Tuesday, 17 September 2019

Ceisteanna (39)

Lisa Chambers


39. Deputy Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade the status of preparations for Brexit; the funding that will be made available in the event of a no-deal Brexit; and if he will make a statement on the matter. [37474/19]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte) (Ceist ar Foreign)

My question is to ask the Tánaiste and Minister for Foreign Affairs and Trade for an update on the status of our Brexit preparations and the potential funding that would be made available to the various sectors, particularly those that are most vulnerable, in the event of a no-deal Brexit.

No-deal planning has the highest priority across Government. As stated earlier, we have been actively preparing for Brexit in order to ensure that citizens and businesses are as ready as possible for all scenarios.

Our consistent message has been that a no-deal Brexit will have profound implications for Ireland on many levels. This is why we have published two comprehensive contingency action plans - one in December last and one in July - setting out the impact of a no-deal Brexit and the work being done to mitigate these risks, held over 1,200 stakeholder preparedness events in all key sectors right across the country, enhanced physical capacity at our ports and airports - Dublin Port alone has spent over €30 million to date - provided training and financial supports to increase our customs capacity, recruited additional staff in key areas and included dedicated measures to get Ireland Brexit ready in budgets 2017, 2018 and 2019.

Appropriate funding supports for businesses have been an important pillar of the Government's preparations for Brexit and dedicated measures have been made available in the previous three budgets. Budget 2019 measures included the introduction of a new longer-term loan scheme of up to €300 million to which the Taoiseach referred earlier and the future growth loan scheme to support strategic capital investment for a post-Brexit environment by business at competitive rates for terms of eight to ten years. This is in addition to announcements in previous budgets where over €450 million was allocated in business supports, including budget 2018's €300 million Brexit loan scheme for businesses.

The Minister for Finance, Deputy Donohoe, has stated that budget 2020 will be based on the assumption of a no-deal Brexit, that the Government will make provision for timely, targeted, temporary measures for the sectors most exposed and that will involve a considerable amount of money. The Government has been clear that, in its approach to this year's budget, it is important to give certainty to businesses and citizens that the Government is prepared for a no-deal Brexit and stands ready to support the economy in such a scenario.

This approach underlines why it is so important that exposed businesses in particular prepare for no deal. To support businesses in this, we recently launched the Getting Your Business Brexit Ready - Practical Steps campaign which focuses on nine steps every business - large and small - should take now to help prepare for Brexit. At this week's National Ploughing Championships, a dedicated Brexit hub will engage directly with businesses and citizens to ensure that they are taking all the steps they should.

The straight answer to the Deputy's question is that I cannot give her an exact number. In three weeks' time, however, she will certainly get the answer to that when the Minister for Finance outlines his budget.

I have consistently asked about the financial supports that will be made available to the most vulnerable sectors.

I refer to agrifood and agriculture, tourism and haulage. I was particularly concerned last week to read the report published by EY that in the event of a no-deal Brexit, rural communities could see themselves going into recession-type scenarios. Clearly, those communities will need direct supports. I refer also to reports from Fáilte Ireland that we could be facing about 10,000 job losses in the tourism sector. We know the impact on the agrifood sector would be in the region of 12,500 jobs. These jobs are predominantly in rural communities across the country. There is no alternative employment outside of these sectors in many areas. It is really important that there are targeted supports for them. I understand the Minister for Finance will be directing his budget towards Brexit. There are concerns that he has indicated he will need to borrow money in order to fund vulnerable sectors in the event of a no-deal Brexit. I am also concerned to see a report from the Central Bank today that a third of farms in this country could be at risk of no longer existing in the event of a no-deal Brexit. There are particular problems in agriculture that must be addressed. Even though some Brexit supports have been made available, just 11% of the combined €600 million in Brexit loan funds that have been made available has been drawn down or sanctioned. That leaves €533 million in Brexit loan funding that has not been touched. That is a problem.

On the Deputy's last question, in order for funds to be drawn down, people have to apply for the funds. A lot of these funds have been put in place as a contingency measure. Many businesses now know that they exist. They may well decide not to apply for them until they have more certainty about the outcome of Brexit. Many small businesses, as the Deputy knows, are not going to trigger significant extra costs or expenditure unless they know they have to do it. Many larger businesses have already put in place a no-deal Brexit plan and are now proceeding accordingly, particularly in the pharma sector. I have spoken to a number of them. They have spent very considerable sums of money but they can afford to do so. Many smaller businesses cannot. That is why we have introduced what is essentially grant aid to help businesses put a Brexit plan in place. InterTradeIreland and Enterprise Ireland have Brexit supports to help businesses get outside advice if they need to. The Deputy is right that while some money has been sanctioned, many businesses will wait to trigger contingency plans until they have more certainty as to whether we are moving into a transition phase for the next two to four years or are going to be dealing with the disruption of a no-deal Brexit.

The other issues the Deputy raised are very fair. Undoubtedly, agrifood and farming are vulnerable sectors given the volumes of food and drink we export to the UK and the impact of tariffs on them. Tourism and fishing are also very vulnerable sectors and this will be very much to the fore of the Government's thinking as we put the budget together.

Tourism, agrifood and fisheries essentially are the west of Ireland. That is our most vulnerable region. It cannot take the hit and is going to need direct supports, immediately. It will not be sufficient for supports to be delivered three or six months after the event happens. They need to be ready to go pretty quickly in the event that the worst does happen. On the third of farms that may go under in the event of a no-deal Brexit, the Central Bank, when asked this morning if direct supports should be provided where those farms are viable, answered that they should. To get these businesses and sectors over the initial hump and to try to survive the initial impact of a no-deal Brexit, direct supports will be required immediately. It was disappointing to see that the Government line had shifted slightly. Initially we were led to believe there would be significant funds from the European Union to help Ireland deal with the worst impact of Brexit. It now appears that the State will be picking up most of the tab. Other member states will be affected but we will be the most affected. It is a reasonable request from Ireland as a member of the bloc, the European Union and the wider community to ask for support. That help and support would be forthcoming to other member states where they faced different challenges. We would not see them wanting, either. If we are to be left to our own devices and on our own in this, it is less than desirable. A strong argument should be made for greater supports from the European Union.

The one thing that has been a common thread throughout the Brexit negotiations for the last three years is that Ireland has not been left on its own. We have had extraordinary solidarity from other EU member states and from the EU institutions. That continues, as lately as yesterday, from President Juncker and the Luxembourg Prime Minister. Virtually every EU leader who speaks on Brexit talks about Ireland and the need for solidarity. In a no-deal scenario, I expect there will be solidarity too. We know that in the context of funding, particularly around agriculture, there will be a financial package of support in the event of a no-deal Brexit. Commissioner Hogan has outlined that, although not the detail of it - I accept that. We also know that there is funding available for people who may be losing employment as a result of the shock of a no-deal Brexit. Along with that, we know we are going to have to access a lot of financial resources ourselves. We are designing a budget accordingly. As the Taoiseach said earlier, we would rather be borrowing money to keep people in employment than doing so to pay for social welfare because people have lost their jobs. We want to focus the support schemes on keeping businesses going and keeping people in employment as best we can as we get through the disruption that will undoubtedly happen after a no-deal Brexit.