Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy for his question and for his ongoing interest in Brexit and how it will impact on this State. Whatever shape it finally takes, Brexit will have a significant impact on the economy. It will fundamentally change the trading environment for businesses currently trading with the UK. In 2018, my Department published a report, entitled Strategic Implications for Ireland Arising from Changing EU-UK Trading Relations, which examined the implications of Brexit for the economy and trade. While tariffs often spring to mind as a significant cost factor, in fact, the cost of non-tariff barriers due to regulatory divergence and bureaucracy will have a greater impact on businesses trading with Britain.

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In January of this year, my Department published a further study on Brexit impacts based on the withdrawal agreement and the revised political declaration agreed between the EU and the UK. The findings suggest a reduction in Irish GDP of between 3.2% and 3.9% by 2030, compared with a baseline whereby the UK remains a member of the EU. This compares with a negative impact of 7% in the no-deal, or WTO rules, scenario modelled in 2018. Of course, both Brexit studies predated Covid-19, which has had a severe impact on the Irish and British economies, with recent forecasts suggesting negative GDP growth of around 10% this year.

The Government has taken extensive action to mitigate the worst effects of Brexit and in each of the last three budgets, provision was made to assist businesses to prepare for Brexit. That provision includes a wide variety of soft and harder enterprise and financial interventions delivered mainly through the enterprise agencies. At entry level, training, mentoring and consultancy advice has been provided, leading to financial assistance by means of vouchers, grants, short-term liquidity loans and longer-term loans to assist businesses to restructure and diversify into new markets beyond Britain. Customs is another area in which we have been actively working on putting in place training programmes, as well as the Clear Customs initiative, which is designed to build sufficient capacity to deal with the new checks, controls and documentation that businesses will need post Brexit.

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