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Small firms fear Brexit tariffs and CAP budget cuts

Tariffs, currency fluctuations and corporation tax were among the concerns raised by more than 230 small business owners and interest group representatives at a Brexit event yesterday.

The event held in Loughrea, Co Galway, and organised by Supermac’s, was addressed by RTE Europe editor Tony Connelly, and Farmers Association president Joe Healy. Among the concerns aired by those present were the implications for small businesses in the event of a hard Brexit.

One such business owner was Mícheál Quinn, owner of Quinn RV SIP, a vehicle manufacturing company employing just over 100 people in Athenry, Co Galway.

Quinn RV SIP exports as much as 70pc of its products to the UK. Mr Quinn said he feels SMEs are largely being ignored by the Government and Enterprise Ireland.

By attending the event, he hoped to get “some form of clarity” around Brexit, but added that he didn’t think he would. “It is becoming difficult to get straight answers,” he said.

The company has projects scheduled for the UK market next spring, and he told the Irish Independent that a number of key customers in the UK have contacted him for assurance that he will still take on UK-based work “which is comfort to us”. However he remains concerned about the impact of possible tariffs and currency fluctuations on this business.

Another SME owner said that while what Brexit will look like remains unknown, it was “reassuring” to be in a room full of businesses with similar concerns.

Worries were also raised around Ireland’s corporation tax rate. The 12.5pc rate has long been a point of contention among some other European nations.

A member of the audience asked if the rate would now come under pressure at European level, given that Ireland was losing a “huge ally” in Europe once the UK leaves the EU.

“There is always pressure on Ireland to adjust our tax regime and that pressure is always resisted,” Mr Connelly said.

However, Mr Connelly added that for any change to the rate to take place, there would need to be unanimity from EU member states on the matter, and Ireland has a veto on any changes to tax rules.

Mr Healy said that some people questioned whether Ireland had allowed itself to become too dependent on the UK as an export market for food.

However he pointed to fact that when Ireland first joined what was then the EEC in 1973, 70pc of agri-exports were going to the UK. Today this figure is around 40pc.

Nonetheless, the agri-food sector is set to be disproportionately impacted by Brexit. Mr Connelly noted that within weeks of the Brexit vote taking place, five mushroom businesses in Ireland went to the wall, due in part to the impact of the fall in the value of sterling.

Ann Mitchell, a member of Galway IFA, asked whether the budget for Europe’s Common Agricultural Policy (CAP) would by affected under a no-deal scenario between the UK and the EU.

“The EU budget would be impacted and CAP would come under attack,” Mr Connelly said, adding though, that he was of the view that the Commission didn’t want a radically cut CAP budget because of Brexit – but that was under the scenario that there would be a withdrawal agreement. “I think everything will be hit if there is a hard Brexit,” he added.

Mr Healy went on to say that a fear for the IFA is that the UK, post-Brexit, pursue a “cheap food policy… importing food from places like South America”.

Mr McDonagh, CEO of Supermac’s, said that he was hosting the event because Brexit is something “we are all still learning about”.

Article Source: http://tinyurl.com/kbwqb42


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