James Reilly (Fine Gael) | Oireachtas source

I welcome the Minister to the House again. I welcome much of what she had to say in her opening statement. Obviously, the prospect of the UK leaving the EU is a major risk to Ireland's economic recovery. The Government has taken this seriously. I imagine we will not know the full extent of the risks until the negotiation process is complete. Already, we have seen the impact of falling sterling on our exports. We are a small, open economy and an exporting nation. It is important to restate that there will be no immediate change to the free flow of people, goods or services between our islands for quite some time, at least until Article 50 is invoked and for two years thereafter.

The bottom line is there will be numerous challenges for us. One is the significant uncertainty in the coming two years while the UK negotiates its withdrawal. We know that it has the potential, if we are not mindful, to reduce economic growth by 1.2% over two years, which corresponds to €2.5 billion. Access for Irish goods to the UK market, which is our largest market, as alluded to by the Minister, will be more difficult than heretofore. Irish goods are likely to be more expensive in the UK. The Government is cognisant of this and it is taking measures to help exporters. The possible re-introduction of hard borders is something Senator Davitt and the Minister have mentioned. These are things that we would very much guard against. As the Minister has pointed out, I do not believe the UK wants this either.

Advantages may come our way too as the only remaining English-speaking member state in the EU. We have a chance to attract businesses and investors who were either investing or planning to invest in Britain but who are now unsure. Ireland has become the sales platform for many goods for other countries outside the EU. That can now become the case for UK goods as well. IDA Ireland has a major opportunity to entice would-be UK companies into Ireland. Many financial services companies, for example, have already signalled their intention to leave London for new European bases. It is in our interest to attract them as well.

Let us consider the impact already. We have seen one major project in Belfast, a £25 million office block, shelved as a consequence of the Brexit vote. There is extraordinary potential for attracting jobs and investment. We have heard the Minister speak of her plans for further trade missions and for diversification into other markets. I welcome that, as, I am sure, does the House.

Clearly there are major challenges for our exporters. Since the UK voted to leave the European Union, the Government has been proactive in setting out Ireland's concerns, putting plans in place and ensuring our voice is heard at the highest political level throughout Europe. We have heard the Minister state that this is a top priority for her and every Minister, Department and agency.

The Minister has alluded to the next steps. These will include an all-Ireland civic dialogue on Brexit, with the initial meeting to be hosted by An Taoiseach and the Minister for Foreign Affairs and Trade on 2 November. We know that Brexit has the potential to impact on all businesses, but it is up to us to support business to ensure the impact is not negative. High-level Government meetings have taken place with Michel Barnier, the newly appointed European Commissioner and chief Brexit negotiator. He visited Dublin this week. Ireland has possibly more to lose from Brexit than any other European country. We must ensure our concerns are dealt with at the highest level.

As the Minister has pointed out, the UK accounted for a little under €14 billion of Irish goods exported in 2014 and €20 billion of services exports. In fairness, the Government has introduced measures in the budget which will help to soften the blow of Brexit. It is reducing capital gains tax for entrepreneurs, albeit with the lifetime limit remaining at €1 million. This is something the Minister for Finance, Deputy Michael Noonan, has said will be reviewed. This is not Brexit specific, of course, but it is a help nonetheless. The Minister for Finance has also extended and amended the foreign earnings deduction to help Irish exporters diversify export markets.In addition, there was an extension of the contentious special assignee relief programme to help businesses to relocate key staff to Ireland, an increase in the earned income tax credit for self-employed taxpayers to encourage entrepreneurship and the introduction of an income averaging stepout in the agriculture sector because of expected volatility in demand for food products following severe price fluctuations.

It is welcome that the 9% VAT rate to help the tourism industry will remain in place. This is very important because tourism, one of our major industries, is affected by the weak pound. We must do everything we can to continue to encourage the huge number of visitors who come to the country from the United Kingdom.

This is a worrying time for farmers. A €150 million loan fund will be developed in conjunction with the Strategic Banking Corporation of Ireland to improve cash flow management for them and reduce the cost of short-term borrowings.

Brexit presents a great opportunity for Ireland. Many companies in Britain are considering relocating here and since the result of the referendum the Government has demonstrated that it has a steady hand on the tiller. We are already encouraging these companies to move here and will develop further incentives for them to do so. The fact we are now the only English speaking nation in the European Union is a great advantage. In my constituency of Fingal which is quite near the border we have a wonderful opportunity because of the increased numbers passing through Dublin Airport, access to Dublin port and excellent infrastructure, including motorways. We need to encourage IDA Ireland and the Minister who was in my constituency with officials from IDA Ireland to support us further in making sure we have sufficient advance factories and other supports available for those who considering relocating to the area. It is an excellent area to which to relocate, with a young, diverse and well educated population. The fact that we now have more than 2 million citizens at work, the unemployment rate is under 8%, the economy remains the fastest growing in the European Union and that we are now able to borrow money at a rate of less than 0.5%, whereas before it was 14%, shows that the country has the capacity to deal with this challenge. My appeal is that we make it an opportunity and turn what could be seen as adversity into an advantage. The Government is making preparations to do this. I commend the Minister for the work she is doing in announcing the creation of new jobs, encouraging more firms to relocate here and undertaking more trade missions to new markets to diversify opportunities for business people and citizens.