Since the result of the UK referendum in 2016, Brexit has been embedded in all of the Government’s economic decision-making, and in the management of our economy. At all times the Government has sought to protect our citizens and support the economy, enterprise and jobs. Dedicated measures were announced in Budgets 2017, 2018 and 2019 including up to €600 million that has been made available through the Future Growth Loan Scheme and Brexit Loan Scheme. This is already helping our businesses to mitigate the risks of Brexit.
Budget 2020 builds on these preparations. Budget 2020, including the macroeconomic and fiscal outlook which underpins it, was based on the sensible assumption that the UK would leave the EU on 31 October without an agreement. Budget 2020 involves a ‘twin-track’ approach, namely:
- Funding services and making progress on particular policy areas, and;
- Supporting sectors and regions most exposed to Brexit-related disruption.
In the event of a disorderly exit from the EU by the United Kingdom, certain sectors of our economy would be impacted more severely than others. In particular, indigenous enterprise and agriculture are likely to be the hardest hit, given our close trading relationship with the UK and the expected increase in tariffs.
To mitigate against this, in addition to allowing the public finances to absorb the shock, the Budget set out a number of temporary, targeted support measures of over €1.2 billion that could be triggered to ensure that that our economy will be protected in as far as is possible from the risks of a no deal Brexit. This is on top of existing grants and loans which are already available for business and agriculture, and is in addition to ongoing Government expenditure on Brexit preparedness.
Assuming a no-deal Brexit ensures that the Government will have the necessary resources at its disposal to address this challenge, whilst preserving the longer-term sustainability of the public finances and safeguarding the hard won progress of recent years in stabilising the public finances.
The Government’s focus is to protect our economic and financial interests, and to minimise the disruption to the Irish economy to the greatest extent possible. The best way we can mitigate against the risks posed by Brexit is through sensible budgetary policy, careful management of the public finances and by focusing on competitiveness-oriented policies. The Government will continue to work to strengthen the resilience of the economy, to maximise opportunities and to prepare for the challenges of Brexit.