Noonan says budget will have measures to combat Brexit

The budget will contain measures to combat the impact of Brexit on the Irish economy, according to Minister for Finance Michael Noonan.

In London ahead of a meeting with Philip Hammond, the chancellor of the exchequer, Mr Noonan said the budget would contain a “number of measures to mitigate the impact on the Irish economy” of Brexit.

The first concrete indication of Mr Noonan’s intentions came on Thursday evening when Mary Mitchell O’Connor, the Minister for Jobs, Enterprise and Innovation, said her department would allocate an extra €500,000 to IDA Ireland.

Sources also believe the Government will consider a range of other measures, including steps to help exporters in exposed sectors hit by the fall in the value of sterling , as well as specific measures aimed at SME’s and the self- employed.

A signal that the 9 per cent VAT rate will remain to help the tourism sector is also expected.

There is also speculation in business circles of measures to reduce capital gains tax as it applies to businesses in Ireland to discourage companies from moving to avail of the more favourable UK regime.

Speaking in London last night, Mr Noonan said Ireland would seek to boost its “promotional and development activities” in the wake of Brexit, specifically referring to the effort to build the financial sector in Ireland.

More funds for Enterprise Ireland are also expected to help boost exports to markets other than the UK.

The extra funding for the IDA is expected to be used by the investment agency in “additional promotional activity in key target markets”, Ms Mitchell O’Connor indicated.

“We should be...determined...that we do not overlook whatever opportunities may emerge for Ireland on account of the referendum result,” she said.

“ Securing new foreign direct investment for the country is one such possibility, and IDA Ireland is already working hard with this goal in mind.”

A number of UK companies have already signalled interest in settling in Ireland in order to retain an EU presence.

The Minister said strengthening the IDA’s communications capacity around the world would be a particular focus. “I am confident...that the sum involved represents real value for money, and that the agency’s work abroad will help lead to future investments that will create more jobs and opportunities for the people of this country.”

Sterling

Mr Noonan said the fall in the value of sterling against the euro after Brexit was already having an impact on Irish exporters, particularly in the food sector. He said that the budget would contain measures to address this, and also to try to alleviate risks that had been identified for the future.

Brexit would affect Irish economic growth, the Minister said, and 0.5 per cent had already been taken off the GDP growth forecast for next year. Some €1.2 billion in trade went both ways between Ireland and Britain each week, he said, supporting around 40,000 jobs in the Republic and the same number in Britain.

The Irish and British governments had a “common interest” in trying to protect this flow of trade and the associated jobs, he said, and this would be an issue for discussion with the British government.

The Minister said he had no particular insight into when Britain would trigger article 50 and signal the start of formal EU exit talks. When this happened Britain needed to clearly communicate its priorities to the rest of Europe.

“The rest of us need to know what their priorities are,” he told a press briefing at the Irish Embassy in London.