Oireachtas Joint and Select Committees

Thursday, 4 May 2017

Seanad Committee on the Withdrawal of the United Kingdom from the European Union

Engagement with Industry Representatives

1:10 pm

Ms Patricia Callan:

I will start with the specific question about lay-offs and short time. In our survey, the member companies said that 7% of companies indicated they were likely to put workers on short time and lay-off and 2% already had to make some staff redundant. That is mainly in the manufacturing industry where one is running product lines and essentially if there is no demand for one's product, one simply scales back. What we have found is that the food sector has been dramatically impacted because prepared consumer foods tend to be a low-margin business and that is where most of our indigenous exports to the UK are coming from. That is a big issue.

In terms of the knock-on effects in the broader sub-supply chain piece, I know from our own members how hard it has been to engage them on Brexit. The ones who are directly impacted are all over it. They have had to move and they have made decisions. We have published toolkits and advice notes and we circulated the Enterprise Ireland, EI, material as well, but I am worried that many businesses have not thought about this at all. As part of the education piece around the initiative, there is an onus on everybody to keep telling all of those businesses that they need to do it. One should bear in mind that 90% of businesses are micro businesses that employ fewer than ten people and they are not necessarily members of the bodies that are present, or any other organisation. In the rural economy in particular, we must get out the message that people need to start assessing. I strongly advocate that those who are affected should be eligible for the funding that is only currently available to EI clients to do their Brexit plan. That makes no sense to me.

In terms of lobbying, Brexit has produced a huge workstream for us. Yesterday, we met with the Federation of Small Businesses from the UK, which came over specifically to look at developing relations post-Brexit. We have been working with the UK Embassy, UK trade people and directly with the British Government, and also with the European Commission and our counterpart business organisations across Europe. Our initial reaction post the summer is that the further east one went in Europe, there was no engagement at all and people were not even talking about it. Getting the issue on the agenda is something other countries are working towards and ensuring an understanding of our issues has been our biggest focus. The big focus on the EU side has been on state aid because the Department is using that as a blocker and we have been trying to help it to come up with more innovative measures.

In terms of specific tariffs and customs, we have already started practical work so I have sent members into workshops both with the Revenue but also with the British equivalent. The member feedback has been very worrying. On the British side, there has been a sense that people coming over to start practical workstreams have no idea because it is so long since people have had to think about customs and models and all of that, the expertise level is not there. I heard the chartered accountants say exactly that this morning. That was certainly the experience. We are getting down to the nitty-gritty. Yoghurt makers and water makers, among others, are describing how they produce product, how they ship it in trucks and how they get it across borders but if one thinks about the totality of Brexit, that is what one needs in every single product line in every single sector and for every single regulation. It is not simply just one room with one group of people. We need to have business people in at all levels in all of these really practical things as we progress through. Our members have been very open and have participated in many Government workshops already around this. However, a bit of Brexit fatigue is now setting in because, for example, our members have gone to workshops about finance and supports last November and they say they spent their time going and they did all of that but nothing happened so we have to keep up the momentum in terms of deliverables to keep people engaged.

In terms of people suspending investment, that question was specifically around Brexit, so half the people did say that it was directly Brexit related. Notwithstanding the negativity this morning, our economic story is still remarkable, our growth figures are outstanding, our employment figures are very good and we should not be talking ourselves into a recession, but at the same time we need to plan for the future. Anyone exporting is directly thinking about this but it is the other people about whom I am a bit more worried.

Going forward, we are a member of the Department of Jobs, Enterprise and Innovation group that has all the agencies and most of the business organisations. The group is chaired by the Minister, Deputy Mitchell O'Connor. We have had one meeting so far and we are viewing that as a very solid workstream. Most of us have been all around the country on panels, at political party meetings, at local enterprise office meetings and we have had a lot of discussion. That has been useful in terms of hearing what everyone is saying. Now we would like to get into detailed work programmes and implementation and we are available to do that.

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