Brexit and beef crisis
Deputy Micheál Martin presses the Tánaiste on Brexit developments, possible no-deal contingencies, and support for beef farmers. The Tánaiste says Ireland is working with the EU, protecting the Single Market and avoiding a hard border, while studying UK proposals and tariffs.
We all agree the Brexit story is moving fast and furiously. The vote yesterday in the House of Commons brings closer the prospect of a no-deal Brexit scenario. The scale of the rejection of the proposal was significant and weakened, by any objective assessment, the authority of the British Prime Minister and the British Government. I understand that even today's vote on a no-deal Brexit does not necessarily take no deal off of the table, given the formulation of the motion before the UK Parliament and the range of amendments proposed. We have to await the outcome of that parliamentary process in Westminster before we can get a definitive shape of what is to come.
As I said, a no-deal Brexit prospect is closer as a result of yesterday’s vote. The announcement of a tariff regime last evening by the British Government has potentially devastating implications for Irish farming and for primary producers in the beef sector, the dairy sector in terms of cheddar, and for poultry, lamb and pork. The impact would be to devastate the rural Irish economy and sectors of our agricultural industry. The cost to the beef sector alone would be more than €800 million if these tariffs were ultimately to apply. The beef sector has been, and continues to be, in real crisis even before Brexit. Prices are well below the cost of production and many beef farmers are at the end of their tethers before any prospect of these tariffs comes into play. Intervention by the Government has been slow and has not been responsive in trying to alleviate this, even through live exports etc. to get some movement.
This tariff regime would wipe out the beef industry. Many primary producers, the beef and suckler farmers, would go to the wall. On that specific issue, has the Government sought emergency aid for the farming sector? Will the Tánaiste indicate whether a specific request has been made to the European Commission under article 219, on market disturbance, and in the context of the current Common Agricultural Policy, CAP, regulations? Will the Tánaiste also give an absolute commitment that, in the context of Brexit, Ireland will not sign off on any increased beef access from South America into the European Union in the latest Mercosur negotiations? We are in a real crisis now.
More broadly, has the Government any response regarding the British Government’s proposals concerning the North-South Border? I refer to it saying simply people can trade across the Border without any checks. Have there been discussions between the Irish Government and the European Commission on what would happen at the Border, from our perspective, on 29 March in the event of a no-deal Brexit? Does the Tánaiste agree, given all of this, an extension is clearly required for everyone to reflect on Brexit and at least avoid Armageddon?
Comment on this
The proposals released by the British Government this morning relate to a no-deal Brexit scenario, which is by no means certain at this stage I am glad to say. Further votes are scheduled in Westminster today and tomorrow on possible Brexit scenarios. Ireland will respond to these proposals as part of the EU27 and, of course, in partnership with our EU colleagues. Our core objective is, and continues to be, to avoid a hard border on the island of Ireland and to protect the integrity of the Single Market and customs union. That does not change in a no-deal Brexit scenario. As co-guarantors, the two Governments will continue to have obligations under the Good Friday agreement to ensure peace and stability in Northern Ireland. That will be challenging in a no-deal scenario.
The imperative is to work together, and with our EU partners, to ensure we deliver on the shared goal of avoiding a hard border, deal or no deal. Tariffs will have a negative impact on trade and will be damaging to businesses, farmers and consumers in Ireland and the UK. We will study the impact of these proposals carefully, together with our EU partners. We have already had contact this morning. However, it should be stressed that no option, including zero-rate tariffs for some product categories or managed tariff rate quotas, would be as good as what is currently on the table in the withdrawal agreement which provides for no change in the current tariff-free trade between the UK and the EU during a transition period and also a guarantee of avoiding a hard border and protecting an all-island economy. Regarding the Deputy's questions on state aid, the Government is in close contact with the EU Commission on the matter of state aid supports. The Minister for Business, Enterprise and Innovation, Deputy Humphreys, and the Minister for Agriculture, Food and the Marine, Deputy Creed, met with Commissioners Vestager and Hogan to discuss the specific challenges facing Irish businesses.
In February, the EU Commission announced a relaxation of state aid rules regarding supports for farmers. Aid limits per farm were increased from €15,000 to €25,000. Only last week, the Minister for Business, Enterprise and Innovation, Deputy Humphreys, announced an amendment to the rescue and restructuring scheme budget from budget from €20 million to €200 million. This scheme is an important safety net for Irish businesses and the increased budget is prudent as part of the overall contingency plan for Brexit. In the event of a no-deal Brexit, the Government will seek further relaxation of state aid rules and EU support for businesses and agribusiness. In its contingency action plan, the EU Commission noted the specific challenges faced by Irish businesses and committed to helping Ireland find specific solutions. That is exactly what is underway.
I could outline in detail the supports already put in place for agrifood. However, I have done so on many occasions in this House, as has the Minister for Agriculture, Food and the Marine, Deputy Creed. In short, the crisis, the problem and the uncertainty linked to Brexit all emanate from the inability of the British Parliament to give a clear signal, through majority support, on what it is willing to support and ratify. We will continue to advocate for the sensible deal which emerged after two and a half years of negotiation which solves many of these problems. I hope we will have a clearer picture in the next 48 hours as debates and votes take place in the British Parliament at Westminster.
Comment on this
The Tánaiste did not answer my specific questions on specific applications for specific packages for beef farmers, for example. I am reading headlines in which the Tanáiste’s colleagues refer to calves now being sold in marts for less than 50 cent as the beef crisis reaches extreme levels. The Tánaiste and the Minister for Agriculture, Food and the Marine, Deputy Creed, know the beef sector is in crisis now. If what happened with Brexit over the last three days had not occurred, my exclusive focus today would have been on the current beef crisis. Brexit, and a no-deal scenario, have come along, however, and this goes to the heart of preparedness.
What package will be on offer to beef farmers if a no-deal Brexit emerges and these tariffs are applied? Can the Tánaiste give us the flesh and bone of such a package? Surely, there have been detailed discussions. We were led to believe the EU Commission has been alerted and that everybody is aware of the challenges. As part of preparedness, surely there have been detailed discussions between the EU Commission and Ireland on what financial and monetary packages would be available, in particular to our beef farmers, in the context of such a tariff regime. The beef sector is in deep crisis now and it will be in a worse crisis in the aftermath of the application of these particular tariffs.
We need specific answers on that. This Parliament not be meeting again until three days before Brexit day at the end of March. In the interests of transparency we need to have this fully fleshed out and for greater detail to be provided to the House on issues that are critical for many people.
Comment on this
First of all, this Parliament will meet if it has to in order to respond to political decisions debated and made in Westminster. That is what we will need to do. Even today a team from the Department of Agriculture, Food and the Marine is meeting with the European Commission on these issues. There have been many meetings and discussions in recent weeks and months on how we can collectively respond to the challenges of a no-deal Brexit. We have more information on how the UK proposes to unilaterally respond after 29 March if it should crash out without a deal. We are studying that. The tariffs the UK is proposing are being looked at in a lot of detail with regard to impact. Undoubtedly, any tariff imposed on agricultural products moving between the UK and Ireland will be very damaging. As a Government, we will need to respond to that appropriately and we will do so. The Deputy certainly does not need to impress on me the importance of this issue or the vulnerability of the agrifood or farming sector, particularly in the beef, pigmeat and dairy markets. We are factoring that in, and we will have a detailed response to that, appropriate to the scale of the challenge. At the start of this week the Minister for Finance, Deputy Donohoe, outlined the financial considerations he will have to factor in should that be necessary. That is the point we are at. We will share those details with the House as they emerge.
Comment on this
Last night the Westminster Parliament again overwhelmingly rejected the withdrawal agreement agreed between the British Government and the European Union in November. That same withdrawal agreement was adopted and supported by this House. It is regrettable that it was rejected for a second time, but not surprising given the chaos in Westminster and in the British political system. What happened last night heightens the prospect of a no-deal scenario or a crash-out Brexit at the end of the month. Mr. Barnier was right when he tweeted last night:
The impasse can only be solved in the #UK. Our “no-deal” preparations are now more important than ever before.
That is a statement I agree with, and I am sure the Tánaiste does too. The root of the problem is the British Parliament, the hard Brexiteers and the DUP. There is an irony in what the British Government has proposed today. It accepts the logic that there is a need for different rules to apply to the North and that the North needs to be a special case where trade is concerned. At the same time, the British Government is trying to undermine the solution which is on the table, that is, the backstop. Again, we need to ensure that there is absolutely no movement on the backstop. It is the bare minimum necessary to protect the Irish economy, businesses and farmers and to ensure there is no hardening of the Border. The problem is that with every passing day we lurch closer to a hard Brexit. It is a possibility. That will bring chaos at the Border and will create problems for the Good Friday Agreement, economic chaos and problems for citizens in terms of their rights.
As we speak, farmers, businesses and exporters are worried. They need real solutions. The Tánaiste said earlier that the European Union is examining easing state aid rules. We need more than that. We need hard, concrete and practical solutions for businesses, exporters and farmers. We have proposed a Brexit stabilisation fund to be put to use to protect farmers and give them the practical support they need, to protect vulnerable businesses and to protect exporters. Will the Tánaiste agree to such a fund and will the Government establish it? When will the European Commission give the Irish Government the necessary flexibility with state aid rules? There is no point in continuing to make promises when today, given what the British Government has announced, people are concerned and worried. The Tánaiste and the Government have a responsibility to make sure that businesses, farmers and the Irish economy are protected. The Tánaiste, the Government and the European Commission need to step up to the plate. Can the Tánaiste spell out to us exactly what the European Commission says it will put in place to ease state aid rules and what additional supports will be put in place by the Government?
Comment on this
I thank the Deputy for those questions. As we have been throughout this process, we are very close to the European Union through the Commission, the Barnier task force and the other member states. Along with the Taoiseach and other Ministers, the Minister of State, Deputy Helen McEntee, and I have spent a lot of time building up an understanding among our colleagues and friends across the European Union of the exposure and vulnerability of the Irish economy to a no-deal Brexit or a negotiated Brexit with a bad outcome. That work is now paying off in that the solidarity is clear. There is no pressure on Ireland to change our approach to the withdrawal agreement, the Irish protocol in it or the backstop in all its detail. The pressure is in London. That is where the crisis is emanating from, and that is where we need to see solutions emerge. We want to help in that process. We have always said that. We have shown a willingness to be flexible and to take account of the political challenges facing Westminster, and the need for clarification and reassurance around issues about which it has concerns. The EU has worked with us on that, particularly in recent days, but it has not been enough. That is the reality.
The response from the EU today will be clear. We have gone as far as we can. It is now up to the British political system and the British Government to try to find a way of resolving the UK's own issues. The proposal that the UK Government published this morning to facilitate trade on the island of Ireland in the context of a no-deal Brexit makes it very clear:
A negotiated settlement is the only means of sustainably guaranteeing no hard border and protecting businesses in Northern Ireland. This is why we are, first and foremost, still committed to leaving the EU with a deal. In a no deal scenario, the UK government is committed to entering into discussions urgently with the European Commission and the Irish Government to jointly agree long-term measures to avoid a hard border.
In that context, it is important to mention the Commission's response today to that document. It says that the EU remains determined to avoid a hard border, that it will ensure the integrity of the single market and customs union in all circumstances, that it is convinced that since no other solutions have been identified, the backstop is currently the only one available to fully address the challenges of the land border and that it is studying these proposals. In other words, deal or no deal, the principles around the backstop and how it was put together will remain the focus of any negotiation between the Irish Government, the British Government and the European Commission. As I have always said, this will undoubtedly have to happen if a no-deal Brexit looks like it is becoming a likelihood rather than a possibility, which it still is today.
I will come back to Deputy Cullinane on one other issue on which I would like to respond.
Comment on this
I thank the Tánaiste. He might answer the questions on precisely what the European Commission and the European Union are considering in regard to state aid rules. We have been hearing about this for months and yet we have not seen any practical proposals. For many businesses and farmers the crisis is here and now. I also asked the Tánaiste if the Government would consider a Brexit stabilisation fund. We believe that such a fund is necessary to provide additional financial supports to the businesses that will be most affected by Brexit. Brexit is a massive market distortion, as we know.
The Tánaiste is right in pointing out that the pressure is in London, but London is playing a game of chicken with Dublin and Brussels on who will erect checks at the Border in a no-deal scenario. If we have a no-deal scenario and a hard Brexit, and if the unilateral tariff regime announced by the British Government today is imposed, what will be the response of the Irish Government?
What will be the response of the European Commission? That is what people are concerned about. They need to know how the Irish Government and European Union will respond to what I see as a fantasy solution and another attempt by the British Government to put pressure back on the Government and the EU.
Comment on this
I do not think the British Government sees what it published this morning as a viable solution in the medium to long term. That is why it has described it as a temporary solution, which is clearly inadequate in terms of the longer term. The European Union, understandably, will want to protect the integrity of the Single Market and customs union, as will Ireland, and, at the same time, recognise the commitments to prevent a hard border on the island of Ireland between the two jurisdictions. That will continue to be the case. What I am saying is that we have a deal on the table that solves that problem. It is called the backstop. It is in place as an insurance mechanism. There are alternative arrangements that the EU is happy to consider but they have to stack up. In my view, there is no viable solution that manages sensibly the two obligations we have of preventing border infrastructure and, at the same time, protecting the integrity of both single markets - in the UK and the EU - and which does not involve something that looks like the backstop around regulatory alignments and also the checking systems that are part of that backstop model. That will have to be discussed between the three parties.
I will make one other comment with the facilitation of the Chair. We have very important legislation on fisheries in the Seanad today. I am appealing to both Fianna Fáil and Sinn Féin, which currently oppose the Bill, to consider what they are doing. We are in the business of preventing border infrastructure, both in the Irish Sea and on land, and we are currently preventing fishing vessels from Northern Ireland accessing our waters within the six-mile limit, which we have done historically under the voisinage arrangements. The Minister for Agriculture, Food and the Marine, Deputy Creed, is trying to fix that problem this week and he needs the facilitation and assistance of both parties in the Seanad. I appeal to them to be of assistance in that regard.