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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Brexit impact and contingency planning

Summary

Leaders debated the ESRI’s warning that Brexit, especially a disorderly no-deal exit, would damage jobs, trade and the wider economy. The Taoiseach stressed that a deal is preferable, that Ireland has already enacted contingency legislation and loan supports, and that preliminary talks on border contingencies are ongoing, while Micheál Martin pressed for more detail on discussions with the Commission and the Government’s plans.

The report published by the Economic and Social Research Institute, ESRI, this morning is a stark reminder of the negative impact of Brexit on the Irish economy, irrespective of the kind of Brexit that occurs. There is no such thing as a good Brexit. It will be negative for the economy, trade, jobs, households, the labour market and so on. The study's analysis of a no-deal, or disorderly, Brexit is particularly stark and significantly more negative than that of previous reports. Some 80,000 jobs will be lost in the event of a disorderly Brexit and there will be a severe impact on trade, notwithstanding whatever positive diversion we receive from foreign direct investment. The overall impact will be negative and damaging to Ireland, while a no-deal Brexit, in particular, will affect firms' capacity to trade, the labour market, the public finances, the household sector and the broader economy.

That underlines a reminder to politicians on all sides across Europe, in the United Kingdom and in Ireland that a no-deal scenario must be avoided if at all possible. I am not sure if that is the view of everybody across Europe or some of our friends in the United Kingdom. I got a sense at the European summit last week that some people were saying that they had had enough of this, that they should get rid of it and move on to the next business. It is not the next business for the 80,000 people who would lose their jobs or the livelihoods and companies that would be damaged. There has to be a reassertion of the imperative to avoid a no-deal Brexit.

I believe President Macron asked the Taoiseach what will happen if there is a no-deal Brexit. He asked the Taoiseach if Ireland would be fine, which is probably the overstatement of the week, to which the Taoiseach replied that we could cope. This has not been denied. I would like an explanation of how the 80,000 people who will lose their jobs will cope. We should take every opportunity to point out to our European colleagues that it needs a medium-term extension. There should be no equivocation about the necessity for one.

I believe Chancellor Angela Merkel asked the Taoiseach about the Border question. It has been revealed that the Commission is in talks with the Irish Government about a no-deal scenario and what would happen at the Border. It says that if there is no deal, there is no backstop, and there will be checks at the Border and, in essence, there will be a Border. The precise form and nature of the checks, how they will take place, and at what distance is being discussed. I think the Taoiseach said it is preliminary and there is a rough plan. Does the Taoiseach not think it is time for him to be upfront and transparent with the Dáil and public about the impact of a no-deal scenario on the Border question? What will happen at the Border? What is the nature of the discussions under way between the Commission and the Government? Will the Taoiseach outline details of the type of arrangements being discussed in the context of a no-deal scenario?

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Leo Varadkar The Taoiseach Fine Gael

The ESRI report published this morning is a reminder of the very stark consequences that Brexit will have for Ireland and the Irish economy. It confirms many things that we knew already. Brexit will be bad for Ireland in any scenario. There is no such thing as a good Brexit for Ireland. While there may be opportunities, there will certainly be more downsides than upsides. It confirms again that a deal is better than no deal, and a managed no-deal situation would be better than a disorderly no-deal situation. It also shows that the economy will continue to grow. It will not be as fast as we anticipate it will grow in the event of a deal but it will continue to grow. We will not go into recession, at least according to the ESRI. There will continue to be an increase in the number of jobs. There will be more jobs, just not as many extra jobs as we would have in the event of a deal. Incomes will continue to rise, just not as fast as they would rise in the event of a deal. Public finances would deteriorate, but not to the extent that we witnessed ten years ago. We would move from a small surplus into a small deficit.

Having said that, we should not underestimate how serious a no-deal Brexit could be for some very vulnerable sectors in our economy, especially the agrifood sector, tourism and small exporters whose only market is the UK. That is where we are most exposed and they will need the most support should we end up in a no-deal scenario in a few weeks. I heard Deputy Martin say a moment ago that we should avoid no deal at all costs. I am not entirely sure what he means by "at all costs" or what price Fianna Fáil would be willing to pay to avoid no deal. I know at the start of Brexit his party conference voted in favour of gantries and hard border measures between North and South. Fianna Fáil's spokesperson on "Morning Ireland" refused to rule out-----

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Stop playing politics with it and act like a Taoiseach.

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Leo Varadkar The Taoiseach Fine Gael

Fianna Fáil's spokesperson on "Morning Ireland" refused to rule out or at least refused to answer a question about whether Fianna Fáil thinks we should be preparing for a physical border between Northern Ireland and Ireland, which we are not.

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She asked for the Government to answer questions and to be upfront in the interview.

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Leo Varadkar The Taoiseach Fine Gael

With reference to plans, we have put in place the necessary legislation to protect the rights of citizens and support businesses in the event that there is no deal. The legislation was signed by the President on St. Patrick's Day. I acknowledge the co-operation of this House and the Seanad in getting that important legislation through. I hope it will not be needed, but it is done and was enacted well ahead of time.

Tomorrow the Minister for Agriculture, Food and the Marine, Deputy Creed, and the Minister for Business, Enterprise and Innovation, Deputy Humphreys, will launch the future Brexit loan scheme to provide finance for businesses which may need it in order to adapt their businesses in the event that Brexit happens. We have secured the common travel area through a bilateral convention with the United Kingdom, making sure there will continue to be free travel between Britain and Ireland and students from the North and the South and cross-Border workers will not be affected. We have developed a package of measures that we can put in place very quickly to support jobs and incomes in the agrifood and export sectors, with a series of loan arrangements that we can put in place to intervene to rescue and restructure businesses to turn them around in the event that there is no deal.

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I do not intend to lower myself to the petty partisan politics in which the Taoiseach engaged just now. I will just remind him that we voted for the withdrawal treaty. We facilitated and expedited the legislation to prepare Ireland for a no-deal Brexit. We have been constructive. Ours has been the only party here that has been resolute in avoiding the need for a general election in order that the Government will have space to negotiate on Brexit. We have been supportive of the national position. That said, a no-deal Brexit should be avoided. Britain agrees with the withdrawal treaty, or at least the British Government and the British Parliament do. No one is talking about compromising on the essentials in the context of a hard border and so on. The Taoiseach did, however, hear me talk about an extension. It worried me that President Macron had asked the Taoiseach on the day of the meeting if Ireland would be fine in the event that there was a no-deal Brexit. That is my point. There was a sense in Brussels last week that this should be moved on at any cost. The date was moved to 12 April. Sometimes it takes a little more patience to work out a resolution.

I have asked a question that I have been asking for three months and which the Taoiseach has again avoided. That is why he went down the road he took to avoid answering the question I asked. What is the nature of the discussions that have been ongoing between the Taoiseach and the Government and the Commission on the Border question in the event that there is a no-deal Brexit? Can the Taoiseach give the House an honest answer to that question that I have been asking for three months?

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Leo Varadkar The Taoiseach Fine Gael

The Deputy said he thought a no-deal Brexit should be avoided at all costs. They were his words.

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Answer the question.

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Leo Varadkar The Taoiseach Fine Gael

I do not think it is petty to ask the Deputy to explain what he meant by it, but I will not pursue it. He is aware that I supported an extension and said so before the Council meeting yesterday. We have granted the United Kingdom an extension which was supported by President Macron and agreed to by all 27 member states.

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The Taoiseach did not. It is conditional.

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Leo Varadkar The Taoiseach Fine Gael

There were differences of opinion on which date we should choose, but there was no push-back against there being an extension. As 27 member states, we stand behind the extension we agreed to last week.

Nobody can say for sure what will happen in a no-deal scenario at the Border between Northern Ireland and Ireland. We will hold the United Kingdom Government to its existing commitments on the Good Friday Agreement, to ensure the free movement of people and free trade, North and South-----

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Has the Taoiseach talked to the Commission?

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Leo Varadkar The Taoiseach Fine Gael

-----and its commitment made in December 2017 to maintain full regulatory alignment. Talks with the Commission have been happening at official level on exploring contingencies. What they will be nobody can say for sure because a lot will depend on the approach the UK Government takes if it maintains full regulatory alignment-----

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Can the Taoiseach share it with us?

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Leo Varadkar The Taoiseach Fine Gael

There is nothing to share; they are preliminary discussions. There are no papers or documents.

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Of course there is something to share.

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Leo Varadkar The Taoiseach Fine Gael

That is a conspiracy theory.

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Leo Varadkar The Taoiseach Fine Gael

It is.

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The Government is having discussions. Can it not share what is being discussed?

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