Michael McGrath
Question:47. Deputy Michael McGrath asked the Minister for Finance his assessment of Ireland’s preparedness for all Brexit scenarios; and if he will make a statement on the matter. [7371/19]
View answerThursday, 14 February 2019
Questions (47)
Written answers
The Government is fully aware of the complexity of the situation and Brexit, in whatever form it takes, will have a negative economic impact on Ireland. Regrettably the UK are leaving the EU and that means that some things are going to change. Planning for this change has been taking place on a whole-of-Government basis since before the UK referendum and the Government has been preparing for every eventuality and have been taking the necessary measures to implement actions to mitigate the risks, as far as is possible.
While ratification of the Withdrawal Agreement is still the Government's preferred outcome, it has also put in place a series of measures, both nationally and in conjunction with the EU, in preparation for the possibility that the UK fails to agree a deal for its departure from the EU on 29 March 2019. Given the proximity of the date of Brexit, contingency planning has now moved to taking actions to mitigate the risks of a no deal Brexit, without prejudice to the Government’s priority of finalising the ratification of the Withdrawal Agreement. The Government’s Contingency Action Plan, published on 19 December 2018, sets out comprehensive, whole of Government approach on no deal planning.
As Minister for Finance, my objective is to protect the economic and financial interests of the State and to support the work of the Revenue Commissioners so as to minimise the Brexit disruption to trade, to the greatest extent possible.
Indeed, the Department of Finance has been to the forefront in assessing the impact of Brexit on our economy - commissioning joint research with the ESRI on the issue, including before the referendum. What is clear from this research and other studies is that the harder the Brexit the more negative the impact on Ireland. The Department and the ESRI are currently preparing a more comprehensive update of their original work and the results will be published later this quarter. A no deal Brexit is the worst possible outcome and would not be in the interests of the UK, Ireland or the EU, and dealing with it would be an exercise in damage limitation.
My Department is working within the whole-of-Government approach and is coordinating closely with its agencies who are developing and implementing plans and measures to protect our economy. All are engaging closely in the overall whole-of-Government preparations, and are confident that they have put appropriate contingency measures in place to do everything possible to limit the inevitable disruption to consumers and trade, in the event of a no deal Brexit.
The Central Bank has statutory responsibility for financial stability and has been focused on Brexit since before the UK referendum. It is working closely with financial services firms to ensure that they have contingency plans in place for end March 2019, and that they are adequately prepared to cope with the possible effects of Brexit, with as little disruption for consumers as possible.
In relation to funding the State, the NTMA’s strategy continues to take account of the market dislocation risks posed by Brexit. The Exchequer’s funding position is strong.
Within Revenue, there is a very significant programme of work that has been ongoing in terms of ICT, staffing and engagement across the country with the business community to ensure that the Revenue Commissioners are prepared to facilitate the efficient movement of legitimate trade to the maximum extent possible in a no deal scenario.
At a general level, the Government has already taken significant actions to get Ireland Brexit ready. Since the UK referendum, all of our national Budgets have been framed to prepare for the challenge of Brexit with dedicated measures announced in Budgets 2017, 2018 and 2019. This is supported by long-term planning through the National Development Plan and the National Planning Framework which will provide significant investment in Ireland’s public capital infrastructure. The Government is also providing dedicated loan funds for affected businesses.
The Government is also developing the additional physical infrastructure needed at ports and airports, in order to ensure that East-West trade continues to move as smoothly as possible. At Dublin and Rosslare Ports, sites suitable for temporary infrastructure have been identified and refurbishment work has commenced. At the same time, plans are advanced for the development of permanent infrastructure in both Ports.
The Government published the General Scheme for the Miscellaneous Provisions (Withdrawal of the United Kingdom from the European Union on 29 March 2019) Bill, on 24 January. The draft Scheme focuses on those areas that need to be addressed urgently and immediately through primary legislation to protect our citizens and to support the economy, enterprise and jobs, particularly in key economic sectors. The Government intend to publish the full text of the Omnibus Bill on 22 February, and to work closely with all Members of the Oireachtas so that it will be enacted by 29 March.
For my own Department, I am proposing legislation in three areas. These seek to ensure continuity for business and citizens in relation to access to certain taxation reliefs and allowances in income tax, capital tax, corporation tax and stamp duty, the retention of a number of anti-avoidance provisions and allow for the introduction of postponed accounting for VAT in order to alleviate cash flow impacts for business, as well as amendments which will cover continuity for the settlement of trading in Irish equities and contract continuity for Irish insurance policyholders.
Finally, Ireland is also continuing to work on preparedness and contingency planning as part of the EU27 with the full support of the European Commission and other seriously affected Member States.
The European Commission published a contingency action plan on 13 November 2018 and a further contingency communication on 19 December 2018. These contained guidance on Commission planning for Brexit and outlined their approach in key areas. The European Commission has tabled a number of legal acts to be adopted in the context of its contingency planning for a no deal scenario. The Commission’s contingency action plan emphasises that it stands ready to engage with the Member States that will be most affected by a no deal withdrawal and expressly states that “the Commission will support Ireland in finding solutions addressing the specific challenges of Irish businesses”.
Whatever the outcome of the Brexit process, Ireland will remain in the EU with all the stability and certainty that membership brings.
Question No. 48 answered with Question No. 37.