Taoiseach warns of Brexit effect on ‘plummeting’ consumer confidence

Taoiseach warns of Brexit effect on ‘plummeting’ consumer confidence

The fear of a no-deal Brexit has hit consumer confidence in the Republic of Ireland, the Taoiseach has said.

The UK is set to leave the EU by January 31 2020, the end of the current extension period.

It can leave earlier if the House of Commons and the European Parliament ratify the Withdrawal Agreement before then.

Speaking at a Future Jobs conference about the future of work in Dublin, Leo Varadkar said while a no-deal Brexit has been averted, the uncertainty surrounding the Brexit impasse hit Ireland’s economy.

The memory and the experience of the last recession has scarred people so much that they're almost waiting for the next major downturn to occur

“Consumer confidence is actually plummeting, it’s at its lowest since 2012. That isn’t all about Brexit, but is largely about Brexit and the fears of the impact that it could have on our economy.

“And while our projections show that even in the event of the hard Brexit, the economy will continue to grow and employment levels will continue to grow, the memory and the experience of the last recession has scarred people so much that they’re almost waiting for the next major downturn to occur.”

Mr Varadkar defended the level of foreign direct investment (FDI) in Ireland.

Its corporate tax regime has been subject to international criticism for being too low.

At 12.5%, the Republic of Ireland has one of the lowest headline tax rates in the European Union.

Mr Varadkar said: “In recent times it’s become a little bit fashionable to cast doubt on our FDI model. And there are some people who’ve taken to suggesting that foreign direct investment isn’t right for Ireland anymore, and that we should do without others, or maybe even less of us.

“There are others who have taken to offering a false choice that we choose between a supportive, pro-enterprise environment, FDI support for our indigenous industries and SMEs. But I think as most people in this room will agree, it is not a zero sum game.”

The talent and openness of the Irish workforce means Ireland enjoys its reputation as being one of the most attractive places for FDI

He said the openness of the Irish economy and its young, educated workforce are the reason foreign companies want to invest.

Mr Varadkar said: “The talent and openness of the Irish workforce means Ireland enjoys its reputation as being one of the most attractive places for FDI.”

He said while the economy in the Republic of Ireland has recovered since the recession, the impact is still being felt by its citizens.

The Irish PM said his Government is anxious that the current upturn in the economy will not lead back to the boom-bust economic cycle of the 2000s which saw thousands of people emigrate.

“The scars can also be seen in the legacy of a generation of Irish men and women who were forced to leave Ireland behind to find jobs and opportunities abroad.

“People who settle down and start their families, and make careers in other parts of the world, across the globe rather than across Ireland. The damage from that time has been healed. But those scars still remain.

“And for those very obvious and painful reasons, the Government is focused on ensuring that the economic progress that we made in recent years has been tamed and protected. It will not be frittered away.”

He said while thousands more houses need to be built, the numbers of those working in construction is not keeping apace.

“Even today there are 100,000 fewer people working in construction than there were back in 2008,” he said.

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