Irish Government Urged to Create Emergency Brexit Protection Fund

The British Irish Chamber of Commerce has called on the Irish government to set up a Brexit response fund to help businesses cope with Britain’s impending departure from the European Union.

The Dublin-based chamber’s pre-budget submission suggests that the Taoiseach should divert €1 billion from larger-than-expected corporate tax revenue to help pay for the fund.

Director-General of the British Irish Chamber of Commerce, John McGrane said: “Budget 2020 will be one of the most consequential budgets in the history of the State. Ireland is facing the real and growing prospect of a ‘no-deal’ Brexit outcome that will place untold obstructions on UK-Ireland trade. At this critical time, we have to balance short-term uncertainty with long-term imperatives.

Emergency Brexit Protection Fund

“By redirecting €1bn from the larger than expected corporate tax intake into a Brexit Response Fund, Government can shore-up indigenous businesses which are most at risk from a disorderly Brexit.” He added.

McGrane claimed that the fund could be used to give grants to SMEs and to pay for staff training in areas such as customs.

The chamber’s Budget 2020 Submission argues that figures from the Irish Fiscal Advisory Council show that €3-6 billion from last year’s corporate tax revenue could be classed as “excess” that should be put towards a “rainy day fund”.

According to the chamber, such a fund could be used to protect the Irish economy from the long-lasting implications of a ‘no-deal’ Brexit.

The chamber’s submission also includes a raft of other measures designed to help Irish businesses flourish in a post-Brexit world. They are:

• Increasing R&D Tax Credits from their current rate of 25% up to 30% to ensure continuous innovation;
• Reducing Capital Gains Tax to help rebalance the economy and incentivise entrepreneurs to operate their businesses in Ireland;
• Building an innovation campus and district in Dublin that will help to enhance Ireland’s reputation as a place of investment;
• Creating a North-South Academic Corridor that encourages the collaboration of universities across the whole island of Ireland.

In the report, McGrane acknowledges that Ireland may need to seek a temporary exemption from the EU’s State Aid rules to help implement the fund. He also notes that the fund could only be open to businesses worst affected by the UK’s departure from the EU.

Tackling Climate Change

The chamber’s Budget Submission also included measures to help tackle the impending threat from climate change. While the chamber supports the Climate Action Plan, they also call for more funding for bioenergy projects and the ringfencing of carbon taxes to help pay for any future green projects.

The submission also claims that the Government should be putting aside funding for water infrastructure projects that may be needed in the future to address Ireland’s water needs.

Housing is also touched upon in the submission, with the chamber calling on the Government to divert spending from the Housing Assistance Payment (HAP) towards building more affordable social housing.

Key Figures

The submission concludes with some eye-watering statistics that detail the importance of the Irish-British relationship for businesses.

Last year, for example, Ireland exported over €16.1bn in goods to the UK, while around a quarter of all imported goods came directly from the UK.

See more Brexit stories here.

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