Ictu says ‘rainy day fund’ should aid low-income families with higher Brexit costs

Union says the impact of a disorderly exit on poorest households ‘not generally appreciated’

Minister for Finance Paschal Donohoe:  the “rainy day fund” will be worth €2bn by the end of the year

Minister for Finance Paschal Donohoe: the “rainy day fund” will be worth €2bn by the end of the year

 

The State’s “rainy day fund” should be used to help low-income families pay the higher cost of groceries in a no-deal Brexit, the head of Ictu has said.

Patricia King, the union’s general secretary, said she felt the possible impact of higher food and other living costs on low-income earners and social welfare recipients was “not generally appreciated” in the Brexit debate, and that they should be supported with increased State payments from the Government’s rainy day fund.

Minister for Finance Paschal Donohoe is considering using the fund, which will be worth €2 billion by the end of the year, to help deal with a disorderly Brexit when he announces the budget on October 8th.

“This is the rainy day, so there should be a Brexit-adjustment fund so that people will not suffer,” Ms King told The Irish Times.

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“For people at the lowest income levels, whether they are working or not in work, there should be a system that can adjust the social transfer to those people so they don’t suffer the worst rigours of this, which is a direct result of a no-deal Brexit.”

The Economic and Social Research Institute (ESRI), the State’s independent think tank, estimated last year that the poorest households would be affected worst of all in a no-deal Brexit.

It put the average increase in the cost of living for households at between 2 per cent and 3.1 per cent – an annual increase of €892 to €1,360 – while the lowest-income households would face a 4 per cent rise.

Shock

“I think a no-deal Brexit will deliver a shock to the economy of the Republic of Ireland which will be deeper than people think it will be,” said Ms King.

Ictu is proposing that the Government consider supporting “short-term work schemes” for businesses in the sectors worst affected by Brexit – agri-food, retail and supply-chain distribution – in rural and Border areas.

Under the scheme companies would put staff on shorter hours but maintain the same number of employees, and that the cost of this would be covered by the State foregoing PRSI charges.

Ms King said that the shorter hours could facilitate the “reskilling and retraining” of staff. “We are trying to preserve good income jobs, decent work, in places that will never be able to replace them.”

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