Cormac Devlin
Question:69. Deputy Cormac Devlin asked the Minister for Finance the status of his Department’s preparations for Brexit; and if he will make a statement on the matter. [39213/20]
View answerThursday, 26 November 2020
Questions (69)
Oral answers (6 contributions)
I thank the Minister for taking these questions. With just 35 days to go before the UK leaves the EU, what preparations have the Minister's Department done in advance of this?
I thank the Deputy for raising this very important matter. My Department has been participating in whole-of-government preparations for Brexit since before the UK referendum in 2016 and, in line with the Government's overall approach, it has intensified work ahead of the end of the transition period on 31 December.
Without prejudging the outcome of ongoing negotiations between the EU and the UK, the central scenario underlying budget 2021 assumes the transition period ends without agreement. Budget 2021 provides €340 million for measures to prepare for Brexit through the continuation of existing measures and new supports for sectors and enterprises likely to be most affected. This comes on top of more than €700 million in budgets since 2017, and budget 2021 also provides for a recovery fund, in part to respond to the fallout from the ending of the transition period. I assure the Deputy that every effort has been put into getting ready for the approaching deadline. Since the morning of the referendum result in 2016, it has justifiably absorbed a significant amount of my time and that of the Department.
To give a little more detail, the Revenue Commissioners have now written to 90,000 businesses that traded in goods in the UK last year and phoned 14,000 of those businesses that were identified as having more than €50,000 in activity with the UK. In October, they hosted seminars with 2,000 businesses in that month alone, and very soon the Revenue Commissioners will launch a campaign focusing on the changes that are due on day one, 1 January 2021.
I have no doubt this has been extremely time-consuming for the Minister and officials not just in his Department but across the Government for the past number of years. That said, it is prudent for us to have the reserve that budget 2021 has given us because of the potential of a no-deal Brexit. It is the right course of action.
I know the Department is making every effort to deal with the challenges of Brexit but the next few months will be extremely difficult for Ireland and businesses, not just because of Brexit but because of Covid-19 as well. Is the Minister aware of this morning's report in The Irish Times, which claims that Ireland could lose out to France in laying claim to a significant portion of the €5 billion Brexit compensation fund? Even if we got all the fund, it would not compensate the hit to our economy. As the Department of Finance and ESRI analysis indicates, the long run impact to gross domestic product is between 2.6% and 5% in a no-deal Brexit, meaning losses of between €9 and €17 billion in 2017 prices. Will the Minister comment on that?
I will do so and I thank the Deputy again for raising a very important matter. I assure him that the Department of the Taoiseach and all of us in the Government are working in an integrated and very careful way to ensure we can access our fair share - a good share - of the Brexit adjustment reserve fund that the Deputy refers to. I am now familiar with these kinds of negotiations and the claims and counter-claims that can arise in them. I further assure him that the effort and diplomacy we have demonstrated over the past number of years in pursuing our issues with Brexit will continue as we approach the negotiations over the Brexit adjustment reserve fund. The nature of that fund and its use will become clearer when we are clearer on the shape of Brexit.
I thank the Minister and I welcome his remarks on the diplomatic approach. It is important that Ireland avails of this fund as much as possible, considering the grave impact Brexit could have on our economy. We must avail of that compensation fund as much as possible.
The Minister made remarks on the work of the Revenue Commissioners and their engagement with businesses, which I very much welcome. We can see from experience with Covid-19 support schemes that many businesses are, unfortunately, not availing of existing supports. It is important we ensure these businesses are prepared for Brexit and that they also avail of supports that are available to them.
Britain has provided six months for the implementation period in their economy, with a deferral of Brexit customs declarations until 30 June 2021. Would a similar adaptation period be considered by the Minister and his departmental officials here?
Matters relating to customs policy and procedures are dealt with at a central level by the European Union and we have requirements we need to uphold as the UK formally becomes a third country. I know the EU will try to ensure the rolling out and introduction of new customs procedures will be done in a way that is proportionate and will reduce the adverse effect on businesses that are trading from the Union. On the other hand, the EU and Ireland must also ensure the integrity of the Single Market is protected. It is an Irish interest in that it is in the long-term interest of Irish businesses and consumers that this happens. The Revenue Commissioners and the Government will do all they can to raise awareness of the schemes, ask businesses to participate and roll out the new customs procedures and policies that will be needed in a manner that is as effective as possible. What comes will be better if there is an agreement rather than no agreement; any agreement would still be very different from the position if the United Kingdom had remained in the European Union.