Dáil Éireann Debate, Thursday - 23 November 2017
1. Deputy Niall Collins asked the Tánaiste and Minister for Business, Enterprise and Innovation the contingencies and supports in place to safeguard Irish small and medium enterprises, SMEs, and export businesses from a hard Brexit scenario, including revision of state-aid rules; and if she will make a statement on the matter. [49667/17]
View answerI ask the Minister to outline the contingencies and supports in place to safeguard Irish SMEs and export businesses from the potential of a hard Brexit. I also ask her to outline the Government's position on revision of state-aid rules.
It is clear that, in the context of Brexit, we need to intensify efforts to support Irish SMEs and large companies. We need to try to minimise the risks and maximise the opportunities. Earlier this morning, I attended a meeting of CEOs to discuss how Irish companies can remain competitive in the face of Brexit but also in the light of other global challenges, including attitudes on taxation in the USA, challenges within Europe and so on.
We have much to do. We need to help firms to compete. This is an issue across Government. It is about access to finance. In the budget, the Minister for Finance, Deputy Donohoe, announced a €300 million Brexit fund. Last Monday, the Strategic Banking Corporation of Ireland, SBCI, also announced, in conjunction with the European Investment Bank, EIB, a new fund designed to make money available to Irish businesses. That is very important. We need to continue to help firms to innovate by increasing money for innovation.
This morning, Enterprise Ireland launched another fund whereby, within three weeks, businesses can access up to €150,000 to help them innovate. That is really important. We need to encourage and support firms to trade and diversify. Obviously, all the work I have been doing on trade missions with IDA Ireland is doing that.
The Deputy asked specifically about state aid. On 10 November I had an extremely positive and good meeting with Commissioner Vestager, who has responsibility for competition issues - including state aid - to discuss the unique challenge facing the country. We agreed to set up a working group comprising officials from the state-aid section of her area and officials from the Department of Business, Enterprise and Innovation. The group already met last Monday for the first time and will meet again in December. The purpose of this important initiative is to discuss the supports and measures available to Irish firms and to look at new measures and supports that can be developed as the Brexit situation develops in order to ensure that there can be - and I stressed this to her - a very timely response to any issues that emerge for Irish business. She agreed that timeliness in response will be critical. It was an extremely positive meeting and the working group has already begun dealing with these issues.
The Minister mentioned the scheme announced by Enterprise Ireland this morning and the earlier budget announcement by the Minister for Finance. By any yardstick, the state of preparedness of business for the onset of a hard Brexit is alarming. AIB recently published a sentiment index for quarter 3 of this year which shows that only one in four Irish SMEs is properly prepared for a hard Brexit.
According to InterTradeIreland, 19 of the 20 SMEs it surveyed are also not prepared for it. Similarly, PricewaterhouseCoopers, PwC, and Deloitte, two major consultancy, auditing and accountancy firms, believe this is the case.
In regard to the working group on the revision of state aid rules to which the Tánaiste referred, will it examine specific issues such as the €200,000 limit, which is posing a huge barrier? During a previous Question Time the Tánaiste referred to a proposal to introduce a rescue and restructure scheme. What are the criteria for that scheme and what will be available to business via that scheme?
I acknowledge the work of organisations such as IBEC, which recently published a piece of work on Irish businesses and helping them to export and diversify, and InterTradeIreland. All of the organisations in this area are doing a huge amount of work to ensure businesses are Brexit-ready. I would encourage any company, particularly those dependent on the UK market, that has not completed the Brexit score card or linked in with the local enterprise offices, LEOs, to do so.
On the rescue and restructure scheme, the Department filed for this scheme in August. Once approved, this scheme will allow for equity supports of up to €10 million to SMEs in severe financial distress as a consequence of Brexit. While I do not expect there will be a need for the State to provide rescue or restructure aid to companies in the Brexit context, this may well be the situation and so we need to have a contingency measure in place. We have made good progress with the Commission in this regard.
We are also putting in place another scheme which will make medium-term finance available for companies. We are also developing a longer-term business development loan scheme. A variety of schemes are being put in place in terms of access to finance, which will be a key issue for firms that need to diversify from the UK market and to develop products on the research and development side. A number of different initiatives are available. Last week, a new fund for small and medium businesses was announced by the Strategic Banking Corporation of Ireland in association with the European Investment Bank, EIB, which will also make tens of millions of euro available to Irish firms at a low interest rate.
On preparedness for Brexit, I have previously discussed with the Tánaiste the leaked Revenue report on our preparedness for Brexit. The issue was discussed on a number of occasions during Leaders' Questions. As confirmed to me by the Tánaiste by way of response to a parliamentary question, the Department of Business, Enterprise and Innovation has commissioned two reports; Sectoral Implications Arising from Brexit: Most Exposed Sectors, and Strategic Implications Arising from EU-UK Trading Patterns. The Tánaiste also told me that these reports will not be published and that the cost of these reports is in the region of €250,000, which is a significant amount of public funds. Why will these reports not be put into the public domain? Surely, the purpose of these reports is to aid business in their preparedness for Brexit. Will the Tánaiste publish these reports and, if not, why not?
A very good range of research reports, commissioned by a variety of agencies, are available and this is important. I will share as much as possible of that information. Information relevant to companies will be shared with them. If there is information that is key to our negotiating strategy which it would be better not to publish at a particular point from a national interest point of view, that is the approach we will take. Anything that can be published will be published.
