Dr. Kieran McQuinn:

We engaged in a scoping out exercise on Brexit in late 2015 and early 2016. The electricity issue and the energy issue in general were explicitly dealt with in a paper by John FitzGerald and Edgar Morgenroth. I will make two brief responses, the first of which relates to the common travel area and labour. Again, the question was explicitly dealt with in that work.

There were four or five chapters, one of which considered the overall macro issue. Then there were the sub-sectors on issues such as energy and labour. The crucial fact about the labour market is that we are used to a highly fluid relationship between the UK and Ireland. That is how economists typically referred to it over the years. Regardless of whether we like it, the UK has acted as a kind of safety valve when we have had particularly bad economic shocks and, as happened in 2009 and 2010, unemployment rates escalated sharply. People then moved to the UK. That puts a cap on the degree of unemployment we witness in the domestic market. If that is in any way impeded, if there are any frictions that prevent people from moving back and forth and if that safety valve does not operate to the same extent, the scale or magnitude of the shock will be greater in the domestic market than it would otherwise be.

Very few people have inquired in great detail as to what is the most efficient, cost-effective way of delivering a certain number of social housing units. That should be analysed. If we have learned anything over the past ten years, it is that we really need to guarantee, however it is done - whether by the State, through local authorities, etc. - that a certain number of units are built every year. The problem that arises is that when that breaks down over several years we end up with this big backlog of a problem which will require a lot of money to be spent in order to resolve the problem, and we have to be careful about how and when that money is spent. That is the number one lesson. We are not alone in this; the UK has also had this problem. We spoke to colleagues from the National Institute of Economic and Social Research recently. The problem in the UK in the 1980s when they sold off the public housing stock, which was positive for many of the households concerned, was that this stock was not replenished and that led to a decline in the amount of public housing. There have been long-standing problems in the UK market as a result. Other economies have had this difficulty. We need to heed the lessons to be learned in this regard. When we were building crazy numbers of houses in 2005 and 2006 - with 70,000 or 80,000 units per annum - one of the ways we thought we would deliver social housing was the notion that a certain percentage would be provided by the private market. It is fine to provide 10% of 80,000 units if that number is being built. However, the model collapses when the private sector is building practically no units. It is very important that we have a mixed response in order that it is more robust to withstand economic shock, but there must be some underlying guarantee that the State will provide a certain number of housing units year in year out. That withstands most economic shocks that occur.

Deputy O'Dowd asked about opportunities from Brexit. This work was done by Ron Davies of UCD and a colleague of ours, Iulia Siedschlag, as part of a scoping out exercise or a subsequent analysis on FDI inward flows that may arise. They noted some increase in inward flows of FDI as a result of Brexit but overall that did not outweigh the negative aspects.