Mr. Kieran Donoghue:

I thank the committee for the opportunity to speak on Brexit and how IDA Ireland is responding to the challenge. Our current strategy, which covers the period of Brexit, aims for significant uplift in the amount of foreign direct investment which we hope to win for Ireland between 2015 and 2019. The targets include 900 new investments, 80,000 gross jobs and a 13% increase in the number of firms in the portfolio. Our performance to date has been quite encouraging, especially in 2017. The total number of people employed in the IDA Ireland portfolio of companies is a record 210,000. This is a positive backdrop from which to confront the challenges of Brexit. Ireland's attractiveness to multinationals continues to increase.

We share the view of the Oireachtas that Brexit is a very unwelcome development. It is not in Ireland's national interest. It fragments the EU market. It is very challenging for multinationals but it is not insurmountable. It is worth remembering that they are quite sophisticated, large investors which have the wherewithal to respond to the challenges of Brexit. Brexit is a double-edged sword, presenting opportunities and challenges for Ireland and in the context of foreign direct investment.

In the lead-up to the UK referendum in June 2016, we had been speaking to our clients about Brexit. They share our collective view that it is a very negative development which creates uncertainty and instability. More fundamentally for them, it threatens cross-Border business activity and supply chains and it poses additional costs and disruptions to trade and investment. It is important to remember that multinationals have options to preserve market access within the EU and the UK from their existing networks of subsidiaries and branches. They will not be frozen out of any of the markets. Some of them view Brexit as such a significant event that they will re-examine the overall structure of their business in the EU and reconfigure it with due regard to Brexit. The two principles guiding their response to Brexit are least disruption and lowest cost. They do not want to have to leave the UK and will stay there as long as possible but they are making plans to respond to the challenges that Brexit poses to them.

Generally, Ireland's multinationals view Brexit as a low risk. The impact varies across sectors and companies but none of our clients are telling us that Brexit is an absolutely terrible challenge.

On IDA Ireland's response to Brexit to date, it is a standing item on the executive committee and board's agenda. Each month, we deal with the issue, reviewing what we are doing, what our clients are saying and our response. Our parent Department, the Department of Business, Enterprise and Innovation, has provided extra financial and human resources to help us address the challenges of Brexit which we have deployed to increase our focus on the UK market and on those clients affected by Brexit. We have established an IDA Ireland Brexit group, which I chair, and we participate at all relevant departmental, cross-agency and other Brexit fora.

Since June 2016, we have completed four sensitivity analyses of our portfolio, meaning that we have approached our clients to identify those which are at risk from Brexit and those that view it as presenting them with investment opportunities. We have also restructured our European operations and now treat the United Kingdom as a separate and distinct market from the rest of the European Union. The full range of grants, information and advisory supports available to our clients are available to the clients now dealing with the challenges of Brexit. We have organised many investor briefings in the UK to brief companies there on Ireland's proposition and we have also undertaken a dedicated marketing campaign in the UK. There is ongoing engagement and monitoring of relevant companies through our operations, teams, overseas and through our client development programme.

We have already won approximately 20 investments with employment potential of more than 2,500 jobs over the next three to five years, as a result of Brexit. We have a considerable pipeline of more than 30 investments on which we are still working and which are yet to be announced. Brexit is already generating investment opportunities for Ireland which IDA Ireland has converted.

IDA Ireland continues to have ongoing and active engagement with clients around Brexit. Its impact varies by sector and company. Financial services is one of the sectors most impacted upon by Brexit and it engaged with us quite quickly to respond to the challenges. The majority of the IDA Ireland portfolio is not heavily exposed to Brexit. I would describe the overall response of our firms to the challenges of Brexit as pragmatic and business-focused. Clients have options. They have extensive networks of branches and subsidiaries in the UK and across the EU which gives them the wherewithal to respond to Brexit. The key issue for our clients is the terms of continued access from Ireland into the UK post-Brexit, and we are working with them to address that. What is really important is the deal of the final EU-UK agreement and transition arrangements. All our clients want and need transition arrangements to give them more time to prepare to respond to the challenges of Brexit.