Everyone is aware that the UK’s departure from the EU will pose significant challenges for Ireland. The challenges posed by a no-deal departure will be particularly acute.
The Government has been putting in place the utmost Brexit preparations since even before the outcome of the 2016 UK referendum on EU membership became known. Since then, Budget 2017, Budget 2018 and Budget 2019 have all contained measures to ensure that Ireland is in the best possible position to respond to the challenges that Brexit will bring.
These measures continue the process of assuring that Ireland’s economy remains competitive and resilient against the backdrop of heightened uncertainty, and include balancing our books; reducing our debt burden; putting in place a major programme of capital investment; establishing the Rainy Day Fund; and broadening the tax base.
Specific initiatives have been introduced aimed at supporting those sectors most affected by Brexit, most notably the Brexit Loan Scheme in Budget 2018 and the Future Growth Loan Scheme in Budget 2019. The Future Growth Loan Scheme is open to eligible Irish enterprises, including those in the primary agriculture and seafood sectors, to support strategic, long-term investment in a post-Brexit environment. The Brexit Loan Scheme provides working capital loans, at least 40% of which is available for food businesses.
The Government and its agencies have also put in place extensive supports and advisory resources to ensure that the sectors likely to be most impacted are prepared for Brexit.
As Deputies will be aware, the Summer Economic Statement set out two budgetary scenarios for Budget 2020, the first involving an orderly departure by the UK from the EU and the second involving a disorderly exit. Last month the Government decided that the budgetary strategy to be adopted should be based on the latter assumption.
In the event of a no-deal Brexit, the Government has already said that it will provide counter-cyclical support to the economy through social protection payments occasioned by higher unemployment and, on the revenue side, lower tax collections which help cushion aggregate demand.
In the event of a no-deal Brexit, the Government will also introduce timely, targeted, temporary measures. Brexit contingency support may also be needed to address specific issues in the event of a ‘worst case scenario’ disorderly Brexit. I am working with the relevant Ministers on such measures in the context of Budget 2020.
All of these measures form part of a comprehensive response to Brexit across all sectors which has been set out in the Government’s Contingency Action Plan, which was updated in July. This is the second update of the Plan that was originally published in December 2018 and reflects the extensive work that has taken place to prepare for a no-deal Brexit.
The Government’s management of the economy, however, means that Ireland is facing the challenge of Brexit from a position of economic strength. The Irish economy continues to grow at a robust pace and we are close to full employment. But we do not underestimate the challenges ahead and will be prepared.