Jim O'Callaghan (Dublin Bay South, Fianna Fail) | Oireachtas source

It is remarkable that less than three months prior to the UK leaving the EU, there is no agreement in place and the UK still does not know what the nature of its trading relationship with the EU will be after 1 January 2021. What we need to learn from this is that if we ever go down the route of having a significant referendum in this country, as we may in years to come, we have to be sure to do our homework in advance. Clearly, the British Government and people, unfortunately, did not have the homework done for them in advance of the Brexit vote.

Irrespective of whether the EU and the UK reach an agreement within the next three months, we know for certain that on 1 January 2021, the UK will leave the Single Market and the customs union. That is remarkable because I do not think anyone who was proposing Brexit in advance of the referendum in 2016 was seriously contending that the UK, if it voted to leave the EU, would automatically take itself out of the Single Market and customs union. That has come to pass, to a large extent, because of the political manoeuvring within the UK political system that took place in the aftermath of the referendum.

Let there be no doubt that the Single Market was probably the most significant development that this country undertook that led to our remarkable economic achievements over the past 20 or 30 years. The Leas-Cheann Comhairle does not have to believe me on that but anyone interested in Brexit and the development of Ireland in the second half of the 20th century should read Kevin O’Rourke’s book A Short History of Brexit. It reveals that the really remarkable performance of Ireland since 1980 was due to our membership of the Single Market. That is what really transformed the Irish economy. We need to recognise that will be significantly affected by the fact that one of our largest trading partners in the Single Market, the UK, is going to depart from that market on 1 January next.

I had the benefit of being at my second finance committee meeting yesterday and it was attended by the Minister of State, Deputy Sean Fleming. We had an opportunity to consider some of the figures that were being put forward by the Minister of State in respect of this country’s preparedness for Brexit. In particular, the Minister of State told us that the State through the Revenue Commissioners has hired considerably more officials for the purpose of performing custom duties on goods arriving from the UK, which will be necessary in light of the fact the UK is departing from the customs union.

One point that was repeatedly emphasised by the Minister of State was that he has a concern - and it is one I share, having listened to what he said - that there are many smaller businesses in Ireland which may not yet be fully prepared for the consequences of Brexit. It appears to be the case that the larger, more well-resourced businesses in Ireland are prepared. They have had expert advice and they know how their business will be affected. Unfortunately, that is not the case for smaller businesses, which may be exporting only a small part of their produce into the UK. It is important that we, as a State, and the Government as the persons ultimately responsible, provide as much information as possible, even at this late stage, for those small businesses. Those small businesses should consult with their trade associations and their local chambers of commerce to find out what it is they must do to ensure they are protected when Brexit arrives on 1 January. If they are not protected and have not completed their preparations, they will face difficulties for business down the road.

It is inevitable that there will be problems arising on a practical basis from the UK departure from the Single Market and customs union and it will have a significant impact on our economy, whether we like it or not. I had the benefit of reading the quarterly report prepared by the Central Bank, published earlier this week. It reveals that if we have a no-deal Brexit and there are World Trade Organization, WTO, terms, the effect that will have is that Irish gross domestic product, GDP, next year will reduce by approximately 2%. That is a very significant impact on our economy. I suspect, however, there will be even more significant impacts as a result of it.

We need to recognise that we can now see the importance of the Irish protocol that was appended to the withdrawal agreement. If we did not have the Irish protocol, we would now be preparing to deal with the prospect of having a land border with a country outside of the Single Market and customs union. It would be a horrific prospect for this State to deal with.

It is important that one becomes aware when looking at the Central Bank report of the threats posed to the Irish economy by the combination of Covid and Brexit. It makes stark reading and one of the things that is apparent from it is that our export business is so strong that it has not been greatly affected by Covid. What is under threat, as the Minister of State, Deputy Troy, will be aware, is our domestic economy, that is, our small and medium enterprises. They face significant challenges by the opening and closing caused by the Covid restrictions. We face a daunting task but it is something this country will be able to deal with. If people in this House think they are exposed to unprecedented challenges, let us think of what our forefathers and foremothers went through 100 years ago, when, during the time of the Spanish flu, they were able to fight for and achieve Irish independence.

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