Ibec on Barnier, Blair, proposals on DB pensions and public sector pay.

Dear member,

Yesterday I met EU chief Brexit negotiator Michel Barnier, who is in Dublin to hear more about Irish concerns. To represent the views of Irish business, Ibec has been in ongoing contact with the EU institutions at the highest levels and there is now a genuine appreciation in Brussels of the unique challenges we face specifically related to the North-South dimension. However, I stressed that the West-East dimension of the two islands is even more important for the Irish business community. Tailored Irish provisions will need to cover the free movement of people, but also the massive trade exposure of key sectors and the potential impact on highly integrated cross-border supply chains.

To make progress, goodwill is needed on both sides and Ibec's focus is on mutually beneficial outcomes, which maintain existing strong EU-UK business ties. Comprehensive transitional arrangements are also vital. At the same time, we need to use our influence on the evolution of the EU into the future, as well as closely tracking the UK's economic model. Both will have a big impact on the external business environment.

At the meeting, I stressed the need for comprehensive contingency planning at a domestic and EU level. A temporary EU state aid framework is needed to offset the worst effects of Brexit on otherwise viable firms. The current EU rescue and restructuring rules are designed to protect large industries that have gone through liquidation. They will be of limited use to businesses forced to quickly diversify and restructure because of Brexit.

Yesterday, along with ICTU and the government, I attended the Labour-Employer Economic Forum. Minsters Paschal Donohoe and Leo Varadkar were the senior cabinet members in attendance along Minsters Pat Breen and Eoghan Murphy. We were updated on Brexit negotiations but also the draft Government Social Welfare Bill which includes proposals on Defined Benefit Pension schemes. These proposals would impose significant burdens on employers. I flagged concerns about the Bill's capacity to produce unintended consequences for both current and former employees, along with placing additional competitive pressures on employers who are trying to maintain DB schemes. The Bill is up for consultation and Ibec will be engaging bilaterally with Minster Varadkar on it in the coming weeks.

I also want to brief you on the Ibec position in relation to the Public Sector Pay Commission report issued this week. The report primarily focused on the need to begin the process of unwinding the Financial Emergency Measures legislation but is also reflective of Ibec priorities with its focus on public sector pension provisions. The report identified that the majority are valued at a rate of 12-18% above pensions of their private sector counterparts. The report acknowledges that the upcoming pay negotiations in the public sector must have critical regard for affordability. The Ibec view is that an orderly approach to pay bargaining is imperative to ensure the public sector is a cohesive, efficient entity. This entails a unified, measured approach to pay talks and a commitment of no leapfrogging by individual actors. The report provides a framework to develop a successor to the Lansdowne Road Agreement which reflects current economic realities.

Separately, myself and the Ibec board will meet former UK Prime Minister Tony Blair today, as part of our ongoing Brexit engagement strategy. Tony Blair has a close affinity with Ireland, and he will be an important and moderating voice in the UK.

Ibec is actively working with like-minded parties, and those we disagree with, to achieve the best possible outcome for your business. As part of this work we have launched a new partnership with influential news website Politico, to ensure the Irish economic story of substance and success is understood by policy markers and influencers across Europe (see: http://www.politico.eu/sponsored-content/ireland-an-economic-model-of-substance/

Over the coming weeks and months, Ibec will continue to forcefully represent your interests at a domestic, EU, UK and global level. Get in touch if we can help.

Best regards,
Danny McCoy
CEO