Seanad debates

Wednesday, 13 March 2019

Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019: Committee and Remaining Stages

 

11:30 am

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The previous amendment, which was ruled out of order as it posed a charge on the Exchequer, effectively required the Government to set up a Brexit stabilisation fund. This amendment asks that the Minister for Finance would report back to the Oireachtas within one month of the passing of this legislation on the establishment of a Brexit stabilisation fund. This is about reporting on something that was not previously required. The Senator's colleague, Deputy Cullinane, raised the issue of a stabilisation fund in the Dáil today. I told him that the Minister, Deputy Donohoe, at the start of this week outlined in quite a degree of detail the financial consequences for the State of a no-deal Brexit in terms of the impact that would have on the Exchequer, the responsibility that his Department would have to work with other Departments to protect vulnerable sectors such as agrifood, farming, the beef and dairy industries, the pigmeat and poultry sectors and so on. The Government is under no illusions that if we face the challenges of a no-deal Brexit, clearly we will have to set money aside that otherwise would not be set aside to support sectors to survive the dramatic change in trading circumstances that may result from a no-deal Brexit and tariff trade barriers. However, what we will not do is create a fund of X hundred million or X billion euro first and then decide how it will get divvied up. Instead, for many weeks we have had Departments that are responsible for managing certain sectors, such as the Department of Agriculture, Food and the Marine, working with the Department of Public Expenditure and Reform and with the European Commission to examine how we can use all the tools and the necessary financial resources available to us to try to protect these sectors in that transition. In this context, "transition" is the wrong word to use because we will not be in a transition period but in a dramatic cliff-edge change overnight. The Minister, Deputy Donohoe, has said, for example, and it is a serious thing to have to say, that having spent the past ten years trying to bring the country back into surplus in terms of the budget, a no-deal Brexit may well drive this country back into a deficit because we would have to borrow money to protect and support certain sectors. I can assure the House there has been much discussion and planning around this issue.

I believe I said earlier that the Department of Agriculture, Food and the Marine has a team in Brussels today talking to the Commission about no-deal Brexit planning in terms of the available tools and precedent from which the European Commission may be able to learn in the context of the kinds of supports we would need to put in place. It is not as simple as just setting up a Brexit stabilisation fund. Instead, there is the challenge and the response to that challenge needs to be designed first, and then we need a funding mechanism that can respond to that. We have a rainy day fund and it is quite a considerable amount of money. I am glad to say we have the capacity to borrow because we have a very strong economy again that certainly can do that at a very low funding cost.

We will be doing something much more comprehensive than simply reporting back in a month or a year's time on a stabilisation fund. We will be providing both Houses, I suspect, with detailed support plans for different sectors that are vulnerable and we will be looking for cross-party support and constructive suggestions in terms of how best to do that. In that context, I hope the Senator might consider whether she should press this amendment.

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