set to benefit from companies seeking to relocate in order to remain in the EU – but could Dublin, the capital of Ireland, ultimately prove to benefit from Brexit the most?
Ireland’s reputation as a business-friendly country
Ireland has long since established a reputation as a business-friendly country, an attitude that helped to lead to a long-term boom, which became known as the Celtic Tiger. However, even though the Celtic Tiger has long since waned – a victim of the 2007/8 financial crash, among other issues – Ireland has remained determinedly open for business.
Ireland’s capital, Dublin, has undergone a substantial focus on ensuring the city is able to facilitate every need of a modern business. Not only has the city experienced significant regeneration, with a variety of business-friendly locations and conference spaces available, but innovations such as Dublin Airport Central have helped to place Dublin on the map as an international business destination.
In addition, Ireland as a whole has ensured that the entire country remains a favourable choice for businesses who may be seeking a permanent relocation. Ireland’s corporate tax rate is incredibly low, at just 12.5%, which compares very favourably to the UK’s 19%. Even though the UK has pledged to bring corporate tax rates even lower, to 18% by 2020, the UK will still lag far below Ireland’s offering.
It’s clear that many major businesses have sought to embrace the low taxation levels, too; this is far from a case of a low tax rate being available but unused. Google, Facebook, and many more recognisable names have chosen Dublin for their European headquarters. What’s more, the companies who have decided to relocate are currently experiencing a far brighter, more settled economic outlook: Ireland’s economy is amongst the strongest in the EU, and though Brexit will undoubtedly present a few problems in this regard, the consensus is that the economy is strong enough to withstand any tremors to come.
The argument against Dublin replacing London as the EU’s business hub
As we have seen, Dublin is an undeniably viable prospect as London’s replacement as the centre of European business – but there is a catch, and unfortunately, it’s a catch that is difficult to address: geography.
Both London and Dublin are located on islands, but London is far closer to the European continent than Dublin. What’s more, the opening of the Channel Tunnel transformed travel to and from Europe forever, with business executives now able to travel as comfortably between London and Paris as they would travel between two major cities located in the same country.
In contrast, Dublin remains isolated, with air travel the only realistic option for those seeking to connect to the continent – the sea routes are slow and infrequent, and the distances between the island of Ireland and the continent are too great for a tunnel or bridge ever to become viable.
So could Dublin replace London?
It’s fair to say that following Brexit, cities across Europe will be seeking to be seen as London’s replacement as the business capital of Europe. However, Dublin has a surprisingly strong claim to be London’s successor thanks to the strength of the Irish economy, the range of amenities available, the fact that English – the lingua franca of the business world – is the national language, and attractive taxation rates. While there are a few dark spots on the horizon, particularly in terms of travel inconveniences, don’t be surprised if Dublin manages to overcome these, and emerge – a phoenix rather than a Tiger – as London’s replacement as the capital of business in Europe.