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Departmental Reports

Dáil Éireann Debate, Wednesday - 21 February 2018

Wednesday, 21 February 2018

Ceisteanna (119)

Micheál Martin

Ceist:

119. Deputy Micheál Martin asked the Minister for Business, Enterprise and Innovation if she will report on the Copenhagen economic report; and the role her Department officials will have in responding to same. [8467/18]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy will be aware, this study commissioned by my Department and undertaken by Copenhagen Economics was published on Tuesday 14th February. It is also the subject of a stakeholder conference today in Croke Park.

The report examines the Strategic Implications Arising for Ireland from Changing EU-UK Trading Relations and provides an evidence base on key trade and investment questions which will help to inform Ireland’s position as part of the wider negotiation on the UK’s future relationship with the EU.

It will also help to inform our evolving domestic policy response and measures necessary to mitigate risks and maximise opportunities arising as a result of Brexit. Using a computable general equilibrium model to quantify new barriers to trade in goods and services which might emerge as a result of Brexit, the study:

- Quantifies impact of six possible Brexit scenarios on trade and investment – the impact of these scenarios on metrics such as GDP and exports is considered, and analysis of both short and long term impacts is examined; and

- Provides analysis of the likely impact of Brexit on key sectors.

All of the scenarios examined produce a result that is less favourable than a non-Brexit scenario. However, regardless of the scenario, the Irish economy is still expected to record strong, positive growth out to 2030 - Brexit has a dampening impact, resulting in a lower growth rate than would otherwise have occurred.

Given the scale of the Brexit challenge, detailed cross-Government work is continuing at home to prepare for the UK’s exit, in parallel to work in Brussels. This includes contingency planning for all possible scenarios.

My own Department of Business, Enterprise and Innovation (DBEI) continues to work with colleagues across government through the various structures including the Cabinet committee on all aspects of Brexit, to ensure the growth and resilience of Irish enterprise.

My Department plays a key role in implementing the Government’s policies to stimulate the productive capacity of the economy and create an environment which supports job-creation and jobs maintenance. Brexit impacts upon all of these areas, and on many others within the Department’s remit.

In relation to Brexit, our objective is to support firms to adapt to the challenges and opportunities Brexit presents by ensuring we have fit for purpose policies. Our strategy is to minimise risks and maximise opportunities by ensuring the growth and resilience of Irish enterprise post-Brexit working across four pillars which are:

- Helping Firms to Compete;

- Enabling Firms to Innovate

- Supporting Firms to Trade;

- Negotiating for the Best Possible Outcome;

My Department recently published “Building Stronger Business” which summarises the issues facing enterprise, the policy measures my Department has already taken, those we plan to take, our research programme designed to inform these policies, and the Departmental structural reforms put in place to ensure that we can work as efficiently and effectively as possible to support our companies.

Several important steps have already been taken to prepare our economy, including through a range of measures announced in Budgets 2017 and 2018, the commitments included in APJ 2017, and the targets included in the Trade, Tourism and Investment Strategy.

From my Department’s perspective, we are leveraging the expertise and enhancing the capacity of our Agencies to ensure that they are in the best possible position to address the needs of their clients in relation to competitiveness, innovation and trade diversification. This is being achieved through the provision of information, advice, training and other supports.

Specific DBEI actions to date include:

- DBEI has made an additional €6 million in funding to its agencies, in 2017 and 2018, to recruit up to 100 additional staff, specifically to assist in the response to the evolving Brexit situation. These resources have been distributed across Enterprise Ireland, IDA Ireland, Science Foundation Ireland and the Health and Safety Authority. These additional resources will be assigned to both overseas offices in markets that are growing and in Irish offices to address a range of Brexit issues, including the support for internationalisation activities, a strengthening of the LEOs ability to respond locally to help micro-enterprises, and enhanced support for innovation.

- The rollout of the Brexit Loan Scheme to provide affordable financing to Irish firms impacted by Brexit. The scheme aims to make up to €300 million available to business with less than 500 employees.

- We are developing proposals for a Longer-Term Business Investment Loan Scheme together with a new Business Advisory Hub service which would focus on business development to allow enterprises to position themselves for a post-Brexit environment.

- The EU Commission has approved a ‘rescue and restructuring’ scheme. The scheme can be drawn on in exceptional circumstance for a company severely affected by Brexit.

- We are working with DG Competition examining other possible measures to support some of our most exposed and impacted companies should the need arise. Such measures may need a greater level of support than is required under current State aid rules.

Looking forward, Action Plan for Jobs 2018 will continue to act as an effective lever for driving reforms that enhance the competitiveness of Irish firms, increase jobs and grow the resilience of our economy in the context of Brexit, while we are also finalising a review of Enterprise 2025 to take account of Brexit and other global challenges over the longer term.

Our response to Brexit will continue to evolve and the Copenhagen Economics study, along with evidence emerging from other relevant studies, as well as continued engagement with a broad range of stakeholders, will assist in informing the evolution of that response.

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