Brexit Bulletin, 11 October 2019

Oct 11, 2019

 

This week read about the Taoiseach and UK Prime Minister Boris Johnson’s Brexit discussions. Also, read an analysis of the €1.2 billion Brexit contingency package announced in the Irish Budget 2020.

Taoiseach and UK Prime Minister Boris Johnson believe Brexit deal is possible 

In an official statement following a meeting held between Taoiseach Leo Varadkar and UK Prime Minister Boris Johnson yesterday, both parties have agreed that a Brexit deal is possible. They have agreed to engage on the matter further and have also stated their investment in further strengthening bilateral relations.

Additionally, speaking after delivering the Brexit-heavy Budget 2020, Minister for Finance Pascal Donohoe has said that he does not want the return of customs checks and tariffs in Ireland, and that the Government is committed towards finding an alternative arrangement.

 

Budgeting for Brexit: €1.2 billion announced to support businesses

With the 31 October Brexit deadline just over three weeks away, it’s no surprise that Budget 2020 was dubbed the ‘Brexit Budget’. With the prospect of a no-deal Brexit looming large, the Minister has announced a contingency package of €1.2 billion (excluding EU funding) to respond to the challenges Brexit presents, out of which €200 million is guaranteed.

With €650 million to be made available to support the agriculture, tourism and enterprise sectors, there is an additional €500 million set aside from the ‘Rainy-Day fund’. The funding will be released in two waves, by priority:

  • First wave: Targeting “most affected” businesses, where €110 million will be deployed to support businesses of all sizes with a particular focus on food, manufacturing and internationally traded services. These businesses are referred to as “vulnerable but viable”.
  • Second wave: In the event of a no-deal Brexit, an additional €110 million will be provided through the Department of Agriculture. The beef sector has been highlighted as the priority, with €85 million of promised support, followed by the fishing industry, with a €14 million allocation.

In addition to the supports previously available for Brexit, new supports will also be made available in the form of a variety of grants, loans and equity investments, including:

• a €45 million Transition Fund;
• a €42 million Rescue and Restructuring Fund;
• an €8 million Transformation Fund for Food and Non-Food Businesses;
• €5 million extra for Micro Finance Ireland;
• €5 million for a Local Enterprise Offices Emergency Brexit Fund;
• €2 million extra for Intertrade Ireland; and
• €3 million extra for regulatory bodies.

An additional €40 million of funding will be provided for the tourism sector from the €650 million contingency to help mitigate the impact of a no-deal Brexit (especially in the border counties), make Ireland more accessible from overseas markets and support activities for targeting key markets such as the UK, North America and continental Europe. The allocation of remaining €390 million will be determined closer to the time.

Furthermore, it seems there will be another €365 million provided for social protection expenditure and related schemes with a further €45 million made available to assist with the creation of new jobs and opportunities.

 
However, as the Minister explicitly pointed out, if a no-deal Brexit does not occur, no additional funding will be secured.

 

Irish economy faces high risk of recession, warns Central Bank

In their Quarterly Bulletin published yesterday, the Central Bank has forecasted that the Irish economy could potentially slip into recession if the case of a a no-deal Brexit. The report has predicted disruption to trade, high impact on the agri-food sector, and 73,000 fewer jobs in Ireland over the next two years. However, the bank also reassures that the economy will begin to recover in 2021 but warns Brexit will have a long-term impact.

 

Brexit preparedness resources

 

Brexit Customs Level 1 and 2 – CPD course

Chartered Accountants Ireland, in association with the Irish Exporters Association, has launched a brand new continuous professional development (CPD) course - Brexit Customs Level 1 and 2 in both the Republic of Ireland and Northern Ireland.

This course provides participants with insights into how to manage their dealings with EU/International customs efficiently and explores areas such as goods classification, origin, valuation and transit. 

Interested parties can visit the CPD Brexit programmes page of our website to learn more and register for the upcoming course in Cork.

 

HMRC – Customs funding

The UK government have announced additional funding to support businesses with the costs of making customs declarations. Businesses based in, or with a branch in, the UK can apply for funding ahead of the UK leaving the EU. Grants can be used to support:

  • training costs for businesses who complete customs declarations, or who intend to in the future
  • funding for IT improvement, which is available to small and medium sized employers who are currently involved in trade as an intermediary

Applications can be made online, with the grant being offered within 30 days of applying. 

 

Irish Government Brexit Supports

The Department of Business, Enterprise and Innovation have released several Brexit preparedness supports, including the Brexit preparedness checklist, the Brexit Loan Scheme and the Getting Business Brexit Ready guide. For the full range of supports for businesses, visit the Department’s website.

 

Read all our updates in our Brexit web centre and our page dedicated to no-deal Brexit planning.