40,000 job losses due to no deal Brexit is 'conservative' prediction, says Donohoe

40,000 job losses due to no deal Brexit is 'conservative' prediction, says Donohoe

By Fiachra Ó Cionnaith, Political Correspondent

Update 6.10pm: Finance Minister Paschal Donohoe has admitted Government predictions a no deal hard Brexit may see 40,000 people lose their jobs and slash economic growth by 6% are "conservative" and could be dwarfed by the real life impact of the crisis.

Mr Donohoe issued the warning as he insisted the Government will not be "involved" in planning any hard border physical infrastructure - but admitted it is "logical" conversations will take place with the EU and Britain if no deal is struck.

Speaking during a wide-ranging Oireachtas finance committee on Tuesday afternoon, Mr Donohoe said existing Government projections suggest a no deal hard Brexit will pose significant problems for both the national and regional economies.

In an opening statement to the committee, Mr Donohoe said a worst-case scenario Brexit could see Ireland's economy slump by 6% compared to if Brexit does not happen, and 4.25% compared to a soft Brexit scenario.

However, asked by Fianna Fáil finance spokesperson Michael McGrath if he acknowledges the situation could be "significantly worse than the economic model predicted", Mr Donohoe admitted the predictions are "conservative" and "evolving".

"In some cases they are based on information and estimates evolving. I would see this as the minimum affect on economy, I have acknowledged the sectoral and regional impact of a disorderly Brexit could be quite different for our country," Mr Donohoe said.

During a later exchange with Fianna Fáil senator Gerry Horkan, Mr Donohoe confirmed the percentage figures mean between 30,000 and 40,000 more people could lose their jobs if a no deal Brexit strikes.

He said such a scenario could also slow the number of jobs being created in Ireland by 52,000, and repeated the figures are potentially conservative.

Meanwhile, during the same Oireachtas committee meeting Mr Donohoe said it is "not possible to avoid all risk in a no deal scenario" as "not all issues are within Ireland's control", and dismissed British claims of a "managed no deal" by saying: "No such thing exists."

Asked by Sinn Féin finance spokesperson Pearse Doherty if he would like to clarify that there will be "no checks at all" on the border if there is a no deal Brexit, Mr Donohoe said the Government "will not be involved in any procedure that will see checks on the border".

Mr Donohoe repeated the view to Mr McGrath and Solidarity-PBP TD Paul Murphy, saying the Government is not planning for any physical infrastructure hard border.

However, in response to Mr McGrath, he conceded "it is only logical if for reasons beyond our control the backstop is no longer operable we would then have to engage with the EU and UK on how it [a no deal] is delivered".

He separately told Mr Murphy's "hypothetical" question of whether the Government would reject any EU demands to help create a hard border if this happens.

Mr Donohoe also confirmed there may be some customs checks on goods if a no deal hard border hits.

Asked by Mr McGrath if further impact updates will be made before the March 29 EU-UK divorce date, Mr Donohoe said there are no plans to do so before the "unique event" occurs.

40,000 job losses due to no deal Brexit is 'conservative' prediction, says Donohoe

Donohoe: Estimated impact of no deal Brexit may not capture full impact

Update 4.30pm: The Minister for Finance has warned a no deal Brexit could see a 2% growth in the unemployment rate here.

Paschal Donohoe is appearing before the Oireachtas Finance Committee to discuss Ireland's preparedness for Brexit and says it represents an historic challenge.

40,000 job losses due to no deal Brexit is 'conservative' prediction, says Donohoe

Minister Donohoe warned that a disorderly Brexit would lead to a significant reduction to Ireland's pace of growth which would have negative consequences on public finances and the labour market.

Minister Donohoe says the damage could be worse than initial estimates.

"These estimates may not capture the full impact and the figures could be conservative," said Mr Donohoe.

"The impact in certain exposed sectors and regions could be worse than the average.

"Nevertheless, quantifying the impact is important to help the government understand the possible macroeconomic implications and to design the appropriate policy response."

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