Oireachtas Joint and Select Committees
Wednesday, 8 February 2017
Committee on Budgetary Oversight
Macroeconomic Outlook: IBEC
2:00 pm
Mr. Gerard Brady:
I agree with Deputy Boyd Barrett that state aid difficulties will become more acute because of Brexit. When the UK is outside the EU, it will not be subject to state aid rules. It is already coming after some of our indigenous enterprise base with offers of state aid and it will continue to do so. At the moment, the EU's state aid rules confine such aid to rescue and restructuring. For example, an Irish company that is in trouble because of Brexit would essentially have to go through liquidation before the State could help, even if that company was viable in the long term.
It also causes issues around investment in terms of how much one can do with voluntary and private sector partners. There are issues.
On the question of social housing and the role of the local authorities, the big difference between the 1940s and 1950s when we were previously able to ramp up social housing is that the State had more or less derogated its responsibilities in education and health. There was no social welfare system, education system or health system that was being funded primarily by the State. The State had more space to be able to spend on social housing. Under the current fiscal rules and because of the level of retirements in particular and loss of capacity in the social housing sections of the local authorities, it will take a long time before the local authorities are able to ramp up that expertise. In the context of Deputy Burton's question, there are skills capacity issues as well in that it will be difficult to compete for the necessary skills at a good level.