Belfast Telegraph

Republic of Ireland predicts no-deal Brexit will cost 50,000 jobs

Warning: Taoiseach Leo Varadkar
Warning: Taoiseach Leo Varadkar

By Kevin Doyle

More than 50,000 jobs will be lost in the Republic amid rising food and clothing prices if the UK continues on the path towards a disorderly Brexit, according to an Irish Government analysis.

Doomsday predictions on the impact of a no-deal scenario compiled by the Irish Department of Finance suggest the economic impact will be "particularly severe".

The agricultural sector and small businesses who export to the UK will begin to shed employees during the second half of the year, followed by a "deepening" of the crisis in 2020.

Taoiseach Leo Varadkar said: "In 10 or 12 weeks' time we could find ourselves needing to find a lot of money to save people's jobs because there are people working in the food industry, in agriculture, small medium enterprises, SMEs, and in small exporters whose jobs may be under threat."

Capital projects could also be in danger while promises of income tax cuts will be reviewed.

Finance Minister Paschal Donohoe said it was very difficult to accurately predict the full scale of the risks a cliff-edge Brexit brings as there is no precedent.

He said food shortages will not be an issue because of the high level of produce which originates in Ireland.

However, the economy would be 4.25% smaller in 2023 than currently projected.

Mr Donohoe said this figure "hides an even larger hit to economic activity in labour-intensive sectors such as agri-food and indigenous small and medium-sized enterprises".

Current forecasts expect an unemployment rate of 5% by 2023, but a no-deal Brexit would push that up by two percentage points.

A projection that 2.49 million people would be in jobs here by 2023 falls to 2.44 million under the departmental analysis.

"Employment growth would still take place in our economy, but we will have 55,000 fewer citizens working than we would've had, had an orderly Brexit and transition period taken place," Mr Donohoe said.

The minister added large employers do still see positive prospects for jobs and investments, however among smaller companies that have to manage their own supply chains into the UK, the level of concern is growing.

"It is important to emphasise that we do have an economy still capable of delivering growth," he said.

However, every household would see their disposable income reduced as the price of food and clothing rises.

John McCarthy, chief economist at the Department of Finance, said many high street chain stores are likely to be affected as around one-quarter of imports come from the UK.

He said any benefits from a drop in the value of sterling would be more than wiped out by the addition of tariffs.

The Government has ruled out an emergency budget in the coming months but admit that plans for 2020 and beyond may have to be scaled back.

On promised tax cuts, Mr Donohoe said his objectives remain the same because Ireland will have to remain competitive with the UK.

"We will only know what will be the affect of a disorderly Brexit and those plans when we get closer to seeing the effect on our economy," he said.

In relation to major infrastructural plans, the minister said that they will still have "a really high level of importance" - but he declined to comment on specific projects "until we are clear on what is going to happen in the British economy".

Belfast Telegraph


From Belfast Telegraph