Wednesday, 18 November 2020
Ceisteanna - Questions
I propose to take Questions Nos. 8 and 9 together.
The Cabinet committee on Brexit and Northern Ireland was formally established by the Government on 6 July 2020, and had its first meeting on 29 October 2020. The next meeting of the Cabinet committee is scheduled to take place on 23 November 2020. In general terms, the Cabinet committee will oversee implementation of relevant programme for Government commitments in the area of Brexit and Northern Ireland and ongoing developments and negotiations. The committee operates in accordance with established guidelines for Cabinet committees and, where appropriate, substantive issues are referred to the Government for discussion and approval. In addition to the meetings of the full Cabinet and of Cabinet committees, I also meet with Ministers on an individual basis to focus on particular issues.
I wish to raise a specific issue that my colleagues, Deputies Howlin and Nash, have raised concerning the Bill on the withdrawal of the United Kingdom from the European Union. The Department of Finance has proposed an amendment that would raise the minimum expenditure required to qualify for the VAT retail export scheme, which is basically tax-free shopping, from zero to €175. This means that in order to qualify for a tax-free rebate, a tourist will have to spend at least €175. This is against all trends in other jurisdictions, but it will also have a great impact on small retailers such as jewellery stores and those selling knitwear, crafts and the arts. Any store that is depending on small sales will be significantly negatively impacted. After the enactment of the legislation, the amended requirement will mean that tourists who wish to qualify for this scheme will have to spend €175. By analysis, this will exclude 80% of current expenditure in such shops. Why is the Government doing this? There must be a reason for going from zero to €175. The people who spend money in craft shops or small artistic venues, who buy small mementos, will essentially lose out dramatically. It should not be the case that tax-free shopping is only aimed at the wealthy who are travelling into the country. Those who come into the country and spend small amounts of money in locations such as the type of shops I have outlined will not be able to benefit from a VAT rebate and that will mean such shops will be negatively affected. I urge the Taoiseach to look at the issue.
I wish to speak about Covid-19 and the necessity of an all-Ireland approach. The worrying stall in the reduction of cases that we are now seeing further adds to the urgency of doing everything possible to try to develop such an approach. Could the Taoiseach give us a report on his latest efforts in that regard and the communications he has had with the Northern authorities to try to push towards an all-Ireland approach? It is clear that divergence is a problem. We need to do anything we can to try to get that all-Ireland approach.
On Brexit, one thing we have learned from Covid, although it has not always been enough in my opinion, is that we can put in place income supports for working people when they are affected by a crisis. That lesson should also be applied to Brexit and contingency planning for the possibility of a hard Brexit. There is a lot of contingency in terms of supports for business, but there has been no discussion about supports for workers. I think we should have a workers support fund. There should be a Brexit crisis fund to support the incomes of workers who may lose out or lose employment as a result of the impact of Brexit.
As the Taoiseach is aware, negotiations recommenced this week with the intention of resolving the major outstanding issues on which there is huge concern, including those relating to the Internal Market Bill. Time is running out, so we need to ensure there is a level playing field on the big issues, including fisheries.
The joint committee is working on solutions to the issues regarding trading arrangements between the North and Britain post transition. As the Taoiseach is aware, the Internal Market Bill will return to the Commons, at which point the British Prime Minister will decide whether to reinstate the contentious clauses that breach the Irish protocol and international law. If Boris Johnson does decide to follow this course of action, he risks the trade deal itself, not only with the EU, but also a future trade deal with the United States.
The British Prime Minister and his cabinet colleagues have talked up bigger and better deals outside of the EU, but none have yet materialised. The Tories' Internal Market Bill is undermining a trade deal with the EU, and now with the US. Boris Johnson's argument that the Internal Market Bill is needed to allow Britain to defend the Good Friday Agreement would be laughable were it not so serious. As a result of the Tories' brinkmanship and prevarication, there has been an inadequate space for preparation for businesses on the implications of Brexit. As has previously been said, the concerns do not just relate to business and trade, because issues also arise about the erosion of human and environmental rights. Of particular concern is the non-diminution of rights commitments in the Irish protocol and the Good Friday Agreement.
Deputy Kelly asked about the €175 threshold for the tax rebate. Deputy Ó Cuív raised this with me at a parliamentary party meeting some time ago and I know Deputy Howlin raised it in the House during the debate. The Government is responding to this and an amendment will be introduced to significantly reduce that threshold. We need a threshold from an administrative-----
There will be a threshold and it will be significantly reduced. The catalyst has been the UK's decision to leave the European Union. We will respond to that in the form of an amendment which will come before the House.
One of my big concerns generally is the preparedness of Irish businesses for Brexit - deal or no deal. It is important that all companies plan and avail of the Government supports to help them to deal with issues relating to customs declarations and other forms. There is a grant for employing assistants and bringing people in. It has not been availed of to the degree that one would have wished. There is an issue there irrespective of whether a deal is done. Even if a deal is done and we have a trade agreement, there will still be issues on 1 January because the UK will be outside the customs union and the Single Market. It will be out of the European Union, which has implications for us.
I welcome that negotiations have resumed and have been ongoing. There are outstanding issues. It makes sense for an agreement to be reached. The UK needs access to the Single Market. Europe needs that access to be on a common basis with the EU states in terms of having a level playing field, state aid and so forth. That is obvious. Access to the Single Market is of great importance to the British economy and I believe that the UK understands that. There will obviously be challenges on that issue, on the dispute resolution mechanism and on fisheries. A no-deal is something that everybody should work against because it would be very damaging for all concerned in the United Kingdom, Ireland and other European Union member states. If a trade deal is done, it should neuter the offending clauses of the Internal Market Bill; they should not proceed on that basis.
Deputy Boyd Barrett asked about an all-island Covid-19 approach. I have had meetings with the Northern Ireland First Minister and deputy First Minister, and with other parties. The issue is of concern. The chief medical officers are meeting and engaging. The incidence is higher in Northern Ireland than in the Republic and there are continuing challenges there. We will continue to work. We hope to have a North-South Ministerial Council next month. Hopefully, that will provide an avenue for further engagement. Prior to that we will continue talking. Obviously, they have difficulties and challenges within the Executive and there have been disagreements within the Executive with different positions taken on the level of restrictions in the North.
The Deputy mentioned funding. The European Union has put €5 billion aside for a Brexit adjustment fund. Obviously, Ireland will apply to get a portion of that because Ireland is one of the countries most negatively impacted by the Brexit decision. This year the Government budgeted for a no-deal Brexit and we have provided our own contingency funding for the fallout from a no-deal Brexit.