Tuesday, 27 February 2018

Questions (364)

Fiona O'Loughlin


364. Deputy Fiona O'Loughlin asked the Minister for Business, Enterprise and Innovation the contingencies and supports in place to safeguard 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. [9796/18]

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Written answers (Question to Business)

The long-term response to Brexit is for companies to become more competitive, more innovative and to diversify their export footprint into more markets. The agencies under my Department have a wide range of supports available to enable companies to consolidate market share within the UK, and also to become more resilient by broadening their sales to other international markets.

Enterprise Ireland (EI) and the LEOs are actively supporting their clients to achieve this. My Department provided for additional monies in 2017 to enable EI and the LEOs to ramp up their supports in light of Brexit to drive improvements in:

- productivity,

- innovation,

- management capability and leadership skills, and really driving the ambition of managers to look to other markets around the world.

At the centre of EI’s strategy, Build Scale, Expand Reach 2017 – 2020, are strategic targets focused on:

- Assisting clients to create 60,000 new jobs by 2020 while sustaining the existing record level of jobs;

- Growing the annual exports of client companies by €5bn to €26bn per annum;

- Increasing the level of spend made by client companies in the Irish economy by €4bn to €27bn per annum by 2020; and

- Inspiring more Irish owned companies to have global ambition.

In support of this, EI is implementing extensive trade mission and event schedules focused on global and sectoral opportunities, further developing in-market expertise and networks, placing greater focus on identifying new sectoral opportunities and stimulating demand for Irish products and services through international marketing campaigns. In 2017, EI launched a new Eurozone Strategy to increase exports to Eurozone countries by 50% by 2020.

The first year of the Strategy was a very strong year for job creation among EI clients with over 19,300 new jobs created in 2017, resulting in a net gain of 10,309 jobs across the country. In 2017 EI supported companies employed 209,338 people. 65 % of client employment is outside of Dublin.

EI has introduced a number of Brexit specific programmes to help Irish companies remain resilient in the face of uncertainty. One of these measures is an online “Brexit SME Scorecard” to help all Irish businesses self-assess their exposure to Brexit. The Scorecard generates a report on weak areas and suggests some initial next steps. 1,909 companies had used the Scorecard by mid-December of 2017. In addition, a €5k “Be Prepared Grant” is available for SMEs to help support the costs involved in preparing a plan to mitigate risks and optimise opportunities arising from Brexit.

We are seeing growth in traditional industry sectors such as construction and manufacturing as well as in the Digital technology and Life Sciences sectors.

The Local Enterprise Offices are supporting their clients by providing information, training and mentoring on Brexit related issues as well as advice on other sources of support. LEO’s 2017 results are expected to be available in early March.

To support the eight Regional Action Plans, and as part of the Government’s strategic response to Brexit, additional funding of up to €60m is being rolled out by EI over the next 4 years. The Regional Enterprise Development Fund will support the development and implementation of collaborative and innovative projects that can sustain and add to employment at a national, regional and county level. Twenty-one successful applicants representing all regions of the country have secured up to €30.5m for their projects in the first competitive call. I intend to launch the second call towards the end of March.

My Department recently launched a €300 million Brexit Loan Scheme to provide affordable working capital financing to Irish businesses that are either currently impacted by Brexit, or will be in the future. The Scheme will be delivered by SBCI through commercial lenders to get much needed working capital into Irish businesses, and will be open to both State Agency clients and those businesses that do not have any relationship with State Agencies.

On the State Aid aspects, In November 2017, the then Tánaiste met with Commissioner Vestager (who has responsibility for EU State aid policy). An outcome from this meeting was the establishment of a Working Group comprising representatives from DG Competition, the Department of Business, Enterprise & Innovation, Enterprise Ireland and Department of Agriculture, Food and the Marine. The objective of the Group is to scope and design schemes to support enterprises impacted by Brexit in line with State Aid rules. The Working Group has met three times and in between these meetings, there has been engagement on specific issues in order to continue to progress matters. Should issues arise that require an approach that does not fit within the existing State Aid rules, this will be raised as part of the Working Group discussions.

As one part of a suite of measures to mitigate against the effects of Brexit, a Rescue and Restructuring (R&R) Scheme notified to the Commission was approved in late November 2017. This scheme has been put in place as it is considered prudent to have contingency measures in place so that we can respond swiftly to changing circumstances as necessary.

A key priority of mine is to ensure that this Government remains true to our export led growth policies. We will continue to support start-ups and ambitious companies across the country and help them scale faster through the work of the Local Enterprise Offices and Enterprise Ireland. I will keep a focus on regional initiatives, on building strength and resilience among existing exporting companies and also on broadening the exporting base by doing all we can to get Irish companies the supports they need to get exporting and thereby create sustainable quality jobs.