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Dáil
‹ Leaders' Questions

Brexit preparedness

Summary

Deputy Donnelly questioned whether Government preparations for Brexit were adequate, especially for farmers, agrifood firms, SMEs and the wider economy. The Minister cited investment and relocations to Dublin as signs of preparedness and defended the Government’s published Brexit strategy and responses.

Stephen Donnelly Deputy Stephen S. Donnelly Fianna Fáil

Everyone in the House agrees that Brexit presents one of the biggest challenges the country has faced in decades. We do not know how hard it will be, but it is obviously the Government's job to prepare the country as well as possible. Unfortunately, it is becoming increasingly clear that we are not as prepared as we should be in several areas. There has been a focus on the Good Friday Agreement which is important to every citizen across the island, but it is an international agreement which will be implemented in full. What has received far less attention is the threat Brexit poses to sustaining, protecting and creating jobs in Ireland. Last October's budget failed to prepare the State to prepare for Brexit. In fact, it largely ignored the challenges we were facing owing to Brexit. Unless more is done, jobs will be lost needlessly and opportunities needlessly missed.

A recent Government survey shows that 15 of 20 Irish-owned firms believe they will be harmed by Brexit. While 15 of 20 believe they will be harmed, only three of 20 are doing anything about it. Why is that? It is because they do not yet know what threats Brexit poses. It is because they are not necessarily equipped to deal with the threats it poses through addressing currency fluctuations to hedge against sterling, reconfiguring supply chains, planning for diverging standards and regulations which are likely to emerge and exporting across an external EU border.

There is real concern the Government believes enough is being done on the ground for Irish farmers, SMEs and exporters. It is not. As we know, Brexit is happening. It is not going to happen in a year and a half. Orders from the United Kingdom are falling. A new UK survey shows that half of the European firms that export to the United Kingdom are seeking to rewire their supply chains outside and that one third of UK firms that export from or buy in from outside the United Kingdom are rewiring their supply chains to within it. Irish businesses need support in preparing for Brexit. If they are to grow beyond Brexit, as they must, we will have to help them to learn how to sell into new markets in which English is not spoken and deal with very different legal systems, working cultures, languages, consumer preferences, regulations and so forth.

Given the scale of Brexit and the threat it poses to sectors such as agriculture, tourism, retail and manufacturing, does the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, believe much more needs to be done, not just to mitigate the risks but also to turn Brexit into an opportunity? If so, what new actions is the Government willing to take to address the current shortfall in preparations?

Comment on this
Paschal Donohoe Minister for Public Expenditure and Reform Fine Gael

When the Deputy says what the Government is doing is not clear, I ask him whether it is not clear to JP Morgan which announced this week that it was buying an office block in Dublin in advance of moving hundreds of jobs to the city.

Is it not clear perhaps to the insurance companies that have approached the Central Bank of Ireland indicating strong interest in locating new activities and, more important, jobs in our country? Is it not clear perhaps to those companies that were on the front page of The New York Times earlier this week explicitly naming Dublin among the places to which they are looking to move further business? I note with interest the Deputy's bare reference to the Good Friday Agreement. He made it appear inevitable that its political status will be recognised when, of course, his party and his party leader for months were pointing to the necessity of that happening. Now that the Government has secured this recognition, this is dismissed by him.

I acknowledge, however, that if the response to the huge Brexit challenge is a response from Dublin, then this is not a national response. This is the reason that the Government is committed to strengthening our national capital investment and that the Minister for Finance and I are travelling to Luxembourg next week to engage with the European Investment Bank to examine what the options are for strengthening investment beyond the additional €2 billion we have signalled we will invest in our hospitals, schools and transport network to respond to the Brexit challenge.

The Deputy made reference to challenges in the agriculture sector, which have been strongly recognised by the Minister for Agriculture, Food and the Marine and the rest of the Government, but, of course, he made no reference to the fact that the Minister, through last year's budget, put in place a fund of €150 million to help the food sector respond to the income volatility we have acknowledged will be exacerbated by Brexit. The Deputy made reference to tourism but no reference to the fact that the Government retained the lower VAT rate of 9% for the sector and the fact that over the past number of months and, indeed, year, access to the country has increased through airports with new routes to Ireland, all in recognition of the challenge that Brexit will create.

The only bit on which I agree with the Deputy is that we are all united in recognising the scale of the Brexit challenge for our country and we all acknowledge we must explore all options open to the Government to respond, but I do not accept the Deputy's contention, which is not borne out by the facts that I have laid out, that the Government's actions to date have not recognised the scale of the challenge. They clearly have, and this is recognised by many parts of the economy.

Comment on this
Stephen Donnelly Deputy Stephen S. Donnelly Fianna Fáil

The Minister's response goes to the heart of what is causing increasing concern among farmers, agrifood companies and Irish-owned SMEs because they know Brexit is coming and it will harm them but many of them do not know what to do about it and they are looking to the State for support. His response is consistent with that of the Taoiseach and the Minister for Foreign Affairs and Trade, which is, "We are doing everything we can". That is the concern because I do not believe, and many businesses do not believe, the Government is doing everything it can. It is great that JP Morgan is looking for offices here but that is of no interest to Irish-owned SMEs worried about whether they will be able to sell their products into the UK. The 2017 Action Plan for Jobs explicitly lays out how much money the Government has provided to the IDA, Enterprise Ireland and Bord Bia combined for Brexit and it is less than €5 million. The Minister for Transport, Tourism and Sport has yet to meet the Irish Aviation Authority or the DAA on the threats posed by Brexit. Could the Minister for Public Expenditure and Reform please address that? Does he believe that less than €5 million is enough? Does he not at least acknowledge the gap between the Government saying everything that can be done is being done and the many business people and farmers who are scared and who do not feel the support he says the Government is providing?

Comment on this

I was hoping for a little more substance and a little less spin from the Deputy on a matter of such national importance because we acknowledge how hugely important is this. I also hoped the Deputy would acknowledge all the steps taken by Government to respond to this huge challenge. We have laid out only in the past number of weeks the Government's position paper on Brexit, the political strategy, and what we have secured to date, but we have been clear in acknowledging that this challenge will take us many years to respond to collectively, and we will.

We have acknowledged the steps that have been taken, from the new trading strategy that was launched by Enterprise Ireland, from the steps that have been taken to support our representation into the European Commission and beyond and from economic measures that have been taken. As we respond further to this challenge, we will look at further steps that will be taken, building on what we have already delivered, building on the fact that this and the previous Government have seen this economy move to over 2 million people at work. We do not need to be reminded of what an economic challenge looks like, and we have shown to date what we are capable of doing, and our determination to do more.

Comment on this