Labour: Rainy Day Fund Should Be Deployed In A No-Deal Brexit

Money available in the Government's Rainy Day Fund should be committed to support industries and jobs impacted by a no-deal Brexit, the Labour Party has said.

Finance spokesperson Joan Burton TD said Government should assign the funds to be used if the UK crashes out of the EU.

It comes as the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe secured Government agreement to base Budget 2020 on the assumption of a no-deal Brexit at the end of October.

The Rainy Day Fund will total €2 billion after the further €500 million is committed in 2020.

Deputy Barton said: "The Labour Party view is that available fiscal space for 2020 should be committed to improvements in public services, and that there is not scope for further income tax cuts with homeless and hospital waiting lists at record levels. We are glad that the Minister and Fianna Fáil have agreed with that approach.

"However, the costs of a crash out Brexit will fall on specific sectors, and will likely require short and medium term fiscal supports.

"The question must be asked, what is the point of a Rainy Day Fund if it is not committed to supporting the economy when such a shock event occurs?

"The planning for no deal Brexit contingencies and how to allocate such funds will involve difficult choices, but the Minister can re-assure workers and businesses now, by committing to making available the necessary resources.

"It would be bizarre for the Minister to salt away a further €500m in 2020 when the Brexit storm is about to hit, while also committing to borrowing any additional needed revenue to maintain current and capital spending next year."

The budget was based on the assumption of a no-deal Brexit for three reasons: to assure businesses and citizens of the Government's preparation, to safeguard recent progress in stabilising public finances and to avoid a situation where budget decisions need to be reviewed in the future.



(JG/CM)