Emergency financial measures to support Brexit-hit businesses and communities will form part of the budget, Taoiseach Leo Varadkar has confirmed.
He said the Government is open to ideas from Britain about alternatives to the backstop.
It was also confirmed yesterday that previously pledged tax cuts for workers next year from Budget 2020 are not a foregone conclusion.
“I’m willing to listen to any proposal that the British prime minister has. The backstop is a means to an end,” he said, adding that it would ensure frictionless trade between North and South.
“The difficulty is anything we have seen so far when it comes to alternative arrangements do something very different. They just manage a border. They facilitate tariffs, they facilitate checks.
“They facilitate controls but they try to do it in a way that is invisible and unobtrusive. That is better than nothing, but it is not the outcome we want to achieve.”
Proposals in recent days from the Ulster Unionist Party would be considered, said Mr Varadkar. These plans suggest a new north-south ministerial body could monitor and regulate trade across the border.
It also proposed the creation of an offence in British law for knowingly transporting non-compliant goods to the EU. This would be a new type of insurance policy to protect the single market, former UUP leader Reg Empey has said.
Mr Varadkar warned there is a “very volatile and dynamic situation” with Brexit and things in Westminster may change in 48 hours. He said there would be a detailed discussion on Brexit and no-deal planning today when Cabinet reconvenes after its summer break.
“We have to be prepared for a no-deal on October 31. That is increasingly likely, we have to be prepared for that,” said Mr Varadkar.
Trade options for a disorderly Brexit are also being finalised in talks with the EU, he added. These would not be rushed and there would be a “lead-in” period for farmers and exporters, if Britain crashes out of the EU and new rules are needed to protect the single market, he said.
“There are still some issues being worked on that need to be clarified and when they are clarified, we will let people know. What we will definitely do is make sure that [businesses] have time to prepare.
“We are not going to announce measures like that and expect businesses to and somehow expect them to be ready to comply the next day or three days later. Anything that is done will have a lead-in time.”
Asked about next month’s budget and Brexit, Mr Varadkar said: “We will need a substantial financial package to rescue and restructure businesses that are viable or vulnerable as a result of Brexit or the very exposed industries like the agri-food sectors in particular. We expect to be in a position to announce the details of that on budget day which is three weeks ahead of a potential no-deal [Brexit].
“Some will come from the EU but the majority will come from our own resources.”