Written answers

Wednesday, 18 April 2018

Department of Jobs, Enterprise and Innovation

Brexit Issues

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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124. To ask the Minister for Jobs, Enterprise and Innovation the degree to which she is in the course of making provision for the negative impact of Brexit with particular reference to the industries here most likely to be affected negatively; and if she will make a statement on the matter. [17062/18]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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Co-ordination of the whole-of-Government response to Brexit is being taken forward through the cross-Departmental coordination structures chaired by the Department of Foreign Affairs and Trade.

Contingency planning for a no-deal or worst-case outcome, bringing together the detailed work being undertaken by individual Ministers and their Departments on issues within their policy remit, is now well advanced. Its focus is on the immediate regulatory and operational challenges which would result from such an outcome. It assumes a trading relationship based on the default WTO rules, but also examines the possible effects on many other areas of concern. This work is therefore providing baseline scenarios for the impact of Brexit across all sectors, which can then be adapted as appropriate in light of developments in the EU-UK negotiations, including in regard to transition arrangements and the future relationship.   It also takes account of the planning being undertaken at EU level by the new Commission Preparedness Unit, which is issuing information notes aimed at different business sectors.

The Government is already acting in order to get Ireland Brexit ready. Dedicated measures were announced in Budget 2018, including a new €300m Brexit Loan Scheme for Business and a €25m Brexit Response Loan Scheme for the agri-food sector as well as additional supports for capital investment in the food industry and Bord Bia marketing and promotion activities, amounting to over €50m in total.  Additional capital expenditure allocation of €4.3bn over four years will also allow the State and its agencies to properly plan major infrastructure projects while ensuring that communities and businesses can plan ahead. There was also increased funding provided to the Department of Foreign Affairs and Trade for the opening of six new diplomatic missions as part of Global Footprint 2025, which will contribute to helping our exporters find new markets. Our Government’s enterprise agencies continue to work with companies, helping them to deal with Brexit – making them more competitive, diversifying market exposure, and up-skilling teams.

Longer-term economic strategies will also be critically important in addressing the challenges of Brexit, notably Ireland 2040 –the National Development Plan. "Enterprise 2025 Renewed: Building resilience in the face of global challenges" was launched on the 9th of March and sets out Ireland’s medium-term national enterprise strategy. We are also in active discussions with the European Investment Bank on a potential increase in investment in the country.

Before the summer the Government will finalise a paper, building on that published in May 2017, on our approach to the negotiations and our latest assessment of the economic and sectoral challenges posed by Brexit and our responses to them.

My own Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the Government’s policies to stimulate the productive capacity of the economy and create an environment which supports job-creation and jobs maintenance.

In relation to Brexit, our objective is to support firms to adapt to the challenges and opportunities Brexit presents by ensuring we have fit for purpose policies. Our strategy is to minimise risks and maximise opportunities by ensuring the growth and resilience of Irish enterprise post-Brexit working across four pillars which are:

- Helping Firms to Compete;

- Enabling Firms to Innovate;

- Supporting Firms to Trade;

- Negotiating for the Best Possible Outcome;

Several important steps have already been taken to prepare our economy, including through a range of measures announced in Budgets 2017 and 2018, as well as commitments set out in APJ 2017 and 2018 and the targets included in the Trade, Tourism and Investment Strategy.

From my Department’s perspective, we are leveraging the expertise and enhancing the capacity of our Agencies to ensure that they are in the best possible position to address the needs of their clients in relation to competitiveness, innovation and trade diversification. This is being achieved through the provision of information, advice, training and other supports.

Specific DBEI actions to date include:

- We are developing proposals for a Longer-Term Business Investment Loan Scheme together with a new Business Advisory Hub service which would focus on business development to allow enterprises to position themselves for a post-Brexit environment.

- The EU Commission has approved a ‘rescue and restructuring’ scheme. The scheme can be drawn on in exceptional circumstance for a company severely affected by Brexit.

 With regard to industry specific responses my Department has already outlined our Brexit Response Plan in “Building Stronger Business – Responding to Brexit by competing, innovating and trading” published last November. This sets out our response to Brexit which supports all enterprise sectors.

My Department also commissioned a report by Copenhagen Economics (CE) on the trade impacts of Brexit (published 21 February 2018) which indicates that 5 sectors account for 90% of the possible economic impact. These are Agri-food (beef, processed food and dairy), Chemicals & Pharma, Electrical Machinery, Wholesale & Retail and Air Transport. However, the impacts are felt in different ways and require different approaches.

In the case of Agri-food, Retail and Air Transport the potential impacts will be felt at the firm level, and we are engaging intensively with those sectors. For Chemicals & Pharma as well as Electrical Machinery, small impacts at firm level have a significant impact on the economy given their overall contribution to GDP in this context broad based mitigation the Government is undertaking to make our economy more resilient may be more relevant to these sectors and individual support for companies is not necessarily what is needed.

The Government has an extensive Plan of activity underway, to support the Agri-Food sector through initiatives by the Department of Agriculture, Food & the Marine, Bord Bia and Enterprise Ireland. In the case of Retail my own Department is working with the Retail Representative organisations through the Retail Consultation Forum, which I chair.

The most effective mitigation measure the Government can undertake is to negotiate for the best possible outcome in the future relationship between the EU and the UK. This will benefit all sectors of the economy and the detail contained in the CE study will further help to inform our approach to the negotiations.

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