Tuesday 20 August 2019

Watchlist: State agencies earmark firms that could collapse or leave Ireland in Hard Brexit

Dublin city centre (Stock picture)
Dublin city centre (Stock picture)

Hugh O'Connell and Philip Ryan

State agencies are compiling watchlists of companies they fear could collapse or leave Ireland in the event of a no-deal Brexit.

The Industrial Development Authority (IDA) and Enterprise Ireland have drafted lists of international and local firms they believe will be severely affected if Britain crashes out of the EU.

The IDA carried out an internal assessment of its client portfolio and classified companies according to the level of exposure they are at risk of in the event of a no-deal Brexit.

The review found that a number of companies have a high exposure, particularly smaller operators in the manufacturing sector whose supply chains would be disrupted.

Enterprise Ireland has also identified 535 companies which it fears will be seriously exposed to the affect of a disorderly Brexit.

Those most exposed are operating in the agri-food and construction sectors, according to Enterprise Ireland experts

An IDA spokesperson confirmed it is carrying out a "client sensitivity analysis" on firms affected by Brexit.

"IDA is supporting current clients to prepare for Brexit and assessing implications through various actions including ongoing engagement with impacted firms and a client sensitivity analy- sis," the spokesperson said.

Meanwhile, Cabinet ministers have been told in recent months that some significant companies could "go to the wall" in a no-deal Brexit.

Such is the sensitivity that surrounds no-deal planning, though, there has been no public document that explicitly states this.

"There isn't enough awareness among businesses of how bad a no-deal Brexit or even an orderly Brexit could be for them," one minister said.

Jonathan McMillan, Brexit unit manager at Enterprise Ireland, said his agency provided €74m in funding to 535 companies that were most exposed to Brexit last year.

"We are telling companies they need to become more diversified, innovative and competitive and always prepare for the worst case scenario which is a no-deal Brexit," Mr McMillan said.

Despite Government concerns over the level of preparedness among businesses for Brexit, Mr McMillan says that he believes Enterprise Ireland's clients are taking the necessary actions.

The Cabinet was also warned earlier this month of the particular challenges of communicating with businesses that trade on a North-south basis, given the high degree of political sensitivity and uncertainty around the implications of a no-deal Brexit for North-south trade.

It has also been impressed on ministers not to provide a running commentary on Brexit during the summer. But speaking to the Irish Independent, Justice Minister Charlie Flanagan has warned a no-deal Brexit would be a "catastrophe" for Ireland.

"We'll be as ready as we can but in a no-deal scenario it's a catastrophe, it's a lose for the UK, it's a lose for the EU, it's a lose for Ireland," Mr Flanagan said.

Mr Flanagan also urged UK Prime Minister Boris Johnson and his cabinet ministers to visit the Border.

"I would hope he'd come to Dublin for an early visit and I would hope that himself and his cabinet, which has a clear hard Brexit complexion, would take some time out to visit the Border," Mr Flanagan added.

Meanwhile, a Government source said that a leaked UK government slide that warns of the dire consequences on day one, the first fortnight and the first month after a no-deal Brexit states much of what Dublin has been warning about since 2017.

The slide, obtained by Sky News, warns cross-Border trade in Northern Ireland "virtually stops" in no deal. "We've been saying it for two years, in particular about imports from the North," the source said.

Irish Independent

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