Written answers

Monday, 11 September 2017

Department of Finance

Currency Exchange

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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195. To ask the Minister for Finance the measures he plans to implement to assist the retail sector due to the difficulties that have arisen from the weakening of the value of sterling; and if he will make a statement on the matter. [38597/17]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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200. To ask the Minister for Finance the way in which he plans to deal with the impact in the fall of the value of sterling for retailers; and if he will make a statement on the matter. [38614/17]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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201. To ask the Minister for Finance his plans to protect exporters and importers from the substantial fall in the value of sterling; and if he will make a statement on the matter. [38615/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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216. To ask the Minister for Finance his plans to support businesses and sectors which are particularly exposed to the decline in the value of sterling; and if he will make a statement on the matter. [38664/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 195, 200, 201 and 216 together.

At the outset, let me say that sectoral issues are a matter for the relevant Departments and Ministers. 

It must be acknowledged that exchange rate movements over the past year have caused difficulties, particularly for the labour-intensive indigenous sectors. Euro-sterling exchange rate developments have been largely driven by the uncertainty associated with Brexit over the last year or so.  There was a notable appreciation of the bilateral rate in the months leading up to the vote and a further sharp appreciation following the outcome of the referendum.  Since the vote, the euro has appreciated by approximately 20 per cent against sterling and is currently trading at around €1 = stg£0.91.

As we cannot control the international environment or exchange rate developments, it is crucially important that continued competitiveness improvements are achieved, including by focussing on costs we can control and by boosting our productivity. Ensuring a sustainable path for the public finances is also of fundamental importance.

As the depreciation in sterling most likely reflects a structural change in the UK economy, it is essential that the policy response is also structural in nature and, going without saying, in line with EU State Aid rules.  Continued market diversification must be part of the policy response, so that dependence and exposure to the UK market is reduced. 

A number of policy initiatives have been introduced since the UK referendum last year.  Budget 2017 included a specific set of measures aimed at making Ireland Brexit ready:

- retention of the 9 per cent VAT rate for the hospitality sector

- package of measures to help the agrifood sector

- further resourcing of Enterprise Ireland and IDA Ireland

- extension of benefits to the self-employed

- changes to the tax regime for entrepreneurs

The Government's trade strategy - Ireland Connected - published earlier this year, sets out a number of measures specifically addressing Brexit related issues, including diversification of markets for indigenous exporters.

In addition, my Department continues to work with the Department of Business, Enterprise and Innovation, SBCI, Enterprise Ireland, and the Department of Agriculture to develop potential supports in response to the future needs of businesses impacted by Brexit. Development of these proposed responses is subject to resources being agreed as part of the annual budgetary process.

Advisory supports in relation to business planning, such as those provided by the Local Enterprise Offices and Enterprise Ireland, will also be particularly important in assisting viable but vulnerable SMEs that may be adversely affected due to Brexit. These supports will help raise awareness of both private market financial supports and existing State supports.

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