Wednesday, 18 December 2019
Department of Finance
121. To ask the Minister for Finance if new customs infrastructure will be required at local and regional ports and airports under the terms of the revised withdrawal agreement reached in October 2019; and if he will make a statement on the matter. [53464/19]
I am advised by Revenue that during 2018, Revenue chaired an interdepartmental group established to consider the adequacy of port and airport infrastructure and facilities post Brexit. The group included representatives from Revenue; the Departments of Agriculture, Food and the Marine and Health; the HSE's environmental health service; the Department of Transport, Tourism and Sport; the Office of Public Works; the Department of Justice and Equality; and An Garda Síochána.
The group identified infrastructural requirements at three locations - Dublin Port, Dublin Airport and Rosslare Europort. No infrastructural requirements were identified for other local or regional ports or airports. The terms of the revised withdrawal agreement do not impact this position. While additional customs infrastructure is not required at these local and regional ports and airports, I am advised by Revenue that the position is kept under ongoing review considering any relevant developments as regards the movement of goods or persons between Ireland and the UK or between Ireland and mainland Europe, through the UK.
122. To ask the Minister for Finance if an impact assessment has been conducted of the revised withdrawal agreement agreed in October 2019 on the economy; if it is in the process of being carried out; and if he will make a statement on the matter. [53461/19]
Budget 2020, including the macroeconomic outlook which underpins it, was based on the prudent assumption that the UK would leave the EU on 31 October without an agreement. The macroeconomic outlook is set out in the Economic and Fiscal Outlook published with Budget 2020. This included, at Box 4, an assessment of the macroeconomic outlook that would apply in the event of an agreed exit by the UK at end October.
The Withdrawal Agreement endorsed by the European Council, will now require ratification by the European Parliament and the UK Parliament. Pending ratification of the deal, it is not possible to say if the outlook will be different to that set out in Budget 2020.
If the Withdrawal Agreement is ratified, the UK will enter a transition period until at least the end of 2020. In this situation the outlook would be broadly similar to that set out in Table 4 (Box 4) in the Economic and Fiscal Outlook 2020. This shows that, in the event of an agreed exit, GDP growth is forecast to be 3.1 per cent in 2020, with employment growth projected at 1.7 per cent next year and the unemployment rate expected to be 5.1 per cent.
The revised Political Declaration envisages an ambitious trading relationship for goods on the basis of a Free Trade Agreement, but until there is greater clarity on the post-transition relationship there is likely to be continued uncertainty, particularly with respect to private sector investment. My Department has been in contact with the ESRI on the economic impact of the revised Withdrawal Agreement and Political Declaration on the future relationship. I am satisfied that the existing analysis in the joint research by the Department of Finance and ESRI, published in March this year, broadly captures the range of possible future relationships. The analysis included a free trade agreement (of which there could be many forms), and a trading relationship under World Trade Organisation (WTO) frameworks. The impacts of these were modelled and estimated in the joint research which was published in March this year.
Under these scenarios, over the medium-term (i.e. 5 years) the level of GDP would be of the order of between 1.9 and 3.3 per cent lower, respectively, compared to a situation where the UK remains in the EU. The negative impacts will be most severely felt in those sectors with strong export ties to the UK market – such as the agri-food, manufacturing and tourism sectors and also SMEs generally – along with their suppliers. The impact will be particularly noticeable outside the main cities.
My Department will continue to monitor developments with respect to the ratification of the Withdrawal Agreement, and the future relationship with the UK, and will update the macroeconomic and fiscal projections to take account of any developments in the Spring of next year at the latest.
I am advised by Revenue that currently 63,984 businesses have a customs registration and acquired an EORI number. 23,939 of these businesses obtained an EORI number in 2019.
When Revenue analysed the 2018 VAT Information Exchange System (VIES) returns, they identified some 94,000 businesses that traded with the UK in 2018. Of these 94,000 businesses, approx. 55,000 do not currently have an EORI number.
However, Revenue advise that 91.7% of the value of imports from the UK in 2018 and 97.5% of the value of exports to the UK in 2018 was carried out by businesses who now have an EORI number.
Of the businesses with import or export trade of more than €50,000 on an annual basis, and therefore with a potentially significant supply chain exposure to trade with the UK, the number without an EORI number is approximately 3,000. This indicates that a significant number of the businesses that are going to be significantly impacted by Brexit have responded to the call from Revenue to prepare for Brexit by taking the important first step of acquiring a customs registration.