Brexit readiness and rainy day fund
Brendan Howlin asks whether enough reserve funding will be available for emergency Brexit measures and job protection. The Taoiseach says the budget is not yet finalised but insists the Government will act to save jobs if a no-deal scenario arises.
With Brexit on the horizon and the possibility of a no-deal exit by the UK from the European Union in a little over six weeks' time, it is vital that the public finances are strong enough to support the emergency measures that may be needed to preserve jobs in this economy. Last year, the Government moved €1 billion from the strategic investment fund to the reserve fund for exceptional contingencies - the rainy day fund. The Government also pledged to put an additional €500 million into the fund this year. Can the Taoiseach confirm that at least €1.5 billion will be available to support jobs in the event of a no-deal Brexit? Presumably, there would be more money available if it was not for the mishandling of the funding of the national children's hospital, the metro, rural broadband and so on. The time has come for the Government to give clarity in respect of the specifics of Brexit preparations.
I spoke to trade union officials across the country during the summer. As I said publicly at the stakeholders forum during the week, we have been focused on the agrifood and tourism sectors, but in manufacturing the lack of certainty about Brexit is leading to a visible downturn in businesses. Important regional employers employing hundreds of jobs in each factory are under pressure. It is reported to me that orders have reduced, overtime is being cancelled and, in some circumstances, temporary workers are being let go. The impact of Brexit is being felt today.
It was reported that official estimates indicated that 10,000 jobs would be lost in tourism and hospitality. As the Taoiseach knows, the British Government was forced by the British Parliament to publish its yellowhammer report on the possible effects of Brexit across the British economy. Does the Taoiseach believe it is now time for his Government to publish its own detailed, clear analysis of a hard Brexit on every sector in our economy? How many jobs are at risk in manufacturing if the UK leaves in six weeks' time without a deal? How many other jobs across each sector of the economy are at risk? We need to know how much money we can deploy to sustain jobs in the short or medium term during this crisis. How much money will be available from the European Union in the event of a no-deal Brexit in six weeks' time? I would like the Taoiseach to address those questions in a very open way. How will money be made available to support vulnerable jobs? How much money will be made available? How much of it will come from Europe and from our own resources, and how will it be delivered?
Comment on this
I appreciate that for the next three weeks I will be asked questions about what is in the budget. I hope everyone in this House will appreciate that the answer will be that we will find out on budget day because the budget has yet to be agreed. It needs to be discussed among Ministers, with Fianna Fáil, as the confidence and supply partners to the Government, and at Cabinet. The only answer I can give people on what will be in the budget in three weeks' time is that they will find out on budget day because the budget will only be signed and sealed that morning.
The public finances are in a strong position. Two years ago, when I became Taoiseach, our public finances were in deficit and they are now in surplus. We are one of the few countries in the world to record a budget surplus. They do not have one in the UK, in America, or in France but we are in surplus. We have also reduced the national debt considerably as a percentage of GDP in that period.
We do not have a document equivalent to the Operation Yellowhammer document but have produced all that information already. It is in the Brexit contingency plan document we published in July, the document in December before that, in the summer economic statement, and in detailed analyses published by Government and done by Copenhagen Economics, the ESRI, and the Central Bank. All those figures are available, and have been for some time. We never had an Operation Yellowhammer-type document which we hid from people. We published the information all along the way.
The budget is based on an assumption that no deal is a real possibility on 31 October. That does not mean that we necessarily believe that is going to happen. We will work to secure a deal until the very last moment but will not do so at any cost. We believe the prudent thing to do is to prepare the budget with a pessimistic scenario, which is one for no deal. The budget will prepare us for no deal.
On budget day we will publish details of the package that will be available to business and to support those businesses and jobs that are vulnerable as a consequence of Brexit. It will be a substantial package. We do not yet know how much will come from the European Union or from our own funds. Some will come from the European Union but I expect most will come from own funds. Again, that is not as yet determined. The Deputy will know as soon as we know for sure.
It is worth pointing out that we put many things in place already. There is a €300 million low-cost loan to businesses to allow them to prepare for Brexit. A future loan scheme is also being made available to businesses to allow them to adapt as is a €200 million approved restructure and rescue fund with approved state aid clearance from the European Commission to allow us to support those businesses which need it.
The Deputy's question is correct in that there has not been an enormous take-up by business of these schemes as yet because they have not needed to take them up but they may need to and that is why it is important that they are there.
Comment on this
Dáil Éireann has not been prorogued so we will be asking questions and, unlike some of what has happened across the water, we expect to get very clear and accurate answers.
All of us in this House, and certainly those workers and employers across the country, understand that the preparations for a no-deal Brexit is not a normal annual budgetary issue. We need to know what the Taoiseach will deploy in terms of the strategic reserves we have in this country to ensure that the task of preserving jobs, which is far more useful than the task of trying to replace jobs, through this difficult period is understood. That means drilling into every industry to know where the jobs are vulnerable and what they might need. The sums talked about are paltry in the context of what will be required in the event of a no-deal Brexit.
We also need to know on a workplace-by-workplace basis what the pressures are and what will be required. Many of these companies are not going to apply for loans because they cannot afford to provide for further demands right now, adding debt. That is not the solution. I want a clear indication from the Taoiseach that he understands the scale of what will be required in the event of a no-deal Brexit and that he has planned well for that and that he understands where and how resources will be deployed and how much resources will come from Europe and to help us.
Comment on this
The Deputy will know the answers to those questions on the same day that I know for sure because the budget will not be signed off on until the Cabinet meeting on the morning of 8 October, when we will present that budget to the House on that day.
We are on the same page here. I would rather be in a position that the country is borrowing money to save people's jobs than borrowing money to pay the dole. If that is what we have to do that is what we will do as part of the budget. I need to be honest with people as well.
If we end up in a no-deal scenario, it will be a case of damage limitation. There may be some jobs and, regrettably, some businesses that cannot be saved but we will put together a package that will be significant and meaningful and will allow us to save those jobs and businesses that are viable in the long term but have been made vulnerable as a consequence of Brexit.