Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

This is not a time for politics as usual. Fianna Fáil has afforded the Government the time and space to focus on delivering the best possible Brexit outcome for Ireland. That was, and remains, the right approach for the largest Opposition party given the enormity of what is at stake. Our decision to allow a fourth budget to pass should not be misread as some kind of endorsement of this Government. Like many citizens, we are deeply frustrated with the Government's obsession with spin and PR and its failure to deliver where it really matters for the people we represent. The people will have their opportunity to give their verdict on the Government but for now, the priority must be to steer this country through the Brexit storm. At a time when there is so much on the line for our country, I believe the people who elected us to this House expect the Government of the day, and those who really want to be in government, to show leadership and to act responsibly. That is why, despite the failure of this Government in health, housing and so many other areas, Fianna Fáil agreed to facilitate a fourth and final budget under the confidence and supply agreement.

Given the ongoing chaos in Westminster, the value of political stability here in Ireland should not be underestimated. The judgment of our leader, Deputy Micheál Martin, last December that there should be no general election in 2019 has been absolutely vindicated by the events that have since transpired. The real effects of a crash-out Brexit are unknown but it would undoubtedly be devastating for some sectors of our economy and the people who work in them. A key priority today and for whatever time is left in this Dáil is to do everything we possibly can to protect jobs from the effects of Brexit. These are the jobs that support families, the jobs that pay mortgages, rent and other household bills, the jobs that sustain rural Ireland and parts of urban Ireland too. The risk of the UK crashing out of the EU without a deal at the end of this month or indeed at some point next year, with all its negative consequences for Ireland, is the inescapable backdrop to this budget. There is no getting away from it.

We all know that many people are weary of Brexit and the endless media coverage and God knows, one can hardly blame them. The outcome of Brexit, however, will set the direction of our country for many years to come. In 2018, Ireland exported over €16 billion worth of goods to the UK and imported €20 billion. This represents 11% of total goods exports and 22% of total imports. However, in some sectors, such as agrifood, tourism and indigenous manufacturing, the level of dependence on trade with the UK and therefore the level of exposure to a hard Brexit is far greater. Closer to the Border, cross-border trade and the freedom to move over and back across the Border unhindered is intrinsic to daily life. Even more important than the economics is the imperative of protecting the hard-won peace on our island. In tribute to those who needlessly lost their lives over several decades, this is a peace that can and should never be taken for granted. Protecting it and upholding the Good Friday Agreement is non-negotiable.

No economic model will predict with any degree of accuracy the true consequences of a crash-out Brexit for the people of Ireland. The impact of a no-deal Brexit on business sentiment and consumer confidence is the great unknown. What we can say with certainty is that the Irish economy will take a sudden and sharp turn for the worse in a no-deal Brexit scenario. A no-deal Brexit would see a step change in the trading relationship between Ireland and the UK. We would see tariffs on goods going to the UK, such as beef and cheese, making many of them dramatically more costly and less competitive. We too would see tariffs on UK goods coming into Ireland making them more expensive for our businesses and consumers. We would see regulatory divergence and customs checks, not just east-west but most certainly North-South as well. All this would lead to an increase in the cost of trading and doing business. Irish products would lose out in the UK and Irish businesses relying on UK goods would have to reorganise their supply chains fundamentally. Add to this the sheer administrative burden and red tape that will be added to what is now a free-flowing seamless border between Ireland and the UK. There are over 5,000 product lines under World Trade Organization, WTO, rules that will face some sort of tariff both coming into Ireland and going out of Ireland to the UK. A crash-out Brexit will most certainly see a further depreciation in sterling, it could very well reach parity with the euro or perhaps even worse. This will put all Irish producers at a major competitive disadvantage.

The tourism sector supports some 270,000 jobs and it is already feeling the effects of the Brexit saga. Fáilte Ireland predicts that a no-deal Brexit could cost 10,000 jobs in this sector alone quite quickly. The pain from a hard Brexit will not be evenly spread. It will be most acute in the Border region and other regions outside urban Ireland where agriculture and tourism are pillars of the local economy. The Central Bank, the Department of Finance and the ESRI and others predict a slowdown of the Irish economy, with some predictions that Ireland could possibly enter recession. It is estimated that the Irish economy will generate between 50,000 and 55,000 fewer jobs in a no-deal scenario. The State’s finances, according to the summer economic statement could deteriorate by some €30 billion over coming years. Next year, according to today's budget, Ireland will have to borrow at least €2 billion if a no-deal Brexit becomes a reality. This is in addition to the nearly €20 billion that the NTMA must refinance in the coming years. By any measure these figures are chilling. We know from different measures of consumer sentiment, such as the purchasing managers index and so on, that consumer sentiment and business confidence is falling fast. Lending to SMEs remains subdued, meaning that companies are putting off key investment decisions until certainty returns.

All of this points to the fact that Brexit is already having a dampening effect on the Irish economy. Brexit is already here and now for some sectors.

For all these reasons, the Government needs to hasten its preparations for a potential no-deal Brexit. Fianna Fáil has given the Government the support it needs in Brexit but we have serious and deep concerns about the preparations to date for a no-deal Brexit. The Government needs to come clean first on what a no-deal Brexit will look like for people and businesses. Up to very recently, the Government assured those same businesses that there would be no physical infrastructure around the Border, even in the event of no deal. Yet slowly and surely it has become clear that this will not be the case. The Government language has noticeably evolved and changed over time.

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