DÁIL QUESTION ON BREXIT AND THE MOTOR INDUSTRY

  1. Deputy Thomas P. Broughan asked the Minister for Jobs, Enterprise and Innovation if the grave uncertainty regarding Brexit is impacting negatively on the motor industry and car sales sectors; the steps she will take to address these impacts; and if she will make a statement on the matter. [22954/17]

Deputy Thomas P. Broughan: We had an opportunity to discuss Brexit with the visit of Mr. Michael Barnier to this House last week. I commend the Ceann Comhairle on his role in allowing the Dáil to have that discussion, which was very valuable. A concern is that the impact of Brexit is beginning to be felt in our country. One area that has felt the impact, which has been made known to me, is the motor trade. We have seen a huge increase in the imports of used cars in the first quarter of 2017 compared to 2016. Has that been brought to the Minister’s attention as it is a matter of concern?

Deputy Mary Mitchell O’Connor: This Government, through the Action Plan for Jobs, has taken decisive action to support all sectors of the economy recover from the deepest recession we have experienced in recent decades. This sustained focus on job creation has resulted in the creation of over 209,000 additional jobs since 2012. The unemployment rate has declined from over 15.1% in 2012 to 6.2% in April this year.

The motor industry was impacted during the recession in the same way as all other sectors. The sector has recovered substantially over the last five years. New vehicles registrations reached their highest level since 2009 last year. While the data for the first four months of 2017 indicates a decline of over 9% compared with the same period last year, registrations remain above the levels in 2015 and immediately preceding years.

Data from the Central Statistics Office, CSO, also indicates an increase in imported vehicles being registered, in part reflecting the weakening of sterling and consumers seeking value for money.

The outlook for consumer spend remains positive. According to data provided by the Department of Finance, personal consumption expenditure is growing and consumer sentiment in March was higher than it was in February. Headline retail sales are up and the total number of private cars has increased over the year. Overall, consumer spending, employment trends and taxation receipts confirm that Ireland’s economic fundamentals remain solid. This positive outlook should continue to benefit the motor sector in its recovery to a sustainable level. Additionally, my Department is undertaking extensive preparatory work and consultation to anticipate the impact of Brexit on key sectors, including the retail sector. As chair of the committee for responding to Brexit in my Department, I will continue to ensure we address the challenges and, of course, the opportunities arising from Brexit.

Deputy Thomas P. Broughan: I thank the Minister for her response but there are growing concerns. We had reports yesterday concerning the slowdown in growth of our exports to the UK in the same period and they are less valuable to us now because of the decline in sterling. There is a fall-off in the hospitality industry of people coming here; I know this relates to the Department of the Minister, Deputy Shane Ross, rather than the Ministers who are present.

The motor trade is a very important industry in this country and it has over 40,000 workers, contributing approximately €1.5 billion to the Exchequer last year through vehicle registration tax, VAT and so on. That was significantly up on 2015. As the Minister states, the industry saw significant recovery after the recession. We will have a debate this week on the outrageous price gouging in car insurance for younger and older drivers, which is very annoying. I am glad to hear the Minister will have a sectoral response to the motor industry, as well as other areas of indigenous industry. I wonder if there are already any responses that could be taken in budget 2018 to alleviate concerns in the motor trade.

Deputy Mary Mitchell O’Connor: I hear what the Deputy is saying. He indicated there was a slowdown in exports to the UK but I make the emphatic point that overall, the Enterprise Ireland companies exported €21.6 billion of goods and services in 2016 but in 2015 they exported goods and services worth €20.5 billion, which means the value increased by €1 billion over that year. We are continuing to monitor the matter. I stated earlier that Enterprise Ireland is making sure that companies reach out to the eurozone, and we have put out a target of a 50% increase in this by 2020. I will make sure we will help Enterprise Ireland and the companies it supports in reaching those targets. The Deputy is correct that we are undertaking a sectoral impact assessment of Brexit, including the retail sector. This work will be completed later in the year and help to reveal the Brexit issues, including in the car market.