Thursday, 20 June 2019

Questions (27)

Joan Burton


27. Deputy Joan Burton asked the Minister for Public Expenditure and Reform the estimated cost of preparing for Brexit, in particular for a hard Brexit, in 2018 and to date in 2019; if he anticipates additional resources to be required should a hard Brexit materialise in October 2019; and if he will make a statement on the matter. [25683/19]

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Written answers (Question to Public)

The Government’s Contingency Action Plan, published at the end of last year and updated at the end of January, sets out the comprehensive, cross-Government preparations for Brexit.  All Departments have sector-specific plans in place identifying key challenges associated with Brexit and associated mitigation approaches.  We have also taken important steps to prepare our economy, including the Action Plan for Jobs 2018, our Trade and Investment Strategy and Project Ireland 2040, while dedicated measures to prepare for Brexit were announced in Budgets 2017, 2018 and 2019.

Budget 2019 was prepared based on the “central scenario” that the UK will make an orderly exit from the EU. In aggregate, a gross voted allocation of €66.6bn is provided across all Government Departments. This includes additional expenditure of approximately €115m specifically related to Brexit and follows the dedicated measures to prepare for Brexit announced in Budgets 2017 and 2018. This funding will enable the implementation of necessary measures including in the areas of customs and food safety controls.

Furthermore, a €300 million Future Growth Loan Scheme is targeted at providing a longer-term facility to support strategic capital investment by business at competitive rates in a post-Brexit environment. With a further view to the impact Brexit will have on the business sector, supports were also provided to the Department of Business, Enterprise and Innovation to expand its Departmental and regulatory agency capacity.

Additional funding was also provided to the Department of Agriculture, Food & the Marine and its agencies to further strengthen the agriculture sector’s ability to become more resilient in addressing the challenges of Brexit.  Also, the OPW has spent in the region of €15.6 million to date on acquiring and developing physical infrastructure for use at Dublin Port, Rosslare Europort and Dublin Airport as a consequence of Brexit.

The impact of Brexit upon the economy and the public finances continues to remain uncertain given that the timing and nature of the UK’s exit remains unclear. Indeed, given this uncertainty, it became necessary to take action to prepare for a potential no-deal exit at end March. This included, the recruitment of additional staff by the Revenue Commissioners, with over 400 staff appointed over the period September 2018 to 12 April 2019.

With uncertainty remaining the Government must continue to plan for the contingency of a disorderly exit. In this context spending plans will be kept under review to identify the potential resources required to deal with the impact of such a scenario this year. This uncertainty will also have implications for Budget 2020. While the SPU maintained an orderly Brexit as the central scenario, a greater likelihood is now being assigned to a no-deal or disorderly Brexit outcome. In this event, it is imperative that the automatic stabilisers are allowed to operate freely. This would include potentially higher social welfare spend as a result of increased unemployment or reduced tax revenue as a result of weaker employment. Further to this, the Government will also provide targeted, temporary, and effective support to the hardest hit sectors of the economy.