Stephen Donnelly (Wicklow, Fianna Fail) | Oireachtas source

This debate concerns the Government’s Brexit strategy, which was published a few days ago. Brexit is widely acknowledged as the greatest economic threat Ireland has faced in decades. The Taoiseach has said that the negotiations will be the most important in our history as an independent State. Nearly half of exports from Irish-owned firms go to the UK. Representatives from international airlines told us yesterday that without a transition agreement - the future conclusion of which is uncertain - planes in the UK could be grounded from March 2019 onwards. That would in turn ground planes in Ireland because much of our air transport goes through the UK. The Department of Finance and the Central Bank estimate that a hard Brexit, which we are now firmly in the throes of, could reduce trade to the UK by one third and result in 40,000 fewer jobs in Ireland. Brexit threatens jobs in many sectors here, including retail, tourism and manufacturing. It has the potential to wipe out Ireland’s fishery sector and several parts of the agrifood sector.

In his address yesterday, the Taoiseach stated that the Government has been planning for Brexit planning for two years. Almost a year has passed since the Brexit vote. Given that amount of time and the severity of the threat Brexit poses to Ireland, the Government’s new Brexit strategy needed to be comprehensive, ambitious and strategic. It is none of those things. It contains no budgets, targets or timelines. There is nothing tangible in it for the people throughout Ireland who are trying to figure out how they and their companies can prepare for Brexit. It is a document bereft of political leadership, political direction or ambition in respect of how Ireland can and must respond to Brexit. It is a well-written document created by the Civil Service, which is doing what it can in the vacuum created by Fine Gael’s internal political considerations. The first third of the document explains what Brexit is. The second third lays out the Government’s negotiating positions, which are already known. The final third lists already published information and a speech the Taoiseach made in the Mansion House three months ago. The document describes itself in its introduction as a position paper. Irish businesses and farmers need a plan, not a position paper. They need to know that the Government has their back, they need to know how it is going to help them and they need to know when that will happen.

There has been much debate this evening on Northern Ireland and its strategic importance and rightly so. The issue has been addressed by the Government and my colleagues. I will focus on jobs and trade. The Government position paper states that adaptive sectoral Brexit response plans will be developed by all Departments under the direction of the Department of the Taoiseach to mitigate emerging sectoral challenges. It states that work is under way to develop options for improving the level of business planning advice available to SMEs. For Irish businesses trading with the UK, Brexit is not something that is going to be agreed in March 2019, it is already happening and they need support now.

How seriously is the Government taking Brexit in terms of supporting industry and protecting jobs? The numbers tell a very interesting story. The 2017 Action Plan for Jobs tells us that in order to mitigate against the impact of the UK’s decision to leave the EU we have allocated additional resources in a number of areas, including an additional €3 million to Enterprise Ireland and IDA Ireland. Bord Bia got €1.6 million. That is €4.6 million for three of the most important State agencies helping react and respond to Brexit. In 2016, the Dáil voted through Supplementary Estimates for health care. This was money which no one had anticipated would be spent on health care until the Minister for Health, Deputy Harris, said he needed it. Almost €800 million was voted through. The Government allocated 171 times more money to health care than it has to the three agencies tasked mainly with dealing with Brexit and it tells us with a straight face that it is taking Brexit seriously.

Irish companies, farmers and food processors need support now. They need to know how to hedge currency, expand into new markets and create new products and services for those markets. Brexit may result in risks to their supply chains, access to credit, cost of credit, the enforceability of contracts and the rights of employees. They need to know how to address these risks and start planning for them today.

The most recent data strongly suggests that while some Irish companies know what to do, many do not. Last week, the Department of Jobs, Enterprise and Innovation published a report on how Irish SMEs are reacting to Brexit. One thousand SMEs were surveyed. Fifteen out of every 20 Irish SMEs believe they will be harmed by Brexit. However, only five companies in 20 intend taking action and only three companies in 20 have done so to date. This suggests that half of Irish SMEs believe they will be damaged by Brexit but do not intend to do anything about that. Why is that? Many do not know what to do or they do not know how to do it. For example, even if they know they should be hedging currency, they have no idea how to do so. Some companies do not have the contacts, experience or resources to act. The State needs to tell Irish companies that there is much they can and should do and that the State will help them do it. While companies may need to consider reducing their exposure to Brexit, they might also be able to turn it into an opportunity.

A Wicklow company in the building sector used to trade in the UK and Ireland. It experienced rapid growth and was very successful. After the Brexit referendum, its orders from the UK fell as builders there started to source UK-based products. The company carried out a feasibility study of various EU member states. It discovered that its product fit perfectly into the market in the Netherlands. The company worked with Enterprise Ireland, went to the Netherlands and conducted marketing there. It is now selling its product in the Netherlands. Due to this success, it has revised its growth projections upwards beyond what they would have been if there had been no Brexit.

Companies are sourcing new supply chains and beginning to work with Enterprise Ireland. They are learning how hedge sterling and are revising their UK pricing strategies. However, many more companies need to take such action.

I recently met diplomats from several EU member states, a number of whom told me the same thing, namely, that to date there has been little direct trade between Ireland and their countries, they have struggled to get high-level access to Ireland’s State agencies and much of the trade between Ireland and their countries has been facilitated by UK companies. However, their governments and industrial sectors are open for business and looking for trading partners. They want to do business with Ireland. We must use Brexit as the push it seems we need to forge these new alliances.

We must remember that Brexit is not the only material threat to Irish jobs and trade. There is also the erosion of our tax competitiveness. President Macron of France has indicated that he will push for tax harmonisation among eurozone states. The common consolidated corporate tax base, which could wipe billions off Ireland’s corporate tax receipts, was being pushed by the European Commission within 48 hours of last year’s Brexit referendum.

Northern Ireland is moving towards having a corporation tax rate of 12.5% next year. Britain is moving towards a rate of 17% and has signalled that it may move towards a lower one. President Trump has signalled that the United States is going to move towards a rate of 15%. In this ever-changing world Ireland’s exporters - farmers and businesses alike - must be adaptable. Some are, but others need help. The economist Dan O’Brien recently reported on the findings of a new ESRI study of Irish-owned companies. The study showed that of all the exports from Ireland, the percentage from Irish-owned companies was only 13%. It also suggested Irish companies tended to be sold rather than scaled and that the level of innovation capacity was not where it needed to be. Let us do something about that. Brexit is a national challenge which requires a national response. To date, the Government has not provided it and its new Brexit strategy does not pave the way for it. We must be much more ambitious for Irish companies. We must engage directly with them to help them to mitigate the risks and seize opportunities arising from Brexit. We need detailed contingency planning per sector. We must review existing strategic plans, including Food Wise 2025. We must also consider every opportunity to develop an all-island economy. In 1959, the Lemass Government adopted the White Paper on Economic Development led by Dr. T. K. Whitaker. It formed the basis for the first programme of economic expansion. The resulting expansion of trade benefited Ireland for nearly 60 years. While the level of international trade from Ireland grows, we must begin to look further afield than the Anglo-Saxon world. If we do, we will have a chance not only to limit the damage caused by Brexit, but to use its impetus to drive future economic growth to service Ireland for decades to come.

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