Business lobby seeks expansion of Brexit fund as no-deal looms

British Irish Chamber also wants VAT temporarily reduced to zero for hospitality

‘Budget 2021 is likely to be one of the most decisive budgets in the history of the State.’ Image: iStock

‘Budget 2021 is likely to be one of the most decisive budgets in the history of the State.’ Image: iStock

 

A no-deal Brexit is likely to place additional costs and burdens on firms already grappling with Covid-19, the British Irish Chamber of Commerce has warned.

In a pre-budget submission, the group called for the expansion of the Government’s Brexit contingency fund along with other measures to support businesses that will likely be impacted by the prospect.

The business lobby wants the €1 billion allocation under the Brexit contingency fund increased to a minimum of €1.5 billion and used to support business most at risk from a change in the EU-UK trading relationship.

European Council president Charles Michel tweeted on Wednesday that the EU wanted a trade agreement with the UK “but not at all costs” amid concerns that both sides were still some way from agreeing a deal.

“With Ireland’s agri-food sector most exposed, now is the time to seek agreement at EU level for dedicated funds for those firms facing crippling tariffs and administrative burdens from January 2021,” Paul Lynam, the chamber’s director of policy, said.

“But we must not lose sight of the importance of east-west trade from 2021 and beyond and of the need to put in place new structures to help our two islands to thrive into the future,” he said.

Research fund

The chamber is urging the Government to create a UK-Ireland bilateral research fund to foster innovation.

To preserve the State’s economic and social relationship with the UK, while protecting the Irish economy from the looming threat of a no-deal Brexit and Covid-19, the chamber is also urging the temporary introduction of a zero per cent VAT rate for tourism and hospitality, something the Government has already ruled out.

The group also wants the Government to make good on a pledge to establish a commission on welfare and taxation to examine the competitiveness of the Irish tax code.

“Budget 2021 is likely to be one of the most decisive budgets in the history of the State,” Mr Lynam said.

“Businesses in Ireland are facing the real and growing prospect of no-deal Brexit shock that will result in additional costs and new burdens on firms who are grappling with the devastating economic effects of Covid-19,” he said.