Neale Richmond (Dublin Rathdown, Fine Gael)
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101. To ask the Minister for Jobs, Enterprise and Innovation the measures that will be put in place to protect vulnerable industries, particularly the agrifoods industry, post Brexit in view of the fact no trade deal will be better than the UK and Ireland both trading within the EU single market (details supplied); and if he will make a statement on the matter. [16129/20]

Leo Varadkar (Dublin West, Fine Gael)
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Brexit, in whatever shape it finally takes, will have a significant impact on the Irish economy and fundamentally change the trading environment for businesses trading with the UK.

My Department undertook a 2018 report entitled "Strategic Implications for Ireland arising from changing EU-UK trading relations" which examined the implications of Brexit for the Irish economy and trade.

While tariffs often spring to mind as a significant cost factor, it is in fact the cost of non-tariff barriers due to regulatory divergence that will have a greater impact on businesses trading with the UK.

In January this year, my Department published a further study on Brexit impacts based on the Withdrawal Agreement and the Revised Political Declaration (RPD) agreed between the EU and the UK. The findings suggest a reduction in Irish GDP of between 3.2% and 3.9% by 2030 compared with a baseline where the UK remains a member of the EU. This compares with a negative impact of 7% in the no deal (WTO basis) modelled in the 2018 study.

Of course, both Brexit studies predated COVID-19 which has had a severe impact on Irish GDP with recent forecasts for negative GDP growth in 2020 of around 10%.

Government has taken extensive action to mitigate the worst effects of Brexit and in each of the last three budgets provision was made to assist businesses to prepare for Brexit. This includes a wide variety of soft and harder enterprise and financial interventions delivered mainly through the enterprise agencies. At entry level, training, mentoring and consultancy advice has been provided leading to financial assistance by means of vouchers, grants, short term liquidity loans and longer-term loans to assist businesses restructure and diversify into new markets outside the UK.

Customs is another area that we have been actively working on putting in place training programmes as well as the Clear Customs Initiative designed to build sufficient capacity to deal with the new checks, controls and documentation that businesses will need post Brexit.

Furthermore, earlier this year my Department brought forward a €28 million economic stimulus package for the border region since border counties are heavily exposed to Brexit.

My Department, through the regulatory agencies under my remit, also has ongoing engagement in important regulatory areas such as product certification and standardisation, market surveillance and on consumer and competition issues.

Budget 2020 recognised the potentially disastrous effects of a No Deal Brexit. While we hope the ongoing discussions will be successful, the possibility of no trade deal cannot be ruled out. Budget 2020 made provision for a Contingency Fund to be made available in the event of a No Deal Brexit to help enterprises and sectors most affected. This contingency may well be required in the event that no deal is possible between the EU and the UK and further consideration will need to be given to this in the remaining months of this year.

While Brexit presents an economy wide challenge, several exporting sectors are highly exposed to Brexit, including the Food & Drinks sector. In 2019, approximately 200 Food & Drinks client companies reported exports into the UK. Of this, approximately 50% are highly exposed to Brexit. Enterprise Ireland is working intensively with this group to ensure that sustainability and growth plans are in place as we approach end of the transition period on 31st December.

Over the past four years, Enterprise Ireland has rolled out a range of supports to help companies to prepare for Brexit including the Brexit Scorecard, Be Prepared Grant, Advisory Clinics, Online Customs Training, and Act On Consultancy. These supports have been effective in ensuring our Food & Drinks clients have access to all the available information and expertise in order to develop robust Brexit plans.

The momentous structural shift that Brexit represents will bring additional challenges for our Food and Drink companies around competitiveness, innovation and market diversification.

Cost competitiveness is key and Irish companies will face increased competition not only in the UK market but also in the domestic market.

Closely related to staying competitive is the real need for companies to invest more in innovation which is a critical component of competitiveness and is also an enabler for companies to diversify into new products and in turn, new markets.

Working closely with Bord Bia, Enterprise Ireland continues to support all Food & Drinks client companies to innovate, compete and diversify their exports in order to support companies to navigate the challenges and opportunities posed by Brexit. Enterprise Ireland’s Brexit specific supports will continue to be utilised alongside supports focused on innovation and competitiveness such as their Agile Innovation Fund, R&D Fund, Lean Transform Fund and Operational Excellence grants to position companies to diversify their product offering and to reach new markets.

It is intended also that the LEOs will continue to offer Brexit measures focused on winning export customers and improving competitiveness through existing measures such as the Technical Assistance for Micro Exporter Grants, the Lean4Micro and Productivity Challenges initiatives.

The July Stimulus Package will also aid our economy to recovery from the shock of the pandemic and restore confidence and prosperity. I have already said that the Package will be radical, far-reaching aimed at setting our economy on the right course for the foreseeable future.

I am confident that the actions we take now, followed by those outlined in the national recovery plan and Budget 2021 in October, will put our economy on the right track to deal with Brexit regardless of the nature of the future trading relationship between the EU and the UK.