Thursday, 11 July 2019
Brexit Contingency Action Plan: Statements
Willie Penrose (Longford-Westmeath, Labour)
We are standing on the bridge as the Brexit date looms into view. The challenges arising therefrom are significant to say the least and have been referred to expansively by my colleagues. We must continue working in an anticipatory fashion. However, we continue to work in a vacuum as we do not know what type of Brexit will emerge or the conditions that will be attached to it. The stark reality, as indicated in the Government's report, is that 50,000 to 55,000 jobs are at risk if there is a hard Brexit. Everyone contributing in Ireland, Britain and everywhere else says we do not want a hard Brexit. However, we are hurtling towards a no-deal Brexit facilitated by a battle for the leadership of the Tory Party in Britain, as the candidates outdo one another in their machismo, trying to indicate how strong they would be, but they have given very little thought to the economic consequences, even in their own country.
A report in Northern Ireland published yesterday states 40,000 jobs are potentially at stake there. For Northern Ireland, that level of job losses would be nearly twice as serious, given its smaller population and workforce. Clearly, the economic risks for Northern Ireland are acute in the context of a no-deal Brexit. As well as direct job losses, we know that any Brexit will affect wider economic output here and in Northern Ireland. The whole economy will contract, with a loss of living standards and incomes across the whole economy or, perhaps I should say, nearly the whole economy. One of the big problems with Brexit is that the harm will be concentrated in some indigenous sectors that have been mentioned such as agriculture and food. During the debate yesterday on Mercosur I indicated that in terms of the impact on agriculture, the immediate focus should be on Brexit. There are 300,000 tonnes of beef going to the United Kingdom, which accounts for well over 52% of the overall market. It is our largest market for high value and quality cuts. It is a terrible impact. While Mercosur is important, it is down the line and we can all work at it and indicate our dislike of it, but Brexit is the big issue. The farming public with which I deal is more acutely aware of Brexit and its confidence has been more directly impacted on by it.
Job losses will be concentrated outside Dublin and the other big cities, which is a significant problem. There is a real risk that the Dublin economy will be okay and that policy makers in the Dublin bubble will not see the reality for the rural economy. The word "rural" appears just once in the Government's 117-page plan which states: "The agri-food and fisheries sector is Ireland's largest indigenous industry [...] and acts as a primary driver of the rural economy". That is an understatement, as everybody understands. The plan acknowledges that most of the 55,000 job losses will be in the most exposed sectors which include agrifood, tourism and retail, but it fails to put two and two together. I asked that this issue be given attention in the coming weeks. It is my view that whoever wrote the plan failed to see the difference between normal fluctuations in employment and the job losses that will come from structural change in our export opportunities. We all know that when the economy is going well and GDP is going up, there are more jobs. We used to hear the old saying about the rising tide. However, what goes up must come down. When GDP drops, as it inevitably will and as the Minister for Finance, Deputy Donohoe, pointed out recently, the economy can provide fewer jobs. While in the normal run of events new or lost jobs are spread across the whole economy, in a hard Brexit most of the job losses will be in the same sectors of the economy and the same towns and rural areas. The impact will be significant.
There are about 91,000 people outside the farm gate employed directly in agriculture, forestry and fishing. How many of these jobs will we lose? Will we lose one quarter, one third, 30% or 40%? We have to get down to that level of detail; otherwise we cannot prepare or put in place the necessary resources to counteract these losses. There will not be another job to go to for someone who has the skills needed for farm work or food processing. They are specialised skills. We may suddenly be faced with losing 55,000 jobs in rural Ireland and smaller towns. If we assume Dublin jobs will mostly be okay, it means that around one in every 30 jobs in the rest of Ireland will be gone. Even if we include all 2.3 million jobs in the State, 55,000 job losses still represents one in every 42 jobs. That is a massive impact which will have significant consequences and implications for thousands of families and communities in the heart of rural Ireland. I know what it is like. We only need to hear the news emanating this morning from Lanesborough and Derrahaun about Bord na Móna. Losing ten or 20 jobs in such a place is like losing 200 or 400 in a city. The impact on the wider economy is significant and will mostly be felt in rural Ireland and smaller towns. The Government's plan does not demonstrate real preparedness for this scale of job losses and the impact it will have in those areas. When there are normal job losses across the whole economy, a worker can usually find work in the same industry or in a job that needs similar skills. However, we are talking about 55,000 workers who might have to retrain and seek work in a totally different industry.
The first response should be to see how many of these jobs we can support. As my party leader, Deputy Howlin, said yesterday, the Government should be talking to trade unions about altering work patterns on a temporary basis to see if we can limit the number of job losses and keep businesses going. We have to be proactive in that regard. It is much easier to preserve existing businesses than to foster new one and jobs from scratch. We are all acutely aware of the concentration being on areas with a high skills base, but trying to find a job in a rural area is more difficult. The Government should be talking about the amount of money and resources that will be available to keep businesses from closing down so as to preserve jobs.
It cannot all be doom and gloom, as this is only anticipatory, but we all have to work together. We all have an obligation in that regard, not just the Government. The economy is going well, but the Labour Party contributed to making the necessary changes and adjustments to fix it, hard though it was, and suffered as a result. However, we do not want to see another wave of job losses barely ten years after the last economic crisis. Following the economic crash in 2008, we created a €500 million jobs fund which we used to boost employment in areas in which a lot of jobs could be created such as hospitality and tourism. The Tánaiste is well aware of this, as it was the jobs fund that was used to fund the lower rate of VAT in the hospitality sector. I recall that, as part of our objectives, the Labour Party set about providing 30,000 new training places per year, but we delivered more than 40,000 per year. The Government’s plan includes a two-page section on training for workers who lose their jobs but no quantitative targets. However, what bothers me - another speaker referred to it - is that there is no indication that new money will be made available to secure existing jobs and train people for new ones. The question is: what jobs? The nature and type of job are of critical importance. There must be a greater focus on an industrial strategy in the Government’s plan.
There are a number of potential growth areas in the economy. We could develop new jobs in home retrofitting. We need workers in such areas if we are to reduce carbon emissions and eliminate fuel poverty. An area in which I see great potential to create new jobs is forestry in making new materials from wood, including replacements for many industrial plastics. Obviously, we could create more jobs in construction in building the affordable homes people need across the country.
In addition to looking across Europe to replace goods we currently import from Britain we should be looking at what we can supply efficiently in the domestic economy. There are many possibilities for job creation in the economy, but none of them is alluded to in the Government’s plan. Having a focus on an industrial strategy within the plan is critical.
The European Union understands the nature of the challenges we are facing. They were outlined by the Tánaiste. The reason there is a European Globalisation Fund, EGF, is to deal with situations where industries go bust and particular regions suffer acute job losses. The Government’s plan mentions the fund, but it simply states: "There has been engagement with the European Commission and agreement on the potential for the EGF to be used...”. That is a good start, but how long will it take to activate funding? If the Government’s plan is to wait and see if it wll be needed, it is being foolish. We must be more proactive. We must seek changes by way of engagement on the European Globalisation Fund to ensure it will be more widely available and less circumscribed than it is in the context of when job losses occurred. More could be done to ensure we would ready to step in at the beginning of the crisis. There is no point in waiting to see how bad matters will become or work out before taking action. Once businesses close and jobs are lost, it will be more difficult to pick up the pieces and families will find themselves unable to pay their mortgage or rent. In a word, the Government’s plan is passive. The tone of the plan is to wait and see what happens. We know what will happen if there is a hard Brexit. We do not need to wait and see thousands of jobs being lost before we take action. There are three and a half months until there is a hard Brexit. The Government has to be ready and we all have to support it in the actions it will take to ensure it is ready.