Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

98. To ask the Minister for Finance if his Department has commissioned economic or regulatory impact assessments of the risks to sectors under the purview of his Department following the decision of the UK to exit the EU and the various types of future relationships that might result; if he will provide a copy of such studies conducted; the persons or body commissioned to conduct this research; the cost of same; and if he will make a statement on the matter. [6305/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Contingency planning at both a domestic and an EU level is focused on three areas: preparing for a no-deal scenario or so-called “disorderly Brexit”; preparing for a transition period based on the “status quo”; and preparing for the future EU-UK relationship.

While the outcome of the December European Council and the move on to Phase 2 has lessened the likelihood of a disorderly Brexit, very detailed work on a no-deal or worst-case-scenario is advancing intensively through the cross-Departmental coordination structures chaired by the Department for Foreign Affairs and Trade. This work is also informed by ongoing stakeholder engagement. Separately, a new preparedness unit in the Commission is considering EU-level responses.

All this work provides a baseline scenario for the policies and sectors impacted, which can then be adapted as appropriate in light of developments in the EU-UK negotiations. In this regard, it is welcome that the direction of travel is now firmly towards achieving a “status quo” transition period.  Agreement on a “status quo” transition will provide certainty to individuals and businesses while also aiming to avoid any cliff edge effects between the UK leaving the EU and a future relationship agreement coming into force. The period will provide time for businesses and citizenship to prepare for the UK’s withdrawal from the EU based on the outcome of the negotiations on the framework for the EU’s future relationship with the UK. In this respect, the expectation is that the European Council will adopt additional Guidelines at its meeting on 22-23 March 2018 on the framework for the future EU-UK relationship. These guidelines – as well as further clarity on the UK position, which has been sought by the European Council – will provide a clearer picture of the direction of travel in the negotiations.

The Government’s contingency planning continues to be firmly grounded in the extensive work and outreach that has already been undertaken by individual Departments and agencies, as well as by stakeholder organisations, academics and others.  Much of this is in the public domain.

Working through the cross-Departmental coordination structure, my Department has been to the fore in producing and funding a number of Brexit-related studies, both before and since the UK's referendum decision. In addition, regular updates of my Department’s Macro-Economic forecasts take account of the impact of Brexit. Published and commissioned Brexit-related studies by my Department and include:

- 'Scoping the Possible Economic Implications of Brexit on Ireland' – A scoping study of scenarios for the future relationship between the UK and the EU. Published under the Department of Finance-ESRI research programme in November 2015;

- ‘An Exposure Analysis of Sectors of the Irish Economy’. An in-depth analysis of the possible sectoral and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published by Department of Finance in October 2016 (Updated March 2017);

- 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland' - Published under the Department of Finance-ESRI research programme in November 2016; and

- ‘Trade Exposures of Sectors of the Irish Economy in a European Context’ – An analysis of trade exposure to the UK in comparison to other EU Member States, published by the Department of Finance in September 2017.

All of these studies have been made public on the Department of Finance Brexit webpage:. Costs incurred for the 'Scoping the Possible Economic Implications of Brexit on Ireland'  paper and the 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland' paper, formed part of the overall costs under my Department’s research programme with the ESRI.

The results in these studies published by my Department and the ESRI, show that the potential impact of Brexit on the Irish economy will be significant.  In the joint paper my Department published with the ESRI, that assessed the medium to long term potential macroeconomic impact of Brexit on Ireland, the study shows that ten years after a UK exit from the EU, the level of Irish output, could reduce in a range from 2.3 per cent to 2.7 per cent and 3.8 per cent (i.e. under a EEA scenario, a FTA scenario and a WTO “hard Brexit” scenario, respectively), below a baseline of what it otherwise would have been. These results are on a no policy change basis. However, with the future trade path between the UK and EU still unknown, it is crucially important that we prepare our economy for the challenges ahead.

In this context, the Government has already taken a number of important steps including in Budgets 2017 and 2018, the Action Plan for Jobs, Ireland Connected our Trade and Investment Strategy and the preparation of a new 10-year Capital Plan. The best way to deal with the uncertainties arising from Brexit is to continue the Government’s competitiveness oriented policies and prudent management of the public finances.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

99. To ask the Minister for Finance the additional budget for 2018 or other years, provided to his Department and all agencies and bodies within his remit to plan or prepare for Brexit; the number of additional staff that have been recruited to work on this policy area in each body, agency and his Department; the number of dedicated staff planning and working on Brexit matters in each; and if he will make a statement on the matter. [6322/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I wish to inform the Deputy that the Assistant Secretary who heads the EU and International Division of my Department is designated as the lead official in the Department for Brexit matters.  A dedicated Brexit Unit within the EU and International Division was established in July 2016 to oversee and coordinate Brexit work across the entire Department and to act as a key liaison point, in particular with the Departments of the Taoiseach and of Foreign Affairs and Trade.  There are currently four staff in the dedicated unit which is led at Principal Officer level.  Also, an additional staff member has been assigned to the Permanent Representation to the EU in Brussels specifically to deal with Brexit.

We have appointed lead Brexit coordinators at Principal Officer level across all divisions of the Department.  The challenges which we face as a result of Brexit are mainstreamed across all divisions of my Department and this is reflected in business planning.

Brexit resourcing has been managed within the existing paybill allocation.  My Department will continue to monitor the resources needed to respond to specific policy challenges on an ongoing basis.

I am informed that the majority of the seventeen bodies under the aegis of my Department do not have additional funding or additional staff working on Brexit-related matters.

The budget of the Office of the Revenue Commissioners provides for up to 40 additional staff for Brexit planning and preparation. This work is carried out by a significant number of staff, currently estimated as 21 full-time equivalents, of whom 12 are dedicated to Brexit work full time, supported by additional staff throughout the organisation as required. Preparations will intensify once the Article 50 negotiations progress and clarity has been provided as to the nature of the future trading relationship between the EU and the UK and the customs regime that will apply. Additional resources will be allocated in line with these requirements.

Many staff across the Central Bank are working on Brexit-related matters on a daily basis in the course of their duties.  Given the nature of this work and how it relates to their role, the Central Bank has indicated that it is not feasible to capture the total staff working on matters related to Brexit in the manner requested by the Deputy. In 2017, the Central Bank allocated an additional 28 staff to address specific Brexit-related new business needs within existing divisions. Of these 28 staff, 18 have been allocated to supervisory divisions to address specific Brexit-related new business needs within existing divisions.  In 2017, the Central Bank Commission also approved an additional 36 resources principally to support increases in Brexit-related authorisation/supervisory activity, as well as to support extensions to the post crisis regulatory framework.

The National Asset Management Agency (NAMA) has indicated that it’s direct exposure to the UK market is, at this stage, very limited, it continues to monitor any Brexit impact on the Irish assets securing its residual loan portfolio.

The National Treasury Management Agency (NTMA) has not recruited or allocated staff to work exclusively on Brexit-related matters. The NTMA is, however, continually monitoring Brexit developments and regards these as key considerations for 2018. The NTMA has internal working groups relating to Brexit which have been staffed by existing employees.

The Strategic Banking Corporation of Ireland (SBCI) has not allocated staff to work exclusively on Brexit-related matters. The only identifiable direct budget item is the 2018 budget allocation of €600,000 towards the Brexit Loan Scheme 1. However, Brexit-related solutions remain a key consideration and focus for the SBCI and it expect that the overall cost for 2018 (or possibly 2019) may be higher than the budget allocation as it is expected that a second Brexit related scheme will be developed and rolled out in late 2018/early 2019.