Wednesday, 13 March 2019
Recent Developments on Brexit: Statements
I am grateful for this opportunity to brief the Dáil on recent developments on Brexit. With some 16 days to go before the scheduled date of the UK's withdrawal, events underscore how fluid the situation in Westminster continues to be. We profoundly regret the outcome of last night's vote. It is a real disappointment that Westminster was not able to approve the withdrawal agreement. We remain firmly of the view that the only way to ensure an orderly withdrawal is to ratify the withdrawal agreement as negotiated and complemented by the legal assurances agreed between the Prime Minister, Theresa May, and the European Commission President, Jean-Claude Juncker.
EU and British negotiators have spent many months working together grappling with the complexities and have jointly identified this way forward. A no-deal outcome is in nobody's interests. As I have said before, it is a lose, lose, lose situation for Ireland, the UK and the EU as a whole. I believe the UK Parliament will vote again, in the next hour, to underline their wish to avoid such an outcome. The Prime Minister was right last night in her statement after the vote, that Westminster needs to make a choice on what outcome it wants for Brexit and for the future relationship between the UK and the EU. Just wishing against a no-deal outcome is not enough. Westminster and the UK Government need to take action to avoid this outcome.
Political uncertainty in Westminster is a cause of worry for all of us, our people and our businesses. They deserve the reassurance and security that a deal can provide. We need to move on to negotiate a deep and comprehensive agreement, which will provide the foundations for that future relationship. The withdrawal agreement, ensuring an orderly withdrawal, is the only way to get us there. There are no shortcuts. As Michel Barnier again made clear last night, the only legal basis for a transition is the withdrawal agreement. No withdrawal agreement means no transition.
On the EU side, we have done all that is possible to reach an acceptable agreement. The EU has confirmed once again that it stands by the withdrawal agreement, including the Irish protocol and the backstop. Given the additional assurances provided by the EU in December, January and this week, it is difficult to see what more it can do. The problems lie in Westminster. If there is a solution it can only be found in London. It is for the UK to set out what it intends to do next. Time is very short but I believe there is still time enough for a sensible outcome.
On Ireland and the EU's side, I can firmly say that Brexit was never our choice and never our wish. However, we have respected the choice the British people made in 2016. The EU has listened and been responsive to UK issues throughout two years of intensive negotiations. This has not been an easy process. The EU has given time and energy to these talks, working closely with the UK and responding to its concerns where possible. We have done this with a view to building a strong future relationship with the UK after its departure. I should again pay tribute to the work of Michel Barnier and his team as well as to the UK negotiators for their efforts.
The withdrawal agreement is not perfect, and it represents real and significant compromise on both sides. I believe, however, it is a fair and balanced document. This was rejected by Westminster in January but the EU continued to listen and there has been an intensive series of meetings between the EU and the UK in since then. On Monday, Mrs. May and Mr. Juncker agreed on measures to provide the legal assurances and clarifications the UK sought on the temporary nature of the backstop. It also reiterated our joint commitment to finding alternative arrangements to the backstop. The UK also set out its own unilateral declaration, which we did not contest. This is complementary to the withdrawal agreement and political declaration. It gives further legal status to the reassurances that the President of the European Council, Donald Tusk, and Mr. Juncker set out in their letter of 14 January. Importantly, it does not reopen or undermine the withdrawal agreement or the backstop. The package sets out in greater detail the process of review and arbitration as set out in the withdrawal agreement. Any action under it would require bad faith to be shown by either side. However, the UK would maintain its obligations under the Good Friday Agreement in all its dimensions, including avoiding a hard border.
There was close contact between our team and the Commission's team as these documents were developed. The Taoiseach spoke repeatedly by telephone with Mr. Juncker before the package was agreed with Mrs. May. We supported this package of measures in the interests of securing an overall deal. As we have said all along, the backstop is an insurance policy and that is all it is. We have no intention or wish to trap the UK into any arrangement against its will. The withdrawal agreement and the backstop do not do this. What they do is provide the guarantees that a hard border will be avoided and that the Good Friday Agreement is fully protected.
The EU is already committed to seeking alterative arrangements to the backstop as part of the negotiations on the future relationship. The negotiations and consideration of alternative arrangements before a backstop may ever even be triggered are set out in the legal instrument agreed this week.
The package agreed between President Juncker and Prime Minister May makes clear that this work will begin as soon as the withdrawal agreement is signed. For Ireland and the EU, the backstop is an essential element of the withdrawal agreement in order to prevent the re-emergence of a hard border on this island. It is the outcome of our joint obligations with regard to the Good Friday Agreement and the red lines of the UK Government on the Single Market and customs union. In fact, Deputies may recall that the backstop was redesigned on foot of a request from the British Prime Minister in the context of customs arrangements. Ireland advocated for that redesign and reshaping of the backstop to accommodate British red lines. Although the backstop is consistently referred to in London as the Irish backstop, it is far more accurate to describe it as a backstop that is as much a creation of the UK as it is of Ireland or the EU. The EU has stated on many occasions that it is prepared to adjust the content and level of ambition in the political declaration should the UK’s intentions for the future partnership evolve. That was again shown to be the case this week. It remains our hope and expectation that we can agree the type of close future relationship which ensures the backstop is never used. We are determined to work towards that best possible outcome.
The measures agreed in Strasbourg were with a view towards the meaningful vote in Westminster and in the interests of securing an overall deal. However, this process cannot be without end. As President Juncker said in Strasbourg on Monday,
There will be no third chance. There will be no further interpretations of the interpretations, no further assurances of the re-assurances.
We have reached the point where realistic decisions must be made. We must accept the consequences of that. That is to what Westminster needs to face up. The Prime Minister, Mrs. May, put that challenge to Westminster last night after the vote. Tonight, Westminster will vote on whether to leave the EU without a deal. We hope it rejects that outcome as it would be the worst of outcomes for all sides. Tomorrow, Westminster may vote on whether to seek an extension to Article 50. We have repeatedly stated that we are open to such a request. However, there would need to be a clear purpose to such request. Any decision requires the unanimous approval of all 27 member states which will need to take into account the reasons for a possible extension and the duration thereof. In addition, the EU will need to consider how its institutions and processes would be affected by any extension, with an obvious example being the upcoming European elections. However, an extension is not a solution in itself. The UK will need to make a choice on what outcome it wants for Brexit and the future relationship between the UK and the EU.
On contingency planning, I thank all parties for their co-operation, support and facilitation on the Brexit legislation which passed in the Seanad this afternoon. I reassure Members that the Government is continuing to accelerate our contingency plans for a no-deal Brexit in the context of facing that challenge in a little more than two weeks should it be allowed to happen by Westminster.
My final point to businesses and many other stakeholders who rely on the relationship we currently enjoy with the United Kingdom is for them to think about and plan for how they and their businesses would respond to a no-deal crash-out Brexit. I assure them that the Government thinks about that every day and is working with all parties in this House to make sure that we are as prepared as we can be.
The announcement this morning of the tariff regime which the UK will implement if there is no deal is a dramatic demonstration that fears of Brexit’s damage are entirely justified. Many Irish businesses, particularly farmers and food producers, have been suffering from the impact of Brexit since the value of sterling dropped immediately after the referendum result. They have been struggling with lost competitiveness and are looking at a future in which their largest market may become all but inaccessible to them. They are now faced with proposals which are as damaging as they are incoherent and which might become operative in little more than two weeks. The tariff schedules and border arrangements published by the British Government are not a serious plan for the future; they are another confirmation of the rank dishonesty and fanaticism of the elites who secured a narrow Leave majority in 2016.
The promises of the Brexiteers and Vote Leave campaign ring particularly hollow now. The campaign was defined by a massive cynicism and a refusal to provide any serious detail about how it was going to deliver Brexit. A particularly infamous statement published in the manifesto of the Vote Leave campaigners declared: “Taking back control is a careful change, not a sudden stop - we will negotiate the terms of a new deal before we start any legal process to leave.” To this, one can, of course, add the assurances given regarding the Single Market, the customs union, the Border not being an issue and assorted other empty claims.
It was interesting to watch the reaction of British industry, business, farmers and others interviewed on the BBC and other UK media today to the tariff schedules and to note that their frustration and anger is similar to that felt in this country. Obviously, the concerns of Irish farmers in regard to the tariffs are shared by many in the United Kingdom. Many of those representative organisations and individuals consider what was announced this morning relating to British industry and farming interests to be a doomsday scenario.
As ever, the issue remains that no matter how angry we are about the behaviour of the British euro-haters, we must manage the situation in order to limit the damage to all parts of our island. It is not enough to hope for something to turn up; rather, we must move from words to action and from planning to genuine implementation. The parties and Deputies of this House, including many Fine Gael Deputies, who agitated for a general election at this very moment need to consider how much worse would be Ireland’s position if Fianna Fáil had listened to their advice and pulled down the Government. Fianna Fáil's position since it first raised the issue of preparedness for Brexit four years ago is that this is an issue which goes beyond party politics and demands real urgency and innovation. We were the first party to speak out on the dangers of Brexit and have been the most consistent in pushing for action. Although we have serious issues with key elements of the Government’s approach over the past year and a half in particular, and there is no doubt that it has avoided the normal level of critical scrutiny, we have repeatedly used our connections in Europe to promote a message of a united approach. We wish to acknowledge the continued robust solidarity of our European allies during this depressing and challenging process. There is no doubt that their position remains that Ireland has the final say on matters relating to Ireland within broad and generous boundaries.
We should also acknowledge the wonderful and passionate advocacy of Sylvia Hermon on behalf of Northern Ireland. She stands alone among its MPs in representing the majority of opinion there. Equally, we should be grateful for the manner in which the Scottish National Party raises the Good Friday Agreement prominently in every Brexit debate. There is no doubt that the full blame for this increasingly dangerous shambles lies with the now dominant wing of the Tory Party. However, opportunities to limit damage have been missed because of the complete breakdown of relations between Dublin and London and between Dublin and political unionism.
In the coming weeks, Ireland is likely to face two major decisions, namely, the length and nature of any extension of Article 50, and specific responses to the immediate impact of a no-deal situation at the end of this month or at some point this year. In regard to an extension of the Article 50 process, of course, we should support an extension with or without a definitive path of progress being set out by Britain. No one is ready for a no-deal Brexit - not Ireland, not Britain and not the European Union, which currently has a fragile economy and other major concerns. There are many plans which countries hope will work, but no one is confident that they are ready. For example, in our case, Dublin Port has customs posts ready but does not have enough customs officials to staff them. We should support any reasonable proposal for extending the Article 50 process even if the only purpose that served would be to finalise no-deal preparations. Obviously, we hope that the House of Commons will come up with an agreed policy and, even more obviously, a reversal of Brexit would be very welcome, but we must assume the worst and use every available day to prepare.
It also may be that in the coming days the British Government will attempt to resurrect the current deal through looking for some further change. Certainly, Prime Minister May's comments today suggest that this is her intention. If this is the case, we need to hear clearly from our Government what is going on and what proposals are being made. If there is an extension of Article 50, then there is no issue more important than trying to get the Northern Executive and Assembly re-established. During two years where Northern Ireland desperately needed a voice, it has been left without one. Two parties have stood in the way of the anti-Brexit majority being able to set the agenda. The House will be aware that the British Government indicated and confirmed this afternoon that it is considering imposing direct rule if there is a no deal. This would be a dramatic and maybe even fatal undermining of the Good Friday Agreement. It would be unacceptable to all in this House. If the Assembly and Executive were in place, it would be prevented.
If there is more time, that time has to be used to give back Northern Ireland its voice in this fundamental debate about its future. It has been a scandal that the Executive and Assembly were collapsed at such a critical time for this island, particularly Northern Ireland, because Brexit is a huge challenge to so many in the North and across the island. It is incomprehensible that there is no Executive and Assembly. It should never have been collapsed.
With regard to urgent actions, we need two things from the Government. We need full transparency on its analysis and proposals and we need a commitment to inform people immediately of what new aid and packages will be available to them, and when. We want the Government to publish exact details of the current levels of Brexit preparedness and exposure. The figures have not been updated for more than a year and are absolutely fundamental to evaluating what needs to be done. What is the current assessment of the impact, not just of no-deal tariffs and checks but also, and more important, the decline of sterling?
We know already that the entire agrifood industry, which is the mainstay of indigenous industry and the only major employer in large parts of the country, is facing dramatic damage. It is really not enough to say there are conversations this week in Brussels. We need to know exactly what is being proposed, how it will operate and the impact it will have.
On the Border, we have heard for months that nothing is being planned but that there will be difficult discussions. What is to be proposed in these difficult discussions? Have we any idea? Have we had discussions with Brussels concerning what will happen on the Border on 29 March if there is no deal? The UK proposals on the Border are transparently not sustainable or credible. They further illustrate the folly of Brexit and the absence of any blueprint for it. The time for careful generalities is over, we need hard facts. I do not know whether the Tánaiste heard Michael Lux, customs expert, state today on News at One that the EU will place obligations on Ireland to protect the customs union and single market in the event of do deal on 29 March. We have not really had a straightforward discussion about Ireland's responsibilities other than that everyone will have to get around the table again and start another year's discussion, as we have had for the past two years.
Fianna Fáil called for this debate because we believe it would be completely unacceptable for Dáil Éireann to be silent on Brexit during this critical fortnight. By the time the recess is completed, the European Council will have responded to whatever emerges from the chaos in London, and Ireland potentially faces many serious decisions. For two months, we have been seeking specific information about the exact level of preparedness of Irish businesses and this information has not been provided. We have repeatedly asked for specific details on what is planned for a no-deal scenario and this information has been withheld. Last week, the Taoiseach made the claim that Ireland is not only ready but also that we are actually the most Brexit-ready country in the EU. If this is the case, there is a lot of information that the Tánaiste should be in a position to publish immediately, and what we should be hearing today are the details of when and how no-deal aid will be distributed. Because of our initiative on extending the confidence and supply arrangement, the Government and Dáil have the time and space to focus on limiting the damage of Brexit. The only way this time can be used effectively is to be fully open and honest with the people. The Government should provide the hard information and let us get on with it.
Since the Brexit referendum result became clear almost three years ago, Sinn Féin's position has been crystal clear. The Government and European Union had to be guided and underpinned by the very obvious fact that people in the North voted to stay in the European Union.
It is very difficult to have an honest conversation about the North with some parties in this House - Fine Gael sometimes but especially Fianna Fáil - because of the political opportunism, point-scoring, the lack of genuine analysis, and no real clue as to where Northern nationalists and politics in the North stand or the real reason there is no Assembly. Deputy Micheál Martin was quite correct to say it is a scandal that there is no Assembly but he does not point the finger at the party that is pro-Brexit and that walked away from a deal negotiated with the help of the Irish Government last year. He has an opportunity to put his very peculiar brand of Northern politics to the electorate if there is a general election in Britain. He can, of course, stand on a platform of swearing an oath of allegiance to a foreign queen and stand on a mandate of taking seats in Westminster, regarding it as the political vehicle to deliver in the interests of Ireland. Best of luck to him and his sister party. We cannot even say they merged; it was more of a partnership. Best of luck to the Deputy and his candidates in the election. I have no doubt the people of the North and the nationalist people will again put their faith in Sinn Féin because they know Westminster is not the place to deliver on Irish interests. They look with amusement and horror at what is happening in Westminster and the fact that politicians there do not act in the interest of people in Ireland. They do not regard nationalists taking their seats in Westminster as doing anything for the people who live on the island of Ireland.
Our approach always has been to ensure no hard border on the island of Ireland, that the rights of citizens and others in the North and South are fully protected, and that the Good Friday Agreement is upheld in all its parts. The withdrawal agreement that has been negotiated between the European Union and the British Government – we would say very carefully and at times very painfully – could not be described as a perfect deal. I said earlier in the week that there is no good Brexit deal because Brexit has such disastrous consequences for Ireland. The backstop is the only viable vehicle by which we can protect the interests of this State.
It is interesting – we had this discussion this morning – that the British Government, in its flawed and impractical customs and tariff regime proposals, at least acknowledged the North is unique and that there needs to be special solutions for Ireland. Again, however, it goes back to the fantasy politics that will not work in regard to the Border, stating it will not impose any border, tariffs or checks and place the responsibility and blame back on the EU and Irish Government. That is exactly what is happening. Everybody can see that. While the British Government does this, it is ignoring the backstop and what was already agreed in good faith with it based on its red lines and what it sought.
It should be borne in mind that the people in the North are not without a voice politically. There was a cross-party consensus involving Sinn Féin, the SDLP, Green Party and Alliance Party whose representatives met the British Government on several occasions. They met the European negotiators on several occasions. Nobody in Britain or Europe was unwise to the fact that there was a majority vote in the North and a majority elected to the last Assembly who are against Brexit and who did represent the people of the North and the island of Ireland.
There is a need to ensure this State is Brexit ready and that we protect the economy. The Irish economy, as the Tánaiste knows, is uniquely exposed to any Brexit shock or turbulence. That will happen in whatever form Brexit takes. Even the softest of Brexits will have an economic impact on this State. Even now, because of all the uncertainty, there are some sectors of the Irish economy that are suffering because of the currency fluctuations. That is a reality and the Tánaiste knows the sectors of the economy that are most exposed. In whatever form Brexit takes, more practical solutions need to be put on the table.
The Tánaiste is right to say we passed the omnibus Bill collectively in this House. In the Seanad, there was support from all Opposition parties to ensure it was passed as quickly as possible. The Tánaiste will know we do not believe that is anywhere near enough or will be enough to ensure, if there is a hard Brexit, businesses, the agrifood sector and exporters will be properly supported.
I am heartened by the Tánaiste's response today that the State would, if necessary, consider borrowing or dipping into the rainy day fund and that, while it might not establish a Brexit stabilisation fund, as many have advocated, it will seek to resource Departments to ensure they can put in place more tangible solutions. That is a welcome statement but it needs to be spelled out. The Opposition needs to hear exactly what the Government is proposing, as do businesses, farmers and exporters because they do not want to hear promises that may or may not materialise. They need to know what exactly the Government is thinking.
Equally, there is a responsibility on the European Union. Everybody accepts, welcomes and commends the position of the European Union in protecting Irish interests in relation to the backstop. However, it had good reason to do that because it was also in its interests. It is in our economic interest that Europe steps up to the plate by supporting vulnerable sectors of the economy that will be exposed. The EU consistently states it will step in and support sectors where there is market distortion. It does so by easing state aid rules and providing financial supports and packages. It needs to do this for Ireland. The EU cannot take a one-size-fits-all approach in terms of providing economic solutions for Brexit that extend right across the European Union. The economic shock or turbulence the Irish economy will feel if there is a hard crash will be unique and will differ from what is felt in Hungary, Poland and various other parts of Europe. That is obvious and demonstrates that we need a bespoke solution from the European Union. This morning, the Tánaiste hinted that the EU was considering supporting the Government's request for the easing of state aid rules and would look favourably at financial supports for the agrifood sector and farmers, among others. Again, however, we have not seen action.
The Opposition has been very reasonable in supporting the Government throughout the Brexit process. The Government must also work with the Opposition, however. When we say we need to see what the Government is planning in terms of additional supports, there is a responsibility on it to inform the Oireachtas and all the stakeholders of what these supports will be. While I welcome the Tánaiste's statement today that he is considering these issues and that there may be more investment and more scope through borrowing and using the rainy day fund to invest and protect various sectors of the economy, we have not seen the colour of that money yet, nor have we seen what exactly the Government is considering.
In protecting the economy we must also ensure that we invest in infrastructure and increase capital spending. Although we have increased capital spending in recent years, for the past ten years capital expenditure here has been among the lowest in the European Union. We need to invest in ports, public transport, broadband and various parts of the economy to support infrastructural development and ensure we remain competitive. That is the best way to protect the economy against any economic shock that will come from Brexit.
I am sure the Tánaiste is aware of all the economic analysis and data, both from Government and non-Government sources, which show that there will be a hit to the bottom line of GDP, GNI* or whatever we call it these days if there is a hard crash or even a soft Brexit. The harder the Brexit, the harsher will be the economic impact on the State, but there will be an impact. I appeal to the Tánaiste to make sure we do everything possible to support the economy.
There will be more votes in the House of Commons this evening. It is possible, if not inevitable, that MPs in Westminster will vote to take a hard crash off the table, but any such vote will not binding and we could still find ourselves in a hard crash scenario by accident. We cannot control what is happening in British politics; that is a matter for the Tory Party, the British Labour Party and others. We can, however, do our best to support Ireland and the economy. The Opposition has done its best in supporting the Government and it is time the Government listened to the Opposition when we say not enough is being done to support certain sectors of the economy. It must step up to the plate with the European Union to ensure we protect Irish interests.
The Brexit situation is fundamentally unpredictable. Few political analysts predicted that the British people would vote to leave the European Union. Few could have predicted how chaotic and torturous the negotiations would become between the United Kingdom and the European Union. Even now, two weeks before the exit date of 29 March, the British Parliament has not been asked to formally vote to express its preferences for the future EU-UK relationship. Yesterday, the House of Commons convincingly rejected the deal brokered by the Prime Minister. Today, Westminster is expected to vote overwhelmingly against a British exit with no deal. From these and previous votes, we know what Parliament does not want, but the default position remains a no deal Brexit until Westminster comes up with something else. Tomorrow, MPs will be asked to vote on extending Article 50. There have been mixed signals from the EU institutions and member states, but it seems likely that a short extension to the end of June would be granted if there is a technical reason for doing so, for example, where it was required to pass legislation. There is little appetite for allowing the current state of limbo to continue.
The Labour Party supports the position that we should not block any reasonable request from the UK for an extension, but there is no guarantee that an extension will be given or that it will last very long. There is a very real prospect that the rejection of the withdrawal agreement will mean the UK leaves the EU with no deal or with only a minimal set of arrangements in place to avoid the worst of a sudden departure. In that context, our immediate priority has to be people's jobs and livelihoods. We have spoken at length in recent months about the open border, and that remains an absolute necessity, but as Brexit looms ever closer, we must preserve jobs and keep small businesses afloat.
The Tánaiste knows the statistics. The Minister for Finance has said 40,000 jobs are at risk. We know that 40% of our exporting firms only export to the UK and are totally exposed to tariffs, quotas or other barriers to trade. Exporters are also vulnerable to a collapse in the value of sterling and the possible influx of cheaper goods from outside the EU into the UK if Britain adopts a certain type of trade policy. Certainly, the indications are that the UK intends to set zero tariffs on a wide range of goods. However, there will be tariffs on some food exports, which is bad news for the meat and dairy sectors, our major exporters. Again, the Tánaiste knows the statistics. These exports from Ireland are largely to Britain, and tariffs on food exports would be a significant blow. Even in cases where zero tariffs apply, extra competition for access to the UK market will be a major challenge to our exporters. The UK could well open its market to countries with much lower wages than Ireland. That would be a challenge which would impact on decent wages and conditions of employment here.
Additionally, we need to be very clear that Ireland imports a great deal from the UK. These imports are often raw materials for goods that we subsequently export. We do not yet know what tariffs the EU will apply to British goods entering the Single Market, but there are likely to be tariffs and perhaps quotas. We must recall that under World Trade Organization rules, the EU must apply one set of rules for all third party countries, and the UK cannot be given any favourable treatment or status in the absence of a formal trade agreement. As we know, such an agreement is a long way off. Serious negotiations on the future relationship with the UK have not yet begun because the British Government has wasted two and a half years negotiating the withdrawal agreement. Much of this negotiation has taken place inside the Conservative Party. In that context, as I said, much is unpredictable. Perhaps Article 50 will be extended for a significant period. Perhaps the UK will pass the current withdrawal agreement to buy the time an agreed transition period could offer. Perhaps the UK will end up having a general election or a new referendum, the result of either of which is genuinely hard to predict.
However, if and when it happens, Brexit will be bad for Ireland. We cannot claim to have predicted all the flows of goods and services, as well as of people, that will make Brexit so damaging for jobs and businesses. The Labour Party remains to be satisfied with the Government's Brexit preparations. While the Government has provided information and delivered a range of seminars, that is far from enough. We need now to talk about what resources will be in place to save jobs and businesses.
After the 2008 economic crash, we had to completely redesign our bankruptcy laws and our personal insolvency services. The most significant lesson from 2008 was that it can be much harder to provide someone with a new job and career than stopping that job being lost in the first place. Likewise, it is easier to keep a business afloat rather than allow someone to become bankrupt and then try to pick up the pieces.
In order to keep jobs and businesses going, we need to have funds in place. We should not allow a situation where there is any delay whatsoever after 29 March, or the end of June, where the Government needs to pass legislation or a supplementary budget to ensure funds can be spent. In this context, the Labour Party endorses the proposal of the Irish Congress of Trade Unions for the creation of a Brexit adjustment assistance fund. It suggested putting €500 million into the fund, rather than into the so-called rainy day fund. The Government's Brexit omnibus Bill has not covered this. We need to be ready, in a lawful manner, to provide state aid or subsidies to those businesses which are most vulnerable to the effects of Brexit.
The Government has said its preference is for each Department to spend money individually to its own sector. That is all well and good but the Government says it is spending €200 million. Is that enough? Why not dedicate the full €500 million to this purpose rather than putting it in the so-called rainy day fund? Is the possibility of a no-deal Brexit not enough of an emergency? The Labour Party would also endorse the call from congress for planned tax cuts in 2020 to be abandoned. We rejected these proposals when the Taoiseach made them. We double down on that rejection now. The proposed tax cuts would only benefit the top one in five income earners, as Revenue statistics showed. No benefit whatsoever would go to the lower and middle paid four out of every five workers. In any context, especially in the context of a hard Brexit, such tax giveaways would be reckless and divisive, as well as economically incompetent.
There are a wide range of other important points made in congress's report, The Implications of a No-deal Brexit. I recommend the Government studies it in detail. Time does not allow me to say much more but I will conclude by coming back to the theme of unpredictability. We just do not know what is going to happen next. A year ago, the Government was sanguine in its view that the Irish Border backstop was bullet proof and cast iron. Then the Government was sure the withdrawal agreement was a good deal for Ireland. The British Parliament, however, has comprehensively rejected the withdrawal agreement, notwithstanding the great efforts of Ministers and Ministers of State such as Deputy McEntee.
The Irish Border backstop is at the centre of the argument, especially how the open Border requires the UK to stay close to European customs arrangements and Single Market rules. It is simply impossible to predict what happens next. Accordingly, we need to be prepared for any eventuality, including a no-deal Brexit in little over two weeks’ time. The Government needs to do much more to ensure we are prepared. If we learned nothing else from the 2008 economic crash and the painful recovery, it is much easier to keep jobs and businesses in existence - even on life support - than it is to let them go to the wall and try to create new jobs and businesses to replace them. The Labour Party calls on the Government to make the necessary resources available, along with whatever legislation is needed to allow their immediate deployment, if and when, they are needed.
We are witnessing the rather shambolic death throes of the great British Empire, as it would have seen itself. Given the blood and hardship for which that empire was responsible across the globe, one cannot be terribly sorry to see this decline. The rotten politics, which dominates the British Tory party and to which Theresa May has been hostage, is propelling us towards the ever more imminent possibility of a no-deal Brexit. It is quite hard to predict what will happen over the next while. However, whatever may happen, if it produces one effect, namely, the death and discrediting of that rotten little Englander politics with imperial aspirations, it would not be bad.
Beyond that, there is not much we can say about what will happen in the UK. They will probably vote for avoiding a no-deal Brexit but it does not mean anything because they can still crash into a no-deal scenario if a deal is not done. Whether it is done with or without an extension is difficult to say at this stage. Personally, I hope there is a general election in the UK soon and we get the Tories out because they are completely incapable of rational behaviour at this stage. They are torn by the rotten politics which dominates their thinking.
Beyond that, what will Ireland do, given the greater likelihood of a no-deal Brexit? For its own cynical reasons as part of the negotiating process, Britain has said that, at least for a period, it will not impose customs checks and a border between the North and South. Members should not get me wrong. I do not trust the Tories on that. Their position is full of contradictions and is part of a bargaining process which also includes threatening tariffs which would do immense damage to significant sectors of the Irish economy.
However, it does put it up a little to both the Government and the EU to answer in kind by committing that we will not, under any circumstances, impose controls, checks or a border infrastructure between the North and the South in the event of a no-deal scenario. That is something which the Government and the EU have still resisted doing. Today, at the Committee on Budgetary Oversight, I asked Carlos Martinez Mongay, director, Directorate‑General for Economic and Financial Affairs, whether the EU would put pressure on the Irish Government to protect the integrity of the Single Market by insisting on a border infrastructure in the event of a no-deal Brexit. We did not get any answers. Similarly, on protecting particular sectors, I asked him how flexible would the EU be on state aid rules and how much of a support package would be made available. It is not just about the rainy day fund or how much the Irish Government sets aside to protect workers and particular sectors of Irish society. In the event of a no-deal Brexit, I asked him what the EU would do to protect people in this country from the economic consequences that may ensue. Again, he refused to answer that question.
We cannot dodge those questions anymore. Given that there are certain matters out of our control, there are also certain matters within our control. The Government needs to say to the UK, which cannot be trusted and does not give a damn about the consequences of all this for this country, that we will not be imposing a hard border under any circumstances. Similarly, we need to tell the European Union that we will not tolerate any pressure from it to impose a border infrastructure in the event of a no-deal Brexit. We should also ask the EU to see the colour of its money in terms of real support if we take a significant hit.
This morning, Britain's Conservative Government announced its tariff plan, to be implemented in the event of a no-deal Brexit. It included tariffs on shoes, some clothing items, cars, beef, dairy, etc. Beef imports are to be hit with tariffs of 7% and cheddar cheese will have a tariff of £20 per 100 kg. The Minister of State said the tariffs would be absolutely disastrous for Irish agriculture. In Washington only a short time ago, the Taoiseach spoke in terms of providing seriously increased state aid for agribusiness. I am in favour of state aid to save jobs - there are 300,000 jobs in Irish agribusiness - but I am not in favour of bailing out some of the wealthiest business people in this country. I am talking about men such as the Queally brothers who are the co-founders of Dawn Meats, the 71st largest company in the State, and the company that handles 20% of Irish beef. Those brothers have a combined wealth of €295 million.
I hear the Leas-Cheann Comhairle. I do not believe that multi-millionaires should benefit from bailouts paid for by taxpayers. Another man who is also a cofounder of that company - I will not name him - has personal wealth of €96 million. The man who is perhaps the best known beef baron in the country has personal wealth of €820 million. He is knocking on the door of being a billionaire. The company he owns is the 35th largest company in the State. His company was the largest recipient of farm subsidies in the State in 2016 with €431,000. I do not believe that company should receive further subsidies now.
We need the State to act to defend jobs without enriching the owners. This can only be done by nationalising the commanding heights of the agribusiness sector under the control and management of its workforce. State aid can then be democratically controlled to defend the jobs, wages and conditions of 300,000 workers. Given that Friday is international day of action against climate chaos, I make the point in passing that nationalisation of the commanding heights of Irish agribusiness provides the crucial lever needed to begin the switch from beef to a more sustainable form of agriculture. This is necessary given that agriculture accounts for 10% of emissions across the EU but the figure in this country is 33%.
Yesterday, the Tory MP, Charles Walker, said that if this British Government was a horse, it would be taken out and shot. That is a bit hard on the horse but probably not hard enough on the Tory Government. It is not often that I agree with a Tory but in this case I do. Theresa May should go and the entire Tory Government should go with her. It is time for a general election in the UK. Like millions of others, I want to see the Tories replaced with a Corbyn Government. However, Mr. Corbyn needs to stop making concessions to the supporters of capitalism within his ranks. He needs to stand up to the Blairites who are seeking to undermine him in every conceivable way. This is necessary if the British working class is to have a Government which stands up for the interests of the many every bit as much as that Tory Government has stood up for the interests of the few.
There has rarely been a time in history when the Members of one Parliament watched the actions of another assembly - the House of Commons is voting as we speak - with such profound frustration and sadness. Although all communities on the islands of Britain and Ireland, including business, farmers and civic society leaders, plead for some degree of certainty regarding the Brexit decision by the British people in 2016, the tortuous manoeuvres at Westminster and between the UK and the EU just go on and on. Of course, even the Theresa May deal only extends to December 2020 and we hear with dismay that major trade deals, such as that between the EU and the UK, may take up to seven years. This ordeal might continue throughout the 2020s.
When we read the documents agreed by the President Juncker and Theresa May yesterday, it seemed that at last, a formula had been devised to permit the withdrawal agreement to be approved. The instrument relating to the withdrawal agreement acknowledged once again that the parties to the agreement do not wish the backstop to become applicable and that both were committed to a subsequent agreement to ensure that there would never be a hard border in Ireland and that both parties would use their best endeavours to conclude by 31 December 2020, an agreement to supersede the protocol on Ireland-Northern Ireland in whole or in part. Section 12 of the instrument, of course, referred to the use of the dispute mechanism enshrined in articles 167 to 181, inclusive, of the withdrawal agreement.
The joint statement of the EU and the UK seemed to amplify the reassurance given to the UK on the backstop and this is also reflected in the declaration by the UK Government on the Northern Ireland protocol and backstop. Therefore, it is mind-boggling that the Prime Minister’s efforts were fatally undermined by her own Attorney General, Geoffrey Cox MP. While he concluded that the instrument and other documents reduce the risk of the UK being detained indefinitely without further agreement in a backstop, his final and unnecessary paragraph that the UK could not legally exit the backstop “save by agreement” with Ireland and the EU seemed to have given another excuse to hardline Brexiteers to prolong the UK withdrawal agony. It is no wonder that many commentators have wondered why the Prime Minister could not have run an agreement past her Attorney General in the first place, but they have also lamented that she had not chosen a reliable Attorney General as Tony Blair did in relation to the Iraq war, when he launched his disastrous campaign in there.
The publication of the UK’s proposed initial tariff regime today under a no-deal Brexit crystallises the profound anxieties of our farming and business community. The threat of tariffs on beef of 53% of the EU external tariff, poultry of around 60% and 100% on sheepmeat are a frightening prospect for our indigenous exporting industry. It is no reassurance to us, of course, that these tariffs would not apply to our exports to Northern Ireland. It raises the issue, which was mentioned by Deputy Boyd Barrett and others, of what happens in a situation where the EU seems to expect us to erect a hard border on non-EU or UK goods coming into this country against our will and how we will react to that.
The UK says it intends to cut tariffs to zero on 87% of imports to the UK but acknowledges that imports of beef and cheddar cheese will be severely hit. The publication today is not only designed to put pressure on recalcitrant Brexiteers of the European Research Group but also on the Taoiseach and the Irish Government. The so-called temporary tariff regime document and so-called strictly temporary unilateral approach are clearly a direct threat to end the backstop which the Dáil and Irish Government must relentlessly resist.
I strongly support other speakers who have supported whatever budgetary steps are necessary to protect our economy and all sectors of our society. I agree with the Irish Congress of Trade Union and Sinn Féin proposal of a Brexit redress fund. I opposed the rainy day fund, as have other Deputies, at this time in our country’s development given the severe problems in health and housing but now that the fund is coming into existence, it and other national savings managed by the NTMA and its various funds should be allocated to protect against the severe existential shock of a no-deal Brexit or the many problems which may also arise with a much softer Brexit.
As my colleague, Deputy Boyd Barrett, noted, earlier this afternoon, the Committee on Budgetary Oversight had before it the EU Commission’s Deputy Director General of the EU Directorate General for Economic and Financial Affairs, Mr. Carlos Martínez Mongay and his team who were responding to our questions on the European semester. I asked why the EU was not taking much more seriously the kind of scenarios that will arise for Ireland in budgetary and fiscal terms if there is a hard or disorderly Brexit.
I referred to how our 7% stellar GDP growth in 2018 could simply evaporate within a year or two. The Department of Finance is issuing ever more dismal forecasts of what may happen to us. Our own Parliamentary Budget Office, PBO, in its recent paper No. 8 of 2019 on the impact of a disorderly or no-deal Brexit, included estimates of cuts in GDP for 2019 by the Central Bank of 3%, the Department of Finance's forecast of 1.5% and the ESRI's suggestion of 1.4%, with longer-term estimates of cuts in growth by 6% from the Central Bank, 4.5% from the Department of Finance and 3.8% by 2027 by ESRI, and with the loss of 55,000 jobs. In the event of hard Brexit, these figures may be too sanguine.
Let us hope tonight, when the vote in the House of Commons is announced, the no-deal resolution will have been taken off the table. Of course, it will also depend on the UK Government seeking an extension to Article 50 to enable the final passage of a withdrawal agreement.
I believe the formula for implementing the Brexit referendum decision by the British people, which has been developed by Sir Keir Starmer MP and Mr. Jeremy Corbyn MP, of a customs union with EU market access for the UK and clear alignment, in particular, protection of workers' rights in the UK, would seem to be the fairest basis for a future close relationship between Britain and the EU 27, including this country. Such a resolution, of course, as a colleague said, will depend on the Labour Party winning a general election, which, hopefully, will put an end to the current shambles, confusion and stasis of the House of Commons.
In a related context last week, I thought that President Macron's letter to the so-called citizens of Europe was unhelpful. The federalist tone of that letter and the French President's earlier speech at the Sorbonne only seemed to reiterate many of the reasons such a large segment of British public opinion voted for Brexit in the first place in 2016. President Macron's so-called roadmap for the EU not only includes possible useful initiatives, such as combatting cyber threats to democracies, an EU minimum wage and an EU climate bank but also included a new treaty of defence and security, which, incidentally, will include the UK, with a European Security Council and a so-called true European army. Macron's Ministers admit that his federal proposals scare people, but the whole tone of this address was one of ever greater convergence and integration. As our colleague, Senator McDowell, argued cogently in The Sunday Business Postlast week, nobody in Ireland voted from 1973 onwards for a united states of Europe. Rather than allowing the European Union and, indeed, all of Europe, because much of Europe is still outside the European Union, to develop as a free and flexible confederation of the European peoples, at the worst possible time President Macron comes out with these statements, with the European future of Britain completely in the balance.
In reality, Macron, Merkel and all the other EU leaders should be doing everything possible to keep the UK in the EU orbit and desist from threats and deliberately confusing roundabout negotiations which also represent such a serious threat to all the people of Ireland. For example, why are there withdrawal and future arrangement negotiations? Why were there not one single divorce negotiations? Of course, that plan for a double negotiation came from the European Union.
Let us hope anyway that the proposed Europe 2.0 or Norway-plus type model is the relationship Britain will maintain with the EU, if and when Brexit happens. Whatever happens, the Irish Government cannot concede on any element of a hard border during any backstop period or in any future long-term relationship.
I compliment the Government, the Taoiseach, the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Coveney, the Minister of State, Deputy McEntee, and all the team who have been involved in this negotiation over the past two years. What has been happening in the Dáil is in stark contrast to what has been happening in Westminster. I acknowledge that because it is important. What we are talking about this evening in a calm and measured manner did not just happen by accident. It has happened through hard work and co-operation.
I would like to approach this debate from a different angle. Rather than looking at it in minute detail, I will look at it from the angle of the lack of trust that has permeated this debate. There is a lack of trust in the withdrawal agreement in Westminster. There is a lack of trust in the reassurances and clarifications that have been given to underpin the withdrawal agreement. There has been a lack of trust within Westminster, a lack of trust within the Conservative Party, a lack of trust within the Labour Party and a lack of trust between the two parties. It is astounding to watch it unfold in Westminster. The suspicion and lack of confidence to act decisively is quite breathtaking. When we look at the body language in terms of what is happening in Westminster and what is happening in Strasbourg, the body language of Mr. Jean-Claude Juncker sitting beside the British Prime Minister in Strasbourg on Monday night last was telling. The frustration was telling also. Mr. Juncker was exasperated, asking how the EU can give clarification upon clarification and reassurance upon reassurance and how can one have a second chance and not take it. He asked what one does with one's second chance. That is most important thing.
We respect what the referendum in the UK delivered. It was a sovereign decision by the population and, of course, we must respect it. I think we have respected it, not only in Ireland but across Europe. We have given every opportunity to the UK to reach a withdrawal agreement. The EU has compromised in relation to the withdrawal agreement, moving from a Northern Ireland backstop to a UK-wide backstop. That was important to reassure the UK that neither Ireland nor the EU had an ulterior motive.
When one looks at this, the backstop is merely another hurdle to get over. The backstop is the reason the withdrawal agreement is being held up but the real and most important negotiations are beyond the withdrawal agreement. Those negotiations are when the EU gets down to negotiating the future relationship. That is where the real tough and complex negotiations will start. The backstop is being used politically to frustrate progress in coming to an orderly exit from Europe. That orderly exit will be negotiated within the future relationship, not really within the withdrawal agreement. The withdrawal agreement outlines the process but the important negotiations will be on the future relationship and hopefully they will be concluded.
Everybody wishes that there will be a close relationship between the United Kingdom and the EU and between the United Kingdom and the Republic of Ireland. Everybody wants that. It is disappointing that there is no trust in the possibility of getting to that.
Triggering the backstop would be a failure in negotiation and that we could not, having spent two or three years negotiating, come to an agreement. Nobody wants to trigger the backstop. The backstop is important but it is only there to prevent chaos on this island. It is merely an insurance policy which will not be invoked for two or three years although hopefully it never will be.
Brexit is the political dilemma of our lifetime. It is the political issue that will be taught in our schools in generations to come. Unfortunately, the only certainty at present is uncertainty as we watch matters unfolding in Westminster. Really, there are only three choices. The first is a hard Brexit and that means no transition which makes no sense and means that there will be no agreement on the future relationship. The second choice is no Brexit, and for that to happen Article 50 has to be revoked or the UK has to have a second referendum which would overturn the first referendum. The third, and the most logical outcome, is the negotiated deal with its legally-binding commitments, reassurances and clarifications.
There is no alternative to a negotiated deal other than a hard Brexit. The European Union has compromised, as I have already stated, in broadening the backstop to become a UK-wide mechanism. When Mr. Jean-Claude Juncker spoke about reassurances on reassurances and clarifications on clarifications, he indicated that the EU does not want to trap the UK in any relationship with which it is not happy. It looks like a compromise would not be enough to satisfy the unionists, the Democratic Unionist Party, DUP, and committed remainers.
I am sharing time with Deputy Fitzmaurice. I did not realise he had entered the Chamber.
The document agreed on 8 December 2017, just over two years ago, identified all the matters we are now discussing, including upholding the Good Friday Agreement, not having a hard border and Northern Ireland remaining an integral part of the European Union. In paragraph 49 of that document, the matters we are debating were identified but no progress has been made on them in the interim.
I thank the Leas-Cheann Comhairle. He is very obliging. There has been a vote in the past few minutes in the House of Commons, with an amendment rejecting a no-deal scenario being approved by 312 votes to 308 votes. I understand that the United Kingdom will now try to seek an extension, so I urge our Government to speak to people in Europe to ensure that is facilitated and a bit of common sense can come into the Brexit process.
For Ireland and its agricultural sector in particular, every day is like being on a surfboard, going up and down. One day it is going one way and the next day it goes the other, as we saw with this morning's announcements. It is a time for calm heads and accurate information because there is much trepidation, especially in the agricultural sector. Reference has been made to calves being sold for 50 cent in certain areas as a result of Brexit but this could not be further from the truth. The real reason is that beef farmers over the past three or four years, regardless of Brexit, have taken €200 per annum less because of what factories are doing and what our British counterparts are producing.
We will know from the votes in the next hour if the UK will seek an extension. If at the end there is a hard Brexit, the UK has indicated that it will not put up a border between Northern Ireland and southern Ireland. Will we be forced by the European Union to put up a border or can we say we will not do it? We have always stated that we will not accept a border and we should concentrate on that.
In the context of the agricultural sector, we must implement plans to help with live exports. We can export 1 million animals by means of live exports but we are not doing so. For the Border communities in Donegal, Sligo, Monaghan and elsewhere, the programme for Government states that we will apply to the EU to put the area into the trans-European transport network, TEN-T. We call it the western arc. Three years after the announcement of the programme, however, this has not been done. Somebody needs to step up to the mark. If the Minister for Transport, Tourism and Sport will not do so, then somebody else must.
We must ensure for the agricultural sector that people can export produce to the UK. Regardless of whether we like it, the UK is our biggest export destination for beef so we must ensure that it remains so.
I am glad the amendment has just been passed in the House of Commons, despite the vote being so tight, because it provides clarity and there is less chance of a no-deal, crash-out Brexit at the end of the month. There is still real concern as it still gives no real clarity on the ultimate solution to this major crisis being experienced by the UK political system.
I have a couple of questions. If the Minister of State cannot reply this evening, a written response will suffice. One of the amendments that went through the House of Commons at the end of February was the Alberto Costa amendment, which proposed that the sections of the withdrawal agreement relating to citizens' rights would, in a sense, be protected and taken out in the event of a lack of agreement. This has been agreed by the House of Commons but it would have to be agreed by the EU side. I know the European Union said in the days following the passing of the amendment that it would not agree to negotiate "mini-deals" as it would imply that negotiations around the withdrawal agreement had failed. I do not know if we are yet at that stage, and it depends on to whom one might speak, but we are fairly close to it with respect to the current withdrawal agreement. I am interested to know the position of the Department or the Government - or that of the European Union if the Government is aware of it - if, in the worst-case scenario, there was no agreement at the end of any extension. In such a no-deal, crash-out Brexit, would we be willing to accept the recommendations in the Costa amendment, which make sense, if we were to try to minimise damage? It would affect approximately 4.5 million people in the UK and the European Union. It is a technical question but I am keen to get a response on it from the Government. A written reply will suffice if the Minister of State cannot answer this evening.
Reading the body language yesterday, it seemed that people were looking to get a withdrawal agreement concluded. There was a sense from those in the Tory Party who have been fighting for a hard Brexit at every stage that if the Attorney General had given evidence to the House of Commons that the legal mechanism agreed the previous night could have had a real effect, the withdrawal agreement might well have gone through. It is important to recognise this because such an observation should govern our approach. We can do very little except prepare as best we can for the event that even at the end of any extension period there would be a no-deal crash-out Brexit or for any new agreement that may be formed. We should maintain open lines of communication, particularly north of the Border.
As a party with a base in the North, we are supporting the backstop, North and South, because it provides real protection to our people. We do not agree with the DUP's assessment of the backstop but we should talk to its representatives. I agree with Deputy Micheál Martin that one of the first elements we should speak about now, as we have mentioned for quite some time, is the urgent need to re-establish the institutions in the North. Again, they would be a protection against what happens next. It is not right for us to say at this stage that we will wait until this all washes out and then we can come to reintroducing the institutions. Now more than ever we must have them and in a way that re-establishes a space where we can again have trust. I reiterate that call as one of the things we can do.
The ball is really to be played in the House of Commons. Will it be able to cross the divide? It seems there is a possible majority in the House of Commons for a deal allowing membership of the customs union in some form, and in agreeing that, the issue of the Irish backstop would become irrelevant. It is a core dividing issue and will influence whether there is a hard or soft Brexit. The European Greens have sought a second referendum but could this be done in the timelines that could be made available with any possible extension? I do not know. We should support that possibility if it arises.
Our role is really to prepare and maintain good relations and co-operation, as we have seen here. That has been beneficial. We must respond to developments as they occur in the United Kingdom in the same way we have done with certain calmness. That word has been used much in the past while but it serves us best.
I also welcome the decision of the British Parliament in the past half hour to support an amendment to reject a no-deal Brexit at any time and in any scenario. This outcome is not especially surprising. What is really surprising is the very narrow margin - a mere four votes - by which it was carried. It beggars belief that so many people in the House of Commons could contemplate the idea of a no-deal Brexit. From our point of view, it is very frustrating and difficult to understand. It is an indication of the extent to which politics in London has become so dysfunctional across the board.
The decision tonight paves the way for a request to extend Article 50. It remains to be seen whether that will be approved by the EU. It has been made very clear by the EU that this is not an automatic decision. A decision to extend Article 50 will be based on the requirement that there is some point in extending. It is not clear whether there is any point in doing so - whether this is just a play for additional time or there is a likelihood that something will come of an extension. That extension will be quite short - up to just before the European elections on 22 or 23 May. We continue to be frustrated, to have deep fears and to feel a sense of bewilderment regarding is going on in London.
We have spent the past two years contributing to debates here hoping and waiting for sense to prevail within the House of Commons. We have all operated on the basis that there could not possibly be a crash-out and yet the closer we get to 29 March, the greater the possibility is of that happening. One would have to ask questions about what happened over the past few days. On Monday evening, there was an indication that some agreement had been reached, although Mrs. May's body language at the press conference gave a fair indication that she was not exactly at ease. One would also have assumed that Mrs. May would have been provided with the advice of the UK Attorney General on an ongoing basis during those negotiations but the bombshell arrived on Tuesday morning when Geoffrey Cox really put the kibosh on that agreement.
It is quite clear that British politics is dysfunctional at all levels, including the highest level, which poses a significant threat to the well-being of this State and the future of people who are very much dependent on exports to the UK. The developments this morning regarding the Treasury proposal regarding tariffs are quite extraordinary. It seems as though a unilateral decision was taken without any reference to the EU. The implications of that for this country are horrendous. That proposal must be resisted out of hand. Obviously, there are significant implications for our exports to the UK, particularly agricultural exports, in light of the massive tariffs they would face. What they saying about us being able to export and the free movement of goods across the Border from south to north is utterly simplistic because that opens up an EU frontier along our Border. The implications of this are significant in terms of the lack of security on an EU border, us having to police that frontier and how we maintain standards, particularly food standards, in the context of a UK policy of moving towards cheaper food of poorer quality. These are significant issues. The cost of doing that, if it comes to pass, must be met by the EU. This is something I have not heard the Government mention. While the responsibility would rest with us, the cost must be covered by the EU.
It is fair to say that the Irish public is extremely nervous when it comes to Brexit, and is probably pretty fed up of it at this stage. It has been the main topic of conversation here in recent years but we are at the point where it has become very real to people and focused minds more than at any time previously. It is an unusual set of circumstances for us whereby we do not have direct control over a political policy that will have such a significant impact on all facets of life on this island, our country, people and businesses. It is a British policy.
What we do control is our own preparedness. Fine Gael and the Government have been working on preparing for Brexit since before the British people voted for it. That preparation began once the referendum was called. We have seen in recent times how that preparedness leaves us as well placed as possible. While we continue to work with our EU partners to avoid a damaging no-deal exit - I welcome this evening's vote in Westminster - and while it is all very well and good for MPs to vote and state that there will not be a no-deal exit, until such time as they agree an alternative, that is the default position. I accept, however, that matters in this regard are a bit more difficult for Theresa May following that vote, which morally compels her not to leave the EU without a deal. It is still a fact that there needs to be an agreement on an alternative. That said, we must focus on the things we can control as opposed to those we cannot. We will continue to use our position at the heart of Europe to get the best possible outcome for our country and citizens and Europe. Hopefully, we can continue to maintain as close a relationship as possible with our friends in the UK as part of that. Individuals and businesses in Ireland also have a role to play. In that context, gov.ie/brexitis the starting point for those - particularly businesses - who have questions on this matter. This week alone, 11 events are being held in five different counties and 80 events have been run to date.
The Minister of State is aware of the concerns of those in the agricultural sector, particularly beef farmers. I have also raised the very serious concerns of our highly valuable horse racing and breeding sector with her. This sector is important to the economy of Kildare but also across the country. The tripartite agreement allows for the free movement of horses between Ireland, France and the UK without the veterinary checks that apply in respect of third countries. In a week when we cheer on Irish horses trying to beat English horses in Cheltenham, that is key because racing at Aintree takes place in the first week after the end of the March deadline with racing at Punchestown taking place soon after that. These are the elements we need to keep to the forefront, which is why I welcome the statement by Commissioner Hogan this evening that Europe has our back and the Taoiseach's comments from the US about putting citizens first and keeping all these topics to the fore in the coming weeks.
This is a time of sadness in the sense that the people who charted the course for Brexit in the first instance had a lot of ideas two or three years ago as to the benefits of leaving the EU. They chanted them regularly and trumpeted the benefits of exiting in a hurry. They have now gone silent. There is no longer as much of that any more but we should be very wary and cautious about being stampeded by some of the most recent announcements, particularly with regard to trade barriers and tariffs. These are meant to soften us up a bit like a fellow being softened up before the football match, which was an old-fashioned idea that sometimes worked. The aspect on which we need to concentrate is that we must be cautious and careful. This morning's announcement was a peculiar one in that it did not do anything to help our colleagues in Northern Ireland. In fact, the reverse was the case. It could have helped because it does prove that it is possible to do the things that people said could not be done. The Government and the Opposition should keep their powder dry and remain on course.
The European Union has done us proud. As part of the European Union, the United Kingdom has stood its ground, as have we, and we have no option except to do so in the future. The saddest part of all this is to see a British Prime Minister humiliated by her own Parliament, sent back and forth to Brussels to negotiate something MPs had no intention of approving in the first place, and they knew that from the beginning. From here on, whatever must be done should be done when it needs to be done. We should not pre-empt anything. We should not offer hostages in any shape or form. We should be ready for the worst but, if the best happens, avail of that too.
I too welcome the passing of the Yvette Cooper amendment this evening, albeit by four votes. I think we will see in a few moments the vote on the Prime Minister's motion. Having said that, while MPs have voted to avoid a no-deal, this does not actually prevent a no-deal from happening.
As I will have an opportunity in the wrap-up to touch on some other issues, I will focus on our own preparedness here at home in the case of a no-deal scenario. Many Deputies have asked the question, "What have we done?" I will first touch on our legislation. With the very constructive support of all Members of this House, we passed all Stages of the omnibus Bill through the Dáil last week. In recent days we have seen it in very quick time pass through the Seanad, which means it is now ready to be signed by the President. The legislation provides continuity in key areas. It protects citizens, supporting our economy, enterprise and jobs in key economic sectors. We are confident the Bill can and will be passed by 29 March if needed.
Regarding the common travel area, part of our preparations and a significant part of the Bill before the House today was to ensure that people will be able to continue to avail of healthcare and related services North, South, east and west, and to live, work and study and do everything else in each other's jurisdictions as we have done before. That work has been done.
We have started to put into place physical infrastructure at our ports and airports. We have 400 additional trained customs staff who will be in place by the end of March. We have the possibility of a further 200 if needed. We have 230 people as part of our sanitary and phytosanitary standards, SPS, checks. We have 61 environmental health staff. We have the numbers there if required by the expected date.
As for business supports and state aid, we have a €300 million Brexit loan scheme fund. Looking at the figures as to how many people have applied for funding so far, we have 462 applications, 413 of which have been deemed eligible, although the figures show that 81 have been progressed to a sanction on finance, accounting for about €17.32 million.
Looking then at the agrifood sector, 99 applicants were eligible, 77 were approved and only 15 have been sanctioned. The reason for this - and the businesses have actually told us this - is that they are naturally reluctant to take on these extra burdens and this financial burden until they are really sure what exactly is happening, which is quite unusual, given the fact that we are 16 days out and we still do not know. Even though they have been approved, businesses are still not taking these supports on board. Nonetheless, they are there and we encourage people to apply and to take on board the supports where they can.
We have the long-term future growth scheme. This will be launched early this year, and already financial institutions have been asked to signal their intent to become lending partners. Enterprise Ireland has provided approval of funding amounting to €74 million to 535 Brexit-exposed companies. Enterprise Ireland has directly intervened with about 1,000 companies. A further 1,000 have engaged in Brexit advisory clinics. We have 4,400 companies that have completed the Brexit SME scorecard and 1,000 that have completed the Enterprise Ireland, EI, online customs insights programme. On top of that, we have provided €8 million extra for Brexit staffing and supports across all enterprises and €1 million in additional funding for InterTradeIreland. A lot of work is being done, as Deputy Heydon has outlined. We have events still ongoing, 11 across five different counties this week. We have had 80 since September alone, so there has been a huge amount more on top of that and many more events are yet to happen. Anyone who has not engaged can visit the website or find out where these events are happening.
Many questions have been raised about our overall supports, particularly from the Commission. The Department of Business, Enterprise and Innovation and our Minister, Deputy Humphreys, have been actively engaged with the Minister, Deputy Donohoe, and the European Commission for some time to try to find solutions to support and assist Irish enterprise. We are actively pursuing with the Commission the question of state aid, which many Deputies have raised this evening. The Commission has already given us permission to announce an amendment to the rescue and restructuring scheme, the budget of which went from €20 million to €200 million. As both the Tánaiste and the Taoiseach announced today, the Commission has said it is willing and ready to provide additional support and to be flexible when it comes to state aid rules.
In addition, at home, as the Minister for Finance outlined earlier this week, we are putting in place through our agencies and with the support of the Departments, measures to ensure that specific industries and sectors such as the agricultural sector and the tourism industry will have their own financial supports available. Again, however, none of this can take away from the fact that if there is a Brexit, particularly a no deal, it cannot, no matter what we put in place, change the fact that we will not have the status quoand that things will not be the same as they were. A no-deal scenario is a lose-lose for everyone, but everything we are doing is trying to mitigate those measures as much as possible.
These statements were sought - I believe our party was the only one to seek them - on foot of the publication of three additional Brexit documents negotiated by the UK and the EU last Monday night: a joint statement, an instrument relating to the agreement and a unilateral declaration from the United Kingdom. With 16 days to go, we had all hoped for a breakthrough in the negotiations and a move forward by the UK Parliament to ratify the withdrawal agreement. Unfortunately, despite the additional documents representing movement in favour of the UK, it was not sufficient to get MPs to support the deal. The unilateral declaration which was issued by the UK states, "In that light, the United Kingdom notes, subject to Article 1(4) of the Protocol on Ireland/Northern Ireland, that the objective of the Withdrawal Agreement is not to establish a permanent relationship between the Union and the United Kingdom." It goes on to state, "If under these circumstances it proves not to be possible to negotiate a subsequent agreement as envisaged in Article 2 of the Protocol, the United Kingdom records its understanding that nothing in the Withdrawal Agreement would prevent it from instigating measures that could ultimately lead to disapplication of obligations under the Protocol, in accordance with Part Six, Title III of the Withdrawal Agreement."
Interestingly, it appears that this is an attempt by the UK to unilaterally exit a bilateral agreement, which is clearly unacceptable to Ireland. This is precisely the issue that Geoffrey Cox, the UK's Attorney General, dealt with in paragraph 19 of his legal advice. What happens if and when best endeavours are used, both parties acting in good faith, yet both parties cannot agree to come to an agreement? In his advice Geoffrey Cox spoke to what he called the intractable differences that may arise, the exact situation that the UK sought to address in its unilateral declaration. The UK Government sought to interpret Article 1(4) of the withdrawal agreement, "that the objective of the withdrawal agreement is not to establish a permanent relationship between the Union and the United Kingdom", to mean that in the event agreement on the future trading arrangement could not be reached through no fault of either party, this would mean that the withdrawal agreement had become permanent. This contravenes Article 1(4) and could therefore lead to the disapplication of obligations under the protocol, namely, the backstop.
Geoffrey Cox took a different view on this issue and directly contradicts this interpretation by stating in paragraph 19 of his advice, "However, the legal risk remains unchanged that if through no such demonstrable failure of either party, but simply because of intractable differences, that situation doesarise, the United Kingdom would have, at least while the fundamental circumstances remained the same, no internationally lawful means of exiting the Protocol's arrangements, save by agreement." However, there were some concessions and compromises on the part of the EU contained in the interpretive document. To anyone suggesting otherwise I would ask what was the point of compiling and publishing these documents, and what was the purpose of the dramatic emergency Cabinet meeting and Theresa May's last-minute flight to Strasbourg? Of course there was movement. Ultimately, however, it was not enough to get the support of MPs in sufficient numbers to get the deal over the line.
Geoffrey Cox's advice ran to three pages. While the focus was on paragraph 19, I would direct people to read his advice in full. Looking initially to paragraph 4, he states, "The Joint Instrument [...] provides, in addition, useful clarifications, amplifications of existing obligations and some new obligations, which in certain significant respects would facilitate the effective enforcement of the UK's rights in the event of a breach of the good faith and best endeavours obligations by the EU." He goes on to state in paragraph 7, "In my view, these provisions of the Joint Instrument extend beyond mere interpretation of the Withdrawal Agreement and represent materially new legal obligations and commitments, which amplify its existing terms and make time of the essence in replacing the backstop." He goes on to say in paragraph 8, "It would be unconscionable and a potential breach of the duties of good faith and best endeavours were the EU to decline to adopt anypracticable alternative arrangements of the type described if they helped to avoid a hard border on the island of Ireland and did not require it to make unreasonable adjustments of its interests."
Much of this is subjective. What exactly are "best endeavours"? What might represent "delay"? What might constitute acting "not in good faith"? Regardless of the subjective nature of the interpretive document, it is legally binding and would strengthen the UK's hand at the arbitration table, if ever the arbitration process were to be employed. This was the change, the compromise and the concession. Ultimately, however, the last paragraph of that legal advice remains the issue. I refer to the intractable differences that might present. Is there anything that can be done by the EU at this stage to address this concern and find a way to move forward?
Politics is about the possible and finding solutions to difficult problems. We are facing a serious threat to our country, our economy and our valued peace. We are already at the cliff edge and staring over at a deep drop below. Ahead of the vote yesterday, the DUP was looking to the advice of the UK Attorney General for divine inspiration. Similar to a domino effect, the European Research Group looked to the DUP. Not desiring to be more unionist than the DUP, it may have actually followed that party’s lead.
It was manifestly disappointing to watch the DUP vote against a deal that it was in Northern Ireland’s interests to support. Perhaps that party welcomed comments today from Michael Gove regarding a possible return to direct rule in Northern Ireland in the event of a no-deal Brexit. That is despite such a move not being what the majority of people in Northern Ireland want. Sinn Féin has again abdicated its responsibilities and spent most of its time this evening talking about Fianna Fáil rather than Brexit and the situation in Northern Ireland.
What happens next is unclear. We know MPs in Westminster tonight voted to reject leaving the EU without a deal. A no-deal Brexit has been taken off of the table but only by a majority of four. The House of Commons then went on to reject an amendment that would have extended the period in which Brexit could take place until 22 May and give no backstop commitment. That is also welcome. We expect that the next step will be for the House of Commons to vote to extend Article 50. The question though is for how long. Our Government must do what is needed to secure that extension, if requested, regardless of whether there is a plan on how to move forward. If the alternative is a crash-out Brexit, then we must support anything to avoid that happening. A short extension poses difficulties in that it prolongs the uncertainty for businesses and farmers. That is not without consequences.
It is, however, far better than the Armageddon of a no-deal Brexit. A longer extension could yield many different developments and not all may be positive for Ireland. We could see a change of Prime Minister in the UK and then an even more hardline approach in respect of a harder Brexit. A no-deal Brexit would be catastrophic for Ireland. There is no point in saying otherwise. The EU's proposals today on trade and tariffs were a shot across the bows. However unrealistic and unworkable they were, it gave our businesses, and in particular our farmers, an insight into what may lie ahead in the event of a no-deal Brexit. There was, naturally, widespread concern across the business and farming communities. They are looking to our Government for leadership and reassurances. The time for generalities is over. We need details on the level of preparedness in the country and exact details of the financial aid package that will be available to businesses and farmers should the worst happen at the end of March or beyond.
We cannot wait until after Brexit to see what available financial support might be there. We will then find ourselves scrambling from day to day to address the catastrophic impact that would have on our country. The deputy director general of finance with the European Commission, Mr. Martinez-Mongay, appeared before the Committee on Budgetary Oversight today to answer questions. I asked him what financial aid package would the Commission provide to Ireland in the event of a no-deal Brexit. The response I got was that it was premature to have those conversations. It is not premature and it is, indeed, well beyond time to be having those conversations. It is incumbent on the Government to be honest with the Oireachtas and our citizens as to what level of conversations have happened and what have been the results of those conversations. I took some positive aspects from the comments of Mr. Martinez-Mongay. He referred to the possibility of some flexibility on state aid rules, if needed. We would again welcome details being provided in this House and to our citizens on what that might look like.
If the EU and the UK fail to deliver a deal for citizens, then politics will have failed. This is the defining political issue of our age. It will affect many things, such as how we interact with our closest neighbour and our nearest market. It could have a severe negative impact on peace and stability on this island. It is incumbent upon all of us to find a way forward so that we can get to a post-Brexit world where trust is restored between the UK and the EU. I refer to a situation where any negative sentiment that may have built up between our two nations can dissipate and be put to bed. I look forward to a time when we are not debating Brexit daily and we move back to discussing the issues of health, housing and education and all the other issues that really matter to our citizens. Until Brexit is resolved, however, it will be the key issue of the day. As always, the support of the Fianna Fáil Party will be there to ensure that whatever needs to be done to protect our country will be done.
The Brexit journey has at times been nightmarish. It has always been a bumpy ride and, occasionally, it has puzzled us all greatly. While almost everybody in Ireland yesterday looked on in amazement at yet another massive rejection vote in the British House of Commons, the British Government was readying itself to announce a new tariff regime. This will apply to goods entering Britain from the Republic of Ireland. In the same breath, the British Government stated that no tariffs would apply to goods crossing the Border into the North. They would, however, apply to goods going from the North to Britain.
This incredible proposition represents not just a puzzling moment. For Ireland, North and South, it is a nightmarish prospect. The British Government document, covering 25 subheadings, including, at the start, aluminium foil and continuing through beef, butter, cheese, poultry, pork and ending with tyres and wheels, would if implemented have a devastating impact on Irish trade. That would be the case particularly in the agriculture and agrifood sector in this jurisdiction and across Ireland. What madness is this? Can it be so easily dismissed, as some in this House would have us believe? Let there be no mistake about this. The Brexit caravan could very easily become a runaway train, with all of the damage that could cause and that could follow in its wake. I again urge our Government and its representative voices in Europe to impress upon the European Commission and the EU Brexit negotiators the importance of presenting a real show of solidarity with Ireland through significant capital investment commitments for our transport links with the rest of the member states of the European Union. I refer to solid and sustainable compensatory measures for businesses, farming families, agrifood processors and for exporters generally. The EU has to accept it has a responsibility to help ensure jobs are protected and maintained in this country in a worst case scenario.
Brexit has always been a threat. It could, however, yet represent an economic disaster for Ireland and its people. With only 16 days remaining until the 29 March deadline, we need certainties from Europe. It is certainly welcome that the backstop is locked in place. The EU, however, has more to do and, I suggest, much more. The vote in Westminster tonight on the proposal to take a no-deal Brexit off of the table, which passed but only just, will be followed tomorrow by another motion to defer Brexit pending further negotiations. There is every chance that motion will be adopted. The EU, however, has made it very clear that it will need to be convinced of its merits.
Before the Minister of State wraps up, I would like her to state on the record where the Irish Government stands on the proposition of extending Article 50 and giving the British Prime Minister more time.
I thank all Deputies for their contributions, not only tonight but over the course of what has been a lengthy discussion. If I could correct the record, I said that the Cooper amendment had been passed but in fact it was the Spelman amendment, moved by Ms Yvette Cooper, MP.
To begin with the last Deputy's question on an extension, we have always said that we would not stand in the way of an extension. However, we need to see what exactly the UK Government seeks that extension for and for how long it would apply. We still do not have clarity on this, even following the passing of the amendments and the Prime Minister's motion this evening. We await the movement of amendments and possible motions tomorrow, but I think we would respond favourably. That said, our colleagues in other member states will want to see why we are extending this, the possible objective and the possible outcomes. We will have to wait and see what they are.
Regarding the documents that were agreed on Monday, it is important to outline that further moves were made by the EU to provide further legal clarity and certainty to the UK. That was done in two or three ways. It was done first by strengthening the political declaration, which had already been agreed last week. That gave further clarification that the EU has no intention of trying to trap the UK within an indefinite backstop and that a very specific timeline would be set out within a framework to try to come to an arrangement on the future relationship. There would also be a move to start looking at alternative arrangements. However, an addition to the unilateral declaration outlined how the UK could possibly leave the backstop or avoid its invocation.
The first means of avoiding the backstop has always been there, that is, for the parties to form a future relationship that would deem it unnecessary. The second is for alternative arrangements to be identified and put in place, but we have yet to see those. The third would be the arbitration process. Deputy Chambers referred to this making it easier for the UK and more difficult for us to prevent the UK leaving on a unilateral basis.
These documents very clearly state that the disapplication of the backstop must be connected with Article 20 which, as already outlined in the withdrawal agreement, is related to the review mechanism from which the UK cannot pull out unilaterally. Title III of Part 6 of the withdrawal agreement provides that as part of the arbitration process the UK must show the EU to have continuously acted in bad faith, and not only that, but to have failed to try to rectify this. There is a very clear and strong process in place. Meanwhile the EU has given further assurances through the political declaration that it has no intention of keeping the UK locked in an indefinite transition or an indefinite backstop position and that we want to address all of these concerns as part of a close and comprehensive future relationship. After weeks of negotiations and the agreement of these documents on Monday, the UK Parliament was last night unable to pass the withdrawal agreement. This has come as no surprise to many people but we are still extremely regretful of the outcome. Tonight the House of Commons, as we all know, has voted to reject the UK leaving the EU without a deal. We will see tomorrow how it votes on possibly requesting an extension of Article 50.
Meanwhile, as many Deputies have mentioned, the UK Government published its own tariff plans this morning as part of its no-deal planning. As a Government we are considering them and working with our partners in the EU to assess their impact fully. There is absolutely no doubt that tariffs would have a negative impact on trade. They would be damaging for business, farmers and consumers, not just here and in the North but also in the UK. I want to be clear. No option, including 0% tariffs or managed tariff-free quotas, would be as good as what we have in the withdrawal agreement. This would preserve the current tariff-free trade arrangement throughout the transition period. It also guarantees that there will be no hard border and protects the all-island economy. It is in the interests of both the UK and the EU that we ratify this.
Built on two years of complex negotiations, with fair compromise on both sides, the withdrawal agreement provides the certainty that so many of us seek this evening. This morning I attended an event in the Carrickdale Hotel, which has become very well known to many people who have travelled to the Border region. Some 300 people attended, not to get an understanding of what is going to happen, because none of us knows that, but to make sure they are as prepared as possible given the uncertainty that still exists. There is a deal on the table. The EU has provided strong and repeated legal assurances, as I have outlined, on the concerns raised by the UK. We are all determined to reach an ambitious future relationship agreement as a priority. Such an agreement would meet the obligations held by both Ireland and the UK as co-guarantors of the Good Friday Agreement. A no-deal outcome is in nobody's interests. It is for Westminster to decide how it believes this can be avoided. While time is short, it has not yet run out. There is still time for sensible solutions. MPs in Westminster have indicated their desire to avoid a no-deal Brexit, but best wishes are not enough. A decision is required and we need clarity on where the UK thinks it can go from here. For the EU's part, our position has been and will always continue to be consistent and clear. The best way to ensure an orderly withdrawal is to ratify the deal that is on the table.
Finally, I want to be very clear that regardless of the outcome, we can be certain of our place in Europe and of the continued support of our fellow member states, just as they can be certain in their confidence in us and in the European Union. Brexit has been a long and difficult process, but we have not faced it alone and I would like to express our sincere gratitude to our fellow member states and to the Commission for their understanding and unwavering solidarity. I also wish to express our thanks and appreciation for the support and advice received by all parties in the House throughout this process. It has been far-reaching and has had far-reaching implications for us, but we will continue to keep the House as fully informed as possible on developments in recognition of that.