Leaders' Questions (Resumed)

Toilim leis an méid a dúirt an Leas-Cheann Chomhairle. I want to raise with the Tánaiste the matter of the Government's clear lack of preparedness in respect of meeting the challenges that Brexit poses for the island of Ireland. Tomorrow marks the anniversary of the Brexit referendum. Yet, there is no sense that the Government has grasped the magnitude of the economic social or political threats arising from Brexit. Let me spell it out for the Tánaiste. Brexit will negatively impact our people, economy and agreements. It is bad news for the island of Ireland as a whole.

The reality of all of this is underscored in the warning delivered by the ESRI this morning. The latest ESRI report states that a hard Brexit will reduce the State's spending ability by €200 million per year for the first three years post-Brexit. The report states that it could cost us up to 49,000 jobs. That means €600 million less will be available to the Government to spend to end the crises in health and housing and to invest in public services.

This should be a wake-up call to the Government to end its prioritisation of tax cuts for the wealthiest over investment in key public services. The Government needs to get real about the impact of Brexit. We know that the Taoiseach is attending his first European Council today.

The people of Ireland deserve to know which Leo Varadkar is attending. Is it the tough talking Leo Varadkar who, during the Fine Gael leadership contest, promised to campaign for the North to remain within the customs union and Single Market and that there would be no economic border on the island of Ireland or is it the weak Leo Varadkar who, after one meeting with Theresa May in Downing Street, became overawed and started talking about invisible borders? That is a fantasy in the context of the North leaving the customs union.

If the North is dragged out of the customs union by the Tory Government, it will mean an economic border on the island of Ireland. Goods crossing the Border will become imports or exports and potentially subject to tariffs. It will mean an average administration cost of €100 for each of the 2.3 million lorries that cross the Border with goods every year. That is not seamless, frictionless or invisible. It is very real and it is time for the Government to get real. It is reported that only one in 20 firms has a plan in place to deal with the consequences of a potential customs border with the North. Yesterday, the Irish Exporters' Association called on the Government to up its game. The challenge posed by Brexit must be met with the seriousness it demands. That means a seismic step-change on the part of the Irish Government.

Can the Tánaiste tell the House whether the Taoiseach's position on the Border is as outlined in his leadership campaign, namely, that he will campaign for the North to remain within the customs union and Single Market with no economic border on the island of Ireland? Is that the position he will present to the European Council today? Can the Tánaiste also inform the House of the steps the Government is taking to prepare businesses for the withdrawal of Britain from the customs union?

The Deputy's summary of the Government's approach to the Brexit negotiations lacks the reality of the work that has been done. All he has to do is look at the agreements reached and statements made so far, all of which put at their centre the priorities of the Irish Government. That is absolutely clear from statements by the British Prime Minister and EU levels. Michel Barnier's understanding and appreciation of the critical nature of the Irish position is clear. The issues about which we are concerned have been given priority over the last months in all the speeches by all the relevant people. There is acceptance that the priorities of the Irish Government need to be fully dealt with in the negotiations. What the Deputy has said is completely inaccurate. The Government has been working at a pace and has been carrying out extremely intensive diplomatic engagements, as all Members of the House know, with all the relevant people across Europe.

Having said that, we all recognise the seriousness of the challenge ahead. This morning's ESRI report clearly addresses the economic implications of a hard Brexit and the job losses that could follow. Every Minister, in all our negotiations and actions, has recognised this. This week I met the IDA and Enterprise Ireland. The engagement they have with business in terms of preparation for Brexit is absolutely clear and is going on up and down the country and, indeed, internationally. There is an increased focus on making sure we have new markets, that current businesses are protected and that our small and medium enterprises engage in innovation to ensure they continue to create jobs and deal with the challenges.

One year on from the decision of the British people to leave the EU, the opening of the negotiations is very welcome. They are important for all of us. It is one of the most serious sets of negotiations this country will ever have to face. The Irish issues are very well placed. I reiterate what we have said consistently, namely, that safeguarding the Good Friday Agreement and avoiding a hard Border on the island of Ireland will be an early priority. That was actually reaffirmed at the meeting between the Taoiseach and the British Prime Minister in Downing Street. A long and difficult road lies ahead but I assure the Deputy that every initiative and step will be taken to safeguard the current situation.

I spoke to the Minister, Deputy Donohoe, in this regard this morning. As far as the economic implications of Brexit are concerned, we will continue to monitor them very carefully and the decisions we take in the months ahead and leading up to the budget will be prudent ones in terms of managing this economy.

It is also worth noting that the Irish Fiscal Advisory Council, which appeared before the Committee on Budgetary Oversight this week, believes the model the ESRI is using is seriously underestimating the impact of Brexit. Therefore, it could be much worse if that were to flow.

The Tánaiste did not answer any of my questions.

I have a very simple question for her and I will pose it again. The Taoiseach, Deputy Leo Varadkar, when he was a Minister travelled to Donegal during the leadership election campaign and made a commitment to the Fine Gael members there. He said clearly, and stated this publicly, that he, as Taoiseach, would campaign for the North to remain within the customs union and within the single economic union to ensure there is no economic border on the island of Ireland. Can the Tánaiste state that this is Government policy? We need to get real about this discussion about a frictionless, seamless and an invisible Border and a hard Border. Is the position of the Irish Government that the North would remain within the customs union? Is it bringing that to the negotiating table at the European Council meeting today? Can the Tánaiste inform us what she is doing to address the fact that only one in 20 companies has any type of plan for Britain leaving the customs union?

As far as businesses are concerned, Enterprise Ireland is working closely with all its 5,000 companies. All the other bodies have been having discussions. There has been the all-Ireland economic dialogue and an economic dialogue will take place next Wednesday, working closely with businesses to ensure that they plan and prepare.

Some 98% of businesses have no plans.

There is nobody more conscious of the challenges they face than businesses where they see the challenges, given our reliance on the UK at present. That is why we are putting such a focus on these negotiations. We realise the seriousness of the Brexit discussions. The questions the Deputy asked have to be seen in the context of the overall approach we have taken, which has been well recognised, namely, that our trade must be protected, that we want to continue a close trading arrangement with the UK and-----

Is the Taoiseach, Deputy Leo Varadkar's position that of the Government?

Allow the Tánaiste to continue without interruption.

Of course it is. The Taoiseach outlined very clearly on Monday what is the approach of the Government.

What about the customs union?

It is that we do not want to see a hard Border and that everything will be done to avoid that. It is in that context that the answer to the Deputy's question is obvious.