A no-deal Brexit could impact the public finances so much this year that key projects will be jeopardised, Finance Minister Paschal Donohoe has warned his ministerial colleagues.
Speaking as British Prime Minister Theresa May narrowly survived a no-confidence motion in the House of Commons, by 325 votes to 306, Mr Donohoe revealed he has ordered an urgent review of the likely impact of a ‘no-deal’ on the Irish economy in 2019.
The minister said that he can, and will, if required “change the spending profiles within government departments in response to events” during this year.
Government spending this year is set to total €66bn, but Mr Donohoe said the economic outlook has “deteriorated” and given the scale of the defeat in the Commons on the Withdrawal Agreement on Tuesday, he has ordered the review of the potential impact of Brexit.
“That is certainly something we would well need to engage in in the event of a disorderly Brexit,” he said.
“There are a couple of different ways in which that could happen. The first one is, we could make the decision whether priority decisions need to be made in the context of a more urgent and imminent need which we may have. Secondly, is whether decisions need to be made in terms of where current expenditure is allocated,” he added.
Reacting to the news, Taoiseach Leo Varadkar insisted there are no plans for checks along the land border in Ireland in the case of a no-deal Brexit, despite Transport Minister Shane Ross saying there would be.
On Tuesday night, Mr Ross said such checks were likely in the event of a disorderly Brexit on March 29 only to be contradicted by Tánaiste Simon Coveney.
Speaking at Government Buildings on Wednesday, Mr Varadkar said any checks would only be at airports and ports.
“The preparation for checks are being made at ports and airports. There are no preparations for checks along the land border,” he said.
“Our absolute priority is to get the deal ratified. Our focus is on avoiding a no-deal scenario. Yes, we are making preparations for a no-deal scenario, we have to do that now. We are not preparing for checks along the border,” he added.
Mr Varadkar said there can be no movement on the Irish backstop or on the need to avoid a hard border, despite the historic defeat for Theresa May in Westminster,
Mr Varadkar restated the commitment made by both the Irish and British governments to avoid a hard border.
“We can’t shift on the issue of there being no hard border between Ireland and Northern Ireland,” Mr Varadkar said.
“That is the outcome that we need. We have said it from day one that Brexit cannot result in a hard border between Ireland and Northern Ireland. We have made that commitment to the people of Ireland, north and south,” he said.
And the United Kingdom and the United Kingdom Government has made that commitment to the people of Ireland, north and south, so it needs to be honoured.
In the Dail, Fianna Fail leader Micheál Martin said there is a “private understanding” that a hard border in Ireland is increasingly likely — but the Government refuses to tell the public.
Mr Martin said Government was increasingly like the old episode of the classic television comedy Fawlty Towers which was entitled ‘Don’t Mention the War’.
Sinn Féin president Mary-Lou McDonald said: “The reality is that in the absence of a backstop, there will be a hard border and there will be checks. The Taoiseach has skated around this issue time and again. Is it not now time to say out loud that in the absence of a deal, there will be a hard border and to reassert that this is an unacceptable, indeed, an unconscionable situation for us?”
Ms May’s official spokesman said that the Westminster leaders of Labour, the Liberal Democrats, the SNP and Plaid Cymru had been invited to meet her last night.
However, a no-deal Brexit was not taken off the table, despite Labour leader Jeremy Corbyn’s insistence it was a prerequisite for talks, he added.
She has also accepted an invitation to meet with the eurosceptic members of her own party this morning.