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British Irish Chamber calls for ‘Shared Islands Fund’ to Reboot the UK–Ireland Economic Relationship

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British Irish Chamber calls for ‘Shared Islands Fund’ to Reboot the UK–Ireland Economic Relationship

British Irish Chamber calls for ‘Shared Islands Fund’ to Reboot the UK–Ireland Economic Relationship
September 27
10:14 2021
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The British Irish Chamber of Commerce has today unveiled its Budget 2022 submission calling for the establishment of a ‘Shared Islands Fund’ to reboot the economic relationship between Ireland and the United Kingdom which has been impacted by Brexit and the introduction of targeted supports for Irish agri-food traders facing new trade barriers.

The organisation championing the €90 billion annual trade between the UK and Ireland is urging both Governments to establish a collaboration fund akin to the Shared Island Fund to enhance trade ties and foster research initiatives between the Islands of Ireland and Great Britain. The Chamber also called on the introduction of a scheme similar to the UK’s ‘Movement Assistance Scheme’ to supports traders moving agri-food products and safeguard them against any future trade interruptions across the Irish Sea.

In its Budget Submission presented to the Department of Finance and the Department of Public Expenditure and Reform, the Chamber has recommended Government adopt key measures to keep Ireland competitive, including leveraging other taxation levers to attract FDI and the reform of the Capital Gains Tax.

To kickstart Ireland’s recovery across a broad range of sectors and facilitate greater economic collaboration between the UK and Ireland in a post-Brexit context, other proposals set out by the Chamber in its Budget 2022 submission include:

  • Expanding Ireland’s diplomatic footprint in the UK so as to develop trade links to regions beyond London.
  • Creating an Oversight Group to ensure the over €1bn from the Brexit Adjustment Fund is deployed effectively to the worst affected sectors.
  • Providing funding to Ireland’s research agencies to enhance their presence in the UK.
  • Establishing a National Infrastructure Coordination Body akin to the UK’s Infrastructure Projects Authority.
  • Introducing a Green Tax Credit to help SMEs facilitate their transition to carbon neutrality and incentivise sustainable measures.
  • Considering other taxation levers, such as the Marginal Rate of Tax and R&D Tax Credits, should Ireland lose the strategic advantage of the 12.5% corporation tax rate.
  • Adopting a multi-annual pathway to raising the entry point of Ireland’s marginal rate of income tax to €50,000.

Paul Lynam, Director of Policy at the British Irish Chamber of Commerce, said: “Although the EU-UK Trade and Cooperation Agreement has given businesses across these islands much needed certainty, the new trading relationship is not without its difficulties and obstacles. Irrespective of the extension of grace periods, these challenges are only set to multiply with new customs requirements and border controls set to be introduced over the coming six months.

“Budget 2022 can help vulnerable firms to navigate the changes that lie ahead while rebuilding the ties that bind our two islands together. A new ‘Shared Islands Fund’ is one innovative way of rebooting Ireland’s economic relationship with our nearest neighbour. Through investment in areas ranging from research and innovation to energy, we can herald in a new era for UK-Ireland trade.

“In addressing short-term challenges, Government must not lose sight of the need to invest in the future needs of Ireland. From infrastructure and sustainability to a greater focus on higher education and research, we must be prepared to reform and reinvigorate Ireland’s economy.

“By moving from crisis to recovery and investing in our special relationship with the UK, Ireland can successfully confront the unprecedented challenges faced by businesses – big and small – and adopt the right suite of policies to best support them.”

The Chamber’s Budget 2022 submission can be accessed here.

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