I thank the Acting Chairman, Senator Wilson, for extending such a warm welcome to the pupils from Drung primary school.
I welcome the opportunity to present this Bill to the Seanad and I look forward to hearing Senators' views and working with all Members of Seanad Éireann and Dáil Éireann to progress this legislation as quickly as possible. The provisions of Part 3 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 are set out again in this Bill. The provisions are related to the granting of lending powers to Enterprise Ireland and other provisions related to support for research, development and innovation in several critical sectors. As that Part of the Act has not been commenced, it is prudent and proper now to introduce those provisions in this stand-alone Bill to further support the enterprise base to remain competitive on the global market through the support of Enterprise Ireland, thus limiting the negative effects of Brexit, whatever its nature. These provisions of the Bill were discussed during the passage of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019. The Bill also includes technical amendments to increase the aggregate limit for funding to the enterprise development agencies and to increase the aggregate limit on grants made to Microfinance Ireland, MFI.
The Government is determined to plan and prepare for future growth and the jobs of tomorrow, notwithstanding the very great challenges of Brexit and other international developments on the horizon. Despite all the uncertainty, Irish companies have continued to win sales around the world and we must ensure that we can sustain these success stories and sustain and grow our market share in the UK and other global markets.
Putting this Bill in context in terms of Enterprise Ireland's development and diversification agenda, the Government's ambition, through Enterprise Ireland, is to drive the exports of Irish companies to the eurozone by 50% by 2020, that is, from €4.1 billion in 2016 to €6.15 billion in 2020. There is considerable work under way to drive this ambition.
As part of the global footprint initiative, Enterprise Ireland announced the targeted expansion of its overseas presence in 2019, with 15 new posts across 13 countries to help more Irish companies accelerate their market diversification efforts. This will include new offices in Germany, France, the United States, Denmark, Vietnam and Australia. Enterprise Ireland's international trade mission and events schedule for this year alone covers an impressive total of 207 events in Ireland and international locations to include 73 ministerial-led trade missions and events. This includes missions across the eurozone, North America, the Asia-Pacific region, the United Kingdom, the Nordic states, Central Europe and Latin America.
As outlined in the budget this week, the Government is putting in place an additional contingency package of more than €1 billion for Brexit supports for the coming year. This contingency will ensure that an initial provision of €110 million will be available to my Department and its enterprise and regulatory agencies to provide targeted supports to impacted businesses in the immediate aftermath of a no-deal outcome. The provision will also allow for additional tranches of supports to be provided to meet actual needs as the impacts of a no-deal outcome develop. The targeted no-deal supports developed by my Department will be available to companies of all sizes, including microenterprises, small and medium enterprises or SMEs, the sectors with a focus on food that are most exposed, and manufacturing and internationally traded services, including exporters and importers. In the first instance, given constrained resources, in planning for no-deal Brexit enterprise support schemes, my Department's supports will be prioritised to those firms that will be most impacted by Brexit and that have future potential, in other words, vulnerable but viable firms. In the event of a disorderly Brexit, it is essential that the appropriate mechanisms are in place to provide liquidity support to business.
The provision of a further €10 million to Microfinance Ireland under the proposed amendment in this Bill to the Microenterprise Loan Fund Act 2012 will introduce improvements to the SME and microenterprise lending market, maximising the ability of businesses to access appropriate finance at a time when liquidity will be critical. This legislative amendment will enable loans of between €25,000 and €50,000 to be made available to businesses based on the same Brexit-related eligibility criteria as apply under the Brexit loan scheme. As a further enhancement, MFI will also be able to support the local enterprise office, LEO, network with a combined LEO-MFI Brexit support product to LEO clients, offering funds of up to €100,000, with MFI servicing the first €50,000 and a LEO repayable grant providing the remainder, up to a total maximum of €100,000.
The likely immediate consequences of a hard Brexit - currency movements, supply chain constraints, delays, duties and tariffs - will, in the first instance, place a strain on the working capital position of businesses. The immediate support requirement for these sectors will be financial liquidity, which will be available through the funded supports of the Strategic Banking Corporation of Ireland, SBCI, Brexit working capital loan scheme, Microfinance Ireland and the credit guarantee scheme, which are available to all sectors. A key message I have constantly delivered to business is the critical importance of putting in place working capital safety nets to deal with short-term liquidity demands, including through the Brexit loan scheme.
Adopting new customs arrangements will be a key challenge for business trading with the UK. In addition to the training programmes being rolled out by the local enterprise offices, by Enterprise Ireland and by Bord Bia, in early August my Department and the Department of Education and Skills through a joint initiative with Skillnet and Enterprise Ireland, launched Clear Customs, a new €5 million customs recruitment and training initiative. This initiative will boost the number of specialists by at least 500 in customs agents and firms.
With regard to Enterprise Ireland's most Brexit-exposed clients, more than 530 companies received approval for funding of €74 million in total in 2018. We need to build on these supports and provide further latitude to our development agencies to provide a wider suite of supports and flanking measures in order to help mitigate the negative effects of Brexit. Through these legislative amendments to section 29 of the Industrial Development Act 1986, as proposed in section 1 of the Bill, we are enabling Enterprise Ireland to help position Irish businesses to be more agile and to be able to respond to global challenges, including Brexit. By enhancing their research, development and innovation capabilities and activity, Irish firms will have a greater competitive advantage and will be able to maintain it by developing cutting edge products and services that are better performing, more efficiently delivered and more effective for their customers.
The amendments remove the 50% cap set in national legislation on the research and development grant rate to allow Enterprise Ireland to fund within permissible EU state aid rules and it allows Enterprise Ireland to pre-fund research and development grants to companies of all sizes. Allowing Enterprise Ireland the flexibility to offer enhanced research and development supports will provide for the development of new or substantially improved products, services or processes and assist businesses to grow and increase employment by remaining competitive. All research and development projects that will benefit from the introduction of these amendments will still have to meet value for money criteria and comply with the Enterprise Ireland conditions related to the offer of research and development grants.
Section 2 is a technical amendment which increases the aggregate capital funding that can be provided to IDA Ireland, Enterprise Ireland and Science Foundation Ireland from €7 billion to €14 billion. Primary legislation currently sets a statutory limit of €7 billion on the aggregate capital funding that can be provided to these agencies since 1993. As the combined cumulative totals being prepared for the agencies annual financial statements as of end 2018 amounted to €6.543 billion, it is timely to increase the limit for the total capital amounts that the Minister is empowered to provide to these agencies.
Section 3 aims to permit Enterprise Ireland to lend and participate in certain types of follow-on investments and provides that Government approval is required for investment amounts or loans in excess of €7.5 million for any client. Providing Enterprise Ireland with the powers to facilitate additional lending and investment instruments in certain circumstances, increases the flexibility to support enterprise development and to manage its investments on a par with private sector investors.
Such additional powers will help to preserve the value of the State's investments in these businesses and will assist companies through restructuring or redevelopment programmes that may be critical in the weeks and months ahead.
I emphasise that there are no additional costs to the Exchequer as the costs of these enterprise supports will be accommodated within Enterprise Ireland's existing budget. It is now more important than ever that Enterprise Ireland can respond in an agile and flexible manner as the opportunities and challenges for its client companies change, specifically in the context of a potential no-deal Brexit, and as the investment market changes. It is also important that Enterprise Ireland can flexibly deploy the widest array of interventions that match supports available in other countries, particularly now in a Brexit context.
Section 4 provides for a technical amendment to section 5(2) of the Microenterprise Loan Fund Act 2012. Section 5 currently caps the equity that Microfinance Ireland can receive at €25 million, providing for a grant of €10 million under section 5(1) and a further €15 million under section 5(2). The amendment to section 5(2) of the Act will increase the funding by €10 million, from €15 million to €25 million, to a total of €35 million. This will mean that up to €10 million in additional funding can be provided to enable Microfinance Ireland to provide increased lending in the event of a disorderly Brexit. Section 5 provides, as referred to earlier, for the repeal of Part 3 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 as this Part is now contained in this stand-alone Bill.
Section 6 provides for the Short Title, collective citation and construction of the Bill. It also provides for the Minister for Business, Enterprise and Innovation to commence the Bill, or sections of the Bill, as appropriate.
In summary, the proposed amendments to allow an extension and enhancements to research and development supports aim to help firms that have tight cashflows to commence important research and development projects. Enterprise Ireland can already do this with small companies. This legislative change seeks to remove the statute bar from doing this with a company of any size. I want Enterprise Ireland to be able to help firms to produce improved horticultural or agricultural processes, methods or products, where the research and development results are likely to enhance, diversify or strengthen, directly or indirectly, the processing part of their business. In making the proposed amendment to the Microenterprise Loan Fund Act 2012, we can maximise the ability of businesses to access appropriate finance at a time when liquidity will be critical. The changes to legislation are required to ensure Microfinance Ireland can provide increased volumes of loans to microenterprises impacted by Brexit. Regarding the proposed new investment powers for Enterprise Ireland, this will have a positive impact on Enterprise Ireland's ability to provide a sophisticated level of financial support, tailored to meet the needs of individual client companies and mirroring new investment norms. It will enhance the State's existing suite of enterprise supports in helping to Brexit-proof Ireland by investing in the future of our firms.