Written answers

Monday, 11 September 2017

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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217. To ask the Minister for Finance the status of the development of sectoral response plans for Brexit; the publication date of these plans; and if he will make a statement on the matter. [38694/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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218. To ask the Minister for Finance the issues identified for consideration in the context of Brexit, including opportunities and their prioritisation; and if he will make a statement on the matter. [38710/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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219. To ask the Minister for Finance the details of issues identified for consideration in the context of Brexit, including threats and their prioritisation; and if he will make a statement on the matter. [38726/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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220. To ask the Minister for Finance the scenario planning that has been conducted by his Department for Brexit; and if he will make a statement on the matter. [38742/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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221. To ask the Minister for Finance the methodology employed in the prioritisation of responses to Brexit; and if he will make a statement on the matter. [38758/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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222. To ask the Minister for Finance the funds that have been requested in response to threats resulting from Brexit; and if he will make a statement on the matter. [38774/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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223. To ask the Minister for Finance the funds have been allocated in response to threats resulting from Brexit; and if he will make a statement on the matter. [38806/17]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Fianna Fail)
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225. To ask the Minister for Finance his Department’s priorities for risk mitigation in response to Brexit; and if he will make a statement on the matter. [38838/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 217 to 223, inclusive, and 225 together.

The comprehensive document “Ireland and the negotiations on the UK’s withdrawal from the European Union: The Government’ Approach” published on 2 May outlined in detail the structures put in place by the Government to ensure a strategic and whole-of Government response to Brexit that ensures a coordinated approach to the identification of key priority issues for the EU-UK negotiations and the wider domestic response.

Since the publication of the comprehensive document, the Government has sought to further increase its strategic oversight of Brexit through the addition of a dedicated responsibility for Brexit matters to the role of the Minister for Foreign Affairs and Trade. The Cabinet Committee structures have also been reformed and a new Cabinet Committee has been established to deal with EU Affairs including Brexit.

The Government’s National Risk Assessment 2017, which provides a systematic overview of strategic risks facing the country, was published on 29 August following a public consultation process. The National Risk Assessment acknowledges the significance of risk arising from Brexit, and that Brexit represents an overarching theme that could have far-reaching impacts on nearly all aspects of national life. It identifies areas where Brexit poses a specific risk, particularly in relation to the economy.

As set out in the comprehensive document of 2 May, the Government’s continuing work to ensure that Ireland’s interests are reflected in the EU’s approach to the ongoing EU-UK negotiations is a central dimension of Ireland’s strategic response to Brexit.

Work is also continuing across Government on Ireland’s wider response to the challenges and opportunities posed by Brexit, building on ongoing cross-Government research, analysis and consultations with stakeholders and encompassing the following themes:

- sustainable fiscal policies to ensure capacity to absorb and respond to economic shocks, not least from Brexit;

- policies to make Irish enterprise more diverse and resilient, to diversify trade and investment patterns, and to strengthen competitiveness;

- prioritising policy measures and dedicating resources to protect jobs and businesses in the sectors and regions most affected by Brexit;

- realising economic opportunities arising from Brexit, and helping businesses adjust to any new logistical or trade barriers arising;

- making a strong case at EU level that Ireland will require support that recognises where Brexit represents a serious disturbance to the Irish economy.

Policy decisions in support of these objectives also arise across a wide range of areas, including the annual budgetary process; the forthcoming National Planning Framework 2040; the new 10-year National Capital Plan; the Review of Enterprise 2025 Policy, and sectoral policies and investment decisions in areas such as agriculture, enterprise, transport, communications and energy.

Within the whole-of Government framework for Brexit, the Department of Finance has lead responsibility for the macroeconomic and financial sector issues. The Department has been assessing and preparing for the impact of Brexit since well before the UK referendum in June 2016. This included the study, published in November 2015, under the ESRI-Department of Finance research programme, entitled 'Scoping the Possible Economic Implications of Brexit on Ireland'. Following the result of the UK referendum, a Brexit Unit was established within the EU and International Division of my Department, to oversee and coordinate the work of fully understanding and preparing for the challenges and opportunities associated with Brexit.

As part of the initial response to Brexit, Budget 2017 contained a number of measures to address the challenges of Brexit, to mitigate future risks, and to support any opportunities that might arise. These included measures to support SMEs, entrepreneurship, agri-food and Irish exporters. These followed on from the Department’s detailed analysis of sectoral exposure to Brexit across the economy which was published with the Budget.

Subsequently, the Department worked with the ESRI to deepen the macroeconomic analysis and a report titled 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland'was published in November 2016. In April 2017, updated macroeconomic forecasts were published by my Department, as part of the Stability Programme Update.

Department of Finance contingency work is ongoing and rightly continues to examine all possible scenarios, challenges and opportunities. This work is an important input to the whole-of-Government work being overseen through the relevant structures. In accordance with its role, the Department continues to monitor the economic impacts and carry out relevant analysis, and to frame budgetary policy advice in this new context of Brexit.

It is clear from the Department's own published research that the potential impact on the Irish economy is significant. The medium to long term economic impacts of a ‘hard Brexit’ with reversion to the WTO trade rules are set out in the November 2016 study referenced above. Looking at the effect ten years after a UK exit, a hard Brexit scenario results in the level of GDP being almost 4% below what it otherwise might have been.

As regards the prioritisation of responses to Brexit, the Summer Economic Statement sets out the Government’s approach which is to strengthen the resilience of the economy against an international backdrop of heightened uncertainty. The best and most immediate policy under the Government's control to counter the likely negative economic impacts of Brexit is to prudently manage the public finances in order to ensure that Ireland's economy continues to remain competitive in the face of future economic headwinds. It is important also to recognise that the full impact of the UK's exit is only expected to materialise over time. As we cannot control the international environment, we will need to continue to improve our competitiveness, including by focussing on costs we can control, by boosting our productivity and ensuring sustainable public finances. Continued prudent management of the public finances is a critical aspect of the Government’s overall strategy to mitigate the economic challenges associated with Brexit, as outlined in the Government’ s Position paper published on 2 May and in the Summer Economic Statement.

Of course, Brexit will also provide opportunities for Ireland. There include opportunities to increase our share of financial services based inward investment. Minister of State Michael D’Arcy T.D. has responsibility for Financial Services, including the implementation of the dynamic and evolving IFS2020 Strategy. We will continue to leverage our IFS2020 Strategy to maximise opportunities arising as a result of Brexit.

The Department is working within the whole-of-Government framework for the preparation of sectoral Brexit response plans. This will ensure that that we will be in a position to counter negative economic impacts arising from Brexit, that our interests are protected in the negotiations at EU level, and also that we can seek to maximise opportunities arising, including in the financial services sector.

The Department will continue to carry out the necessary research, analysis and consultations, and to develop budgetary policy in the context of Brexit.

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