UK and Irish businesses want €1bn to withstand 'no-deal Brexit shock'
Businesses in the UK and Ireland have called for a €1bn (£908m) fund from the Irish government to help them withstand the “Brexit shock” in the event of no deal.
They want a slice of Ireland’s unprecedented €10.4bn (£9.4bn) corporate tax intake earmarked for business trading in both directions that will be hit by tariffs, delays in Calais and Dover and other challenges in the event of the UK crashing out of the European Union on 31 October without a deal.
John McGrane, the director general of the British Irish Chamber of Commerce (BICC), said: “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.
“From the agri-food sector to freight and haulage, SMEs [small- and medium-sized enterprises] across Ireland will need urgent protection.”
Ireland has enjoyed what the economist Cormac Lucey recently described as a “stupendous corporation tax windfall” with higher-than-expected tax “without precedent in the history of the state”.
Earlier this year, the Irish Fiscal Advisory Council concluded that “€3bn to €6bn of the €10.4bn corporate tax receipts received in 2018 could be considered excess.”
The BICC said the €1bn should be combined with a series of other initiatives including customs vouchers and training for companies dealing with customs for the first time and temporary exemptions from EU state aid rules to enable government support for Brexit impact companies.
It also wants Brexit training for all hauliers and recruitment of more customs agents to support business exporting to the UK in a post-Brexit regime.
The BICC, in its submission to the department of finance on the upcoming budget, also called for government investment in higher eduction research links between the UK and Ireland to “ensure the closest possible relationship with our nearest neighbour into the future”.
It specifically calls for a new northsouth corridor to forge research and academic links between universities in the Irish Republic and Northern Ireland.
McGrane is particularly concerned that many small- to medium-sized businesses would be caught out and possibly go to the wall because they adopted a wait and see approach to Brexit as they could not afford to develop contingencies.
It is widely acknowledged that the Irish agri-food sector would be severely damaged but while big businesses could prepare, smaller businesses in the supply chain in the beef and dairy export trade would be particularly vulnerable.