Dr. Tom Healy:

I thank the committee for the invitation to present. My colleague, Mr. Paul McFlynn, who is Belfast-based, cannot be here today. I will speak briefly about the issues of jobs, employment and trade, which have been highlighted in the document presented jointly with the ICTU. This very much reflects our thinking and analysis at the moment of the risks, as well as the opportunities, in respect of economic matters.

The first key point is that we need to diagnose the scale of the problem and the scale of risks. Some analysis has been undertaken by the Department of Finance on sectors of manufacturing that are vulnerable. That includes agrifood and many other sectors. Perhaps surprisingly, the pharmaceutical industry, which is not generally Irish owned, is also vulnerable because of the extent of its trade links with the UK. There is also the issue of energy, as we are reliant on imports of oil and gas from the UK. In so far as the Government is in a position to begin to respond to some of these challenges, it is vital that we know the scale of risks and problems, and that we map the extent of exposure and risks across the sectors. There could very well be a role for many actors, including employers, unions and Government, to assess what needs to be done in the short term in particular, if there is a risk of redundancies and firm closures.

The second key point is the important of retraining and equipping workers at risk of redundancy. There is surely a role here for the European Globalisation Adjustment Fund, which has been successful to some degree in respect of transitions in the past. Brexit is potentially a major shock to the labour market, especially in particular regions. My sense is that the Republic may well gain in areas such as financial services but there is no automatic mechanism by which workers in the mushroom growing industry in County Monaghan, for example, can be transferred painlessly and seamlessly to the IFSC in Dublin. That would be generally recognised and, therefore, this represents a major challenge.

The third message is investment. In so far as we will need to equip firms to divert trade to non-UK markets and to develop new product and service lines, there is a need for strategic investment in new and existing enterprises. There ought to be an expanded role for the Strategic Banking Corporation of Ireland to interact directly with enterprises to equip them not only with finance, but with advice and strategic marketing support, where appropriate. Clearly, the work of Enterprise Ireland and the IDA are also crucial in this regard.

Fourth, the wider debate in the EU about fiscal rules needs to take into account the potential shock of Brexit for manufacturers and producers across the Union, especially the island of Ireland, which is most vulnerable. There is a cogent argument here for adapting the fiscal rules to accord some flexibility in capital investment.

The final point relates to energy. There is a role for the Northern Ireland Executive and the Government to ensure the single energy market for electricity is safeguarded and energy supplies in so far as is possible are secured into the future because we are very much dependent on fossil fuel imports, much of which come directly from the UK.

All this uncertainty and challenge throws up an opportunity to rethink our long-term enterprise strategy away gradually from one of over-dependence on foreign direct investment to a much stronger export-oriented indigenous economy. This challenge has been posed for countries such as Finland, which went through an enormous economic shock in the 1990s, not least associated with the collapse of the USSR, to a relatively successful economic performance following many years of difficult transition.

The final shape of Brexit will determine outcomes for the Republic of Ireland. By far the most preferable outcome would be some form of customs union for the UK and the EU. If that were possible, then it is not impossible that Northern Ireland could remain within the EU whatever the precise constitutional arrangements in the long term there. That would be hugely beneficial to people across the island of Ireland, in the absence of which the complications in respect of free movement of people and goods, services and rules of origin would be extremely challenging. It would not be at all in our interest if such were the outcome of Brexit.