More than £7bn of Irish taxpayers’ money has been earmarked to buy UK Government bonds for the first time in history.
The Government is planning to use an extra £4bn in this year’s budget to buy shares in a number of firms that are based in the UK and will make a profit from selling them.
The Irish government has earmarked a total of more than £11bn for this year and will continue to allocate a further £4.5bn to the public sector as part of a plan to boost growth and job creation.
Theresa May will announce the first instalment of this allocation on Monday.
She will announce an additional £1.3bn in the second instalments.
It will come after the Government announced a raft of changes to its plan to support companies and individuals that are already operating in the country.
The changes include:The Irish Government said the measures would ensure that all taxpayers’ funds will be allocated in the best interests of the Irish economy.
“We are looking forward to working with the Government and our partners to ensure that we have the necessary resources to support the economy in the years ahead,” it said in a statement.
“The Government will announce details of the additional funding within the coming days and we will work closely with the Irish government to ensure this funding is properly utilised.”
The Government said it has “an interest in ensuring that our own financial services firms can continue to compete in the global economy and the economy of Ireland”.
The UK Government has announced a series of measures aimed at boosting the UK’s economy, including a rise in corporation tax from 20% to 35%.
The Irish Investment Bank is to receive a £500m boost from the Government to support Ireland’s economy.
The bank will be given access to the government’s “big five” financial institutions: Lloyds Banking Group, Bank of Ireland, HSBC, Barclays and RBS.
The banks will be required to hold at least 10% of their assets in Irish sovereign debt, and the Government will invest in “a range of financial instruments” including small- and medium-sized companies.
“This will give our businesses and employees more certainty about the future of their investment in Ireland and ensure that they are fully capitalised,” the Government said.
“More than 90% of all Irish firms and individuals are now in the public service and more than 80% of them are small and medium enterprises.”
The Irish Business Investment Bank (IBIB) will receive a $1.5 billion boost to help boost the economy.
Its new Chief Executive, John Flanagan, said: “IBIBIB is the only UK bank to be awarded the largest corporate investment grant in Irish history.
It’s the result of the Government’s commitment to investing in the Irish private sector, which is already generating a significant amount of economic activity and employment.”
The government is also introducing a range of tax reliefs to help Irish companies and their employees.
“For companies that have been here for more than 10 years and are investing in our economy, these measures will help them create more jobs and more wealth in Ireland,” the Prime Minister said.