Caution on spending key due to ‘hard’ Brexit fears - Martin

The Government should show far more caution in spending public funds in light of Britain's move towards a so-called "hard" exit from the European Union, Fianna Fáil leader Micheál Martin has said.

While saying the Government needs to exercise budgetary prudence, he said continued investment in public services is needed.

Mr Martin was speaking on The Irish Times Inside Politics podcast, where he also said a hard Border and tariffs between Northern Ireland and the Republic is likely unless there is a softening of positions in the Brexit negotiations.

British prime minister Theresa May this week said she wants to take the UK out of the European single market and indicated she will also leave the customs union, making a customs border with Northern Ireland likely.

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“I see the return of borders and I see the return of tariffs unless the position is softened, unless the European Union and Britain can reconcile those differences,” Mr Martin said.

He said Ms May had provided “clarity” but added: “There is not a whole welcoming in negative clarity.”

A so-called “hard” Brexit means people need to wake up to the dangers such a substantial change to our relationship with the UK will bring, Mr Martin added.

“Brexit hasn’t happened, so Britain is still in the single market. My concern about it is even in the last budget, the gravity of this over time and the medium term gravity of a Brexit wasn’t really reflected in the budget statement, and there almost needs to be a call to arms to the nation to say this is a grave threat to us down the line.

“This is the end of an economic model we have been working with for well over 40 years.

“It means far more caution in the budgetary situation. There should have been a rainy fund or a particular fund created for Brexit because I believe we will need to intervene to protect Irish companies.”

At risk

He said Enterprise Ireland had told him that 25,000 jobs, mostly in the agri-food sector and situated outside Dublin, are at risk.

“Those jobs would be at risk in the event of a hard Brexit,” he said, adding Government intervention is needed to both financially cushion these businesses by providing State funds to cut their costs and by encouraging them into new markets.

“The Government will need to find money to help companies that get into difficulty and sectors that get into difficulty because of Brexit.”

This does not mean cutting back on spending on public services, a key election position of Fianna Fáil.

“You can’t stand still in terms of services, we have to improve public services,” he said.

Mr Martin also said Fianna Fáil had been given “commitments” that the acceleration of public sector pay rises will not lead to less spending on public services.

“We are pro-services. Our priority is services. That is our number one priority as we committed to in the general election.”