Dáil Éireann Debate, Thursday - 18 October 2018
2. Deputy Maurice Quinlivan asked the Minister for Business, Enterprise and Innovation her views on the effectiveness of the Brexit business supports currently available such as the Be Prepared grant, the market discovery fund and the Brexit loan scheme; her further views on the low uptake of these supports; her plans to increase the uptake; and if she will make a statement on the matter. [42761/18]
View answerMy colleague, Deputy Michael Quinlivan, sends his apologies as he could not make it this morning. Will the Minister outline the effectiveness of the Brexit business supports available such as the market discovery fund and the Brexit loan scheme? Is she concerned about the low uptake of these supports? What are her plans to increase the uptake and will she will make a statement on the matter?
The agencies within my remit have an extensive range of supports available to enable companies to prepare for Brexit. For 2019 I am allocating an extra €8 million to the enterprise agencies and regulatory bodies under my Department for various Brexit supports, as well as to continue driving export diversification. I am allocating an additional €5 million for the local enterprise offices, which will include a specific measure for customs training for importers and exporters. I am providing an additional €1 million for InterTradeIreland to step up business preparedness actions.
On the effectiveness of the supports, a recent survey of 2,400 Enterprise Ireland clients found that 85% were taking Brexit-related actions. The figure is up from 38% this time last year, a positive indication that companies are undertaking Brexit preparedness actions. It is important to note that companies are choosing from the full suite of supports available from the agencies. Among Enterprise Ireland clients, in the first six months of this year alone, 43% of the 1,600 most exposed firms received grant aid. Similarly, the number of firms using the Enterprise Ireland Brexit scorecard is at nearly 3,000. Enterprise Ireland is working to ensure businesses will start to take Brexit-related actions and avail of supports which suit their requirements to help them to be more competitive, innovative or grow exports. In that regard, I am happy with the cumulative uptake of such supports.
The focus is on increasing the numbers that have completed Brexit scenario planning. For those with a plan, the focus is on working through implementation actions and building capability in the areas of customs and tariffs, the supply chain, regulation and standards and employee movement issues. In addition, I have recently met the Strategic Banking Corporation of Ireland, SBCI, and the three participating pillar banks to discuss the €300 million Brexit working capital loan scheme. To date, 224 firms have been approved by the SBCI in the agrifood, retail and distribution, manufacturing, hospitality and transport sectors. To date, 38 loans to the value of €8.5 million have been sanctioned at bank level. As part of budget 2019, I also announced a new €300 million future growth loan scheme, to come into effect from early 2019, to provide loans for up to ten years.
We continue to engage with businesses to step up the preparedness of companies using a range of communications channels — print, social media, online toolkits, radio and advisory clinics. The next Enterprise Ireland Brexit advisory clinic will be held in Dundalk.
I thank the Minister for her response but information that Sinn Féin has received shows a very poor uptake of Brexit business supports to date. A response to a parliamentary question shows that, up to last month, just ten SMEs had availed of the Brexit loan, drawing down just €2.49 million, which is less than 1% of the total €300 million pot. In addition, we have been told that just 88 market discovery fund grants were given out and only 127 Be Prepared grants were approved. Has the Minister examined the reasons for the poor uptake? If so, what are they? Is the poor uptake due to too much red tape or the criteria being too strict? Has the Minister any plans to reform the process to ensure businesses can gain access to the funding in order to prepare for Brexit?
With regard to the Brexit loan scheme, as of 12 October 2018, of the 262 applications received, 224 had been approved by the Strategic Banking Corporation of Ireland as being eligible and 38 had progressed to sanction at bank level, to a value of €8.5 million. There is, therefore, a good stream of applications coming in and they are being dealt with. I am glad the figure has increased in the past month from €6.5 million to €8.5 million. The system is working and people are applying for the funding. At the same time, businesses have to consider whether they need the money. They obviously have to tie their decisions on the funding in with their plans, including expansion plans.
With regard to Enterprise Ireland's Brexit scorecard, almost 3,000 scorecards have been completed. This included 204 local enterprise office clients as at 15 October. Enterprise Ireland has approved 137 Be Prepared grants and 113 projects have been approved under the Enterprise Ireland market discovery fund, which is available to companies seeking to diversify into new markets. Eight Enterprise Ireland advisory clinics have been run, with approximately 590 people in attendance.
A total of 2,350 SMEs have engaged directly with the Brexit advisory service of InterTradeIreland, a cross-Border agency that supports businesses. There have been 619 applications for its Brexit Start to Plan vouchers, of which 514 have been approved and 105 are pending. Good work is being done by the agencies.
In the budget last week, a new loan scheme for businesses, the future growth loan scheme, was announced. Why would we announce and introduce such a scheme when the current one is clearly not working? The current one, worth €300 million and announced in budget 2018, has helped only a tiny handful of businesses. I acknowledge the Minister said there are applications outstanding and that there are more approvals in the pipeline but, according to what we have learned, the fund has assisted only ten SMEs, which availed of less than 1% of the total pot. Is the Minister going to address the shortcomings in the current scheme or just hope the new scheme, which is the old one rebranded or renamed, will take the bad look off the old one?
With the prospect of a hard Brexit now more likely, has the Government engaged with the European authorities to seek European funding for a contingency fund for businesses that could be accessed in the event of a hard Brexit?
On the last question, the European Union has rescue and restructuring schemes in place for worst-case scenarios. We have engaged with and work very closely with the European Union.
With regard to the Brexit loan schemes, the first, announced last March, has a fund of €300 million. Grants are for a working capital facility for up to three years, which involves very short-term stuff. The loan rate is very competitive. The long-term Brexit loan is for identifying a need in the market in respect of which people can borrow for a longer term. They can borrow from €50,000 up to €3 million. Up to €500,000 can be unsecured, which is very significant. One can borrow for up to eight or ten years. Therefore, it is really for longer-term planning. It is to protect a business against future shocks. Businesses must consider carefully whether they want to take up the offer of finance. The Government is providing an array of supports to businesses through Departments and agencies but ultimately businesses have to decide themselves whether they want to avail of the supports. The job of the Government is to ensure the necessary supports are in place for businesses that need them. That is what we are doing. We engage regularly with businesses. We meet staff from representative organisations and hear their concerns. If there are issues, we deal with them.
