Written answers

Thursday, 17 December 2020

Department of Enterprise, Trade and Employment

Brexit Preparations

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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185. To ask the Minister for Enterprise, Trade and Employment the extent to which he remains satisfied as to the adequacy of measures taken to protect the economy as Brexit unfolds; his views on whether the alternative arrangements are sufficient insofar as is possible, meet all eventualities; and if he will make a statement on the matter. [43835/20]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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235. To ask the Minister for Enterprise, Trade and Employment the extent to which he is of the view sufficient provision has been made to compensate for losses of jobs or export markets in respect of goods or services in the aftermath of Brexit; if he remains satisfied that adequate provision has been made to withstand the initial trade shock of developments; and if he will make a statement on the matter. [44640/20]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 185 and 235 together.

Brexit, in whatever shape it finally takes, will have a significant impact on the Irish economy, fundamentally changing the trading environment for businesses trading with the UK, excluding Northern Ireland. With just two weeks until the UK leaves the Single Market and the Customs Union, work to ensure Government, business and citizens are Brexit ready is of paramount importance, because change will happen from 1 January 2021.

Key elements of Brexit readiness right across all Government Departments and agencies has been progressing since the outcome of the UK referendum on Brexit in 2016. Since that time, Government has published three Brexit preparedness Action Plans, the most recent being September 2020. Since September, Brexit readiness work has being intensified across all Departments and agencies to be Brexit ready for the end of the transition period, whatever the outcome of the EU/UK negotiations. Our readiness work is supported by a major national communications campaign under the ‘Getting Ireland Brexit Ready’ brand.

Over the past number of budgets, Government has taken extensive action to mitigate the worst effects of Brexit, and in the case of businesses, has providing numerous initiatives to assist businesses get Brexit ready. These range from planning vouchers, consultancy and mentoring supports, tariff advisory services, research on new markets, and innovation supports. These are all provided through agencies such as Enterprise Ireland, the Local Enterprise Offices and InterTradeIreland. These initiatives are monitored and adapted as necessary to ensure they effectively address the challenges of Brexit. In successive budgets, new and additional initiatives have been introduced and we will continue to support businesses and the economy as needed with the introduction of additional measures.

Customs is an area that will most immediately impact businesses on 1 January next and we have been adapting our response by putting grants and customs training programmes in place. Enterprise Ireland’s “Ready for Customs” grant provides up to €9,000 per eligible employee hired, or redeployed within the business, to a dedicated customs role. A second phase of Skillnet Ireland’s free customs training, Clear Customs Online 2020, is open for applications, to support the customs intermediary sector and businesses that trade frequently with, or through, the UK.

The Government has also put in place extensive financial and other supports for sectors to assist businesses prepare for and mitigate the worst impacts of Brexit. These include the Brexit Loan Scheme, the expanded Future Growth Loan Scheme and the €2 billion Credit Guarantee Scheme to help businesses with their finances as they reboot and rebuild both through Covid-19 and Brexit. Additional funding was provided to Microfinance Ireland to help microenterprises that can not avail of bank funding over the coming period.

In Budget 2021, Government has provided for a recovery fund of €3.4 billion for a combination of COVID-19 and Brexit and specifically earmarked a contingency fund of €100 million to assist businesses with Brexit. We will keep under review the existing measures in place for Brexit and, should additional supports prove necessary, we will use the recovery fund to protect the economy in the same manner as we have done for COVID-19.

We have also been engaged with the European Commission in the context of the €5 billion Brexit Adjustment Reserve the proposal for which is expected to be published by the Commission shortly. This fund is aimed at protecting those Member States most impacted by Brexit and, as the Member State that stands to lose most from Brexit, Ireland is actively pursuing our share of this fund.

Separately and in parallel to the task of preparing businesses for Brexit, my Department has also, through Enterprise Ireland, been actively working on a strategy of market diversification for companies to find other markets.

Ireland's overall export performance over the last 10 years has been marked by year-on-year growth with total exports of goods and services reaching further record levels of €374 billion in 2019.

The overall scale of the Ireland-UK trade relationship can be seen through the €51 billion of goods and services we exported in 2019, while importing €41 billion from the UK. While the UK is, and will remain, a major market for Irish companies, expanding the Irish export footprint in markets beyond the UK is a key priority. In that context, Enterprise Ireland’s strategy is to support Irish exporters to be more innovative, competitive and market diversified.

The Irish exporting landscape has been strong and companies in Ireland have been succeeding in winning business worldwide for their products and services. Enterprise Ireland client companies achieved record levels of worldwide exports in 2019 of €25.6bn, against the backdrop of Brexit uncertainty. In 2019, the Eurozone region, which is a key focus of Enterprise Ireland’s diversification strategy, saw growth of 15% to €5.65bn, with Germany, France and the Netherlands each exceeding €1bn in exports. Exports to North America increased from €4.08bn in 2018 to €4.72bn, an increase of 16%.

Enterprise Ireland client companies exports to the UK amounted to €7.9 billion in 2019, which represent an increase of 2% on the 2018 figure. While the UK continues to be the top export market for Enterprise Ireland client companies, such exports now account for 31% of total exports, having fallen from 36% in 2015 in accordance with the market diversification strategy.

I am confident that through this work with Enterprise Ireland, firms will be encouraged to look to other markets and to expand their footprint outside of the UK.


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