Business Establishment Opposition to Southern Ireland’s Exit from the United Kingdom

Abstract

After more than a century of political and economic integration, Southern Ireland exited the United Kingdom in 1922. By identifying the leading business firms of the era and the political and religious allegiances of their owners, this paper explores the perspective of the Southern Irish business establishment on the issues involved. While the mass of the population was Catholic and by 1918 favored secession, the business elite is shown to have been predominantly Protestant and strongly supportive of continued integration. Business elite perceptions of the consequences of exiting the United Kingdom are explored, and post-independence economic and business developments assessed in light of the concerns expressed at the time. The paper also charts the post-independence fate of the leading former unionist firms and the erosion and eventual disappearance of the sectarian divisions then prevalent in Irish business life.

Political Economy of Secession: Lessons From the Early Years of the Irish Free State

“…Ford's personal (familial) connections may have motivated the choice of location more than purely business considerations (Jacobson 1977;Grimes 2008). It had been established when Home Rule was anticipated (Barry 2021). Britain was one of the main export markets but the introduction of McKenna tariffs on imported motor vehicles, introduced during WWI and maintained after the war to protect British industry (Foreman Peck 1979), affected its trade with Britain.…”

“…-Ernest Blythe, Dáil Debates 2 November 1923. While income tax rates were purposefully kept below the British level to win approval of the middle classes in the newly independent state, a middle class that was protestant and unionist in outlook that paid the majority of income tax (Barry 2021), increasing regressive taxation (such as customs and duties), which tended to increase inequality, was the only viable policy (see Figure 4 & 5). Due to the configuration of the economy, it has been claimed that this choice was largely "forced upon the Free State government," which regrettably tended to favour the mass of people who had not been strong supporters of independence at the expense of the mass of people who had.…”

“…Especially problematic for the new administration was that in Ireland's case, "pensions were in a class of their own" dwarfing other categories of social welfare payments, and represented a "boon" to the aged poor (Ó Gráda 2000Gráda , 2002. When the pensions were introduced contemporaries estimated that they would "absorb at one stroke nearly one-third of the total revenue of the country" (Jalland 1983;Barry 2021). While UK pension payments consumed 5% of government expenditure and over 1% of GDP by 1930, the Irish equivalents still stood at 13 and 2%, respectively, even after substantial cuts (Ó Gráda 2000).…”

“…These hidden tensions would surface at secession and play out in the early years of the new state as competing interests fought to implement their vision of independence. The minority unionist community, protestant in outlook, were still the major capitalists in the IFS and the owners of the majority of large businesses (Barry 2021). The political economy of independence therefore required a delicate balance of urban and rural interests.…”