Wednesday, 7 October 2020
Brexit and Business: Statements
I am grateful for the opportunity to address Members on the important topic of Brexit and business. The date of 31 December 2020 is drawing in and this signals a major change for Irish businesses doing business with the UK as it exits the EU Single Market and the customs union. Businesses that move goods from or through Great Britain will be subject to a range of customs formalities, sanitary and phytosanitary, SPS, checks and other regulatory requirements that do not apply to such trade today.
I want to stress the importance for businesses to act now to get ready for the changes that we know are coming in January and to make it clear that these changes will happen regardless of the outcome of the negotiations between the EU and the UK on a free trade agreement.
Businesses have already had to deal with a lot of change this year. They have demonstrated that they can adapt rapidly to public health guidance and they will adapt to change again. The Government stands ready to assist and guide businesses in dealing with the changes that Brexit will bring, including both the changes we already know are coming and those that might come to pass.
The most recent round of Brexit negotiations concluded last week with Michel Barnier stating that there is still a considerable way to go before agreement can be reached. The European Commission President, Ursula von der Leyen, and the UK Prime Minister, Boris Johnson, also reviewed progress on the status of the negotiations in a call on Saturday, 3 October. While their joint statement noted that progress had been made, “significant gaps remained, notably but not only in the areas of fisheries, the level playing field, and governance”. They have instructed their chief negotiators to work intensively to try to bridge those gaps. We know that unlocking these outstanding issues is crucial in moving towards a more intensified phase of the talks.
A no-trade deal is in no one’s interests and we want to forge the closest possible relationship between the EU and the UK, although this cannot come at any cost. We cannot undermine the EU’s economic interests or the integrity of the Single Market and we must have a level playing field, that is, a set of common minimum standards. It is not acceptable for Great Britain to try to undercut us on standards when it comes to workers’ rights, the environment or health and safety. The EU is continuing to negotiate in good faith to try to achieve the type of future partnership with the UK that was described in the political declaration, agreed less than a year ago. That can only happen if the UK honours the political declaration and the withdrawal agreement, including the Irish protocol, in full.
Our aim is a zero-tariff, zero-quota free trade agreement, linked to a fisheries agreement, as well as measures to ensure that a level playing field will operate between the EU and the UK. I believe a no-quotas, no-tariffs agreement with some form of minimum standards and controls on state aid and fishing is still possible. But we are planning for the possibility that there will not be a deal. Our message to businesses is to get ready, because deal or no deal, things are going to be different.
In a nutshell, businesses need to get ready, get informed and get support.
We will focus on the businesses that could be worst affected, such as those in agri-food and small exporters. We want to help them to retain their market in Britain and to open up other markets, a task that is made all the more difficult by Covid-19 because of the restrictions on international travel.
Even the smallest businesses need to take immediate steps to understand the impact on their operations of the UK exit from the Single Market and customs union. They must be ready for changed customs and supply chains. Failure to engage with and comply with new customs rules and other regulatory checks will prevent businesses continuing to trade with Great Britain. In turn, this could lead to significant delays in moving goods to, from or through Great Britain from 1 January 2021. The Government is working in partnership with businesses as they face these challenges and has taken a multifaceted approach to assist and financially support businesses through essential planning. We have provided targeted grants and advisory services to assist with both these vital issues through our agencies, and I urge every business to engage now.
In early September, the Government published a Brexit Readiness Action Plan. This plan provides guidance and advice to business and individuals in a vast range of areas including trade in goods and services, customs and other sanitary and phytosanitary checks and controls, import duties, EU Single Market accreditations, use of the British land bridge, data transfer, recognition of qualifications, and many other issues. The plan provides clear advice on steps that need to be taken by businesses to deal with these many and varied issues come 1 January 2021.
The readiness work is complemented by a major national communications campaign under the Getting Ireland Brexit Ready brand. Despite the impact of Covid-19 and the approaching Brexit deadline, many Irish exporters are resilient and optimistic. A recent survey of Enterprise Ireland clients found that 57% expect to grow their exports in 2021, 83% intend to hire new staff in 2021 and more than eight in ten exporting companies are either confident or very confident about the international trading environment in 2021. This optimism is encouraging and the results are encouraging for this cohort of exporting companies but, of course, this view is likely to be different for SMEs that are more domestically focused and therefore need greater assistance from the Government.
New customs facilities will be the most immediate and visible impact on businesses on 1 January. All businesses that want to continue trading with Great Britain in January must, at a minimum, have an economic operators’ registration and identification, EORI, number. This identifier will allow them to submit the necessary customs declarations. It is positive that over 67,000 businesses now have an EORI number but I am concerned that many businesses, though a small percentage in terms of trade, have not yet registered with the Revenue Commissioners. As part of an intensified engagement, the Revenue Commissioners are now making follow-up phone calls to some 14,000 businesses it believes will be most significantly impacted.
The Government is also helping businesses to develop the skills and systems necessary to handle new customs requirements. As part of the July jobs stimulus, the Government announced a €20 million ready for customs package to help businesses to put in place the necessary internal arrangements, staffing, software and IT systems to be ready for the new customs arrangements and regulatory requirements. As part of this package, Enterprise Ireland launched a new ready for customs grant through which businesses can claim grants of up to €9,000 per eligible employee hired, or redeployed within the business, to a dedicated customs officer role. I strongly encourage businesses to avail of this grant to assist them in hiring or redeploying employees to a dedicated customs role. Enterprise Ireland is also running an online customs insights course for businesses dealing with customs for the first time. Some 1,000 businesses have registered for Clear Customs Online 2020 since its launch on 9 September. This free online training programme, provided by Skillnet Ireland, is also helping Irish businesses prepare for increased customs requirements.
Local enterprise offices are carrying out the second phase of their one-to-one successful Brexit mentoring and training Prepare Your Business for Customs workshops. These will commence this month and will be supported by a full awareness campaign to target small Irish businesses.
Enterprise Ireland, local enterprise offices and InterTradeIreland are providing a range of initiatives to assist with getting Brexit ready. These include planning vouchers, consultancy and mentoring, tariff advisory services, research on new markets and innovation. Enterprise Ireland has launched a Brexit readiness checker. The tool follows on from the Brexit scorecard and will produce a report assessing a company’s readiness for Brexit across a range of areas and signpost users to resources to assist them on their journey.
Enterprise Ireland’s Act On initiative is helping Brexit-exposed companies to create strong action plans to deal with areas such as financial and currency management, strategic sourcing, and customs and logistics. Enterprise Ireland will continue to help in the form of grants, mentoring and training to enable its clients to examine their exposure and their capability to meet both the challenges and opportunities Brexit presents.
InterTradeIreland’s Brexit advisory service offers a focal point for businesses working to navigate changes in cross-border trading relationships. The Brexit advisory service has proved popular, with over 700 SMEs directly engaging with it in 2020. As part of this service, InterTradeIreland has run a series of awareness-raising events to help improve knowledge of customs processes and procedures, as well as identifying actions businesses can take in areas like logistics and supply chain management. InterTradeIreland’s Brexit planning voucher enables eligible businesses to seek professional advice on how best to plan for Brexit. This voucher helps businesses obtain advice on specific areas such as tariffs, currency management, and regulatory and customs issues.
Local enterprise offices continue to offer their grants to business including the technical assistance for micro exporters, TAME, grant of €2,500 and the lean for micro grants to drive productivity improvements.
Financial assistance is also available through the Strategic Banking Corporation of Ireland, SBCI. For example, the Brexit loan scheme offers businesses the means to deal with short-term liquidity issues that could arise in buying stocks or for delays that could arise at the ports. To help businesses secure longer-term funding for investment purposes, the SBCI future growth loan scheme was expanded at the beginning of the summer in response to very high demand. It provides up to €800 million in lending to eligible businesses to support strategic long-term investment, including for a post-Brexit and post-Covid-19 environment.
The new €2 billion credit guarantee scheme, launched in mid-September, is the largest guarantee scheme that has ever been provided for Irish businesses to date to ensure that low-cost loans are available for Irish businesses as they rebuild both through Covid-19 and Brexit. We have also provided further funding to Microfinance Ireland to ensure it can meet the needs of microenterprises that cannot avail of bank funding over the coming period.
The Minister for Finance has indicated that budget 2021 will be framed on the basis of a no-deal Brexit and we will consider what further targeted measures to help businesses and affected sectors measures are needed in that context as the shape of the final trade deal with the UK becomes clear.
The launch of the Brexit Readiness Action Plan was accompanied by an intensified communications campaign under the Getting Ireland Brexit Ready brand. The campaign targeted small businesses, including shops, hauliers, farmers, fishermen and fisherwomen, and others who trade with the UK, who are most exposed. The campaign ran from 9 to 27 September with advertisements on national radio in English and Irish, as well as in the main daily, Sunday and regional papers. This campaign is now being followed up by specific sectoral campaigns. While it has raised awareness of the changes at the end of transition, we know that further work is needed.
This morning, I chaired a meeting of the enterprise forum on Brexit and global challenges. The group has been meeting on Brexit since early 2017. The role of business representative groups is crucial in getting messages out through their membership and we will continue to use this forum and others to help get the message out over the coming weeks.
Tomorrow, I will write to all 250,000 businesses that are registered in the State to inform them of the most important actions that they need to take in advance of 1 January and to provide them with a useful Brexit checklist of those actions and contact details of the Government agencies they can contact to help. The Revenue Commissioners have written to over 90,000 businesses that have traded with the UK since 2019 to advise them of the essential customs changes that lie ahead. That letter also included relevant information from the Department of Agriculture, Food and the Marine on exporting animals, plants and products of animal and plant origin. As I mentioned earlier, Revenue is following up this by way of telephone calls.
Earlier this week Revenue hosted a series of Brexit information webinar sessions covering a range of technical issues such as submitting customs declarations, understanding how the origin of goods is dealt with and managing goods in transit. My Department presented on the enterprise and financial assistance available.
Other agencies under my remit, such as the Health and Safety Authority, Irish National Accreditation Board and the National Standards Authority of Ireland, are actively engaged in a series of webinars this month and for the remainder of this year. I encourage Deputies to visit their websites and access the virtual events at any time.
As well as the challenges facing businesses in the customs and SPS area, changes are coming in the regulatory area due to the UK leaving the Single Market. EU law in the area of product standards and certification will no longer apply to Great Britain. This has a direct impact on businesses if they are, for instance, engaged in putting industrial goods on the EU market and had relied on the UK for product certification such as the CE mark.
From 1 January, UK notified bodies will no longer be authorised to certify the compliance of EU products with EU rules and standards in respect of specific regulatory controls, public safety, etc. For businesses that currently rely on UK notified bodies for conformity assessment certificates, it is essential that they source an alternative approved notified body established in Ireland or another EU country. This may involve transferring existing certificates to a notified body in another member state or obtaining new ones altogether. Many businesses have taken the necessary steps to address this issue. Businesses that source products requiring EU certification from the UK should engage with their EU-based notified bodies.
Other impacts in this area that businesses may need to consider include: requirements to register products on EU databases; requirements to be established in the EU; and requirements relating to the marking and labelling of goods. Manufacturers, distributors, importers and authorised representatives of industrial products must comply with their obligations and responsibilities under EU product legislation when placing a product on the EU market.
To provide clarity to businesses in affected sectors on the new procedures and requirements at the start of next year, a wide range of webinars are being hosted by Government Departments and agencies, as I previously mentioned. These webinars cover a wide range of issues, including implications for industrial products, how the supply chain may be impacted by Brexit, CE marking products post-Brexit and tariff classification.
The introduction of new import and export processes, along with enhanced checks and controls on trade between the EU and Great Britain, may lead to disruption in the supply chains for Irish-based retail and other businesses. It is important that retailers intensify their work on understanding and strengthening their supply chains in order to mitigate disruption and to limit potential congestion at the ports.
The food supply chain is a matter of the highest importance to the Government and my colleague, the Minister of State, Deputy Damien English, chairs the retail forum. He is looking at the issue closely. Along with other Departments, we will continue to work closely with stakeholders in the grocery retail and distribution sector to ensure that preparations are being undertaken by businesses to manage potential impacts on supply chains so as to minimise the risk of disruption in January.
To ensure the highest possible degree of efficiency at Dublin port regarding customs checks and SPS inspections, effective planning is being put in place by the relevant State bodies and this work is being overseen by the Department of Public Expenditure and Reform. To assist this sector in bringing business online, Enterprise Ireland administers the online retail scheme. The objective of the scheme is to help companies in the indigenous retail sector with a pre-existing online presence to respond to domestic and international consumer demand for a competitive online offer.
At European level, the European Council has approved the establishment of a €5 billion Brexit adjustment reserve to counter adverse consequences in member states and sectors that are worst affected by Brexit. We expect the European Commission to present a proposal by November and as one of the member states most impacted by Brexit, we are working with the Commission to ensure the allocation criteria for the fund are targeted at those member states and sectors most affected by Brexit.
The Minister for Foreign Affairs and Trade, Deputy Simon Coveney, met Commissioner Johannes Hahn in Brussels on 22 September and discussed with him Ireland’s priorities and the need to target the most exposed sectors. The Minister for Finance, Deputy Paschal Donohoe, and I met Commissioner Margrethe Vestager today and I will be engaging with European and Government colleagues over the coming weeks and months to ensure Ireland makes the best use of the measures available to help deal with Brexit and Covid-19.
As a small open economy, Ireland relies on external demand and international markets for sustainable and continued growth. Exports lead to sustainable job opportunities and growth in revenues for firms beyond that available in the domestic economy, while having a substantial multiplier effect across the entire economy in terms of jobs and tax revenues.
Export growth in recent years has been exceptionally strong, but should not be taken for granted. Ireland's overall export performance over the past ten years has been marked by year-on-year growth, with total exports of goods and services reaching a further record level of €366 billion last year. This strong performance makes a continued significant contribution to our economic growth. Indeed, despite the challenges posed for our economy, trade figures released by the CSO last month show that goods exports over the period from January to July increased by 6% compared to the same period in 2019.
We have experienced two recessions in the past 12 years. Many things make them different, but there is one thing that makes them similar, the fact that our multinational and export sectors have held up the economy. I do not think anyone can doubt the value of being part of a globalised trading system and making Ireland an attractive place for multinationals to invest. It is important that we never fundamentally change those economic policies that have ensured we will be able to export our way out of two recessions caused by very different reasons.
The Irish exporting landscape is strong and companies in Ireland have been succeeding in winning business worldwide for their products and services. While the UK is, and will remain, a major market for Irish companies, expanding the Irish export footprint in markets beyond the UK is a priority. In that context, Enterprise Ireland’s strategy is to help Irish exporters to be more innovative, competitive and market diversified.
Enterprise Ireland client companies achieved record levels of exports in 2019 against the backdrop of Brexit uncertainty. In 2019, the eurozone region, which is a focus of Enterprise Ireland’s diversification strategy, saw growth of 15%, with Germany, France and the Netherlands each exceeding €1 billion in exports. While Enterprise Ireland client companies’ exports to the UK increased by 2% in 2019, this accounted for only 31% of their exports compared to 42% in 2009. The ratio has been falling steadily since then and provides assurances that Enterprise Ireland’s diversification strategy is being successfully implemented.
Of course, retaining and strengthening Ireland’s reputation as a first-class destination for foreign direct investment is fundamentally important to our economic model. That is why IDA Ireland continues to work closely with international clients from a range of sectors to attract job-rich investment from overseas firms, often in the face of increasing international competition for high-value investment projects.
In doing so, the IDA has targeted new name investors and increased investment from companies already located here. The agency has also restructured its global footprint in response to Brexit and other global challenges. This expansion of the IDA’s presence overseas has allowed IDA staff to secure new investment opportunities from non-traditional target markets and to further diversify our sources of investment. The IDA continues to emphasise the core elements of Ireland’s value proposition for foreign direct investment, particularly those with increased relevance in the post-Brexit landscape such as EU membership, access to talent, the common law system and the English language.
Next month I will publish the national economic plan to set out a vision for what our post-pandemic and post-Brexit economy will look like. It will look to the future and set out how our economy can be positioned to exploit opportunities for growth in the emerging sectors and how we can embrace the twin transition, which will be digital and green. Drawing from the ambition of the programme for Government, it will set out how the State can facilitate new ways of working and prepare for the transitioning of enterprises and workers in response to technology and climate change developments.
We cannot get away from the fact that the trading environment with the UK outside of the EU will fundamentally change from 1 January. Our job is to encourage and work closely in partnership with businesses to help them work through these challenges and face the realities ahead. I sincerely regret that businesses must face these realities while dealing every day with the ongoing struggles the health pandemic presents.
I know it is a huge ask and I do not in any way underestimate the challenges. For our part, Government will assist businesses as much as possible to face the realities of the changes that will take effect on 1 January, to overcome them and to prosper into the future.
Brexit poses a huge threat to the economic future of the people of this island, with the land Border resulting in the North being forced out of the Single Market, with barriers to trade, potential devastation of agriculture, not to mention the potential implications for the peace process and the Good Friday Agreement. This is one area in which I am sure there is unanimity across this House and among sensible people throughout this island. The only way to prepare for what is coming down the road with Brexit is a proactive detailed strategy to deal with the special and unique circumstances faced by the island of Ireland and the needs of our farming community, businesses and workers, all-island trade and the huge challenge for future trading relationships between the European Union and Britain.
This past year has been a very difficult time for business and workers in this State. Covid-19 has rocked our economy and society to their very core. It has shone a light on the need for big government and the steady hand of the State, the importance of public services and nationalised services, and the requirement for ambitious and assertive actions from Government. We can debate whether such actions have occurred but when we look at those countries that have combated the virus best, namely, Germany, Vietnam, New Zealand and many more, we see a significant government response. The reason I refer to this is that Brexit will not be any different. It will take a great effort by the State and its steady hand will continue to be needed until Brexit has been concluded and for a considerable time thereafter. While we will also need EU support, our Government will have to do the bulk of the heavy lifting.
As Britain withdraws from the European Union, protecting jobs and supporting business need to be at the forefront of the minds of the Tánaiste and Minister for Enterprise, Trade and Employment, his officials and everyone working on this issue in his Department. There is probably little doubt that Brexit will exacerbate the current economic crisis. Sinn Féin has long argued that the EU fiscal rules will stifle essential investment and starve public services of the funding they so badly need and on this we have been proven correct. While the rules have been relaxed until the end of 2021, that relaxation must continue for this State beyond that timeframe, especially given the impending effect of Brexit. These combined events constitute an exceptional circumstance and the EU should allow for continued derogation as per the fiscal rules so as to allow the Government adequate scope to invest North and South in order to protect against the fallout from Brexit and put the country in prime position to thrive in the aftermath of Brexit. This means that we should be looking at grants and other economic supports that have been used throughout the Covid-19 crisis to help businesses which will be affected by Brexit. Grant aid and wage supports have been successful in helping to stabilise many businesses and preventing their collapse. As we approach Brexit and the implications that it will have for the agrifood and manufacturing sectors, the State must stand ready to support these businesses and the workers whose livelihoods depend upon them.
On the matter of state aid, the European Commission published a temporary framework for state aid measures to support the economy during the Covid-19 outbreak until the end of 2021. While Sinn Féin finds the idea that the State cannot invest in companies and businesses in its own jurisdiction somewhat ridiculous and a significant infringement of our sovereignty, the relaxation was nonetheless to be welcomed. However, the relaxation of state aid rules for the purposes of Covid-19 will not cover this State in the event of difficulties arising post-Brexit. It is imperative that the Government lobby the European Commission to allow the State to invest in workers and business and support them during the British withdrawal from the European Union and through the shock of any changes to our trading relationship after this withdrawal. As with the fiscal rules, exceptions are permitted in some circumstances.
The EU treaty governing state aid leaves room for a number of policy objectives for which state aid can be considered compatible. Sinn Féin believes that Ireland should be exempted from state aid rules for the spending and investment that is required to offset the damage of Brexit. Ireland should apply for and be granted dispensation to make direct investment and spending in ways that, under normal circumstances, would constitute state aid to combat the impact of Brexit into the future. An exemption exists under Article 107(3)(b) of the Treaty on the Functioning of the European Union, which states that it "may be considered to be compatible with the internal market" to provide "aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State". In any event, the Covid-19 crisis has now set a precedent that should be used to secure such a derogation in order that we can invest in jobs and businesses. It should be stated that such investment should go further and allow us not only to offset the damage of Brexit but also focus on allowing our SMEs and micro-businesses to capture the market share of any available opportunities that may arise. This will require the EU to engage with Ireland in a different manner from other EU countries. It is imperative that the EU formulate a tailored plan outlining how it will help Ireland to overcome the negative economic shock following a new trade deal between the EU and Britain. It is especially necessary that infrastructural investment is forthcoming to help Ireland to position itself to capture the market share of available manufacturing and services jobs and investment in a post-Brexit European Union.
There is no doubt that trade gaps will arise in the European market as a result of Britain’s exit from the EU. The Government should be working with SMEs and other businesses to help them expand to fill these trade gaps.
There also needs to be some fundamental changes around examinership and the costs for SMEs and micro-businesses. Businesses will often say that the simple things are the one that make the greatest difference. One change the Department should be examining immediately is the fast-tracking to January 2021 the use of examinership-lite, as it is known, for small and medium enterprises and micro-businesses. Covid-19 has shone a light on the need for this fast-tracking and with Brexit ahead, it is even more necessary. Many businesses with viable and functioning business models may not be able to trade their way into recovery despite the supports and measures put in place to date and those that have been proposed. For those businesses, a fast-track, low-cost examinership model should be made available, that is, one that limits the exposure of the business and protects the rights of workers. For many small businesses, the cost of examinership is a barrier to using the examinership tool to save their business. The solution, therefore, may potentially lie in fast-tracking examinership-lite. I would appreciate if the Tánaiste investigated this proposal because it is worthy of debate.
Has the Tánaiste given any consideration to the establishment of an IDA-type body to specifically focus on micro-business, workers co-operatives and small and medium enterprises to help them find domestic and external investors? As we move through the Covid-19 crisis and with Brexit on the horizon, such a move would be worthy of consideration.
The response to Brexit must not be low pay and precarious work or the exploitation of workers. Sinn Féin believes that the central plank in dealing with Brexit must be a real commitment to our micro-businesses, SME sector and family businesses, as well as a steadfast commitment to workers’ rights embedded in legislation and the creation of decent jobs with decent pay and conditions. The State can and must protect workers and support businesses.
It is very apparent that several major obstacles remain as the EU negotiating team attempts to bring the British to an agreement on Brexit. It appears that Tory attitudes and outlooks have retreated into an echo chamber where Boris Johnson and his cronies feast on their own toxicity. While I understand that many of the EU negotiators have been shocked by the perfidious actions of the British, no depth of British mendacity comes as a surprise to us here in Ireland. It is apparent to all that the British position is designed to discard two generations of social progress and protections brought about through EU membership. Through the potential deregulation of the economy and the creation of their set of rules around competitive advantage, the British can position themselves to reap unfair business and trading advantages over EU member states through unfettered and unencumbered access to EU markets without cost or responsibility.
Indeed, the term "level playing field" is enough to invoke a Tory to make a sign to ward off an evil eye, such is the anathema among Johnson's Tories for values, fair play and decency.
We are now looking at a scenario where the Tories are looking to introduce the equivalent of a windrush 2.0 scheme designed to target EU and EEA citizens. Under this EU settlement status scheme, EU citizens will have to pay a fee of £65 and register an application to stay in Britain with authorities before 30 June 2021. Under this scheme, by the end of August this year, just under 11,000 EU citizens were refused the right to stay in Britain. This shameful Tory attitude to EU citizens has both business and human rights implications. Many EU citizens who have lost their jobs as a result of the pandemic are being refused universal credit. A Danish woman with breast cancer was challenged to prove that she had the right to be treated by the NHS. The list goes on.
This has the potential to seriously impact cross-Border workers and businesses here in Ireland. Businesses on both sides of the Border are often reliant on the expertise of citizens from other EU states and beyond. That includes everything from IT specialists, diesel mechanics to general operatives. We are conceivably looking at a situation where swathes of cross-Border workers may well be deported by the Tories leading to serious difficulties for businesses along the Border.
At this moment, Covid-19 infection rates in the North are several times greater than here in the South. A total of 828 cases were confirmed in the North today. That has directly led to Donegal having the highest level of infection here in the South. To arrest the rate of infection, political leaders in the North want to introduce what has been termed a circuit breaker, a temporary lockdown, but unfortunately they are powerless to do so. The Assembly in the North is left dependent on a heartless Tory Government for the funding necessary to save Irish lives.
This is a snapshot of the problems that lie ahead for both the North and for businesses and politicians in the South. Under the United Kingdom Internal Market Bill, the Tories will have the right to impose legislation to destroy workers' rights to allow access to Irish markets of inferior food produce, whatever the protestations of local politicians. We must remember that only yesterday the Central Bank warned that a no-deal Brexit could result in the loss of 75% of food trade with Britain.
We are heading towards what is becoming the warmest year on record, yet the Tories have signalled an attempt to disavow environmental legislation at a time when our discourse on the issue is centred on how we may reconfigure our economy to become more environmentally friendly. This afternoon, the Taoiseach described the environment as an essential pillar of our economic recovery. Our inability to develop an all-island approach undermines all plans in this area.
Ireland now has what can be described as a two-speed economy, which the Central Bank argues will recover at an uneven rate and remain vulnerable to the impact of a no-deal Brexit, which could potentially lead to the loss of more than 100,000 jobs. Our continued capacity to withstand the economic impact of the Covid-19 pandemic on the nation's economy is primarily due to the strength of our exports. With the domestic service economy under increasing pressure, with unprecedented job losses and unemployment now in the region of 15%, we are now even more dependent on exports. Conversely, it is the export sector which is at most risk from Brexit.
The Government needs to ensure the impending budget, which has been bolstered by better tax revenues than was initially anticipated, provides adequate supports for Irish business on several levels: first, to survive the onslaught of the pandemic; and, second, to provide businesses with supports to survive a no-deal Brexit. We need business stimulus measures. We need to see the export sector protected by Government action.
In February 2018, the Government published a report that it had commissioned on the impact of Brexit on the Irish economy. The report deals with four possible scenarios, the most severe being a hard Brexit, which is a real possibility now. It confirmed at the time what we already knew, namely, that there will be no good Brexit for Ireland, with a crash-out Brexit being all too real a possibility. I read the report again and it highlights how rural Ireland would be particularly hit. It predicted a loss of 30,000 jobs in the food sector in the event of a no-deal Brexit. Agriculture, fishing and food processing would be among the sectors hardest hit. That would decimate rural Ireland. These were the warnings the Government received two years ago. Two years ago we knew rural Ireland would bear the brunt if there was a crash-out Brexit. That was long before we ever heard of Covid-19. In my constituency of Mayo there are twice as many working in agriculture and fisheries than the average in the State. Ninety per cent of our beef is exported. Of that, 50% goes to the UK, constituting a value of €1.2 billion.
A no-deal Brexit means tariffs. A World Trade Organization, TWO, tariff would add more than €3 to a kilo of beef and increase the price by more than 60%. That would make it absolutely uncompetitive versus the South American imports that would be coming in to Britain. The UK has the highest price in the EU while British consumers consider Irish beef as local. That is important. Ireland is the only imported beef supplier to the three largest UK supermarkets, namely, Tesco, Asda and Sainsburys, as well as to McDonalds and Burger King.
Fishermen understand that their sector has become one of the key stumbling blocks in the negotiations but also that they catch one third of their landings in the waters that are controlled by Britain. I am aware that is one of the key sticking points, as well as the State aid issue. Thirty-four per cent of Irish landings are taken from UK waters. That means 30% of Irish fishing is dependent on access to UK waters, with the top two catches being mackerel at 60% and prawns at 40%. The UK vessel land is 20,000 tonnes in Irish ports each year. The Irish vessel land is 12,000 tonnes in UK ports.
Another stark warning came last September from the Central Bank which said that 70% of all farmers were economically vulnerable. Beef and sheep farmers are facing an existential crisis. The west, the mid-west and the midlands, the regions most reliant on cattle and sheep production, will be hit the hardest if Britain crashes out of the EU. They do not blame the Government for Brexit but there is a real anger that successive Governments have failed to take on the meat factories that have driven prices far below the cost of production. The budget needs to send a strong message that rural Ireland will be protected.
This is the time for Ireland to stand firm. The EU Brexit fund must be front-loaded by financial supports for agriculture and the fishing sectors. I was glad to hear the Tánaiste say that but it is very important that fund is targeted towards the regions and rural Ireland, and the west of Ireland in particular. I am aware there are ongoing discussions with the sectors but those discussions need to intensify. That funding needs to be targeted in a way that it will mean something real.
Failure to do so would be intolerable and would certainly mean the destruction of fishing and farming.
The Tánaiste correctly stated much business is being done online. It is likely that at least 100 extra pieces of paper will be required per export transaction. It is vital that we have broadband to deal with this. I am hearing reports all the time that it will take three to five years for many rural areas to have adequate broadband speeds. I am aware of this because of my higher education portfolio. Many students are contacting me to state they are being asked to do lectures online but cannot do so because they do not have broadband. It is important, therefore, that we do not consider the impact of Brexit in isolation; our consideration must be intertwined with our approach to the broadband plan. It would be really useful to have a very specific update on the broadband plan and its direction for the next three months.
Another way to combat the negative impact of Brexit is with infrastructure. We should invest in it now so it may carry us through to the future. Knock Airport is crucial to the development of the west, as is the western rail corridor. I was alarmed to see that the business section of the Mayo campus of Galway-Mayo Institute of Technology is closed at this time. I cannot understand that. When education and the connection between education, industry and the development of the west in terms of sustainable energy projects are so important, why would we seek to close down the business section of the campus? This is not unrelated to Brexit. We have to invest in infrastructure and learning facilities in the regions if we are to stand any chance of fighting the negative impact of Brexit and Covid.
I ask the Tánaiste to consider all these points and work with the Opposition, particularly on the development of the western economic corridor in order we can have sustainable development and targeted investment, making use of EU Structural Fund and the Brexit fund so we will have long-lasting, long-term projects that will see us through to the future.
I welcome the Tánaiste and thank him for his speech. The Labour Party has always been pro-business and pro-Europe on the basis of what business and Europe can do for ordinary people, including workers. I am sure the Tánaiste shares my party's concern over potential export losses to the tune of €18 billion in respect of the UK land bridge. Eighteen billion euro is 40% of our entire export revenue. About 150,000 trucks are involved. The Tánaiste and many others who watch these matters carefully will know that the publication of the United Kingdom Internal Market Bill caused absolute shock and dismay right across Europe.
The Tánaiste said that, today or tomorrow, he will be communicating directly with 250,000 businesses across the country. That is a good initiative but a large number of businesses are so caught up in firefighting in respect of Covid that Brexit is far down the priority list. I welcome the fact that the Tánaiste is perhaps reminding them of what is potentially coming down the tracks. We do not know what is going on and what political machinations are taking place in Downing Street, nor do we know the mentality of the Prime Minister of the United Kingdom. His actions heretofore have made me and my party believe we are not dealing with a stable government or ordinary politics and that we are potentially dealing with somebody who is pursuing a no-deal Brexit strategy for his own ends. That means our relationship with the United Kingdom has been at its lowest ebb for quite some time.
Although my constituency is urban, it has Howth Harbour and constituents who depend on fisheries. Obviously, the agri-food sector is important in many regions. I believe 20% of jobs in counties such as Cavan, Monaghan, Wicklow and Wexford are dependent on the agri-food sector, yet firefighting because of Covid has taken up most people's time.
I suggest to the Tánaiste that there are other factors that cannot be put to the bottom of the agenda. I mentioned to the Taoiseach today that we must build a society and economy that are robust enough to withstand the shock of Brexit but we must also ensure we do not put things on the long finger on the basis that it is convenient to do so. The Tánaiste got major publicity for himself on Monday evening by telling NPHET it had not thought things through and by not taking its advice to move from level 2 to level 5, or level 3 to level 5, yet when the Low Pay Commission advocated a 10 cent rise to the minimum wage that was not accepted by those who think these things through, he accepted it. The trade union movement walked away from the deal on the basis that it would not be fair to workers. The Tánaiste might say to me that an increase represents an unfair burden on businesses but we have operated heretofore in a low-pay, low-wage economy. As I say constantly, 23% of workers are on low pay and 40% of workers under 30 are in insecure work. That is the economic model that this country was showing to the world. It has not been and is not sustainable. When the pandemic hit, the impact was felt mainly by the poorly paid. When dealing with Brexit and building a business model, we must ensure we can protect businesses but we must do so in a way that protects the people who work for them. Sick pay, employment security and pay are important in this regard.
Having said all that, I believe it is easy for people who share the Minister's political ideology to state members of my political party are not serious about business and its cost. However, I have spoken to people in Dublin Chamber and other chambers around the country who are aghast that various political parties, including some purporting to be of the centre-right, have consistently cut the local property tax, thereby making councils depend disproportionately on commercial rates. I realise the situation is different now because of the Government's actions but the model the Tánaiste's local representatives are pursuing means councils cannot fund themselves or promote business and enterprise strategies to the best of their ability. Dublin City Council is €12 million down. Some of the resources could be allocated for community infrastructure, community building, addressing issues within communities and anti-poverty strategies but they could also be allocated for enterprise and development strategies at local level. Despite this, it was councillors in the Tánaiste's party, and Fianna Fáil in opposition, who consistently curtailed the potential of councils at local level to address these issues. It genuinely makes no sense to my party. If one is trying to provide supports for businesses and enhance the capacity of SMEs to survive the pandemic, one must realise businesses look not only for State supports but also for local authority supports. A local authority has to be fully funded and have the capacity to deliver such supports. One cannot say, on one hand, that the Opposition is not serious about its fiscal response, its demands regarding business and its talk of sick pay and tackling low-paid work while, on the other hand, not fund the local authorities, which are in many instances where SMEs and those in the local enterprise community go to look for support.
If it was not for the pandemic, our minds and energies would be completely focused on the issue of Brexit. I am satisfied that we have the support of partners around the European table. It is of comfort to me that many of us in the Oireachtas have supported the European project over many generations on the basis that when it came to an issue such as this, we could seek solidarity from other member states and ensure that we have their backing.
I would like to summarise some of the points I have made. The enormity of what we are facing has to filter down to people - €18 billion worth of exports, 40% of our entire export capacity and 150,000 trucks that use the UK land bridge. That is colossal. If we are facing a no-deal scenario, that is potentially ruinous. There is also an issue, as I mentioned, in regard to the agrifood sector and the number of jobs dependent on it. I have not touched on the security or identity elements, on which I know the Tánaiste shares my concerns.
His communication with businesses around the country and his contribution earlier are to be welcomed. It is clear to the Labour Party, in particular to me as a local Deputy, that businesses are not equipped mentally or in any way for Brexit. I do not attach any blame to them in that regard because I am aware of their daily struggles in regard to whether the levels are going up and down and their capacity to trade. I reinforce the point that we cannot return to the model we had previously. Notwithstanding the pandemic and Brexit, a low pay, low tax model is not a model we can return to. The Tánaiste's personal insistence on budgetary matters to keep income tax regardless of what one earns, or USC, regardless of what one earns, on people at the higher end to cushion them from any sort of impact from budgetary changes is indefensible. Fine Gael party representatives on local authorities stripping away of moneys that could be used to invest in communities and to support business is also indefensible. That said, the Labour Party will stand by the Tánaiste and Government when it comes to having a united Oireachtas viewpoint and stance facing down a no-deal Brexit, which, unfortunately, it appears is the determination of the British Prime Minister.
I welcome the opportunity to contribute. With all that is happening in the State and globally in terms of the pandemic, Ireland also has the threat of Brexit hanging over it. The Government and previous Governments have been working hard to mitigate the harsh realities of Brexit.
Coming from a rural constituency that has a flourishing agriculture industry, I am all too aware of the challenges facing that industry as we face into the Brexit negotiations. I have seen much of the commentary in regard to the land bridge and our access to markets. In the years since we joined the EU, or the Common Market as it was at the time, agriculture has developed enormously and an awful lot of people are engaged in farming. The farmers of this country have worked might and main to produce a product that is internationally renowned and has been so for generations. This is due in no small way to the first line of defence, namely, the farmer. We should always recognise that when speaking about the agriculture industry. We should always recognise the work that is being done on family farms.
I fear the biggest challenge in the Brexit negotiations is in respect of small to medium-sized farms that are the backbone of rural communities and many of our small provincial towns. One hears all of the time when farmers have a good or a bad year weatherwise or in terms of prices that the farmers are doing okay and that they invariably spend all of their money from an agriculture viewpoint, be that in respect of contractors, diesel, raw material, inputs, merchandise and so forth in their local communities. We should applaud them for what they have done. As we face into Brexit, I ask the Tánaiste and the Government to ensure they are to the fore of their thoughts. The industry is worth in excess of €10 billion in exports. We want to ensure that the industry continues to thrive for no better reason that we have an excellent product that has been tested internationally in terms of its traceability and production and it benefits people's general health as well as everything else. There are many issues arising in health but our agriculture industry is producing a product of which we can be justifiably proud. In terms of what is happening in Britain and the commentary emanating from it, the agricultural community is worried for the future of the industry. We also have concerns in regard to the dairy industry and the beef industry. The beef industry, as with the dairy industry, has faced many challenges over the past number of years. We want to ensure that they can remain viable.
Regarding the commentary that has been emanating from the UK over the past number of months, anybody who has studied Irish history will be well aware of the scant regard of many well-heeled Tories for Ireland, our institutions and our people. The ignorance of some people when speaking about Irish history or the island of Ireland reiterates to each and every one of us that a small minority of people in Britain are making huge decisions about the future relations of Ireland with the EU and everybody else and that they have no understanding of the Republic, or Northern Ireland. These people have made particular comments, in particular in the fall of last year, which left people aghast.. Any student of Irish history would be well aware that this is nothing new, that it has been happening down through the decades. The British have been allowed to pursue these policies to the detriment of the Irish people, North and South. We need to take a firm stance because we need to protect our island and our people in so far as possible.
Other issues are emerging. The EU must be mindful of the number of businesses trading throughout the Union. Over decades, we have built up massive exports across the spectrum. In my own area of Duhallow there is a massive agricultural industry but there are other great industries also, such as Munster Joinery and APS Cork that export and small companies like Avonmore Electrical, which exports wind to the Scottish highlands. These are small to medium-sized industries that will be badly affected by Brexit. These companies are at the high end of their product. They provide fantastic employment and high-end jobs and a fantastic service. We want to keep them in our rural communities. We want to benefit our rural communities but we need to recognise the challenges to the businesses, large or small, that would be affected by a no-deal Brexit.
Is it so terrible to hope for successful negotiations? It is as simple as that. We are hoping for successful negotiations. Over the past week or so we learned of the passage of legislation in the House of Commons which disregards international trade and willy-nilly threw it to one side. This would not have been heard of or dreamed of in any State over the past number of years, but the UK did it. It is hell-bent on leaving the EU.
We must ensure that the Union is on our side at all times. There were times in the past when we had bought well into the European Union and it can be questioned, in our core, whether it was on our side in times of difficulty. We must challenge it at every stage. The information on negotiations and the talk from the European Union give the impression that the Irish Government and the Union are at one in trying to ensure we get the best possible deal. We need that more than ever.
We also must seek to challenge the next Common Agricultural Policy, CAP, negotiations which have started or are being discussed. We must ensure we get the best possible deal from that. We have seen the cuts in the budgets of the European Union, and we cannot afford that. We want to get the most money possible under the CAP.
What is the current position? International commentators have spoken about the challenges for the EU and Britain in successfully concluding a deal. They have also looked at Ireland and its vibrant, open economy with massive exports. We will be affected by the nonsense and, I must say, the absolute madness of the Brexiteers. I cannot find any other way in the English language to describe it. I could find other languages, but that might not be allowed in the House. The absolute madness of the Brexiteers is that they have tunnel vision. In my opinion, they believe that if they get rid of the EU they can go back to imperialism and the powers Britain had 200 or 300 years ago. That is not going to happen in the world as it is now.
This country must face the reality of its current position. We must examine the challenges that are going to affect all of society. Whether it is the large urban centres or very rural places, everybody will be affected by Brexit. We must have a copper-fastened deal with the European Union. We must hold the EU to account to ensure it is in our corner at all times. Negotiations have shown over the last while that it is in our corner. We are entering the last crucial stages. Who would have thought this time 12 months ago that we would be in this position, heading into the second week of October, where there is no deal or proper structure in place for how Britain is going to exit the EU and for what the relationship will be after 31 December?
We face challenges. The Houses of the Oireachtas are willing to stand by the Government as it goes into very detailed negotiations. We wish it well in ensuring that it brings the best possible deal for all citizens, not just those of the Republic of Ireland but all the citizens of the island, as we face a new and different Europe after Britain leaves the EU.
I thank the Tánaiste for facilitating the debate and for his hard work over the past number of months, along with the Ministers of State, Deputies English and Troy, as we enter the final months of the transition period. I was impressed with the level of detail in the content of the Brexit readiness action plan published last month. It was clear from the document that the remaining preparations have taken account of the added pressure related to Covid-19 being experienced by business owners.
I welcome the clarity that the Government will focus its remaining efforts on three specific work streams, one of which is communicating with and supporting sectors and businesses most directly impacted. Much of the communication efforts on the ground are no longer possible due to the pandemic and it is important that additional effort is put into Brexit-related communications as we approach the end of the transition period, including the post-transition period. I commend the work of the local enterprise offices in assisting businesses that have reached out to them, and on their range of supports and training on offer to businesses. However, I am still concerned that some smaller business owners are unprepared for what will happen early next year and about their contingencies if they experience potential disruptions to sourcing raw materials for their businesses.
There are some very practical tools such as Enterprise Ireland's currency impact calculator, which will greatly aid businesses in determining their exposure to foreign exchange risks. We need more of these practical tools. The use of webinars and customer training programmes must continue to be resourced after the transition.
While Mayo is not a Border county, it is approximately a 90-minute drive from Charlestown to Enniskillen. The agricultural and tourism sectors play an important role in local communities in Mayo. One example which binds our communities is the Mayo Peace Park in Castlebar, which I invite the Tánaiste to visit if he has not already done so. During normal public health circumstances, one would regularly see tourists visiting from Northern Ireland and the UK to search the monument for the names of their Irish ancestors. The protocol on Northern Ireland and Ireland, in addition to reaffirming the common travel area, has resulted in a greater degree of certainty for Mayo businesses. Even on a personal level, some people commute weekly from Ireland West Airport Knock to London or other UK cities for work in financial services or construction.
The emerging fear in recent weeks is about what happens if there is a significant difference in public health guidelines in the UK. I fear that public health guidelines may end up circumscribing the progress that has been made in North-South and east-west relations. I have spoken in the Chamber previously about European plans to promote a common approach to travel restrictions and movement within the EU. It is important that there is some alignment between public health guidelines and common approaches to travel, which also must be considered with our closest neighbour.
Communication from the Government and business support agencies will continue to be a key factor in how Irish businesses respond post the transition. I would welcome comments from the Tánaiste on how he wishes to improve the more face-to-face mechanisms in the months ahead.
Businesses in north Kildare were just accommodating the prospect of Brexit when the coronavirus hit Ireland. Now they face the double whammy of a novel virus, about which little is known, and a British Government that is novel about Brexit in ways that some never imagined. However, what is imaginable and reachable now is a united Ireland in the broader context of Brexit. My party leader, Deputy McDonald, is quite right when she says that a united Ireland is everybody's business now, not only North and South, but also east and west and in my constituency of Kildare North. This is something my party will be bringing to all the people in the time to come, and doing so serenely and with pride. It is unfortunate for Irish politics that while the Fianna Fáil Taoiseach excoriates his fellow citizen and Sinn Féin leader, Deputy McDonald, he simpers over the Tory Prime Minister, Boris Johnson, and the three ring Brexit circus he is running. Fine Gael has "the United Ireland Party" in its subtitle. I hope Fine Gael will put more thought into effecting that united Ireland than it did into commemorating the Black and Tans, as if any Irish person could forget them. That might bring us further along in our joint endeavour.
In my constituency, there is concern among local businesses and those working in the equine industry about what Brexit will mean for them. I applaud them for the way they have risen to the regulatory and bureaucratic challenges, not to mention their nerves of steel in the face of the political shenanigans across the water. Businesses in north Kildare, particularly in the non-food retail sector, still feel bruised as the county is now into its fourth extension of restrictions.
We must discuss business and Brexit in the context of the virus. Self-employed people in my constituency, too, are suffering the effect of Covid poverty. The Taoiseach might think the pandemic unemployment payment, PUP, is not tenable but neither is poverty, as the Tánaiste noted on Monday evening. I am currently working on the case of a taxi man, an essential worker and fine gentleman who has worked hard all his life. After being struck by Covid and being on a ventilator for 12 days, he is now being denied the PUP. This has left him and his family stricken. There is Covid poverty in my constituency and throughout the county. We turn a blind eye to banks that broke a country and almost collapsed a currency yet we put hard working men and women under the microscope for a relative pittance by comparison.
We cannot face the economic shock of Brexit unless we take a big picture approach. The many self-employed and small businesses facing into Brexit need a citizenry with money in their pockets. That is why we must face Brexit with policies that protect our workers and look after small businesses, many of which are family businesses. We must face it with policies that make the economy work around society and not vice versa as we have seen. Covid-19 has laid bare all the fault lines in society. It has shown us that the shallow politics of PR has nothing to offer us in times of crisis. Unless we have the kind of Government and policy that put people and their life stories first, not elite profit, those fault lines will deepen and broaden under Brexit.
We are facing a winter like no other. The Chief Medical Officer has said tonight that the Covid situation is rapidly deteriorating and that NPHET is seriously concerned. I want to assure businesses and workers across North Kildare that Sinn Féin is and will be on their side. We will be calling for every possible support from the Government for them. Our alternative budget will outline this in detail. I refer especially to our small businesses which are already hanging by a thread and suffering acutely from the Government's lack of competence, courage and clarity in its handling of the virus. These are difficult times but they are also opportune times to imagine a better, deeper and kinder way of doing business as a society and as a State. Brexit and Covid need to be tackled on an all-Ireland and a united island basis.
I back the comments on low pay by a previous Deputy. The best way to ensure economic recovery is to get money circulating in the economy by tackling low pay. When people on low pay get a pay increase it goes straight back into the local economy. It is circular. We can see from the data at the moment that people on higher incomes have a higher level of savings. Part of that is because there is less opportunity to spend with the current Covid restrictions. There is nothing more circular than tackling low pay and having that money go straight back into services and jobs.
On the very real threat of a Brexit with no trade deal, all of us in this House hope a deal is done as it is massively in the interests of Ireland, the UK and the European Union. Brexit with no trade deal is a threat to business, jobs, workers' rights, tackling low pay and tackling climate change. The biggest threat to the Irish economy in that scenario is the WTO tariffs. We could be looking at €1.5 billion being imposed in tariffs, which would have a devastating effect on the exporters of Irish goods into the UK. Some 43% of all our food exports, as the Tánaiste will know, go into the UK. In the event of those tariffs being applied, projections are that Irish food exports could drop by about a third, according to the London School of Economics. The Halle Economic Research Institute in Germany has projected 700,000 jobs potentially being lost across the European Union in the event of a Brexit with no trade deal, and some 35,000 of those jobs would be lost in Ireland, which is almost 2% of our workforce. This is very serious indeed. It means that Ireland is more exposed than almost any other EU state. The agri-food sector and dairy, in particular, would be especially affected. There is a double danger that if we had the WTO tariffs in place, we could see the UK Government deciding to devalue Sterling which would somewhat cushion them in terms of the cost of tariffs on their exports. It would be to their advantage but would have a double effect on us and our competitiveness.
I refer to the 150,000 Irish trucks that use the UK land bridge every year to export 3 million tonnes of goods to continental Europe. About 40% of Irish exports, in both value and volume terms, or €18 billion in exports, use the land bridge, which is essential for delivery of just-in-time goods to continental Europe. As it currently works, the land bridge can mean transport times of about 20 hours compared to 40 hours for goods moving by direct ferry to continental Europe. The UK Government is predicting potential two-day delays of trucks from 1 January, as the Tánaiste is aware, with queues of up to 7,000 trucks. Flow rates across the Dover-Calais strait will be heavily disrupted. At its worst, this disruption will last for the first three months initially. It is imperative that every effort is made to improve our connectivity to mainland Europe in terms of direct and fast ferry routes. It would be a mistake for us to be entirely reliant on the land bridge. Indeed, given the current breaches by the UK Government of the withdrawal agreement and international law, it would be a grave mistake for us to be entirely reliant on the commitments that have been given under the common transit convention. I welcome reports of a six-day ferry service being put in place. A frequent and fast service is required. The Minister for Foreign Affairs and Trade told us last night that the Government had considered subsidies and had decided for the time being not to go forward with them. That needs to be looked at again. The Minister for Foreign Affairs and Trade was saying that currently there is a lot of capacity on the ferry routes to mainland Europe but we can expect that to change quite quickly. We are now just 12 weeks away from 1 January. The time on this is running out and it is essential that the Government takes a very hands-on approach. It is concerning that there are reports that Dublin Port is not yet ready for Brexit.
Businesses in Ireland may face an extra disadvantage in exporting into the UK market in respect of state aid. If a deal is not done, UK companies will potentially benefit from state aid. That makes no sense whatsoever. If we had been talking about this a few years ago there would have been no prospect of a Tory Government pushing so heavily on state aid. In the last Parliament, it was the Corbyn leadership that was pushing for state aid, not the Tories, so it is quite a turn of events. It also makes no sense in terms of the EU state aid rules, which are there to ensure that investment is based on the principle of preventing a race to the bottom in terms of different cities and regions competing for subsidies and so forth. The state aid rules are also about transparency and avoiding cronyism.
Irish businesses and exporters could be also undercut in respect of consumer standards. The National Farmers' Union in the UK has called on the UK Government to bring in legislation to ban chlorinated chicken and hormone-fed beef from supermarket shelves.
No such legislation is in place at the moment. We run the risk that come 1 January, we could not only be competing on tariffs and, potentially on state aid, we could also be competing in terms of consumer standards for exporters into the UK.
As for workers' rights and climate change, Irish businesses again could be undercut when seeking to maintain our business and exports into the UK. There have been several reports of sweatshop conditions in manufacturing in the UK at present and of workers being paid as little as £3.50 per hour and of completely lax enforcement of employment laws and minimum wage payment. The essence of the Brexiteers' project from the outset was really to attempt to gain access to European markets but to undercut in respect of workers' rights, environmental protections, consumer protections and standards.
The €5 billion in the EU emergency fund for Brexit is significant. In a worst-case scenario, however, with those potential multiple hits against Irish businesses and jobs and given that we will only get a portion of that €5 billion, there is a possibility that we will need additional support from the European Union. In the wrap-up on this, I ask the Tánaiste to address the event of a worst-case scenario with all these factors carrying in and our share of the support from the European Union not being sufficient. Will the Government push for more and has there been discussion on that scenario so far?
To conclude, we are talking about the survival of sections of our economy, which will be severely put to the test in the case of an no-trade-deal Brexit. I very much hope it does not come to that. The Government must do everything it can to actively support Irish businesses, exporters, the agri-food sector and dairy in particular, as well as the protection of Irish jobs. We need a hands-on approach in this regard, especially by directly intervening to ensure direct and fast ferry services to continental Europe. The Government should do everything it can to ensure additional capacity is put in place.
We must ensure any action by the Government or the European Union will support both the immediate hits caused by Brexit and a no-trade deal Brexit, if that happens, but also will have an eye on long-term sustainability in terms of both jobs and in tackling climate change and workers' rights. In the future, we need to make sure we maintain high standards in those areas as well as meeting these significant challenges we face.
I have spoken many times in this House about the need for Ireland's Brexit strategy approach to not merely focus on maintaining the status quorelationship between Ireland and the UK. Ireland should start to look at other markets and diversify its horizons. Part of so doing is ensuring we have connectivity on and off this island. This is currently at risk and our economy will suffer if we fail to diversify our international trade as a consequence of Brexit.
We estimate in the region of €300 million per annum for intra-European traffic, which represents real value in supporting the 140,000 jobs in aviation and the 325,0000 jobs in tourism. There is a need for a two-pronged approach to the situation, that is, the need to get clarity on international travel on and off this island and the need to put a stimulus package in place to sustain the aviation industry over time. We must recognise that the Covid-19 virus will be with us for the long term and we need to plan accordingly.
In terms of Cork Airport, passenger numbers fell by over 95% during lockdown when compared with the same period last year. Air traffic is not expected to recover to 2019 levels until 2024 and the impact of Covid-19 on Cork Airport is expected to cause the loss of more than 2 million passengers this year and more than €23 million in lost revenue by the year end.
Cork Airport is Ireland's second largest international airport with 2.4 million passengers in 2018. The airport offers more than 50 routes to destinations across the UK and Europe. Such a loss will result in both a huge loss to jobs in my region and a huge loss to connectivity in Cork East and the south of this country more generally. We need this connectivity for the Cork region to economically thrive in a post-Brexit world. We should also look at improving the runway at Cork Airport during the upcoming review of the national development plan to help expand current routes and protect the future of our country's second airport.
Easing travel restrictions will not immediately repair the aviation sector and other European governments have already moved to provide substantial financial assistance. A stimulus package should be put in place for Cork Airport to encourage the rebuilding of traffic. I will quote the final report on the task force for aviation recovery from July 2020. It states, "As part of this package, the State should directly provide the airports with a common fixed sum per passenger which will be used by the airports to stimulate traffic by reducing airport charges for airlines and restoring and growing passenger numbers." This scheme would represent state aid and should be notified to the European Commission for approval in accordance with state aid rules. It should apply for the duration of the aviation sector's recovery from this virus.
We must adapt and champion the green list at a European level. Ireland has continued to deviate from the approach of our European partners, ignoring the European Centre for Disease Prevention and Control, ECDC, guidelines and adopting a failed quarantine strategy. Green and amber countries should have no restrictions in terms of moving through the European Union, meaning free movement within these countries if a legitimate negative test can be obtained. We need to bring in a better testing regime, which other countries have in place, for countries deemed to be in the red zone. Quarantine is a blunt instrument. The DAA has investigated the ability to facilitate pre-departure rapid testing at Cork and Dublin airports. They could conduct up 15,000 tests a day, which is absolutely staggering. We need to look at investing in and investigating better testing such as loop-mediated isothermal amplification, LAMP, testing. The market is constantly getting better at being able to adapt to the airport environment during Covid-19.
Ireland should be at the forefront of ensuring such investments are made and we need to ensure a return to international travel in this country. If we want to Brexit-proof our economy, it is more than necessary. It is dangerous to think the routes that have been removed from our airports will re-emerge overnight. Therefore, we need to add act now. The restoration of routes requires a huge effort and it could be 2024 before we see a recovery within this sector. It is a recovery that Ireland can and should champion.
I wish to express my concerns that when all the talk is about Covid-19, we seem to have forgotten the other major disruption facing our lives, that is, Brexit.
Brexit will impact all of us from every sector of society. Last week, I met local farmers in County Carlow and we talked not about Covid-19 but about Brexit. The Irish farming and food sector has a higher dependence on the UK market when compared with other sectors in Ireland and is, therefore, the most exposed sector to any negative economic impact of the UK Brexit decision.
Farmers have done much for this country since the first settlers farmed our lands years ago. We cannot forget them. Farmers need a dedicated examination of Brexit risks. At present, beef farmers are living without any certainty on beef prices or markets. There have been massive losses in our economy because of Covid-19 and now we are looking at the potential of €740 million in tariffs being imposed. Yet, the meat industry, the Department of Agriculture, Food and the Marine, Bord Bia and Teagasc have not been clear on what is happening. We cannot allow all our focus to be on Covid-19. It is a pandemic and we must deal with that but we must be able to multitask and prepare for 2021 to be another intense year with Brexit.
Beef farmers need a coherent plan to develop suckler beef as a premium product, a guarantee for funding for developing a suckler brand and assistance for start-up farmer producers who wish to sell their beef directly to the market. Preparations are already under way for next year's lambing season and there has been no word on whether the sheep welfare scheme will be rolled over into next year. Sheep farmers need this scheme to roll over into 2021 and for all avenues of providing additional financial support to sheep farmers to be explored.
We must do all we can for dairy farmers to retain the tariff-free access to the UK market, particularly for Irish cheddar exports. Any loss or reduction of access to the UK market could have a destabilising impact the overall value of the Irish dairy sector. It is vital we do not leave anyone behind.
We cannot forget the close relationship tillage farmers have to the Northern Irish market, nor can we lock away our mushroom farmers, for whom the UK represents 90% of the value of exports. I insist that we do all we can to protect all our farmers, our farm families and our future.
Naturally Brexit impacts all sectors of society. The devastation Covid-19 has brought to our doors could very well be compounded by a no-deal Brexit. Ireland's economy and society will be tested in the coming months in ways never experienced previously. It is important, therefore, that we ensure emergency supports issued during this pandemic, which are very welcome to many sectors but which are due to expire in the first half of 2021, are followed by a new suite of policy measures to support economic recovery while we prepare for a no-deal Brexit. A second shock on 1 January after all we have been through may be too much to bear if we do not prepare. Let us use some of the lessons we have learned during the pandemic to our advantage in the event of no deal.
As some sectors were very hard hit by Covid-19, some indigenous sectors boomed. Our garden and hardware sector, our pharmaceutical industry and other multinationals all have potential to be key drivers of the economic resurgence and jobs throughout the country. It is time for us to be bold and brave because as Joseph Campbell once said, " Opportunities to find deeper powers within ourselves come when life seems most challenging."
In less than 90 days, the UK will be outside the EU Single Market and customs union. While the work of Government and the Union to salvage a Brexit deal continues, the message for businesses here at home continues to be to get Covid ready. Unfortunately for small and medium-sized businesses scattered throughout the country, Brexit and Covid are aligning as a perfect storm and bringing all the stresses and calamities associated with that.
Earlier this week I met some small business owners and tourism providers in west Clare. They told me that the pillar banks still insist on negotiating interest rates and repayment terms of existing loans when cash-strapped business owners approach them for Government- and EU-backed capital. This is fundamentally wrong and entirely contrary to the Government's July stimulus. Small and microfinance loans provided by Government must always be considered to be in a separate purse from other loans that the banks generally provide.
In Clare and the wider mid-west, our regional economy lives and dies by Shannon Airport. I welcome the news that the Government plans to adopt EU-wide flight protocols next week, but this needs to be more than just giving a political thumbs-up to the protocols, it needs to be backed in meaningful ways at the point of departure and arrival. I was concerned that at today's meeting of the Oireachtas Joint Committee on Transport and Communications Networks, the Minister for Transport suggested it may take some time to implement the traffic light system of enforcement measures. We do not have time to dither on this. The aviation sector, especially Shannon Airport in my county, is on its knees. It is essential that we move with full expediency and urgency.
I refer to road haulage. As I drove to Dublin this morning, I noticed at Kill, County Kildare a tailback about 4 km or 5 km long on the opposite side of the motorway with all three lanes fully backlogged with traffic. This tailback was as a result of a Garda Covid checkpoint. Where these Covid checkpoints are set up, we need a fast-track facility for haulage trucks that are hard pressed on time to negotiate their way across Ireland to ferry ports and onwards to Britain and continental Europe.
Deputy Murnane O'Connor mentioned farming. Like many Members, I have been briefed and pressed by the IFA in my county in the past week. This is the winter they fear most. Yesterday I was out in my old clothes helping a friend with cattle testing of weanlings that will hopefully be sold at mart in Sixmilebridge next week. Farmers such as him, who are so reliant on the beef sector, which is turbulent in the best of years, need next week's budget to be a good budget for farming so that they can approach the next few months of uncertainty buoyed up in the knowledge that the Government has their back.
This has been a year of nothing but uncertainty. Up to now all the talk has been about Brexit, but as we know the Covid-19 pandemic has spread around the world and has made the complex process of the withdrawal of the UK from the EU even worse and has wasted time that could have been devoted to more important matters. Brexit has presented challenges that we could not imagine. It has put the future and prosperity of many of our businesses in jeopardy. It has caused uncertainty leaving businesses unable make plans or at least limited in their plans for the future.
I will take my county of Tipperary as an example. For many communities in my constituency, agriculture is the lifeblood of the local economy. It provides jobs across the board in transport, machinery hire, food production and export. The list goes on. It is vital to the flow of money locally. However, all that has been threatened with the uncertainty we now face. Our agri-sector relies heavily on its ability to export. The free movement of goods is vital in this respect. With Brexit threatening to disrupt this, there are many unanswered questions about what the future holds.
At the yesterday's meeting of the Joint Committee on Agriculture and the Marine, many of these challenges were outlined. These include compliance with customs and regulatory requirements that will increase the cost of trade, and delays in the movement of goods with the potential to disrupt the flow of trade and the supply chain. I relayed to the committee a call that came from IBEC for radical investment in our ports, particularly Rosslare. This requires infrastructure and a new vision on how upgraded infrastructure in our country can benefit the flow of trade. This is of particular importance in the two regions that straddle my constituency, the south east and the mid-west.
The N24 is a key artery route between the east and west and vice versa. It runs through my constituency but, despite its importance, it has been neglected. Its potential as a more free-flowing arterial route from one side of the country to the other, from Rosslare Port to Shannon Airport, is not being tapped into. Along with my constituents, I have been calling for this route to be upgraded to improve its ability to cater for heavy goods traffic. At the moment it is used heavily but traffic is congested in many towns on the way, especially Tipperary town. If the N24 was upgraded and given motorway status, and if bypasses or ring roads were developed near a number of those towns on the route, it would serve to improve traffic flow to our ports and the connection between east and west. It would not disimprove our infrastructure while also serving to streamline the transportation of goods across the country at a time we will need to facilitate trade in whatever way we can.
This is just one element of many that could be used for our benefit and to facilitate trade. It may require a comprehensive and immediate review of the regional development plan. I have spent much time talking to hauliers. While they have been given some advice about what might be required of them in a new trading environment, there is still no certainty about what lies ahead. Will they be stuck in queues in Kent while trying to cross the English Channel? What will happen if they have perishable goods on board? When it comes to our use of the UK land bridge post-Brexit, what agreement can be devised to ensure that whatever assurances our hauliers are given on prompt transit are not rowed back on like so much of what we have seen so far?
I want to discuss how the Covid pandemic affects this transition. The ability of our businesses to absorb a so-called Brexit hit is lower now than it has been to date. Our public finances have also taken a serious hit due to Covid. When the transition period ends, unforeseen issues may arise meaning we are operating on a new playing field. Can the Government guarantee that it will be able to provide this kind of assistance while also providing Covid supports? Can the Government outline its plans to source the money needed if this arises and assure us that the most vulnerable will not be targeted for cuts in this scenario?
I refer to how this whole process has damaged trust. The six counties in the North of this country have been used by the UK as a bargaining chip in the process of the negotiations so far. Commitments have been broken on several occasions. The interests of the people in the Six Counties who voted to remain in the EU have been ignored by the British Government, which has tried to manipulate the situation for its own economic purposes. The Six Counties are being used as leverage to stop the old imperialistic legacy of the past from fading away. The arguments and the distrust we have seen in recent years have made the case for one course of action very clear and that is the pursuit of a united Ireland.
The Government must remember that by not having a discussion on a united Ireland, it has failed to address the key stumbling block in Brexit talks over the years. It is the only plausible way of resolving the majority of the issues we are facing today.
I thank the Tánaiste for his address earlier and the great level of detail he went into. I commend the very many actions taken heretofore by the Government in co-operation with various State agencies as well as EU partners. Even though the work has been exhaustive, there will always be more work because it is very hard to wholly prepare for Brexit, particularly when we are at this very late stage in negotiations and we do not know exactly what form Brexit will take. It is providing much concern and indeed worry for many sectors of the economy and wider society. This transition period was to be used to prepare and negotiate but here we are at the beginning of October and negotiations are ongoing. Indeed it seems there are some people who want to reopen negotiations on matters that have been resolved and are legally binding. That said, there are still so many supports open to our businesses and our enterprise sector as a whole. More can be done however, not necessarily by Government, but particularly by the business sector itself. While I have met many businesspeople around the country who are in large organisations and have the luxury of appointing a Brexit-preparedness officer, our SMEs are dealing at the moment with the economic onslaught of a global pandemic, the likes of which has not been seen for more than a century and they do not have the time to appoint such an officer. They are talking about supply-chain management and where they get their export markets from. Their supplier may be in Dún Laoghaire but where is their supplier's supplier? That is providing uncertainty and it is still so important that they continue to work with Government and agencies to prepare. Driver's licences are one area where quite a simple thing has been done and I commend the Road Safety Authority, RSA, on this. People resident in the State can no longer drive solely on a British driver's licence. Approximately 70,000 are in this situation. I found out in a reply to a parliamentary question to the Minister for Transport that 53,000 people have switched over their driver's licences but a considerable number of people still need to do that before 31 December.
I wish to push the Tánaiste on his remarks about the €5 billion Brexit adjustment reserve created by the EU, as well as the EU recovery fund. This is something I challenged the Minster of State, Deputy Thomas Byrne, on during pre-European Council statements. This is something where we have to be proactive. One of the great achievements made by Irish diplomats, the permanent government and everything else, over the past few years is to lean on our EU network - a very strong network and one we are very proud of - to ensure we have that level of solidarity when it comes to Brexit and the withdrawal agreement. We need to once again dip into the well to stress to European colleagues how deeply affected Ireland will be by Brexit and how important it is that we get those vital supports.
One are that falls under the Tánaiste's own brief and that is going to be particularly difficult, albeit vitally important, is looking at our diversification and at the markets Ireland can appeal to. Over the past couple of years, our reliance on the British market has declined. Let us not forget that when we joined the EEC in 1973, 60% of our exports went to the UK alone, which is a massive number. At the moment, products such as cheddar cheese and others are wholly reliant on the British market but much more work can be done. First and foremost is exports to other member states. We have seen the rise in exports to France and Germany. Equally, we will see that expand further into other member states and we need to continue the development of our diplomatic footprint within the EU. It is brilliant that we are opening embassies in Auckland and soon in Accra but we need to maintain our diplomatic presence in all member states. I spoke earlier of our soft power and the importance of European solidarity. The fact is that Ireland was able to maintain its diplomatic network within the EU through the very difficult years of the financial crisis and not closing a single embassy was vitally important to that. We have to maintain that representation both within the member states and with our permanent representatives in Brussels to ensure that influence is maintained.
We also need to consider where else we can trade through the EU. We must use the new European trade deal with Japan, a deal that is not only agreed and ratified but is in operation. We must likewise use trade deals with South Korea, Canada and more important, soon to be agreed deals with countries such as Malaysia, Vietnam and Indonesia as well, potentially, as ones with Australia and New Zealand. That is particularly relevant to the Tánaiste's Department. I acknowledge, however, that it will be extremely difficult to do a trade mission via Zoom as it is not something that necessarily comes to us very easily but we have to adjust to that. I spoke to the Irish-Australian Chamber of Commerce only last week. It was 10 a.m. in my office and we were speaking to people who were going to bed in Sydney and all of these other places staying up for the conversation. It was a frank conversation. They now see Ireland as the gateway into the single market. Equally, other countries are gateways, such as into south east Asia. Improving our trading ties with north America and elsewhere is important and again, this falls on the Minister of State, as does ensuring that the Commission and the new European Commissioner for Trade, Mr. Valdis Dombrovskis, pushes the need for increased external trade.
Returning to the core issue we are discussing, one of the most important trade deals will, hopefully, be decided in the next couple of days, if not the next couple of weeks. Maintaining a trading relationship with the UK is vitally important for the EU. It is a lot more important to the UK than to the EU despite what some people say in certain tabloid newspapers but it is vitally important for Ireland and certainly for key sectors. I assume Deputy Cahill will address the agrifood sector shortly with a level of expertise I can only dream of. That is why we need to ensure there is a deal. A thin deal would be extremely disappointing but it would be something and it could be built upon. I commend the Tánaiste on the work of his Department over the past number of years and the work ahead which it faces. We are less than 90 days away from Brexit. We need to continue to prepare at all levels of society. There is no such thing as a good Brexit but we have to prepare and make the best of what will unfortunately be a bad situation.
In 90 days, the UK will be outside the EU Single Market and the customs union. This is going to have very significant implications for every business that moves goods to and from Great Britain. Even if a free trade agreement is concluded between the EU and UK, there will be significant and enduring change. Not since the economic war of the 1930s will Ireland have been deprived of access to the UK market. We have spent centuries feeding and watering the UK market. It is our nearest market and the one we depend on and trade with the most. Businesses large and small are going to be impacted. If we do not act to shield vital employers and producers in the economy from the shock of a no-deal Brexit, the economic situation our country finds itself in is going to become a lot more troublesome.
I give an example of a large industry in my own constituency of Tipperary. Other Deputies have businesses in their own constituencies facing similar problems. Bulmers is a very big company in Clonmel, south County Tipperary and the south east region. It is a major employer in our area and Brexit is a major threat to the economic viability of this County Tipperary-based operation going forward. Bulmers' parent company, C and C Group, employs 800 people nationally, many of them in Clonmel. On top of this, other businesses such as apple farms and transportation services also benefit from Bulmers being located in south County Tipperary. It adds enormous value to the local community. The plant pays approximately €1.6 million in rates to the county council annually. The council is prevented from giving a waiver on rates to any business whose annual rates exceed €100,000. I ask the Tánaiste to act in this regard. A total of 50% of the Clonmel plant's output is exported to the UK. Its revenue is down approximately 70% due to Covid and the resulting closure of pubs, lack of matches and all of the social restrictions that are in place. Brexit also brings a unique threat to this industry, in the form of a threat of a proposed tariff on cider imported to the UK of 6.90 per 100 l. No tariff is proposed on beer. This is going to place cider at a major competitive disadvantage if that tariff is not eliminated.
Bulmers produces 12.5 hectolitres annually and this tariff is set to cost the company €6 million. The danger is that if the production plant in Clonmel becomes uncompetitive the company will have no choice but to move its operations abroad to another plant owned by the parent company C&C Group. This cannot be allowed to happen. Losing the employment it provides, the annual payroll of €12 million and the €1.6 million in rates that it pays to Tipperary County Council would be devastating for the county and the south-east region. A no-deal Brexit would be detrimental to the work of the Clonmel plant and could very well result in its relocation to the UK.
On the Good Friday Agreement, we have won a hard-fought peace on this island. The actions of Boris Johnson and his Government in recent times are worrying in the extreme. A Brexit deal cannot under any circumstances result in a border on our island. The Brexit we see on 1 January next year must respect the Northern Ireland protocol. Protecting jobs is vital, saving industries that are the backbone of our economy in rural Ireland is essential and the agrifood industry is dependent on retaining access to the UK's premium markets but ensuring peace and stability on our island for all people North and South must be paramount. I very much welcome the position of leading US politicians such as the Speaker of the House, Nancy Pelosi, and the presidential candidate, Joe Biden, who have stated there will be no trade deal between the UK and the United States if the UK breaches its obligations under the Good Friday Agreement. Protecting peace at all costs is essential. The Government has an obligation to do this for all the people on the island.
The beef sector is hugely dependent on the UK market and it is the highest returning market available to our producers. Half our beef goes into that market. It would be a long haul to get alternative markets for that beef and getting alternative markets with the same economic return would be extremely difficult. This is why when we have proposed plants, such as the one in Banagher, we have to do everything possible to ensure they are built. Here we have a Chinese consortium that wants to build a plant in the midlands where there is a ready supply of cattle. It would create extra competition and, most importantly, it would provide us with a route to an alternative market such as China. We have had an awful lot of fanfare about gaining entry into the Chinese market but, unfortunately, up to now the beef that has gone there would fit in a wheelbarrow. Here we have a consortium that has a route into the market but, unimaginably, obstacles are being put in the way of building that plant. This is nonsensical. We have to get these routes to markets outside the UK. It will take a generation or more to reduce our dependence on the UK. When we have an opportunity we have to use it.
The other industry that will be under huge pressure is cheddar cheese. It is produced almost solely for the UK market. We have developed it over the centuries and 80% of all cheddar cheese we produce is sold into the UK market. If we are denied access to that market, or if a tariff is put on our product, it will create huge problems for the dairy industry.
The amount of milk that moves between North and South in the country is significant. A total of 25% of liquid milk sold here comes from Northern Ireland but Glanbia, Lakelands and Aurivo all import a lot of milk from Northern Ireland. We have to ensure this trade can continue unhindered.
It has long been mooted that Brexit will cause pressure and strain on our businesses, in particular our small and medium enterprises. Throughout the country we have seen devastation rippling through our businesses as they have been forced to close to assist our country in our time of need. Some reopened but closed again last night. The effects of these closures and the loss of business will be felt for some time to come and we need to ensure we support business during this very difficult time. Brexit will throw another spanner in the works for our businesses as we move towards the end of the year. The fact that there is such uncertainty around how exactly the UK will leave the EU is causing a huge amount of angst throughout the business sector. Will there be restrictions on travel? Will there be restrictions on the movement of goods? These are all very important questions on which we need answers.
The UK Government is leaving us all in the lurch by claiming it is leaving on 1 January, deal or no deal. It sounds more like the game show than political leadership. This is not acceptable and we need to put on the pressure to ensure we have a deal that does not hamper peace on this island in any way, shape or form. However, aside from what I have mentioned already, there is plenty the Government can do regardless of what Brexit will bring. While I accept a number of grant schemes are available for companies to become Brexit ready, we have to ensure our businesses have recovered from Covid before they hit the Brexit issue.
Only last week, I met the Loop Head tourism group. It has called for the same proposals that we have been demanding for some time now. We must reduce the VAT rate for the hospitality sector. One business owner was able to tell me that when he last availed of the lower VAT rate he was able to install and extend the kitchen in his business, which then directly led to the hiring of three additional staff from the local community. These small measures cannot be underestimated, especially in rural areas where employment opportunities are thin.
I have also been asked to raise the plight of the travel agents. This is yet another industry that has been let down by the Government, with little or no supports. The rollback of the temporary wage subsidy scheme to the new employment wage subsidy scheme has been seen as regressive by this sector in particular. I have no doubt that Brexit will have a massive impact on this industry.
It has already been said that we need supports, given the circumstances we are in and any possible circumstance we could be in as regards Covid-19 and the pandemic we are dealing with. Brexit and British rule in Ireland is the gift that does not stop giving.
I welcome some of what I was told earlier by the Minister for Foreign Affairs that a significant percentage, more than 90%, of businesses operating on a cross-Border and east-west level have dealt with revenue and customs and have their EORI numbers. There are many businesses that do not have the time or the wherewithal to organise this and we need to ensure people do what they can and do the checks they need to do for their supply chain logistics. We need to ensure this happens but at the end of the day we are dealing with something that is somewhere between a bad Brexit and an absolute nightmare Brexit. While we might only be dealing with a British Government gamble or a negotiating gambit we do not know this for sure. We need to ensure we maintain the international solidarity we are getting from the European Union, and that we maintain the same solidarity we are getting from Nancy Pelosi and Richard Neal in the US. This is absolutely vital. We need to keep the pressure on with regard to the British Government because we have the difficulty coming down the line of the internal market Bill combined with a possible finance Bill that is looking to circumvent the protections given in the withdrawal agreement and the Irish protocol.
Beyond this, the fact we are dealing with a circumstance and a British Government that does not care about hauliers or farmers, whether on the island of Ireland North or South, means we need to prepare for the only solution for the North-South relationship, which involves having a proper conversation about Irish unity and giving the people in the North a proper choice if we are down to a nightmare scenario where their choice will be to stay in the European Union or to stay in an utterly dysfunctional so-called United Kingdom.
Coming from a Border area, I know more than most the devastating effects a hard border is going to have. I remember the last time we had a so-called hard border and, believe me, it is not what anybody wants but I fear it is where we are heading. I am also realistic and we need to prepare now for a hard border that is coming in less than three months time. This is the worrying side of all of this. We are only three months away from going back to a hard border on the island of Ireland. I have consistently warned the Minister, Deputy Coveney, about the real prospect of a hard border, and on each occasion I was told that a deal for the island of Ireland was secured and that we had nothing to worry about.
I only wish that was true today. We have to face the fact that a hard border will be in place in fewer than three months and we will have to deal with it. Even if a deal is reached with the UK Government at the last minute, can anyone still trust it?
There are so many unanswered questions for the people on the ground, particularly for those who have to cross the Border every day for either work or personal reasons. It is true that we did not vote for Brexit. It is also true that the North did not vote for it but the reality is that it is coming. I speak with people along the Border every day and these are some of the questions they ask me. Is there going to be a hard border? Will there be customs checks at the Border? How will cross-Border workers be affected? How will standards be maintained and even implemented? How will farmers operate along the Border? Will mobile telephone roaming charges be reintroduced? Will security services on each side of the Border still have the same level of co-operation? Will the North-South bodies remain? Will students who cross the Border to go to school or college be affected? These are just a small example of the many questions I am asked every day.
The truth is that none of us have any real answers to these questions because nobody knows. We can say the plans are in place but what are they? How are businesses supposed to know what is happening when the Government is not even sure what is happening? This is too serious a matter to leave to the last minute.
We need action and plans now. I appreciate the difficulty of negotiating with the UK Government and the fact it seems to make it up as it goes along. We cannot allow that to stop us planning for the worst-case scenario, however. For example, today it was reported that Dublin Port is behind its plans for Brexit in that an inspection facility is needed but has not yet been delivered. We are fewer than three months away from Brexit and our main port is behind in its plans. How are hauliers supposed to have confidence in the system when they see this reported so close to the deadline? Why is Dublin Port behind in its plans? This is not acceptable.
Hauliers will also read in today's newspapers that Irish operators will face significant delays and blockages at UK ports come 1 January. Can the Minister imagine owning a haulage company business and reading this with less than three months to go to Brexit? We cannot sleepwalk into this. We must take the lead now and start the process of implementing measures to deal with a hard Brexit.
The Minister and his colleagues do not like to be told bad news. Coming from a business background, I know that we have to deal with what is in front of us, namely, a hard border. In business, people have to deal with difficult situations and make difficult decisions every day of the week. All businesses are looking only for the truth. Businesses are resilient and will deal with any situation to find solutions. To find solutions, however, they need to know what is coming down the track.
The Government website on Brexit states, "When the transition period ends, Brexit is likely to affect how one's business operates". It advises businesses to review their supply chains, understand the rules for importing and exporting to the UK, review all the regulations, licences and certification requirements. With all due respect, this is stating the obvious. This is not real or practical advice. The bottom line is that businesses are still in the dark when it comes to Brexit. What is happening is quite simple. We have gone from having a backstop arrangement to a technical solution to a border down the Irish Sea to a hard border on the island of Ireland, with nobody seeming to know what is happening. This is simply not good enough.
In the event of a no-deal Brexit, will third level students who attend college across the Border have the same rights and entitlements as of now? Will the current rules for cross-Border healthcare arrangements stay in place? Will the tax treatment for cross-Border workers remain the same? Will there be customs and security checks at Border crossings? Will driver licences and motor insurance remain the same after Brexit? Will North-South co-operation in respect of security be affected?
Since Britain first announced its intention to break away from the European Union, it has generally been acknowledged by all onlookers that the fortunes of the Republic of Ireland would suffer most from this event. Not alone do we share social, cultural, economic and political ties with the UK, we also share a common Border which, with the advent of the Good Friday Agreement, has become a well-travelled route of commerce on the island of Ireland with over 33,000 movements daily. A significant amount of this transport is commercial in nature and represents the transit of national and international goods and services traded between Ireland, the UK, mainland Europe and beyond. Political and social integration that was achieved with the Good Friday Agreement has also led to economic integration, particularly in the areas of agrifood, with beef, lamb and milk products crossing the Border daily. This seamless transfer has provided for business models to develop to the benefit of all communities on the island of Ireland.
The idea of severing relations between Britain and the EU was a construct of the Tory Party, which has championed its nationalist fervour in order to achieve its wish list of financial sovereignty, self-regulation and the idea that the UK economy would power ahead when freed from the shackles of European legal and fiscal oversight. Europe was deemed at fault for the destruction of the British car, coal and aviation industries. Unemployment in the north of England was sold to voters as the result of European meddling in UK fiscal management. The changing demographic face of the UK - the result of freedom of movement of those impacted by the UK's colonial past - was instead presented as the fault of access mandated to EU citizens.
The result of all of this messaging was that British society became somewhat fractured and implemented the decision to leave the EU. The consequent guarantees and commitments given to protect the Good Friday protocol in the recently negotiated withdrawal agreement now also appear subject to the new iteration, depending on the whims of the UK Prime Minister, Boris Johnson, and his trusted Brexit advisers.
Whatever our political opinions on the actions of the current UK Government, we in Ireland must remember that our significant economic and cultural ties are forged with the British people and not their political elites. Britain has long been one of Ireland's largest trading partners and will likely remain so after Brexit has been dealt with. Britain and Ireland share significant export and import requirements that each rely on the other to provide. Although some trading trends may change based on price fluctuations, it is likely that it will still prove easier for Irish medium-sized businesses to develop UK customers as opposed to customers in Europe, the US or Asia. The geographical position of our countries will not change after a delivered Brexit. We will continue largely to speak the same language, consume the same media and eat the same meals, although the food provenance may change somewhat for certain people in the UK.
I urge all those in the Government who are dealing directly with the Brexit issue to continue to negotiate with integrity and good faith. While relying on our EU friends to mind our economic interests, it must be remembered that the UK is still an important ally and economic friend to Ireland. Ireland will most likely have to pick up the economic pieces as a result of Brexit. Doubtless our national trading relationship with the UK economy may change to a significant degree.
Brexit will also challenge the UK population. Within that challenge will come opportunity to redefine our economic ties and to continue in close co-operation as the only two islands on the western edge of Europe. Brexit must not become a UK-Ireland divorce but rather a managed separation that allows each party to continue to respect each other's differences and to work in co-operation while working closely to our mutual benefit and security.
What is the point in encouraging Irish firms to move their trade from the UK, to source their raw materials from anywhere other than the UK and instruct businesses to try fellow EU countries to broaden their horizons and find alternative markets? The Government is constantly telling Irish firms to prepare, only for it to then not play its part in ensuring a riskless transportation operation in which they can do so.
A former political adviser told me this week that the Government strategy's is not one of risk management but of crisis management. In adopting a strategy of allowing a crisis to evolve instead of preventing it, the Government is fettering the EU in terms of its ability to negotiate and putting us at risk. Jobs and businesses are being put at risk all because the Government's attitude is that it is better to have a crisis to manage than not have a crisis at all. A crisis is not good for the country. To allow one to manifest itself in order that the Government can display its crisis management skills is unconscionable. Businesses, jobs, farmers, fishermen and hauliers are all at risk because of the Government's strategy. We need to get out of the business of crisis management and into the business of risk management and crisis prevention.
The Government is allowing a crisis to develop to ensure that it can get more bang for its buck on political payday by displaying its crisis management skills instead of heading it off at the pass. Since I have become involved in politics, I have noted it is all about crisis management. Dare I say it but the Government is getting plenty of experience. Its strategy is costing the country a fortune in terms of housing, health and Covid. It is across all Departments. We have a crisis in forestry. Everything the Government does involves firefighting.
Good managers are the ones one does not hear from while bad managers are the ones one hears from every day because they are out explaining themselves. The Government is full of them. This needs to stop. We need a good manager to ensure we have a riskless transportation alternative to the UK land bridge and such an alternative, as the Government has been told by everyone in the know, is a fast, efficient, daily, direct ferry service from Rosslare to mainland Europe. Those in the know are not the civil servants or the Department Secretaries General. They are the operators who safeguard the exports and imports of the country. It brings us to the old saying that a chain is only as good as its weakest link. To ensure our exporters and importers can make the most of their opportunities, all the links in the chain need to be strong. There needs to be recognition that, after Brexit, Ireland is geographically much more isolated within the EU. That requires transportation solutions so our economy’s potential is not stunted by geography and distance and by the Government’s failure to prepare, as it would prefer to manage the crisis it is allowing to develop.
Here is a map. There is little old Ireland, 300 miles from mainland Europe, as it will be after the transition period. It includes only EU countries on the map, not the UK, and it should bring it home to the decision-makers just how geographically isolated Ireland is from the rest of the EU. We are out on a limb. The map clearly show the importance of good transportation links to negate that geographical disadvantage.
The Government must be able to see these things. If the Minister of State does not see them, it is time he went to Specsavers. Leaving our naked vulnerability there for this UK Government to attack and coerce us with is like a boxer fighting while voluntarily holding one hand behind his back. It is madness and so is the Government’s crisis management strategy. Businesses and Brexit go hand in hand and so do jobs and livelihoods. The Government needs to practice what it preaches and start to prepare with the knowledge it has. Please start the crisis prevention.
It is remarkable that less than three months prior to the UK leaving the EU, there is no agreement in place and the UK still does not know what the nature of its trading relationship with the EU will be after 1 January 2021. What we need to learn from this is that if we ever go down the route of having a significant referendum in this country, as we may in years to come, we have to be sure to do our homework in advance. Clearly, the British Government and people, unfortunately, did not have the homework done for them in advance of the Brexit vote.
Irrespective of whether the EU and the UK reach an agreement within the next three months, we know for certain that on 1 January 2021, the UK will leave the Single Market and the customs union. That is remarkable because I do not think anyone who was proposing Brexit in advance of the referendum in 2016 was seriously contending that the UK, if it voted to leave the EU, would automatically take itself out of the Single Market and customs union. That has come to pass, to a large extent, because of the political manoeuvring within the UK political system that took place in the aftermath of the referendum.
Let there be no doubt that the Single Market was probably the most significant development that this country undertook that led to our remarkable economic achievements over the past 20 or 30 years. The Leas-Cheann Comhairle does not have to believe me on that but anyone interested in Brexit and the development of Ireland in the second half of the 20th century should read Kevin O’Rourke’s book A Short History of Brexit. It reveals that the really remarkable performance of Ireland since 1980 was due to our membership of the Single Market. That is what really transformed the Irish economy. We need to recognise that will be significantly affected by the fact that one of our largest trading partners in the Single Market, the UK, is going to depart from that market on 1 January next.
I had the benefit of being at my second finance committee meeting yesterday and it was attended by the Minister of State, Deputy Sean Fleming. We had an opportunity to consider some of the figures that were being put forward by the Minister of State in respect of this country’s preparedness for Brexit. In particular, the Minister of State told us that the State through the Revenue Commissioners has hired considerably more officials for the purpose of performing custom duties on goods arriving from the UK, which will be necessary in light of the fact the UK is departing from the customs union.
One point that was repeatedly emphasised by the Minister of State was that he has a concern - and it is one I share, having listened to what he said - that there are many smaller businesses in Ireland which may not yet be fully prepared for the consequences of Brexit. It appears to be the case that the larger, more well-resourced businesses in Ireland are prepared. They have had expert advice and they know how their business will be affected. Unfortunately, that is not the case for smaller businesses, which may be exporting only a small part of their produce into the UK. It is important that we, as a State, and the Government as the persons ultimately responsible, provide as much information as possible, even at this late stage, for those small businesses. Those small businesses should consult with their trade associations and their local chambers of commerce to find out what it is they must do to ensure they are protected when Brexit arrives on 1 January. If they are not protected and have not completed their preparations, they will face difficulties for business down the road.
It is inevitable that there will be problems arising on a practical basis from the UK departure from the Single Market and customs union and it will have a significant impact on our economy, whether we like it or not. I had the benefit of reading the quarterly report prepared by the Central Bank, published earlier this week. It reveals that if we have a no-deal Brexit and there are World Trade Organization, WTO, terms, the effect that will have is that Irish gross domestic product, GDP, next year will reduce by approximately 2%. That is a very significant impact on our economy. I suspect, however, there will be even more significant impacts as a result of it.
We need to recognise that we can now see the importance of the Irish protocol that was appended to the withdrawal agreement. If we did not have the Irish protocol, we would now be preparing to deal with the prospect of having a land border with a country outside of the Single Market and customs union. It would be a horrific prospect for this State to deal with.
It is important that one becomes aware when looking at the Central Bank report of the threats posed to the Irish economy by the combination of Covid and Brexit. It makes stark reading and one of the things that is apparent from it is that our export business is so strong that it has not been greatly affected by Covid. What is under threat, as the Minister of State, Deputy Troy, will be aware, is our domestic economy, that is, our small and medium enterprises. They face significant challenges by the opening and closing caused by the Covid restrictions. We face a daunting task but it is something this country will be able to deal with. If people in this House think they are exposed to unprecedented challenges, let us think of what our forefathers and foremothers went through 100 years ago, when, during the time of the Spanish flu, they were able to fight for and achieve Irish independence.
Communities across the midlands are already reeling from Covid-19 and now we find ourselves facing significant uncertainty as a result of Brexit and how it will ultimately play out in our community. I appreciate the Trojan work done by the previous Administration on this issue and I know a number of our Ministers, our Taoiseach and our Tánaiste are assiduously working to ensure there is no negative impact from Brexit on the midlands region. However, regardless of whether the UK ultimately yields to a deal on Brexit, the reality is the transition will be hugely difficult for the midlands. More than two years ago, an IBEC report on the challenge identified Longford as one of four counties at greatest risk from Brexit, owing to the large concentration of businesses involved in engineering, food production and logistics.
That report did not take account of the agricultural sector and the challenges therein. I recently met a number of Longford farmers in an airy slatted shed in Oldtown, Ardagh. The shed was not too dissimilar to this building although it had significantly more atmosphere and character. Those Irish Farming Association, IFA, farmers had issues and concerns. They referenced Common Agricultural Policy, CAP, transition funding, the suckler herd, sheep farming, forestry, the fair deal scheme and farm safety. Ultimately, their greatest cause for concern was the uncertainty presented by Brexit. I know that the Brexit piece is foremost in the mind of the Minister for Agriculture, Food and the Marine, he is conscious of the significant shift in farmer profile over recent generations and that a troublesome Brexit will deeply unsettle a fragile ecology.
County Longford is already reeling as a consequence of Covid-19. We expected just over 50 pubs to reopen in the county a number of weeks ago but, sadly, within a ten-mile radius of Longford town, ten family-run bars did not open. In essence, we lost 20% of the county's bars, the reality is that they will not be back and with them have gone focal points for many of our local communities.
It is a similar story for our retailers with a notable shift to online trading. This week's additional restrictions, while necessary, are another hammer blow to beleaguered rural communities. There is no doubt that the restart grant and other supports have been hugely supportive and the hope is that next week's budget will include additional measures.
Since March, Longford's only travel agency, Kanes Travel, has remained open to assist its customers with getting refunds and still there is no likelihood whatsoever of any income throughout this period for the family-run business. At best, it will be next April before the business sees any actual sales. We do not want to lose the travel agency in Longford town which has been at the heart of our community for 60 years. We are desperately hoping that many of our local businesses will be able to see some dividend from the Christmas trading season this year.
Provincial towns have faced numerous challenges over the past couple of years and the reality is that Covid will rob them of a full year's trading. It will, unfortunately, be the death knell for many of these businesses. Cork, Dublin, Galway and all the other large urban centres will bounce back once the visitors and investors return but for rural Ireland, the challenges are considerable and will be further emphasised by the looming Brexit crisis. After Covid, and regardless of whether we see an agreed or unilateral British withdrawal in 90 days' time, rural Ireland will suffer. Accordingly, it needs to be prioritised in terms of funding and support.
For more than 30 years, I worked in the private sector before being elected to the Dáil and I understand the fear and uncertainty that businesses and employees are facing as a result of Brexit. Approximately 15% of Irish goods and services are destined for the UK and, in the agrifood sector, that figure goes up to 40%. In a report commissioned by the Government, Copenhagen Economics found that a Brexit resulting in the application of World Trade Organization trading regulations - in other words, a no-deal Brexit - could see Ireland lose 7% of GDP. Current trade costs could rise from 4% to 32% in a no-deal scenario. It also found that regions outside Dublin are more exposed to Brexit with rural areas bearing much of the brunt. Let us not forget that 80% of Irish businesses are small or microbusinesses. Those individuals and families are the people who will feel the sting of Brexit the most.
With two thirds of Irish goods exporters using the UK land bridge, the situation facing business is dire. We need to find alternatives and invest in our ports, build ferry capacity and ensure there are no delays of our exports to Europe or the rest of the world while protecting our continued sustainability in the face Brexit. This should be a key priority for the Government. In 2018, Cork Port handled almost 10.6 million tonnes of goods. There is a serious opportunity now for the Government to invest in Cork, its port and ferry capacity, in the face of a no-deal Brexit.
Cork Airport is also vital for the area and, especially at this time of uncertainty, needs to be supported. The Government has been vocal about its desire to improve Cork as a viable alternative to Dublin and we are now in a unique position to do that. Let us use this opportunity to build Cork, invest in its infrastructure, make it an alternative and opportunity for global business. With a Taoiseach and Minister for Foreign Affairs from Cork, to miss this opportunity would be unforgivable.
I represent the Border constituency of Sligo-Leitrim, including south Donegal and north Roscommon. Business in that area is always somewhat hampered by the Border. In every area across Europe, it is recognised that a border corridor is a disadvantage and problem. Particular disadvantages exist when the border in question is totally unnatural, as is the case in Ireland. Much of the economics and commerce that goes on across the Border, which has thankfully, by and large, disappeared over the past 20 years, runs over and back. Cows are milked in the South, processed in the North, brought back into the South for further processing of the milk, before it is brought back into the North again for further processing. That is going on all along the Border. That problem is going to be magnified if we have a situation where we have any kind of posts, checks or infrastructure placed at the Border. We need to make certain that cannot happen under any circumstances.
The British Government's intransigence towards Ireland and the particular predicament that all the people on this island will face because of Brexit has been farcical. We need to be looking at how we can resolve that issue here and now. We also need to look at the broader picture. Many of my colleagues have mentioned issues about exports. Large amounts of our produce are exported through Britain and into Europe. That is a problem and emphasis should be placed on building our port capacity and getting a new ferry service from Rosslare, Cork or another port which can go directly across into Europe. That needs to be prioritised as we move towards a situation where it looks more likely every day that we will not have a proper deal on Brexit. There may be a deal patched together at the last minute which might not be long term and might not work out. That is a crisis for many people in business.
Additional resources will have to be pumped into small businesses around the country to ensure they can survive the economic impact of Brexit because it is going to be colossal in a no-deal situation. I appreciate that the Government is in a difficult position with Covid-19 and all the other stresses that exist. Europe will have to step up to the mark here because this is not only a problem for an Irish Government, it is a European problem and Ireland is, unfortunately, the country that will meet the largest impact of it. The European Union will need to put a fund in place to assist Irish business through the deep problems we are going to have as we move into a situation where we are likely going to have a no-deal Brexit.
I will be sharing time with Deputies Michael Collins and Danny Healy-Rae. The Tánaiste has been told repeatedly by speakers in this debate that there are only 90 days left before the end of the transition period. That is not a long time where international and European relations and negotiations are concerned.
I want to salute the work of the late Fr. Alec Reid and Dr. Martin Mansergh, two Tipperary men, and the work that many people did, including former Taoiseach Bertie Ahern, in the establishment of the Good Friday Agreement. That must be sacrosanct. We have seen in recent weeks how the British Government has driven a coach and four right through the agreement. It is time that we stopped pussy-footing around, ended niceties and got down to real business. Otherwise, we are going to be caught in a fire that we cannot put out.
We will have no export channels. Without proper connectivity to Europe, we are in big, deep trouble. The Tánaiste has been told that clearly on a number of occasions by Deputy Verona Murphy. She understands business. She is in the haulage business and knows it inside out. The farmers, agricultural industry and its employees will be affected. Milk moves back and forth across the Border. I know the Border area well and the devastation to it will be unbelievable if we do not do something.
The Government has been doing crisis management but now is the time for cool, calm and direct leadership. Now is the time to call in chips from Europe. We have been good European boys for decades and now is the time we need assistance. We did not get a good indication in the most recent negotiations with Brussels. Ireland is the fifth largest net contributor to the European Union. We cannot afford that with what is happening with our nearest neighbour. We have had relations and traded with the UK for centuries and it will be gone, all of a sudden, come 1 January.
The Government came back from Brussels with a backstop some years ago. Where is it now? There have been a lot of backstops and full stops. We are at a dead stop now and it is time that the Government sat up, took note and ensured there are proper negotiations and support from Europe. It is not sufficient to have niceties. There is an unpredictable Prime Minister and Britain is fighting Covid. There are major issues. The time for talking is over.
I referred to jobs in the agricultural industry. The IFA, ICMSA and all of the farming organisations are perilously worried about the future of our exports and our situation in respect of agriculture. It is our primary industry and we need to protect it. The Minister of State needs to do something more to protect us than what is happening now. Thousands of jobs will be affected. The haulage industry will be totally decimated if we do not do something. I appeal to the Minister of State to wake up, smell the coffee and get real negotiations going.
Business confidence in Ireland is already among the lowest in the EU. The ongoing impact of Covid-19 and the approaching deadline is a massive cause of concern for small and medium-sized enterprises in Ireland. The details published today in the economic forecasts from the Department of Finance for budget 2021 assume one in seven jobs will be lost this year.
I want to talk about fisheries. The EU wants to maintain its access to UK waters based on historic fishing patterns. The UK has emphasised its sovereign control over its waters and wants fishing quotas to be negotiated on an annual basis. The worries for the fisheries sector in Ireland are many. Britain, which has long been seen to hold the upper hand in fisheries talks, is looking for a much larger share of fish quotas from stocks which cross into its waters, with the ability to reduce the amount of access EU vessels can have to UK waters after Brexit.
The EU, in turn, wants to stay as close as possible to current quota shares and access rights under the much hated Common Fisheries Policy. Now member states are piling the pressure on Mr. Barnier to stick to his negotiating mandate. The chief Brexit negotiator has held talks with Ministers from the group of eight coastal states which consist of Ireland, Belgium, Spain, the Netherlands, Denmark, Germany, France and Sweden. The key question is whether the Minister for Agriculture, Food and the Marine, Deputy McConalogue, has been steadfastly protecting the Irish fishing sector or has been swayed by the EU through Mr. Barnier. The grave danger to the Irish fishing industry is linked to the wider trade negotiations. We have heard that the UK linkage is there, but what use or abuse of the linkage is being made?
There is a complete lack of transparency being provided on this issue. It is time that the Minister, Deputy McConalogue, updated the industry and the Dáil on the matter and on what steps he is taking to protect the sector. For example, 400 vessels from the EU are known to fish between the North Sea, the Irish Sea, the French channel and off the Shetland Islands. They are fishing inside UK waters. What happens if they are denied access?
Can the Minister confirm, in respect of the cross-border directive which has become a major concern as the clock is ticking, that an order will be made to allow Irish residents to continue to travel to Northern Ireland and avail of the EU cross-border directive after 1 January 2020? I believe that the Act that was passed by the House in 2019, the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act, allows for this to happen. It is not only in the public interest and an effective use of the resources of the State, it will also remove the need for citizens to make a journey to France or further afield if they wish to use the EU directive. Given that many of them are elderly, in pain or have poor sight, if the Minister and Government does not confirm that an order will be made, these citizens will be left to wait for the HSE or the National Treatment Purchase Fund to act instead of being able to make a personal choice to fund surgery.
An economic research body based in Germany has forecast in its latest publication that Ireland could lose over 35,000 jobs in companies directly or indirectly involved with exporting to the UK in the event of a no-deal Brexit. The majority of these jobs are in rural areas. They have been badly affected as it is, without being hurt any further.
The part of the country that I come from and represent has Munster Joinery, Liebherr Container Cranes and Fexco, all of which export to and deal with the UK day in and day out. They provide thousands of jobs and if they were to be hurt or closed down, or to reduce their number of jobs, that would affect our local economy in a desperate way.
Farmers and those who own SMEs are very worried at the present time because, as we know, the greater part of their work and products is being exported to the UK. They need serious help. Wonderful people work in London and elsewhere in the UK, such as Dan Tim O'Sullivan who is from the heart of south Kerry and employs over 2,500 people. Mike Jack Cronin, who is from Killarney, employs people in Killarney and London. We are very proud of him and his venture with Thermohouse insulated homes. He is making headway and has been making progress in the UK. If there is a hard Brexit, we hope it will not affect these honest and hard-working people.
We are importing and exporting. Like Deputy Collins, I am very worried about the fishermen and the prospect of England taking back some of her waters. This could greatly reduce the ability of our fishermen to eke a living out of the sea. They need financial support right away.
We need to invest in our ports and ferries. We are very worried about the land bridge to Europe. We must have our own facilities, mechanisms and ways to get to mainland Europe. We are a small island in the middle of the Atlantic Ocean. The Government needs to realise that and deal with it. If we have to buy ferries and upgrade our ports, that is what we have to do. We have to ensure that our farmers and business people are not compromised.
In regard to the North of Ireland, we greatly respect our interaction with it. It is part of our country. Only a ditch separates North and South and trade is going on up and down the country. We hope this is not interrupted or interfered with in any way because it would have a devastating effect on local work and business.
I appeal to the Government to ensure that tariffs and customs regulations are dealt with expeditiously. Why are we leaving everything to the last day? There is too much left to do and the Government has lost a lot of time. I know the coronavirus is taking up a lot of time, but we have to delegate and make sure that these matters are properly and expeditiously dealt with.
I thank the Acting Chair. I ask him to remind me when I have spoken for six and half minutes.
I am glad to have an opportunity to make a few points on Brexit and business. I am from the north west of the country, as the Minister knows. Sadly, many businesses in my region are concerned about whether they will make the Brexit deadline in business such is the impact of Covid and our dependency in the north-west region on the hospitality sector. I will come back to that.
In the context of budgetary preparations and with regard to the north-west region, as the Minister will probably know, due to continuing neglect over many decades of investment in the north-west region we have been reclassified from a developed region to a region in transition.
As a result of that, the Government will qualify for up to €350 million in grant aid under the Cohesion Fund, whereby €60 of every €100 committed is payable to the Government by the EU. It is vitally important that we do not repeat the mistake of the period 2014 to 2020 in the next period 2021 to 2026 by reprofiling pipeline projects to take advantage of a funding scheme from the EU. That is not what it is intended for and it will not be the medicine that is required for the illness, which is the lack of improvements in the north-west region to get it to that developed stage which will ensure that counties like Donegal, Sligo, Leitrim, Cavan and Monaghan are capable of performing to potential and making a contribution to the national effort which is sustainable.
To achieve this the Northern and Western Regional Assembly has appealed to the Government to introduce, and I am supporting it by asking the Minister to ensure that the Government introduces, an integrated territorial investment vehicle to ensure that the EU funding that we qualify for, as I have outlined, is targeted in that region, and that in line with the principle of subsidiarity, those moneys are controlled and made available through the existing apparatus in that region, with the input, obviously, of the Northern and Western Regional Assembly. There is no question that to be creative in accountancy one could probably draw down this money and buy PPE for the north west region with it. We are buying that anyway. I ask that this money is put where it is intended to be, which is to improve the overall region and to allow it to develop.
On the current situation with Brexit, we hope we successfully secure an agreed future relationship so that we do not go totally off the cliff. The reality of this region of the north west and my area is that any Brexit will be a hard Brexit. We have such an interdependency with Northern Ireland and with the export market, together with the fact that we suffer high levels of unemployment already, that it is critically important that we get the money to the people and businesses that need it and prioritise that.
In that context it is very difficult not to talk about the current Covid-19 pandemic. I will give one example again of the hospitality industry. It has been totally wiped out by Covid-19. The superficial suggestion that level 3 plus is supportive of pubs, restaurants or hotels is ridiculous in the extreme. It has got to have been thought up by somebody at a desk who was never in a pub, restaurant or hotel in Ireland because 15 people cannot eat out in the rain and hail or during Storm Alex last weekend. They cannot have pints or Coca-Cola outside in the rain or hail. Within our own county we will not be having staycations for people from Collooney in Sligo town. These businesses need the required level of supports to allow them to survive. Brexit is not even on their list of concerns at this stage. They are worrying about having a future in business at all.
I have seen correspondence from the Tánaiste's office which confirms that the top-up grant of 40% for the restart grant, which was payable to businesses here in Dublin such as pubs and so on, only entitles businesses in Donegal, which have been at level 3 plus for several weeks, to a further 10% on top of the 30%, whereas this would be a net 70% top-up if the pubs were in Dublin. This is being done on the basis that the pubs in Donegal are allowed to open, that is, they are entitled to have 15 people out in the rain. That is just ridiculous. All of these businesses are going to close. There may be an odd exception where a business may have a huge semi-covered deck area which has central heating, but in the main all of these businesses are gone. I ask the Minister, please, to revisit this to ensure that the full top-ups are available to all of the businesses. This applies not just to Donegal, where it has arisen, but also now to all the other 24 counties outside of Dublin. If we are going to support businesses, let us do that.
I very much hope that the Minister can take this on board to ensure that we are giving the appropriate supports, because we have wiped out hospitality as an industry in this region. Unless we take a more strategic approach to managing the Covid-19 situation which permits some level of safe trading for that industry, it is quite simply finished. It is not good enough for us to say that we must do this. "Must" is not an option. We have to protect people's lives, as the Taoiseach has said, and livelihoods. Our plan as outlined at the moment will not achieve this.
We cannot discuss Brexit without including Covid-19. One cannot have a discussion about Covid-19 without including Brexit. Both of them have shown the State to be far less effective than it should be. It has shown that the reforms that were suggested over the years and were not implemented are now playing against us. How ready are we to deal with the Covid-19 nightmare into 2022? How ready are we for Brexit?
I will point to a number of issues that are of grave concern to me. One is the hospitality sector. I come from Kilkenny, which is a tourism city, and during this summer there were one to two buses at the castle park where regularly the whole line of the street in front of the castle would be full of visitors and buses from all over the world. That has led to a serious problem for the hospitality sector because we rely on tourism. Those who are involved in tourism who were badly affected by the downturn and the financial crash and are only barely recovering out of that now face into other huge issues, which are Covid-19 and then Brexit. They are struggling financially, in spite of being big employers both in the hotel sector and in the services supporting the hotels, to keep their doors open and are being shown no support from the banking sector, the sector that brought this country to its knees. Now it is meting out a second beating to those businesses that are willing to take the risk, that have a good product, but are not backed by the banks because their credit rating has been lowered due to their history from the financial crash. The State should be providing some form of refinancing for those businesses so that they can continue in the work that they are doing and to give employment. That is not happening.
The second big sector in the country which is affected by both Covid-19 and Brexit is coach tour and bus operators. They have been brought to their knees by Covid-19 and by the actions that had to be taken by Government. We should be giving a tax rebate on their fuel directly to that sector, a tax break on the buildings that they occupy, and financial support to assist them through this time into 2022, because it is that year that is being forecast as a year that, maybe, the tourism industry may turn itself up again and people will begin to travel.
If we do not take these dramatic steps now to support these sectors, they will not be there when the turn comes in the economy, with Brexit or, indeed, with Covid-19 if we get a vaccine. There are so many things that we can do to help that may not cost the State money and we need the support of the banks to achieve those. Are we strong enough as a Government to tell the banks to support individuals with difficulties in their mortgages and businesses that are the backbone of this country at this difficult time?
The previous Government was not able to do it. I know the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and the Minister for Finance, Deputy Donohoe, were to meet the banks again. I believe the banks will ignore them. We need to encourage another banking competitor into the market such as Sparkasse or one of those community banks that will give interest rates similar to those in Germany and support our businesses as we go through this, because what is happening in the economy, in pubs and in the general hospitality sector is shocking. It is shocking to see family businesses close down. It is shocking to see pubs boarded up. As Deputy MacSharry outlined, some of the measures are not supporting the reopening of those pubs or hotels in real terms.
I encourage the Government to look even beyond those sectors at the many small businesses that at one stage employed up to 1 million people and give them support because they are outside of most of the businesses that are represented at national level. They are family run businesses. They are in our communities and villages and, believe me, we will want them in the future. We will want to see those shops open to keep villages alive in the future, but if the Government does not invest in them now, we simply will not have them. Having someone creating a small number of jobs in any community is a massive benefit for that community.
Lastly, in the context of Covid-19 and the money that is being spent, the Minister cannot overlook the usual supports that are needed in such areas as the disability sector. In Kilkenny, I have seen the disability sector and its supports decimated. People cannot get respite. They cannot get special care in homes. Regardless of what we do to deal with the impact of Covid and Brexit, let us not forget those who are marginalised and less well off. Let us not forget those on hospital waiting lists. Let us put them first. This country has to be brave in terms of the risk it is going to take because it will be the saving of the next generation and those who are in business now.
I welcome the opportunity to speak on this issue. I have spoken to the Minister of State, Deputy Troy, previously, but this is my first time to speak to him in the Dáil, so I wish him luck as a new Minister.
The uncertainty around Brexit is ferocious. Whether people like it or not and whether they live in a city or a rural area, we must realise that food is transported between Ireland and England by lorry and by ships going back and forth. We need to make sure that we understand that 60% to 70% of our beef goes to the UK. It was alarming to see Asda's statement yesterday that it will buy only British beef, which would not be a welcome development for Irish farmers. We have to make sure that we put the funds in place. Be it state aid or whatever and regardless of whether the EU blocks it, we have to support the agricultural sector, be it the beef, dairy or sheep sector. While 300,000 to 400,000 lambs are transported here from across the Border, some of them come from the UK. It appears that will continue with the agreements that are in place. However, in terms of our beef getting to the UK, if a deal is not done, there will be tariffs imposed, and with the current price of beef, the farming sector cannot withstand the likes of that. There must be Government intervention to make sure our farmers continue to be viable.
With regard to the business communities, especially those in the Border areas, we have to make sure that we put a foot under them, so to speak, because not only are they going through the torment in respect of Covid-19, which was highlighted earlier, Brexit is a double whammy coming at them.
In terms of the timber industry, last Friday, for the first time in 30 years, there was a mill in this country that did not have any timber. We must realise that much of our timber goes to the building industry in the UK, and for pallets. We have to put a foot under that sector also which employs 12,000 people.
I refer to the haulage industry and roll-on, roll-off services. In terms of our new models of where we will be going in the future, are we ready in ports such as Rosslare? I am aware a review was done earlier in the year by the EU and I believe Rosslare will go into a core node in TEN-T, but will the Port of Galway get help? Will the infrastructure be put in place under, say, the core network for TEN-T funding from Donegal, along what we call the western arc, through the Minister of State's constituency, and I have often advocated on behalf of Mullingar, to Castlebar? We need the infrastructure to make it linkable in terms of traffic going back and forth.
On a note of caution, we had a meeting with IBEC via Zoom last week attended by the pharmaceutical sector and other businesses in the west. They have highlighted the major problem that Ireland is losing foreign direct investment, FDI. The CEOs or the people who make the decisions about FDI are not coming to this country because of the need to quarantine on arrival. I am not saying they should be allowed be in contact with people on arrival, but we need to put in place a system that facilitates those who are spending money here to get through our airports, without having contact with others, and travel to where the business they will make the decision on is located. It has been stated to us bluntly that we will not get the FDI that other countries are getting currently because of such regulations in place.
I spoke to a business today and it seems that the banks are putting people through the ringer with respect to the Covid credit guarantee fund. I believe a decision will be made with respect to that business tomorrow but the bank involved was AIB, which we bailed out. It asked for a business plan to be done but subsequently requested another one. They then had to do a business plan indicating that they will be doing almost no business next year. With the current situation, no one in business can foresee more than six months ahead let alone look into a glass bowl and say what will happen in the next year. The Government is prepared to stand 80% behind a business but some of the people in the credit committees of the banks, especially the State-owned banks like AIB, who are making the decisions seem to be putting people through the hoops. It is as if they do not want to give them money. We have to keep businesses in operation. We have to take risks at times. No one knows what the Covid situation or Brexit will bring in the next six months or year. Through no fault of anybody's things are happening and we have to make sure that we protect the existing jobs. If we do not, what comes in goes back out. If the Government is not getting in the money in taxes, rates and other revenue, more people unemployed will be a problem.
Coach hire was talked about by Deputy McGuinness, as was the hospitality sector. They have got a hammering this year, including from Covid. If there are many rules and regulations coming in under Brexit, it will be problematic.
Prices are going up all the time. It is necessary to be competitive to survive in this world. Last week, the PSO levy was increased. We talk about the great new world we are going to enter but households will have to pay €54 more for electricity because of the increase. We are talking about climate action again and introducing a carbon tax. Basically, rural people will suffer. While everybody is willing to make an effort and help in every way, we are dealing with crises. We are dealing with Brexit and Covid and now we are talking about introducing climate action legislation that will basically screw people more in the rural areas if there is to be a carbon tax increase of €6 or €7 per tonne this year and next year. When under pressure, it is necessary to pull back on certain things. The health and wealth of the people are more important than deciding that we, as a nation, are going to save the world when others are giving the whole lot the two fingers. I am not saying we are ignoring the issue but people cannot be left as I describe. Do we want an Ireland in which we are looking out a half door and drawing the dole while saying we are a great country and that our emissions levels have come down? Alternatively, do we want to keep creating work? We are emerging from a tough time that began in 2010. We are now in the middle of a very tough time and we must ensure we put incentives in place so businesses can continue right around the country, but we must also ensure there are links between all the relevant Departments, including those responsible for agriculture and transport, to be sure we are as Brexit ready as possible. People talk about being Brexit ready but how do we solve the problem if a heap of lorries are banged up together with food in them, resulting in shortages here and there?
I ask the Minister to take my points into account. This debate is well worthwhile but at the end of the day we do not know what is going to happen. We hope the issue will be resolved and that an agreement will be reached. If not, we have to be prepared to step in for the people of this country and help them in their hour of need because they have put their shoulders to the wheel over recent years.
I thank the Deputies for their constructive contributions on the topics of business and Brexit. Deputy Fitzmaurice is dead right that the banks must step up to the mark, particularly when the Government is underpinning lending by up to 80%. I have engaged with people in my constituency in this regard. It is regrettable that the banks are not stepping up to the mark.
Deputies raised the issue of additional supports for businesses in the contexts of Covid and Brexit. We have had our July stimulus. That was one of the biggest cash injections in the history of the State. It was the first part of a three-part approach to supporting our businesses and economy. The budget is next week and I believe there will be extensive supports for businesses, followed by the national economic plan later this year.
There are a number of questions to be answered arising from the UK's decision to leave the EU Single Market and customs union on 1 January 2021. I acknowledge the efforts of Mr. Michel Barnier's negotiation team to bring about a satisfactory conclusion to the negotiations. I disagree with Deputy Mattie McGrath that the time for talking is over. The time for talking is very much now because we want to reach an agreement to avoid a hard Brexit. The only way we can do so is through negotiations and talks. While we do not know the ultimate outcome, we know substantial and lasting change is coming on 1 January 2021. We also know we need to prepare businesses for that change.
On 1 January, businesses will be affected most immediately by the terms of the new customs procedures, which will affect what has up to now been the seamless movement of goods through ports and airports and via the UK land bridge. Most businesses, unless exporting to third country markets, will be completely unfamiliar with the procedures, checks and controls concerning customs and with other regulatory checks. These changes mean businesses must get Brexit ready within a short period. It is important to emphasise that the changes will occur regardless of the outcome of EU-UK negotiations and regardless of whether there is a trade deal. That is why I urge businesses to prepare for the change and take action now. They need to get ready, get informed and get support.
This morning I took part in the Department's enterprise forum on Brexit and global challenges with the Tánaiste and the Minister of State, Deputy English. Having listened to stakeholders, I note there is still concern about the level of preparedness among businesses. I commenced a regional roadshow with Enterprise Ireland and, in kicking off the tour, I prioritised the north-east region given its exposure to Brexit. From discussions, I realise companies engaging with State agencies are confident but a priority concern for me is that many small business communities are not engaging with State agencies and not engaging in Brexit preparedness activity because of competing demands on their time as they continue to deal with the impact of Covid and many other challenges. We must ensure no one is left behind and everyone is engaging with the process.
The Government and State agencies are here to help and provide support for businesses navigating the changes. The Tánaiste, in his statement, outlined a full range of State supports to help to get businesses Brexit ready. With just 11 weeks to go until the end of the transition period, I ask all Deputies to ensure they bring these supports to the attention of local businesses that can make best use of them.
Using the UK land bridge also remains a key issue. I visited Dublin Port last week and saw for myself the amount of work under way to get it prepared. In fairness to it, it has been preparing for more than two years, but it is important to remember that if businesses wish to continue using the land bridge, customs formalities will be necessary.
Direct sea link options provide a viable alternative, and businesses should be considering these to avoid future risk and backlogs. My understanding is that there are approximately 20 direct sailings from Dublin Port to mainland Europe weekly and in the region of six direct sailings from Rosslare Europort weekly, depending on the time of the year. From listening to some Deputies tonight, one would swear there were no direct sailings from Ireland to mainland Europe.
I want to emphasise the issue of customs training and familiarisation, in addition to the training and support initiatives available to get businesses up to speed on new customs procedures. This will probably be the area of greatest impact on businesses, and it is the one with which they will be least familiar. In a recent Enterprise Ireland survey of over 600 companies, customs proved to be the matter of greatest concern. From 1 January next, businesses wishing to continue trading with the United Kingdom will need, at a minimum, to have an EORI number and to complete the relevant customs declarations. Businesses will also need to decide whether to complete these declarations in-house or use a customs agent. To help to build businesses' in-house capacity in the area of customer familiarisation, one of the measures associated with the July stimulus included a ready-for-customs grant, available through Enterprise Ireland. Under this grant, businesses can claim up to €9,000 per eligible employee hired or redeployed to a dedicated customs role within a business.
Once again, I urge businesses to look into what supports are available. Skillnet Ireland's FREE Clear Customs training and Clear Customs Online 2020 are accepting applications for their online training courses, which are free and available 24-7. The local enterprise offices are also holding a one-day Prepare Your Business for Customs workshop throughout the country, while Enterprise Ireland also has a customs insight online course available. I am concerned with the low take-up of some of these supports and I have raised these concerns with employer representative groups. We must continue to raise awareness of the supports to enable businesses to avail of them, particularly small businesses who are unaware of them.
Beyond customs supports there are numerous initiatives available from Government to help businesses get Brexit-ready, ranging from vouchers and financial supports to consultancy, mentoring and advice. These are offered through agencies, including Enterprise Ireland, the local enterprise offices and InterTradeIreland. Those starting their Brexit preparations should consider Enterprise Ireland's Brexit-readiness checker or the Brexit planning voucher to seek professional advice on how best to plan and get ready for Brexit. There are many other supports under consideration. For more substantial financial supports, business should consider the Brexit loan scheme and the future growth loan scheme, which offer short to long-term loan facilities. Microfinance Ireland is also an option for micro-enterprises. We know that Brexit will bring many changes. Addressing these changes may seem daunting and overwhelming in equal measure but Government is here to help and steer business in the right direction.
While we are aware of all of the challenges of Brexit, we must also use this time to look at the opportunities to diversify our market reach through its existing free trade arrangements and work with the new Commissioner for Trade on building a new roadmap for EU trade. There is huge benefit in being an EU member. We need to leverage all of the advantage that we have. Trade in this country has taken a battering over the last number of months. It is essential for the country as we move forward. As Minister of State with responsibility for trade promotion I reiterate the need to look to 2021 as the year we can expand our global footprint, encourage businesses that are trading currently to expand and scale-up and to encourage new businesses to trade internationally.
The Minister of State said in his statement that there are 20 plus sailings per week from Dublin. I need to correct the record. There are actually six in the roll-on roll-off sector which use the land bridge.
I understand Deputy Murphy in her former role as president of the Irish Road Haulage Association has extensive knowledge in this area but I take issue with her remarks. I have visited Dublin Port. Either they are misleading me, or they are misleading the Deputy.