Tuesday 20 August 2019

Editorial: 'If there is a 'bad' Brexit everything is up for review'

Finance Minister Paschal Donohoe (Niall Carson/PA)
Finance Minister Paschal Donohoe (Niall Carson/PA)


We know there is no such thing as a "good" Brexit and we must keep that in mind as the end game nears this autumn. Even with a relatively benign outcome, the EU-UK divorce will never be as good as our oldest and most important trading partner staying in the bloc we have chosen to build our futures around.

There are, however, degrees of damage which can emerge from this process all of us have lived with for the past three years. And by now, even the most cautious analysts have had to acknowledge that a plethora of recent developments have increased the risk of a very bad Brexit - a chaotic UK departure without any deal.

Finance Minister Paschal Donohoe has tried to condition the public mood by unveiling two separate scenarios for the Budget he is due to present on October 8, little more than three weeks shy of the Brexit deadline of October 31. The Finance Minister argues that in the case of a disorderly outcome there must be Government money pumped into the economy to cushion the dreadful impacts.

Sadly, this would return us to the red for the current account and see us increasing long-term debt, which has remained something of an albatross even as we exited recession. It is time to brace ourselves for less than good news and take an upbeat attitude to upcoming challenges.

If the worst does happen, things risk being very grim for a time. Today we get an additional taster of what the details of that grimness might involve.

This newspaper reports that Social Protection Minister Regina Doherty has admitted the modest pension increases which have characterised budgets in recent years cannot be guaranteed this time because of the threat of a no-deal Brexit.

Ms Doherty has insisted that until we are sure of what we are dealing with next year, it would be unwise to make firm promises at this stage. So, cue Fianna Fáil to accuse Fine Gael of using the threat of a no-deal Brexit to "make poor people poorer".

In doing that, the main Opposition party has a deal of independent expert opinion on its side. Indeed, it needs no leap of imagination to know that those dependent on the old-age pension are always vulnerable.

Fianna Fáil has grounds for arguing that it has kept this issue in the forefront of public debate, allowing no room for wriggling out of a firm promise made in the Fine Gael general election manifesto. But it may be time for more reasoned debate in the coming weeks and months.

Fianna Fáil has by and large taken a very responsible position on most Brexit issues to date, taking a common stance with the Government in the interests of every citizen and avoiding playing politics. It would be a shame, as things become really critical, if they were to abandon that reasonable stance for some short-term political advantage.

Things will go better if all parties acknowledge they all have the interests of the poorest in society in mind. From such a standpoint, it would be easier to make hard decisions about scarce resources.

The Government has raised social welfare entitlements by €5 a week in each of the last three budgets negotiated with Fianna Fáil. Ms Doherty reasonably argued yesterday that there may be more effective ways to help the worst off than just giving everyone a flat extra fiver.

Brexit may offer us a reason for better discussion on these issues. But Mr Donohoe cannot just forget the work and sacrifices made by older people down the years. Pain must be shared with those best placed to cope taking the greater share.

Irish Independent

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