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Speech by An Taoiseach, Leo Varadkar, British Irish Chamber of Commerce Gala Dinner, Thursday 5 September 2019

Check Against Delivery 

Good evening Ladies and Gentlemen.

It’s hard to believe it now, but when this Chamber was founded in 2011 some people wondered if it was really necessary.  They cited as evidence the fact that our two countries were so similar and suggested there was no need for a new body to bring people together.

What a difference eight years makes!

Today you play an integral role – helping to create links, shape ideas, and expand the close relations that exist between Britain and Ireland.

At a time of political and economic uncertainty in the UK your work is needed now more than ever. 

We meet tonight at a point where the stated intention of the British Government is to leave the EU on 31 October, with or without a deal. 

However, the story of Brexit does not end if the United Kingdom leaves on 31st October or even January 31st - there is no such thing as a clean break.  Rather, we just enter a new phase.

If there IS a deal we are going to enter several years of negotiations on a new free trade agreement and a new economic and security partnership.  That will be frought.  There will be difficult debates and even more difficult decisions to be made on:

  • tariffs,
  • customs,
  • quotas,
  • product standards,
  • state aid,
  • minimum standards for the environment and workers,
  • visa regimes and, not forgetting,
  • fishing rights and aviation landing rights between UK and EU, including Ireland. 

I think it may make the negotiations on the Withdrawal Agreement seem simple. 

Europe and division on Europe will dominate British politics for many years to come.

That won’t happen here, we will remain at he heart of Europe.

If there is NO-deal, and I believe we may have to live with no-deal for a period, then at a certain point we will have to begin negotiations again.  The first and only items on the agenda for such negotiations will be citizens’ rights, the financial settlement with the EU and a solution to the Irish Border.  All the issues we spent the last two years on.

So Brexit is not a storm to be weathered.  It is a permanent change in the political and economic environment in which the European Union and the United Kingdom will exist.

I believe, our future depends on making a realistic assessment and developing practical responses.

The good news is that thanks to your businesses and others like them our trading relationship is strong. 

Yes, Brexit will pose challenges and will change the way business is conducted, but we can withstand the challenge. 

Trade with the UK is healthy and vital to our economic prosperity. 

In 2018, Ireland exported over €16 billion worth of goods to the UK, while nearly a quarter of all Irish goods imports – worth almost €20 billion in total - came from the UK.

In 2017, the UK was Ireland’s largest services export market with 16.4% of all services exports going to the UK, worth over €26 billion in total.

The Revenue Commissioners estimate that there are approximately 90,000 Irish traders either exporting to or importing from the UK. 

The UK is geographically and culturally our closest neighbour and will continue to be a vital trading partner, no matter what shape Brexit takes. 

It is our mission in Government to cushion and protect our trade-flows as much as possible.  Your experience has been - and will be - invaluable as we develop strategies to do so.

On Brexit itself, our position has been clear and consistent.  Our preferred outcome is a deal on the basis of the Withdrawal Agreement.  The EU has been firm and respectful in its response that any deal must be consistent with the Withdrawal Agreement that was negotiated, in good faith, over a two-and-a-half year period by all 28 EU governments.  

Avoiding the return of a hard border on this island is a Government priority in all circumstances.  We must protect peace on the island and the success of the all-island economy.  This is why the backstop continues to be a critical component of the Withdrawal Agreement, unless and until an alternative is found.  And yes, we are open to alternatives as we always have been.  But they must be realistic ones, legally binding and workable in practice.

We have received no such proposals to date.

Recently Prime Minister Johnson and I spoke by phone.  We spoke of our shared desire to see the Northern Ireland political institutions reinstated.  We shared our perspectives on the Withdrawal Agreement and agreed that our teams would establish one-to-one contact.  We will meet again in Dublin on Monday. Unfortunately, given political developments in the UK, there is a significant and growing risk of no deal.  We don’t wish to see a no-deal Brexit and we will continue our efforts to avoid one, but not at any cost.  Unlike some, I see no upsides to No Deal.  I do fear it.  But I am prepared for it. 

A Withdrawal Agreement without the backstop is no good to us.  It merely kicks the can down the road until the transition phase ends in December 2020.  The only difference being that the United Kingdom would legally be out of the European Union but not in any meaningful way. They would experience none of the consequences.  We would face 14 more months of uncertainty and sapping confidence.  It's not an outcome that the Irish Government can agree to.

Economies and businesses do not succeed on the basis of hope alone.  Everyone in this room knows this as well as I do.

So we must be ready.  Ready as we can be.  A Comprehensive Contingency Action Plan is in place, with a cross-government response.  We have ramped up our planning at both domestic and EU levels.  The Brexit Omnibus Act has put in place all the legislation we need for no-deal.  It is focused on protecting our citizens, on defending the economy and jobs, particularly in the regions and sectors most exposed to Brexit.  The House of Commons has yet to pass such legislation.

All businesses, from the major multinationals to the small indigenous microbusiness, need to listen to the advice and help on offer to respond to the challenges of Brexit.

Our contingency planning has revealed that some sectors have low levels of Brexit preparedness, particularly smaller and independent businesses, retail and construction.  That needs to change.

We also want to help those who trade cross-border.  According to research carried out by Inter Trade Ireland earlier this summer, just 6% of an estimated 20,000 cross-border traders are prepared for cash flow and liquidity issues in the event of no deal.

Many businesses are already feeling the impact of Brexit.

So the Government has taken several steps to advance no deal preparations.

Revenue are communicating directly with businesses potentially at risk from Brexit.  Over 100,000 letters and over 10,000 follow-up phone calls.  Over 85% of traders now have an EORI number.

The Clear Customs initiative, developed by Skillnet on behalf of the Government, offers eligible customs agents, customs intermediaries and affected businesses a free training programme to build capacity in the customs sector, as well as a €6,000 grant to help build in-house capacity.

A €100m Beef scheme recently opened for applications and will provide financial aid to Irish beef farmers facing difficult circumstances as a result of market volatility and uncertainty arising out of Brexit.

Millions are available in business grants and hundreds of millions in low-cost loans.

Training and information seminars are being held all over the country.

Our diplomatic and agency staff around the world are opening up new markets and pathfinding opportunities.

On Budget Day, we will detail the further financial supports that will be made available to those most exposed in industry, agriculture, tourism and the border region.  Among these is a €200m rescue and restructure fund to save businesses vulnerable because of Brexit but still viable with adaption.


People often ask me what will happen in the event of no-deal.  As this is an event with no precedent, we cannot know all the answers.  But we do know a lot.

No-deal, of course, can only ever be a British decision.  A decision to leave without a deal, on WTO rules, will be theirs, and not one imposed on them by the EU.  It is a British policy choice to make.  Whatever happens, Ireland will not be dragged out of the Single European Market.  A market of 400m consumers.  A Single Market we helped to build and one on which our jobs and economic model depends.

If no deal happens, first of all, some things won't change.  The Common Travel Area will remain in place so British and Irish citizens will still be able to travel freely between our two islands and  live, work, study and access healthcare, welfare, housing and the labour market as though we were citizens of both.Irish and Dual British-Irish citizens in Northern Ireland and Britain will be still be able to travel, work, do business and study throughout the EU without a visa or permit.  For British only citizens, this will no longer be the case. 

While medicine shortages occur from time to time, we do not anticipate any significant change in medicines supplies.  There will still be plenty of food on shelves but perhaps not all of the same brands. 

When you fly into Ireland from Britain, you will no longer pass through the blue channel.  You will have to choose the green or red one and pay any taxes that may be due.  The same will apply to products bought on-line from the UK, brought in from Northern Ireland and EU consumer protections will no longer apply. 

Flights, trains and buses will continue to operate normally for a period but an agreement will be needed for this to continue permanently.  EU vessels will no longer be allowed to fish in UK waters and vice versa, though the Commission has proposed a short extension of the status quo. 

Tariffs will apply to goods imported into Ireland from the United Kingdom and vice versa.  The tariff schedules are already known.  You will need to be registered as an importer/exporter and you will need to make customs declarations.  This will be expensive and bureaucratic for business.   There will be checks on goods and live animals and, as far as possible, they will take place in ports, airports and at businesses.  But some may need to take place near the border.  We are working out the details of this with the European Commission.

A no-deal Brexit will have adverse effects on our economy causing growth to slow, but it will grow and we don’t anticipate a return to recession.

Unemployment will rise but total employment will also continue to rise albeit at a slower rate. There will be more people at work.

The  public finances will go from surplus to deficit but a deficit of less than 2%, so better than our longrun average.

We do not anticipate pay cuts, income tax increases or reductions in overall public spending.

There will be no return to austerity, we won’t be taking that trip again.

When we focus on Brexit, it is easy to become despondent.  We shouldn't be.

We are starting from a strong position economically.  We are ranked the 7th most competitive economy in the world and the 2nd most competitive economy in the euro area.   Our economy is being managed well, as are the public finances.

Today we have:

  • 2.3 million people in employment.  The most ever.
  • An unemployment rate of around 5% and falling.
  • Economic growth increasingly well spread across the country.
  • Solid wage growth, with average earnings increasing by over 3% last year, well ahead of inflation.
  • We have a budget surplus, one of the few countries that has.
  • Falling poverty and deprivation rates.
  • The national debt down as a % of GDP.  About half of what it was five years ago.
  • Public spending is rising but at only half the rate it did in the “Celtic Tiger” period.  That means it is sustainable.
  • Household debt is falling.
  • Implementation of Project Ireland 2040, the Public Sector Stability Agreement on pay, the National Childcare Scheme and reforms to social protections like parental leave, and Job Seekers Benefit for the self-employed, are all on track and will be unaffected by Brexit.
  • Housing construction is increasing and there is some evidence of house prices levelling off.  More than 20k new homes were built in the past year.

However, the impressive performance of our economy has resulted in the emergence of real capacity constraints. 

The housing shortage is a huge social and economic challenge.  External risks have also grown.  Not only is a disorderly no-deal Brexit more likely, trade tensions are threatening the global economy, and international tax developments could impact foreign investment.

Our planning for Budget 2020 is informed and shaped by these risks.  I want to thank this Chamber for its submission and we are studying it closely.  We agree with John McGrane when he says, ‘we all have to balance short term uncertainty with long term imperatives.’

I believe we must protect the progress we have made in economic terms and also in terms of advancing social justice, equality of opportunity and improving quality of life.  This means three things.

First, we must not allow our day-to-day spending to increase too fast.  However, we are playing catch-up on our national infrastructure, and our detailed plans in Project Ireland 2040 are deliberately designed to solve this problem. So capital spending, that's spending on public infrastructure, will increase by more than 10% next year, on top of 25% this year.

Second, we must not become over-reliant on volatile revenues.  As you know, over the last few years we have benefitted from bumper corporation tax receipts.  However, we can’t assume that money will always be there.  That's why so much is going into capital.  You only need to build a new road or new school once.

Third, we need to respond to the long-term challenge of climate change in this budget and every Budget from now on.

We cannot mitigate all risks.  We can take decisive and positive action to minimise the fallout.  We will work with you and the companies you represent to make our passage through these turbulent times as predictable and secure as possible.  Whatever the future holds for our closest neighbour, businesses here are going to want to, and need to continue, trading across the border and across the Irish Sea. 

Four times in our history, we travelled a different road to Britain.  When we became independent a hundred years ago, when we became a Republic and left the Commonwealth, when we broke the link with Sterling and when we joined the euro without the UK.  On all four occasions, there were enormous challenges.  On all four occasions we emerged stronger and continued to trade with the UK throughout.  We will do so again.

This Chamber was founded to protect and enhance the British-Irish trading relationship.  That is also the Government’s mission in the weeks and months ahead.

I am committed to working with you to prepare and protect businesses for the changes that will come. 

Charles Stewart Parnell, one of my great political heros has been invoked this week in another place.  Allow me to finish by invoking him and using his words;

Parnell believed that our future prosperity depended on us being ‘hopeful, energetic and determined’.  They are three qualities which are needed now more than ever as we deal with the challenge of Brexit.  We must be hopeful about finding a solution, energetic in preparing for the worst that might happen, and determined to defend the all island economy, peace, and all that we value.


Thank You.